Traditionally, information systems have been focused on managing information within the company. Currently, intense level of competition in the market has forced corporations to actively involve in the search and management of information of other companies, especially their market rivals. As such, coordination of information systems of companies has become a crucial component of managing the systems. In the present business arena, high technological advancements have resulted into the capability of integrating different information systems for efficient decision-making process in companies. This paper seeks to explore integration of information systems in business enterprises, primarily focusing on the roles played by information systems and consequences of their integration.
Information systems have become indispensable part of doing business in the current global economy. When managed strategically, information system can be a crucial source of competitive advantage to a firm. Systems integration refers to assembling different subsystems into a whole in physical or functional perspective. System integration adds value to the system by enabling efficient communication between the subsystems.
Globalization has resulted into a competitive business world where companies have been forced to share information among them to serve their customers better and keep abreast with their major rivals in the market. The integration of information system functions is increasingly becoming important for business enterprises (Guido & Paiano, 2010). It facilitates easy retrieval of information whenever it is required in the company.
There are three basic information systems integration: vertical, star and horizontal integration. Vertical integration is where subsystems are integrated according to their functions by developing functional sections. Star integration is where each system is coordinated with all other subsystems. The method is cheaper in the short-run. When viewed from the subsystem being integrated, the network is star-shaped. This method is more expensive than the vertical approach. Finally, integration of systems can be horizontal. It is also known as Enterprise Service Bus (ESB). Here, a specialized subsystem is focused on communication between the remaining subsystems.
Informational Function of Information Systems
No single organization can thrive in the present competitive business environment without generating and utilizing crucial information. Information management has become an indispensable part of doing business. The success of strategic decision-making entirely depends on how efficiently and effective information is managed within an organization (King & Malhotra, 2000). To achieve efficient information management, a company must establish an effective information system. As such, information collection, analysis and distribution are one major role of information systems of companies (Pant & Ravichandran, 2001).
Informational role of information systems concerns the reception and transmission of important information from source to the intended targets. Company mangers are primarily charged with the task of conveying relevant information to various destinations. They therefore must acquire, analyze and disseminate relevant information on the operations of the company to the intended groups with an aim of improving the performance of the organization. The informational role of information systems may include monitoring, distribution and representative purposes.
Managers are faced with the task of evaluating the sources of information deemed crucial for business operations. The manger gathers information on factors that are likely to affect the operations of the corporation from both within and outside the organization. The process of gathering such important information from internal and external company environment is referred to as the monitor task.
The manager is also charged with the responsibility of distributing the necessary information to their respective destinations within and outside the company. Information systems are charged with the task of providing efficient medium through which these informs can be transmitted easily to their final destinations. An effective information system will integrate well with other systems of the organization in order to ensure efficient and timely delivery of information whenever required at any department of the organization or the company’s affiliates (Sowa & Zachman, 1992)
Information systems provide a means through which the information about the organization can be communicated to the external environment (Kumar & Thapliyal, 2010). It is the means by which a company networks with its stakeholders, who are major success determinants of any business organization. It is critical to implement systems that can facilitate effective communication with people who have great influence on the operations of the company. Information systems supply mangers with information which enable them make effective decisions for the success of the business enterprise.
Intelligence Function of Information Systems
Competitive Intelligence Systems
Business Intelligence (BI) or a competitive intelligence system refers to a systematic process of gathering, processing, analyzing and disseminating external information essential for making crucial business decisions (Hohhof, 1994). It is important for an organization to organize its crucial information systematically in order to ensure smooth flow and improve its operational and decision-making process. Competitive intelligence (CI) and Business Intelligence (BI) are often used interchangeably but competitive intelligence is an integral part of the business intelligence system. Business intelligence focuses on the external environment variables that have a bearing on the operations of the company. Competitive intelligence system must therefore support the general business intelligence as linked to competitive dimension of the business enterprise (Barnes, Hinton & Mieczkowska, 2003).
Competitive functions of information systems may include collecting information on rival companies, the entire market segment, customers socio-economic and political forces as well as technological advancements that can improve the operations of the company and optimize returns for the firm.
