Strategic Role of Information Systems

Information Systems (IS)

Information Systems is systems comprising of people, processes and technology to process data into meaningful and interpretable information. This system aims at assisting management and business operations in making business decisions and support business processes. There are various types of information systems, for example: transaction processing systems, decision support systems, knowledge management systems, learning management systems, database management systems, and office information systems. Critical to most information systems are information technologies, which are typically designed to enable humans to perform tasks for which the human brain is not well suited, such as: handling large amounts of information, performing complex calculations, and controlling many simultaneous processes.

Organizational Hierarchy

The components of information systems can be broadly categorized into: Hardware, Software, Data, Procedures, People and feedback.
Executive
Information System
Decision Support
System
Managment
Information System
Transaction
Processing System

Strategic Importance of Information Systems.

In current world and business scenario right information, at the right time and with the right person can be the difference between survival and extinction of an organization.

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A strategic IS helps an organization gain a competitive advantage through its contribution to the strategic goals of an organization and its ability to significantly increase performance and productivity Information system can help strategize an organizations business model or enhance existing ones to give it an edge over its competitors.

The different thoughts currently in the market for successful information systems management strategies are
Descriptive Analytics - This is based on historical data and represents patterns that occurred in the past.

Predictive Analytics - This is also based on historical data and related patterns but has the intelligence to predict related probable events that might occur in the near future. Prescriptive Analytics – This stream not only identifies patterns and probable near future events but also suggest probable course of actions based on past experiences. For Example – How much cash to keep in each ATM machine across the country and what currency notes to keep for each one of them so as to reduce idle cash and ensure customer satisfaction. Again organizations are employing predictive and prescriptive analytics to identify probable attrition cases and related remediation patterns.

Probuddho Halder EMBA ITM 2015
Information courtesy Canadian Center of Science and Education

Cases of Successful Information System.

A few examples of effective and strategic use of information system are Ryanair Airlines – is an Irish low-cost airline headquartered in Swords, Dublin, Ireland, with its primary operational bases at Dublin and London Stansted Airports in 2013, Ryanair was both the largest European airline by scheduled passengers carried, and the busiest international airline by passenger numbers. In 1986, the two Ryan brothers announced that their young airline will take on giants like British Airways and Aer Lingus for the first time on the route between Dublin and London.

It significantly undercut those two airlines on price, bringing in people who had previously preferred rail or ferry tickets. The Rayan brothers had based their business model on a robust and reliable information system that showed that the big airlines were missing out on a successful customer base out of the middle and lower middle class commuters, who were least concerned about luxury and opulence and were more interested in pure transport.

Pre-Shipment(Amazon) – Amazon the e-commerce giant is working on a model whereby they will base their product shipping strategy based on the browsing patterns of users. Predictive analytics will predict that a customer is most likely to buy a product and in a given time frame. Amazon will ship the product to the nearest warehouse even before the consumer has placed the order and ultimately when the order is placed deliver it within hours and not days. This clubbed with bulk order description can significantly reduce the logistics cost for amazon at same time increase the customer delight.