INFORMATION SYSTEMS IN GLOBAL BUSINESS TODAY

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1 INFORMATION SYSTEMS IN GLOBAL BUSINESS TODAY Timeframe: Learning Outcomes: 16 hours Develop an advanced understanding of the role and importance of information and communication technology in management Chapter in textbook: Chapters 1 and 2 Additional sources to consult: Section overview Norton, D.P. 1995, Managing benefits from information technology. Information Management & Computer Security. 3(5): This section examines the role of information systems in organisations today. It examines how information systems are transforming businesses and how management information systems have evolved. Key ways in which globalisation has created both opportunities and challenges for information systems are discussed. Critical issues related to the emergence of a digital organisation and how this impacts on the organisation s strategic objectives related to information systems are also explored. Introduction It is currently apparent that since the introduction of computers, every aspect of our lives from social interactions to business dealings involves some form of information and communication technology. (Think of how distance learning like this ICT course has changed the way you can study.) The proliferation of negative news about the burst of the dot-com bubble (late 1990s through 2001) has greatly exaggerated the death of the Internet. You need only consider the 2012 listing of Facebook on the stock exchange to know that the Internet remains very much alive and well. The Internet / World Wide Web (WWW) is thriving and growing at an exponential rate. Many of the organisations that went into liquidation in the 1990s did so primarily because of poor business planning or simply because their product was not viable in the first place. Nowadays, many organisations are remodelling their organisations and information systems with the Internet in mind. Think about your own organisation has the Internet changed the way in which you do business and interact with customers and suppliers? Regenesys Business School 1

2 The Role of Information Systems in Organisations Today Ask managers in organisations to describe their most important resources and they will list money, equipment, materials, and people not necessarily in that order. It is very unusual for managers to consider information an important resource, and yet it is. As electronic business and electronic commerce grow in popularity and more organisations digitise their operations, having useful information is becoming even more important to the global business community. This chapter gives you an overview of many of the subjects we will touch on in this course at Regenesys. As an ICT student, it will help you to understand how all organisations today, large and small, local and global, use Information and Communications Technology (ICT) to achieve important organisational objectives, such as operational efficiency, customer and supplier intimacy, better decision-making, and new products and services. How information systems are transforming business Data volumes and our reliance on data to make more informed decisions, on both a personal and organisational level, have increased dramatically since the 1980s due to factors such as population expansion and urbanisation, to mention only but a few. This has created pressure on government and organisations to capture, store, retrieve and sort this data into useful information that can be used to make better informed decisions. The typical decisions are the ones we all make daily, such as deciding which shops are conveniently located in my suburb, what facilities are in that area, etc. Technology, especially mobile technology, has allowed both, individuals and organisations, to operate twenty-four hours, seven days a week without having a physical presence. Many offices have become virtual offices and you no longer have to commute to the office to get your work done. This has made our lives far simpler and more convenient. Information has become an essential and powerful resource in organisations today. Buyers have a vast amount of information available on their mobile devices to make better informed decisions and be more selective in purchasing products and services. Look at the simplicity of on-line booking for movies, flights, etc. Could you have studied for an ICT degree in your own home whenever it was convenient for you and still participate in a class session back in the 1980s? What has happened and what is new in Management Information Systems? In reading through Chapter One, it would appear that changes in technology are never-ending. Especially in the business world, the use of technology now extends far beyond the simple desktop computer. As the text points out, five interrelated developments are affecting organisations worldwide: The growth of the personal computer The growth of mobile technologies The emerging mobile digital platform The growth of online software as a service The growth of cloud computing and other platforms Regenesys Business School 2

