Gaining Competitive Advantage Through Information System

The information revolution is sweeping through our economy. No company can escape its effects. Dramatic reductions in the cost of obtaining, processing, and transmitting information are changing the way we do business.

Most general managers know that the revolution is under way, and few dispute its importance. As more and more of their time and investment capital is absorbed in information technology and its effects, executives have a growing awareness that the technology can no longer be the exclusive territory of EDP or IS departments. As they see their rivals use information for competitive advantage, these executives recognize the need to become directly involved in the management of the new technology. In the face of rapid change, however, they don’t know how.

Information technology is changing the way companies operate. It is affecting the entire process by which companies create their products. Furthermore, it is reshaping the product itself: the entire package of physical goods, services, and information companies provide to create value for their buyers.

Initially, companies used information technology mainly for accounting and record-keeping functions. In these applications, the computers automated repetitive clerical functions such as order processing. Today information technology is spreading throughout the value chain and is performing optimization and control functions as well as more judgmental executive functions.

Information technology is also transforming the physical processing component of activities. Computer-controlled machine tools are faster, more accurate, and more flexible in manufacturing than the older, manually operated machines. Schlumberger has developed an electronic device permitting engineers to measure the angle of a drill bit, the temperature of a rock, and other variables while drilling oil wells. The result: drilling time is reduced and some well-logging steps are eliminated. On the West Coast, some fishermen now use weather satellite data on ocean temperatures to identify promising fishing grounds. This practice greatly reduces the fishermen’s steaming time and fuel costs.

Finally, the new technology has a powerful effect on competitive scope. Information systems allow companies to coordinate value activities in far-flung geographic locations. (For example, Boeing engineers work on designs on-line with foreign suppliers.) Information technology is also creating many new interrelationships among businesses, expanding the scope of industries in which a company must compete to achieve competitive advantage.

So in conclusion based on  all the facts above, Information System do really matters in the nowadays business world due to a lot of information out there from one single transaction in a business can help a manager to make a better decision for the company future. A Company who use Information System will get a lot more advantage against a company who didn’t use Infromation System because the company who use is can analyze their company information so they know what they did wrong and what they did right which to lead to better decision while company who doesn’t use Information System will probably stuck using the old traditional way which is much harder and will more likely lead to terrible business decision.