Influence of the Information System on the Decision Making Process - Essay Example

CHAPTER 2: LITERATURE REVIEW

2.0. Literature Review

2.1. Introduction to Literature Review

In the modern world, innovations in technology are rapidly changing. With more technological innovation, more businesses are being created. The more the number of businesses in the market, the more the technology comes to their rescue by enabling them to make things work easier and faster hence increasing productivity and customer relations. Technology and business have existed in a symbiotic relationship for many years; thus, this gives the certainty that their relationship will always exist for many years to come.

Since the days of prehistoric times, businesses have been existing, and they have been around for years. However, business in those eras may have started with nothing more than exchanging goods for goods. Since then, the business has gone through massive changes into an extensively complex activity. Despite this, none of these changes being witnessed in the business world would have been realized without the positive impact of technological input. Without the incorporation of technology in the business, and if the technology use were to be taken away abruptly from the business world, the major global organizations would not live to exist, and most of them would collapse. This is because many businesses in this century cannot operate their transactions and daily operations without using technology.

For many years, the use of technology has greatly impacted the business, trade, and commerce. The introduction of information technology led to the revolution of several traditional models in business hence changing the business landscape. The view of a different business perspective was made possible by the introduction of technology. Technology introduced new ways of approaching scenarios in business and also gave greater efficiency in running business operations. Examples of the areas where technology has been critical in changing the business operations include the system of sales, ICT in organization management, the system of accounting, and other day-to-day activities of the business that appears complex. Without technology, the modern world would not appear the way it looks. It is not easy to imagine businesses going back to conduct their operations manually. Many businesses will be hit hard, which will take them about a century or more to reach their current operational levels.

In the contemporary world, the use of technology in business has become a common thing. However, in the past, this was not the case. In the old days, transactions in businesses were slow and not as fast as they witnessed today. The pace at which the process of conducting business was slow since businesses were operating manually, and people had to do work activities using their hands. The absence of today's faster tools in conducting business activities means that workers couldn't think of conducting any business transactions on the spot. These further made individuals embrace the use of technology in business. Since then, technology, together with the services of information technology, has become an important component for any kind of business.

2.2. Informational Technology in Business- A Historical Perspective

Information technology is composed of interrelated components that perform collection, storage, and distribution of information to help make decisions and controlling organizations. Information technology can be applied in various areas in man organizations, including human resources, manufacturing, security, and finance. In business, information technology can be used smoothly to manage activities through computers and software programs.

Information technology has been existing for many years. It can be argued that as long as people have existed around, information technology has always been used with them. This is because people were always finding means of communicating through the available technology at that period. The history of the use of technological input in running businesses can be traced for a while. The pioneers of information technology were among the initial people to incorporate technology's use in business operations. The incorporation began with a scratch plow that was used farming and irrigation. This was a breakthrough since the incorporation yielded dividends by helping in having extra food supply. The pioneers used this extra produce for trading. The introduction of the scratch plow was a major advancement ion technology for that era.

The upsurge of advancements in technology was seen at the start of the nineteenth century. During this era, individuals began using innovations and other tools to conduct businesses. The incorporation of information technology was a great success since it helped them increase the business process, thus allowing them to explore new business avenues. The electronic period of the 1940s is regarded as the era of information technology that the modern world is enjoying. It started with the introduction of electronic equipment, such as computers. At the beginning of computing, several operations of computers were majorly reduced to basic calculations. This because the programs used were primitive and had to communicate with the computer elements directly.

As known in the modern world, information technology would not have occurred without the development of the natural programming language. The early period of programming involved using codes that were just numbered. With the evolution of computers, it made it possible for the concept if interpreter. This would translate the programs that were written using a set of the basic form of instruction hence advancing computing. This later created the field of information technology.

