Assignment of management information technology

Topic:-

Role of information system in business today

Submitted by:-

Madiha bhatti (3043)

Sumaira razzaq (3067)

Shiza rubab (3065)

Saba afzal (3056)

Sadaf liquat (3059)

Hira Ayesha (3025)

Submitted to:

Mam maria shahid

University of education bank road campus Lahore

The Role of Information Systems in Running the 21st Century
Organization

Introduction:
Management Information Systems (MIS) focus on the use of Information and
Communication Technologies (ICT) in managing organizations. In the 21st century almost all
organizations use Information and Communication Technologies to efficiently manage their
operations, to help managers make better decisions and achieve competitive advantage, and
to facilitate seamless internal and external communications with their employees,
customers, partners, and other stakeholders.

Businesses Pre-Information Systems

Until the 1990s, before the widespread adoption of personal computers and the Internet,
companies were using information systems to manage data processing and record-keeping
activities associated with business transactions like maintaining the general ledger (book
keeping), payroll, billing, inventory management, etc. The focus was mainly on maintaining
files and databases related to day-to-day operations. Communications, both internal and
external, relied on paper, telephone, faxes, and other analogy media. Information systems
have evolved over the last 40 years, including the move from the mainframe computer of
the 1970s to personal computers becoming an integral part of the tracking and
organizational process in the 1980s. The arrival of the mainstream internet in the 1990s
expanded business capabilities and the role of information systems to a global system of
interaction.

Today, the main focus of companies is to stay globally competitive by leveraging the
capabilities of modern information and communication technologies (ICT). Companies can
use ICT to provide products & services of the highest quality at affordable prices and top-
rated customer service, and help the companies to enter new markets through e-commerce.
Globalization, collaboration, and integration have become the new drivers in this
competitive arena. To remain competitive, companies are investing in modern information
systems like Enterprise Resource Planning (ERP) software, which integrate the different
functional areas of the business, and provide consistent real-time data for fast decision
making. ERP systems help companies manage their operations seamlessly across the globe.
Companies Modern Day Use of Information Systems

In the past when a company received a customer order, whether it was for a service
requested or for a product purchased, the order needed to go through a process of paper-
based workflow that was passed along to different departments, inbox-to-inbox. Throughout
this process, the order often had to be re-typed as it passed through various departments,
increasing the potential for human error. There was no accurate account order status
because there was no official tracking device to alert each department. In order to retrieve
order status information, customers were frequently directed to contact the companys
warehouse for manual research!

Today, companies have eliminated the inaccuracy of paper-based tracking by implementing

ERP systems. In a recent study conducted by Panorama Consulting Solutions, 63 per cent of
companies used their ERP software to eliminate inefficiencies in processes such as order
tracking. Instead of standalone computer systems, ERP uses a unified program that links
various functional departments such as finance, HR, manufacturing, warehouse, planning,
purchasing, inventory, sales, and marketing. While each department may have its own set of
software modules, the software is interconnected so that information can be shared
throughout the organization. Once one department is finished updating and processing the
order, it is automatically routed to the next department so that everyone is alerted to
changes made.

Adopting the Global Market

Many businesses have begun to participate in the global market, as it presents a chance for
greater revenue and larger business prospects.

Already, the global information systems market has seen consistent demands from several
businesses. The challenges vary depending on the size of businesses. For smaller businesses,
controlling operations and storing information are less complicated. As businesses grow,
especially those intersecting with global relations, information systems are used to manage
operations accurately without growing the number of employees. The growing supply chains
require that software solutions be used in the following sectors:

Web-based ordering

Customer relationship management

Product configuration

The Future of Information Systems

As companies try to reduce costs, improve productivity, employers are looking to ERP
systems to help them grow and remain competitive globally. Information systems have
enhanced productivity for businesses. A career in managing information systems is ideal for
those looking to advance in a Fortune 500 company. As businesses and organizations today
require more and more technical skills, companies are looking for employees who will help
manage and operate the various information-based tools.

