The strategic and operational value of an Information system for an organization
Use of computers in organizations increased rapidly from 1955 to 1977. But only very few of them are useful for the management, for decision making. Information system means collection of components that work together to collect, process, store and so that it can help in decision making to achieve the organization’s goal. The use of Information technology means the installation of all the necessary hardware and software and use it to enhance or expand the business. It is also necessary for the organizations so that they can compete with the global trends. Information System plays an important role in the business strategies. In 80’s and 90’s it was the importance of information systems was realized. Many surveys and researches show that the organizations have better information systems provide better customer satisfaction. Whether you want to make a transaction processing level or a complex information system in both the cases computer-based system will be the ultimate solution. To achieve the business goals and make the organization prosperous, information system needs to cater to the strategic demands of the organizations.
Information system or in other words information technology impact the improved inventory management, production and customer service. The purpose of the information system is to make the computers do intelligent so they can help the top level managers in decision making. Some time information makes decisions itself.
Information is the output of an information system. Planning for the information system or any other, the first step should be the identification of needs. It is necessary for an information system to be effective it should respond to the need. Planning for the information system and strategic planning in management are almost same things. It requires the identification of objectives, and priorities. Information system requires the analysis of a corporation’s information and its process using information
How Can an Information System Help?
Investigating an organization i.e. AspenTech it can be said that objectives, goals and strategic plans all this information are required by the managers. It can be summarized from the databases in the form of the printed reports. Information system also provides other analysis. An information system provides multi-dimensional information analysis. It helps the managers in AspenTech to cope with the new trends. Changes that can affect the need for banking products or services. Information system helps the managers to deliver the products and services ineffective way to satisfy the needs of the customers as well as organization.
- Competitive forces effect the business environment: There are several competitors’ forces that affect the business environment.
- Porters Diamond: Michael E Porter defines the five forces competitive model. The five competitive forces defined by him in his book are, bargaining power of suppliers, bargaining power of customers, and threat for the new entrant, threat of substitutes and competitive rivalry between existing players. These forces are very important to evaluate the organizations. This model helps an organization understand external threats. This model helps the organizations to decide how to manipulate certain characteristics of industry. The live forces described in this model tell the importance of competition in the market.
Bargaining power of suppliers
Suppliers are input sources that are required by the organization to produce goods and services. If the customers are split then the bargaining power of the supplier will below. Suppliers’ bargaining power will be high if the market is ruled by few large suppliers. There is no substitute for the suppliers’ product in the market. It may a case that buyers can be hindrance to suppliers if they are not accepting the new products in the markets. Definitely switching costs is dependable on supplier. It can be high from supplier to supplier.
Threat of substitute
Substitute are those products which are from the different industry but perform similar functions. As there are many substitutes are available in the market to the consumers, it makes them powerful. So consumers also have high bargaining power, so in the first step it is necessary to analyze the scope of the industry. There are many ways to treat the substitutes like brand royalty to customers, close customer relations or switching costs for customers. In this way huge market share can be attracted and sales for the existing firms can be reduced. Patents and license can restrict the new entries. There are other things they should also be treated like labor that have good expertise. They can also make one scary. Porters’ model can be applied to particular companies and industries or regions.
A customer can also have high bargaining power if he buys large quantities. By using Porter’s five forces competitive model an organization can make its own place in the market. Michael Potter’s five forces framework are specially designed to keep an eye on organization’s objective and high goals. Five forces can be used in Aspen Tech in order to determine attractiveness of industry enough to obtain desirable results. The five forces of Substitutes, Buyers, Entry, Rivalry, and Suppliers combine obtain the intensiveness of competition and profit potential for a both large as well as small industry or market sector.
According to Wal-Mart , there are following factors which every organization faces and it depends on organization’s creativity how it copes up with certain factors in order to achieve high position in market. Potential competitors are of medium pressure and according to Porter’s Entry barriers are comparatively high, as Wal-Mart holds outstanding distribution systems, brand name, locations, capital and financial resources. Wal-Mart pricing techniques are specially designed in such a way to decrease the bargaining power of a consumer. Bargaining of buyers & suppliers combinable imposes a great pressure on Wal-Mart’s management.
“Listen to everyone in your company, exceed your customers’ expectations, but most importantly, control your expenses better than your competition, this is where you can always find the competitive advantage.” SAM Walton
Wal-Mart gives a clear idea of how business works. Following factors play a pivotal role in the success of AspenTech or any other business: Growth, Leader in its industry, Strong Financials, No real threats, Good Management, Successful in their business model and Future Growth. Applying porter’s and Wal-Mart points AspenTech has gained a huge popularity among its clients. Use of information technology has added a dramatic change in its popularity graph.
Information technology has reformed all marketing strategies and management policies in all multi national organizations. In recent world, all organizations are updating their policies and strategies by adopting new technologies. Information systems and technologies are the best helping aid on the path to success. There are numerous organizations that are using information systems in order to establish their position in international market. In United States, and United Kingdom Information systems has brought the dramatic change in marketing and management policies of organizations. Use of information systems enables organizations to update their manual system as well as in introducing new products. During past few years use of information systems has bought the great transformation in techniques and policies of an organization. This transformation, has introduced a specular change in our society this transformation also known as “Information revolution”,
Information revolution is basically referred to the consolidation of different organizational procedures by enabling new and advanced information technologies and information systems. The result of the transformation is unpredictable and uncalculated, but numerous researchers and policymakers have referred to the result in various terms. The main objective of this report is to analyze the change in AspenTech organization due to the use of information system. Information technology is a marvelous tool that adds life to the organizations. There is an important need to analyze a popular view of how technology has introduced a wide social change by emphasizing the traditional aspect of industry, agriculture and information (Etheredge 2003: 12). The most important perspective demonstrates the context for various new ideas. There is number of discussions that discuss information technology history, uses etc but thousands of readers are aware of this and the objective of this report is not to enter into the debate about controlling technology.
