Answer to Question #216928 in Management for ISHAQUE

Question

How can information technology support a company’s business processes and decision making and give it a competitive advantage? Give examples to illustrate your answer.

Answer 1

In business, information technology plays a significant role, and it may be a key enabler of success and innovation. To begin with, information systems and technology allow multiple channels of communication to all employees at anytime, anywhere in the world, such as E-mail, instant messages, and SMS servers. This type of software aids in the reduction of both time and expense. Second, businesses use computer-based information systems on a regular basis to manage customer purchases, inventory, pay staff, purchase new merchandise, and assess sales trends. Businesses would collapse if they didn't have the support of information technology. For example, if a company does not use computer-based information systems, it will be unable to assess which products are selling better than others, resulting in the loss of critical knowledge for future success. Business decision-making can also be aided by information technology. Computer-based information systems give analysis that is used to make decisions. For example, depending on sales trends research offered by computer-based systems, a store manager may decide whether to discontinue an item for sale or retain it on the floor.

Finally, an information system can assist a company in gaining a competitive edge. A competitive advantage is a product or service that customers value more highly than a competitor's comparable offering. FedEx, for example, gained a competitive advantage by developing consumer self-service software that allows individuals and businesses to request parcel pickups, print mailing slips, and track packages online.