Information Systems Trends - Article Example

REPORT ON INFORMATION SYSTEMS TRENDS: NOW AND THE FUTURE By College Department 14 October This article reviews information systems for business management from the past to the present. It lays emphasis on the changes that have occurred in recent years in information communication systems. There is a possibility of identifying technical advances and functionalities such as the functionality meant to incorporate the m-commerce that has great influence to the information systems. Businesses use information systems at all levels of operation to collect, process and store data. It is then the duty of the management to obtain this data in the form of information, so as to carry out day to day activities. All processes in businesses today such as payment of bills and making of business decisions use information systems. In this age, businesses concentrate on management information science to gain competitive advantage over other competing businesses. Management information systems contain data management operations to store, search and analyze data. It is through these systems that the needs of managers, staff and customers are met. The data systems are managed by management information systems, which liaise with customers, managers and staff to implement information security, integration, and information exchange, hence achieving effectiveness and efficiency in the organization. Introduction Information systems include systems that are computer based as well as social systems. People use information systems for different purpose, for example in entertainment, browsing and reading. However, in a business perspective, people and companies use information systems to make sound decisions and for solving organizational problems (Olson and Kesharwani, 2010). Information systems are based on internet technology and include transaction processing systems, management information systems, decision support systems and expert systems (Olson and Kesharwani, 2010). Information systems for companies form a very important factor in enterprise development. They have developed from being mere work tools to more competitive and strategic elements. Recently, fast and important advances have occurred. According to Gomes, Serna and Badenes “recently have occurred different, fast and important advances, both in technology and in policies and philosophies of management in companies”, information systems have to be adapted to these advances, and companies have to spend on research, development and innovation (2010). History Information systems have been incorporated in organizations since their inception through the first computers. The computer acted as a best tool to optimize and improve management activities. The first implementation of information systems was made in 1960 in accounting management. Information systems have their roots back in the 1960’s. Vasilecas et al. (2006) traces their origin to Scandinavian researchers who had a great influence on their evolution. From then henceforth, information systems have evolved to include relevant knowledge to multi- perspective approaches. They were basically accounting software that could be applied all over the world because the accounting rules are universal. Soon, they were followed by systems to be used around the administration areas. Information systems made it possible to integrate finance and accounting systems. They improved productivity and led to an overall reduction in costs and mistakes. In the beginning of the 1970’s the first material requirements planning emerged. This evolved to the level of Enterprise Resource Planning (ERP) which defines the notion of information systems. ERP comes in two folds; there is ERP I referred to as the traditional ERP, which was an immediate technology after the MRP (Material Resource Planning) and there is ERP II, which was the later stage of ERP I and is more technologically advanced. Traditional ERP enables the departments of a company to communicate together. It must cover all the business areas in the company such as accounting and finance, logistics, operations, human resource, sales and marketing, collection and payment, warehouse management, cost and project management. All these systems are integrated by the ERP in a single unique system called the unique data. The recent growth in business has necessitated the need for connection with customers, workers, suppliers and many other stakeholders. This has led to the newer system called extended ERP and that covers special concepts dealing with interconnection between companies. Organizations have undergone transformation from what was referred to as the vertical integration because it optimized internal processes in organizations to horizontal structures, whereby it exhibits good relationship and communication between members in the supply chain. Horizontal structure not only deals with Business to Business (B2B) and Business to Customer (B2C) electronic commerce, but also the C-commerce. Evolution has caused the development of electronic commerce, customer relationship business, supply chain optimization, supply relationship management, business intelligence tool, and product life management. In this century of information, almost all fields of business undertakings require information systems. Examples are education, research, games and entertainment and business information systems. Facilities such as ATMs are provided by information systems. A system can therefore be defined as a group of activities and elements which have been arranged to achieve a certain objective. It is a combination of hardware and software as well as telecommunication systems that can support business activities (Kehal and Singh 2005). Currently, the success of a business depends on information systems adopted by a business unit. They are used by many organizations to provide services to customers with greater satisfaction. They also help to track business dynamics and improve workers productivity. An effective information system should be able to exceed the customers’ expectations and fulfil business needs. Information systems have become the backbone of most institutions. Overall, business information science can at times be simply termed as information systems and deals with conceptualization, advancement, maintenance and utilization of systems (Wigand et al., 2003). The long term goal for an information system is to carry out automation, but when automation fails, an information system provides support to specialists and executives to accomplish their tasks. Information systems were put in place due to the alteration of business environments by business transformation such as emergence of global economy, transformation of industrial economies, and transformation of the business enterprise. There is worldwide dependence on imports and exports in the global