Competitive Advantage in Business, Essay Example
Information systems are transforming business by transforming data into useful information for more accurate, reliable and expeditious business decisions. The core of any business is dependent on how the decision makers take inputs from the business environment, calculate the data together and ultimately compute a business decision based on those inputs. As businesses go from the antiquated legacy processes of manipulating data to collaborative and instant information utilizing information systems, businesses can adapt and overcome their environments to help facilitate a competitive advantage. These information systems help provide a closer relationship between the key business decisions and the data needed to take the right actions. The closer and quicker decision makers can interpret and act upon the data, the better chance they have in creating a gap between themselves and their competition.
Key Factors for Information Systems
There are three areas in which information systems have transformed business practices. Information systems have reduced the necessary manpower to complete certain job functions, enhanced the performance and impact of those job functions or have provided a differentiating element to a new function in the business that can provide a competitive advantage (Rainer & Cegielski, 2010). All three of these results from the advent of business information systems have greatly benefited the way we are conducting business. With each stride forward the business world is conducting more activity with less human intervention as well as making the world a bit smaller by providing enhanced communication tools and multiple methods for transferring information in a globalized environment. In business there are always problems facing the decision makers. When faced with a problem there is a four step process to work through the issue. The steps are definition of the issue, brainstorming, evaluation and implementation. This four step process can help facilitate the any problem facing information systems by constructing a logical process in which to derive a solution. This process provides a framework for problem solving.
In certain functions the implementation of information systems allowed specific transactions that require numerous people to conduct into automated methods which eliminated the need for menial job tasks. By eliminating these tasks the initial work force could be reduced and the limited resources the company has to employee their workers could be reallocated to other parts of the business in order to enhance their overall business model. An example of this is the replacement for the bank teller. While we still have live bank tellers in banks across the world, the automation of that position with the automated teller machine or ATM has provided the ability to provide better service to the banks customers by allowing access to the customer’s funds at their convenience but also allowed the role of the bank teller to progress into a role more associated with banking transactions than a customer service representative. This automation provided better service and enhanced the teller position by allowing the banks to redefine what is expected from their banking positions.
As positions grow through the use of information systems their roles and responsibilities increase due to the fact that they can manage much more information and process data more efficiently and effectively. In manufacturing the receiving process requires the coordination of multiple different departments and companies to make sure the right products are received at the right time in order to have the raw material as the input to the factory’s process. As inventory tracking systems required more from the business, information systems were developed to meet the need. As the information systems were leverage, the receiving departments became more effective by moving away from manual processes to automated systems with capabilities to leverage technology such as barcodes and tracking of their goods. Information systems allowed the position of the receiving team to increase in their ability to track, monitor and report their inventory which provided greater insight and efficiency to the business leaders to make critical choices in their supply chain.
In order to create a differentiation through information systems the business must adapt or leverage a technology and adapt it to their strategic business goals. This is apparent when a technology system is leverage to help a company stand out from the competition and provide a good or service that the consumer requires. An example of creating a competitive advantage through an information system is how Apple conducts their sales and access for their iTunes library. Through the use of cloud technology, Apple provides their end user with the access to their information from anywhere internet access if available (Mootee, 2011). This is the perfect example of providing information as close as possible to where it is needed and using that strategy to create a competitive advantage. While Apple is often imitated it is rarely duplicated in its service and function.
Information systems are transforming how we conduct business globally. Integrated systems, instant messages, email access, shared collaboration portals and virtual conferencing capabilities are just some of the information systems that allow business transactions to be conducted in near real-time across multiple time zones (Stair, Reynolds & Reynolds, 2009). This access to information allows enhanced collaboration between globally disparate business entities that was not available previously. As we move forward and emerging economies are becoming more and more important to domestic companies, it is apparent that information systems are essential for managing and conducting business today. The global economy is ripe with opportunity and leveraging information systems to participate is the only sustainable way for a business to conduct itself.
The benefits of information systems have been discussed but in order to take advantage of their usefulness it is important to first understand what information systems are at their core. Information systems are the networks, hardware and software facilitated by people to collect, analyze, process, transmit and create data so that the data can be processed into useful information. This works by taking a technology and using it to replace the manual efforts associated with processing data. This provides a more efficient and accurate derivation of data to information. The people behind the scenes in the information system organization provide the necessary expertise to manage, upgrade, facilitate, implement and sustain the information systems for business use.
Information systems transform the business environment by providing the tools necessary to bring the right people, data and issues together at the right time in an accurate and reliable fashion. Information systems are leveraged in business to break down unnecessary boundaries and walls that previously prevented transactions from occurring. Through eliminating manual efforts, creating enhanced opportunities or creating a competitive advantage by leveraging information systems, the business is conducting themselves in new and different ways every day and in expanded capacities.
Rainer, R. K., & Cegielski, C. G. (2010). Introduction to information systems, enabling and transforming business. (3rd ed.). Hoboken, NJ: Wiley.
Stair, R. M., Reynolds, G., & Reynolds, G. W. (2009). Principles of information systems. (8th ed ed.). Course Technology Ptr.
Mootee, I., (2011). Apple – a rare case of sustainable competitive advantage. Retrieved from: http://www.innovationexcellence.com/blog/2011/08/24/apple-a-rare-case-of-sustainable-competitive-advantage/
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