Strategic Investment in Information System Essay

Introduction

In the current business world that is typified by relatively high levels of competition, firms are investing in various information systems (Stair & Reynolds 2013; Hodge, Kennedy & Maines 2004). An information system is a collection of people and digital processes, which are important in handling information of consumers (Laudon & Laudon 2011).

Strategic investment refers to business decisions that are made by firms and individuals for the reason of generating steady returns in the short-term and long-term. This paper aims at discussing the concept of strategic investment in IS. It draws on the case study provided and academic sources of information.

Body

Levy and Powell (2005) have proposed four concepts vis-à-vis implementing IS, which are evident in the case study. First, Horace’s coordination of business activities is greatly supported by the use of IS. In the case study, it is clear that the entrepreneur was able to effectively manage transactions with his clients. Consequently, the market share for the firm was remarkably increased.

Second, efficiency was promoted by the adoption of both emails and a web page for the firm. They implied that the business could respond to customers within a relatively short period, unlike in the previous time when much paperwork was involved. As a result of increased efficiency, value was added in relation to the existing customers.

Third, the repositioning concept is clear is the case study the reason that the company used emails and a web page with the goal of achieving growths in the market. In fact, when Horace realised that emails were not effective, he shifted to the use of a web page so that he could reposition the company in the market. Through this, he was able to achieve relatively high margins from the existing customers.

Fourth, the aspect of collaboration has been stressed in the case study. In consultation with his information technology expert, Horace adopted a unique website that enabled customers to utilise their credit cards in making orders and payments for goods.

Thus, collaboration with IT professionals could go a long way in supporting various investments in IS because they are typified by high levels of expertise. For a business to thrive in the contemporary business world, it needs to invest in an excellent website that would act as a communication link between it and its customers.

Management teams of business establishments should always focus on using IS to gain more market shares and competitive advantage. From the information provided in the case study, it is evident that Horace started his company with the goal of offering unique products that could be supported by good use of information technology.

However, along the way, he found that his first form of IT application, a web page, was not effective towards meeting customer demands. Consequently, he shifted to the use of emails, which could be utilised to communicate with consumers more effectively. A fast expansion pace of the firm resulted in mismanagement of information about clients. In fact, clients contacted Horace, expressing their disappointment that made the entrepreneur offer them better deals.

Although companies can benefit from the use of IS, they need to be concerned about ethical issues that might arise from outsourcing their software requirements and IT infrastructure (Lacity & Hirschheim 2012). In addition, it has been noted that legal implications and issues in relation to the management of business intelligence might result from the implementation of IS in a business establishment.

Management teams of companies can use protective, pre-emptive, exploitive, and corrective methods in their IS programmes (Beckinsale, Levy & Powell, 2006; Melville, Kraemer & Gurbaxani 2004).

Conclusion

This paper has demonstrated that IS tools are important in enabling business establishments to perform better than their business rivals. In the context of competitive business environments, management teams of companies are required to use different approaches in relation to IS. Some of these are protective, pre-emptive, exploitive, and corrective methods that lead to excellent outcomes.

References

Beckinsale, M, Levy, M, & Powell, P, 2006, ‘Exploring internet adoption drivers in SMEs’, Electronic Markets, vol. 16, no. 4, pp. 361-370.

Hodge, FD, Kennedy, JJ, & Maines, LA, 2004, ‘Does search-facilitating technology improve the transparency of financial reporting?’, The Accounting Review, vol. 79, no. 3, pp. 687-703.

Lacity, MC, & Hirschheim, R, 2012, ‘The information systems outsourcing bandwagon, Sloan management review, vol. 34, no. 9, pp. 23-28.

Laudon, KC, & Laudon, JP, 2011, Essentials of management information systems, Pearson, Upper Saddle River, NJ.

Levy, M, & Powell, P, Eds., 2005, Strategies for growth in SMEs: The role of information and information systems, Elsevier Butterworth-Heinemann, Amsterdam, Netherlands.

Melville, N, Kraemer, K, & Gurbaxani, V, 2004, ‘Review: Information technology and organizational performance: An integrative model of IT business value’, MIS quarterly, vol. 28, no. 2, pp. 283-322.

Stair, R, & Reynolds, G, 2013, Fundamentals of information systems, Cengage Learning, Boston, MA.

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