economy. Information systems offer required communication and analytical power for the firms to conduct trade and manage business globally hence bring competition to local business. It is also a fact that leading economies have transformed from knowledge based to information based services. The combination of knowledge and information are the basis for business layout. In regard to transformation of the business enterprise, the old businesses were more centralized and structured with sets of specialists while the new systems consists of more flexible and customer oriented forces. They require customization of products, information, commitments and are goal oriented. An information system in business acts as an interrelated component that collects, stores, processes and thereafter distributes information and makes control in an organization. In a business perspective, an information system provides a solution to organization and management by applying information technology to challenges posed by the environment (Cassidy, 2005). Benefits of information systems Planning of information systems provides the driving reasons for the development of a business. There are more values and benefits, for example, promotion of effective management of valuable and critical assets of an organization, improvement of communication and the relationship between businesses and organizations, and setting of business direction and alignment of priorities. An information system also provides identification of opportunities and applies technology to increase business value and gain more competitive advantage. It also plans the flow of information and processes, and lastly, effectively and efficiently allows allocation of resources (Malecki and Moriset, 2007). Management information systems not only include the software system but also the entire business processes and resources. Organizations have multiple functional systems including sales systems, call systems, finance, and logistics. Management information systems help management and staff to understand their organization better. In most cases, the combined data such as sales and available inventory help the manager take the appropriate action to meet the customers’ requirements. Recent advances in information systems Information systems have a historic impact on construction of methodologies. This was achieved in a systematic way, doing varied tasks in a natural and logical order. The information system in this approach was therefore set to manageable phases and steps, each step with a specialist and an expert knowledge. The past trend was more of a system approach. Information System Development (ISD) has all along been modelled towards certain interests growing wider and wider over the years. The modelling came from the information moulding concepts which have developed in a business moulding structure; it is then facing the challenges for the modelling of virtual markets. Information modelling started with information analysis before program construction and designs. Information moulding was put in place as an efficient tool for analyzing information flows to be utilized by organizations and would be realized by the computer based systems. Information modelling is still applicable in the modern day information systems design work (Gurin, 2014). Historically, information technology has been regarded as the resource that helps an organization operate efficiently. The past trend saw the development of some developmental techniques such as the conceptual modelling and information resource management as a resource, a concrete model of data, concepts and objects can be developed together to form a better relationship. In this resource driven methodology, data is considered a vital resource for an organization. The focus of progress efforts in information systems development has originally been on developing information technology solutions that would support various business operations in organizations. The systems developed are then viewed as resources for development. The business operation specifications are made in terms of content and structural requirements; therefore the past trend treated IT as a support. In the past, IT systems were developed with computer focus in mind; the computer based system was the main interest. The task is aimed at finding the best solution. The past trends run behind a full scale development in order to develop the whole IT system. This meant that the requirement specification had to be completed and manipulated before the implementation process. It better served for large investments in IT systems. Present trend The current trend is more based on the network approach; it is developed through industrial marketing within the business region (Vasilecas et al, 2006). Different stakeholders establish strong networks within companies. This approach involves the construction of information systems development methodologies and outsourcing systems approach. The present trend model is all about the business modelling also referred to as the enterprise modelling. This means that models are used to understand and change business operations and integration with the information technology systems in companies. There is more emphasis on business needs and commercial effects than analyzing information flows. In the present trend, information technology systems are viewed in a broader sense as a means of making a meaningful process of an organization. The techniques developed under the current trend of process view include business process reengineering, as well as the process management. Aspects of activities can be modelled together with the logical order. Process view enlightens association of company functions and triggers the initiation of different tasks in business. In this regard, business information flows are considered an important platform for developing good firm structures. The present trend holds information technology as an enabler. There have been a lot of efforts to develop information in the systems that would generate business opportunities for the organization and hence strengthen market competition. Therefore, IT acts as enablers for change (Vasilecas et al., 2006). More IT additions are the innovations in multimedia fields. Here, internet and electronic commerce become the value enablers. In the current age, IT systems are developed with focus on organizations; there is an inter-focus between computers and people. In this case, information system development is concentrated on developing individual work tasks as well as communication patterns through the construction of IT solutions. The desired value is developed with focus on the organization. The present trend rallied behind a rapid form of development. Here, the systems are developed and launched faster in order to achieve immediate results. In this approach, prototyping systems are