Information systems are fundamental to the functioning of contemporary commercial organizations across all economic sectors. In essence, the use of information systems in an organization's strategy determines both its viability and competitiveness. Due to the Internet's extensive commercialization and the dominance of online platforms in both business and marketing, digitizing corporate structures is no longer an option. The consumer-business connection has undergone a change because to social media platforms and mobile technology. Customers now prioritize immediate access to services and a prompt response to their demands. The impacts of technology to the business processes have brought opportunities for new services and products, efficiency in operations and more significantly, adoption of better business models. This paper will focus on the analysis of information systems specifically on the value chain and cost of doing business.
Introduction
The adoption of the information management systems is affected by various factors so as to derive operational and strategic advantages. Management information system involves the recognition that information is an important value that has the ability to create competitive advantage and expansion of an enterprise. This necessitates that the management take good control of the information and exploit it as a vital resource in daily operation and future plans of an organization. The MIS systems require good planning with proper handling of the business intelligence with a lot of reservation to avoid leaking the data to the competitors.
The MIS system helps and organization in decision-making, management planning and action regarding business processes that are crucial in daily operation and future expansion plans. Furthermore, the system provides reliable and dependable analysis of information on the necessary changes to the business management. The major challenges encountered with these information systems are the specificity of the data obtained and what steps the organization should take as a corrective measure. The authentication and the security of the information system, information available and accuracy of the data is a matter of concern in deriving crucial intelligence in order for an organization to gain competitive advantage.
Customer Relationship Management System
The main aim of installation of this system is to collect data about your customers focusing on their needs, identifying new entrants and capturing the information regarding the traditional consumers of your services or products. The fact that technology has led to new developments such as e-commerce CRM systems helps business organization to upload data to help the consumers in making decisions and analyzing the company and its reliability. CRM systems aids in creating better relationships with the customers because of the closer attachment with the organization. This is essentially because the organization is concerned about them, understanding their needs and appreciating doing business with them. The application of CRM involves such actions as creating profile for the routine customers, using customer friendly software and ensuring that there are preferences for the buyers by providing variety product information for the consumers to make choices.
Enterprise Resource Planning (ERP) as a Part of MIS
ERP involves the installation of software that helps in the flow of information in an organization for the different management functions. The decision-makers benefit from this system because they have an overall idea of the impact of their decision on the entire enterprise. Notably, there is a computing system that inter-links all the departments, branches and business units in ensuring that all the business processes are standardized hence ERP acts as the backbone of the information system for an entire organization. The system ensures that there is visibility, consistency and transparency because of the integrated and reliable information accessed from the system (Roberts & Sikes, 2011). The processes are rationalized and the redundant data is removed to ensure
The business functions are integrated leading to an increase in the speed of productivity because of proper communication network and sharing of information to enable effective decision-making. Enterprise software has become part and parcel of major corporations around the world due to access to accurate information on demand and supply (Chaffey & White, 2010, p.31). The notable benefit of adopting enterprise software has been the improvement on productivity reducing on the overhead costs of the organizations hence leading to profitability. The trend in the information technology age is the digitization of information sharing so the demand for packaged applications has increased hence becoming a source of competitive advantage.
The Supply Chain Management System
Ensuring that the procurement department has a good relationship with the suppliers and that there is seamless flow of information informed by demand and supply is crucial to the improvement of the value chain. SCM helps organization to create a closer relationship with the suppliers in an effort to ensure there is accuracy and transparency in the transactions for a long-lasting business relationship.
Transaction Processing System
The system aids in the authentication of transactions in order to ensure that they are genuine by validating the identity of the client before officiating the transaction. This system has contributed immensely in reducing the paperwork involved in the business processes, while at the same time reducing the time taken to complete the transactions. Furthermore, the application of the technological innovations to automate the system has made possible to complete the transactions online (Pearlson et al, 2016).
Knowledge Management Systems
Knowledge management systems are very crucial in the management of an organization. This is generally because they aid in the analysis of the available expertise in an organization, thus, helping the human resource department in identifying the knowledge gaps and the expertise they need to source to improve performance in an organization. Essentially, these systems are critical in ensuring that there is accurate data about the capacity of the organization to ignite innovation and to ensure proper utilization of the information technology to be competitive in a particular market niche.
