Introduction to information systems

competitive and strategic uses of information systems;

how information systems are transforming organizations and their
management;
the issues, difficulties, and opportunities facing the technology professional
and business manager today.

Defining Information Systems

“Information systems (IS) is the study of complementary networks of hardware and

software that people and organizations use to collect, filter, process, create, and distribute
data.”[1]

“Information systems are combinations of hardware, software, and telecommunications

networks that people build and use to collect, create, and distribute useful data, typically in
organizational settings.”[2]

“Information systems are interrelated components working together to collect, process,

store, and disseminate information to support decision making, coordination, control,
analysis, and viualization in an organization.”[3]

As you can see, these definitions focus on two different ways of describing information
systems: the components that make up an information system and the role that those
components play in an organization. Let’s take a look at each of these.

The Components of Information Systems

The six components that must come together in order to produce an information system
are:

1. Hardware: The term hardware refers to machinery and equipment. In a

modern information system, this category includes the computer itself and all
of its support equipment. The support equipment includes input and output
devices, storage devices and communications devices. In pre-computer
information systems, the hardware might include ledger books and ink.
2. Software: The term software refers to computer programs and the manuals
(if any) that support them. Computer programs are machine-readable
instructions that direct the circuitry within the hardware parts of the system
to function in ways that produce useful information from data. Programs are
generally stored on some input/output medium, often a disk or tape. The
"software" for pre-computer information systems included how the hardware
was prepared for use (e.g., column headings in the ledger book) and
instructions for using them (the guidebook for a card catalog).
3. Data: Data are facts that are used by systems to produce useful information.
In modern information systems, data are generally stored in machine-
readable form on disk or tape until the computer needs them. In pre-
computer information systems, the data are generally stored in human-
readable form.
4. Procedures: Procedures are the policies that govern the operation of an
information system. "Procedures are to people what software is to hardware"

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 is a common analogy that is used to illustrate the role of procedures in a
system.
5. People: Every system needs people if it is to be useful. Often the most
overlooked element of the system is the people, probably the component that
most influence the success or failure of information systems. This includes
"not only the users, but those who operate and service the computers, those
who maintain the data, and those who support the network of computers".
6. Networking Communication: An information system can exist without the
ability to communicate – the first personal computers were stand-alone
machines that did not access the Internet. However, in today’s hyper-
connected world, it is an extremely rare computer that does not connect to
another device or to a network. Technically, the networking communication
component is made up of hardware and software, but it is such a core feature
of today’s information systems that it has become its own category.
7. Internet: The internet is a combination of data and people. (Although this
component is not necessary to function.)
Data is the bridge between hardware and people. This means that the data we collect is
only data until we involve people. At that point, data is now information.

Competitive and strategic uses of information systems

Competitive uses of information systems

Information systems play a vital role in streamlining and automating business processes,
thus enhancing operational efficiency. Through the use of enterprise resource planning
(ERP) systems, organizations can integrate and centralize various functions, such as
finance, human resources, and supply chain management. This integration allows for real-
time data visibility, improved communication, and better decision-making. By eliminating
manual tasks and reducing redundancies, businesses can allocate resources more
effectively, reduce costs, and achieve operational excellence

Data is a valuable asset, and organizations that can effectively harness and analyse data
have a significant advantage over their competitors. Information systems provide the
infrastructure and tools to collect, store, and analyse vast amounts of data. Business
intelligence and analytics systems enable organizations to derive meaningful insights from
their data, identify patterns, trends, and customer preferences. These insights empower
businesses to make data-driven decisions, optimize processes, and seize market
opportunities swiftly.

Customer expectations are continually evolving, and organizations that can deliver
personalized and seamless experiences gain a competitive edge. Information systems,
particularly customer relationship management (CRM) systems, enable businesses to
gather, track, and analyse customer data. This information helps organizations understand
their customers better, tailor products and services to their needs, and provide personalized
experiences. By leveraging information systems, businesses can enhance customer
satisfaction, loyalty, and ultimately gain a competitive advantage in the marketplace.

Innovation is crucial for organizations to stay ahead in competitive markets. Information

systems facilitate innovation by enabling collaboration, knowledge sharing, and creativity

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within the organization. Through cloud-based platforms and collaboration tools, teams can
work together regardless of geographical location, fostering innovation and driving new
ideas. Moreover, information systems provide the agility needed to adapt to rapidly
changing business environments. Businesses can quickly respond to market trends,
customer demands, and competitive threats, thereby maintaining a competitive advantage.

