UNIT IV

THE IMPACT OF INFORMATION

TECHNOLOGY ON THE BUSINESS

By: Kanika Vij

•Modern Organizations- IT runs the Airlines,
•Technology Transforms
•Securities Industry
•Creating New Types of Organization
•Examples of Designs using IT Variables
•Adding peoples to the design
 How IT runs the Airlines?
• Information technology system assists a lot of functions including reservation management,
inventory management, and ticketing.
• Airline Company has a number of branches and distributors among globally, so they should
require efficient communication between different branches and distributors. Good
information technology systems assist them to maintain these functionalities all around the
world. For smooth functioning airline company uses wide range of internal system for various
activities. Lots of management and decision support system(DSS) helps the airlines to reduce
the critical errors in the process management. Several software systems are using to optimize
crew, aircrafts and other resources.
• Information technology architecture is the high level plan of the information within the
organization. It guides current operations and future plan also. It architecture integrates the
business needs of the entire organization.
 An Introduction to Information
Systems

•Information system refers to various information technology systems like computers,

software, database, communication systems, the internet, devices, and others used by an
organization to collect, transfer, organize, and store data. Bursting with changes, the current
business milieu has helped companies implement a varied set of advanced technologies into
different processes. These IT applications have introduced automation, efficiency, and
timeliness in various business activities.

•The introduction of information systems into the business has evoked a chain reaction
among different interrelated processes that have only benefited the companies by
increasing profits and reducing costs and lead time, among other things. Therefore, it is
imperative to understand the growing importance of information systems in companies.
 What Is Information Systems And its
Importance?
•An information system is a group of data sets that ensures that business operates smoothly,
embracing change, and helping companies achieve their goal. The dictionary defines an
information system as a computer system or set of components for collecting, creating,
storing, processing and distributing information. The information system is incomplete
without the support of information technology (IT) systems.
•An information system is not primarily associated with technology or IT system. Instead, it is
related to how technology is used to fulfil the needs of- individuals, groups or organizations.
In the digital era that we are in, the importance of information systems is increasing because
it standardizes the process of passing, collecting, storing, and accessing information or data
for individuals or businesses.
What Are The Types Of Information
Systems?
1. Knowledge Work System
2. Management Information System
3. Decision Support System
4. Office Automation System
5. Transaction Processing System
6. Executive Support System
 1. Knowledge Work System(KWS)
•
There are different knowledge management systems that an organization implements to ensure a continuous
flow of new and updated knowledge into the company and its processes. A knowledge work system (KWS) is one
of the knowledge management systems that ease the integration of new information or knowledge into the
business process.
•KWS also offers support and resources to various knowledge creation techniques, artificial intelligence
applications, and group collaboration systems for knowledge sharing, among others. It also uses graphics, visuals,
etc., to disseminate new information.
•Designers often use computer-aided design systems (CAD) to automate their design process.
•Financial workstations are used to analyze huge amounts of financial data with the help of new technologies.
•Virtual reality systems are found in the scientific, education, and business fields for using graphics and different
systems to present data.
 2. Management Information
System(MIS)
The management information system provides aid to managers by automating different processes that were
initially done manually. Business activities like business performance tracking and analysis, making business
decisions, making a business plan, and defining workflow. It also provides feedback to the managers by analyzing
the roles and responsibilities.
A management information system is considered a significant application that helps managers immensely. Here
are some of the advantages of the information system:
1. It enhances the efficiency and productivity of the company
2. It provides a clear picture of the organization’s performance
3. It adds value to the existing products, introduces innovation and improves product development
4. It assists in communication and planning for business processes
5. It helps the organization provide a competitive advantage
3. Decision Support System(DSS)
A decision support system is an information system that analyses business data
and other information related to the enterprise to offer automation in decision-
making or problem-solving. A manager uses it in times of adversities arising
during the operation of the business.
Generally, the decision support system is used to collect information regarding
revenue, sales figures or inventory. It is used across different industries, and the
decision support system is a popular information system
4. Office Automation System(OAS)
An office automation system is an information system that automates different
administrative processes like documenting, recording data, and office
transactions, among others. The office automation system is divided into
managerial and clerical activities.
Here are some of the business activities that are done under this type of
information system:
1. Email
2. Voice mail
3. Word processing
5. Transaction Processing
System(TPS)
The transaction processing system automates the transaction collection,
modification, and retrieval process. The characteristic of this type of information
system is that it increases the performance, reliability and consistency of
business transactions. It helps businesses perform daily operations smoothly
without hassle.
6. Executive Support System(ESS)
An Executive Support System or ESS helps top-level executives to plan and control workflow and
make business decisions. It is very similar to Management Information System or MIS.
Here are some of the unique characteristics of ESS:
It provides great telecommunication, better computing capabilities, and effective display options
to executives.
It enables them with information through static reports, graphs, and textual information on
demand.
It helps monitor performances, track competitors’ strategies, and forecast future trends, among
others.
How To Apply Information Systems in
Business?
The several strategic uses of information technologies for electronic business and commerce and
they give competitive advantage to a business. Business process re-engineering frequently
involves the strategic use of business technologies.
Here are some of the business activities that require the intervention of an information system.
1. Enterprise resource planning (ERP)
2. Supply chain management (SCM)
3. Customer relationship management (CRM)
Enterprise resource planning (ERP)

