Your Guide to Information Systems

IS is an ‘Interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization.’ (Laudon and Laudon 2019). IS supports operations, management, decision-making (Bulgacs & Simon, 2013), interaction and support business processes (Kroenke 2008 and O 'Brien 2003). Alter (2003) captures, transmits, stores, retrieves, manipulates and displays information (Alter 2006).

Functions of an IS

According to Laudon and Laudon (2019), an IS creates organisational value by performing 3 activities:

1. Input: Data capture and collection.
2. Processing: Converting data into meaningful information.
3. Output: Transfer information to users.

IS importance to organisations 

4 IS types used by organisations

1. Transaction Processing Systems (TPS): 
1. Performs routine processes/transactions including payroll, order booking, shipping. 
2. Decision-Support Systems (DSS):
1. Uses analytical models helping managers to make decisions including budgeting or staff deployment.
3. Management Information Systems (MIS):
1. Provide management with reports on past, current performance to aid planning, controlling, and decision making.
4. Executive Support Systems (ESS):

• Help senior managers to make strategic decisions.

 IS Functions (Morgan 2020)

 IS examples   (Morgan 2020)

Meeting objectives

As global connectivity grows, organisations capture more data via the internet of things (IoT), the role of IS is even more important. IS can help organisations achieve 6 objectives (Laudon and Laudon, 2019):

1. Operational excellence
2. New products, services, and business models
3. Customer/supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Day-to-day survival.

Improving organizational performance

• Enterprise Resource Planning (ERP) applications including Oracle coordinate activities across business functions.
• Supply chain systems manage  planning, sourcing, manufacturing, and delivery.
• Customer relationship management (CRM) systems including Salesforce store customer data and coordinate communications.
• Knowledge management systems including MS Sharepoint help organisations to share knowledge.

Improve Business Processes

IS automates organizations processes including online advertising and dynamic pricing. This speeds up decision making and organisational effectiveness. Google Ads launches remarketing campaigns to website visitors. Ryanair’s airRM system adjusts ticket pricing based on audience interest and tickets remaining (BusinessWire 2011).

New business models

IS supports competitive positioning by facilitating new business models. AirBnB operates as platform businesses, not competing directly against other accommodation providers, they facilitate market exchange and extract a margin in the process. Other examples include eCommerce website, Spotify music streaming, Roblox gaming.

Competitive Advantage

Organisations can secure competitive advantage via differentiation or cost leadership. This can be supported as IS can effectively manage the organisations value chain activities (Porter, 2001).

IS impacts competitive strategy by increasing barriers to entry, increasing the organisations bargaining power and differentiating against competitors.

Wiseman (1984) argues that IS can deliver products/services at lower costs and aid differentiation, segmentation and innovation.

Collaboration

IS allows staff to collaborate, during Covid-19 lockdowns organisations used tools including:

• Zoom: Video conferencing.
• Google Drive: Document sharing.
• VMware: Virtual desktops.
• Asana: Project management.
• Outlook: Email communication.

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