. Why Organization Need Information Systems?
Today, few medium or large-sized companies can survive without computers and information systems. Here are some reasons why organizations need information systems.
a. Meeting Global Challenges
The world has become a small place; the competition faced by a business is no longer limited by national boundaries. Companies therefore strive to produce high-quality goods and services that can compete in world markets. Through globalization can bring many benefits, such as increased profits and markets share, the challenges of running a global company are also significant. If the company is to be successful, it must effectively coordinates and control products, people, and procedures around the world. This requires a great deal of timely, accurate, and reliable information.
b. Capturing Opportunities in the Marketplace
Successful companies are those that can identify and take advantage of opportunities in the marketplace and can continue to do so over the long run. Information systems that allow a company to identify strategic growth opportunities in the marketplace are known as strategic information systems (SIS). These systems have catapulted some companies to the top of their industries, leaving their competitors far behind.
c. Supporting Corporate Strategy
Companies use three basic strategies to compete successfully in the marketplace:
• They stay ahead of the competition by providing goods services at the lower price than their competitors.
• They produce high specialized or unique goods and services that allow them to stand apart from their competitors.
• They find a market niche and focus on meeting the needs of this special group.
These three strategies are not mutually exclusive; a company can use them in combination. Regardless of the strategy a company uses to stay ahead of the competition, information systems and technologies play an important role in the implementation of business strategies. Companies use information systems to cut costs, improve productivity, create unique and innovative products and services, and better serve customers.
d. Linking Departments whose Functions are Different
Some years ago, departments or units with different functions in a business, such as accounting, finance, manufacturing, and human resources, were viewed as separate business entities. Often the efforts of these departments were not coordinated; this resulted in inefficiencies and lost opportunities for the company. Today, most companies treat these apparently different departments as parts of a cohesive unit whose members must work together to achieve the overall goals of the business. This is not always an easy task, because the goals of some units may conflict with those of others. However, information systems can bring different functioning units together by coordinating their tasks and functions.
e. Enhancing Worker Productivity
The pervasiveness of computers and information systems in business has made them essential tools in many tasks, such as manufacturing the shop floor, evaluating the performance of employees, tracking customers, recording items, and generating the payroll. Computers and information systems can therefore have a significant impact on a company’s bottom line.
f. Enhance Decision Making
Managers make their decision based on the information available and the experience they have achieved over time. If the information is well processed and well analyzed, it facilitates managers to make proper decisions. MIS, DSS, ESS supports managers to make enhanced decisions.
g. Improve Team Collaboration
Team working is characterized as a best business practice today. A team comprises more than two people who are responsible for similar work. They may be geographically spread and need to exchange information. Networking, Internet and Groupware software facilitates the process of information sharing among group members.
h. Create Business Partnership and Alliances
No business in the world works standalone. They need to communicate and make transactions with suppliers, customers, banks, insurance companies etc. Information systems facilitate the process and help to make amity among different parties. Electronic Data Interchange (EDI) transferred structured information such as invoice, orders between business organizations. Internet along with firewalls can also establish business-to-business transaction which is known as B2B e-commerce.
i. Enable Global Reach
We embraced globalization and our operating environment is a global economy. Because of the Internet we now have the ability to market our products and services in countries all over the world and develop partnerships and alliances with other businesses throughout the globe.
j. Increasing the Quality of Goods and Services
Quality is a leading concern for top and middle managers around the world, regardless of the products or services that their companies produce. Total quality management (TQM) is one of the most popular and most widely used approaches for enhancing quality in an organization. Quality-oriented efforts and decisions are highly information-intensive, so computers help a company achieve its quality goals by providing the right information to the right people at the right time. An enterprise-wide effort is required to improve quality; this often involves coordinating the tasks and decisions of many departments and units, sometimes located all over the world.