The Critical Role Of Information Systems Essay

, Research Paper

The Critical Role of Information Systems

Today s information systems are both proficient and societal in nature. Management must understand the importance of information within the organisation. It is direction s occupation to understand how information is collected, processed, and distributed. We are all highly affected by information systems and must be willing to understand and work with them. Our planetary economic system does non let us to depend on face to confront minutess like in the 1980 s. Today, few directors can disregard the importance and impact of how information is handled by their organisation. Information systems play a critical function in today s concern organisation and society ( Laudon 5 ) .

Since the outgrowth of the planetary economic system, the success of houses today and in the hereafter depends on their ability to run globally. The American economic system depends on imports and exports. Foreign trade, both imports and exports histories for a small over 25 per centum of goods and services produced in the United States, and even more in states like Japan and Germany.

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This per centum is presently and will go on to turn in the hereafter ( 5 ) .

Globalization of the universe s industrial economic systems greatly enhances the value of information to the house and offers new chances to concerns. Today, information systems provide the communicating and analytic power that houses need to carry on trades and manage concerns on a planetary graduated table. Globalization and information engineering besides brings new menaces to domestic concern houses. This is brought on by the client s ability to shop in a world-wide market place, obtaining the monetary value and quality information faithfully, 24 hours a twenty-four hours. The worldwide market topographic point brings competition to a higher degree than of all time before, coercing all concerns to play a portion in this planetary economic system. In order to go a profitable participant in a world-wide market houses, need powerful information and communicating systems ( 5 ) .

Many states are sing the 3rd economic revolution. These states include the United States, Japan, Germany and other major industrial powers. This revolution, which is now in advancement, is transforming itself into a cognition and information based service economic system. This revolution began at the bend of the century and by 1976 the figure of white-collar workers employed in offices surpassed the figure of farm workers, service workers, and blue-collar workers employed in fabrication. Today, most people no longer work in farms or mills, but alternatively are found in gross revenues, instruction, wellness attention, Bankss, insurance houses, computing machine engineering, and jurisprudence houses. In add-on, they provide concern services like copying, computing machine package, or bringings. These occupations chiefly involve working with, administering, or making new cognition and information. In fact, cognition and information Fieldss now account for 75 per centum of the American gross national merchandise ( GNP ) , and about 70 per centum of the labour force ( 7 ) .

In a cognition and information based economic system, information engineering and systems take on great importance. For case, information engineering constitutes for more than 70 per centum of the invested capital in service industries like finance, insurance, and existent estate. This means that directors determinations about information engineering will be the most common investing determination ( 7 ) .

Productiveness of employees depends greatly on the quality of information systems functioning them. Management determinations about information engineering are critically of import to the endurance of a house. See besides that the turning power of information engineering makes possible new services of great economic value. See that recognition cards, nightlong bundle bringing, and world-wide reserve systems are illustrations of services that are based on new information engineerings. Information systems have many utilizations. They non merely assist you track stock list but besides help you make determinations on where to open another shop and aid in calculating how much money it will be to keep it ( 7 ) .

There are six major types of information systems. The first is the Executive Support Systems ( ESS ) . This is a strategic degree system that allows senior directors to undertake and turn to five-year tendencies, runing programs, budget prediction, net income planing, and manpower planning. The 2nd is Management Information Systems ( MIS ) . This is a direction system and is directed at in-between directors in helping them make determinations on gross revenues direction, stock list control, one-year budgeting, and capital investing analysis. Another direction degree system is the Decision Support System ( DSS ) and is besides directed at in-between directors. This system is directed for the directors that are crippled by their, Paralysis of Analysis. The 4th and 5th, are knowledge degree systems called Knowledge Work Systems ( KWS ) and Office Automation Systems ( OAS ) directed at cognition and information workers. The KWS is a system that assists extremely educated professional and proficient staff. This system is used as technology, artworks, and managerial workstations. The OAS is used for word processing, image storage, and electronic calendars. This system is directed toward clerical workers. The last system is an operational degree system called Transaction Processing Systems ( TPS ) directed towards operational forces and supervisors. This system has many utilizations. The TPS is used for order trailing, order processing, machine control, works programming, material motion control, securities trading, hard currency direction, paysheet, histories collectible, histories receivable, compensation, Training and development, and employee recordkeeping. There are many illustrations of how information systems non merely profit T

he investor but besides the client ( 19 ) .

