Role of Information Systems in an

Organization
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eHow Contributor

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An information system increases organizational productivity.

(Image: computers network image by Orlando Florin Rosu from Fotolia.com)
An information system can be a mainframe, mid-range or network computer concept that
allows distributed processing for a group of users accessing the same software application.
These systems provide management with control over their data, with various tools to
extract data or view data structures and records. The role of an information system is to
foster a data management environment that is robust and can be expanded according to an
organizations strategic plan for information processing. An information system also
satisfies diverse information needs in an organization.

Automation of Manual Tasks

Information systems architecture can assist an organization in automating manual tasks.
Automation can save time, money and resources and enhance organizational workflow.
There are various types of information systems that automate manual tasking, ranging
from robotic information systems used in areas such as health and medical services to
logistical information systems (automated warehouses and distribution systems).

Hardware and Software Integration

An organization can have several different computer platforms (hardware and software).
The concept of information systems as a scalable platform can merge different hardware
and software systems. A system can process, store and distribute information if integrated
 into the workflow of an information system. For example, a local area network (LAN) can
integrate into a mainframe system that processes accounting information through a
concept called a gateway. An open architecture information system allows for integration
at all levels throughout an organization.

Support of a Multi-Processing Environment

An information system can support a real-time multi-processing environment through
the concept of time-sharing application. Time-sharing application allows for the
prioritizing of applications based on user-id and system priority assigned to an application,
device, and database or system catalog. These features are important to an organization
that process transactions while developing and testing program applications. In a multi-
processing environment, various departments, divisions or branches can have access to the
system at the same time intervals.

System Partitioning
The layout of an information system is partitioned according to data security policies, user
access and program applications. The partitioning of the physical hard drives, memory and
storage space related to software applications creates system balance and effective use of
the system Central Processing Unit (CPU). System partitioning programs, tools and routines
keeps the system from overloading, which slows down system performance. Extra files
paged to memory that are not being used can slow down a customer support system, which
relies on timely processing of customer inquiries. System partitioning is maintained by a
process of preventive maintenance which ensures the integrity of system partitioning.

Provides Data for Decision Support

The most important role of an information system in an organization is to provide data to
help executive management make decisions. Data is compiled through transaction
processing or query routines built into the information system to access item and detail
records. Through decision support programs, which are packaged as software routines,
executive management can analyze several areas of an organization and create scenarios
through the information system for a desired result. These results are defined in the
organizations objectives and goals to improve productivity.

Related Searches

References
Knowledge Management, Information Systems and Organizations: Educause.edu Article
Information and Knowledge Management- Dimensions and Approaches: Information
Research Article
Around the Web
Application of IS in an organization

Management Information Systems are typically organized around the functional areas of an
organization. Learn about some of the most common applications of Management Information
Systems.

MIS Applications
Many organizations are structured based on functional areas. This is often reflected in an
organizational chart. Typically, functional areas include finances, human resources, marketing, etc.
Many of these functional areas have their own Management Information System, or MIS.

Financial MIS
A financial MIS provides financial information for managers to make daily decisions on operations
within the organization. Most systems provide these functions:

Integrate financial information from multiple sources

Provide easy access to financial information in summarized form
Enable financial analysis using easy-to-use tools
Compare historic and current financial activity

A financial MIS often has a number of subsystems, depending on the type of organization. These
include systems to analyze revenues, costs and profits, auditing systems for both internal and
external purposes and systems to manage funds. A financial MIS can also be used to prepare
reports for third parties, such as external auditors or shareholders.

Marketing MIS
A marketing MIS supports activities throughout the many activities of marketing departments. Some
of the typical subsystems of a marketing MIS are marketing research, product development and
delivery, promotion and advertising, product pricing and sales analysis.
One of the most common uses of a marketing MIS is to produce sales reports. These are typically
produced on a regular schedule, such as by week, month and quarter. Reports can be organized by
sales representative, product, customer or geographic area. Such reports allow managers to see
which aspects of sales are doing well and which ones need attention.
Perhaps one sales representative has suddenly experienced a drop in sales by losing one major
customer and needs some support to develop some new leads. If there are only a handful of sales
reps sharing one office, a manager might be able to pick up on this just by talking to everyone.
However, what if a manager has to oversee more than 100 sales reps in 12 different offices around
the nation? A specialized information system that provides regular updates in a meaningful format
will make it a lot easier for the manager to make effective decisions.

