A Strategic Information System (SIS) is a system to manage information and assist in strategic decision making. In short, boxes are more important than networks when an organization uses information technologies for internal cost control purpose. For … A strategic plan provides management the roadmap to align the organization’s functional activities to achieve set goals. In the recent past, any business success has been pegged on the information technology quality that the business has employed and the capabilit… Third, organization changes created by mergers and acquisitions, by downsizing the organization or by market-driven reorganizations have necessitated consolidation and centralization of information technologies. Second, information technologies have become distributed over time with respect to processing, memory, switching and intelligence. In the old days, it required specialized technologies for voice, data and video communication, for example. While the focus is on the centralized, single location displacement of professional staff, it is important to note that it is not hardware architecture but software capabilities that are key to this application of information technologies. Today, the strategic information system are widely used in business. The employees will be able to manage all their information and improve the execution of their business processes. Cost effectiveness and productivity – the IS application promotes more efficient operation of the company and also improves the supply of information to decision-makers; applying such systems can also play an important role in helping companies to put greater emphasis on information technology in order to gain a competitive advantage. Therefore, organizations have to plan for the long term when acquiring information systems and services that will support business initiatives. This framework is represented in Figure 6. Therefore, organizations have to plan for the long term when acquiring information systems and services that will support business initiatives. It is no wonder that information products and services including FAX, data networks, personal computer terminals, and private lines have been growing rapidly around the world. It is, therefore, not surprising that more generic operating systems, such as UNIX and higher level user languages such as the C language, have become extremely popular in recent years. Most hardware manufacturers have discovered that they have a weakness. For example, we are witnessing market share battles in the steel, metal, chemical, processed foods, mainframe computing, automobile and appliance industries. As part of the strategic planning process, Similarly, at APL., a container shipping company based in Oakland, California, information technologies are centralized and report directly to the CEO. 4.0 Strategic Roles of IS The Information systems help an organization at being strategic. How are the Organizations Likely to Use Information Technologies. Other examples include Martin Marietta and TRW in the defense industry; Apple and Hewlett-Packard in computers and electronics; Archer Daniel Midland (ADM) and Kellogg in food processing; 3M and General Electric in general manufacturing; Merck and Abbott in pharmaceuticals; Nucor and Carpenter Technology in steel and metals; and Federal Express and American Airlines in the transportation industry. In virtually all businesses, whether they are high tech or low tech, consumer or industrial, products or services, there is at least some degree of global business operations. A number of books have been written in recent years that discuss specific case histories. A good Information Systemprovides a framework for companies to evaluate themselves relative to dimensions. In many organizations, top management has recognized that it is better to invest in capital spending in order to reduce operating costs. It represents a radical departure from other information systems concepts — a completely new way of thinking about the role of information systems in the strategic planning process. ft is the linking of independent organizations for partnership purposes. Federal Express went one step further. By the time they graduate, MBA students should be familiar with new technologies, such as information systems, and also the tried-and-true business skills that have long produced effective and productive business leaders. Second, we have witnessed a significant number of domestic mergers and acquisitions in many industries especially in the last decade. Some experts believe that just as labor was probably the most critical resource in the agricultural age, and capital was the most critical resource in the industrial age, information will be the most critical resource in the post-industrial age. WSU creates opportunities for a high-quality education, and since 1890, has produced forward-thinking graduates who make a difference in the world through skillful, ethical leadership. 426-434. Business executives in nearly every industry have discovered that the processes they use, particularly the “as-a-service” cloud analytics services, and the active participation of customers who want to customize their experiences more each year are inseparable from business information systems. These alliances can be a research consortium, co-development, shared manufacturing, marketing or support services. These mergers and acquisitions require reorganization and rationalization of respective information technologies. This is essential for all elements of the organisation ranging from marketing communications through … Business processes can be simplified and unnecessary activities can be streamlined through the use of information systems adapted to common business tasks, such as manufacturing, supply chain, and employee processes. To integrate communication, Bourgeois suggests adding people and process to the traditional hardware, software, and data components of information systems. Strategic