applied. Rapid prototypes developed provide a reality check for the future of a business. Prototyping provides clear information on what stands ahead for the business. Company management has recently advanced in its information systems. There are two different ways in which this has occurred; functional line and the technical line. The functional line develops company systems. These include customer relationship management, human resource management, business intelligence, and electronic commerce. The technical advancement incorporates the new technology with the developed systems. Examples of these are open programming, object oriented information, layers programming structure and system architecture (Gurin, 2014). System architecture is the most important aspect of information system advancement. As the organizational information systems are scattered and dispersed everywhere in the company, the servers are centralized. The basic elements that are found between the servers and the customers are the data base, the user and the application. All these are defined by the system architecture and depend on how the elements are distributed. Future trends ERPs have been developed to meet the needs of the big companies. In the recent times, software developers have been looking to extend markets by considering successful strategies to catch the market by developing systems with the following characteristics; lower license cost, lower implementation cost and software with open source. The future trends depend on the foreseeable market trends and challenges that need to be surpassed. They can also be classified into the functional tendencies and the technical trends. The functional tendencies point out new functionalities that are going to cover the information systems for the management of companies. Within the functional tendencies, there are trends to include functionalities of the system. Company information systems can be incorporated with other specific systems that cover specific needs. There is also the tendency to incorporate all possible functionalities. Future technical trends are related to the actual technical trends as they highlight open source software, host application service providers, and m-commerce. The future trend represents the multi-perspective approach. It’s a view that has evolved more recently within the information system development. It will be a major trend. Information system development is placed in a large context as part of organizational and cultural changes in organizations (Vasilecas et al., 2006). The future trend of information systems will be accelerated by the IT systems and will connect business processes from diverse perspectives. As Vasilecas says, “human-cantered and market-driven factors will heavily influence the development work” (2006, p. 30). Modelling based on the future trends focuses on how different inter-organizational information technology systems will be able to handle commercial application and web based businesses. The future trend will be geared towards service based operations in organizations. This will be an extension of information and business modelling. According to Kirikova (2002), information systems are getting more and more multimedia based and network based. The future system intends to guide IT systems in the best direction. This is achieved through specification of intentions behind developmental work. Current techniques are applied such as the SWOT and scoreboard analysis. The future trend holds the intention of making and developing methodologies that consider business objectives and general purpose of IT systems. The future trend holds and regards information technology as an essential part of the business mission and will provide a description of the managerial visions that would guide the developmental work towards more insistent IT systems. The future trend of information system development will be focused on people; the development orients a person as the main focus. The success of the system will be based on the effect on different actors. According to Vasilecas et al. “a people focus puts the human-cantered interest of ISD in the foreground with the motive for a better anchorage of deeper commitment to the IT- systems in organisations” (2006, p. 36). The future trend deploys the mechanism of evolutionary development whereby IT systems are distributed over a given phase of time. The new systems are delivered step by step. The idea is to have a continuously improving system, rather than a more risky ‘all at once’ strategy. M-commerce This is one of the technological advances that have been integrated into business information systems. E-commerce has been in use for quite some time, but it has now reached the point to be surpassed by m-commerce. According to Gomez, Serna and Badenes (2010) “the mobile technology is a new communication channel, that allows companies and people to always be connected and accessed to internet, regardless the place, date and hour” M-commerce can relay information about new services and advertisements. Knowledge and digital economy The new economy is different from the old economy in that it is based on hardware. The use of software defines the characteristics of the new economy. Looking at the definitions, digital economy has been defined by Bidgoli that it “involves conducting economic activities electronically, based on the electronic processing, storage and communication of information including activities that provide the enabling physical infrastructure and software” (2004, p. 478). The addition of the new knowledge adds value to the existing knowledge. According to Kehal and singh, “the current transition from the old economy toward the new economy is therefore a transition from the industrial age of making and consuming products to the information age creating and absorbing knowledge” (2005, p. 315). The driving force of the new economy is the revolution of information technology. The new economy is based on creating and disseminating knowledge and information and this is accelerated by the convergence of information technology, as well as the communication technology. The digital economy has emerged to become a knowledge economy (Malecki and Moriset, 2007). The knowledge economy is a source of innovations and economic growth that have made use of the benefits of information technology. This has led to rapid reduction in costs of processing, storing and sending information. The aim of a knowledge based economy is to decisively handle knowledge in order to meet the existing requests of a business or organization. Knowledge management is critical for the success of an organization. An innovation in economical field is as a result of sharing and exchange of information. Knowledge sharing is enhanced by the possibilities provided by technology. A digital economy is based on electronic transaction of