Manufacturing MIS
Manufacturing is one of the areas where information systems have made a major impact. A
typical manufacturing MIS is used to monitor the flow of materials and products throughout the
 organization. In a manufacturing process, raw materials or parts are transformed to finished
products, and a manufacturing MIS is used at every stage. Some of the common subsystems in a
manufacturing MIS include: design and engineering, production scheduling, inventory control,
process control and quality control.
Consider the example of building an airplane. How many different parts do you think there are in an
airplane? One of those commercial jets used by the major airlines easily has over 100,000 parts.
Many of those parts come from suppliers and have to be ordered. Others are made at the
manufacturing plant itself. Now think of the process that is needed to get all those parts at the right
place at the right time. And, all those parts have to be carefully inspected before they can be used in
building the plane.

1. Small Business
2. Business Technology & Customer Support
3. Human Resource Information Systems
Importance of Information Systems in an Organization
by Bert Markgraf

Related Articles
1The Three Fundamental Roles of Information Systems in Business
2Importance of the Management Information System
3Types of Information Systems in an Organization
4The Role of Management Information Systems in Decision-Making
To gain the maximum benefits from your company's information system, you have to exploit all its
capacities. Information systems gain their importance by processing the data from company inputs to
generate information that is useful for managing your operations. To increase the information system's
effectiveness, you can either add more data to make the information more accurate or use the
information in new ways.
Communication
Part of management is gathering and distributing information, and information systems can make this
process more efficient by allowing managers to communicate rapidly. Email is quick and effective, but
managers can use information systems even more efficiently by storing documents in folders that they
share with the employees who need the information. This type of communication lets employees
collaborate in a systematic way. Each employee can communicate additional information by making
changes that the system tracks. The manager collects the inputs and sends the newly revised document
to his target audience.

Operations

How you manage your company's operations depends on the information you have. Information
systems can offer more complete and more recent information, allowing you to operate your company
more efficiently. You can use information systems to gain a cost advantage over competitors or to
differentiate yourself by offering better customer service. Sales data give you insights about what
customers are buying and let you stock or produce items that are selling well. With guidance from the
information system, you can streamline your operations.

Decisions

The company information system can help you make better decisions by delivering all the information
you need and by modeling the results of your decisions. A decision involves choosing a course of action
from several alternatives and carrying out the corresponding tasks. When you have accurate, up-to-date
information, you can make the choice with confidence. If more than one choice looks appealing, you can
use the information system to run different scenarios. For each possibility, the system can calculate key
indicators such as sales, costs and profits to help you determine which alternative gives the most
beneficial result.

Records

Your company needs records of its activities for financial and regulatory purposes as well as for finding
the causes of problems and taking corrective action. The information system stores documents and
revision histories, communication records and operational data. The trick to exploiting this recording
capability is organizing the data and using the system to process and present it as useful historical
information. You can use such information to prepare cost estimates and forecasts and to analyze how
your actions affected the key company indicators.

COMPETITIVE ADVANTAGE OF IS IN AN ORGANISATION

Using Information Systems to Achieve Competitive Advantage

Firms with a competitive advantage over others typically have access to special resources
that others do not or are able to use resources more efficiently, resulting in higher revenue
growth, profitability, or productivity growth (efficiency), all of which ultimately in the long run
translate into higher stock market valuations than their competitors.

Michael Porter's competitive forces model describes five competitive forces that shape the fate
of the firm.

1. Traditional competitors: Existing firms that share a firm's market space

2. New market entrants: New companies have certain advantages, such as not being
locked into old equipment and high motivation, as well as disadvantages, such as less
expertise and little brand recognition. Some industries have lower barriers to entry,
ie: cost less for a new company to enter the field.

3. Substitute products and services: These are substitutes that your customers might
use if your prices become too high. For example, Internet telephone service can
substitute for traditional telephone service. The more substitute products and services
in your industry, the less you can control pricing and raise your profit margins.

