INFORMATION TECHNOLOGY IN THE BUSINESS ENVIRONMENT

BUSINESS IN THE INFORMATION AGE: PRESSURES AND RESPONSES

Businesses in the Information Age must compete in a challenging market place—one that is rapidly changing, complex, global, hypercompetitive and customer focused. Companies must rapidly react to problems and opportunities arising from this modern business environment. The BUSINESS ENVIRONMENT refers to the combination of social, legal, economic, physical and political factors that affect business activities.

The main business pressures in the Information Age are: global competition for trade and labor, the need for real time operations, the changing workforce, customer orientation, technological innovation and obsolescence, information overload, social responsibility, government regulations and deregulation, and ethical issues.

Organizations respond in many ways to the business pressures of competition in the Information Age. Many of their responses are facilitated by information technologies. Major organizational responses are: strategic systems, customer focus and service, continuous improvement efforts, business process reengineering, enterprise resource planning and supply chain management, business alliances and E-commerce.

Information systems in modern organizations provide fast and accurate transaction processing, large-capacity, fast access storage, and fast communication (machine to machine, human to human). They also reduce information overload, span boundaries within and between organizations, provide support for decision making and provide a competitive weapon in the marketplace.

 INFORMATION TECHNOLOGIES IN THE MODERN ORGANIZATIONS

Before we begin the discussion on the topic some terminologies need to be defined. An Information architecture is the "blue print" that provides the conceptual foundation for building the information infrastructure and specific applications. It maps the information requirements as they relate to information resources. The information infrastructure refers to the physical shared information resources (such as a corporate data base) and their linkages, operation, maintenance, and management. The major categories include: (a) the transaction processing system (TPS), which covers the core repetitive organizational transactions such as purchasing, billing or payroll; (b) management information systems (MISs) that support managers in the major functional areas; (c) the general support systems, including office automation, decision support, group support, and executive support; (d) intelligent systems such as expert systems and artificial neural networks; and (e) the integrated system that link the entire organization, such as enterprise resource planning (ERP) systems.  

Most organizations are structured vertically in what is known as hierarchical structure, from headquarters down to departments and operating units. Information systems follow this structure closely. For instance, an organization typically would have divisional information systems, plant information systems, and departmental information systems.

Information systems are also categorized by the support they provide to certain individuals in organizations, particularly to managers at different levels, to knowledge workers and to data workers (clerical office employees). Knowledge workers are those who find, develop, integrate and maintain organizational knowledge. They are usually the experts in the functional areas.

Information resources are extremely important to an organization, and they must be properly managed by both the Information Systems Department (ISD) and the end users. In general, the ISD manages shared enterprise information resources such as networks, while end users are responsible for departmental informational resources such as PCs. The role of the ISD is becoming more managerial and its importance is rapidly increasing. Steering committees, service-agreements and conflict-resolution units are some of the mechanisms used to facilitate the cooperation between the ISD and end users.