The significance of management information systems


It is said that “Modern economy is economy of knowledge” the one who are advance in specific information and communication technology continue to transform the competitive goals into reality. Information technology has completely changed the position of business now the ways are completely changed from traditional to internet based information systems. It included the information required during communications, transactions, production of goods, provision of services and operational management. Organization’s resources must be quite efficient and effective to meet the needs for competition. All the management of organizational and business processes, required level of knowledge about customer’s needs, and it should be capable to put that information to right department with organization on time that can produce quick response to changes in business environment. It is issue that the manager should have deep understanding of how to use information and technology to support and then to manage the organizational and business processes accordingly to meet get the competitive advantages.

This assignment makes discussion over the role of information technology in supporting organization strategy, application of information systems, use of this information system to support business processes. It also discuses role of information system in the process of operations, manufacturing, cost management, quality. It will also cover the activities to build effective information system. In this assignment we will also examine the alternative information system; we will look into current technologies and their use in marketing. At and before making conclusion we will make a analysis about the use of data base for marketing by e-marketing and e-Commerce.

Later we will make a link between the use of all new modern information systems and marketing techniques to the planning of business especially the developing business. Because it is all about adopting a solid practical approach while adopting new information systems so that business could grow and it can bring profits to the investors.

1: Significance of Traditional and internet based information system.

Information system can be defined as “information system, an integrated set of components for collecting, storing, processing, and communicating information.” (Encyclopedia Britannica, 2010) It further says that “Business firms, other organizations, and individuals in contemporary society rely on information systems to manage their operations, compete in the marketplace, supply services, and augment personal lives. For instance, modern corporations rely on computerized information systems to process financial accounts and manage human resources; municipal governments rely on information systems to provide basic services to its citizens; and individuals use information systems to study, shop, bank, and invest.” (Encyclopedia Britannica, 2010)

It is very clear that all kind of human activities these days rely on information and it is perfectly said as age of information. The existing information system can be easily divided into two main groups one is traditional way of information and other is internet based information system. We can put following ways of information into traditional information system:

  • Direct
  • Books
  • Letters
  • Newspapers
  • Gazettes
  • Journals
  • Reports
  • While the internet based information includes
  • Websites
  • Blogs
  • E-newspapers and journals
  • Emails
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Both the traditional and internet based systems have different and unique importance in business. Both have advantages and disadvantages over each other. They can not be put into same level of importance while we see into their different use according to needs of the business. They both can be placed on equal importance level that varies from one situation to other. There are situations where one can be preferred over the other easily.

Traditional system is effective where in-formations are required for all time anywhere in all circumstances without facing the problem of electricity cuts and internet availability.

While internet based system is effective where the issue of time is important factor and there is requirement of fastest delivery of information.

2: Use of Information system in operations, manufacturing, cost management, quality.

Now a day’s information system is more important and integral part of business. Information system is a greatest tool for acquiring competitive advantage over the market competitors. If it is use effectively during all the business process from planning to quality assessment it can bring amazing fruits to the organizations. A successful organization requires understanding of organization behavior, leadership and management, societal, ethical and legal issues, relationship management, and strategic management.

Operations management focuses on managing the processes of production and distribution of products and services. Major, overall activities often include product creation, development, production and distribution. Related activities include managing purchases, inventory control, quality control, storage, logistics and evaluations. An effective information flow on time is a key in all the operation process if one thing is delayed all can go into waste or delays in production which can bring cost to the organization. A great deal of focus is on efficiency and effectiveness of processes. Therefore, operations management often includes substantial measurement and analysis of internal processes. Information system always plays key role in all operations and without continuous flow of right information at right time one can not complete operation effectively. There should be always a focus on flow of information through effective information system or systems while conducting operations for successful businesses.

Manufacturing is another important issue in a business the perfect information systems brings quality and accuracy in manufacturing its noticed that all business organization always take great care during manufacturing because when dealing products its the product at end which bring profits to the investors. What are the details of product being manufactured and what processes will be followed play important role the information system of the organizations decide the right move at right time and try to win the advantages.

Quality is always the advantage that can be crucial in markets. The issue of quality also depends on the flow of right information at right time for an organization. If there is problem with right information or its delivery to related people on right time it can bring problems for organization.

Overall what the process is being implemented the role of information and its right time delivery play vital role in business success and should be taken seriously whether its the process of operations, manufacturing or its about the quality concern.

