MBA Information Systems and Business Analytics
How are information systems transforming business, and why are they so essential for running and managing a business today?
Introduction
In the modern age, globalisation can be defined as the profound process of merging the economies of all countries and districts into one connected global environment. Improvements in Information Technology (IT) and the Internet allow companies to operate across the globe and bring individuals closer by engaging them with each other. The ‘death of distance’ – a reduction in the cost of transmitting information – is a critical factor in trade knowledge in products using web technology (Kaim et al., 2019). Without the extensive use of information technology, several industries would not be able to survive. They would not achieve their business objectives, including operational excellence, customer and supplier intimacy, improved decision-making, competitive advantage, day-to-day survival, and the development of new goods and services.
How information systems have changed the operations of businesses
An information system comprises interconnected components that collect, process, store and distribute data to facilitate decision-making, control, and communication (book). Information systems have opened up an entirely new world by enabling organisations and people worldwide to work together on various projects and have helped firms become more efficient, as jobs are performed much faster, resulting in higher productivity (Götz and Jankowska 2020). Many businesses can use global telecommunications for several tasks, including accessing new markets and finding qualified employees. Some of the largest organisations worldwide, such as Facebook or Google, operate almost entirely online, and most of their revenue is generated via online advertising and online promotion. The rapid advances in intelligent technology, combined with information systems development, have entirely altered the way businesses operate today. The use of wireless communications, such as smart mobile phones, tablets, and computers, enables business executives, managers, workers, suppliers, and consumers to be connected (Hammami, 2019). Social media, the Web and the Internet, have made communication more convenient by providing new communication channels. In the majority of organisations, Internet, World Wide Web, and other technologies have caused a reshaping and redesigning process. They have facilitated the transformation of the organisation’s structure, activities, working methods and products and services. The increased number of communication channels and the reduced cost of communication have made people more inclined to search for better quality products and cheaper alternatives (Tong et al., 2020). In addition, the emergence of cloud computing and the cultivation of big data are also examples of how information systems have changed business operations and production processes. New laws and regulations have also forced most companies to keep an electronic record database, including e-mails and other information concerning employees. Lastly, e-commerce has helped many businesses to generate more sales and increase their customer base, thus increasing their profits.
Three significant new information system trends
This industry undergoes constant change, and it becomes essential for professionals to keep up to date with these changing trends. Three significant developments affecting how organisations interact with their employees, consumers and suppliers include the growth of cloud computing, the emerging mobile digital platforms, and the expansion of big data analytics. It has been made apparent by the emergence of cloud computing that companies require a designated location for the collection and storage of their digital information. Cloud computing refers to the delivery of different services over the Internet, including data storage, servers, databases, networking, and software. The computer services are provided as virtualised resources which can be accessed over the network. Files can be stored in a remote database and retrieved on demand. As a result, companies that wish to improve the efficiency and effectiveness of operations in a digital space frequently turn to cloud computing services for assistance. By using cloud computing, companies can outsource their computation and data storage needs to a third party, where these resources can be provided on a “just-in-time” basis.
Moreover, the emergence of mobile digital platforms has become very popular in the past few years due to their flexibility. Mobile applications are typical in business, and many companies strive to improve their performance. Last but not least, big data analytics is a trend developed in the last few years and has been introduced in many sectors that are related to manufacturing and supply chain management. As a result of this trend, companies can analyse their information faster and understand what they need to improve.
Characteristics of a digital firm
A digital firm is where nearly all business relationships between an organisation and its customers, suppliers, and employees are enabled digitally. Everything associated with the business is conducted online (Frank et al., 2019), and therefore, all business operations are conducted through networks. In a digital firm, the responses to changes are much faster than in traditional, non-digital firms, and there is greater flexibility in difficult economic eras. Furthermore, all of the critical assets a firm possesses can be easily monitored and managed digitally at any time. It should also be noted that digital firms are capable of time-shifting, which is referred to as the ability to have a high level of productivity throughout the day rather than being confined to specific hours. Lastly, utilising space-shifting is another way digital firms can proliferate, reducing their reliance on physical locations and conducting business operations from anywhere in the world (Laudon and Laudon, 2021).
Challenges and opportunities of globalisation in a ‘flattened’ world
In his book, ‘The World is flat’ (2009), Thomas Friedman analysed globalisation in the early 21st century. He used the metaphoric phrase ‘the world has flattened to highlight the significance of this phenomenon. Friedman wanted to emphasise that globalisation, which emerged because of the Internet and the reduction in costs of communication and transport and the increased significance of transnational companies, has levelled the economic playground between developed and poorer nations by breaking down trade barriers. It has opened up more opportunities for free international trade between countries and has helped firms become more efficient and lower their costs due to reduced communication and transport costs. ‘Working from home’ initiative has also been encouraged because of these developments and has saved further financial costs to organisations. In addition, globalisation has created many job opportunities in numerous fields, including research and development and information technology. It has promoted tourism that helped stimulate economic development in many developing countries.
Moreover, today’s ‘flat’’ and globalised world has enabled firms to gain access to international markets and grow further, taking advantage of economies of scale. The benefit of cost savings from economies of scale is likely to benefit consumers who may be charged higher prices. Shoppers are no longer obliged to depend on local firms to purchase goods and services, as they now can shop online 24/7 for anything they desire. Lastly, globalisation has resulted in increased competition worldwide which means that employees need to keep up-to-date and grab every possible opportunity to enhance their professional development. However, globalisation has also several critical challenges that need to be considered. First of all, there is a challenge in workplaces with employees from different ethnic and religious backgrounds. It is not easy to manage people from different ethnicities and religions, which should be handled cautiously. In addition, the reduction in the cost of transport and the emergence of free international trade has serious adverse effects on the environment. The increased use of non-renewable resources, harmful chemicals and greenhouse emissions in the air and water contribute to increased pollution and climate change, harming biodiversity. Lastly, the increased need for transportation because of the emergence of free international trade may lead to issues such as loss of habitat and pollution. Consequently, environmental awareness needs to be raised. Firms should invest in renewable energy sources and become more socially responsible by promoting sustainable practices and setting in place some environmental regulations that have to be obeyed by everyone.
