Micro link Information Technology

and Business College

Department of Management
Master of Business Administration
Course Title: Information Processing and Management
Individual Assignment
By:- Lielti Aymut Abrha
ID No:- MBA0239/23
E-mail: lieltim19@gmail.com
Submitted to: MEHARI HAILE (PHD)
E-mail: haileg2003@gmail.com
Date: - 04/04/2024 G.C

Maichew, Tigraiy

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1. Explain why knowledge of information systems is important for business professionals,
and identify five areas of information systems knowledge that they need.

Knowledge of information systems is critical for business professionals as it allows them

to efficiently leverage technology to achieve their organizational goals. Here are five
areas of information system knowledge that business professionals need:

1. Decision-making: Information systems offer valued data and analysis tools that
can inform strategic decision-making within an organization. Business
professionals must be able to comprehend and understand this data to make
knowledgeable choices that will benefit the business.
2. Customer Relationship Management (CRM): CRM systems are important for
handling and constructing relationships with customers. Business professionals
need to comprehend how CRM systems work and how to leverage them to
recover customer gratification and drive sales.
3. Enterprise Resource Planning (ERP): ERP systems mix key business purposes
such as finance, HR, and supply chain management into a single system.
Business professionals need to understand how ERP systems work and how they
can rationalize business operations and recover efficiency.
4. Cyber security: Cyber security is a major concern for businesses in the digital
age. Business professionals need to understand basic cyber security principles
and best practices to protect their organization’s data and systems from cyber
threats.
5. Business Intelligence: Business intelligence systems gather and examine data to
provide visions that can help drive business decisions. Business professionals
need to comprehend how to use these systems to collect valued information about
market trends, customer behaviour, and other key factors affecting their business.
2. Give examples to illustrate how the business applications of information systems can
support a firm’s business processes, managerial decision making, and strategies for
competitive advantage.

Surely! Here are examples demonstrating how the business applications of information
systems can support different aspects of a firm’s operations:

1. Improving Business Processes:

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 Example: A manufacturing company implements an Enterprise Resource
Planning (ERP) system to streamline its production processes. The ERP system
integrates data from various departments like inventory, sales, and production,
enabling real-time tracking of inventory levels, production schedules, and
customer orders. This leads to better coordination, reduced lead times, and
improved efficiency in the manufacturing process.

2. Enhancing Managerial Decision Making:

Example: A retail chain utilizes a Business Intelligence (BI) system to analyse
sales data, customer buying patterns, and market trends. By generating reports and
dashboards from the BI system, managers can identify which products sell best in
different regions, adjust pricing strategies, and launch targeted marketing
campaigns. This data-driven decision-making approach enhances the company’s
competitiveness and profitability.
3. Supporting Competitive Advantage Strategies

Example: An e-commerce company invests in a Customer Relationship

Management (CRM) system to provide personalized customer experiences. The
CRM system captures customer preferences, purchase history, and interactions
across various touch points. By leveraging this data, the company can tailor
marketing offers, provide targeted recommendations, and offer superior customer
service. This creates a competitive advantage by fostering customer loyalty and
increasing repeat purchases.

4. Facilitating Supply Chain Management:

Example: A logistics firm implements a Supply Chain Management (SCM)

system to optimize its transportation and distribution operations. The SCM
system tracks inventory levels, shipment schedules, and delivery routes,
allowing the firm to coordinate logistics activities efficiently. By minimizing
transportation costs, reducing delivery times, and improving inventory
management, the firm gains a competitive edge in delivering products to
customers faster and at lower costs.

5. Enabling Innovation and Agility:

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 Example: A tech start up adopts cloud computing services to enhance its
scalability and agility. By leveraging cloud-based infrastructure and platforms,
the start up can quickly deploy new applications, scale resources based on
demand, and collaborate easily with remote teams. This flexibility enables the
firm to innovate rapidly, respond to market changes swiftly, and adapt to
customer needs effectively, positioning it ahead of competitors.

By leveraging information systems effectively, businesses can optimize their operations,

empower decision makers with actionable insights, develop sustainable competitive
advantages, and drive innovation for long-term success in the dynamic and competitive
business landscape.

3. Identify several basic competitive strategies and explain how they use information
technologies to confront the competitive forces faced by a business.

