Show Information technology and systems have revolutionized firms and industries, becoming the largest component of capital investment in the U.S. and many industrialized societies. Investment in information technology accounts for approximately 50 percent of all capital invested in the United States. Figure 1-1
Information systems are transforming business and the visible results of this include the increased use of cell phones and wireless telecommunications devices, a massive shift toward online news and information, booming e-commerce and Internet advertising, and new federal security and accounting laws that address issues raised by the exponential growth of digital information. The Internet has also drastically reduced the costs of businesses operating on a global scale. These changes have led to the emergence of the digital firm, a firm in which:
Information systems are essential for conducting day-to-day business in the U.S. and most other advanced countries, as well as achieving strategic business objectives. Some firms, such as Amazon and E*Trade, would be nonexistent without information systems. Some service industries, such as finance, insurance, and real estate industries, could not operate without information systems. The ability of a firm to use IT is becoming intertwined with the firm's ability to implement corporate strategy. Figure 1-2
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What is the main purpose of using information systems in any organization?Information systems allow users to collect, store, organize and distribute data—functions that can serve a variety of purposes for companies. Many businesses use their information systems to manage resources and improve efficiency.
What is an information system and what is its importance for a business in order to create value?From a business perspective, an information system is an important instrument for creating value for the firm. Information systems enable the firm to increase its revenue or decrease its costs by providing information that helps managers make better decisions or that improves the execution of business processes.
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