No one can deny the importance of information technology. Information technology has added lots of advantages to the organization. Information technology makes everything easy and flexible, it reduces manpower and enhances employee’s productivity. Information technology has revolutionized the view of business and marketing strategies around the globe. There are numerous questions arise: who will take advantage form IT? Does IT add value to organization, Does IT helps in increasing revenues? Since the beginning of the history, business is organized in order to gain advantages, both financial and social. Has IT added value to AspenTech? In order to answer this question it’s very important to understand the meaning and context of the word “value”.
According to Warren, the term value can be defined as” “Price is what you pay. Value is what you get.” In the light of another definition of value, value can be stated as “value is “worth in usefulness or importance to the possessor; utility or merit” (American Heritage Dictionary 2000: 88). Aspen Tech has a wide network of managers, and other staff. If it is to create value for an organization it means every member of an organization must get advantage from it within an organization.
In AspenTech, productivity and business profitability are the interest of the owners and stakeholders and consumer’s surplus is of consumer’s interest. Many analysts have cleared that information technology is lifeblood for an organization in recent days. Analysts declared that information technology is important for the survival of organizations in international market. Research has shown that organizations that did not spend on information technology are less profitable than others. Evidence proved that Information technologies are important if the organization wants to be remaining competitive but it does not mean that additional spending on It will bring great revenues to the organization.
At AspenTech IT has added huge advantage to organization’s success. IT at place has dramatically changed the employee’s creativity and productivity. It has reduced employee’s work and time. With the aid of IT at place employees are able to do more work in less time. IT also provided flexibility in timings, work hours and productivity to all employees. Flexibility allowed by information technology assures the quality and creativity of employees. On the other end, Customers have really gained a huge advantage from using IT in order to locate lower prices for the goods. The best example is online shopping services, online shopping services provide everything at your doorsteps and one can take advantage of online shopping anywhere, anytime.
Use of IT helps customers in finding new and right products at economical rates. At AspenTech customers are taking full advantage as It has provided convenience and ease of finding new information about company products anytime. Customers have gained advantage to shop anytime from their desired store. Use of information technology in organization’s strategies has given a great advantage to organization, staff members and its customers. Due to information technology there is number of services/products are available at economical rates than they would otherwise be. Every person linked with organization whether directly or indirectly has gained an advantage from Information technology.
At AspenTech IT helps in processing more information accurately. In other words, at AspenTech everyone gains and everyone loses something. There are some cases when IT does not create value for the business. IT has gained so much popular but still at AspenTech management faces few problems from customers regarding use of information technology. At Aspen tech, information technology has added huge advantages in both veins, financial and marketing. Use of information technology at Aspen tech helps in marketing techniques and it can also be used in exploring new and advanced ideas for the promotion of sales and revenue. At aspen Tech, with the aid of Information technology, a number of tasks are now done faster than earlier.
No one can deny the truth and importance of information technology at Aspen Tech. Information technology also helps in creating and attracting customers. Aspen Tech sales and revenues have increased a lot during past decades due to the use of information technology. Aspen tech has collected the feedback from customers in order to evaluate the satisfaction level of its customers and the results show that AspenTech has gained more popularity in last few months.
Competitive advantage is one of the topmost requirements of an organization for its long survival. The widespread impact of IS has been noticed in numerous organizations during past few decades. For example in the following organization the automation use increases the effectiveness of the organization. It has been observed that IT expenditures are rapidly increasing around the globe (John 1997: 1). IT & IS provide easy access to information to all customers. In the following organization, use of information technology has bought a huge advantage which can be determined from their sales increase.
AspenTech sales have been increased from previous level. The income of the consumer or client is remaining constant but still Aspen tech sales increased. The rise in their Revenue curve indicates that users are rendering their services more e than before. Revenue curves shift upward because of staff activeness, time-saving etc. Information technology & information system at Aspen Tech has given a new drive to its strategies. Information technology has given a new drive to organizations. It & IS at Aspen Tech provides easy access to information. Use of information technology and information system at Aspen Tech bought an advantage for all members. With the aid of information technology the clients of Aspen Tech are more satisfied and it has shown in their feedback. Employees are spending less time and are doing more work; employees are not getting paid for their working hours so revenue of the organization will increase. Aspen tech has gained so much popularity due to information technology use. Information technology adds a huge advantage to the organization. There are numerous analysts who proved the use of information technology in an organization is necessary for organizations’ success.
Aspen Tech managers and stakeholder shave observed that how their sales curve has increased during past few months due to the use of information technology and on-time staff availability. Information technology adds life to organization as at AspenTech, the graph of user and employees satisfaction has reached its optimum level which shows a great change in sales and revenue. In a nutshell, it has been observed that information technology is important for organization on the path to success. IT has now become congruent and in recent days it’s more involved in the strategic management areas, their value to competitive advantage becomes more nebulous in recent world.
Information technology and new advantage technologies have added a great advantage in business. Numerous organizations are taking advantage of new technologies in making huge revenues. As, it has been observed above that how AspenTech sales curve increased and it is now easy for AspenTech stakeholder to beat their competitors. Information systems are the strategic weapon in order to achieve reputable position in market.
American heritage dictionary of the English language, (2000). Boston: Houghton Mifflin, (4th ed.).
Etheredge, L (2003). The need for evidence-based health policy to address health care variations. Health Affairs, W366-W368.
John Vice, (1997), LEVERAGING INFORMATION TECHNOLOGY TO MAXIMIZE COMPETITIVE ADVANTAGE. Web.