Question

In: Economics

Criticize this discussion base on this information : Explain how information systems influence businesses to be...

Criticize this discussion base on this information :

Explain how information systems influence businesses to be more competitive, efficient, and profitable.

Provide at least one example for each factor.

Discussion :

Information systems influence businesses to be more competitive, efficient and profitable in many of ways. Most companies throughout the world utilize information systems for their day to day operations. The introduction part in small business could sometimes be a little easier but at the same time these business could face different constraints and opportunities. A few approaches that will be analyzed when incorporating information systems in small businesses according to (Doukidis, Smithson, & Lybereas, 1994) will have previous computer experience, factors in influencing decisions to adopt IT, have advice, involvement in Information Systems development, training etc.

            Effective executions of an IT system should be lithe for the needs of an organization while providing plenty of room for expansion and development over a period of time. If organizations cautiously support their IT systems along with the resources to their organizations strategies then they will be able to present an extremely aggressive advantage that can be effective and very efficient information for the company (Argosy Bookshelf, 2018).

            It systems becomes very competitive when it is available, ready for action and has high security backing it. High security protects the information from leaving an organization and getting in the hands of other competitors that are in the same market. All companies have something unique about each of them and having a IT System that is different from the others is one of them. An IT system that is not available for those who use it most will not be a good thing for a company who is trying to grow to become better than the next company. According to our text (Laudon & Laudon, n.d.)anyone using the internet technology is both a necessity in the business market as well as a competitive advantage

Doukidis, G. I., Smithson, S., & Lybereas, T. (1994). Trends in information technology in small businesses. Journal of End User Computing, 6(4), 15.

Laudon, K., & Laudon, J. (n.d.). Information systems in global business today.

Solutions

Expert Solution

Answer : Information system plays an important role for the business to achived comparative advantage, efficiency and profitability such as :

  • With the help of information technology applied in the business they are gain comparative advantage such as to make changes in the entire organisation such as they reduced cost , alter the terms and condition of competition and outperform there rivals.
  • Company can able to gain value chain which are connected and able to reduce the cost of the product. Example : A more costly product and raw material resulted in decrease selling cost which shows that companies can compete with there competitors and they gain comparative advantage.
  • In terms of efficiency the advancement in information technology resuled in change in the structure of the industry.
  • New ways and effectivness has been gained in an organisation. Example : In the industry automated bills has been generated and vendor quotation has become easier. Strong relationship on the bargaining between buyers and sellers such as Westing house electric supply company.
  • Increase in profit of the business through managing large scale production and providing efficient profit to the business scanerio. Computer aided capability not only reduce cost but added new features into it. Example : General Electrical has been gained higher profit through application information system in the business process.

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