4. Customers: The power of customers grows if they can easily switch to a competitor's
products and services, or if they can force a business and its competitors to compete
on price alone in a transparent marketplace where there is little product
differentiation and all prices are known instantly (such as on the Internet).

5. Suppliers: The more different suppliers a firm has, the greater control it can exercise
over suppliers in terms of price, quality, and delivery schedules.

Figure 3-10
 FIGURE 3-10 PORTERS COMPETITIVE FORCES MODEL
In Porters competitive forces model, the strategic position of the firm and its strategies are determined
not only by competition with its traditional direct competitors but also by four forces in the industrys
environment: new market entrants, substitute products, customers, and suppliers.

There are four generic strategies used to manage competitive forces, each of which often is
enabled by using information technology and systems:

1. Low-cost leadership: Use information systems to achieve the lowest operational

costs and the lowest prices. For example, a supply chain management system can
incorporate an efficient customer response system to directly link consumer behavior to
distribution and production and supply chains, helping lower inventory and distribution
costs.

2. Product differentiation: Use information systems to enable new products and

services, or greatly change the customer convenience in using your existing products
and services. For instance, Land's End uses mass customization, offering individually
tailored products or services using the same production resources as mass production,
to custom-tailor clothing to individual customer specifications.

3. Focus on market niche: Use information systems to enable a specific market focus
and serve this narrow target market better than competitors. Information systems
support this strategy by producing and analyzing data for finely tuned sales and
marketing techniques. Hilton Hotels uses a customer information system with detailed
data about active guests to provide tailored services and reward profitable customers
with extra privileges and attention.

4. Strengthen customer and supplier intimacy: Use information systems to tighten

linkages with suppliers and develop intimacy with customers. Chrysler Corporation
uses information systems to facilitate direct access from suppliers to production
schedules, and even permits suppliers to decide how and when to ship suppliers to
Chrysler factories. This allows suppliers more lead time in producing goods. Strong
linkages to customers and suppliers increase switching costs (the cost of switching
from one product to a competing product) and loyalty to your firm.

The Internet has nearly destroyed some industries and has severely threatened more.
The Internet has also created entirely new markets and formed the basis for thousands
of new businesses.

Because of the Internet, the traditional competitive forces are still at work, but
competitive rivalry has become much more intense. Internet technology is based on
universal standards, making it easy for rivals to compete on price alone and for new
competitors to enter the market. Because information is available to everyone, the
Internet raises the bargaining power of customers, who can quickly find the lowest-
 cost provider on the Web. Some industries, such as the travel industry and the financial
services industry, have been more impacted than others. However, the Internet also
creates new opportunities for building brands and building very large and loyal
customer bases, such as Yahoo!, eBay, and Google.

The value chain model highlights specific activities in the business where competitive
strategies can best be applied and where information systems are most likely to have
a strategic impact. The value chain model views the firm as a series or chain of basic
activities that add a margin of value to a firm's products or services. These activities
can be categorized as either primary activities or support activities.

Primary activities are most directly related to the production and distribution of the
firm's products and services, which create value for the customer. Primary activities
include inbound logistics, operations, outbound logistics, sales and marketing, and
service.

Support activities make the delivery of the primary activities possible and consist of
organization infrastructure (administration and management), human resources
(employee recruiting, hiring, and training), technology (improving products and the
production process), and procurement (purchasing input).

Figure 3-11
 FIGURE 3-11 THE VALUE CHAIN MODEL
This figure provides examples of systems for both primary and support activities of a firm and of its value
partners that can add a margin of value to a firms products or services.

You can use the business value chain model to identify areas where information systems will
improve business processes. You can also benchmark your business processes against your
competitors or others in related industries, and identify and implement industry best
practices.

Benchmarking involves comparing the efficiency and effectiveness of your business

processes against strict standards and then measuring performance against those
standards.

Industry best practices are usually identified by consulting companies, research

organizations, government agencies, and industry associations as the most successful
solutions or problem-solving methods for consistently and effectively achieving a
business objective.
A firm's value chain is linked to the value chains of its suppliers, distributors, and customers.