Competitive intelligence system, as a subsystem of business intelligence, is usually charged with the responsibility of providing adequate and timely information for making critical decision by the management of the company. It placates the magnitude of possible shocks to decision makers from the company’s competitive niche. It also aids the management of the company to discover the underlying threats and opportunities for growth in the market (Anica-Popa & Cucui, 2009). The reduction of time spent in developing counteractive measures by the management of a company is characteristic of an effective competitive intelligence. It enhances fast implementation of competitive actions.
Competitive intelligence also encourages and supports tactical planning. Competitive intelligence systems are founded on three fundamental tasks of providing general information services, gathering of primary data and analysis and evaluation of collected data. The system is usually comprised of different personnel who mange the activities. The activities must be integrated to make a whole and effective system that supports quality improvement and results of the operations of the organization (Gilbreath, Schilp, & Pickton, 1996).
The intelligence functions of information systems of organizations are concerned with gathering external and internal data from the organization’s business environment. The information obtained from external business environment is analyzed in connection to the internal data of the business enterprise, which aids in deep understanding of external environment and reduces chances of risk and uncertainty that concern managerial decisions. The intelligence function eliminates the incapacitation of business managers in their ability to make effective decisions concerning business operations. Competitive intelligence systems allow mangers to gain knowledge on their competitors’ intentions or actions and develop counter actions that enable them to stay on top of the market (Olszak & Ziemba, 2007).
A good competitive information system must be capable of integrating well with the existing organizational information systems. It is crucial to understand the source, managers and users of business information when designing competitive intelligence information systems. According to McDougal et al (1973), the intelligence function is the collection, examination and distribution of information, which is essential for decision-making process. The authors identify intelligence function as a crucial variable at every level of decision-making. Information systems create a rich pool of information from which mangers can chose from and develops business strategies. Information systems reduce the level of uncertainty and improve critical choices in business enterprises.
Transcriptional Function of Information Systems
Transcription form part of non-voice enterprise process outsourcing projects of a company. It enables business organization to store important records in a manner that can easily be accessed for long periods of time (Troshani & Rao, 2007). The current global economy is overridden with a lot of uncertainties and risks. With threatening economic downturns, companies are continuously on the look to achieve secure places in the market. Transcription is a crucial technique in dealing with the deaf and individuals with hearing problems. It allows such individuals to pursue their intended objectives, which cannot be achieved through sound devices.
Technological advancements have enabled people to control voice texts from different locations. Through transcription, recorded audio texts can be transformed into standard text documents through user’s modified voice model. Transcription makes use of speech detection element that matches a specific voice to the available information in the database. Transcription process aids in achieving smooth workflow in an organization. The user commands the information, which is relayed to the transcription server to aid in speech recognition and identification of personal information. The transcribed text is then conveyed to the workflow management system. After the creation of text file, workflow application transmits sound signals and text to the manger to ascertain that correct editing has been done. The important texts are then kept in the workflow data system.
There is growing urgency to optimize business potentials and also to maximize resource use. In the face of recession, many business enterprises have been scratching deep to discover ways in which they can survive in the market without necessarily using too much resources and their financial reserves. Labor cost usually constitutes one of the highest costs especially in a situation where a task demands high levels of professionalism and specialization.
Under these circumstances, outsourcing plays a crucial role in cutting the operation cost of the company. Outsourcing enable a company to seek for cheap labor elsewhere and hence greatly reduce and save its costs of operation (Gottschalk & Solli-Sæther, 2005). It is a strategic way of spreading the burdens of a company to other players who are ready and willing to execute them.
The existence of different word-processing systems provide various types of file formatting features, which allow users to manipulate and set documents into formats that suit their needs. This function permits creation of files in sophisticated formats that ensures documents meet the required specifications (Kohn, 2009).
As business organizations grow, it is essential that they concentrate on their primary and core tasks. Information systems allows organizations to determine which activities are crucial to the organization and cannot be outsourced and also it enables the management to identify activities, which are non-core functions of the organization and make critical decision on how, when and whom to outsource such activities.