The impact of Management Information Systems on the Value Chain
The analysis of the value chain helps to identify the tangible benefits that the consumers derive from the application of the information systems in an organization. An organization in this case is viewed as a chain of processes that is divided into the secondary activities and the primary activities (Xu & Quaddus, 2013, p. 31). The primary activities include logistics, marketing, operations and sales services while the secondary activities involve the functions of management such as human resource, administration, procurement and technology. The application of the Porter`s model of analysis will help to establish the specific areas in which information systems lead to strategic advantages to an organization. Essentially, the information systems such as MIS helps in adding value to the chain due to the establishment of the strategic partnerships through the formation of the alliances with the external partners. Organizations can create a valuable web of relationships by leveraging on information software brought about by the internet technologies (Lucey, 2005, p. 84).
The effectiveness and the efficiency of the value chain is improved because the customers are digitally engaged by the organization, the suppliers and other partners access the information needed for the supply chain to work seamlessly. The information systems help in sealing the gaps that exist in the value chain through enhancing collaboration and cooperation, while ensuring that the commination web is efficient (O'Brien & Marakas, 2006, p. 72).
Competition and Business Eco-Systems
MIS helps an organization to be actively involved in the business ecosystem by expanding their alliances and sourcing more information for their strategic interests. The creation of service eco-system informs the decisions that an organization makes with regard to introducing new products and venturing into new markets for profitability.
Specific roles of Information Systems
MIS ensures that an organization establishes a niche with regard to cost leadership. The cost of doing business can be reduced greatly while the charges of driving some of the business processes decreased to ensure efficiency in an organization. This will essentially lower the costs incurred by the suppliers in delivering goods and services while at the same time reducing the costs accruing to the customers to access the products produced by a particular organization. The practical application of the information systems include the introduction of platforms for e-procurement, online businesses for e-commerce and business to business models that will in the end reduce operation costs of an organization.
Management Information systems are valuable to an organization because of the strategic advantages it bestows in a saturated market niche. An organization can introduce differentiation features or compete to derail the differentiation features that are adopted by the rivals. This may include the use of the online-chatting software to engage the consumers in an effort to serve and understand them better. Technology in this case will give the consumers a better chance to evaluate the goods and services offered to them by a specific organization through end-to-end interaction. Information systems will help in the advancement of online operations in order to ensure that there is effectiveness and efficiency in advertising. Furthermore, the customer service systems can be enhanced to create traffic in the organization`s website as a way to market its products.
Improving Business Value by Adopting Information Systems in an Organization
An investment in the management information systems by companies around the world has become a priority after the realization of their potential to improve the business performance (Xu, 2014, p. 17). MIS can help the organization to add value by helping to improve performance, enhance its competitiveness and thus lead to profitability. The strategic plans that an organization has can be achieved through the adoption of information technology. The IT solutions and services can be relevant in the separation of business units when applied in different parameters for ease of the business processes. These technological solutions assist by ensuring that a particular business organization coordinated and monitored properly. The monitoring helps in assessing the performance by the employees and lowering the cost of ensuring all the business processes are active for the daily operations of an organization.
Information systems are crucial internal strategy to ensure transparency and a seamless communication interaction and sharing of crucial information among the departmental heads and other employees for action. The implementation of an ERP can help in adding value to an organization by enabling the acceleration in the building of relationships with the other corporates. The managers in a corporation are able to make informed decisions because they have access to accurate information from the systems on demand and supply dynamics of certain jurisdictions of their target markets. There is more interaction between the employees in the lower cadre and customers because they have access to information hence frequent delegation of responsibilities for faster execution of decisions (Soon & Fraser, 2014).
The major notable benefits of the information management systems include increasing the timeliness and the validity of data collected for the purposes of decision-making, simplification of the work processes and hastening the coordination of responses by an organization. The value chain of the internet contributes immensely in reducing the overall cost of production and marketing of an organization. The enterprises market share can be increased as a result of effective exploitation of information systems, boosting the satisfaction of the customers and reducing the marginal cost (Al-Abdallah, 2014, p. 49).
Direct benefits of implementing management systems are traceable to the value chain of an organization by contributing immensely in the development of better business practices. Information management systems ensures that there is constant flow of information between the different business units, thus, improving the coordination of employee, while at the same time enabling the centralization of the administration. The repair to the systems creates the capability of the organization in adopting the best system processes reducing losses and ensuring a data-based decision-making business model (Bughin et al, 2010). Enterprises around the world must keep adopting the latest IT solution to improve on operation productivity and applying better management methods to achieve a competitive and MIS is one of the best technology solutions that have advanced business practices around the world. The management systems can play a crucial role in identifying the weaknesses existent in an organization and the best way to alleviate them to enhance profitability (Laudon et al, 2010).
