The world today faces the largest growth in most economies is coming from ‘information’ industries. The success of such knowledge-based organizations lies in their information systems. Also, forced by technological change and globalization of markets, all industries including manufacturing, service sector and government are also placing increasing emphasis upon information systems (IS).
A bank can have a huge customer database and transactions records. Everytime if a bank gets new customer, number of records will be generated which will be availlable to employees as per needs. Likewise if a customer submit a cheque or do internet banking transaction, a number of transactios will be generated. The database and transactions will be used by staff of the bank as weel as customer through Internet banking interface. The bank also have to rum other applications like money transfer and Customer Relationship Management (CRM) which also generates a great number of transactions. To support large number of customers, bank can have connection to ATMS, POS and Strategic partners. It also must provide interface to government agencies like Tax department and regulatory authority, Central Bank. The bank also needs a special systems for Management Information System(MIS) for managers and executives. To have such services, a bank needs a collection of application systems, operating systems, servers and desktops, network and communication technologies and skilled and efficient people to design and maintain software, hardware and communication technologies. A combination of all is called Information System(IS).
Many people do think that Information systems are limited to computer programs or science. It is rather a broader concept used in every discipline, focuses on exploring the interface between management, information science and computer science. Computer Science focuses on information technology: software, hardware and communication systems. Information Systems mediates the two opposing worlds of human activity of corporate systems and information technology.
Though information and communications technologies are playing an increasing role in meeting organizations’ information needs, an information system is a much more general concept. It refers to the wider systems of people, data and activities, both computer-based and manual, that effectively gather, process, store and disseminate organizations’ information.
Information systems are the foundation for conducting business today. In many industries, survival and even existence without extensive use of IS is
inconceivable, and IS 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.
Modern business organizations become more and more dependent on their information systems to deal with the complexity and changeability of the context (markets) in which they operate and consequently their internal organization structures. Up-to-date, complete and accurate information has become a necessity to survive in an increasingly competitive world. Developments like dynamic cooperation networks, mass customization of products and services, and end-to-end process control require automated means to control operational business processes, for the simple reason that humans cannot oversee the entire operation in an efficient and effective way anymore. Consequently, business requirements to information systems increase at a dazzling pace.
On the other hand, the rapid developments in information technology give way to application types that simply were not feasible just a few years ago. These developments range from basic computing technology via communication technology and a broad spectrum of data and process management technology to complete frameworks for enterprise information systems and e-business systems. Consequently, technology push forces have a major influence on current developments.
Information Systems is the backbone of today’s businesses and critical part of mid-size to large businesses like banking, telecoms and insurance industry. 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 Executive Support systems for strategic decision making. 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 small mobile devices. The more businesses grow the more dependent they become of Information Systems.
Business improve the efficiency of their operations in order to achieve higher profitability. Information systems are important tools available to managers for achieving higher levels of efficiency and productivity in business operations. A good example is BigC, a supermarket-chain in Thailand that uses a modern system, which digitally links its suppliers to every one BigC ‘s stores. As soon as a customer purchase an item, the supplier is monitoring the item, knows to ship a replacement to the shelf.
Information system is a major tool for firms to create new products and services, and also an entirely new business models. A business model describe how a company produces, delivers, and sells a product or service to create wealth. Apple Inc. transformed an old business model based on its iPod technology platform that included iPod, the iTunes music service, and the iPhone.
When a business serves its customers well, the customers generally respond by returning and purchasing more. this raises revenue and profits. The more a business engage its suppliers, the better the suppliers can provide vital inputs. This lower costs. The Crowne Plaza in Shanghai and other high-end hotels exemplify the use of information systems and technology to achieve customer intimacy. They use Information Systems to keep track of guests’ preferences, such as their preferred room temperature, check-in time, television programs etc.
Many managers operate in an information bank, never having the right information at the right time to make an informed decision. These poor outcomes raise costs and lose customers. Information system made it possible for the managers to use real time data from the marketplace when making decision. Directi, a multinational company in the business of Internet domain registration and hosting, uses a Web-based digital dashboard to provide resellers and customers with precise real-time information on customer sales business performance. Using this business managers can immediately allocate their resources to affected areas, inform customers.
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. Toyota Production System (TPS) focuses on organizing work to eliminate waste, making continues improvements, TPS is based on what customers have actually ordered.
Business firms invest in information system and technology because they are necessities of doing business. This necessities are driven by industry level changes. Citibank introduced the first automatic teller machine to attract customers through higher service levels, and its competitors rushed to provide ATM’s to their customers to keep up with Citibank. Providing ATMs services to retail banking customers is simply a requirement of being in and surviving in the retail banking business. Firm turn to information system and technology to provide the capability to respond to cope with new technologies and expand their productivity. Without information systems, business organizations cannot effectively transfer information, which is usually the lifeblood of any corporate.