The entry of computers in the environment of business led to the advent of information technology. The introduction of online solutions and the internet changed the business world abruptly. It helped produce numerous opportunio6toies for business growth and later became a necessity for any business within a very short period. Information technology in business is undoubtedly a vital part of business assets since it is shaping and reshaping how businesses have been conducted in the past. Today, several businesses are conducted online, and most transactions are done using technological gadgets such as mobile phones from any part of the word without encountering any problem.

2.3.Trends in the uptake of IT in business (compare developed and developing countries)

Technological innovations have emerged as the talking point on how growth and productivity can be rekindled in developing and advanced countries. Digital technologies have become prominent in determining the growth of the economy, security if the country, and a competitive edge internationally. Today, most developed countries are at the forefront of the world landscape in the innovation of technology and information. Their growth and competition in the global field are due to dynamism in business, strong pillars in their institutions, mechanisms of finances, and vibrant ecosystem for innovation. In developed countries, innovation is the key feature in their competitiveness. It has catapulted the countries to dominance in the field of information technology since the era after the industrial revolution. The developed countries lead the rest of the world by coming up with technological advancement and leveraging the maximum capacity of production in their digital innovation technologies in gaining a strategic advantage in market competition.

Also, the developed countries have invested deeply in their information technology such as software, hardware, and internet. The impact of information technology in developed countries is measured in terms of information technology-capital services being part of the country's gross domestic product. In this front, many developed countries have been able to secure a worldwide front to maintain their strong level of competitiveness as compared to the developing countries. The developed countries have shown a positive impact from the information technology on the economy, leading to transformation in their manufacturing and business technology sector. Therefore, in developed countries, the information technology industry increases its dominance faster within the sector of products and services offered. This is largely being powered by the sector of technology that is vibrant.

On the other hand, there has been little progress in incorporating information technology into daily business activities in developing countries as compared to developed countries. However, over the past years, there has been a positive increase in opportunities for developing countries to embrace the use of information technology. The incorporation of information technology by the developing countries will help in tackling several ranges of problems in the area of social, health, and economy. Improving accessibility to information technology will enable effective communication, thus helping to play a critical role in achieving the set millennial development goals like poverty eradication, fighting diseases, and achieving universal and free education. Also, the embrace of information technology by developing countries will be key in improving the accessibility to information. This will be essential to help in tackling several problems of socio-economy and, most importantly, the eradication of poverty.

On the other hand, the advantages and benefits of information technology are not distributed uniformly across societies in developing countries. In these countries, there is a massive digital divide that has resulted from unequal information accessibility leading to a widening gap of inequality.

However, despite the poor technological adoption in developing countries, there have been some intriguing innovations in these countries that have attracted developed countries' attention. Such innovations include MPESA and Grameen AppLab. Though these innovations are rare to come across in the developing countries, they have proved to be a success and impressive. The innovations, MPESA, have helped shape the business activities since it is used as microfinance, transactions of payments from any part of the country, and storage place for money. Thus, this innovation has shaped the business operations and contributing positively to the growth of the country.

2.4. Impact of IT on economies

The progress witnessed in the social and economic sectors in the last century is because of the input of information technology. Information technology has played a key role in the growth of the economy as well as social welfare. Since the introduction of information technology, it has been witnessed playing a crucial role in the socio-economic development. Therefore, any change in technology is seen as an essential piece of the strategies of development globally. Therefore, the processes leading to changes in technology has been attracting intense interest in the economic sector.

The impact of information technology on the economy has been a subject of debate for years. For the economists who study business, the identification of how information technology impacts the economy is important. This is because information technology and its related changes are likely to have a big effect on the economy's growth in the coming years. Today, the use of information technology is nearly applied to all organization's activities. Hence, if the cost of using information technology decreases, there is a possibility of substantial growth and gains in the economy since the budget allocated for information technology can be spent on other organizational inputs hence improving the services and production rate.

Many business are depending on information technology to run their daily operations and creating a competitive advantage; there are significant gains that are achieved that are not easy to measure. Furthermore, in a larger context, information technology has a wider implication on economic progress. This is because it has helped open new communication channels like the internet and broadband applications, thus providing several businesses with newer channels of reaching out to their customers.