information systems are the information systems that companies use to help achieve their goals and become more efficient. Tech writer Julie Davoren details them on Chron.com as follows: As information systems become more entrenched in the world of business, companies’ managerial staffs and executives are expected to familiarize themselves thoroughly with business information systems and what they have to offer. The goal of such information systems is to provide relevant information to management so that it helps in its functioning. Second, global business operations have necessitated use of online computerized networks to minimize time and distance barriers. We are witnessing similar cost reductions in fiber optics, switching systems, and digital services. In today’s continuously changing and fast moving world, where customers’ requirements and preferences are always evolving, the only businesses that can hope to remain competitive and continue to function at the performance levels that can match their customers’ expectations are those that are going to embrace innovation. It is a massive change, and the consolidated data processing and telecommunications departments become a significant resource for top management attention. Systems development risks in strategic information systems ... bility has been of benefit. The performance-price ratio of a new generation of information technologies is making them more affordable and useful to the organization. This kind of technology allows for faster, more accurate reporting, better business decisions and … ), it is possible to transmit, store, process and distribute different forms of information (voice, data, video, text) on a single integrated technology. This use of information technologies for internal planning purposes is relatively new. Another example of DuPont’s commitment to using information technology is its investment in advanced computing. Information systems when used for providing information to managers for their decision-making needs become a management information system. Many of Bryant & Stratton College's continuing education programs highlight information systems and the skills needed for positions that deal directly with the technology and practices of health information systems. It results in account control. This directly impacts information technologies. The WSU Carson College of Business has a rich history of more than 55 years delivering graduate management education, including more than 20 years of experience offering online degree programs. Figure 2 depicts the four drivers of the changing role of information technology, in this section of the report, we will discuss why and how each force is enhancing the strategic importance of information technology. Alliance management across multiple organizations requires network solutions. A strategic information system helps an organization gain a competitive advantage through its contribution to the strategic goals of an organization and/or its ability to significantly increase performance and productivity. In the 21 st century almost all organizations use Information and Communication Technologies to efficiently manage their operations, to help managers make better decisions and achieve competitive advantage, and to facilitate seamless internal and … As the industry matures, lack of growth and excess capacity often result in market share battles between two or more very large competitors. In other words, application-based, customized software systems become extremely critical—unlike the hardware configurations of a typical mainframe computer company or an office equipment vendor. Technology Revolution. Database management capabilities are extremely critical in this case. Every airline has to deposit its schedule and fares, which allows American Airlines to adjust its schedules and fares to compete more effectively. Why is Information Technology Becoming a Strategic Resource? Some experts believe that just as labor was probably the most critical resource in the agricultural age, and capital was the most critical resource in the industrial age, information will be the most critical resource in the post-industrial age. Sharp experience curves, distributed processing and communication, and integration of alternative technologies all have made information technologies more capable of solving organizational structure and Strategy issues. system (MIS). Arid finally, they are likely to be used more and more for managing alliances among multiple organizations. Management Information Systems (MIS) focus on the use of Information and Communication Technologies (ICT) in managing organizations. Businesses use these systems to achieve a competitive advantage on their competitors as they seek to provide a good or service in a way that is better than that of their competition. A third way to use information technologies is for internal planning purposes. There is less error per unit of activity. 45-53). Information technologies are used by organizations in a variety of innovative ways. First, intense competition has encouraged organizations to become cost efficient and to differentiate themselves by value-added services. This requires distributed processing, memory, switching and signaling capabilities to enable professionals across independent organizations to work together, communicate and coordinate their activities. (b). They are not equally good at customized software or database management skills nor are they capable of offering a vendor independent environment. First, we have achieved extremely sharp experiences in information technologies resulting in increased value in use. For example, a company can integrate information systems with … This value-added service, also utilized by APL in the container cargo business, provides a competitive advantage through differentiation. With constant reorganization, as well as increased mergers and acquisitions, top management recognizes the need for flexibility through