CHAPTER 2: Information Systems
and the Modern Organization
Computer-based information systems (CBIS) use computer
technology to perform some or all of their tasks and are composed of Hardware
which is a device such as a processor, monitor, keyboard or printer, Software
which is a program or collection of programs that enable hardware to process
data, Database which is a collection of related files or tables containing data,
Network which is a connecting system (wireline or wireless) that permits
different computers to share resources, Procedures which are the set of
instructions about how to combine the above components in order to process
information and generate the desired output, and People which are those
individuals who use the hardware and software, interface with it, or uses its
output. There are two types of Information Systems, Information Systems Inside
Your Organization and Information Technology Outside Your Organization. An
application program is a computer program designed to support a specific task,
a business process or another application program. Breadth of Support of
Information Systems is Functional area information systems support particular
functional areas in an organization, Enterprise resource planning systems
tightly integrate the functional area information systems via a common
database, Transaction processing systems support the monitoring, collection,
storage, and processing of data from the organization’s basic business
transactions, and Interorganizational information systems connect two or more
organizations, Examples are supply chain management systems and electronic
commerce systems.
Competitive Advantage: An advantage over
competitors in some measure such as cost, quality, or speed, leads to control
of a market and to larger-than average profits.Strategic Information Systems
(SIS) provide a competitive advantage by helping an organization to implement
its strategic goals and to increase its performance and productivity. Porter’s
Competitive Forces Model, The best-known framework for analyzing
competitiveness is Michael Porter’s competitive forces model (Porter, 1985). It
is model is used to develop strategies to increase their competitive edge.
Threat of entry of new competitors is high when it is easy to enter a market
and low when significant barriers to entry exist. A barrier to entry is a product or service
feature that customers expect from organizations in a certain industry. For most organizations, the Internet
increases the threat that new competitors will enter a market.
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