Several scholars and economists have argued in the benefits of using information technology; it has become more apparent that several businesses are gaining a competitive advantage. It benefits the result of incorporating advanced technology. Also, there have been grea6t improvements made in the operations of businesses and the development of products through the organization's use of information technology. There is a likelihood that the consumers of the products and services being offered by organizations are also going to benefit from the use of higher technological advancement. These changes will be witnessed since the services that are going to be provided will be improved in many organizations from the use of technology. In the future, the changes in information technology are likely to expand the availability of services and products. This will further enhance the improvements of the standards of products and services being supplied to the consumers hence reducing time. When business operations are improved, it helps to contribute to positive economic growth in the end.

2.5. Cost-Benefit analysis of IT in business (look for several case studies)

Cost-benefit analysis is a systemic procedure that is used to measure the gains and losses in businesses. This tool is used to measure the relative desires of competition alternatives where the desires are constantly being measured in terms of economic worth to the whole society. The advantage of cost-benefit analysis is offering quantitative metrics to help organizations in their process of making decisions. According to---- in the cost-benefit analysis, viable alternatives are first identified then a detailed analysis is then performed. They include the analysis of the cost, benefit, and risks. Though each of these separated analyses has different aims, the results obtained from the analyses should undergo a thorough collective evaluation to identify any recommended alternative.

In a study conducted by……, the section cost analysis provides the organization estimates of the cost of the life cycle of the available alternatives for delivering the information technology solutions to the business to help in meeting the needs of the business project. Assumptions drive the model that helps to calculate the cost since the cost analysis is a projected examination of the costs life cycle. The section of analyzing the benefits evaluates the benefits that are anticipated for all the available alternatives. The benefits are both qualitative and quantitative. The analysis of the benefits of quantitative helps to evaluate the benefits that are potential to a certain alternative following a similar approach that is driven by assumption and employed in the analysis of the cost. The analysis of the qualitative benefits assumes that the benefit is likely to get delivered for the alternative.

Moreover, the analysis of the risk section involves evaluating elements that are both qualitative and quantitative. The analysis of risk that is quantitative uses an approach that is driven by assumptions. In contrast, qualitative risk analysis involves then the possibility of a viable alternative to offer a solution to help in meeting the business needs of the project. The outcome of the analysis is vital in the decision-making process of the organization.

The elements of costs for any big project is based on the projected costs needed to complete the information technology project over the life cycle that is defined. The major elements of costs related to time are the services and the products of the organization. These elements can be decomposed into finer details required by the model of estimating the cost to facilitate approval of the project by the major stakeholders.

2.6. IT in business beyond the 21st century

The world is changing fast. One may not be able to notice or feel it at the moment. However, there is a definite shift that is taking place. As the world is changing, so does the approaches of businesses. Hence, the business that will be operating beyond the 21st century will have to match the changes. Because of the changes taking place so rapidly, the future business outlook will slowly be declining. Individuals are afraid that in the future, with increased automation of various job activities, many will lose their jobs. With these anticipated changes in this century and beyond, many orga there will be a need for many organizations to impart new skills to their employees to run the operations. These massive changes in the operations of the business will drive the need to have changes in workplaces and organizations.

Currently, machine learning and artificial intelligence are taking place. This is forcing the business world to shift with the introduction of these new technological innovations. The business world is undergoing massive changes. Today, we have the LinkedIn impersonal messages, cha-bots, and the increasing need to be present online to reach out to more customers. Many competitors are using automation in the businesses, and these technological uses are causing a major shift in the market.

In the future, we are expecting a new wave of new technology. Several technologies off the future are currently undergoing testing such as virtual reality, augmented reality, and many others that can be deployed in various situations. Businesses and other organizations, such as those dealing with sales, have already started thinking about using these new technologies. Some of these new technologies are anticipated to have a fundamental impact on changing the lives of people and businesses.

