Over the twentieth century, the ability to process information in terms of labor
ID: 415531 • Letter: O
Question
Over the twentieth century, the ability to process information in terms of labor units has improved by a factor in the order of 1 to 5 trillion. This improvement represents a compounded growth rate of between 30 to 35 percent per year for a century. At the turn of the twentieth century, the mechanical calculator offered a modest productivity increase but the number of workers required to maintain the accounts of a medium-sized business still remained very high. Many tasks would take a large investment in equipment and a significant number of accountants’ weeks to process. A hundred years later, the same tasks can be completed by a standard desktop computer in minutes. The challenge for management has transitioned from a simple reduction in labor requirements to leveraging the increased processing power to develop competitive, efficient, and profitable organizations.
With this example in mind, use the assigned readings for this module and respond to the following:
• Explain how information systems influence businesses to be more competitive, efficient, and profitable.
• Provide at least one example for each factor.
Explanation / Answer
1) Information Technology (IT) is the one of the revolutionary change for the way business organization do their business in the race of competition. The most important change come in the business due to information system is shifting of manual work to computer based work. It has much impact on the business, which can be described as:
A company can easily serve its customers with the help of computer based order system. An executive working on a computer or ms –office can easily prepare a requisite list of customers for the top manger.
2) It helps in cost reduction :
Many businesses can be seen which are taking advantage of being a tech savvy corporations like Amazon, Google, yahoo etc.
Even a non-IT company can also reduce its cost/budget with the help of information system.
3) It helps in real time data access for Executive decision making :
A company can maintain all the data related to routine business activities in master software or in management information system (MIS) software. It can be accessed by an executive to take crucial business decisions in the functional area of HRM, Marketing, Finance, operations etc.
4) It Helps in Setting up a better customer relationships:
The software like Customer relationship management (CRM) can be developed so as to attract as well as serve the existing customers for building a pool of loyal customers.
5) Effective utilization of resources:
Many information systems like ERP can be introduced to mange each single activities of business like daily sales, stocks, key challenges, existing data for most demanded articles etc.
2) Examples:
A company like Wal-Mart is making best use of information systems to position its business ahead from the other retail sector players across the globe. It utilizes internet based technology to make its business operations more flexible, reliable and responsiveness. So, it is competitive one as compared to its competitors’.
IBM provides many software’s to start-ups and mid- size businesses to make their business more efficient into their manufacturing, production, making record and unique business transactions. For example: An older production rate of 500 articles in months has drastically changed to 50000 articles in a day with the help of IS.
The profit of Amazon, Google, and Microsoft etc. is heavily depending upon their low cost incurred business model. Their interaction with customers takes low cost and hence they are getting a huge profit margin with the help of information systems.
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