The Fundamental Roles of IS in Business

• Information technology has become a vital and integral part

of every business plan.
• From multi-national corporations who maintain mainframe
systems and databases to small businesses that own a single
computer, IT plays a role.
• The reasons for the use of computer technology in business
are
1. Communication:
• For many companies, email is the principal means of
communication between employees, suppliers and customers.
• Over the years, a number of other communications
tools have also developed, for e.g. live chat systems,
online meeting tools and video-conferencing systems
etc.
2. Inventory Management:
•In the following areas, the IT is involved in inventory
control.
 Periodic valuation of inventory
 Inventory status and stores ledger
 Exception reports of high/low stocks and re-order
level.
 ABC analysis
 FSN analysis
 XYZ analysis
 MRP-I output reports
 MRP-II output reports
3. Data Management:
• Companies are able to store and maintain a
tremendous amount of historical data economically,
and employees benefit from immediate access to the
documents they need.
4. Management Information Systems.
• Management Information Systems (MIS) enable
companies to track sales data, expenses and
productivity levels.
• Managers can track sales on a daily basis, allowing
them to immediately react to lower-than-expected
numbers by boosting employee productivity or
reducing the cost of an item.
5. Customer Relationship Management.
• Customer Relationship Management (CRM)
systems capture every interaction a company has
with a customer, so that a more enriching
experience is possible.
• It helps to improve the way they design and
manage customer relationships.
E - BUSINESS ENTERPRISES
• E-BUSINESS:
• Deals with the buying and selling of information,
products and services through the computer
network.
• Business activity which uses electronic medium.
• E Business (e-Business), or Electronic Business, is
the administration of conducting business via the
Internet.
• This would include the buying and selling of
goods and services, along with providing technical
or customer support through the Internet.
ORIGIN OF E-BUSINESS:
• 1950s : Computers were used to process and store
records of internal transactions. But information
between various business continued to be
exchanged on paper.
• 1960s : exchanging transaction information on
punched cards or magnetic tapes. Later,
transferring data over telephones, instead of
shipping punched cards or magnetic tapes.
• 1970s : Introduction of Electronic Data
Interchange (EDI) between the banks over a
secured private network changed the financial
market.
• 1972 : IBM used the term ‘e-business’. E-
Business became widespread within companies
in the form of electronic messaging technologies
i.e.,EDI and Email.
• E-BUSINESS V/S TRADITIONAL BUSINESS:

Basis E-Business Traditional

Reduction of data error Data goes directly from one Data was entered
computer to another without manually . This creates
involving human being. error.

Paper Work Electronic form Re-entry of data at

every level
Cost Initial cost high,Over a time , it Involves a lot of time
is effective and if there is an error,
it may lead to wastage
of money.

Process Cycle Time E-Business reduces the Orders are in paper

processing cycle time as the data format , the data is
is entered into the system. reentered into the
seller’s computer.
• ADVANTAGES OF E-BUSINESS:
• Easy to Set Up
• Cheaper than Traditional Business
• No Geographical Boundaries
• Time saving
• Enhanced speed and accuracy of a product
• Cost saving of the product
• Reduces paper work
• Flexible Business Hours
• Government Subsidies
• DISADVANTAGES OF E-BUSINESS:
• Lack of customer awareness
• Small Businessmen do not want to take any
extra burden
• Legal formalities
• It is not free
• Security problems
• Customer satisfaction problems
• Data integrity problems
 Why E- business?
• E-Business Saves Money
• Better Communication and Faster Decision-
Making
• The Office can be Anywhere
• Cheaper Marketing, More Control
• Less Restrictive Hours
• More Avenues for Making Money
• E-Business Means Freedom