The industries and organizations that are slow in adopting change are likely to be left behind in the future. It does not matter the kind of industry or organization that is being operated, change is taking place, and new technology is anticipated to come in the future. If an organization needs to survive the future test of information technology and innovations that are accompanied by it, then it has to get prepared to adopt the new changes immediately.

2.7. Identified gaps in Literature

In the study of information technology in businesses, most Literature is discussing the impact of technology and innovations in general without incorporating the aspect of information communication. Technology and information do accompany one another, and one cannot exist without the other. It is good to note that the era of technological innovation gave birth to communication hence leading to the field of information technology. The impact of information technology has been witnessed in every corner of the society form the banking system to education to the health sector, each experiencing different impacts. However, Literature chooses to explain the impact in general without considering the various sectors where information technology can be used to create a positive impact.

2.8.Literature Review Summary

The literature review discusses the influence of the information system in the organization's decision-making process. The paper indicates that the importance of information technology in business cannot be underestimated. The advent of information technology has changed the business landscape and how businesses are being conducted in the twenty-first century. These changes have been of great benefit to the social and economic growth. They have also contributed to the changes that are being witnessed in organizations' production of goods and deliverance of services. The technological gap between developing and developed countries is wide. The developed countries have adopted the use of technologies in most of their operations and are have majorly invested in information technology, unlike the developing countries. The poor adoption of technology in developing countries is leading to a massive digital divide in society. It is also noted that, with the rapid changes in the field of information technology, most of the current technological innovations are going to be obsolete in the future. Hence, organizations must brace new changes to stay alive in the coming years and beyond.

2.3.Trends in the uptake of IT in business (compare developed and developing countries)

Technological innovations have emerged as the talking point on how growth and productivity can be rekindled in developing and advanced countries. Digital technologies have become prominent in determining the growth of the economy, security if the country, and a competitive edge internationally. Today, most developed countries are at the forefront of the world landscape in the innovation of technology and information. Their growth and competition in the global field are due to dynamism in business, strong pillars in their institutions, mechanisms of finances, and vibrant ecosystem for innovation. In developed countries, innovation is the key feature in their competitiveness. It has catapulted the countries to dominance in the field of information technology since the era after the industrial revolution. The developed countries lead the rest of the world by coming up with technological advancement and leveraging the maximum capacity of production in their digital innovation technologies in gaining a strategic advantage in market competition.

Also, the developed countries have invested deeply in their information technology such as software, hardware, and internet. The impact of information technology in developed countries is measured in terms of information technology-capital services being part of the country's gross domestic product. In this front, many developed countries have been able to secure a worldwide front to maintain their strong level of competitiveness as compared to the developing countries. The developed countries have shown a positive impact from the information technology on the economy, leading to transformation in their manufacturing and business technology sector. Therefore, in developed countries, the information technology industry increases its dominance faster within the sector of products and services offered. This is largely being powered by the sector of technology that is vibrant.

On the other hand, there has been little progress in incorporating information technology into daily business activities in developing countries as compared to developed countries. However, over the past years, there has been a positive increase in opportunities for developing countries to embrace the use of information technology. The incorporation of information technology by the developing countries will help in tackling several ranges of problems in the area of social, health, and economy. Improving accessibility to information technology will enable effective communication, thus helping to play a critical role in achieving the set millennial development goals like poverty eradication, fighting diseases, and achieving universal and free education. Also, the embrace of information technology by developing countries will be key in improving the accessibility to information. This will be essential to help in tackling several problems of socio-economy and, most importantly, the eradication of poverty.

On the other hand, the advantages and benefits of information technology are not distributed uniformly across societies in developing countries. In these countries, there is a massive digital divide that has resulted from unequal information accessibility leading to a widening gap of inequality.

However, despite the poor technological adoption in developing countries, there have been some intriguing innovations in these countries that have attracted developed countries' attention. Read More