According to Rialti and Marzi (2020, p. 1), modern organizations can benefit from the existence of more information than ever through the form of big data. However, although this data could allow an organization to obtain competitive advantages and improve its performance, its positive effects do not come without a burden (Rialti & Marazi 2020, p. 1). The purpose of this report is to discuss the role of information systems within an organization, including the different types of information systems, then to discuss how information systems help support business operations.
Role of Information Systems
The basic role of information systems is to help improve the efficiency and effectiveness of an organization. According to O’Brien and Marakas (2008) as quoted by Anagbo (c. 2021), there are three fundamental roles played by information systems in businesses, which are to support business processes and operations, support decision making of employees and managers and support strategies for competitive advantage.
This could be something as basic as an invoicing/accounting program that allows staff to create an electronic invoice instead of a handwritten one or complex AI that helps drive more sales due to getting a deeper understanding of the customer’s needs. Rialti and Marzi (2020, p. 39) analyze the concept of big data analytics capable business process management systems and discusses a framework on how they can be developed and how they can improve the agility of an organization and thus help increase the organizations performance. Whilst a discussion of this framework is beyond the scope of this report, it does show the importance of information systems in an organization, regardless of its size.
Types of Information Systems
According to National Archives of Australia (c. 2021), types of systems include:
- Business systems that create, keep and manage business information, such as finance systems, personnel systems, workflow systems.
- Electronic document and records management systems.
- Data stored on network drives.
Whilst these examples are useful to help define what an information system is, it doesn’t provide enough detail to be able to effectively examine how these can be used in specific organizations.
Kukreja, (c. 2021) breaks these down further, and identifies 6 main types. These are:
- Transaction Processing Systems: Payroll systems, human resource management systems, accounting/bookkeeping systems, invoicing systems etc.
- Office Automation Systems: word processing systems, emailing systems etc.
- Knowledge Work Systems, which is a “specialized system built to promote the creation of knowledge and to make sure that knowledge and technical skills are proper integrated into business” (Kukreja c. 2021). These could include Computer-aided design (CAD) systems, Financial Workstations (Kukreja c. 2021), systems designed to process large data sets (big data/AI) etc.
- Management Information Systems, which are “developed to support planning, controlling, and decision-making functions of middle managers” (Kukreja c. 2021).
- Decision Support Systems, which “processes information to support the decision-making process of managers” (Kukreja c. 2021).
- Executive Support Systems, which “is a computer-based information system that helps in decision making at the top-level of an organization” (Kukreja c. 2021).
How Information Systems Support Business Operations
The goal of a business is to produce products that have greater value to the consumer than the sum of their parts (both materials and labor/indirect costs etc.) and the ability to do this cheaper or better than its competitors, will help it gain a competitive advantage over its competitors (Agbolade 2018).
A strategy for doing this is by using Michael Porter’s value chain. This helps by “disaggregating a company into its strategically relevant activities, thereby creating a clear overview of the internal organization”, which helps managers assess where true value to the customer is created and where improvements can be made (Agbolade 2018).
Below is a summary of Michael Porter’s value chain:
Source: Agbolade 2018
The 5 primary activities are directly involved in the production and selling of the actual product (Agbolade 2018). These are largely self-explanatory.
The 4 support activities “go across the primary activities and aim to coordinate and support their functions as best as possible with each other by providing purchased inputs, technology, human resources and various firm wide managing functions” (Agbolade 2018).
“Procurement refers to the function of purchasing inputs used in the firm’s value chain” (Agbolade 2018). Technology development refers to systems to improve the product or the process (Agbolade 2018), for example automating a manufacturing activity that was previously done by hand or by using an automatic accounting system instead of producing a handwritten summary of income and purchases.
“HRM (Human Resource Management) consists of activities involved in the recruiting, hiring (and firing), training, development and compensation of all types of personnel” (Agbolade 2018). Firm infrastructure refers to “a number of activities including general (strategic) management, planning, finance, accounting, legal, government affairs and quality management” (Agbolade 2018).
The value from this model primarily comes from understanding how each activity links with each other. For example, even though procurement is responsible for purchasing inputs, if the company choses to change suppliers, this could affect production costs (operations), marketing and sales (the cost to the consumer might increase or decrease) service (the quality of the product could affect the number of complaints). Another example could be that the choice of whether to run a marketing campaign, which could affect marketing & sales, procurement (amount of materials required), operations (production costs), firm infrastructure (are more or less resources required due to an increase/decrease in sales).
A discussion of some of the information systems that eBay uses can be found in the appendix.