3 Globalisation Challenges and Opportunities: A Flattened World Next time you purchase a product, any product, look at the fine print and see where it is made. It could be China, or the Philippines, or a South American organisation, or even in the United States. You can disagree with the fact that many manufacturing jobs are being moved from the United States to foreign countries; but look at the vast number of jobs that are being created in this country. Maybe they are not the traditional factory jobs we re used to. In fact, many of our new jobs are in the information industry. Many of them service whole new markets that did not exist just a few years ago. There was no position called Webmaster in That is because the Web did not exist. However, this particular job category is now one of the fastest growing in the United States and overseas. The global economy Brown (2012) talks about is being made possible by technology, and that is why it is so important that you understand how to use ICT instead of just computer technology. There is a big difference between the two, and we will talk about it more throughout this Module on ICT (McNurlin, et al., Sprague, and Bui, 2014). The Emerging Digital Firm Brown (2012: 1) argues that the utilisation of Information and Communication Technology (ICT) has become pervasive. He explains that a digital organisation is one in which nearly all of the organisation s significant business relationships with customers, suppliers, and employees are digitally enabled, and key corporate assets are managed through digital means and not through brick and mortar buildings. Digital organisations integrate ICT into their strategy and are able to integrate suppliers, buyers, government any other relevant organisation through integrated systems. This integration enables the organisation to automate the manual processes and reduce the time to execute processes. The application of digital organisations can be seen in the way organisations are able to order from suppliers over the Internet anywhere in the world. Organisations can also integrate with government departments, for example in terms of revenue services and for making on-line payment. This creates a paperless process with traceability. This has implications for organisations in terms of the need to rent offices and having employees coming into the office to do work. With a digital organisation, employees can work from anywhere as long as they have connectivity and are linked into the organisation's ICT systems. The digital organisation is therefore not bound to a physical location because staff can operate from anywhere in the world with the correct connectivity and ICT systems. The digital organisation can operate 27/7 all around the world. This gives the organisation its unique competitive advantage (Brown, 2012: 1, and McNurlin, et al., 2014: 28). Task Questions 1. Identify any digital organisation and motivate why you think this is a digital organisation. 2. What are digital organisations and do you think they can have a competitive advantage in the market place? Regenesys Business School 3

4 Strategic Business Objectives of Information Systems Although many managers are familiar with the reasons why managing their typical resources such as equipment and people are important, it is worthwhile to take a moment to examine the growing interdependence between an organisation's ability to use information technology and its ability to implement corporate strategies and achieve corporate goals. Business organisations in particular invest heavily in information to achieve six strategic business objectives (Brown, 2012): Operational excellence New products, services, and business models Customer and supplier intimacy Improved decision making Competitive advantage Survival Operational Excellence The rapid growth of ICT systems has assisted organisations to become digital and integrate key business processes (Lauden and Lauden, 2011). Digitalisation and integration reduce the time to complete the process and increase the consistency and reliability of the processes. This enhances the organisational excellence as well as the competitive position of the organisation. As an student at Regenesys you will notice that the advancement of ICT systems will assist you in your studies. The ability of any organisation to deliver operational excellence is now becoming more dependent on ICT systems. New Products, Services, and Business Models Brown (2012:3) discusses the emerging growth of Social Networking and the New App economy where Information systems and technologies are becoming a major enabling tool for organisations to create new products and services, as well as entirely new business models. The Regenesys student portal and the applications you can download onto mobile devices allow you greater flexibility in completing your studies, anywhere in the world. A business model describes how an organisation produces, delivers, and sells a product or service to create wealth. As successful as Apple Inc, NetFlix, and Wal-Mart were in their traditional brick-and-mortar existence, they have all introduced new products, services, and business models that have made them both competitive and profitable (McNurlin, et al., 2014). Regenesys Business School 4

5 Customer and Supplier Intimacy Brown (2013: 1) argues that ICT has become pervasive and that this is creating a greater link between the organisation, its customers and suppliers. This allows for a more integrated approach to conduct business and improve the levels of customer service. This is mainly due to the rising technological capability of ICT and the convergence of technology. As Brown (2013: 1) points out, we use GPS systems in our daily lives to navigate the best route from point A to point B. This impacts the effectiveness and efficiency of value chains in organisations, especially logistics organisations. Many organisations, such as Amazon.com, are good examples of how information systems and technologies are extensively used to better serve suppliers and retail customers. Improved Decision Making Information systems and technologies have made it possible for managers to use real-time data from the marketplace when making decisions. Previously, managers did not have access to accurate and current data and as such relied on forecasts, best guesses, and luck. The inability to make informed decision resulted in increasing costs and losing customers. In this Regenesys ICT module we would encourage you to continually scan for new technologies and identify ways in which that technology can be used to improve the organisation. Competitive Advantage This ICT module makes every effort to give you the knowledge to use this information as a competitive tool in an organisation today as you strive to become more competitive in the marketplace. By using ICT as a competitive advantage in organisations, the time to market can be reduced through more integrated value chains. Brown (2012) and Laudon and Laudon (2013) both argue that ICT has integrated organisation more with their suppliers, customers, regulators, relevant industry experts and complementors. In turn, this has created a Value Web, which essentially locks in all members mentioned above (McNurlin, et al., 2014: 28-35). Task Questions Read Chapter 1 of the recommended textbook by McNurlin, et al. (2014) and see how ICT has impacted on this organisation. Regenesys Business School 5