Management of information system

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Management of Information System
Contents:
1. Introduction.............................................................................................................2
2. Importance of Information System........................................................................3
3. Four trends of global business environment...........................................................4
4. Advantages of internet for business expansion.......................................................6
5. Importance for intranet for gaining organisational efficacy......................................7
6. Organisational hierarchy.............................................................................................8
7. Types of information system serving each level of organisational
hierarchy......................................................................................................................9
8. References..................................................................................................................10

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Organisation ranges from small to medium and large are predominately relied on Information
system. Organisations use it as a continuous survival key. Many organisations for example
British Telecom, British Gas, Water and the Power companies got millions of client or
customer, they need to calculate the bills and keep records as well as provide customer
service and make profit. Without the help of Information system it’s impossible for them. In
addition, for Central and Local Government as well as high street banking organisations, this
same arguments employ. Moreover, Information System no longer stick to ad hoc approach;
it changes to a professionally planned , managed, disciplined and engineering approach.
Furthermore, it is a necessity rather than an option to elevate the computer information
system in this globalization era. Companies deriving competitive advantage over other firms
by upgrading information system to collect, absorb and assess internal and external data or
information. Management is faster to cope up with client’s requirements and complaints.
Subsequently, an advanced information system assists companies to supervise employees, to
keep managers and employees intercommunicated, to collaborate actions among division, or
to sell product through the internet.
Consequently, firm and suppliers, manufactures, dealers and marketers can be benefited
through direct communication between them with the help of a good information system. ,
they may create a value chain although they were in one organisation. In spite of , they were
in one organisation they can create a value chain.

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Part 1
Importance of Information System
Information system is inevitable in business today because of the outgrowth of a global
economy, conversion of industrial economics, transformation of the business enterprise and
the emergence of digital firm. In addition, to operate business in this unstable economy
information system is a backbone. Moreover, without wide use of information system
achieving strategic business goals is difficult for any business organisation. Now it becomes a
survival key for any business.
Further, without information system firms like, Amazon, E-bay and E- Trade would be
nonexistent and some service industries for example, finance, insurance, and real estate
industries might not operate. Though firm’s information systems and business capabilities are
interconnected, they are independent. However, we need to upgrade, software, databases, and
telecommunications, if we change strategy, rule, and business process.
For gaining six strategic business objectives organisations invest heavily in information
systems :
1. Operational excellence: We can obtain higher profitability by improving the
efficiency of business operations. Managers use information systems as a tool for
gaining better efficiency and productivity. For example, Retail Link system used by
Wal-Mart, all stores are connected digitally with its suppliers. Whenever, customer
buy a product, the supplier monitoring the transaction and shipment of the item.
2. New products, services, and business models: In order to create wealth a business
model illustrates how company produces, delivers and sells a product or service.
Information systems opens horizon to engage in business by creating opportunities
for products, services.
For example: Based on iPod technology platform Apple inc transformed its old
business model and include iPad, iTunes music service and iPhone.
3. Customer and supplier intimacy: Organisations can increase profit by improved
customer service. As customer purchasing more and more as well returning to
business. In addition, we can lower cost by involving with suppliers as they provide
maximum effort.
4. Improved decision making: Right decision needs accurate information but in many
organisation managers act as a source of information which is not preferable because
man has limitation of knowledge. As a result customers are diverting to competitors
and rise of cost. However, managers can use current data from marketplace if they use
information system. This make decision perfect.

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5. Competitive advantage: Organisation can reduce price for superior products if they
apply efficient and effective information system. Consequently, sales volume and
profit margin rises than the competitors do.
6. Survival: In this modern business world information system and technology
continuously provide incentives to survive. This refers to industry level changes. For
example: Automatic teller machine first introduced by Citi bank, after that
competitors adopt ATM to cope up with Citi bank.
Four trends in global business environment
“ The ICFAI center for management research state that the global business environment can
be defined as the environment in different sovereign countries, with factors exogenous to the
home environment of the organization, influencing decision making on resource use and
capabilities. This includes the social, political, economic, regulatory, tax, cultural, legal, and
technological environments.”
The exponential growth of digital information is the result of extensive development of
information system which transforming business that consists of increased use of wireless
communication devices, a massive shift toward online news and information, internet
advertising and booming e-commerce. In addition, accounting laws and new federal security
are also affected by the drastic growth of digital information. Moreover, internet made it
possible to reduce business cost and give the business world wide reorganisation.
These changes have led to the emergence of the followings:
The Emergence of Digital Firm:
The new phenomenon in industrial society because of the extensive use of information
technology in business firms(since the mid 1990s), coupled with equally significant
organisational redesign. All important business processes and relationships are digitally
enabled in digital firm. Customers, suppliers and employees are communicate digitally. In
addition, business assets are managed through digital means.
The emergence of global economy:
We are continuously experienced with new patterns of evolution as time to time major shifts
occur and redefine business. New power balance and architecture are the features of global
economy. In order to develop this are inevitable. In some reason, we see the well defined and
consciously applied strategy which is based on scientific change.

