Use of Information Systems in Global Business Today 1

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Use of Information Systems in Global Business Today
Introduction
Technological development has revolutionized how people conduct business globally in
more than one ways. Information Technology has recently become a critical cog in driving world
economies forward in terms of investment, economic value, and accounting (Tapscott). In the
last few decades, we have witnessed the highest technological investment than before.
Businesses worldwide are heavily investing in information systems software, hardware, and
telecommunications equipment so as to keep up with the market forces that are constantly
demanding for automation of business processes. For instance, businesses in America spent over
562 billion dollars on information systems software and hardware only. Additionally, the world
trend has witnessed an increase in technological investments rise from 32 percent in 1980 to 52
percent in 2009. Therefore, it is evident that information systems have transformed the global
business of today in many ways. In this essay, I will comprehensively describe the use of
information systems in the world’s business today.
Information Systems
Information system refers to a set of interconnected components that collect, process,
store, and disseminate information necessary for decision making in an organization.
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Components of an information system include software, hardware, infrastructure, and personnel
that coordinate and control the decision-making process in an organization (Clayton).
Information systems in business are viewed in three different dimensions; technology,
management, and organizations. An information system is an integral part the larger
organization. An organization is made of different levels of employees who take part in different
organization's roles. Senior management, for instance, long-term strategic plans, middle
management execute plans of the senior management, and operational managers monitor daily
business activities. On the other hand, the mandate of the enterprise management is to make
decisions, solve organization's problems, and allocate resources necessary to meet business
goals. Finally, among the many tools management use to run the business is the information
technology. The hardware part of the information system is the physical part while the software
consists of instructions that control the computer hardware.
The management invests in information systems for their ability to provide a real
economic value of the business. Despite the huge technological investments made by businesses,
the investment choice made determines the success of the business. A firm that makes a wise
technological decision is able to outdo its competitors while those that make poor investment
choices end up wasting resources. Therefore, there is a direct link between the performance of an
organization and the information system invested in. This is because an information system will
enable the management to efficiently execute business processes to meet business objectives and
strategic plans. The information system acquired should have a direct impact on the business
processes in terms of resource allocation, staff management, workflow management, and activity
monitoring. An information system is meant to ensure efficiency while reducing operational
costs.
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How Information Systems are Transforming Global Business
Since the inception of the Internet technology, the world has been reduced to a village as
people can talk to people all over the world as if they were close to each other (Luftman). The
diversity of the internet and web-related products have drastically reduced the cost of operating
businesses on a global scale. With the introduction of e-commerce, business is able to sell their
products to the broader internet market. The information system has seen increased use of
wireless technology, change in media and advertising, improved decision making, and better
customer relations.
Growth of Wireless Technology
The twenty-first century has seen an explosion of mobile radio communication system.
People are entirely relying on mobile phones in everyday life for communication, entertainment,
shopping, and banking. With the increased use of mobile phones and other wireless devices,
businesses have rushed to invest in the readily available market. The usability of wireless devices
is derived from the fact that it is portable and can serve multiple purposes. For instance, many
employees prefer to work on their portable devices as they are not restricted to work from the
office. Advancement in wireless technology has also contributed to development of Machine-to-
Machine (M2M) technology where are devices are interconnected to communicate and share
data (Lawton). In an information system, the harmony of all components of the organization is
important as it ensures smooth running of all operations. Therefore, incorporation of M2M
technology in business enhances automation of business processes thus offering competitive
products to the customers.
Change in Media and Advertisement
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Businesses have been able to shift to digital media and online advertising platforms.
Digital communication media have enabled efficient access to information and dissemination of
instructions. Combined with the internet, digital media has caused significant disruption in the
field of world commerce leading to paperless business activities as all media are consumed and
produced on computers. With the existence of the website and social media, a business can be
able to pass information to a wide range of employees and customers at a very low cost.
Additionally, businesses are able to share ideas and instructions from different locations. For
instance, a firm that has directors from all over the world can have them exchange ideas in real
time using video conferencing. Additionally, digital data can be shared from different
geographical locations instantly thus enabling first decision making among the management.
Advertising is an important aspect of business as it allows access to new customers and
sustainment of the existing customers. Marketing information systems are powerful tools ensure
the success of business by being able to drive sales up by maintaining customer focus and
outdoing the competitors. Marketing information systems have made it easy to manage recurrent
expenditures such as advertisement campaigns and advertising expenditures (Boykin). Marketing
information systems have changed advertisement approach as it has enabled email
advertisement, promotion, and social network advertising.
Social network advertising is a new advertising method that refers to online advertising
form that targets social networking services such as Facebook, Twitter, and Instagram. Social
media employs geotargeting, social-psychology targeting, and behavioral targeting options to
identify the needs of the target group. Social media platforms have rapidly grown over the past
few years gaining interest from online advertisers. Businesses that have embraced social network
advertising have enjoyed an advantage over other organizations as they are able to deliver
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individually tailored advertisements that have higher chances of yielding positive returns to the
businesses (Arslan).