Among the many degree and certificate programs available online at The University of
Scranton are the two programs pertaining to Enterprise Resource Planning (ERP). These
programs provide hands-on experience in utilizing SAP ERP, the market leader in ERP
software today. The ERP programs offered at The University of Scranton are: (i) a stand-
alone, 4-course Graduate Certificate program; and (ii) an ERP specialization within the MBA
program.

THE ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY.

Information technology and systems have revolutionized firms and industries, becoming the
largest component of capital investment in the U.S. and many industrialized societies.
Investment in information technology accounts for approximately 50 per cent of all capital
invested in the United States.

Information systems are transforming business and the visible results of this include the
increased use of cell phones and wireless telecommunications devices, a massive shift
toward online news and information, booming e-commerce and Internet advertising, and
new federal security and accounting laws that address issues raised by the exponential
growth of digital information.

The Internet has also drastically reduced the costs of businesses operating on a global scale.
These changes have led to the emergence of the digital firm, most of the firm's significant
business relationships with customers, suppliers, and employees are digitally enabled and
mediated. Core business processes, or logically related business tasks, are accomplished
through digital networks.

Key corporate assets (intellectual property, core competencies, and financial and human
assets) are managed through digital means. Business responses to changes in their
environment are enhanced through digital communications, allowing for time shifting
(business being conducted 24hrs x7day) and space shifting (business being conducted
globally or beyond traditional geographic boundaries).

Information systems are essential for conducting day-to-day business in the U.S. and most
other advanced countries, as well as achieving strategic business objectives. Some firms,
such as Amazon and E*Trade, would be non-existent without information systems.
Some service industries, such as finance, insurance, and real estate industries, could not
operate without information systems. The ability of a firm to use IT is becoming intertwined
with the firm's ability to implement corporate strategy.

Information Systems in Business

Businesses today face new challenges in structuring their organizations and managing their
operations to meet global competition. Goods and services are increasingly produced by
world-wide networks of firms, using modern information technology to share information
and coordinate activities. In this information-centric environment, companies do not
become competitive just by amassing physical capital: they must make investments in
systems and technologies that maximize the value of their Information assets. The principles
and techniques covered in the MIS departments programs in information systems (IS) and
supply

Chain management (SCM) are crucial as companies work to define and execute a
twenty-first century business strategy. Because of the imperative for companies to
invest in information systems, there are more people in the U.S. working in
information technology today than ever before
Even more than at the height of the so-called dot-com era. The career prospects are
outstanding for students who learn how IS and SCM investments interact with
business strategy, and who can apply the best tools and technologies to the planning
and execution of business processes. At the executive level, these skills are
fundamental to the Chief Information Officer (CIO) position, which is

Responsible for assuring alignment between a firms IT strategy and its overall

Business strategy; and the Chief Operating Officer (COO) position, which is responsible for
maximizing the value captured from a firms activities. At the entry level, there are
challenging and rewarding opportunities in systems analysis and design, project
management, database administration, network management, and information security.

Fundamental role of information systems in business

Support of business processes and operations.

Support of decision making by employees and managers.
Support of strategies for competitive advantage.

Strategic role of information system in business

1. Support business process and operations
 IS helps manager to conduct their daily activities and functions properly? E.g. in bank
different activities like account creating, withdrawal of money, statement generation etc.
take place. IS help mangers to conduct such activities accurately and timely manner with the
help of software

VITALITY OF INFORMATION SYSTEM IN BUSINESSADITYA INSTUTE OF

MANAGEMNT AND TECHNOLOGY
2. Support decision making for employees and managers

IS can simply be defined as input -> process -> information. IS takes data as input and
processes them and generate information. Managers can use this information for the
betterment of their organizations. E.g. IS cananalyze existing historical data about customers
in bank and generate Informations like good customers, bad customers etc. Managers can
Use this information while deciding to provide loan for new customers.

3. Support in making strategic decision for competitive advantages

IS can give information like which items to launch in which location byanalyzing data
collected from different sources such that company can have advantage by using these
information over their competitors. IS also can help business houses in conducting their
business process differently than their competitors.

