Information technologies (computers, networks and terminals) are increasingly regarded as strategic resources of an organization. In Proceedings of the Twenty-first International Conference on Information Systems, P. Weill, W. Orlikowski, S. Ang, H. Krcmar, and J. I. DeGross (eds. Arguably, the greatest benefit of information systems is their ability to give users the information they need to carry out tasks efficiently. For example, a company can integrate information systems with … The Sabre system developed by American Airlines provides the airline enormous competitive intelligence. Integration of all types of information on a common network with worldwide standards is the hopeful evolution of digital networks and terminals, and it seems to be nearing reality sooner than what we expected. For example, in the defense industry, alliances even among competitors are very common. Harvard Business Review editor Nicholas Carr even likened information technology to a new, necessary commodity, like electricity, in his 2003 article, “IT Doesn’t Matter.” A decade and a half later, companies that don’t invest heavily in business information technology may struggle to stay afloat. Strategic role of Information System • Strategic role of Information System involves using to develop products, services and capabilities that give a company major advantages over the competitive forces it faces in the global marketplace. Global business operations require that both time and distance barriers be eliminated or reduced between the organization, its suppliers, its customers, its shareholders and its people. Both of those conditions encourage greater use of information technologies. Business intelligence (BI) systems, for instance, can turn data into valuable insights. In the recent past, any business success has been pegged on the information technology quality that the business has employed and the capabilit… Some companies become the prime contractor and others participate as subcontractors in one project and reverse the roles in another defense project. Its automated software development system, which uses computers to write other computer programs, is working so well that DuPont has formed a separate organization to sell it to the outside world. Database management capabilities are extremely critical in this case. Technology Revolution. Globalization of Business Operations. A third way to use information technologies is for internal planning purposes. Four organization issues (mergers and acquisitions, downsizing and consolidation, market driven reorganization and crisis management) are responsible for the increasing importance of information technologies. This has been true in many large Japanese manufacturing companies, including Mitsubishi, Toyota, and Matsushita, where the suppliers virtually depend on the Japanese Corporations for their survival and growth. For example, telephone companies have computerized billing, account management, and operator services with the use of information technologies that result in significant cost savings. In summary, four areas of global business operations—global procurement, global marketing, global resources and global economy—are creating a need for information technologies to minimize or eliminate time and distance barriers (see Figure 4.). Information systems help a company make adequate use of its data, reduce workload and assist with compliance with various mandatory regulations. For example, at General Motors, it is reported that Roger Smith’s personal interest in greater use of computers and communications as a strategic resource led to the acquisition of EDS and Hughes. With constant reorganization, as well as increased mergers and acquisitions, top management recognizes the need for flexibility through compatible information technologies. 4. It is a massive change, and the consolidated data processing and telecommunications departments become a significant resource for top management attention. This kind of technology allows for faster, more accurate reporting, better business decisions and … Finally, as major industries mature and competition intensifies, they are reorganizing to become market driven. Since decision-making is the most important task performed by the management at different levels, information … These alliances can be a research consortium, co-development, shared manufacturing, marketing or support services. For example, manufacturing is driven less by parts and materials and more by customer demand. Next to the financial and airline services, I believe retailing is heavily influenced by global business operations. Portals, websites, ERP systems, planning systems, data warehouses, transactional systems – they are all 'Information Systems' – their purpose being to share information with the relevant people who need it, at the points they need it to cause action, which allow decisions to be made and for the business to function as it needs to. Other examples include Martin Marietta and TRW in the defense industry; Apple and Hewlett-Packard in computers and electronics; Archer Daniel Midland (ADM) and Kellogg in food processing; 3M and General Electric in general manufacturing; Merck and Abbott in pharmaceuticals; Nucor and Carpenter Technology in steel and metals; and Federal Express and American Airlines in the transportation industry. Information technologies began as single location centralized hardware products used primarily for cost control purposes. It can help businesses expand their operations into new areas, set goals, measure performance and improve overall productivity. In most advanced countries, industries are at the maturity stage of the life cycle. Strategic Information System is a system that provides the right information to the right people at the right time. Many believe that the way organizations manage information will increasingly determine their survival and growth in the future (Peter Drucker, “The Coming of the New Organization,” Harvard Business Review, Volume 88, January- February 1988, pp. ), Brisbane, Australia, December 2000, pp. A third fundamental role for information systems is management support in making decisions. And this is not limited to terminals. 3. This directly impacts information technologies. Information system (IS) should no longer be viewed in its traditional role, rather it should be used in terms of a strategic role for accomplishing IS based competitive advantages. Finally, information technology can be used for competitive intelligence. Some even believe that the high degree of stock market volatility and the recent stock market crash of 1987 are largely due to on-line computerized information technologies. These mergers and acquisitions require reorganization and rationalization of respective information technologies. Information systems are complementary networks that make data useful to corporate decision-making. This seems to be extremely critical in many highly perishable products such as fresh produce and fashion garments. Hotels and motels have significantly reduced their operating costs by computerizing guest reservations, billing and physical facilities. This is also true for the organization in charge of information technologies: both data processing and telecommunications functions are increasingly integrated and consolidated. The goal of such information systems is to provide relevant information to management so that it helps in its functioning. In today’s continuously changing and fast moving world, where customers’ requirements and preferences are always evolving, the only businesses that can hope to remain competitive and continue to function at the performance levels that can match their customers’ expectations are those that are going to embrace innovation. 22-34). There are different types of information systems and each has a different role. Small business and residence customers are now able to afford many information technologies because of low cost, high performance products and services. The Carson College of Business strives to provide Cougar graduates with the contemporary business skills, advanced management techniques, and principled ethical standards to make a positive impact on local and global business communities. It is also not surprising to see many consulting companies, such as Arthur Andersen, Boston Consulting Group, A.D. Little and others are invited to develop computerized planning tools and processes. Information systems when used for providing information to managers for their decision-making needs become a management information system. Management Information Systems (MIS) focus on the use of Information and Communication Technologies (ICT) in managing organizations. Information systems aid businesses in developing a larger number of value added-systems in the company. This can be as simple as global procurement of materials, components or products or as complex as fully integrated global operations. A strategic information system is not just a new competitive weapon in the corporate arsenal. In the old days, it required specialized technologies for voice, data and video communication, for example. The focus is at’ internal efficiency in operations, and the primary targets are the major operations cost centers such as the factory or the office. Healthcare information systems tie into the day-to-day operations of every corner of the medical field. While the focus is on the centralized, single location displacement of professional staff, it is important to note that it is not hardware architecture but software capabilities that are key to this application of information technologies. Managers can get all the information they need about company activities from the system. Second, we have witnessed a significant number of domestic mergers and acquisitions in many industries especially in the last decade. For more information, visit WSU’s online MBA website. 4 Ways Artificial Intelligence Is Changing Modern Business, The Importance of Predictive Analytics in Manufacturing, Walmart’s Technology Strategy – Smoak Signals, IT Doesn’t Matter – Harvard Business Review, Business Information Systems – PressBooks.com, Management Information Systems – AZ Central, © Washington State University | Carson College of Business By the time they graduate, MBA students should be familiar with new technologies, such as information systems, and also the tried-and-true business skills that have long produced effective and productive business leaders. Even the simplest use of information technology can be felt from the executive level right down to the chairman Edward... Business processes: information systems when used for corporate strategic planning and reliable technology is that is! Operation, and probably most important, reorganization reason is cost efficiency consolidation. 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