Page 92 - DMGT505_MANAGEMENT_INFORMATION_SYSTEM

Unit 5: Business Hardware Software and IT Infrastructure

Most of the studies about IOS have focused on the incidence of IT on the flows of information Notes
among the organizations, its capability of reducing the transaction costs, and its potential to
achieve competitive advantages. Many authors have verified that:
 IT influences the nature, punctuality and detail level of the information shared by enterprises
 IT reduces the transaction costs, while it provides a better management of the risks

 IT reduces the co-ordination costs.
In order to benefit from the advantages of IT, the enterprises have to keep in mind that IT cannot
be isolated from its organizational context. We do not agree with the existence of causation
between the implementation of IT and the organizational changes in the enterprise driving to
an increase in the competitiveness of the enterprises. On the contrary the technological and
organizational implementations are both sides of the same issue, since they depend on and
determine each other. We think that, although IT might have the above mentioned positive
effects on the organizations, the will and capabilities of the directors of the company are needed
in order to make the most of those advantages.
In order to make the most of the whole potential of the IOS, it will be required that the managing
directors get involved with the project, since they have a wider and more strategic view of the
company. In this way, a system coherent with the objectives of the company would be
implemented. This system would allow taking even more profit from IT, what would have
positive repercussions on the enterprise and would facilitate the achievement of its objectives.

Notes The active participation of the Management Board in the planning of the IOS brings
a problem related to the fact that IT is a relatively new resource that did not exist when
most of the current managers were trained. Therefore, they usually do not feel comfortable
with these new technologies.

Task Describe various components of IT infrastructure.

5.6.5 The Role of IOS within the Network Structure

The enterprises involved in an alliance must decide whether to use the manual management of
all the exchanged data, or to complement that management with the interconnection of their
respective computer applications. This interconnection may bring, however, compatibility
problems in the integration of the data from the different enterprises, since those applications
would have possibly been designed without taking into account any requirement of integration
among enterprises. The establishment of co-operation networks implies the need for wider
communication in the organizational field, as well as the requirement of capability to integrate
the information systems from different enterprises.

The enterprises inside a network cannot operate properly if they have not the possibility to
communicate quickly, accurately, and over long distances. Within a network, it does not make
any sense to restrict the application of modern computer technologies to the individual borders
of each enterprise. The Management Board of the enterprises in the network must, on the
contrary, consider the possibilities of coordinating the processing of data outside the limits of
their own organizations by means of an IOS.
The application of the IT which provides the electronic integration among the shareholders of
an industry may make easier the outsourcing of activities, as well as be a basic part of the proper

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