compatible information technologies. (c). Strategic systems … enabled data integration and sharing between Walmart and its suppliers. Strategic information systems are developed in response to corporate business initiative and they are intended to give competitive advantage to the organization. (See Figure 3.). o Aware of the resources available to pursue the spelled goals and objectives. It represents a radical departure from other information systems concepts — a completely new way of thinking about the role of information systems in the strategic planning process. They have formed a separate subsidiary called Sears Communications Network (SCN) that reports directly to the chairman, Edward Brennan. With a great information system, your company will be well organised, come up with quick solutions and make faster decisions under any circumstance. Strategic-Level Systems For strategic managers to track and deal with strategic issues, assisting long-range planning. Since the onset of the Internet Age, the importance of information in business cannot be overstated. Strategic information systems (SIS) are information systems that are developed in response to corporate business initiative. This reduces bottlenecks, dependence on experts, and large capital expenditures to properly use information technologies. Thus, there are at least four ways an organization can gain competitive advantage by using information technologies. In short, account control (supplier or customer) creates a competitive advantage through value-added service. In the oil and chemicals business, DuPont is pouring millions of dollars into expert systems that mimic the problem-solving abilities of sages who have devoted their careers to learning the intricacies of industrial chemical processing. Demand driven manufacturing requires significant reorganization of functional activities and support systems. A good example of the benefits of business information systems is the success of Walmart. Real Time Data Through having integrated information in one system, all of the data is up to date. Washington State University is a top-tier public research university with a mission to serve. Rooted in such a strategic role perspective, this paper develops a research with the aid of a Dynamic Simulation Model of IS and creates an effective plan of Strategic … Importance of information systems IT systems can produce: Strategic information systems (SISs) are systems that support or shape a business unit’s or organization’s competitive strategy (Callon, 1996, and Neumann, 1994).An SIS is characterized by its ability to change significantly the manner in which business is operated. Recent articles claim that the management Information Systems (IS) function should no longer be faced in its classic role, but in terms of a strategic role for exploiting IS-based competitive advantages. They not only trade, borrow and invest capital across global financial markets, but many large full-service banks from the United States, Japan, and Europe virtually move their financial factories (portfolios) around the world on a daily basis. Five Roles of an Information System: a Social Constructionist Approach to Analyzing the Use of ERP Systems. • Information systems that promote business innovation, improve operational efficiency. The retailer’s latest technology feat is the Wal-Mart Satellite Network (WSN)—a multimillion dollar project to join more than 1,200 Wal-Mart facilities in a private, two- way satellite communications network. Finally, in some instances, information technology organization is asked to both review and participate in the long-term strategic plans of operating divisions or subsidiaries. Information systems have evolved over time, requiring redefinitions as new technologies (Web 2.0, for example) have proliferated. Organizational Changes. Gaining top management attention has often resulted in integrating data processing and telecommunications functions under one organization, in centralizing the information technology organization and in creating a position of either vice president of information services or chief information officer (CIO). This is also true for the organization in charge of information technologies: both data processing and telecommunications functions are increasingly integrated and consolidated. This requires a highly centralized, integrated, and dedicated on-line information system which is secure, accurate and reliable. Enabling customers to have computerized order entry systems not only makes sales and service more efficient and convenient, but also creates exit barriers for the customer to switch to a competing vendor. Finally, information technologies are increasingly integrated. The application focus then shifts toward external inter-organizational operations. Four organization issues (mergers and acquisitions, downsizing and consolidation, market driven reorganization and crisis management) are responsible for the increasing importance of information technologies. As the industry becomes more global in its procurement, manufacturing and marketing operations, it requires greater use of information technology to reduce time and space barriers. First, it reduces the operating costs through office or factory automation. chairman and founder Sam Walton appeared on television at Wal-Mart Stores, leading the company’s more than 185,000 employees in a simultaneous Wal-Mart cheer. Indeed, in many organizations, it is possible to eliminate the strategic planning department and still retain the process by developing decision support systems. Finally, information technologies have become more affordable and improved their performance in recent years. I have identified several aspects of organization changes that have become the driven for changing the role of information technologies. They have become the tools to meet corporate objectives of efficiency and effectiveness. Many believe that the way or… It increases operational efficiency. 