Impact of IT on Business Operations

This assignment analyzes how Information Technology (IT) systems enhance business operations. It examines the role of IT in increasing efficiency across different departments, discusses transaction processing systems (TPS) and decision support systems (DSS), and explores how IT can be used to solve common business problems like forecasting and planning failures. The report concludes that implementing IT systems is crucial for organizational growth and success.

Information Technology
Systems

TABLE OF CONTENTS
INTRODUCTION:..........................................................................................................................1
LO1..................................................................................................................................................1
P1 How IT systems are used in different business functions.................................................1
P2 How IT system contributes in achieving business objectives...........................................2
LO2..................................................................................................................................................3
P3 Different ways in which IT system process data...............................................................3
LO3..................................................................................................................................................4
P4 How IT system supports changes within organisation......................................................4
LO4..................................................................................................................................................5
P5 IT solutions for common business problems.....................................................................5
CONCLUSION:...............................................................................................................................6
REFERENCES:...............................................................................................................................7

INTRODUCTION:
In present era, Information Technology (IT) has become an essential element in business
operations. Without using information technology systems, it is not possible for business to
successfully manage its operations. IT helps in bringing change in process, operations,
techniques, etc. It transforms overall business functioning and brings efficiency in working. This
report will show that how IT systems are implemented in different business functions and
contribute in achieving objectives. Moreover, an analysis is done to find out ways how IT
systems process different data to provide useful information. In another section, it evaluates
support of IT system in bringing change in business performance. At last, an example is given
to show how IT system solves common business problems.
For present assignment, firm taken is Johnson supermarket. The cited firm belongs to
retail sector and operates in the UK. The existence of the company on large level requires proper
IT systems to operate effectively. Thus, this report will brief about some systems that can be
implemented by firm.
LO1
P1 How IT systems are used in different business functions
The basic business functions are marketing and sales, production, accounting and human
resource (Cassidy 2016). These functions are combined together to achieve business goals and
objectives. Implementing IT system in these functions will upgrade them thus increasing their
efficiency. It will provide accurate data that can be used in decision making process. So, its
various uses are described below:-
Marketing and sales- Marketing functions involve various activities like promotion, sales,
pricing, etc. A proper planning is done to provide effective data to management on market
condition and needs of customers. MIS helps in decision making regarding marketing mix which
include product, place, price and promotion. It collects external research data based on different
factors. This also helps in sales forecasting so that average profits can be estimated.
Management Information System- Small and medium size business relies on this system as it
provides data regarding management performance. It helps in creating reports based on sales and
inventories so that strategies can be developed (Galliers and Leidner 2014). Moreover, it uses
historic data to make tactical decisions which helps in planning resources.
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Production- It is related to manufacturing products. Implementing IT systems can be beneficial
in increasing efficiency of machines and workforce. System will help in reducing cost per unit
and proper utilisation of resources (Maurino and et..al 2017).
Human Resource Management- It refers to selecting and managing workforce within an
organisation. IT system will help in measuring performance of individual so in case training can
be provided to them to enhance his skills and abilities. It will be useful in providing resources to
them. Furthermore, it will analyse requirement of manpower and effective method to recruit
them.
Accounting and finance- It is the most important function of business as it decides whether firm
is having enough resources to implement IT systems or not. An effective IT system will help in
allocating resources to each department. It will also be useful in estimating budgets and net
profits. It will maintain proper records of daily business transactions. This will control expenses
by doing audit.
Research and development- Information technology is most beneficial in doing research. It
helps business to bring changes in its operations by implementing new technology. Moreover, it
guides business in right direction to ensure its survival in the market. Also, it provides a platform
to enhance its business operations by using new methods, procedures, process, etc.
In this way, implementing IT system can be useful in different functions of an
organisation. It transforms the overall business operations and helps in growth and development
of business.