goods and services (Georgieva and Zia, n.d.). The digital economy is transacted through the internet and web based technologies therefore effectiveness and security are very essential. The digital economy is based on technological developments especially those related to digital communication and information. They are the key components in the creation of a digital economy. The socio-economic changes have equally been influential in adoption of new technologies and have been adopted by people of all ages (Raisinghani, 2004). An all cases, digitalization alleviates the importance of knowledge in business perspective and makes the spread of information more fast and reliable. Open and big data The emergence of big and open data applications is yet another phase of the ongoing information revolution and resembles the ongoing economic transitions. The concept of open data is simple; it’s a public data either from government or other sources and is available for access by anyone. For example, accessing a Global Positioning System on a smart phone is a way of enjoying the open data. The free data can be used to launch business ventures, solve strategic problems and provide kinds of business intelligence. Gurin (2014) suggests that the open data is currently leading us into the new world and is becoming a secret for the success of businesses across the world. The revolution of open data systems is leading us into the new territory. The databases are now open for the general public view; this helps investors to analyze risks and seek better business opportunities. Data has become a key asset for the economy in every field. Be it geographical, statistical, health transport or research, data is very important. The big data leads to innovations in technology, development of tools and new skills. Big data has been defined by the European commission as large amounts of data generated at a very high rate by a number of diverse sources; it is usually defined by 3V’s, which stand for volume, velocity and variety. This data can be generated by machines or people. The idea of opening up and providing ease of access to data benefits both the data holder and the user in many ways. It makes it easy to rediscover the value and purpose of data through the recombination of other sources. Information can be found long after it has been utilized. There is enhancement of innovation due to the unlimited accessibility to data. Other benefits of big and open data include feedback gain and increase in transparency. The key principle of open data philosophy is an all through availability of data. Unless there is some need for restriction, the data is open by default. Restriction could be as a result of concealing privacy, national security concerns and protecting commercial confidentiality. In order to estimate the impact of big and open data, there are forces that affect the economy on the aggregate level. Big and open data is expected to increase productivity and manufacturing services. These increases from business process efficiency. There is improvement of competition as a result of reduced business barriers due to opened data for public access. There is an aspect of improved allocation of production factors that result from better decision making and data management processes. The EMEA report shows that by 2020, big and open data will have improved European GDP by 1.9% (“Center for European Strategy,” n.d.). A nation with more advanced technology is expected to advance more than those who lag behind (“Center for European Strategy,” n.d.). Big data revolution offers an opportunity for micro economy as well as macro economy growth; this allows the economists to develop robust economic analysis. Conclusion Information systems and their application in company management have evolved rapidly and have been incorporated into the market as well as the new technologies. Software applications have developed from small programs to bigger ones within a short period of time. At the beginning, information systems were developed to serve accounting problems but recently, enterprise resource planning has controlled all the information an organization requires, both internally and externally. In the last few years, new advances have also been introduced into the systems. There is the aspect of functional requirements and new technologies. Designers are continually developing systems to improve company management. These include the designs of systems for the foreseeable trends with both technical and functional improvements. The functional trend is expected to integrate new features so as to improve and optimize current features. The technical trend has foreseen the inception of m-commerce and it is expected that further trends would modify some processes from the company. All these ensure that the company is available for the users at any given time. In order that a management system is maximized and improved beyond its current trend, it needs to be adapted to mobile devices. Although this needs that several factors be considered, it is satisfactory to say that the current technology has reached a new level. The companies have the chance to optimize their resources and capabilities. References Bidgoli, H., 2004. The Internet Encyclopaedia. New Jersey: John Wiley & Sons. Cassidy, A., 2005. A Practical GHuide to Information Systems Strategic Planning-Second Edition. Florida: CRC Press. European Commission, n.d. Digital Agenda for Europe; a Europe 2020 initiative. [online] Available at: [Accessed 14 October 2014]. Georgieva, L. and Zia I., n.d. Knowledge Management in Digital Economy. MACS, Heriot-Watt University. [online] Available at: [Accessed 14 October 2014]. Gomez, H. G., Serna, M. D and Badenes, R. F., 2010. Evolution and Trends of Information Systems for Business Management: the M- Business. A Review. DYNA, 77 (163). [online] Available at: [Accessed 14 October 2014]. Gurin, J., 2014. Open Data now: the Secret to Hot Start-ups, Smart Investing, Savvy Marketing, and Fast Innovation. New York: Mcgraw Hill Professional. Kehal, H. S. and Singh, V. P., 2005. Digital Economy. Hershey, PA: Idea Group Inc (IGI). Kirikova, M., 2002. Information Systems Development. Dordrecht: Springer Science & Business Media. Malecki, E. J. and Moriset, B., 2007. The Digital Economy. Oxon: Routledge. Olson, D, L. and Kesharwani, S., 2010. Enterprise Information Systems. London: World Scientific. Raisinghani, M. S., 2004. Business Intelligence in the Digital Economy. Hershey PA: Idea Group Inc (IGI). Vasilecas, O., 2006. Information Systems Development. Dordrecht: Springer Science & Business Media. Warsaw Institute for Economic Studies, n.d. Big and Open data in Europe. Centre for European Strategy. [pdf] Available at: [Accessed 14 October 2014]. Wigand, R. T. et al., 2003. Introduction to Business Information Systems. 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