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3: Information System Role in competitive advantage and management.

Information system is deciding factor in the business success for any company or organization. Whether it is providing product or it is giving services. If an organization has effective flow or right information with in organization that is right at right time and managers are abele to control it properly that brings the advantage to that business in the competition with other competitors. But if that system of information fails at any stage it brings decline in profits and earnings. Similarly a good management is always equipped with quality of information and it knows how to in place that information while doing their job from planning phase to making overview at end of year about the business performance.

4: Activities to build information system.

The activities include in a building of an effective information system are inputting data, processing of that data into information, storage of data and information, then the production of outputs such as management reports.

This needs a proper system which consists of following systems Decision Support System, implementation system and monitoring system.

  • A manager should keep closer monitoring and liaison with his colleagues’ during all the process and activities so that he could control the flow of information according to needs.
  • These activates can be arranged as following:-
  • Problem recognition and specification
  • Information gathering
  • Requirements specification for the new system
  • System design
  • System construction
  • System implementation
  • Review and maintenance

5: Alternative systems of information.

Alternative system for information are all those new and innovative fast systems of information delivery and safety which are replacing the traditional systems of information like direct information, newspapers, books documents etc. In modern world these alternative systems include systems which are based on new technologies like internet, phones, computing gadgets (i-phone, i-pad, multi media and data books). These systems can be categories according to their effectiveness and advancement.

6: Current technology and their use in marketing and data mining.

Due to the explosion of information systems, businesses progressively have the ability to attract higher numbers of customer data in large databases. However, much of the useful marketing insights into customer characteristics and their purchase patterns are largely hidden and untapped. Current emphasis on customer relationship management makes the marketing function an ideal application area to greatly benefit from the use of data mining tools for decision support. A systematic methodology with use of new technologies can be used to manage the marketing and data mining. This methodology can be the basis for enhancing customer relationship management.

This technology includes internet, telecommunication, and computing.

In modern time there is growing and expanded use of these three tools in marketing and data mining. As we can found many ways of advertising and marketing as websites, advertisement on different websites, similarly there are is different software for data mining which making things more easy.

7: Use of data base for marketing by e-marketing and eCommerce.

Internet marketing is “Achieving marketing objectives through applying digital technologies.” These digital technologies include Internet media such as web sites and e-mail as well as other digital media such as wireless or mobile and media for delivering digital Television like cable and satellite.

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E-Marketing is gaining more influence on consumers’ buying decisions and television’s influence on awareness is decreasing. E-Marketing gets you closer to customers by creating a dialogue, asking questions and learning about customers’ preferences. E-Marketing is about people and making sure that the process, like all marketing, is people orientated – far too many times it is producer or technology orientated and businesses wonder why it doesn’t work.

Before the internet, consumer purchases were restricted by time, geography, location, and physical store space. In the digital economy, buying is unlimited by these constrictions. But internet brought the revolution and it brought market in the rooms.

On other hand Electronic commerce or E-Commerce is buying and selling products or services over the Internet. The meaning of electronic commerce has changed over the last three decades. Originally, electronic commerce meant technology such as Electronic Data Interchange and Electronic Funds Transfer. E-Commerce has lowered barriers to entry in the selling of many types of goods and services as it allows small and medium sized businesses to compete – the web is not the high street.

Data is central thing in both the e-marketing and e-commerce because it is the tool that connects buyer and sellers. Data base is the availability of specific data which required operating the process of e-marketing and e-commerce. There is a systematic way to organize that data on networking and internet. This required latest computer technology which could fast and effectively handle all the data flow and processing so that all marketing, buying selling could be made profitable.


During the past two decades, business managers and scholastic researchers have shown significant curiosity in understanding how information technologies can help to create competitive advantage for a business. Recently idea of competitive differentiation through IT has become a challenge. Specifically, it is argued that by demarcating specific types of capabilities, we can put in to better understanding of the sources of IT-based competitive advantage. Theoretically, we distinguish here between value, competitive, and dynamic capabilities as three distinct types of capabilities. The study tells that information system play vital role in the process of management and planning and developing business can grow only bye the adaptation of effective use of these modern technologies which shape these systems. Whether it’s about the business or marketing of that business planning is key factor that makes a business success or failure. So it is very important for firms to adopt such policy while planning the business that they could effectively benefit from these modern technologies and methods of information systems.

At the end it’s all about the good planning through effective and suitable information system that bring a business into success or failure.

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