Importance of Business Information Systems
Discuss about the Business Information Systems for Cost Management.
Nowadays, information system is a base for operating the business today. There are so many businesses, whose survival and ability to attain business objectives is difficult without the use of advanced information technology. The organizations are engaged in using different models of Information Technology for database management, cost management, accounting system management and customer relationship management. Now, Small and Medium Enterprises are also implementing the cloud computing services for cost reduction and database management. This report answers the questions from the case study of ZCM.
There are some objectives, which work as major reasons, why the use of business information system is essential (Gunasekaran & Sandhu, 2010). The reasons are stated below;
In today’s business, information system is a major technique for the organizations to develop new products and services. It also plays an important role in formation of entire business model of company. Business model of a company indicates how it manufactures, delivers and sells its products and services to generate revenues and profits (Abramowicz, Tolksdorf, & Wecel, 2010). For example; Apple Company converted its old business model on the basis of its iPod technology, which included iTune music service, iPod and iPhone.
Every business wants to enhance efficiency of its business operations for increasing its profitability. In this process, business information systems are important to the managers and their team for increasing productivity and efficiency of business operations. In this aspect, there is a good example of Wal-Mart. This organization utilizes a Retail Link system that electronically connects its suppliers to the stores of Wal-Mart (Abs, 2013). When the customers buy the product, the supplier is observing the product.
There are various organizations, which face the problems relating to the management of data and information. The managers never have the right information on right time to make the decisions in organization. This increases the costs of operations and declines the customer base. Use of information system can make it possible for management to pursue the real time information at the time of decision making (Allen, Heurtebise & Turnbull, 2010). There are some organizations, which installs web-based digital panel to give the managers real time information, related to customer grievances, stakeholders’ performance etc. By the use of this information, the management can assign the required resources to the areas, which are affected and inform the customers about the restoring efforts.
Challenges
When an organization offers its services to customers in effective way, then customers in turn respond by purchasing more products. This increases the profits and revenues. When the business engage its suppliers more, then in turn suppliers can deliver vital inputs (Bocij, Greasley, Hickie, 2008). It decreases the costs.
When the companies attain its above –mentioned business objectives, then it demonstrates that they have attained a competitive advantage in respective industry (Chaffey & White, 2010). Performing the tasks better than competitors, engaging the suppliers and customers and providing information to the suppliers on time assist in sales and profits.
In today’s business environment, the companies are investing in the information technology services because they are essential for operating the business. These requirements are driven by the changes in the industry.
There are some other trends, which make the business information system indispensable in today’s business, like; emergence of global economy, fast speed innovation in technology, conversion of business enterprise and development of digital firms. These given trends pose various new challenges for the business firms and their organizations. As the increasing percentage of advanced industrial economies relies on exports and imports, information systems source both analytic and communication instruments for carrying in business and for managing the trade, which are spread all over the world. The subordinates have more knowledge in comparison to seniors. Under this transformation, the companies are becoming more customers oriented.
The key challenges, which are involved in building, operating, and maintaining the information systems in Small and Medium Enterprises, are like; globalization challenge, strategic business challenge, business information system investment challenge and responsibility and control challenge. Globalization challenge, which is faced by the SMEs, is that they should be able to assist the organizations in developing an information system, which will be able to support the objectives of the company when the technologies and business conditions are changing very quickly. Second one is strategic business challenge, which makes the organization realize that if they want to implement and maintain the information system, then they should be able to use the information technology systems to design the companies so they are very effective, competitive and technology-enabled. Information system investment challenge is for SMEs to gain the knowledge about that how their firm can decide on the business value of these information systems. This is one of the major challenges for SME, that there may be some issues related to ethical and social consideration. So, these challenges are for the firms to understand that how they can make sure that the information systems are utilized in social and ethical manner.
Cloud Computing Services
Cloud computing is the internet based computing service that provides collective data and computer processing sources. This service enables the organizations to use the computing resource, like virtual machine, an application or storage, like a utility rather than building and maintaining the computing arrangements in house. Cloud computing offers various benefits to the companies. If the ZCM uses the cloud computing, then it will be beneficial for it (Tograph & Morgens, 2008). Using this service will eliminate the need of Information Technology administrator to manage the computing resources in the organization. It reduces the costs of the company as they have to pay only for the resources and services, which they use. These resources are monitored at granular level. This avoids the requirement of investment in infrastructure.
