In an attempt to get through these as quickly as possible, here’s the second one in one night.

This lecture is about the impact of information, and the new ways it’s become important, on businesses.

Information in business

Information is probably one of the most valuable pieces of information on Earth, especially for businesses. The reasons for that are endless.

The biggest thing a company can do with brilliant information is make the best decisions. If a company needs a new, high quality printer for their offices, they wouldn’t just go out and buy the first one they see in PC World. Most likely they’d look around for the best quality printers, or the printers that can make the most of it’s ink before it needs to be refilled again, or a printer with the best support. They’d gather all that information and make a much better choice when buying the new hardware.

Businesses need information like the exchange rate, relevant laws, and the market place in order to compete in a global market. Without it they’d run into all sorts of problems and ultimately end up losing money rather than making it.

Information on the market helps hugely too (do people really want our new product? how much is a good price to sell at?).

Business find information so important some of them simply live to find out more – imagine how much money Google could make from selling it’s entire database, or how much Facebook can make from knowing all of your addresses and phone numbers? Most businesses keep the information they have as secret as possible though.

Information systems

Back in the day businesses could either develop their own systems, or use a standard, off the shelf package. These days though, there’s way many more choices than those.

To manage their finances a business could either design and write their own software, or go out and buy SAGE. Now though, there’re websites which offer just the same services as both of those options. Or they can outsource their accounting to an accountant.

Each of those have their benefits and disadvantages, which is why it’s important for a business to look ahead and really think about what they actually need, rather than just jumping at the first or cheapest option. When a business decides how to solve their problem before they actually now what the problem really is, they run into problems.

Analysts use something called Business Processing model to work out the problem, and what they actually need.

Here’s the quote we’re given to explain what a business model is:

A business model is a graphical representation of one or more business processes that a company performs

–Systems Analysis and Design, by Gary B. Shelly, Thomas J. Cashman, Harry J. Rosenblatt

To explain a business profile:

A business profile is an overview that describes a company’s overall functions, services, products, customers, suppliers, competitors, constraints and future direction

–Systems Analysis and Design, by Gary B. Shelly, Thomas J. Cashman, Harry J. Rosenblatt

Basically, analysts use both of those to try and understand the business better.

Figure 1: An example of a business model. Unsourced, but I suspect it's from Shelly's book. I got it from presentation, so copyright DMU unless I hear otherwise.

That diagram basically shows one event in the business that they have to deal with, and then highlights what processes would need to take place. That shows the analyst what type of information systems they’ll need.

Transaction processing and the Internet

These are the most important and most used systems used each and everyday. These are just transactions that the businesses does each day; someone buys something, producing an invoice, paying employees. With the internet now, e-commerce enables businesses to take ten fold more orders because of how streamlined the system can be.

Businesses are able to have a much wider range of stock than ever before because they usually don’t even have to pre-order the stock. For most products, a business can just phone up a reseller to order a single item, rather than having to have every possible item in stock which takes up a lot of expensive real estate.

Because of how fast the internet can be updated, market data is now available as soon as it’s created. It no longer takes days for a business to order wholesale goods, but seconds instead. People can find out about the stock market as the changes happen rather than waiting for them to appear on the news.

In summery, because of how the speed of the world has increased with recent technology breakthroughs, businesses can also increase their speed. That means they can generate money faster, and expand exponentially over night.

I’ve kinda of resorted to business studies again… but the point is that old systems are no longer viable.