Case Study:
What major features of a business are important for understanding the role of information systems?
A business is very similar to the information systems; both require inputs and some sort of processing, both have outputs, and both depend on feedback for successful completion of the loop. Information systems use data as their main ingredient and businesses rely on people. However, the similarities are remarkable. Both are a structured method of turning raw products into useful entities.
Every business has four functional areas: production and manufacturing, sales and marketing, accounting and finance, and human resources. In a successful business, the four basic functions will work seamlessly together to serve five entities:
• Suppliers
• Customers
• Employees
• Invoices/payments
• Products and services
Business processes help clarify tasks and maintain order in an organization. They integrate functions throughout an organization. Processes that deliver the best product for the lowest cost in the most efficient manner are imperative to success. Businesses can use information technology to enhance current business processes and even create new ones as follows:
• Change the flow of information and give access to it to many more people.
• Replace sequential tasks with ones that can be performed simultaneously.
• Eliminate delays in decision making.
• Drive new business models.
A good information system serves all three management levels: senior, middle, and operational, and helps a firm monitor its environment. It also helps a firm achieve some or all of the business objectives, including to:
(1) achieve operational excellence,
(2) develop new products or services,
(3) create customer and supplier intimacy,
(4) improve decision making,
(5) achieve competitive advantages, and
(6) ensure survival.
Discuss:
Question 1. Identify and describe the different levels in a business firm and their information needs.
Question 2. Explain why environments are important for understanding a business?