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In addition, global economy also forms a economy block which means no barriers for
business in certain regions for a particular countries. It also gives some benefits like less tax,
no services. For example, we can talk about European Union in which members of Europe
need not to pay services, and they have no barriers among them which ease the business
operation.
Moreover, sometimes we experience some Brownian movement something like it just
happened. To illustrate, we can talk about BRIC countries (Brazil, Russia, India and China).
These four countries not only change the patterns of global economy but also able to lead it
in the near future(2050).
The transformation of industrial economics:
Industrialisation is the transformation of human group from an agricultural society into an
industrial one by the process of social and economic change. Especially, technological
innovation contributes to the socio-economic development which is a larger part of
modernisation process. In addition, by the high-level energy and metallurgy production
industrial transformation accelerates and the industrial organisations evolve for large-scale
manufacturing.
The effect of Industrialisation shown by rising income levels since 1500. The graph shows
the gross domestic product (at purchasing power parity) per capita between 1500 and 1950 in
1990 International dollars for selected nations.
( Source: Depicting data excerpted from Contours of the World Economy, 1–2030
AD. Essays in Macro-Economic History by Angus Maddison, Oxford University
Press, 2007, ISBN 978-0-19-922721-1, p. 382, Table A.7.)

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The transformation of business enterprise:
The modern system of sovereign states symbols the hegemonic conversion of business
system. The powerful sate of “Monopolizing” is the main cause of evolving new business
enterprise. New competitors find their way of development through high-value-added
activities by enterprise system. The effect is expansive “monopolization”. For this reason,
monopolization is impossible. Enterprise system creates new and profitable path for business
as a result the formation of new system of business enterprise.
Part 2
Hundreds of thousands of individual networks and billions of people are linked via internet, it
is the largest implementation of client/sever computing and internetworking.
There are two ways to connect internet: via local internet service providers (ISPs) and
through their business firms.
The wide use of internet shapes people’s way to operate business. Now-day-days
organizations conduct business via online and allow people to contact via internet. Experts
also cautioned in the day to come internet rule all over the business. Dell computers only sell
product through internet. They got no store. Only they have a warehouse.
“According to professor Walter Solomon who is a world renowned consultant (commerce)
and a professor at Harvard University in the year 2000 Internet sales will be 6.5 billion
dollars, although only 34% of Internet users actually conduct business "on line, 76% of web
surfers say they will "e-trade" in the future. According to Solomon those that will not sell
airline tickets, home banking and tourism "on line" will be at a disadvantage. Other items that
sell well over the Internet are computers. Dell computers sell over the Internet at a rate of
$10.000.000 a day, with little expense. Tourism and leisure do well over the Internet.”
(source: http://www-
users.math.umd.edu/~bnk/CAR/project.htm#Business)
(a) Advantages of internet for business expansion
By the invention of navigation technologies global trade has existed for thousands of years.
Navigation helps people travel to distant lands or open new markets in exotic goods. At
recent business expand globally at decreasing marginal cost by the innovation in
transportation and communication. In addition, internet is another modern invention which
gives business a dramatic expansion. Moreover, public and private enterprises are expand
borders by facilitated collaboration.
The another aspect of business expansion is marketing. Marketing face changed dramatically
by internet. This process is much more easier and efficient than traditional marketing.

