The
development of effective information systems holds a number of challenges for
small businesses. "Despite, or perhaps because of, the rapid development
of computer technology, there is nothing easy or mechanical about building workable
information systems, " Laudon and Laudon stated. "Building,
operating, and maintaining information systems are challenging for a number of
reasons." For example, some information cannot be captured and put into a
system. Computers often cannot be programmed to take into account competitor
responses to marketing tactics or changes in economic conditions, among other
things. In addition, the value of information erodes over time, and rapid
changes in technology can make systems become obsolete very quickly. Finally,
many companies find systems development to be problematic because the services
of skilled programmers are at a premium.
Despite
the challenges inherent in systems development, however, MIS also offer
businesses a number of advantages. "Today, leading companies and
organizations are using information technology as a competitive tool to develop
new products and services, forge new relationships with suppliers, edge out
competitors, and radically change their internal operations and organizations,
" Laudon and Laudon explained. For example, using MIS strategically can
help a company to become a market innovator. By providing a unique product or
service to meet the needs of customers, a company can raise the cost of market
entry for potential competitors and thus gain a competitive advantage. Another
strategic use of MIS involves forging electronic linkages to customers and
suppliers. This can help companies to lock in business and increase switching
costs. Finally, it is possible to use MIS to change the overall basis of
competition in an industry. For example, in an industry characterized by price
wars, a business with a new means of processing customer data may be able to
create unique product features that change the basis of competition to
differentiation.
The
impetus to develop a new information system can grow out of end-user demands,
the availability of new technology, or management strategy. A variety of tools
exist for analyzing a company's information needs and designing systems to
support them. The basic process of systems development involves defining the
project, creating a model of the current system, deriving a model for the new
system, measuring the costs and benefits of all alternatives, selecting the
best option, designing the new system, completing the specific programming
functions, installing and testing the new system, and completing a
post-implementation audit.
Information
systems designers, whether internal to the company or part of an outside firm,
are generally responsible for assuring the technical quality of the new system
and the ease of the user interface. They also oversee
the process of system design and implementation, assess the impact of the new
system on the organization, and develop ways to protect the system from abuse
after it is installed. But it is the responsibility of small business owners
and managers to plan what systems to implement and to ensure that the
underlying data are accurate and useful. "The organization must develop a
technique for ensuring that the most important systems are attended to first,
that unnecessary systems are not built, and that end users have a full and meaningful
role in determining which new systems will be built and how, " according
to Laudon and Laudon.
