A business information system is a group of interrelated components that work collectively to carry out input, processing, output, storage and control actions in order to convert data into decision making and operational activities in an organisation
Source: Business Information Systems, technology, development and management for the e-business. (p.43)
The reasons behind an organisation usually initiating an Information System can be put down to a business opportunity or problem and or the strategic advantage over its rival businesses in order to grow and survive in a competitive environment. A key question for an organisations reasoning behind whether or not to initiate an information system is, “what would be the consequence of not having the proposed information system?”
The benefits of initiating an information system are,
Some benefits to consider when an organisation is thinking of initiating an Information System are the ‘5 C’s of Senn’ (1995)
Cost reduction: This is often the main objective in the introduction of a new system.
Capability: being capable of achieving something which was not possible before.
Communication: try to improve internal and external communications with costumer’s and suppliers.
Control: better information delivery on things like performance.
Competitive advantage: having the edge in a competitive market is vital to staying ahead or keeping up with the industry.
A feasibility study.
Before any organisation initiates an information System they must carry out a feasibility study. This is to establish whether the business problem or opportunity can be solved by introducing the new system and to check that it benefits the overall business strategy.
This may involve two separate steps. The first, establishing an overall feasibility report of a project, to establish the objectives and the needs for a new system. Once it is decided that the whole project is worthwhile then a more in depth evaluation will be carried out and a list of different solutions will be drawn up.
There is a sequence of activities which is undertaking during the initiation phase of any information system project.
Assessing feasibility is arguably the most important step of the initiation phase. This involves a cost-benefit analysis and the effect on the organisation from having the new information system.
Defining the business objectives and outlining systems requirements. The need for critical success factors (CSF) is valuable to help align business objectives with the new system.
Evaluating acquisition alternatives, this will go through different aspects such as performance, suitability and cost from different suppliers.
Defining scope involves specific system boundaries by describing which part of the business will be affected by the new system.
Defining responsibilities to allow time for the final users of the system and managers input must be set aside along with the system developers.
Assessing the risk involved to identify any potential problems which may affect the project and cause it to fail and taking precautions against this.
Identifying the constraints and developing the project plan is useful for the estimating and planning of the initial project plan. This will take into account the size and the complexity and establish a preliminary timescale and also budget.
The basis for a good business.
Information systems are the basis for a lot of businesses. Most industries rely on an up to date information system for survival and even existence. Without the use of Information Technology it would be inconceivable, because of its critical role in increasing productivity. In a lot of modern organisations, information systems make extensive use of information technology such as desktop computers and laptops. This is mostly down to the advantages which arise from the use of such systems.
Speed, being able to process millions of instructions each second and completing each task in a very short space of time is hugely beneficial to any company or organisation.
Accuracy, a calculation which is carried out by a computer is most likely to be completely accurate and human error can be reduced or even eliminated altogether.
Reliability, computer-based information systems can in theory have no down time and can operate 24 hours a day.
Programmability, the ability to change or to modify the software to suit any given function provides a high degree of flexibility.
Combining these advantages is majorly beneficial to any business; however there are still disadvantages to an organisation which relies heavily on a computer based information system.
Judgement or experience cannot be thought to a computer based information system.
Flexibility or improvisation, a computer based information system would be unable to react to an out of order or unexpected event or situation.
Innovation, the computers inability to think outside of the box and to discover new ways to help improving processes or even solving problems.
Many of the reasons for initiating an information system are to increase productivity, improve order fulfilment, business or customer demand, legal requirement, update an old system, technological change, or gain strategic advantage or the competitive edge over other companies in the industry, however there are a lot of steps in which an organisation must go through to see whether or not the system will benefit the company’s overall business strategy. Once all the right steps have been taken and every part of the process mapped out, the decision must be made, taking into consideration the advantages over the disadvantages if the plan is feasible or not or whether it makes good business sense?
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