3. And this is not limited to terminals. In short, information technology has shifted from a highly decentralized support operation to a centralized strategic function. Information technologies have evolved over time in their applications. Arguably, the greatest benefit of information systems is their ability to give users the information they need to carry out tasks efficiently. As part of the strategic planning process, The last category of application of information technologies is more recent and emergent. The second dimension of the changing role of information technology is that it is gaining top management attention. A third fundamental role for information systems is management support in making decisions. Hotels and motels have significantly reduced their operating costs by computerizing guest reservations, billing and physical facilities. For example, personal computers today offer memory and processing capabilities at a fraction of the cost of mainframe computing only a decade ago. A third major force, and probably a more immediate reason for the increasing the importance of information technologies, is organizational change, especially the reorganization of corporations. This leads to questions concerning how much IS managers really understand about the development of strategic systems [17], [18]. I have identified four distinct forces which seem to be driving the strategic importance of information technology. Intense Competition. Globalization of business operations is a second major force which is responsible for the increasing strategic importance of information technologies. Management information systems use all of these capabilities in a way tailored to managerial and executive decision-making. A strategic plan offers a much-needed foundation from which an organization can grow, evaluate its success, compensate its employees and establish boundaries for efficient decision-making. Some companies become the prime contractor and others participate as subcontractors in one project and reverse the roles in another defense project. The three characteristics of information technologies (sharp experience curves, distributed processes, and integration of information) are bridging the gap between needs and usage resulting in their increasing importance in organizations. However, unlike cost control through factory or office automation, it becomes immediately necessary to focus on connectivity across distance and time barriers, and therefore the focus shifts from products (terminals, computers) to networks. Medical Office Technology Information systems help a company make adequate use of its data, reduce workload and assist with compliance with various mandatory regulations. “ (1) supporting and influencing the strategic direction of the firm through identification of value-adding computerized information systems, (2) integrating and coordinating various organizational technologies through development of holistic information architectures, and (3) developing general strategies for successful systems implementation” (Segars et al., 1998:306). This can be as simple as global procurement of materials, components or products or as complex as fully integrated global operations. The goal of such information systems is to provide relevant information to management so that it helps in its functioning. It can also change the goals, processes, products, or environmental relationships to help an … It is also not surprising to see many consulting companies, such as Arthur Andersen, Boston Consulting Group, A.D. Little and others are invited to develop computerized planning tools and processes. The energy crisis of the 1970s led to mergers and acquisitions in the oil industry deregulation of the airlines industry resulted in industry consolidation; and more recently, as a consequence of global competition, there have been large scale mergers and acquisitions in the automobile, appliances and financial services industries. In this setting, it is usually the data processing industry which tends to provide expertise and products as compared to the telecommunications industry. This has been true in many large Japanese manufacturing companies, including Mitsubishi, Toyota, and Matsushita, where the suppliers virtually depend on the Japanese Corporations for their survival and growth. They are intended to give competitive advantage to the organization. The Universal Product Code (UPC) bar chart labels provide superior quality assurance at the supermarket check-out counters, airline baggage handling, as well as merchandise management in retail stores. The focus is at’ internal efficiency in operations, and the primary targets are the major operations cost centers such as the factory or the office. Although this is very convenient and efficient for the customer, it also creates exit barriers. For example, in many industries, middle management ranks have been eliminated by flattening the organization, as well as consolidating the support functions such as clerical, secretarial and staff organizations. Managers can get all the information they need about company activities from the system. Information systems strategy is of central importance to IS practice and research. So that an organization is: o Clear about its objectives because the information system has provided precise and directive information about the tasks and their purpose. Information technologies (computers, networks and terminals) are increasingly regarded as strategic resources of an organization. Even the simplest use of technology can dramatically improve your business' productivity and efficiency. A strategic information system is not just a new competitive weapon in the corporate arsenal. Integration of all types of information on a common network with worldwide standards is the hopeful evolution of digital networks and terminals, and it seems to be nearing reality sooner than what we expected. 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