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Through internet people find plenty of opportunities that’s why it plays an important role in
the world of economy.
Freedom of marketing is most probably the best reason why most companies use internet.
Company can keep on eye and control business expansion through different strategies.
Company can also enable to customize their business goals and needs by high level of
creative control over their business.
In addition, company can access customers anytime when necessary by the assistance of
internet. Website going to be a employee who works for the company. It allows automation
in specific parts of business. Which is a great benefit for business expansion.
(b) Importance for intranet for gaining organisational efficacy
Intranet is a private computer network which uses internet protocol technology to link
securely a certain part of organisation. It is a restricted network which can access only certain
group. It is converse idea of internet which means a website for a particular group,
organisation or community.
Intranet allows employee to access data faster. They can use application according to their
role. Organisation’s people can view data which are available for them by the web browser
the interface. That helps organisation’s people to take decision over accurate data.
Intranet help organisation to disseminate information to employee on an as required basis. As
a result employees are not distracted by the random electronic mail.
In addition, vertical and horizontal communication is easier through internet. It is powerful
communication tool for such communication. A good example of intranet is Nestle. In
Scandinavia Nestle had a large number of food processing plants. A huge number of queries
overlook by the central support system every day. While nestle tried to go for intranet , they
think about savings.
Moreover, across the internetworked enterprise intranets are also used as a platform for
developing applications to assist business activities.
Subsequently, intranet reduce paper work as user can watch data via browser rather than
maintaining different forms like requisition forms, procedure manuals. To illustrate,
Peoplesoft use intranet in their HR process which saves them a lot.
Consequently, management information system also can be connected via intranet, like time
keeping system.

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Part 3
Organisational hierarchy
Organisations ranging from small to large or medium there consists four levels of
organisational hierarchy. Organisational hierarchy is crucial because it depicts how
commands are forward and operations done by whom. It also illustrates the chain of
command. Like who obey who’s command, who is responsible for work, priorities and so on.
However, the levels of the organizational hierarchy are:
1. Operational;
2. Knowledge ;
3. Management;
4. Strategic.
1. Operational level: It is the lowest level of an organisation. All actions are done in
this level. Like manufacturing.
2. Knowledge: This level relates to knowledge worker. They are expertise of
performing operations. They are extraordinary in that sense they know every corner of
an organisation. And they are good at problem solving.
3. Management: It is the level where all decision are taken through different analysis.
Managers are take decisions based on data, scenario. They are also manage all the
activities of a business. And responsible for business activities.
4. Strategic: This level sets the organisations short and long term strategy. This is the
most sensitive part of an organisation because it refers where the organisation will go
and what the vision.
For example: we can talk about Google. Google got nearly 20,000 employees. In this
organisation only four levels of organisational hierarchy:
Founder/CEO;
Vice President;
Middle manager;
Individual workers.

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Types of information system serving each level of organisational hierarchy
Transaction processing systems, like payroll, order tracking, machine control and
compensation serve the operational level.
Knowledge level includes engineering workstations, processing, graphics workstations,
managerial workstations, document imaging, and electronic calendars of knowledge work
systems and office systems.
Decision support systems and management information systems involves sales region
analysis, cost analysis, annual budgeting, and relocation analysis.

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Books:
1. Organizational Behavior: Managing People and Organizations
By Ricky W. Griffin, Gregory Moorhead
2. The Internet encyclopedia, Volume 1
By Hossein Bidgoli
3. Chaos and governance in the modern world system
By Giovanni Arrighi, Beverly J. Silver, Iftiḵẖār Aḥmad
4. Management Information Systems
Managing the Digital Firm 10th Edition
By Kenneth C. Laudon an Jane P. Laudon.
Website:
1. http://en.wikipedia.org/wiki/Industrialisation
2. Depicting data excerpted from Contours of the World Economy, 1–2030 AD. Essays in Macro-
Economic History by Angus Maddison, Oxford University Press, 2007, ISBN 978-0-19-922721-
1, p. 382, Table A.7.
3. http://ideas.repec.org/a/blg/journl/v5y2010i2p100-110.html
4. http://e-learning.mfu.ac.th/mflu/1203371/Chapter1_1.htm#top
5. http://wiki.answers.com/Q/What_is_the_definition_of_Global_Business_Environment#ixzz1
LomARfLy
6. http://www.comp.glam.ac.uk/pages/staff/tdhutchings/chapter1.html
7. http://www.submityourarticle.com/articles/Ted-Holcomb-7592/internet-marketing-
102557.php