Use Of Information Systems In Global Business Today

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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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