There are three fundamental reasons for all business applications of information technology. They are found in the three vital roles that information systems can perform for a business enterprise.
• Support its business processes and operations.
• Support decision making by its employees and its managers
• Support its strategies for competitive advantage
For example, lets consider these three roles in a retail store.
• Support Business Processes : most retail stores now use computer based information systems to help them record customer purchases, keep track of the inventory, buy new merchandise, pay employees and evaluate sales trends.
• Support Decision making : CBIS allow management to make decisions on what lines of merchandise is required or should be discounted and which areas need investments.
• Support Competitive Advantage : Gaining a strategic advantage over competitors requires innovative use of IT. Store management might make a decision to install touch-screen kiosks in all of their stores, with links to their e-commerce website for online shopping. This might attract new customers and build customer loyalty because of the ease of shopping and buying merchandise provided by such information systems.
Therefore, strategic information systems can help provide products and services that give a business a competitive advantage over its competitors.
Therefore, strategic information systems can help provide products and services that give a business a competitive advantage over its competitors.
Information Systems In the Functional Areas of Business
Studies have shown that the involvement of managers and decision makers in all aspects of information systems is a major factor for organizational success, including higher profits and lower costs. Information systems are used in all functional areas and operating divisions of business.
The principal business functions are,
• Sales and Marketing : ensuring that the firms products meet the needs of the marketplace, developing a market for those products, providing them at the right time for the right price.
To develop new goods and services (product analysis), determine the best location for production and distribution facilities (place or site analysis), determine the best advertising and sales approaches (promotion analysis),and set product prices to get the highest total revenues (price analysis).
• Production : creating or adding value by producing goods or offering services. In firms that produce goods, the production function is known as manufacturing.
To process customer orders, develop production schedules, control inventory levels, and monitor product quality. In addition, information systems are used for product design.
• Accounting and Finance : managing the funds of the enterprise.
To forecast revenues and business activity, determine the best sources and uses of funds, manage cash and other financial resources, analyze investments, and perform audits to make sure that the organization is financially sound and that all financial reports and documents are accurate.
• Human Resources : developing the personnel of the firm.
To screen applicants, administer performance tests to employees, monitor employee productivity, and more.
