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What are Information Systems? Why so Needed?

Define Information Systems

What exactly is an Information System (IS)?  Let’s look at the definition here…an information systems focus on networks of hardware, software that people and organizations use daily to handle their data and information.  These components are used in order to gather, analyze, store and disseminate information.  The information in turn helps to support strategic decisions being made for the agency.

Walmart Example

As for a competitive advantage, it can go either way. It seems that there’s an ongoing debate as to how much of an advantage IS gives, if at all.  But as an example, Walmart has used it to a great advantage.  One key to success for them was implementing a brand new supply-chain management system.  It’s unique for them only to where suppliers can go in and review how well their products are selling at Walmart, in any of their stores at any location.   Suppliers can petition them if they feel products are being sold to quickly so inventory levels can be increased for their products.  It’s pretty interesting how it all works…so Walmart can drive prices down and respond to the market more quickly due to this new management system.

The Main Goal

The main goal of IS is to be able to change data into information that can be used in strategic decision making.  Databases are what is considered collections of related information.  Examples of this are MySQL and Microsoft Access, where data is inputted and organized into records as one example.  A database has to be created in order for an IS to be built that will work correctly.  The question is, where can big data be collected, sorted out and put into reports?

Competitive Advantage

Competitive advantage is when said company can sustain profits over average for the industry they’re in.  Differentiation comes to play also.  The key is to learn how to use information systems to build competitive advantage.  This is where SISP comes to play.  The information system has to try to do one or more of the following:

  1. Deliver products or services at lower cost
  2. Deliver products/services differentiated from others
  3. Assist companies to focus on specific markets
  4. Allows for innovation

Examples of IS falling into this category are:

  1. Electric Data Interchange – Integrate supply chain electronically
  2. Collaborative Systems – Google Drive, Microsoft SharePoint, or Cisco WebEx
  3. Decision Support Systems – Helps companies to make strategic decisions

Increased Difference

It has been shown through studies that information technology (IT) has assisted in increasing differences between companies instead of reducing them.  Technology has sped up and heightened the amounts of differences.  It also helps with increasing good management abilities in organizations.  Through figuring out the right types of innovations to include with the upgrades, it can greatly increase competitive advantage in their industry.

Questions to Answer

What the company in question has to answer before upgrading anything though is, what exactly has to be changed in order to allow for competitive advantages?  Is it the hardware that needs to be upgraded?  CPU’s hard drives, devices?  Or does the software have to be upgraded?  Which new programs need to be implemented and to which department?  What languages do the programs need to be written in?  What kind of databases will be used?  Are they going to create all new programs tailored specifically for them and maybe suppliers like Walmart did?  These are just some of the questions that have to be answered before they begin anything, or there will be a mess of confusion at some point.