Information systems so important in business today

Six reasons why information systems are so important for business today include:

1. Operational excellence

2. New products, services, and business models

3. Customer and supplier intimacy

4. Improved decision making

5. Competitive advantage

6. Survival

The emergence of a global economy, transformation of industrial economies, transformation

of the business enterprise, and the emergence of digital firm make information systems
essential in business today. Information system is a foundation for conducting business
today. In many businesses, survival and the ability to achieve strategic business goals is
difficult without extensive use of information technology. There are six reasons or objectives
why businesses use information system:
1. Operational excellence.
Business improves the efficiency of their operations in order to achieve higher profitability.
Information systems are important tools available to managers for achieving higher levels of
efficiency and productivity in business operations. A good example is Wal-Mart that uses a
Retail Link system, which digitally links its suppliers to every one of Wal-Mart's stores. As
soon as customer purchase an item, the supplier is monitoring the item, knows to ship are
placement to the shelf.

2. New products, services, and business models.

Information system is a major tool for firms to create new products and services, and also an
entirely new business models. A business model describes how a company produces,
delivers, and sells a product or service to create wealth. Example: Apple Inc. transformed an
old business model based on its iPod technology platform that included iPod, the iTunes
music service, and the iPhone.

VITALITY OF INFORMATION SYSTEM IN BUSINESSADITYA INSTUTE OF

MANAGEMNT AND TECHNOLOGY
3. Customer/supplier intimacy
. When a business serves its customers well, the customers generally respond by returning
and purchasing more. This raises revenue and profits. The more a business engages its
suppliers, the better the suppliers can provide vital inputs. This lower cost. Example: The
Mandarin Oriental in Manhattan and other high-end hotels exemplify the use of information
systems and technology to achieve customer intimacy. They use computers to keep track of
guests' preferences, such as their preferred room temperature, check-in time, and television
programs.

4. Improved decision making.

Many managers operate in an information bank, never having the right information at the
right time to make an informed decision. These poor outcomes raise costs and lose
customers. Information system made it possible for the managers to use real time data from
the marketplace when making decision. Example: Verizon Corporation uses a Web-based
digital dashboard to provide managers with precise real -time information on customer
complains network performance. Using this information managers can immediately allocate
repair resources to affected areas, inform customers of repair efforts and restore service
fast.

5. Competitive advantage.
When firms achieve one or more of these business objectives (operational excellence, new
products, services, and business models, customer/supplier intimacy, and improved decision
making) chances are they have already achieved a competitive advantage. Doing things
better than your competitors, charging less for superior products, and responding to
customers and suppliers in real time all add up to higher sales, and higher profits. Example:
Toyota Production System focuses on organizing work to eliminate waste, making continues
improvements, and TPS is based on what customers have actually ordered.

6. Day to day survival

. Business firms invest in information system and technology because they are necessities of
doing business. These necessities are driven by industry level changes. Example: Citibank
introduced the first automatic teller machine to attract customers through higher service
levels, and its competitors rushed to provide ATM's to their customers to keep up with
Citibank. Providing ATMs services to retail banking customers is simply a requirement of
being in and surviving in the retail banking business. Firm turn to information system and
technology to provide the capability to respond to these. Information systems are the
foundation for conducting business today. In many industries, survival and even existence
without extensive use of IT is inconceivable, and IT plays a critical role in increasing
productivity. Although information technology has become more of a commodity, when
coupled with complementary changes in organization and management, it can provide the
foundation for new products, services, and ways of conducting business that provide firms
with a strategic advantage.

The Importance of Information Technology In Business Today

Information technology drives innovation and innovation is the path to business success.
Innovation in business has the same impact that steam had on the industrial revolution.

In fact, its hard to imagine any business that has not benefited from the digital revolution.
Even something as hands on as agriculture uses computers. Farmers use computers for
production records, financial planning, research on technical issues, and procurement.

