ROLES OF INFORMATION TECHNOLOGY IN MANAGEMENT

INTRODUCTION:-

In this report, I will describe the various types of information technology and how they are
utilized within an organisation.

The invention of computer has greatly influenced human being than any other inventions. Its
existence has made possible to manage the business on fingertips. Technologies like database
management system, management information system, decision information system has
collectively offered a new tradition in management of corporate world.

Information technology is critical to change management. It also supports rapid growth as

seen in last 2 decades. IT has so many common features which are used in daily routine life
like drives internet retailing (‘e-tailing’), helping understand finance better. Today IT has
become as an investment perspective in an organisation rather than the expense part of an
organisation. Now a day’s information system has been a part of almost every business
aspects whether directly or indirectly it is involved.

DEFINITION:

Information technology (IT) was described by Chaffey and Wood as “technology resources
used for business information technology”. These resources include hardware, software, and
teleworking technologies used for management.
CONCEPTS OF INFORMATION SYSTEM IN BUSINESS:

The main function of information system is to transform the data into information. The
general purposes of information system are to process input, maintain data, produce reports,
handle problems, manage online transactions, generate reports, and other output.

TRANSACTION PROCESSING SYSTEMS (TPS):

The system that handles business activities or transactions by itself, which can be thought of
as simple, discrete events in the life of an organisation is TPS.

Record of each transaction is captured, transactions are verified and accepted or rejected and
validated transactions are kept for later aggregation.

To recognise as a TPS, transactions done by the system must be restricted to the ACID test.
The ACID test has four requirements
 ACID TEST

Atomicity Consistency Isolation Durability

Atomicity: means that transaction either been completed into full or not at all.

Consistency: TPS system exists within a set of operating rules.

Isolation: Transaction must appear to take place in isolation.

Durability: once the money has been transaction has been done by customer he cannot undo
it.

Management information system (MIS):

MIS is a system which gives information required to manage organisation in a better

and effective way. This system is regarded as total internal process in a business, which
includes the application of human resource, documents, technologies, and methods used by
management accountants for the solutions of business obstacles such as product costing,
service or a business wide strategy.

One of the examples where this system is used is in e-business, if we buy some products from
websites like eBay, amazon etc. we have to give our personal details and credit card no.
through site. The information related to purchase is sent via mail and mobile phone services
and the amount used to purchase is directly debited from the account.

DECISION SUPPORT SYSTEM (DSS):

It is a particular class of computerized information system that helps business and

organizational decision-making activities.

A passive DSS is a system that aids the process of decision making but that cannot give out
clear solution or decision suggestions.

THREE PRIMARY COMPONENTS OF DSS:

1) The database
2) The model
3) The user interface

Advantages of DSS:

It helps automate the managerial processes, Improves personal efficiency, speed up the
process of problems solving in an organisation, generates new evidence in support of a
decision, encourage decision maker.

PRIMARY ROLE OF INFORMATION SYSTEM APPLICATIONS IN BUSINESS:

Three vital roles of information system in any type of organisation

1) Business processes and operations

2) Decision making by employers and managers
3) Strategies for competitive advantage

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Support business operations: From finance to tracking customers order information system
supports daily business activities. The quick ability of information system to aggregate and
integrate information becomes very helpful as the quick response is very crucial in today’s
business world.

Support managerial decision making: Just as the information gathered by information

system helps run business in better way, it also support managers to take more precise
decision and outcome of previous decision by the information gathered.

Support strategic advantages: Through innovative use of IT helps to take a decision that
makes company succeed better than its competitors.
 HISTORY OF INFORMATION TECHNOLOGY SYSTEMS IN ORGANISATION:
INCREASING USE OF INFORMATION SYSTEM IN BUSINESS AND MANAGEMENT

INCREASING PARTICIPATION OF MANAGERS IN INFORMATION SYSTEM

1990 – 2000:E-COMMERCE (INTERNET WORKED E-BUSINESS)

1980 – 1990: STRATEGIC AND USER (END USER COMPUTING)

1970 – 1980: DECISION SUPPORT (DSS)

1960 – 1970: MANAGEMENT REPORTING (MIS)

1950 – 1960: ELECTRONIC DATA PROCESSING (TPS)

1950’s - 1960’s: Information technology systems introduced in organisation management

with the application of TPS which made the transactions, record keeping, and accounting
automated.

