Relationship of IS and IT on competition
Being competitive in the 20s will depend in the effective application of information systems and technology (IS/IT). Increasingly , IT is being used by innovative organizations to facilitate the reengineering of their business process and in some instances to radically change the way in which they conduct business.
An information system is a system that uses information technology to capture, transmit, store, retrieve, manipulate, or display information used in one or more business process. It is a system that uses information technology and information. It typically includes people, methods, and procedures for doing things with the information. To understand an information system requires understanding the way information and information technology are used to accomplish work in a business setting. It concerns with the efficient utilization of resources for providing the required level of information support for the management of business operations.
Information technology (IT) represents the technical perspective and includes telecommunicating, computers and automation technologies. More formally, it is the enabling mechanism with facilitates the processing and flow of this information, as well as the technologies used in the physical processing to produce a product or provide a service. For example the Automated Teller Machine (ATM) is composed buy the IS and IT.
The information system plays an important role but does not directly affect other significant aspects of the business processes. Today's business organization is an information based organization. A major driving force is information technology itself, computers and communication, which are vastly increasing the amount of information in and around the organization. It is also leading to greater shrinkage of time and distance effects and greater inter-relatedness within an industry and organization. Increasing competition nationally and globally and economic conditions are also responsible for this information-based organization requiring business organization to be more responsible, flexible and innovative if they are to be compete successfully.
IS/IT has a role to play in developing new technologies. The speed and quality of new engines and designs in the automative industry is significantly improved by the use of computer-aided design technology. By apply a proper IS/IT , it can enable performance improvements which is illustrated in the case of
Swiss Options and Financial Futures Exchange (SOFFEX).
Information technology on its own if it does not take into account how the business operates will only layer technology upon technology. Apply information technology to existing processes can often only exaggerate the problem by automating existing poor direction. Moreover , technological change is a significant factor in corporate competition.
Since the late 1970s many progressive organizations have recognized the potential of IS/IT in the pursuit of competitive advantage. Competitive advantage is gained when an organization moves into a position where it has an edge in coping with competitive forces and in attracting buyers for its product. By applying IS/IT in a novel way it is possible to gain a competitive advantage over competitors as the example of
American Hospital supply who established direct IS/IT links with their customers by giving them terminals linked directly to their computer systems.IS/IT is being used as a direct lever to create competitive advantage. IS/IT can be applied directly to achieving competitive advantage by giving organizations new ways to outperform their rivals. IT can be used as a weapon to combat competitive forces and also help achieve better utilization of resources, decrease in inventory, reduction of shrinkage and waste in raw material use etc.
From a business perspective, an information system is an organizational and management solution, based on information technology, to a challenge posed by the environment. IS and IT has a very close relationship between each other. They are dependent on each other. If there is an IT and no IS , the business process will not success. Both of them are important and it will assist the organization to compete successfully with the competitors. Finally, an organization with the use of IT and IS will get the competitive advantage.
IT is critical to the success of many organization. IT functions in four ways in an organization, there are:
As a support activity
As a production activity, ensure the smooth running of operation
As a turnaround activity in which IT is used to open up new opportunities
As a strategic activity where it is crucial to the business.
IT can be used as a strategic weapon in the following ways:
give an organization a competitive advantage
used to improve productivity and performance
used to alter the management and organizational structure
used to develop new business
As a result, IS and IT must work hand in hand to gain the competitive advantage for the organization. Belows are some example of information system which is typically being popular used by the organizations:
In order to the above IS to be effective, IT is needed where it can drive the successfulness.
