Impact of Information Systems on Modern Business

Information Systems, Business, and Globalization

Email, smartphones, and tablet computers have become essential tools for conducting business, allowing many businesses to buy, sell, advertise, and solicit customer feedback online. Organizations are trying to become more competitive and efficient by digitally enabling their core business processes and evolving into digital firms. The internet has stimulated globalization by dramatically reducing the cost of producing, buying, and selling goods on a global scale.

Why Information Systems are Essential

Information systems are a foundation for conducting business today. In many industries, survival and the ability to achieve strategic business goals are difficult without extensive use of information technology. Businesses today use information systems to achieve six major objectives: operational excellence; new products, services, and business models; customer and supplier intimacy; and day-to-day survival.

Academic Disciplines and Sociotechnical Perspectives

The study of information systems deals with issues and insights contributed from technical and behavioral disciplines. The disciplines that contribute to the technical approach, focusing on formal models and capabilities of systems, are computer science, management science, and operations research. The disciplines contributing to the behavioral approach, focusing on the design, implementation, management, and business impact of systems, are psychology, sociology, and economics. A sociotechnical view of systems considers both technical and social features of systems and solutions that represent the best fit between them.

Defining Information Systems and Their Components

From a technical perspective, an information system collects, stores, and disseminates information from an organization's environment and internal operations to support organizational functions and decision making, communication, coordination, control, analysis, and visualization. Information systems transform raw data into useful information through three basic activities: input, processing, and output.

From a business perspective, an information system provides a solution to a problem or challenge facing a firm and represents a combination of management, organization, and technology elements:

• The management dimension: Involves issues such as leadership, strategy, and management behavior.
• The technology dimension: Consists of computer hardware, software, data management technology, and networking/telecommunications technology (including the internet).
• The organization dimension: Involves issues such as the organization's hierarchy, functional specialties, business processes, culture, and political interest groups.