Strategy Development through the Use of the Management Information Systems
Organization`s strategy are in most cases meant to develop a plan for the future for expansion or an innovation strategy for the organization to gain competitive advantage over other industry players. This can be achieved by the organization making radical changes in their business processes through adoption of technology to automate their operations. Management systems can be of great assistance in development of new market niches, creating new products and in digital simulation and designing of new products. The telecommunication and internet networks present the employees with opportunities to be innovative in making the system better. The fact that the employees and clients are connected through the internet present an avenue to enhance close relationship that can be exploited for future business engagements.
Information systems are crucial in the expansion of an organization. Integration and diversification into other products can be achieved by expanding into international and domestic operations by the organization through the exploitation of the management information systems (Robert & Sikes, 2008). Leveraging on the global online communities, an organization can use the intranet services applying business models that lead to growth and creating a niche in the international market. Furthermore partnerships and long-lasting business relationship can be ignited by use of mobile applications in order to form strategic alliances with other businesses. Information systems inter-linked with different organizations and formation of virtual organizations will be a major step towards achieving an effective expansion strategy through exploitation of management information systems.
Challenges and Issues in the Implementation of MIS
The major challenge associated with MIS is the problem of the security of the system which at risk of cyber-attacks and loss of important information. The information Technology used in the development of management software must be secured properly to ensure that crucial business intelligence information is not accessed by the hackers. Critical information that is private accessed by outsiders could injure other business processes heavily leading to massive losses, while, control of internal systems would be critical to the daily operations in a company. The security of the information contained in the system is vital and any loss would result in monumental problem to the decision-making process. Regulations should be created among the staff to ensure that individuals who are not authorized are not allowed to access the system. Incorporation of features for authentication of the system is important so as to ensure that there is integrity of transactions conducted through the management system.
The Best Time to Adopt the Information Management Technologies
Early adoption of the technologies guarantees the companies of competitive advantage and faster modification of the systems to fit the organizational needs. The company gets the reputation and impressions of being an adopter of modern technologies. The organization executives are able to test their innovational skills because of the opportunities presented by the information systems to engage the employees in acquiring knowledge on information technology. Essentially, the business and the innovation strategy are aligned for the purposes of futuristic goals of the organization`s management (Bharadwaj et, 2013.p. 63). The need to conduct business on a global scale has necessitated that the international corporations adopt information systems that will help in analyzing the wide market niche.
Powerful communication and information systems are a crucial tools as transaction can be done effectively and transparently on e-commerce platforms. Information and knowledge has become crucial resources for organizations that wants to diversify their services or in launching new products to their traditional markets. Furthermore, the business enterprise has been transformed reducing the hierarchy and encouraging delegation of responsibilities to the junior employees to ensure efficiency (Greasley & Hickie, 2008, p. 66). The factors considered before employees are entrusted with the responsibilities are knowledge and their skills with regard to decision-making.
The emergence of the digital firms in contemporary times has led to intensive competition and traditional firms have to adopt information systems to fit in this market niche. The digitization of the traditional firms will be important in responding to customer needs and having constant interaction to understand their needs and reservations on particular products or services offered. The information contained in the system helps the management in making informed choices with regard to production, hiring and updating their online platforms for better relationship with the market and prospective customers.
The strategic position of an organization is improved, while profits increase due to the accuracy of information of the level of demand, hence avoiding wastages and saving on time. Information technology systems are helpful in the behavioral change of the employees which improves their individual productivity as communication happens instantly and there is online linking of offices to effect teleconferencing on issues of urgency that require brainstorming among the staff. Notably, the most significant development brought about by technological innovations on management information systems is the direct linking to the customers through creation of profiles that is customized to their tastes and preferences. Information systems are fundamental developments that will make business processes more efficient today and in the future.
Conclusively, the management information systems are important innovation in the modern world and have led to great progress in the business processes is managed. The efficiency and effectiveness of the systems contribute to productivity and reduction of the costs due to the accuracy of the information given to suppliers and other stakeholders in business (Laudon & Laudon, 2014) .Furthermore, the integration with other businesses and stakeholders makes the information systems an inter-link that ensures there is constant communication. Corporations that adopt the system in contemporary enterprise management have realized great benefits as much of the management in the modern practices depend on the data fed on information systems.
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