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Information Systems and Their EfficiencyEssay

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¶ … Information Systems in Business & Organization

This research paper will examine the various basic principles of information systems, and their use and management in organizations and businesses. The research comprises one case assignment, one session long project, and one discussion page. While the case assignment will give an overview of the knowledge's role in a company, the session long project will detail out the characteristics of information systems.

Case Assignment

Initially, knowledge was transferred to be stored, in an implicit way, in books, documents, and manuals (Wiig). Knowledge is the fundamental procedure that enables processing of various data and information collected into useful end products that could be efficiently used later on by people, businesses, or organizations. The process of this transformation between data and valuable information depends on the creation of relationships between various sets of data. In an information system, Knowledge can be described as: "awareness and understanding of a set of information and the ways that information can be used to support a specific task or reach a decision" (as cited in Alhammad, Al Faori, and Abu Husan, 2009).

There are two knowledge-related factors that determine the success and viability of any information system (Wiig).

1) The first one is the Knowledge assets that must be nurtured, stored, and used as much as possible by the organizations and individuals.

2) The latter is the knowledge -related processes that are used in the creation, compilation, organization, transformation, transferring, pooling, applying, and protecting the knowledge and calls for a very careful and explicit management [Wiig].

The careful and proper management of knowledge is essential to meet the desired objectives in the most feasible way. This underlines the need of knowledge management to be analyzed and considered from three various angles (Wiig).

1. The business

2. The management and

3. The hands-on operational.

The Business Viewpoint -- This focuses on why, where, and to what extent the knowledge must be exploited (Wiig).

The Management Viewpoint -- This provides an in-depth view of the strategies, products, services, acquisitions, alliances, or perhaps divestments required for knowledge exploitation. Management will ease the creation of knowledge, acquisition, retention, transfer and usage.

Hands-On Operational Viewpoint - The third perspective will focus on the application of the expertise for the execution of the explicit knowledge-related works and tasks (Wiig).

While the knowledge has always been managed in an implicit manner by the organizations, explicit and active management of the knowledge does call for the need for various novel techniques and perspectives (Wiig).

So what exactly does knowledge management (KM) mean? Because there is no agreement on what comprises knowledge, no universal explanation is available for knowledge management (Levinson, 2007). To put it precisely, KM can be considered as the process wherein organizations make use of their knowledge and intellectual assets to generate value. One of the best examples of such a procedure would be creating information by gathering inputs from the data provided by employees, customers and partners, and sharing this collected information across the organization for devising various strategies. While the definition does not indicate the use of technology, information technology (IT) facilitates KM, but technology alone does not comprise KM (Levinson, 2007).

A golf caddie would be a simple illustration as a knowledge worker. A good caddie does more than just carrying the clubs and tracking the balls. He also guides the golfer about the possible shots according to the direction of wind. While this would fetch him a handsome tip, the golfer always has the advantage of getting the right shot in the right course. If this particular caddie shares his knowledge with fellow caddies, they will also be benefited. In short, even though the flow of knowledge is only from caddie to golfer, in broader context, both of them enjoy the benefit. A small use of knowledge management helped the caddie earn more, and the golfer to play better. Game Theory is a classic example of how data, information, and knowledge can be managed in an explicit way and applied to an organization. These excerpts from Avinash Dixit, a professor at John J.F. Sherrerd '52 University Professor of Economics at Princeton University, are helpful in understanding the basic principles of information systems. According to game theory, an interactive decision making procedure, the winning or losing of each player is dependent on how the rest of the players act. If you are a player in such a game, then you will decide your strategy based on what the thoughts and choices of the other players. However, while analyzing their thoughts, you also must identify and analyze what others may have planned for you. It is a chain process where the decision of each of the participants is based on the inputs and decision from the other persons in the game.

This is the same way a knowledge management system functions. Once you come across an idea, you will see various factors that influence it. The same concept explains the reason why competitors undercut each other's costs only to find out that the original prices would have been profitable for both the groups. In simple words, the concept can even be referred to as the 'tit-for-tat' strategy. The whole group will be able to put forward a better level of external performance if and only if there is a well-defined internal cooperation.

Supporting the above mentioned game theory, there are other examples of real-life-based evidence. One example begins when a young boy Kamal Rekhi came to Michigan Technological University USA to earn the master's degree in 1967. After three years, another young India Saumil Majumdar from the Bangalore started a small company, and both of them became connected while performing the knowledge accumulation (Leonard and Swap in 2005). In 1989, Rekhi sold his company to Novell and decided to arrange his wealth and business knowledge in a way that other South Asians could benefit from the same. One of the major beneficiaries of this venture was an organization called Exodus Communication whose entrepreneurs, K.B. Chandrashekhar and B.V. Jagdeesh, met Rekhi when they were almost broke. Along with this entrepreneurial skills, Rekhi helped them on a monetary level too, enabling the company to cross $30 million revenue in March 2000. However, Exodus communication went bankrupt after Chandra and Jagadeesh moved on to start new business ventures. Chandra soon became the mentor of Rajesh Reddy, a budding entrepreneur Indian in 1998-1999 who owned Unimobile. Unimobile was in its incubation stage when Chandra met Reddy. The former even tore off the business plan Reddy had put together as he found it baseless and far from actual revenue projections. However, despite of his aggressive act, Mr. Chandra did invest in the company and took company to the market level of United States (Leonard and Swap, 2005). The success of Unimobile thus can be attributed to the knowledge flow of the entrepreneurial skills from Mr. Kanwal through Mr. Chandra to Mr. Reddy. The knowledge flow did not still come to an end with Reddy; the flow then moved onto Saumil Majumdar to help him with his start-up. Reddy shared the problems and their solutions with panel of business investor, who used it for solving their employee's incompetency and inability (Leonard and Swap, 2005).

Session Long Project

In the quest to understand the Information System, one can easily understand it by the simple definition given separately by Charlie Love (in 2014) and ManipalGlobal (2013). According to the definition, the Information System is the database of the company that would be used by the company. The information system is an integral part of technology required to be handled by smart technical hands. Strategic information (SI) is accessed by the topmost management to help them formulate various strategic decisions. Some of the best illustrations for SI would be the revenue earning trends of the organization that is essential for creating various organizational policies. Known as the Decision Support Systems, these information systems are accessed only by the top management. The next comes the Management Information System (MIS) that offers access to the middle management for reaping information essential to formulate short-term decisions. The MIS offers information such as quarterly or annual sales analysis for various products or product categories. Even though MIS is an integral part of any organization, it is quite huge and hence needs a special MIS department to handle the entire system. The third type of IS offers information that is essential for carrying out the daily requirements in an organization. The best examples for information systems under this category would Transaction Processing System and Data Processing System. The concerned people get access to various information such as order processing, overdue purchase order evaluation and so on.

A small business takes the help of a customer relationship management system to analyze its sales and marketing efforts and synchronize the same (Daveron, Three Fundamental Rules). CRM systems have the potential to collect various customer activities such as purchasing trends, customer inquiries, and product defects and track these. These… [END OF PREVIEW]

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