Information systems play a critical role in safeguarding sensitive business data and
intellectual property. With the increasing prevalence of cyber threats, organizations must
invest in robust information security systems to protect their valuable assets. This includes
implementing firewalls, encryption, access controls, and regular security audits. By
proactively securing their information systems, businesses can build trust with customers,
suppliers, and partners, thereby gaining a competitive advantage in terms of data privacy
and protection.

Conclusion

Leveraging information systems is essential for organizations aiming to gain a competitive

advantage in today's digital landscape. By enhancing operational efficiency, enabling data-
driven decision-making, improving customer experiences, fostering innovation, and
protecting valuable assets, businesses can differentiate themselves from their competitors.
However, it is crucial for organizations to adopt a strategic approach, align their information
systems with their business goals, and continuously adapt to technological advancements to
stay ahead in the rapidly evolving business environment.

Strategic uses of information systems

What is the strategic use of information systems?

Strategic use of information systems refers to how companies integrate and use technology
to meet business goals. A strategy is a plan designed to help an organization perform better
than the competition. Business strategies usually emphasize the identification, creation and
exploitation of new business opportunities.

The strategies are usually based on the development or improvement of products / services,
identification of unsatisfied needs of the consumer, customer retention or any other action
aimed at increasing the value of the business through review generation software.

A business achieves a competitive advantage by maximizing its strengths by executing

some strategy. When the intention of the strategy is to create new markets, it does not aim
to compete with rivals because the marking does not yet exist. Therefore, a strategic action
does not always have a competitive nature considering similar products or services.
However, markets rarely remain for a long time under the domain of a single organization
and competition arises almost immediately.

Extending business to the Web opens the doors to a global market with millions of potential
customers; However, just extending the business to the web is no longer a guarantee for
the achievement of a competitive advantage. But doing it in an innovative way is.

Creation of competitive advantage

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A for-profit organization achieves competitive advantages when its earnings increase
significantly; in a good part of the cases due to a greater participation in the market thanks
to the creation of opportunities and the strengthening of some competitive advantage. The
following point shows the most usual initiatives in which ICT could be applied to achieve a
competitive advantage:

Costs reduction

A company can gain an advantage if it can sell at a lower price than the competition.
Automation to reduce time and personnel is the usual way of using ICT to help achieve this
goal.

Create entry barriers

A company can gain an advantage if the entry of new competitors is difficult. Reaching the
market first, capitalizing on the experience and protecting the intellectual capital
accumulated in the development of ICTs help to execute this strategy.

Raise exchange costs

A company can gain an advantage if the change to competition implies high direct or
indirect costs for the customer.

Create new products or services

A company can gain an advantage if it can offer a new product or service in the market.

Differentiate products or services

A company can gain an advantage if it can attract customers by convincing them that its
products are better than those of the competition with the help of review management
system.

Improve products or services

A company can gain an advantage the products or services it offers are better than those of
the competition.

Establish alliances

Companies from different sectors can help each other by jointly offering products or services
in more convenient conditions for the customer.

strategic actions

The maintenance and search of competitive advantages supported or not supported by

technology is a constant task because competition, if possible, will imitate the leader and
this inevitably reduces the advantage.

How information systems are transforming organizations and their management;

Information systems are transforming organizations in the following ways.

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 Improved decision-making by the management. Information systems provide
managers with efficient, timely, and effective information, which is crucial in the
decision-making process. Besides, information systems deliver data as well as the
modeling results required in decision-making. The fact is attributed to the real-time
data of an IT system, which ensures that the updated data is integrated into one
system. Indeed, it saves on time spent while making decisions, hence improving
organizational efficiency.
 Greater productivity. The fact that organizational data is integrated into one system
reduces time and cost spent on replicating data, as well as waiting for information to
be sent from one department to another. Notably, the time spent can be diverted to
other productive processes, augmenting productivity.
 Improved operations management, leading to competitive advantage in the business.
Information systems' data enables businesses to acquire sales insights through the
determination of the products preferred by consumers. The idea enables companies
to streamline operations, leading to improved sales.