Management Decisions About Information Technology example essay topic

Globalization of the worlds industrial economies greatly enhances the value of information to the firm and offers new opportunities to businesses. Today, information systems provide the communication and analytic power that firms need to conduct trades and manage businesses on a global scale. Globalization and information technology also brings new threats to domestic business firms. This is brought on by the customers ability to shop in a worldwide marketplace, obtaining the price and quality information reliably, 24 hours a day. The worldwide market place brings competition to a higher level than ever before, forcing all businesses to play a part in this global economy.

In order to become a profitable player in a worldwide market firms, need powerful information and communication systems (5). Many countries are experiencing the third economic revolution. These countries include the United States, Japan, Germany and other major industrial powers. This revolution, which is now in progress, is transforming itself into knowledge and information based service economy. In a knowledge and information based economy, information technology and systems take on great importance. For instance, information technology constitutes for more than 70 percent of the invested capital in service industries like finance, insurance, and real estate.

This means that managers decisions about information technology will be the most common investment decision (7). Productivity of employees depends greatly on the quality of information systems serving them. Management decisions about information technology are critically important to the survival of a firm. Consider also that the growing power of information technology makes possible new services of great economic value.

Consider that credit cards, overnight package delivery, and worldwide reservation systems are examples of services that are based on new information technologies. Information systems have many uses. They not only help you track inventory but also help you make decisions on where to open another store and assist in forecasting how much money it will cost to maintain it (7). There are six major types of information systems. The first is the Executive Support Systems (ESS). This strategic level system allows senior managers to tackle and address five-year trends, operating plans, budget forecasting, profit planning, and work force planning.

The second is Management Information Systems (MIS). This is a management system and is directed at middle managers in assisting them make decisions on sales management, inventory control, annual budgeting, and capital investment analysis. Another management level system is the Decision Support System (DSS) and is directed at middle managers. This system is directed for the managers that are crippled by their, Paralysis of Analysis. The fourth and fifth, are knowledge level systems called Knowledge Work Systems (KWS) and Office Automation Systems (OAS) directed at knowledge and data workers. The KWS is a system that assists highly educated professional and technical staff.

This system is used as engineering, graphics, and managerial workstations. The OAS is used for word processing, image storage, and electronic calendars. This system is directed toward clerical workers. The last system is an operational level system called Transaction Processing Systems (TPS) directed towards operational personnel and supervisors.

This system has many uses. The TPS is used for order tracking, order processing, machine control, plant scheduling, material movement control, securities trading, cash management, payroll, accounts payable, accounts receivable, compensation, Training and development, and employee recordkeeping. There are many examples of how information systems not only benefit the investor but also the customer (19).