Roles that Support the Delivery of Information Systems capabilities
According to the Cambridge English Dictionary, a capability is “the ability to do something” (Cambridge University c. 2021). Therefore, the roles that support the delivery of information systems capabilities are the people and/or departments in an organization that help create new features and abilities either for existing systems or by implementing a new system.
Common roles and their relevant responsibilities are likely to include:
- Database Designers
- Design, manage, create and maintain databases (Study.com 2019). This could include designing/creating/modifying tables if additional functionality is being added to an existing/out of the box system or designing the database for a program from scratch if they are designing a new system.
- Choose a database management system (eg: Oracle SQL, Microsoft SQL Server, MySQL etc.) and collaborate with the programmers in deciding what programming languages are going to be used.
- User Interface Designers / User Experience Designers
- Design the front-end of programs using appropriate tools.
- Show prototypes to potential users and get their feedback on how the design can improve.
- Information Security Officer
- “Research, develop, implement, test and review an organization’s information security in order to protect information and prevent unauthorized access” (Study.com 2019). This would involve reviewing the solution/update created by programmers to find bugs and/or other security vulnerabilities.
- Systems analysts
- Define & prioritize user and organizational requirements (Wilson 2018).
- Gather data and facts from the users of the system (Wilson 2018).
- “Analyze various problems, their causes, and effects on business operations” (Wilson 2018).
- Develop specifications (Wilson 2018).
- Design & evaluate systems (Wilson 2018).
- Project leader/manager
- “Activity and resource planning” (Mrsic 2017)
- “Organizing and motivating a project team” (Mrsic 2017)
- Develop realistic deadlines (both internal and with the client) and ensure they are met (Mrsic 2017)
- “Cost estimating and developing the budget” (Mrsic 2017)
- “Ensuring customer satisfaction” (Mrsic 2017)
- “Analyzing and managing project risk” (Mrsic 2017)
- “Monitoring progress” (Mrsic 2017)
- “Managing reports and necessary documentation” (Mrsic 2017)
- Information systems managers
- Oversee the project and how well information systems in the company are performing in general.
- Chief Information Officer
- Set broad objectives and goals for information systems that align with business objectives (Inside Network 2020).
- “Deliver guidance to IT professionals and plans the implementation of new systems and operations” (Inside Network 2020).
- “Monitor the purchase of technological equipment and software” (Inside Network 2020).
- “Supervise changes and evolution in technology to explore ways the company can gain a competitive benefit” (Inside Network 2020).
- IT Administrator
- Complete system installs and upgrades (Job Hero 2021).
- Make sure the program does not violate any laws in any of the counties the organization does business in such as the privacy act in Australia and GDPR in Europe.
This report discussed the role of information systems within an organization, with eBay used as an example and then discussed the roles that support the delivery of information systems capabilities which included the programmers, system designers, database designers, user interface/experience designers and others.
How eBay Uses Information Systems to Support Business Operations
Some examples of the information systems eBay uses are:
Transaction Processing Systems
- In the past, eBay used to use PayPal as their primary payment processing system, however in 2018 they began the process of switching to Adyen, which is now used as the back end for most of their payments (Adyen and eBay: What Managed Payments Means for Sellers 2020). Adyen is also used by Netflix, Spotify, Etsy, Uber, EasyJet, Booking.com and Groupon (Adyen and eBay: What Managed Payments Means for Sellers 2020).
Adyen allows eBay to manage the payments from end to end and thus allows customers to pay for their purchase directly from the eBay website, whereas PayPal requires customers go through their website in order to complete their payment (Adyen and eBay: What Managed Payments Means for Sellers 2020). This is likely to result in a more seamless user experience for customers. This is also likely to result in better sales for eBay as since the process is quicker and more seamless, it is less likely to confuse the customer and/or lead to an increase in impulse purchases (due to customers spending less time completing the order).
Knowledge Work Systems
- According to Seshu Adunuthula, the Senior Director of Analytics Infrastructure at eBay “Data is eBay’s most important asset” (Adunuthula as quoted by Lopez 2016). As “eBay is managing approximately 1 billion live listings and 164 million active buyers daily” the “key to its future success will be how fast it can turn data into a personalized experience that drives sales” (Lopez 2016). Since a data warehouse was not able to sufficiently meet their requirements in terms of the type of data that needed to be stored, the structure of the data and the required speed of analysis (eg: some data is required to be analyzed in real-time assist shoppers throughout the selling cycle), eBay uses ‘Data Lakes’ (Lopez 2016).
- eBay uses multiple tools to help support their data analysis including Apache Spark, Storm, Kafka, and Hortonworks HDF (Lopez 2016).
eBay uses big data and machine learning of both structured and unstructured data for some use cases such as personalization, recommending products to buyers, fraud detection etc. (Lopez 2016).
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