Information Management Report

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Information Management


 12 April 2006

1.  Introduction

“An organisation which recognises the importance of information and more specifically, Information Systems as being synonymous with success may gain a competitive advantage over an organization that doesn’t because….”

The purpose of this report is to take this statement into consideration and to provide evidence, in relation to a specific industry, which will support it.

  1. Introduction to Information Systems

According to Ratzan (2004) Information systems are systems that use information technology to capture, transmit, store, retrieve, manipulate, or display information used in one or more business processes. The oval surrounding information systems is light because information systems can sometimes be seen as business processes themselves. Firms consist of interdependent groups of business processes and compete in a business environment.


Ratzan (2004) believes the layers in Figure 1.1 illustrate why the term information system must be defined along with the terms information technology and business process. Information systems are systems that use information technology to capture, transmit, store, retrieve, manipulate, or display information used in one or more business processes.


Firms consist of groups of business processes and compete in a business environment. More specifically: Information technology is the hardware and software that make information systems possible. Hardware is the devices and other physical things involved in processing information, such as computers, workstations, physical networks, and data storage and transmission devices. Software is the computer programs that interpret user inputs and tell the hardware what to do. Software includes operating systems, end-user software such as word processors, and application software related to specialized business tasks such as recording credit card transactions or designing automobiles.


An information system is a system that uses information technology to capture, transmit, store, retrieve, manipulate, or display information used in one or more business processes. For example, a department store’s bar-code system for collecting data at the point of sale is part of a larger purchasing and distribution system that includes purchasing decisions and physical movement of goods to the stores. Viewed as general-purpose tools, computer programs such as a spreadsheet program or word processing program are not information systems because they do not provide information for specific business processes. A business process is a related group of steps or activities that use people, information, and other resources to create value for internal or external customers. Business processes consist of steps related in time and place, have a beginning and end, and have inputs and outputs. Examples of business processes in a restaurant include taking orders, cooking food, and preparing a bill. Examples in a factory include manufacturing products, hiring employees, and maintaining equipment. Examples in a doctor’s office include making appointments, examining patients, and filling out insurance forms. Each of these business processes consists of a group of related activities that have a beginning and end and have inputs and outputs. Although some business processes such as providing customer service are directed at external customers, many business processes create products or services for internal customers within the organisation. A firm (or government organisation) consists of a large number of interdependent business processes that work together to generate products or services in a business environment. The business environment includes the firm itself and everything else that affects its success, such as competitors, suppliers, customers, regulatory agencies, and demographic, social, and economic conditions.


2.  E-Business

The most basic definition of e-business is simply this: using the internet to connect with customers, partners, and suppliers. But the term also implies the transformation of existing business processes to make them more efficient. To engage in e-business, companies need to be able to unlock data in their back-end computer systems, so they can share information and conduct electronic transactions with customers, partners, and suppliers via the internet. For some companies, engaging in e-business means adopting new web-enabled business models—auctioning off surplus goods, selling products directly to consumers, or joining in online purchasing cooperatives with their competitors. Without a doubt, embarking on an e-business effort requires as much thinking about business strategy as it does about technology.

In today’s business world we often hear companies attempting to achieve competitive advantage through the use information technology. Moving along this area, e-business has evolved and is growing rapidly. E-business is viewed as a critical strategic marketing tool to achieve key business values, which direct or indirectly impacts the bottom-line of an organisation.

E-business is basically the use of internet-based tools to support business processes in organisations (Cagliano et al. 2003). The evolution in technology has fostered the development of powerful tools that are expected to improve performance of an organisation with higher levels of process efficiencies in a highly integrated business environment.


2.1 Cross-Functional System 

According to Fredericks (2005), cross-functional systems refer to a group of systems with:

“Varying expertise directly, collaborating and sharing resources in the form of information, schedules, procedures, and processes, all of which are necessary to develop a timely and profitable innovation”.

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  1.  Key Business Value

As explained by Crismatts (2003), business value, in the language of business refers to profit. The ultimate goals of every company are as follow:

  • Increase or protect profit
  • Increase or protect Return on Investment (ROI)
  • Improve cash flow

In order to achieve the above, the company’s value chain has to be enhanced. Johnson (2001) describes value chain as “the sum of all processes – from idea to implementation – in a product’s creation, including design, pricing, procurement, and fulfilment”. With the help of enterprise systems, companies can re-evaluate its value chain to achieve ...

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