Information systems can be used to achieve strategic advantage at the industry level by
working with other firms to develop industry-wide standards for exchanging information or
business transactions electronically, which force all market participants to subscribe to similar
standards. Such efforts increase efficiency, making product substitution less likely and
perhaps raising entry costs.,

Internet technology has made it possible to create highly synchronized industry value chains
called value webs. A value web is a collection of independent firms that use information
technology to coordinate their value chains to produce a product or service for a market
collectively. It is more customer-driven and operates in a less linear fashion than the
traditional value chain.

Figure 3-12

FIGURE 3-12 THE VALUE WEB

The value web is a networked system that can synchronize the value chains of business partners within an
industry to respond rapidly to changes in supply and demand.
A large corporation is typically a collection of businesses. Information systems can improve
the overall performance of these business units by promoting synergies and core
competencies.

In synergies, the output of some units can be used as inputs to other units, or two
organizations pool markets and expertise, and these relationships lower costs and
generate profits.

A core competency is an activity for which a firm is a world-class leader, such as being
the world's best miniature parts designer. A core competency relies on knowledge that
is gained through experience as well as incorporating new, external knowledge. Any
information system that encourages the sharing of knowledge across business units
enhances competency.

Business models based on a network may help firms strategically by taking advantage
of network economics. In network economics, the marginal costs of adding another participant
or creating another product are negligible, whereas the marginal gain is much larger. For
example, the more people offering products on eBay, the more valuable the eBay site is to
everyone because more products are listed, and more competition among suppliers lowers
prices.

Another network-based strategy is the virtual company, or virtual organization, which uses
networks to link people, assets, and ideas, enabling it to ally with other companies to create
and distribute products and services without being limited by traditional organizational
boundaries or physical locations. One company can use the capabilities of another company
without being physically tied to that company.

The traditional Porter model of competitive forces assumes a relatively static industry
environment; relatively clear-cut industry boundaries; and a relatively stable set of suppliers,
substitutes, and customers. With the emergence of the digital firm and the Internet, some
modifications to the original competitive forces model are needed. Some of today's firms are
much more aware that they participate in business ecosystems, loosely coupled but
interdependent networks of suppliers, distributors, outsourcing firms, transportation service
firms, and technology manufacturers. In a business ecosystem, cooperation takes place across
many industries rather than many firms.

Figure 3-13
 FIGURE 3-13 AN ECOSYSTEM STRATEGIC MODEL
The digital firm era requires a more dynamic view of the boundaries among industries, firms, customers,
and suppliers, with competition occurring among industry sets in a business ecosystem. In the ecosystem
model, multiple industries work together to deliver value to the customer. IT plays an important role in
enabling a dense network of interactions among the participating firms.

Business ecosystems can be characterized as having one or a few keystone firms that
dominate the ecosystem and create the platforms used by other niche firms. Keystone firms
in the Microsoft ecosystem include Microsoft and technology producers such as Intel and IBM.
Niche firms include thousands of software application firms, software developers, service
firms, networking firms, and consulting firms that both support and rely on the Microsoft
products.

USE OF INFORMATION
TECHNOLOGY IN
COMPETITIVE ADVANTAGE
By
Karehka Ramey
-
October 15, 2012
12376
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A company gains competitive advantage by providing a product or service in a
way that customers value more than the competitions. However, it is not
information technology that gives a company a competitive advantage; its the
way they use information technology that makes the difference. Companies
need to use information technology in an innovative manner.

Innovation is the process of devising ways to do things in new and creative

ways. Using information technology to tackle a business problem in the way
the other companies have been doing is certainly not going to give a company
competitive advantage. The company has to use creative ways to create some
thing new their competitors dont have yet. Below i have listed a few detailed
points on the Use of Information Technology in Competitive Advantage:

1. The CEOs attitude toward information technology: The CEOs vision can
influence the way managers think about lots of things within their company,
including information technology. If the CEO understands that IT can be a
powerful competitive weapon, a message is sent to the entire organization that
coming up with creative IT ideas that can lead to company growth and customer
satisfaction is important. Company leadership is very important in determining its
competitive advantage using information technology.

2. Use Information Technology to bridge the gap between business people

and technical people: Business people must understand the use of Information
technology to gain competitive advantage. In this case, they work hand on hand
with technical people to archive this goal; in this process technology brings both
parties together and bonds their relationship. Designing an information system
that gives a competitive advantage requires at least two things. First, it requires
an understanding of the business problem you are trying to solve. Second, it
requires an understanding of available technologies to know which ones to use in
designing a creative solution for the business problem. Its very important for
business people to study management information systems (MIS). This will help
them analyze technical issues if need arises.

