The importance of information systems cannot be denied by anyone, yet it can be understood in a slightly different way regarding its impact on business in general. The information systems are essential in today’s business because of the emergence of a global economy in parallel with transformation of industrial economies and transformation of the business enterprises, not to mention the emergence of digital companies. As one did put it, the information system is a foundation for conducting any kind of business these days. The extensive use of information technology is essential for many businesses to achieve strategic goals and to survive. These cannot be accomplished without business data and database list, which not used by almost all companies; yet sometimes they are not built properly!
When it comes to the importance of information systems, one usually thinks of following reasons; operation excellence; new products, services and business models; customer and supplier intimacy; improved decision making process; competitive advantage and last but not least survival.
And as it was stated above there are six objectives why businesses use information systems. Short description of each one is below so that one might realize what important role information systems play these days.
Operational excellence. The higher profitability is achieved by the improvement of the efficiency of business operations. Information systems are said to play important role in achieving higher levels of efficiency and productivity in business operations by using database list and organized business data. For example, Wal-Mart Stores, Inc. uses RetailLink system which digitally links its suppliers to each of Wal-Mart store. The supplier is notified about the purchase as soon as a customer buys an item. That is how supplier knows to ship a replacement of the product. This business data allows suppliers to place the order as soon as possible without any delay.
New products, services and business models. Information systems are also used by companies to create new products and services as well as completely new business models. A business model is responsible for describing how a company produces, delivers and sells a product or service. The Apple Inc.’s decision to change the old model business based on its iPod technology platform that included iPod, the iTunes and the iPhone makes a good example of it.
Customer and supplier intimacy. When customers are served well, they tend to respond more positively by both returning and buying more. The quality of service and customers’ satisfaction raises business revenue and profit as well. In addition, there is one simple rule, the more business engages it suppliers, the better suppliers can provid essential input. Luxurious hotels show how information systems can be efficiently used to achieve customer and supplier intimacy. Computers are used to keep track and understand guests’ preferences, including the room temperature, television programs, etc. In this way hotels build the essential business data and database list which then can be used to expand the business and create more effective marketing campaign.
Improved decision making process. To make a decision, at least a good one, managers need to have the access to the right information at the right time so the risk of negative outcome of the decision will be minimized. Information systems, however, make it possible for managers to use real-time data from marketplace while making decisions. For example, Verizon Corporation exerts a Web-based digital dashboard to provide its managers with real-time detailed information on customers’ complaints, etc. This way Verizon Corporation’s managers can use the provided information to allocate, for example, repair resources where they are needed. So business data will make a company more effective in its industry.
Competitive advantage. When a company accomplishes one or more of above mentioned objectives, there is a chance that it has already achieved a competitive advantage. Being more reliable as business partner, charging less for products and responding to your customers and supplier needs in a real-time will certainly make your sales and profit grow.
Survival. These days most companies invest in information systems because they are essential to conduct a successful business. These necessities, however, are driven by industry level changes. Companies need to turn to information systems and technology to obtain information for creating business data and database list as well; companies are capable of responding to new challenges occurring in the market.
And as it has been already stated here, information systems are essential for conducting business nowadays. In many fields and industries, survival without the access to IT technology will not be possible. Information systems, including business data and database list play an important role in increasing productivity. In addition, the information technology provides one with the foundation for new products, services and ways of conducting business as well.