Nowadays the formula for business success is simple: drive innovation with information
technology. So, the first thing start-ups in any industry try to figure out is how to make smart
IT recruiting choices. Without a backbone of information technology, a business is not going
to go far.

The Love Affair with Innovation

We like to imagine that the human race has always been innovative. But innovation was a
slow and steady affair for most of the 20th century. It was the work of individual genius or
think tanks. For the most part, brilliant people innovated and the public slowly adopted the
idea. The mainstream love affair with innovation began with the invention of the computer.
It attained momentum with the birth of the Internet.

In the 1980s, innovation was not necessary for business success. A business could do well
just deploying a proven business model. Efficiency was not a prime directive.
Following tradition was a sensible way to stay in business. A store owner, for example, was
content with using a cash register similar to the one invented by James Ritty in 1879 to
prevent his employees from pilfering his saloon profits in Dayton, Ohio.

All this changed on 6 August 1991, a little-remembered date, when the World Wide Web
went live to the world. There was hardly a mention of it in any newspaper on the planet.
Most people around globe had no idea that the Internet existed. Although Tim Berners-Lees
invention changed the world as we know it, it was only toward the end of the decade that
the Internet became popular.

The Rise of Innovation

The rise of innovation can be traced to the human race getting smarter. According to the
Flynn Effect, general IQ has begun to rise since the 1930s. The average IQ has risen from 80
points to 100 points.

While innovations in travel and multimedia improved collective intelligence, these were
mainly passive forms of learning. Today, computer applications and the global brain have
switched on active learning and improved how fast people learn new things.

Innovation in Business
Information technology fosters innovation in business. Innovation results in smarter apps,
improved data storage, faster processing, and wider information distribution. Innovation
makes businesses run more efficiently. And innovation increases value, enhances quality,
and boosts productivity.

Innovation through information technology has created the following radical changes in
business:

Online shopping is more efficient than shopping in a store.

Digital marketing is more efficient than high cost newspaper, television, and radio
advertising.
Social networking is more efficient than going to clubs.
VoIP communication is more efficient than legacy telephony.
Cloud computing is more efficient than a private computer network.

Importance of Information Systems in an Organization

To gain the maximum benefits from your company's information system, you have to exploit
all its capacities. Information systems gain their importance by processing the data from
company inputs to generate information that is useful for managing your operations. To
increase the information system's effectiveness, you can either add more data to make the
information more accurate or use the information in new ways.

Communication
Part of management is gathering and distributing information, and information systems can
make this process more efficient by allowing managers to communicate rapidly. Email is
quick and effective, but managers can use information systems even more efficiently by
storing documents in folders that they share with the employees who need the information.
This type of communication lets employees collaborate in a systematic way. Each employee
can communicate additional information by making changes that the system tracks. The
manager collects the inputs and sends the newly revised document to his target audience.

Operations
How you manage your company's operations depends on the information you have.
Information systems can offer more complete and more recent information, allowing you to
operate your company more efficiently. You can use information systems to gain a cost
advantage over competitors or to differentiate yourself by offering better customer service.
Sales data give you insights about what customers are buying and let you stock or produce
items that are selling well. With guidance from the information system, you can streamline
your operations.

Decisions
The company information system can help you make better decisions by delivering all the
information you need and by modeling the results of your decisions. A decision involves
choosing a course of action from several alternatives and carrying out the corresponding
tasks. When you have accurate, up-to-date information, you can make the choice with
confidence. If more than one choice looks appealing, you can use the information system to
run different scenarios. For each possibility, the system can calculate key indicators such as
sales, costs and profits to help you determine which alternative gives the most beneficial
result.

Records
Your company needs records of its activities for financial and regulatory purposes as well as
for finding the causes of problems and taking corrective action. The information system
stores documents and revision histories, communication records and operational data. The
trick to exploiting this recording capability is organizing the data and using the system to
process and present it as useful historical information. You can use such information to
prepare cost estimates and forecasts and to analyze how your actions affected the key
company indicators.