3. Use Information technology to view business problems from another

perspective: It is very important to view a business problem in the perspective of
your customers. These are the owners of the business, not you, because without
them, the business will not survive. The best solution for this, is to put yourself in
the place of the primary user of the system and try to come with ways in which
that user would be not just served but delighted by the system. So, take the
perspective of the customer of the company and ask, how could the information
system be designed so that it enhances the customers experience? Learn more
about ways to use IT to improve customers servicehere
4. Use Information Technology in Creative Designing: A creative design of an
IT system is one that solves the business problem in a new and highly effective
way rather than the same way others have solved it. One of the biggest mistakes
most business people make when designing new information systems is to come
up with a design that is ordinary, something very similar to what other companies
are doing. For a business to gain competitive advantage, it has to use
information technology to design a new concept and idea which is different from
its competitors.

A good example is Bing & Google. Bing is a new search engine owned by
Microsoft and it is using the same technology used by Google to index and
suggest data, however, Bing has added some extra value to its search engine
right from its glamorous home page which is better than Googles white home
page. Bing is good when youre making keyword search for a specific project
because of its relevant suggestions of keywords, Bing will also record all your
past searches to help you remember and find data easily. This has helped Bing
compete with Google and bit yahoo search. Also, companies should note that
being the first to use a specific technology will not make you the winner all the
time, new players in the industry will twist the technology and provide your
customers with a better service.

So, it is very important to know what your consumers need and add value to your
technology. Companies like Facebook.com have gained competitive advantage
by twisting and adding value to their existing technology to service their users
INFORMATION SYSTEM MAINTAINANCE

What is system maintenance? What are its different types

BY DINESH THAKUR
X
by Counterflix

The results obtained from the evaluation process help the organization to determine
whether its information systems are effective and efficient or otherwise. The process of
monitoring, evaluating, and modifying of existing information systems to make required
or desirable improvements may be termed as System Maintenance.
X
by Counterflix
System maintenance is an ongoing activity, which covers a wide variety of activities,
including removing program and design errors, updating documentation and test data
and updating user support. For the purpose of convenience, maintenance may be
categorized into three classes, namely:
i) Corrective,
ii) Adaptive, and
iii) Perfective.

i) Corrective Maintenance: - This type of maintenance implies removing errors in a

program, which might have crept in the system due to faulty design or wrong
assumptions. Thus, in corrective maintenance, processing or performance failures are
repaired.
ii) Adaptive Maintenance: - In adaptive maintenance, program functions are
changed to enable the information system to satisfy the information needs of the user.
This type of maintenance may become necessary because of organizational changes
which may include:

a) Change in the organizational procedures,

b) Change in organizational objectives, goals, policies, etc.
c) Change in forms,
d) Change in information needs of managers.
e) Change in system controls and security needs, etc.

iii) Perfective Maintenance: - Perfective maintenance means adding new

programs or modifying the existing programs to enhance the performance of the
information system. This type of maintenance undertaken to respond to users
additional needs which may be due to the changes within or outside of the organization.
Outside changes are primarily environmental changes, which may in the absence of
system maintenance, render the information system ineffective and inefficient. These
environmental changes include:

a) Changes in governmental policies, laws, etc.,

b) Economic and competitive conditions, and
c) New technology.

The results obtained from the evaluation process help the organization to determine
whether its information systems are effective and efficient or otherwise. The process of
monitoring, evaluating, and modifying of existing information systems to make required
or desirable improvements may be termed as System Maintenance.
System maintenance is an ongoing activity, which covers a wide variety of activities,
including removing program and design errors, updating documentation and test data
and updating user support. For the purpose of convenience, maintenance may be
categorized into three classes, namely:

i) Corrective,
ii) Adaptive, and
iii) Perfective.