Information systems ensure that mangers get adequate information about all the players in a particular field of concern. Effective information systems will give information about best performing companies and hence aid in making critical decision about outsourcing some of the activities of the organization. For example, in healthcare provision, there is increasing need to distinguish core functions from non-core functions of the organization so that as it expands in its activities, it can easily decide to outsource non-core tasks like transcription among other secondary functions. Outsourcing medical transcription is more advantageous than internal transcription process. Information systems allow companies to organize and store their information in the most convenient way and also accommodate other companies’ data without necessarily without prior request. It allows the use of data from different sources without demanding that the data be of standard form. It reduces immensely the cost of data transmission for companies.
Technological advancements have resulted into the development of devices that can convert speech into texts, which simplifies the dictation process of memos and e-mail for transcription on the computer with a lot of precision. The software when complemented with digital recording tools can make the work of sales officers and reduce elaborate and tiresome paperwork. These techniques allow more interaction with the customers of the company in virtual world. They can also be utilized in capturing the impressions and crucial information about the customers, who make calls at sales centers.
Consequences of Integrating the Functions of Information Systems
There are organizational factors that influence the nature and effectiveness of information systems within various companies. Organizational culture and structure of management will determine the nature and how effective the information systems of a company can be (Weber & Pliskin, 1996). Different companies, for example have different information systems. In the event of mergers and acquisitions, the functions of each information systems of different companies will overlap. The company, which is acquiring the other may in some occasions ignore the culture of the acquired organization and consider only its information systems at the expense of that of the acquired company. A balance must be achieved when companies are forming mergers or when a company acquires another business enterprise so that integration success of information systems can be realized. Integration of information systems may result in change in organizational structure. The company will need management structure that can support its new information system. As a result, some employees of the organization may be forced to quit during system integration. The success of the integration will be determined by whether systems employees of the merging companies stay put or leave the organization.
Integration of information systems functions will lead to organizational restructuring. Organizational structures that outsource information system development may have great impact on information system integration. Varying organizational structures may also to a considerable extent affect the level of integration of information systems.
In the dimension of information systems integration, the major idea is to stimulate greater benefits. The integration of different functions of information creates a whole system that can operate with more efficiency and also encourages information sharing within an organization (Litan et al., 2011). Integrating information systems ensures that necessary information is available to mangers at all times. This is achieved by making sure that managers can easily access the data they need through a single network of computers that allow different departments of the organization to share critical information for decision-making process. Integration of functional dimension of information systems ensures adequate and reliable flow of information across the organization as well as exchange of information between the company and its business environment (Markus, 2000; 2001).
According to Bharadwaj et al, (2007), many companies do not have system-level integration that can allow them to retrieve essential information easily and effectively mange their business processes. Integrated information system capability will permit an organization to access a wide range of data on a particular field and hence improve decision-making process thereby leading to improved business processes. Integrated information systems are focused to create a link between business activities so that there is improvement in visibility and information flow (McAfee, 2002).
Integrated information systems ensure better flow of information across the company and improve exchange of relevant data for making crucial decisions by managers. The integrations process upgrades the performance of other resources of the company and promotes joint planning process in pursuit of organizational goals. Further, integration of information systems ensures that information is transmitted through a standard language and thus eliminates the need for additional administration mechanisms to ensure that the objectives of the organization are achieved.
Managers need adequate information about the stakeholders of the company as well as the company’s competitors in order to make decisions. Without sufficient information on the company’s environment, no success can be smelled and the only visual phenomenon is company failure. Information systems are crucial part of organizations in the current competitive business world. Without effective information systems, no company can manage the wave of global competition. Every company requires information about its potential customers, competitors and even political factors that can affect the business. Information systems are charged with the responsibility of collecting, analyzing and disseminating relevant information, both external and internal. Mangers rely on information systems to gather knowledge on the company’s business environment and make crucial business decisions that steers the organization closer to achieving its goals and objectives. Information systems can be categorized into three areas: informational, intelligence and transcriptional functions.
The integration of these three major functions of information systems improves business processes of an organization by ensuring improved flow of information within the company and also between the company and its external environment. The integration process may demand change in organizational structures that can support the desired information systems. The integration of functional areas of information systems result into easy and timely access of information, which are essential for decision-making by mangers of different organizations. Organizational culture and culture are some of the factors which affect the success of integration of information systems. Therefore, when integrating the functions of information systems of companies, the executives of the company must consider if the present organizational structure and culture can support the resultant information systems.
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