Management Information System: Firm’s Supportive Tool

Executives use many strategies to achieve competitive advantage. Some of the strategies include Cost leadership, Differentiation, Innovation, Growth and alliance strategies. Business managers use investments in Information technology to directly support a firm’s competitive advantage. Information technology can be used to achieve competitive advantage by developing inter enterprise information systems, making major investments in technology and creating an entry barrier, include IT components in products and services making substitution difficult and leverage investment in IS Professional and infrastructure (O’ Brien, James and Marakas, George; Management Information System, Tata McGraw-Hill Edition, Seventh Edition. Pg. 41-45).

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The 3 issues in making decisions regarding the strategic value of information systems include

Evaluating Hardware, software, and services

Large companies consider the request for proposal from independent suppliers against the standards fixed by the management and frequently evaluate proposed hardware and software by requiring the processing of special benchmark test programs and test data. Benchmarking stimulates the processing of various typical jobs on computers and evaluates their performance. Users then can evaluate test results to determine which hardware device or software package displayed the best performance characteristics. Hardware evaluation factors include:

  • Performance: This determines the speed, capacity and throughput of the device
  • Cost: This determines whether to lease or buy the hardware after considering the cost of
  • operations and maintenance.
  • Reliability: This determines the error control and diagnostic features of the device.
  • Compatibility: This determines whether the hardware fits with the old legacy system as well as recent devices.
  • Technology: This determines the type of technology in-built.

Other factors include Ergonomics, Connectivity, Scalability, software and support.

Ratings are given to each factor and totaled to get the final rating. Based on the final rating the hardware of a particular supplier is selected. Similarly software evaluation factors are listed and ratings are done and software is also selected.

The software evaluation factors include quality, efficiency, flexibility, security, connectivity, maintenance, documentation, hardware and other factors.

The IS services factors include performance, systems development, maintenance, conversion, training, back up, accessibility, business position, software and hardware.

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Evaluation format

Hardware/Software/IS Service Evaluation factors
S.No Factor Rating

Other issues to be considered in making decisions regarding the strategic value of information systems include technology costs, trained Professionals, data conversion, documentation, conversion methods, IS maintenance, privacy on the internet, privacy issues, computer monitoring, challenges in working conditions, challenges to individuality and health issues etc (O’ Brien, James and Marakas, George; Management Information System, Tata McGraw-Hill Edition, Seventh Edition. Pg. 406-412).

In small businesses, information systems tend to be more focused and specific. These firms have limited resources and are focused on immediate value. Complex systems may not be appropriate. Identify a specific market or industry, and discuss how small businesses in that area should use information systems to enhance small business success and performance.

Information systems have made it difficult to manage the reputation and legal standing of businesses due to the astounding frauds and crimes occurring in the e-business. Some include

Computer Crime

Cyber crime is becoming one of the net’s growth businesses. Today individuals hack into restricted networks and play havoc with the files, data and money. Computer crime poses a great threat to the society and it includes unauthorized access, use, modification and destruction of resources, unauthorized release of information, unauthorized copying of software, denying access to an end user into his own system etc.

Example: Paypal, Inc, an online payment processing company experienced computer crime when some individuals opened many accounts and started transacting. All the shipment went to a Russian address and redirected to a mock site named Paypal. Finally, using high end software and forensic science assistance from FBI, Paypal was able to solve the issue.

Hacking

Hacking is the obsessive use of computers, or the unauthorized access and use of networked computer systems. Hackers can be external persons or insiders who use the internet to and other networks to steal or damage data and programs. Hackers use sniffers to steal passwords and use hazardous software to break into a secured network.

Cyber Theft

Many computer crimes involve the theft of money. In most cases, they are insider jobs that involve unauthorized network entry and fraudulent alteration of computer databases.

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Example: In 1994, $11 billion was stolen from Citibank. Hackers hacked into the Citibank’s main frame computer in New York from St. Peter’s berg. They then succeeded in transferring money from several Citibank accounts to their own banks at various places.

Recently, HSBC Bank had the same issue of money theft.

Due to the above discussed crimes, an IS professional spends an increasing portion of their time addressing legal and ethical issues like business ethics, technology ethics etc. The main role of an IS Professional is to establish ethical guidelines and ensure that it is being followed in the organization.

References

O’ Brien, James and Marakas, George; Management Information System, Tata McGraw-Hill Edition, Seventh Edition. Pg. 41-59, Pg. 406-412, Pg. 428–435.

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