MBA 620 Information Systems and Business Analytics
How are information systems transforming business, and why are they so essential for running
and managing a business today?
15/05/2022
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.
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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.
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References:
Frank, A.G., Mendes, G.H., Ayala, N.F. and Ghezzi, A., 2019. Servitization and Industry 4.0 convergence in
the digital transformation of product firms: A business model innovation perspective. Technological
Forecasting and Social Change, 141, pp.341-351.
Friedman, T., 2009. The world is flat. [Bridgewater, NJ]: Distributed by Paw Prints/Baker & Taylor.
Götz, M. and Jankowska, B., 2020. Adoption of Industry 4.0 technologies and company competitiveness: case
studies from a post-transition economy. Форсайт, 14(4 (eng)), pp.61-78.
Hammami, A., 2019, April. Smart environment data monitoring. In 2019 International Conference on
Computer and Information Sciences (ICCIS) (pp. 1-6). IEEE.
Kaim, R., Härting, R.C. and Reichstein, C., 2019. Benefits of agile project management in an environment of
increasing complexity—a transaction cost analysis. In Intelligent Decision Technologies 2019 (pp. 195-204).
Springer, Singapore.
Laudon, K. and Laudon, J., 2021. Management Information Systems. 16th ed. Harlow: Pearson Education,
Limited.
Tong, S., Luo, X. and Xu, B., 2020. Personalized mobile marketing strategies. Journal of the Academy of
Marketing Science, 48(1), pp.64-78.