Advantages and disadvantages of information systems

The competitiveness of most companies is in a large degree based on the effective use of
information technologies and information systems especially. The main purpose of
information systems are provide the right information to the right people at the right time. It
is used to track, store, manipulate and distribute the information from gathered data to
appropriate persons when necessary.

In this post I thought to think about what advantages and disadvantages can bring to the
businesses and society the integrating information systems. Of course, without any doubt
the efficient usage of information systems will give a lot opportunities to the companies and
advantages to their business. Sometime it can make kind of new job environments but on
the other hand it can make some group of employees unemployed.

Advantages
Communication with help of information technologies the instant messaging, emails,
voice and video calls becomes quicker, cheaper and much efficient.

Globalization and cultural gap by implementing information systems we can bring

down the linguistic, geographical and some cultural boundaries. Sharing the information,
knowledge, communication and relationships between different countries, languages and
cultures becomes much easier.

Availability information systems has made it possible for businesses to be open 247 all
over the globe. This means that a business can be open anytime anywhere, making
purchases from different countries easier and more convenient. It also means that you can
have your goods delivered right to your doorstep with having to move a single muscle.

Creation of new types of jobs one of the best advantages of information systems is
the creation of new and interesting jobs. Computer programmers, Systems analyzers,
Hardware and Software developers and Web designers are just some of the many new
employment opportunities created with the help of IT.

Cost effectiveness and productivity the IS application promotes more efficient

operation of the company and also improves the supply of information to decision-makers;
applying such systems can also play an important role in helping companies to put greater
emphasis on information technology in order to gain a competitive advantage. IS has a
positive impact on productivity, however there are some frustrations can be faced by
systems users which are directly linked to lack of training and poor systems performance
because of system spread. Orange cartoon between plus and minus. White background.

Disadvantages
Unemployment and lack of job security implementing the information systems can save a
great deal of time during the completion of tasks and some labour mechanic works. Most
paperworks can be processed immediately, financial transactions are automatically
calculated, etc. As technology improves, tasks that were formerly performed by human
employees are now carried out by computer systems. For example, automated telephone
answering systems have replaced live receptionists in many organizations or online and
personal assistants can be good example also. Industry experts believe that the internet has
made job security a big issue as since technology keeps on changing with each day. This
means that one has to be in a constant learning mode, if he or she wishes for their job to be
secure.

Dominant culture while information technology may have made the world a global
village, it has also contributed to one culture dominating another weaker one. For example it
is now argued that US influences how most young teenagers all over the world now act,
dress and behave. Languages too have become overshadowed, with English becoming the
primary mode of communication for business and everything else.

Security issues thieves and hackers get access to identities and corporate saboteurs
target sensitive company data. Such data can include vendor information, bank records,
intellectual property and personal data on company management. The hackers distribute
the information over the Internet, sell it to rival companies or use it to damage the
companys image. For example, several retail chains were targeted recently by hackers who
stole customer information from their information systems and distributed Social Security
numbers and credit card data over the Internet.

Implementation expenses to integrate the information system it require pretty good

amount of cost in a case of software, hardware and people. Software, hardware and some
other services should be rented, bought and supported. Employees need to be trained with
unfamiliar information technology and software.

Information systems contribute to the efficient running of organizations. Information

systems are showing the exponential growth in each decades. Todays information
technology has tremendously improved quality of life. Modern medicine has benefited the
most with better information system using the latest information technology. By
understanding and learning what advantages and disadvantages it can bring, we have to try,
believe and put an effort with our best to make that existing advantage much better and
navigate the disadvantages to have a less impact on organizations and society.

Reference
http://smallbusiness.chron.com/importance-information-systems-organization-69529.html

http://murigibenson.blogspot.com/2012/06/role-of-information-systems-in-business.html

http://elearning.scranton.edu/resource/business-leadership/the-role-of-information-
systems-in-increasing-productivity

http://www.business2community.com/tech-gadgets/importance-information-technology-
business-today-01393380#9a4Fk