•Applying information systems to enterprise resource planning helps automate business

administration and planning functions.
•ERP software can integrate all of the processes needed to run a company.
•ERP solutions have evolved over the years, and many are now typically web-based applications
that users can access remotely.
•Some benefits of ERP include the free flow of communication between business areas, a single
source of information, and accurate, real-time data reporting.
•There are hundreds of ERP applications a company can choose from, and most can be
customized.
•An ERP system can be ineffective if a company doesn't implement it carefully.
Supply chain management (SCM)

Supply chain management (SCM) is the centralized management of the flow of goods and
services and includes all processes that transform raw materials into final products.
By managing the supply chain, companies can cut excess costs and deliver products to the
consumer faster and more efficiently.
Good supply chain management keeps companies out of the headlines and away from
expensive recalls and lawsuits. 
The five most critical elements of SCM are developing a strategy, sourcing raw materials,
production, distribution, and returns.
A supply chain manager is tasked with controlling and reducing costs and avoiding supply
shortages.
Customer relationship management (CRM)

Processes in CRM:
1. Marketing: this process involves decision regarding which customers to target, how to target
customers, and what products to offer, how to price products and how to manage the actual
campaigns targeting customers.
2. Sell: it focus on making an actual sale to a customer. The sell process includes providing the
sale force the information they need to make a sale and then executing the actual sale.
3. Order management: the process of managing customer orders as they flow through an
enterprise is important for the customer to track his order and for the enterprise to plan and
executives order fulfilment.
4. Call/services center: it is often the primary point of contact between a company and its
customer. Is center helps customer place orders, suggest products, solves problems, and
provides information on order status.
Advantages of CRM:  Disadvantages of CRM:

1. Provide better customer service 1. Record loss

2. Increase customer revenue 2. Overhead
3. Training
3. Discover new customer
4. Help sales staff
5. close deals faster
6. Simplify marketing and sales
processes
Technology Transforms

A huge benefit of technology is that it has the ability to collect and store tons of data. For
example, organizations collect information about consumer behavior, so they can improve the
customer experience. They track trends, customer buying habits, and other contextual
information.
With technology, organizations scan further segments and target their customers based on
their individual interest and buying behaviors.
Technology makes organizations more powerful because the more data an organization has
the more of an advantage they have in the market.
Top Digital Transformation
Technologies

1. Cloud Technology
2. Artificial Intelligence and Machine Learning
3. Big Data
4. Real-Time Analytics
5. Internet of Things and 5G
6. Augmented Reality
7. Digital Twin
8. Additive Manufacturing and 3D Printing
 Cloud Technology

Cloud computing is a broad term that refers to the provisioning of computing services in a flexible and
scalable manner.
Cloud computing services fall into three main categories:
1. Infrastructure as a Service (IaaS)—provides on demand access to infrastructure like servers, storage,
and networking.
2. Platform as a Service (PaaS)—a hosted environment that allows organizations to build new services
and gain access to advanced technologies.
3. Software as a Service (SaaS)—business applications operated by third party providers and offered as a
service over the Internet.
Cloud computing is an important digital transformation technology that provides flexibility, scalability and
agility. Most digital transformation initiatives leverage the cloud, because often traditional infrastructure is
not sufficiently advanced, scalable, agile, and cost-effective to run the required digital infrastructure.
Artificial Intelligence and Machine Learning

