INFORMATION SYSTEMS STRATEGY VERSUS TODAY BUSINESS ENVIRONMENT FACTORS.
Today, the businesses operate at an environment characterized by factors that require information systems and ICT solution compared to traditional business environment.
The changes in today’s business environment, pose a number of new challenges and opportunities for business firms and their managements such that the only way is to apply ICT and information systems. The factors in today’s business environment that necessitate heavy use of ICT and information systems are:
1. Internet growth and technology convergence
Today, an entirely new Internet business culture is emerging with profound implications for the conduct of business.
This factor entails:
a) Emergence of new business technologies with favorable costs e.g. emergence of epayment methods.
b) Emergence of ebusiness, ecommerce, m-commerce, c-commerce and e-government
c) Rapid changes in market boundaries and market structures that eliminate the need for middle men.
d) Increased obsolescence of traditional business models such as company distributors or company agency or company middle-men / brokers.
2. Transformation of the business enterprise
Today, most businesses have become more decentralized by eliminating some unnecessary decision levels so that the management has become lean and the organization structure has become more flattened.
This factor entails:
a) Flexibility of business operations and achieving business location independence.
b) The need for low cost of business transaction and business coordination.
c) The need to empower employees to do more and in collaborative work or teamwork.
d) The need to flatten organization structure and need for decentralization of authority.
3. Growth of a globally connected economy
Today, most businesses are able to increase their market share by moving to the cross boarder markets such as marketing in other countries or continents.
This factor entails:
a) The need for efficient management and control in a global market place
b) The need to cope with the competition in world markets
c) The need for well-coordinated global workgroups and global delivery systems
4. Growth from old industrial economy into recent knowledge and information-based economies
Today, the businesses are known to be competitive according to the efficient way of handling knowledge or information but not based on the size of the machinery they have in the factory.
Information systems and ICT tools enable businesses to achieve efficiency in handling knowledge and information in order to move from the traditional mass production into the new digital concept called mass customization (ability to produce different designs for different customers on the same manufacturing line).
This factor entails:
a) The need to cope with knowledge and information-based economies
b) The need to be able to compete with the frequent new goods and new services in the market characterized by shorter product life
c) The need to be able to handle knowledge as a central productive asset and as a strategic asset
5. Emergence of the digital firm
Most businesses today operate in digitally enabled relationships with customers, suppliers and employees.
This means that the core business processes today are accomplished using digital networks and require agile or swift sensing and responding to environment changes.
This factor entails:
a) The need to provide digitally enabled relationships with customers, suppliers and employees.
b) The need to ensure that the core business processes are accomplished using digital networks.
c) The need to achieve digital management of key corporate assets e.g. use of database systems to manage company asset records.
d) The need for swift and agile sensing or responding to business environmental changes.
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