1960’s – 1970’s: One of the most effective systems till date was initiated in this era. It
changed the whole way of management in an organisation as this system is able to handle the
total internal business activities including human resource and documents.
1970’s – 1980’s: System introduced in this decade was crucial in management as the DSS
supports decision makers to take the precise decision in a competitive market.

1980’s – 1990’s: End user computing helped end users to support their job requirement
through their own computing resources instead of waiting for indirect support from corporate
information services.

1990’s – 2000: The latest trend in a business is E-BUSINESS done through internet; one of
the most rapid growths of invention that human being has seen which interconnected the
globe has revolutionising the operations and management of today’s business enterprises.

Database Management System (DBMS):

DBMS is a system with set of computer programmes that enables the user to store, modify,
and extract information from a database that is currently installed on a system hard drive or
network. It has very crucial role in any type of business/web based application.

When we sign in any website or application username and password are stored in database
along with the activity done by user, therefore we can refer it as database engine which deal
with programs and return a desired result. It is very difficult to control, manage, and organise
the information of data.

TELEWORKING:

Teleworking has made it possible to work from home or other place by communicating to the
workplace through modem, phone or fax. It is family friendly as well as business friendly.
According to some survey conducted there is strong evidence to show that teleworker are
more productive, reliable, and loyal than office based counterpart.

Teleworking is not just family friendly but also eco-friendly as the teleworker saves the time
and money spent on unnecessary travel. Teleworking don’t just save the money of teleworker
but also reduce the requirement of office space and increase the output of employee.
IMPORTANCE OF INFORMATION TECHNOLOGY IN BUSINESS:

Business to Business (B2B): Electronic transactions (TPS) have made it possible to transfer
the amount from one account to other account just by some clicks through internet. Before it
took days to complete the transactions whereas, now within some minutes and clicks we can
transfer millions of dollar with some minor charges in contrast of costly environment before.

INTERNET: Internet is one of the most common and very important features for the
business world. Without internet many deals would just not be possible to make. Internet is
the most cheapest and efficient form of IT that can be utilized within a business. E-business
totally depends and works through internet.

EXTRANET: It is similar to intranet but allows access to some external partners such as
business partner, suppliers, and key customers to exchange data and application and sharing
information. With extranet it is possible to remote access to corporate systems for staff who
works away from office or for teleworker.

BARCODES: Bar codes are a series of lines printed which is an optical machine-readable
representation of data, which represents the product on which it is attached. It gives accurate
recording of information and works much faster and precisely. This information is scanned
into software that allows business to keep account of what has been sold and what has to be
re-ordered.

EXPERT SYSTEM: An expert system is software that answers the question using artificial
intelligence techniques. This system is offer advice using expert database knowledge in fields
such as medical diagnosis, trading on the stock market, chemical plants etc.
ENTERPRISE RESOURCE PLANNING: An integrated computer-based system used for
managing internal and external resources if enterprise including financial resources, human
resources, tangible assets etc.

CONCLUSION:-

The above report illustrates that how information technology plays a major role even in large
corporations to find ways to reduce cost, increase productivity, and improve customer
service. These goals are best achieved through web-based systems, which are the major
enablers in the transformation to an e-business or e-company in today’s digital economy.

Information technology is seen as an investment instead of expense in business as it helps in

rapid growth and success of business. Whether you are a customer or a partner in business
you directly or indirectly depend on IT in today’s world. If you are purchasing an item from
eBay or a ticket for your holiday destination you have more than likely participated in the
automated world of Information Technology. In today’s competitive world, no business can
survive or succeed its organisation without the requisite resources of IT.
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http://www.scribd.com/doc/39672883/The-Role-of-Information-Technology-in-Management

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