Strategic information systems

1 Strategic Information Systems

Information Systems

Information System is a set of components that collect information at different levels of organization , consolidate it and distribute it all across organization to support decision making , coordinating activities and controlling workflow in an organization

Strategic Information Systems

Strategic information systems modify an organization 's goals operations , products , services or environmental relationships to help the organization gain a competitive edge (Laudon 2002 ,

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Impact of Information Systems on Organizations

An Information System can become a company 's core competency by

significantly improving its product . It can enhance distribution channel management . Implementing an information system may start with large scale changes and business process re-engineering . Some businesses go as far as changing the entire business model . The aim of an organization should be to achieve a competency by making information system its core function

Supplier management becomes simple if IS updates the purchasing department regarding current status of inventory level of each material Firm can bring down its inventory storage costs and enjoy quicker delivery from suppliers . Similarly , buyers and distributors of product can share information regarding in-store product level that company can replenish before the buyer is out of stock

Information Systems also have capability to impact the production process . Large scale productions can be organized through automated systems which help in cutting costs in overhead and achieving breakeven at lower production levels . This enables organization to produce economies of scale in its manufacturing procedure . Furthermore , this cost advantage increases company 's revenues and its profitability

Employee management becomes easier and effective . Not only internal communications are enhanced but human resource inventory can be maintained just as inventory of other resources is maintained . Any change in information initiated from one department of organization will automatically prompt another reducing tedious work . For example if an employee has received increment in pay then Human Resource department can make relevant changes and Finance department will automatically be prompted to make their payment invoice as per new level

Organizations that directly deal with their end-user specially those in service industries such as banking , airline , hospitality or freight delivery can benefit highly through Information systems . Through tracking a consumers buying behavior and their prior experience with the organization enables customer service personnel to personalize and improve service level for the customer

Once a company is able to develop and sustain such advantages over its competition , it is plausible for it to become a market leader . Also , if an organization with such competencies is operating in an industry , the industry often becomes unattractive for new entrants . Thus , increased entry barriers reduce threat of any further competition

Levels of Strategic Information Systems and Their Impact

A Strategic information system modifies traditional models of strategies and replaces them with new information flows . These changes occur at three levels in a Strategic Information System business level firm level and industry level . A combination of different strategic systems at these levels make up an entire organizations Strategic Information System

Business-Level Strategy is...