Artificial intelligence and machine learning (AI/ML) involve simulating human cognitive
processes by machines. Specific applications of artificial intelligence include expert systems,
natural language processing, computer vision, predictive analytics, and speech recognition.
Digital transformation initiatives make extensive use of AI/ML as part of new business strategies.
In addition to improving productivity, these technologies are critical to better making use of the
data that businesses collect.
Deriving actionable insights from data enables businesses to improve their products and
services and develop innovative strategies.
Big Data

Data is considered the fuel of the modern economy, and is an invaluable resource for most
organizations. This has led to exponential growth, which is only expected to increase in the
coming years, creating both a challenge and opportunity for any business.
Big data can include structured, semi-structured, and unstructured data collected by
organizations in their daily operations, from their customers, or obtained from third parties. This
data can be used for predictive modeling, data mining, and other types of data analytics.
By implementing big data analytics, organizations can process large amounts of data, extract
information relevant to the business, create strategic models and make data-driven decisions.
Real-Time Analytics
Real time analytics is the analysis of data and related resources as soon as it enters the system.
“Real time” refers to the ability to act on data in a way that users perceive as instantaneous.
Streaming data architectures deliver data from operational systems in real time, leverage high
performance analytics engines, and enable fast operational decisions. These decisions can be
carried out by robotic process automation (RPA) or other forms of automated policy
enforcement.
Internet of Things and 5G
The Internet of Things (IoT) is a system of computing devices, machines, or other objects which are
connected to the Internet and able to transfer data over a network. They can often function
independently, without requiring a human or traditional computer system to oversee them.
IoT devices require more bandwidth, faster transmission capabilities, and seamless connections, which
is made possible by 5G technology. For example, most major cities in the world have implemented a
network of IoT sensors, many of them connected by 5G, as part of their digital transformation.
In the manufacturing industry, the Industrial Internet of Things (IIoT), also known as Industry 4.0, is
driving digital transformation. This technology helps manufacturers improve operations and increase
flexibility, innovation, speed and quality.
In the retail industry, IoT plays a key role in increasing customer satisfaction by providing valuable
insights about how consumers buy and use products. In healthcare, telemedicine enables new,
innovative services thanks to wearable devices and portable medical equipment that can be deployed
in patient’s homes or physically attached to them.
Augmented Reality
Augmented reality (AR) connects digital information to a visual user experience. Unlike virtual
reality, which creates an entirely artificial environment, augmented reality takes an existing
environment and overlays new information on top of it.
AR can be applied both to employee tasks and consumer interactions with a company. It helps
businesses increase productivity and quality, facilitate knowledge transfer, improved training,
and superior customer support. It opens the way for a more intuitive use of technology and is
expected to change the way we interact with digital systems.
Digital Twin
Digital twin is a technology that helps bridge the gap between the physical and digital worlds. A digital twin
is a virtual model designed to accurately reflect a physical object.
The real object is equipped with various sensors related to important functional areas. These sensors
generate data on various aspects of object performance, such as energy output, temperature, and weather
conditions. The data is then passed to a processing system and applied to the digital copy.
This makes it possible for organizations to use the virtual model to run simulations, investigate performance
issues, and make possible improvements. The objective is to generate valuable insights that can be applied
back to the real physical object.
Applications of digital twin include:
Improving diagnosis and treatment in the healthcare industry
Optimizing manufacturing in the automotive and aerospace industries.
Improving the way consumer products are developed, designed, and sold.
Additive Manufacturing and 3D Printing
Additive manufacturing (AM), also known as 3D printing, adds digital flexibility and efficiency to
the manufacturing process. AM uses computer-aided design (CAD) to instruct hardware to
deposit a material with a specific shape layer by layer, automatically fabricating a desired object.
In contrast, when creating traditional objects, it was necessary to start from raw material and
remove parts of it using milling, engraving, molding, and so on.
AM is a technology that has existed for several decades and is highly mature. When
implemented correctly, it enables high-quality end-products with improved performance, more
complex geometries than were possible in traditional processes, and simplified manufacturing.