P2 How IT system contributes in achieving business objectives
Only implementation of IT system is not enough; along with this, it is measured that
whether system has helped in achieving business goals or not. For this, all systems are managed
and controlled by experts. (Pearlson, Saunders and Galletta 2016). These systems are very
beneficial for a company to achieve its goals and objectives in an effective manner. It improves
performance by processing information and data. This gives accurate and useful information to
take decisions. There are various ways in which IT system contributes in business goals:-
Business decisions- IT system helps in taking effective decisions to achieve goals and
objectives. This makes it easy for manager to take decisions based on information provided by
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the system. Also, it provides alternatives to managers to choose from it. Manager chooses the
best one in order to achieve those goals. Flexibility in decision making improves performance of
employees and managers thus increasing business efficiency.
Various system implemented in business will be according to its nature and requirement.
It helps in collecting data and analysing it so that strategies can be developed . Moreover, an
effective communication procedure will ensue that information is shared with employees and
managers (Peppard and Ward 2016). Therefore, they will work with more efforts to achieve
goals. IT system ensures that there is proper utilisation of resources thus reducing wastage. Also,
expenses are reduced that leads to increase in profits. The overall procedure of working is
changed allowing workers to adopt them. This helps them to work more effectively and enhance
their productivity. So, this enables them to complete goals leading to improve in company
performance. For example- integrating system will help in sharing information with each other.
So data collected by research department will give production department to develop new
products. This is done to fulfil demands of customers. In similar way past data will help
managers to do forecasting. By this managers can develop strategies to increase sales.
Therefore, in this way IT system will contribute in achieving goals and objectives of
organisation.
LO2
P3 Different ways in which IT system process data
It is very important to store data that can be processed into information. Data can be
stored in several ways and processing can be done by different systems. It is ensured that
information provided is useful and accurate. This will help in taking decisions regarding
improvements in operations. For this, various information systems are used which are described
as follows:-
Transaction processing system (TPS)- It is generally used by small business for its day to day
operations. It includes processing orders, generating bills, checking stock, etc. It works son real
time system that direct system to retrieve, process and store data in organised way. User enters
specific data and system stores this data (.Rivard and Aubert 2015.). Then data is process to
generate an output. It will be very beneficial for small business like Johnson super market where
a lot of daily transactions occurs. This will help in recording every customer transaction so that
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it becomes easy to retain them. It records details like customer name, address, product purchased,
etc. With this they will be able to solve their problems and taking feedback. It will be useful in
improving their services and increasing customer satisfaction. Also, this will improve their
CRM and they will be able to gain trust of their customers. Along with this communication
between supplier and purchasing department will be improved as they will be able to get updates
on inventory and daily sales (Schnoll 2015).
Decision support system (DSS)- It is a system that is implemented to enhance business
decisions. These decisions are taken by analysing past data so that improvements can be made. It
helps mangers to plan and make quality decisions. It provides several alternatives so that the best
one can be selected. Information gathered by DSS includes sales figures, estimated revenue, etc.
Moreover, it helps in identifying problem in objectives and designing plan to solve it. Managers
do not have to waste time in collecting data , as this system provides integrated data of all
departments to help manager. It helps at every levels within an organisation. DSS provides
several ways in which customers problems can be solved. It helps in finding out problem in
CRM and taking decision to solve it (Weaver and et..al 2016). Moreover, it helps purchase
department of cited firm to make decision among different supplier that provide better quality
raw material at cheap cost.
Customer Relationship Management (CRM) - It stores data relating to customer that helps
business to maintain and build relations with them. This uses tools and methods that help in
retaining customer and solving their problems. It ensures that customer’s needs are fulfilled and
is useful to identify change in taste and preference. In addition to this, it measures their
behaviour to analyse change needs and desires.
LO3
P4 How IT system supports changes within organisation
With implementation of IT system the entire functioning of organisation changes. It
brings modifications in process, methods, procedures, etc. and all other activities that helps in
accomplishing goals and objectives. It has become an integral and vital plan for business. It
helps in providing support to various activities by giving accurate and proper information. It
gives specific information by processing data related to activities. It ensures that performance is
enhanced and there sis change in operations (Schwalbe 2015). Due to this efficiency of
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employees are increased that boost their confidence to work hard. In Johnson super market
owner is focus on how to achieve goals and objectives by implementing IT systems. It enables
him to sustain in the market for long term. Also, it will be beneficial in taking effective
decisions.
