Free «Impact of Information Systems in an Organization» UK Essay Paper
Organizations and businesses today consider information systems as factors of production that substitute labor and capital. Information systems automate business production processes thus resulting in the reduction of capital and labor required in specific productions. According to scholarly materials, an information system is the sum of all tools, procedures and techniques used by firms to process information. Firms adapt to the use of this method to improve their activities in given business settings hence allow development of business. The article in the discussion is “The Effect of Information Systems on Firm Performance and Profitability Using a Case-Study Approach.” The authors state that information systems of organizations are different because of the varying needs. The aim of the information system according to the authors is to bring about a competitive advantage by ensuring improvement, repetitive evaluation of efficiency and effectiveness of the business processes. The organization discussed in this article is Beale and Cole Building Services. The case study here is with the aim of discussing the existing information system practices and their effect in organizational performance. In the past years, the existing processes, operational practices and ICT infrastructure happened to be inadequate for the sustaining of the business. After the establishment of the Knowledge Transfer Partnerships, there was a critical analysis of the existing information systems and propositions that would foster improvement of the business processes, increase profitability and efficiency.
The study involved a review of the internal business processes and consequent information systems to highlight major areas of concern such as duplication of information, process inefficiency and inappropriate communication. The main issues discussed in the article were the inefficiency of operations, lack of integration and uniformity and communication. The communication models were expensive and limited at the same time (Olugbode, Elbeltagi, Simmons & Biss, 2008). To correct these disparities, there was an improvement in the existing information systems. There was the introduction of electronic sheets that got rid of duplication problems. In order to improve information security, there was an integration of communication systems and IT thus increasing reliability and user confidence. After the implementation of the new information system, it is clear that there was an improvement in the operations of the business. Such include streamlined communication, enhanced customer service and relations, efficient management of information, increased turnover and business growth and cost control.
Information systems (ISs) affect costs and qualities of information in a business. This helps to contract the size of firms as it reduces transaction costs. In an effort to reach the main objective, firms can lower transaction costs hence making it possible for them to work with suppliers externally (Olugbode et al., 2008). Information systems also reduce internal management costs of a business. They reduce costs of analyzing and acquiring data thus reducing agency costs as managers oversee the number of employees. In summary, information systems and technology reduce management costs thus enabling businesses to increase their revenue and reduce the number of personnel at the same time. Information Systems flatten organizations: this entails downsizing of organizations by reducing the number of employees and hierarchy levels.
Another impact of information systems is its use in the achievement of competitive advantages. For most successful enterprises such as Apple and Wal-Mart, strategies employed base on the information systems. Information systems also help firms to establish new services and products that meet customer requirements (Olugbode et al., 2008). The article also explains that adaptation of the information systems requires changes in individual and personal routines. To make this work, it is, therefore, important to change the tasks, technology, structure and people. This way, the business produces, collects and analyzes information about market situations and the necessary actions to boost their sales.
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