For illustration, UPS competes globally with information engineering. UPS delivers over three billion bundles a twenty-four hours to more than 185 states. All this would non be possible without an accurate information system. UPS has invested 1 to 1.8 billion dollars on information engineering entirely from 1992 to 1996. This engineering has helped UPS hike client service while maintaining costs low and streamlining its overall operations. UPS does this by utilizing a handheld computing machine called a Delivery Information Acquisition Device ( DIAD ) . UPS drivers automatically capture clients signatures along with pickup, bringing, and timecard information on these computing machines. These computing machines are so placed into an arranger attached to each UPS truck. The arrangers so transmit to the chief UPS computing machine web through cellular entree. From the chief computing machine web any information can be accessed ( Wilson ) .

Through TotalTrack, its machine-controlled bundle tracking system, UPS can supervise bundles throughout the bringing procedure. Throughout the procedure, bundles are scanned at each halt utilizing saloon codifications. The information is so fed into a cardinal computing machine. This allows the clients to seek for any bundle utilizing a bundle tracking package supplied by UPS. Soon anyone can happen out the position of his or her bundle by accessing the UPS web site. It is easy to see how information systems have helped UPS win ( Wilson ) .

Another illustration on the critical function of information systems is Baxter International s stockless stock list and ordination system. This is an information system that locks in clients and satisfaction. Participating infirmaries become unwilling to exchange to another provider because of the system s convenience and low cost. Baxter Healthcare International Inc. supplies about two-thirds of all merchandises used by United States infirmaries. It uses an information system originally developed by American Hospital Supply Corporation. Buying this system has made Baxter a full line provider for all infirmary demands ( Removing the Warehouse ) .

Baxter has gone one measure farther by giving all the purchasers a computing machine to link straight to their chief web. Customers no longer hold to name to put an order, all that is required is to utilize the on-site computing machine to see and order from the catalog. The system generates transporting, charge, invoicing, and stock list information. In add-on, the on site computing machines provide clients with an estimated clip of bringing. Because Baxter has over 80 distribution centres in the U.S. , clients frequently receive orders within hours of puting the order ( Removing the Warehouse ) .

The system used by Baxter is similar to the just-in-time bringing systems developed in Japan and now being used in the American car industry. Baxter has even gone one measure farther by extinguishing the demand for bringing forces to drop off their carts at the lading dock, which is so placed in a infirmary storage room. Alternatively, they deliver orders straight to the infirmary corridors, dropping them at nursing Stationss, runing suites, and stock cupboards. This basically has created a stockless stock list since Baxter serves as the infirmaries warehouse. A stockless stock list greatly reduces the infirmaries need for storage infinite and forces. It besides lowers keeping and managing costs significantly. This is a better system than the just-in-time stock list method because under the other systems, storage is required, but under the stockless stock list system, it eliminates stock lists wholly. The most of import portion of the stockless stock list is the information system that allows all minutess to go on at the touch of a key ( Removing the Warehouse ) .

A concluding illustration on how information systems benefit big houses by lower costs and leting them to present merchandises and services at lower cost is Wal-Mart. By maintaining monetary values low and shelves good stocked, Wal-Mart utilizations an outstanding stock list refilling system triggered by point-of-sale purchases. This is considered the best system in the industry. This uninterrupted refilling system sends orders to providers every bit shortly as the merchandise is purchased by the client at the registry. Point-of-sale terminuss record the saloon codification of each point go throughing the check-out procedure counter and sends a purchase dealing straight to a cardinal computing machine at Wal-Mart Headquarters. The computing machine collects orders from all of the Wal-Mart shops and transmits them to providers. Because this system allows them to refill stock list really fast, Wal-Mart does non pass every bit much money on stock pilling stock list as its rivals. Wal-Mart lone spends 15 per centum of gross revenues in operating expense while Sears spends 30 per centum and Kmart spends 21 per centum. Again, this is merely possible because of the usage of information systems.

As you can see information systems are far more than merely input, procedure, and end product machines. Directors and society must understand that these systems provide solutions to concern challenges and must be willing to alter with the new engineering. Information systems can assist in the twenty-four hours to twenty-four hours undertaking at work and at place. We no longer have to depend on merely one house or corporation to purchase stuff we need. We can shop the planetary market 24 hours a twenty-four hours to happen the best monetary value and quality. With the increased planetary competition, companies will hold to utilize information systems in order to last in today s market topographic point.

Work Cited

Laudon, Kenneth C. , and Jane P. Laudon. Management Information Systems.

New Jersey: Prentice-Hall Inc. , 1996

Removing the Warehouse from Cost-Conscious Hospitals. New York: Timess, 1991

Wilson, Linda. Stand and Deliver. Information Week April. 1992

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