If transaction processing system is implemented it will record each and every transaction
that occurs daily. This will record cost, profit, sales, customer details, etc. of each transaction. It
will provide data to managers to decide each day activities and on basis if this planning will be
done (Taylor, Fritsch and Liederbach, 2014). Furthermore, eat the end of month inventory will
be checked, this will be useful for purchases department to communicate with supplier regarding
goods to be purchased. Suppose if goods are not available then department can approach to other
supplier. They can inform management about non availability of goods. In this way
communication between supplier and purchase department will increase. The operations will
have a great impact by this so manager will take decision based on information provided by
departments. A forecast will be done by analysing each year profit and sales. This will enable
them to know profit and loss of each year. So accordingly they can develop strategies to increase
those profits. Moreover, it will determine expenses done by organisation on various activities.
Thus, managers can take actions to control and manage expenses that will lead to increase in
profits. By measuring performance it will help in identifying weak areas of departments. So
proper plans and decisions can be made to improve those areas. This will lead to enhance
employees productivity and work efficiency. It directly affects functioning of overall
organisation leading to smoothly running of business operations. Therefore, overall performance
and profitability of Johnson super market will be increased.
LO4
P5 IT solutions for common business problems
Business faces a lot of problems during its operations. The problems faced should be
solved to ensure smooth flow of business activities. For solving issues strategies and decisions
must be taken by managers (Vaishnavi and Kuechler 2015). It also helps in dealing with similar
problems in the future. Some common issues faced by business are:-
Failure of plan- It is the mostly occurred issue faced by business. In order to overcome this IT
system can provide several other business plans to implement. IT system helps a manager to
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prepare various plans by analysing different situations. These plans can be used in critical
situation when a particular plan gets failed.
Resistance to change- Many employees avoids adopting change in the organisation. They think
that it is not useful for them. But IT systems provides platform to them by adopting change and
making their work easier. It helps in increasing work efficiency and motivating them.
Supply chain- It is important to communicate with suppliers to provide raw materials in right
time and quantity. So IT systems helps in creating link between purchase department and
supplier to exchange information and data (Valacich and Schneider 2015).
Problem solving- Conflicts are major issues that occurs in every organisation. It may occur
between manager and employee or different managers. System shares information between them
and helps management to solve the problem.
Forecasting- Enterprises are bot able to forecast sales and profits . This hamper their growth and
development in the market. IT records past data and analyses it to provide useful information .
This information helps in forecasting of sales and profits of coming year.
CONCLUSION:
From this report it is concluded that implementing IT systems helps an organisation to
enhance its business operations. It is useful in increasing efficiency in overall business functions.
There are different ways IT systems are used in different business departments and how it helps
in taking effectively decisions to achieve goals and objectives is shown. In addition to this
transaction processing system (TPS) and decision making system (DSS) and its relation with
customer relationship management (CRM) is analysed. Further, how some common business
problems such as forecasting, failure of plan, etc. can be solved by implementing different IT
systems.
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REFERENCES:
Books and Journals:
Cassidy, A., 2016. A practical guide to information systems strategic planning. CRC press.
Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges and
strategies in managing information systems. Routledge.
Maurino and et..al 2017. Beyond aviation human factors: Safety in high technology systems.
Routledge
Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information
Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.
Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a
digital strategy. John Wiley & Sons.
Rivard, S. and Aubert, B.A., 2015. Information technology outsourcing. Routledge.
Schnoll, H.J., 2015. E-government: Information, technology, and transformation. Routledge.
Schwalbe, K., 2015. Information technology project management. Cengage Learning.
Taylor, R.W., Fritsch, E.J. and Liederbach, J., 2014. Digital crime and digital terrorism. Prentice
Hall Press.
Vaishnavi, V.K. and Kuechler, W., 2015. Design science research methods and patterns:
innovating information and communication technology. Crc Press.
Valacich, J. and Schneider, C., 2015. Information Systems Today: Managing in a Digital World
Plus MyMISLab with Pearson eText--Access Card Package. Prentice Hall Press.
Weaver and et..al 2016. Healthcare information management systems. Cham: Springer
International Publishing.
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