Improved Decision Making
Management information systems have helped the management make valid decisions by
performing analytic functions that provide accurate and up-to-date information. Therefore, the
information system chosen must be able to work with the type of data available in the
organization and meet future needs. Management information systems are able to structure
available data from company’s operations and produce reports that guide the management into
making viable decisions.
Information systems provide the management with scenarios that will enable them to
vary decisions to determine the best result for the business. For instance, one can be able to
determine what happens to revenues if staff levels are reduced or advertisement budget is
increased. These systems are important for making realistic scenarios. The decisions adopted
result to changes in projected business results and may require modification of business
strategies and long-term goals (Markgraf). To monitor these changes, management information
systems have built in trend analysis that determines how projected results will be after the
decisions have been implemented. Management information systems also track the business's
results to determine whether they have had the desired effect on the business.
Better Customer Relations
Good customer service gives them the confidence to come again thus increasing returns
and profits for the business. A company is able to master good customer service by timely
response to customer questions and complaints. New technology provides ways to predict
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customer needs and customizing business processes to best serve customer needs. A business
with a robust customer care system will improve its efficiency and cut a clear competitive
advantage over other businesses. There are a number of ways that can be put in place to improve
customer loyalty. Use of a website where customers can share their experiences and seek help is
one way that technology can improve customer service. Additionally, a business can use email
service to take and responds to customer requests. Finally, there are other sophisticated data-
gathering tools and customer management systems that can be put in place to better serve the
customers.
The primary aim of any business is to create a log lasting customer relation and loyalty.
This can only be achieved by the provision of quality products and customer appreciation.
Technology has not only provided businesses with better customer service but has also increased
the channels through which interaction with customers can take place. Customer care
information systems realize quality customer service through analyzing collected customer data
to determine their preferences, insight-driven marketing, self-service optimization, and
marketing automation.
Globalization Opportunities
Information systems have enabled local businesses to go global. Growth in the Internet
and personal computer use have allowed enterprises conduct their activities globally with a lot of
ease. By the use of e-commerce, businesses are able to sell their products to a large pool of
customers in the online market. E-business goes beyond geographical barriers enabling
businesses to reach to customers from all over the world. The information system has had a great
role to play in availing of globalization opportunities by influencing different cultures.
Globalization has not only affected the internal management of businesses but also makes it
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easier to transact between other industries all over the world, thus improving profit margins
(UKEssays).
Factors Limiting use of Information System in Business
Despite a load of the positive contribution of an Information system to the growth of
business, there are a number of challenges that have limited its use in business. The initial cost of
implementing information system is high thus limiting the use of information systems to large
companies. Acquiring of required hardware and software requires heavy investment which
means startup enterprises are not able to enjoy the benefits of using information system in
business processes.
Use of information systems presents the business with data security issue to worry about.
Information system relies on digital media for data storage and transportation. Such data is at
high risk of being stolen by cyber criminal which would have a devastating effect on the firm.
Firms entirely depend on an information system for all business activities; therefore, loss of data
would bring the firm to a standstill making it suffer huge losses.
Finally, there is are chances of an information system failing. Investing heavily in
information system does not guarantee business success. Therefore, in case implementing an
information system does not yield tangible results, the firm may incur huge loses that might be
hard to recover. Therefore, before investing in an information system, it is advisable that a
comprehensive research be carried out to ensure the right information system for a given
business model is implemented.
Conclusion
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In conclusion, information systems have had a great impact on global business today. In
the technology era, survival of a business greatly depends on the technology adopted. Businesses
that are able to incorporate new technologies into their existing business models have a
competitive advantage. As discussed above, information systems have enabled global businesses
to operate efficiently, improve decision-making process, improve customer service, and produce
new products among others. Therefore, it is logical to conclude that information systems have
had a positive impact on global businesses today despite the huge implementation cost and other
associated challenges.
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Works Cited
Arslan, Ibrahim, et al. "The effects of information technologies in marketing." Lex ET Scientia
International Journal (LESIJ) 15.2 (2008): 190-196. Document.
Boykin, George. "The Effect of Marketing Information System on Sales Performance." 23 June
2014. Chron Website. Web page. 08 April 2017.
Clayton, Paul D., et al. "Building a Comprehensive Clinical Information System from
Components The Approach at Intermountain Health Care." Methods Archive 42.1 (2003):
1-7.
Lawton, George. "Machine-to-machine technology gears up for growth." Computer 37.9 (2004):
12-15.
Luftman, Jerry N., Paul R. Lewis, and Scott H. Oldach. "Transforming the Enterprise: The
alignment of business and information technology strategies." IBM Systems journal 32.1
(2013): 198-221.
Markgraf, Bert. "The Role of Management Information Systems in Decision-Making." 2015.
Chron Website. Web page. 8 April 2017.
Tapscott, Don, and Art Caston. Paradigm Shift: The New Promise of Information Technology.
New York: McGraw Hill, Inc., Professional Book Group, 2003.
UKEssays. "Information systems and globalization." 23 March 2015. UKEssays website.
webpage. 9 April 2017.

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