Free When Management Information Systems Are Used The Competitors Gain Competitive Advantage Over Each Other In A Couple Of Ways: Essay Example

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Management Information System [MIS] provides many benefits to the business: It works as a mean of efficient and effective coordination amongst the Departments; reliable and quick referencing; easy and quick access to documents and relevant data; Lesser use of labor as compared to labor-intensive firm; improvement in and departmental and organizational techniques; efficient management and record of daily activities (such as accounts, payroll, stock control etc.); daily help in a Department and better communication with the world. MIS has proven to be a very valuable source of time-saving to the workforce.
With the existence of MIS, the employees do not have to collect data manually anymore for analysis and filing. Instead, the data can be entered easily and quickly into a database. As the business grows the amount of raw data increases and becomes too large for workers to analyze, so the business analysts build programs to access information and data helpful for the business. As managers can access data faster now, they can make better decisions about future directions, developments and procedures by competitors, with greater speed.
Computer systems prove to be helpful for the organizations during the processing of data into up to date, accurate and cost effective information.
For example, if we take an example of automating inventory management, the system works in the following way. Firstly, bar codes send a signal to scanners which items consumers want to buy. The scanners then transmit all the information to computer software after reading the bar codes and then send the information to the software. Then the numbers are interpreted by the software, from the bar code, and it is then matched by those numbers to the merchandise type they represent. This helps the merchant to track inventory and transactions that have taken place - this happens either with the help of a scanner or a counter-- keeping the merchant aware of the items being sold. (Mdx.ac.uk, 2015)
This software’s keeps record of the quantity of goods are being sold and of that which remains in the warehouses, giving a clear picture to managers regarding the progress of business. It helps to analyze the data and makes recommendations on how to improve business strategies.
The most important function of information systems is to reduce the time to a greater extent. The costs that incur to the organization due to the department, staff, facilities, or organization being idled when the system isn’t cooperative can hurt the organization's profits in a short span of time. The inconvenience occurred to customers can incur unwanted costs and earn a bad repute for the firm. (Referenceforbusiness.com, 2015)

Cost Leadership: Competitors may frequently make the use of information systems to lower the costs involved in doing a business (Booth, Roberts & Sikes 2011) and to decrease the costs of either suppliers or customers, i.e., a business may start selling their products to consumers directly online or sell their products directly to other businesses.
Differentiation: Competitors may use information systems to figure out features that they can differentiate from other firms or/and to lower competitors’ differentiation advantages that could be done in several different ways, using social networking sites and online live feedback from consumers regarding their products and to help answer their queries and complaints. (Booth, Roberts, and Sikes 2011); (2015)
Innovation: The competitors can use information systems to create and identify new product ideas and services or/and to identify niche markets to differentiate their products from the rest and save time and costs at the same time. (Chui & Fleming 2011). But the main aim of innovation of new products is that a company produces such product ideas that the other firms haven’t come up with, yet. They can initiate and completely transform their business into an online business store.
Growth: Competitors may use information systems to grow the business domestically as well as and internationally the operations and integrate and diversify into other products and services and with other companies (Rigby 2011). The other business may remain in small size and may not earn many economies of scale due to their small size, but the firms that have expanded into large firms, may earn higher revenues, greater profits, and much lower costs of production than their competitors.
Strategic Alliance: Competitors may use information systems enhance good relations with their partners via information systems, such as developing organizations(virtual) and other systems such as within an organization.

References

Mdx.ac.uk,. (2015). Business Information Systems Management | Middlesex University London. Retrieved 21 February 2015, from http://www.mdx.ac.uk/courses/postgraduate/business-information-systems-management
Referenceforbusiness.com,. (2015). Management Information Systems - strategy, organization, levels, examples, advantages, model, type, company, business. Retrieved 21 February 2015, from http://www.referenceforbusiness.com/management/Log-Mar/Management-Information-Systems.html
Crosby, T. (2015). Modern Inventory Management Systems - HowStuffWorks. HowStuffWorks. Retrieved 20 February 2015, from http://money.howstuffworks.com/how-inventory-management-systems-work2.htm