There are three types of cloud computing, which can be used by ZCM for resolving the issues. These forms are like; private, public and hybrid cloud computing. Private cloud computing are the services, which are delivered from the data center of business to the internal users only. This type of service offers convenience and flexibility and protects the control and management. In public cloud service, third party provides the services over internet. Hybrid clouding is the combination of private and public cloud computing services (Nowduri, 2017). ZCM can use the public cloud computing for its operations. This will provide the enterprise the best economies of scale and it is very reasonable to install because, in this the costs of hardware, software and applications are covered by the service provider. Generally, private cloud computing cannot be used by the Small and Medium enterprises and it is mostly used by the large enterprises. It can be very expensive for them (Senarathna, 2016).
In Australia, including all the sectors, SMEs can have the great benefits by implementation of cloud computing services in their organization. Small and Medium enterprises need to get and store the information at competitive costs, so that the cloud computing services can provide a solution for this. This service will provide the required infrastructure for storing the data on third party service provider. These organizations should develop the cloud computing service and use the clouds to manage the data demanding processes more efficiently (Ismaili, Li, He & Shen, 2016). The reduction in capital costs, which cloud computing offers, makes it more attractive to the SMEs with having limited access to the capital. With the limited capital, the SMEs like; ZCM should use the public clouds for managing the database. It will create new business opportunities and decreases the computation costs. By implementing the pubic clouds, ZCM can cope with the problems related to the management of database and increasing demands for information and technology from users, like; customers, employees and suppliers.
There are many companies, which successfully implemented to the cloud computing services and taken the benefits from it (Skyrius, Kazakeviciene & Bujauskas, 2013). For example, the hallmark of Apple is to be on taking advantage of technology. So, it is not surprise that Apple migrated to cloud computing services to manage the release of its program, “Siri”. This was the program by the Apple, which mimics the people listening ability and answers the questions asked by users. In this, implementation of cloud allowed the organization to accept and expand this program overtime without the users of Apple ever knowing that there was any change.
Apart from this, there is a small enterprise in Australia, i.e. a smart ordering company, 365cups. This was the early adopter of cloud computing services (Neves, Marta, Correia, & Neto, 2011). The co-founder of the company, Simone Eyles stated that now their company will struggle in operating the business without it. This has used the cloud services from the beginning from their Google apps for accounting software system and their servers. This has given various benefits to the company and had a better experience by accessing everything and paid only for that what they use.
Conclusion
Thus, the organizations will have the benefits by using the cloud computing services as their business information system. It will reduce the costs and enhance the competitiveness. Cloud services allow the businesses to rapidly meet fresh demands and create new opportunities, without purchasing and installing the new hardware and worrying about application rate. ZCM can also use the cloud computing services for dealing with issues related to database and information management. It can provide the real time information to the suppliers and customers by using effective business information systems.
References
Abramowicz, W. Tolksdorf, R. & Wecel, K, 2010, Business Information Systems Workshops: BIS 2010 International Workshop Berlin, Germany, May 3-5, 2010, Revised Papers, Springer Science & Business Media.
Abs, 2013. Business Use of Information Technology. Australian Bureau of Statistics. Canberra Australian Bureau of Statistics
Allen, B., Heurtebise, A., & Turnbull, J. 2010, Improving Information Access. Business Management US. Retrieved October 2, 2010 from https://www.busmanagement.com/article/Improving-information-access/
Bocij, P., Greasley, A. and Hickie, S., 2008. Business information systems: Technology, development and management. Pearson education.
Chaffey, D. & White, G., 2010. Business information management: improving performance using information systems. Pearson Education.
Gunasekaran, A. & Sandhu, M, 2010, Handbook on Business Information Systems, World Scientific Press.
Ismaili, S.A., Li, M., He, Q. & Shen, J, 2016, Cloud computing services adoption in Australian SMEs: a firm-level investigation, University of Wollongong Australia.
Neves, F.T., Marta, F.C., Correia, A.M.R. & Neto, M.D.C., 2011. The adoption of cloud computing by SMEs: identifying and coping with external factors.
Nowduri, S, 2017, Management information systems and business decision making: review, analysis, and recommendations, Journal of Management and Marketing Research.
Senarathna, I.R, 2016, Cloud Computing Adoption by SMEs in Australia, Retreived from https://dro.deakin.edu.au/eserv/DU:30088887/senarathna-cloudcomputing-2016A.pdf.
Skyrius, R., Kazakeviciene, G. & Bujauskas, V, 2013, From Management Information Systems to Business Intelligence: The Development of Management Information Needs, International Journal of Artificial Intelligence and Interactive Multimedia, Vol. 2, No. 3.
Tograph, B. & Morgens, Y.R., 2008. Cloud computing. Communications of the ACM, 51(7), pp.9-11.
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