University of Science and Technology Chittagong

Chittagong, Bangladesh

Assignment
on
“Business transformation by Information systems and its
importance for running and managing a business today.”

PREPARED BY
Kaiser Md. Chowdhury
ID : 1043
MBA Evening
Major : HRM
Batch : 31
Subject : Management Information System
Faculty of Business Administration
University of Science and Technology Chittagong. (USTC)

Date of Submission: 12-02-2021

Why Information Systems Are Important for Business Today
Running a successful business calls for proper management of financial and organizational data
and statistics with quality information systems. Almost every company has experienced a
drastically slowed workflow because of data problems related to reliability and accuracy. It’s
true that there is no substitute for right information at the right time in the business world.
This prompted the development of systems that can be used to make the information accurate,
readily available, and easily accessible. With the effectiveness of information systems, an
organization can have better decision-making, better planning, and ultimately better results.

How do Information Systems Influence Modern Business?

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. In the recent past, any business success has been
pegged on the information technology quality that the business has employed and the capability
to correctly use such information.
Information systems (IS) importance has increased dramatically, and most businesses have been
prompted to introduce it to keep their competitive edge. Today, nobody can envisage a business
without an effective information system. Introduction of an information system to a business can
bring numerous benefits and assist in the way the business handles its external and internal
processes that a business encounters daily and decision making for the future. Some of the
benefits of an information system include:

New Products and Services

Any company looking to improve and secure the future has to establish a broader perspective
with the use of a well-designed and coordinated information system. The IS makes it easier to
analyze independent processes such as information to produce valuable products or services and
organized work activities. Therefore, an IS can give a company the competitive advantage by
analyzing how a company creates, produce, and sell their products or services. This means that
the focus will be put on the main goal ahead.
Information Storage
Every organization needs records of its activities to find the cause of problems and proper
solutions. Information systems come in handy when it comes to storing operational data,
communication records, documents, and revision histories. Manual data storage will cost the
company lots of time, especially when it comes to searching for specific data. A quality
information system stores data in a comprehensive and sophisticated database which makes the
process of finding it convenient. With such information, a company can analyze how certain
actions affected the business as well as prepare cost estimates and forecasts.

Easier Decision Making

Without an information system, a company can take a lot of time and energy in the decision
making process. However, with the use of IS, it’s easier to deliver all the necessary information
and model the results and this can help you make better decisions. The management team can
use the information system to choose the best course of action and carry out the tasks. When
there are several appealing alternatives, the information system can be used to run different
scenarios by calculating key indicators such as costs, sales, and profits. This way, you can
determine the alternative with the most beneficial results.

Behavioral Change
Employers and employees can communicate rapidly and more effectively with an information
system. While emails are quick and effective, the use of Information systems is more efficient
since documents are stored in folders that can be shared and accessed by employees.
This implies that information flows from the management to lower-level employees and vice
versa. Also, the lower-level employees get enlightened and involved in important decision
making, and this eliminates the need for middle managers. Employees who are directly involved
in the decision-making process are motivated and dedicated to their tasks.
Importance of Earning a Master's Degree in Information Systems
Nearly all businesses have an IT department, outsourced IT service of a full-time professional.
This is essentially due to the importance that businesses try to improve productivity and reduce
costs. The information systems section is answerable for sustaining the software, hardware, data
storage, and networks that encompass the business’s IT arrangement.
As more and more businesses are looking for ways to grow and remain competitive in the
market, there is an increase in need of technical skills and employers are looking for individuals
who can operate and manage the information-based tools. It is crucial for those looking to
advance in a career in managing information systems to advance their education in order boost
their earning potential.
Summary
1. Why information systems are so important today for business and management.
Information systems are a 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. Information technology has become the largest component of capital
investment for firms in the United States and many industrialized societies.

2. Evaluate the role of information systems in today’s competitive business environment.

Information systems have become essential for helping organizations deal with changes in global
economies and the business enterprise. Information systems provide firms with communication
and analytic tools for conducting trade and managing businesses on a global scale. Information
systems are the foundation of new knowledge-based products and services in knowledge
economies and help firms manage their knowledge assets. Information systems make it possible
for businesses to adopt more flexible arrangements of employees and management that can
coordinate with other organizations across great distances. Organizations are trying to become
more competitive and efficient by transforming themselves into digital firms where nearly all
core business processes and relationships with customers, suppliers, and employees are digitally
enabled. The Internet is bringing about a convergence of technologies that is further widening
the use of information systems in business and transforming industries and business models.
3. Assess the impact of the Internet and Internet technology on business and government.
 The Internet provides global connectivity and a flexible platform for the seamless flow of
information across the enterprise and between the firm and its customers and suppliers. It is the
primary technology infrastructure for electronic commerce, electronic business, and the
emerging digital firm. In electronic commerce (e-commerce), businesses can exchange electronic
purchase and sale transactions with each other and with individual customers. Electronic
business (e-business) uses Internet and other digital technology for organizational
communication and coordination, collaboration with business partners, and the management of
the firm, as well as for electronic commerce transactions. Digital firms use Internet technology
intensively to manage their internal processes and relationships with customers, suppliers, and
other external entities. E--government uses the Internet and intranets to improve delivery of
government services, make internal operations more efficient, and empower citizens to network
electronically with other citizens.
4. Define an information system from both a technical and business perspective and
distinguish between computer literacy and information systems literacy.
 An information system collects, stores, and disseminates information from an organization’s
environment and internal operations to support organizational functions and decision making,
communication, coordination, control, analysis, and visualization. Information systems transform
raw data into useful information through three basic activities: input, processing, and output.
From a business perspective, an information system creates economic value for the firm as an
organizational and management solution, based on information technology, to a challenge posed
by the environment. The information system is part of a series of value-adding activities for
acquiring, transforming, and distributing information to improve management decision making,
enhance organizational performance, and, ultimately, increase firm profitability.
Information systems are rooted in organizations; they are an outcome of organizational structure,
culture, politics, workflows, and business processes. They are instruments for organizational
change and value creation, making it possible to recast these organizational elements into new
business models and redraw organizational boundaries. Managers are problem solvers who are
responsible for analyzing the many challenges confronting organizations and for developing
strategies and action plans. Information systems are one of their tools, delivering the information
required for solutions. Information systems both reflect management decisions and serve as
instruments for changing the management process. Information systems cannot make managers
and organizations more effective unless they are accompanied by complementary assets such as
new business processes, organizational culture, or management behavior.

           Information systems literacy requires an understanding of the organizational and

management dimensions of information systems as well as the technical dimensions addressed
by computer literacy. Information systems literacy draws on both technical and behavioral
approaches to studying information systems. Both perspectives can be combined into a
sociotechnical approach to systems.

5. Identify the major management challenges to building and using information systems.
 There are five key management challenges in building and using information systems: (a)
obtaining business value from information systems; (b) providing appropriate complementary
assets to use information technology effectively; (c) understanding the system requirements of a
global business environment; (d) creating an information technology infrastructure that is
flexible enough to support changing organizational goals; and (e) designing systems that people
can control, understand, and use in a socially and ethically responsible manner.