Information systems

Executive Summary

The organisation today in all industries throughout the world is now dependant on their information systems.  For example telecommunication, media, entertainment, retail and more, where the product is further being digitised depends on the software applications of information technology.  The element of dependency is known as e-commerce, this provides an organisation with new ways of conducting business.

This has provided a virtual selling point for organisation to trade on-line, known as the internet.  The application of IT is not only assisting in old business trends but creating new innovative opportunities to allow businesses to gain a comparative competitive advantage over existing businesses (Ward & Peppard, page 1)

The report looked at two areas of what ICT is and what it is used for:

  • How the role of ICT has changed and the ways organisations now conduct business
  • The strategic opportunities offered by ICT and how ICT has provided added value to organisations.

When using the models I used examples of the airline industry to illustrate how ICT provides value and how it provides strategic opportunities.

The use of electronic databases, journals and text books will provide prime examples of how ICT is seen in organisation.  The information gathered will be used as evidence to back up any theory that is stated within the report.

Recommended text books and further readings will be used to provide theory about ICT in general and when identifying strategic opportunities the text books will provide theory about strategic models and how they are used to identify strategic opportunities.

Strategic models include:

  • Mcfarlen’s Strategy Matrix
  • Porters Five Forces
  • Porter Value Chain.

The models provided sufficient evidence that they can be used to assist with the development of IS/IT and help position the company where they need to be.  By analysing the internal & external factors it provided evidence that it allows management to understand their current position and then to look at where they need to be.  Also using the value chain they can compare with the competition and see where they are and see how they can get to the same stage if it is beneficial.

Journals provided fairly up to date information about how the value chain should be used and the benefits it can bring to the organisation.

How ICT has changed the way businesses now conduct business.

An information system has move on rapidly in the last 50 years or so.  In 1950 IS started of as a technical change and then entering into the 60’s & 70’s IS became managerial control.  The 80’s & 90’s saw IS as the core activities of the business using Decision & Support Systems and entering the 2000 and 2005 IS has entered into the digital firm (Laudon & Laudon 2002, page 17)

Organisations and managers cannot afford to ignore the effectiveness of information systems.  IS plays a critical role in helping managers decide, manage employees, and increasingly shape what products are produced and how (Laudon & Laudon 2002, page 14)

IS and organisation influence one another.  The IS must be aligned in accordance to the organisation needs and the organisation needs to adapt to IS to obtain the benefits, one major benefit being comparative competitive advantage (Laudon & Laudon 2002, page 68)

During the mid 1990’s organisations seen the introduction of E-business & E-commerce.

E-commerce opened up a new market for organisation by providing virtual selling; this is known as the internet.  It enabled the organisations to advertise existing products and create new products that where easier to sell via the internet, products that came from abroad etc.  

Using E-commerce provided a rapid exchange of business documents using something called EDI (Electronic Data Exchange).  EDI enables business partners to reduce the costs of exchanging business documents such as orders, invoices and price lists.  Following EDI is financial EDI which is known as electronic payment through the internet (Ward & Peppard, page 5)

With electronic payment it provided a hassle free zone for consumers to purchase their products and not have to leave the comfort of their home.  

E-commerce provided a new route for organisation in which this could market products in existing and developing countries and to advertise their products to new consumers.  Take the retail industry for example; Sainsbury, Tesco, Iceland and more have now developed a new way of shopping via the internet.  The use of ICT provided a way of providing a service, for example, to disabled people to have the opportunity to do shopping as they are restricted to their homes etc, individuals and families who live some distance from supermarkets or live in cities where it is to much hassle and would rather pay a supermarket to deliver.

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E-business concentrates on the internal operations within organisations using internet and browsers.  In E-business there are the ‘pure plays’ dot.coms which is often the way to reach directly to the consumer.  Unless the products are digitizable companies do not exist totally on virtual worlds.  Retail, manufacturing industries have the physical appearance of products which over powers the virtual logistics.  What many organisations try to implement is a ‘bricks and ‘clicks’ strategy that allows the internet to enter the mainstream of the organisations operations.

The potential benefits of IS/IT are known as E-business and E-commerce which created a tremendous hype ...

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