i) Corrective Maintenance: - This type of maintenance implies removing errors in a

program, which might have crept in the system due to faulty design or wrong
assumptions. Thus, in corrective maintenance, processing or performance failures are
repaired.
ii) Adaptive Maintenance: - In adaptive maintenance, program functions are changed
to enable the information system to satisfy the information needs of the user. This type of
maintenance may become necessary because of organizational changes which may
include:

a) Change in the organizational procedures,

b) Change in organizational objectives, goals, policies, etc.
c) Change in forms,
d) Change in information needs of managers.
e) Change in system controls and security needs, etc.

iii) Perfective Maintenance: - Perfective maintenance means adding new programs or

modifying the existing programs to enhance the performance of the information system.
This type of maintenance undertaken to respond to users additional needs which may be
due to the changes within or outside of the organization. Outside changes are primarily
environmental changes, which may in the absence of system maintenance, render the
information system ineffective and inefficient. These environmental changes include:

a) Changes in governmental policies, laws, etc.,

b) Economic and competitive conditions, and
c) New technology.

Role of IS in an organization

Company or organisation going through a transformation. Organization change occurs when

business strategies or major sections of an organization are altered. Also known as reorganization,
restructuring and turnaround

Consideration for implementing a change program in an organisatin

8 Steps to Implementing Change

1. Management Support for Change
Employees develop a comfort level when they see management supporting
the process.

It is critical that management shows support for changes and demonstrates

that support when communicating and interacting with staff.

There is nothing worse than sending a mixed message to employees. If you

cant support the change 100% dont even think about making it. Employees
will know it and it will self destruct.

2. Case for Change

No one wants to change for change sake, so it is important to create a case for
change.

A case for change can come from different sources. It can be a result of data
collected on defect rates, customer satisfaction survey, employee satisfaction
survey, customer comment cards, business goals as a result of a strategic
planningsession or budget pressures.

Using data is the best way to identify and justify areas that need to improve
through change initiatives.

3. Employee Involvement
All change efforts should involve employees at some level.

Organizational change, whether large or small, needs to be explained and

communicated, specifically changes that affect how employees perform their
jobs.
Whether it is changing a work process, improving customer satisfaction or
finding ways to reduce costs, employees have experiences that can benefit the
change planning and implementation process.

Since employees are typically closest to the process, it is important that they
understand the why behind a change and participate in creating the new
process.

4. Communicating the Change

Communicating change should be structured and systematic.

Employees are at the mercy of management to inform them of changes.

When there is poor communication, and the rumor mill starts spreading
rumors about change which can create resistance to the change.

Being proactive in communications can minimize resistance and make

employees feel like they are part of the process.

5. Implementation
Once a change is planned, it is important to have good communication about
the rollout and implementation of the change.

A timeline should be made for the implementation and changes should be

made in the order of its impact on the process and the employees who
manage that process.

For instance, if your organization is upgrading its software program, employee

training should be done before the software is installed on their computers.

An effective timeline will allow for all new equipment, supplies or training to
take place before fully implemented.
Implementing without a logical order can create frustration for those
responsible for the work process.

6. Follow-up
Whenever a change is made it is always good to follow-up after
implementation and assess how the change is working and if the change
delivered the results that were intended

3 Stages of Implementing Change

1) Communicate the Rationale Behind the Need for
Change
The first stage of introducing any change, however large or small, is to explain to
employees why it is important for the change to occur and the intended benefits. This
needs to be handled carefully and communicated to all affected parties. There should
also be adequate opportunity for people to voice their concerns and contribute their
thoughts, views and opinions.
Missing out on this stage of the process will almost certainly damage the change
process before it has even properly begun.

2) Implement the Change in Phases

Change is usually best received when it is implemented in bite sized chunks, unless of
course, this is impossible (as in the case of mass redundancy or bankruptcy). Most
change can be broken down into phases that can be reviewed along the way.
Collaboration is key so, if circumstances allow, having a pilot group of employees to test
the change before it is fully embedded is a good way to ensure that more people buy
in to what is happening and why.

3) Evaluate, Review and Report on Change

Careful monitoring of the entire change process is essential in order to be able to
measure its impact and evaluate its success. People need to be kept informed about
how things are progressing, the results that are occurring and whether the change
program has met its objectives.
An organizations intention when it decides to embark on a change program is usually
to make improvements. It is, therefore, important that employees understand whether
the change has had the desired effects and what is to be done if further work is needed.