Essay Preview: Mis
Report this essay
Management Information Systems is a general name for the academic discipline covering the application of people, technologies, and procedures — collectively, the information system — to business problems.
As an area of study it is also referred to as information technology management. The study of information systems is usually a commerce and business administration discipline, and frequently involves software engineering, but also distinguishes itself by concentrating on the integration of computer systems with the aims of the organization. The area of study should not be confused with computer science which is more theoretical in nature and deals mainly with software creation, and not with computer engineering, which focuses more on the design of computer hardware. IT service management is a practitioner-focused discipline centering on the same general domain.
In business, information systems support business processes and operations, decision-making, and competitive strategies.
Potential benefits of MIS investments
Investing in information systems can pay off for a company in many ways. Investments are a part of finance, the benefits are listed below:
Such an investment can support a core competency. Great companies invariably have one or two core competencies, something they can do better than anyone else. This could be anything from new product development to customer service. It is the heart of the business and no matter what it is, information technology can support that core competency. An IT investment in a companys core competency can create a significant barrier to entry for other companies, defending the organizations pnt system can be a major barrier to entry.
It can enhance distribution channel management. As with supplier networks, investment in distribution channel management systems can ensure quicker delivery times, problem free delivery, and preferential treatments. When the distribution channel management system is exclusive, it can mean some control over access to retailers, and, once more, a barrier to entry.
Such an IT investment can help build brand equity. To build a brand, firms often invest huge sums in advertising. A huge brand name is a formidable barrier to enter and sustaining it can be facilitated by investment in marketing information systems and customer relationship management system.
Information systems can mean better production processes (1). Such systems have become essential in managing large production runs. Automated systems are the most cost efficient way to organize large scale production. These can produce economies of scale in promotion, purchasing, and production;
economies of scope in distribution and promotion; reduced overhead allocation per unit; and shorter break-even times more easily. This absolute cost advantage can mean greater profits and revenue.
IT investment can boost production processes (2). Information systems allow a company flexibility in its output level. Michael Porter claims that economies of scale are a barrier to entry, aside from the absolute cost advantages they provide. This is because, a company producing at a point on the long-run average cost curve where economies of scale exist has the potential to obtain cost savings in the future, and this potential is a barrier to entry.
Implementing IT experience can leverage learning curve advantages. As a company gains experience using IT systems, it becomes familiar with a set of best practices that are more or less known to other firms in the industry. Firms outside the industry are generally not familiar with the industry specific aspects of using these systems. New entrants will be at a disadvantage unless they can redefine the industries best practices and leap-frog existing firms.
IT investment can impact mass customization production processes. IT controlled production technology can facilitate collaborative, adaptive, transparent, or cosmetic customization. This flexibility can increase margins and increase customer satisfaction.
Leverage IT investment in computer aided design (1). CAD systems facilitate the speedy development and introduction of new products. This can create proprietary product differences. Product differentiation can be a barrier to entry. Proprietary product differences can be used to create incompatibilities between competing products. These incompatibilities increase consumers switching costs. High customer switching costs is a very valuable barrier to entry.
It means expanded E-commerce. Company web sites can be personalized to each customers interests, expectations, and commercial needs. They can also be used to create a sense of community. Both of these tend to increase customer loyalty. Customer loyalty is an important barrier to entry.
Information systems leverage stability. Technologically sophisticated firms with multiple electronic points of contact with customers, suppliers, and others enjoy greater stability. This monumental