Several basic competitive strategies that businesses can use are:

1. Cost Leadership: This strategy contains becoming the lowest-cost producer in the
industry. Businesses can leverage information technologies to streamline
operations, reduce production costs, and improve efficiency. For example,
implementing Enterprise Resource Planning (ERP) systems can help automate
processes, reduce labour costs, and optimize inventory management.
2. Differentiation: Differentiation strategy focuses on offering unique products or
services that are perceived as valuable by customers. Businesses can use
information technologies to gather customer insights, conduct market research, and
tailor products or services to meet customer needs. Customer Relationship
Management (CRM) systems can help businesses track customer preferences,
personalize offerings, and enhance the overall customer experience.
3. Focus: Focus strategy involves targeting a specific market segment and tailoring
products or services to meet their needs. Information technologies can help
businesses identify and segment target markets, track consumer behaviour, and
customize marketing efforts. Digital marketing tools such as social media
marketing email campaigns, and targeted online advertising can help businesses
reach their target audience more effectively.
4. Innovation: Innovation strategy involves developing new products, services, or
processes to stay ahead of the competition. Businesses can use information

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 technologies to facilitate research and development, collaborate with partners, and
bring innovative ideas to market. Project management tools, collaboration
platforms, and data analytics can help businesses identify market trends,
brainstorm new ideas, and streamline the innovation process.
5. Strategic Alliances: Strategic alliances involve collaborating with other
companies to gain competitive advantage. Information technologies play a crucial
role in managing communication, sharing resources, and coordinating activities
between alliance partners. Cloud-based collaboration tools, data sharing platforms,
and virtual project management software can facilitate effective partnerships and
help businesses leverage collective strengths to confront competitive forces.
4. Explain how knowledge management systems can help a business gain strategic
advantage.

Knowledge management systems (KMS) help businesses gain a strategic advantage by

effectively capturing, storing, sharing, and utilizing valuable knowledge within the
organization. Here are some ways KMS can help businesses gain a strategic advantage:

1. Improved decision-making: By providing access to relevant and up-to-date

information, KMS helps business professionals make informed decisions
quickly. It enables employees to access the right information at the right time,
leading to improved decision-making at all levels of the organization.
2. Enhanced productivity: KMS streamlines processes and facilitates knowledge
sharing among employees, leading to increased productivity. It eliminates
duplication of work, reduces time spent searching for information, and enables
employees to collaborate more efficiently.
3. Innovation and creativity: KMS can help spark innovation and creativity
within the organization by providing a platform for employees to share ideas,
best practices, and lessons learned. By fostering a culture of learning and
collaboration, KMS can drive innovation and help businesses stay ahead of the
competition.
4. Better customer service: KMS enables employees to access customer
information and insights, leading to better customer service. By providing a
centralized repository of customer knowledge, KMS helps employees understand
customer needs, preferences, and history, enabling them to deliver personalized
and high-quality service.

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 5. Competitive advantage: By leveraging KMS to harness and utilize
organizational knowledge effectively, businesses can gain a competitive
advantage. KMS helps businesses stay agile, adapt to changes in the market, and
make strategic decisions based on data-driven insights, ultimately leading to
sustainable competitive advantage in the long run.
5. What is the role of a database management system in a business information system?

A Database Management System (DBMS) plays a crucial role in a business information

system by effectively managing and organizing data. Some key functions of a DBMS in a
business context include:

1. Data Storage: A DBMS provides a centralized and structured way to store

large volumes of data. This ensures that data is stored securely and can be
easily retrieved when needed.
2. Data Access: DBMS allows authorized users to access and manipulate data
efficiently. It ensures that data is available to users without compromising its
integrity or security.
3. Data Integrity: DBMS enforces data integrity rules, such as ensuring that data
is accurate, consistent, and valid. This helps prevent errors and inconsistencies
in the stored data.
4. Data Security: DBMS provides security measures to protect sensitive data
from unauthorized access, manipulation, or deletion. It helps to ensure that data
remains confidential and secure.
5. Data Backup and Recovery: DBMS facilitates regular data backups and
provides mechanisms for data recovery in case of system failures, human
errors, or other unforeseen incidents. This helps in ensuring that data is not lost
irretrievably.

Overall, a Database Management System is essential for businesses as it helps in

maintaining and managing data efficiently, ensuring data integrity and security, and enabling
easy access and retrieval of data when needed. It contributes significantly to the
effectiveness of a business information system by providing a robust foundation for storing
and managing critical business data.

6. What are the advantages of a database management approach to the file processing
approach? Give examples to illustrate your answer.

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Advantages of a database management approach over a file processing approach include:

1. Data Centralization: In a database management approach, data is stored in a

centralized database, allowing for easy access and maintenance. This eliminates
redundancy and inconsistency of data that can occur in a file processing approach
where data is stored in separate files.
 Example: A retail company can store all customer information, purchase history,
and inventory data in a centralized database, allowing for quick retrieval and
updates.
2. Data Integrity and Security: Databases offer mechanisms to ensure data integrity
through validation rules and referential integrity constraints. Security features like
access controls and encryption can also be implemented to protect sensitive data.
 Example: A hospital database can enforce rules to ensure accurate patient
information is entered, and restrict access to patient records to only authorized
healthcare professionals.
3. Data Consistency: Database management systems (DBMS) support ACID properties
(Atomicity, Consistency, Isolation, Durability) to ensure data consistency and
reliability during transactions. This ensures that data remains accurate and consistent at
all times.
 Example: An online banking system relies on transactions being processed
accurately and consistently to ensure that account balances are updated correctly.
4. Data Sharing and Accessibility: Databases allow for simultaneous access to
data by multiple users, enabling real-time collaboration and information sharing
across different departments or business units.
 Example: An e-commerce platform can allow customers to browse
products, make purchases, and update their profiles concurrently without
data conflicts.
5. Scalability and Performance: Database management systems are designed to handle
large volumes of data efficiently, offering scalability as data grows. Indexing, caching,
and query optimization techniques can improve performance for faster data retrieval.
 Example: A social media platform can handle millions of simultaneous user
interactions, data queries, and content uploads without significant
performance degradation.
7. Identify the computer systems and peripherals you would acquire or recommend for a
business of your choice, and explain the reasons for your selections.

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When acquiring or recommending computer systems and peripherals for a business, it is
essential to consider the specific needs and requirements of the organization. For a software
development company, for example, the following computer systems and peripherals would
be recommended:

1. High-performance desktop computers: Workstations with powerful processors,

ample RAM, and dedicated graphics cards would be ideal for software developers
to run resource-intensive development tasks and applications smoothly.
2. Multiple monitors: Providing developers with multiple monitors can enhance their
productivity by allowing them to easily view and compare code, test results, and other
project elements simultaneously.
3. High-speed internet connection: Given the need for continuous collaboration,
software updates, and cloud-based development tools, a high-speed internet
connection with reliable bandwidth is crucial for optimal performance.
4. Software development kits and tools: The business would need to invest in essential
software development kits, Integrated Development Environments (IDEs), debugging
tools, version control systems, and testing frameworks to support the development
process effectively.
5. Network storage solutions: Implementing network-attached storage (NAS) or cloud
storage solutions would enable developers to securely store and share project files,
code repositories, and documentation, promoting collaboration and version control.

The selection of these computer systems and peripherals is based on the specific
requirements of a software development business. These recommendations aim to
provide developers with the tools and resources necessary to streamline the
development process, optimize productivity, and ensure efficient collaboration
within the organization.

8. Identify several challenges that a business manager might face in managing the
successful and ethical development and use of information technology in a business.

Several challenges that a business manager might face in managing the successful and
ethical development and use of information technology in a business include:

1. Security and privacy concerns: Ensuring the security of sensitive data and
protecting customer privacy are critical issues that managers must address. Data

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 breaches, cyber-attacks, and unauthorized access to information can have serious
consequences for a business.
2. Compliance with regulations: Businesses must comply with various laws and
regulations related to data protection, privacy, and cyber security. Staying abreast of
changing regulations and ensuring that the business is in compliance can be a
challenge for managers.
3. Managing technology risks: Implementing new technologies or upgrading existing
systems can introduce risks such as system failures, data loss, and disruptions to
business operations. Managers must effectively manage these risks to ensure the
smooth functioning of the business.
4. Balancing innovation and cost: Investing in new technologies can drive innovation
and improve business processes, but it also comes with significant costs. Managers
must strike a balance between investing in technology and managing costs to ensure
a positive return on investment.
5. Ethical considerations: Using information technology ethically and responsibly is
crucial for maintaining trust with customers, employees, and other stakeholders.
Managers must navigate complex ethical issues such as data privacy, intellectual
property rights, and the impact of technology on society.
9. Explain how database management software helps business professionals and supports
the operations and management of a business.

Database management software plays a vital role in supporting the operations and
management of a business by efficiently and effectively organizing, storing, and managing
data. Here are some ways in which database management software helps business
professionals:

1. Data Organization: Database management software helps business

professionals organize and classify their data in a structured manner. This
helps in easy retrieval of information, reducing the time and effort required to
access relevant data.
2. Data Security: Database management software ensures that data is stored
securely and access to sensitive information is controlled through permissions
and authentication. This helps in protecting the business’s data from
unauthorized access and security breaches.
3. Data Integrity: Database management software maintains data integrity by

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 enforcing data validation rules, constraints, and ensuring that only accurate and
consistent data is entered into the system. This helps in maintaining the
reliability and validity of the data stored in the database.
4. Data Analysis: Database management software provides tools for querying and
analysing data, making it easier for business professionals to extract valuable
insights and trends from their data. This helps in making informed decisions
and developing strategic business plans.
5. Streamlined Operations: Database management software facilitates the
seamless integration of data across different departments and functions of the
organization. This integration streamlines business operations, enhances
collaboration, and improves overall efficiency.

In summary, database management software plays a crucial role in helping business

professionals organize, secure, analyse, and leverage their data to support their operations
and management processes effectively.