It is a big category but in brief, Information Systems is the back bone of today’s
businesses and critical part of mid-size to large businesses like banks. The massive
data and increasing volumes of data needs organized storing and fast and effective
processing for variety of purposes from decision making to risk management, from
transaction processing to state-the art products. The large-scale businesses are globally
distributed across the world which needs stable and reliable infrastructure and network
administration and the applications which can run and handle simultaneous, real time
and fast processing. The availability of technology has enabled the businesses to offer
variety of services which has made Information Technology as part of the businesses
today. What seems to be a simple online banking transaction for instance, involves
web-based programs which run on a one platform and access the data in another
platform like mainframe and make there should be network communication and systems
which can communicate to each other, available 24 by 7. The more businesses grow
the more dependent they become of Information Systems.
If the information system failed, especially in the New York, and the stock
exchange, we would be in a repeat of the great depression, in way. Since the
information system play a large role with computers, the stock exchange would crumble.
If the information system failed in an airport, that would be bad news. Every flight would
be grounded, air traffic control would not be able to safely control and bring in planes,
let alone allow the planes to take off. Currently we depend too much on technology, and
computers. Basically our whole lives are surrounded by it. Just like if I was not able to
get my computer to work, than I could not attend class.
A good example of the information system is Wal-Mart that uses a Retail Link
system, which digitally links its suppliers to every one of Wal-Mart’s stores. As soon
as a customer purchase an item, the supplier is monitoring the item, knows to ship a
replacement to the shelf.
Another example is the Mandarin Oriental in Manhattan and other high-end
hotels exemplify the use of information systems and technology to achieve customer
intimacy. They use computers to keep track of guests’ preferences, such as their
preferred room temperature, check-in time, and television programs.
When firms achieve one or more of these business objectives (operational
excellence, new products, services, and business models, customer/supplier intimacy,
and improved decision making) chances are they have already achieved a competitive
advantage. Doing things better than your competitors, charging less for superior
products, and responding to customers and suppliers in real time all add up to higher
sales, and higher profits. Example: Toyota Production System focuses on organizing
work to eliminate waste, making continues improvements, and TPS is based on what
customers have actually ordered.
Information systems are the foundation for conducting business today. In many
industries, survival and even existence without extensive use of IT is inconceivable, and IT
plays a critical role in increasing productivity. Although information technology has become
more of a commodity, when coupled with complementary changes in organization and
management, it can provide the foundation for new products, services, and ways of conducting
business that provide firms with a strategic advantage.