Business Information Systems Model Question Solution BITM 6th sem
Group “A” — Brief Answer Questions
(Attempt all questions) [10 × 1 = 10 Marks]
Thank you for reading this post, don't forget to subscribe!1. Define information system.
An Information System (IS) is a coordinated set of components — hardware, software, data, people, and procedures — designed to collect, process, store, and distribute information to support decision-making, coordination, control, and analysis within an organization.
2. What do you mean by competitive advantage?
Competitive advantage refers to the unique attributes or capabilities that allow a company to outperform its competitors, such as superior quality, lower cost, innovative products, or customer loyalty.
3. What is data mart?
A data mart is a subset of a data warehouse that focuses on a specific business area, department, or function (e.g., sales, marketing, or finance) to provide faster and more focused data access for analysis.
4. What do you mean by short-range wireless network?
A short-range wireless network enables communication between devices over short distances (typically a few meters) using wireless technologies such as Bluetooth, Wi-Fi, NFC (Near Field Communication), or ZigBee.
5. What is Web 2.0?
Web 2.0 refers to the second generation of the World Wide Web, emphasizing user-generated content, interactivity, collaboration, and social networking, as seen in platforms like Facebook, YouTube, and Wikipedia.
6. What do you mean by social shopping?
Social shopping combines e-commerce with social networking, allowing consumers to interact, share reviews, get recommendations, and shop collaboratively through social media or community-based online platforms.
7. Define transaction processing system.
A Transaction Processing System (TPS) is an information system that records, processes, and manages day-to-day business transactions efficiently and accurately, such as payroll systems or order processing systems.
8. Define customer touch point.
A customer touch point is any interaction or communication between a business and a customer throughout the customer journey — for example, through websites, emails, customer service, or physical stores.
9. Define descriptive analytics.
Descriptive analytics involves analyzing historical data to understand what has happened in the past. It uses data aggregation and data mining techniques to summarize business performance and trends.
10. What is software as a service?
Software as a Service (SaaS) is a cloud-based software delivery model where applications are hosted by a provider and accessed by users over the internet on a subscription basis (e.g., Google Workspace, Salesforce).
Group “B” — Short Answer Questions
(Attempt any FIVE questions) [5 × 3 = 15 Marks]
11. What is the relationship between business process and information system?
A business process is a set of related activities performed to achieve a specific organizational goal, such as order fulfillment or payroll processing.
An information system (IS) supports and automates these business processes by providing the necessary data, software, and tools.
Relationship:
- Information systems enable, monitor, and improve business processes.
- IS provides real-time data and supports decision-making across processes.
- Automation through IS increases efficiency, accuracy, and productivity in business operations.
12. Describe the characteristics of Big Data.
Big Data refers to large and complex datasets that traditional data processing tools cannot handle effectively. Its key characteristics are often described as the “5 Vs”:
- Volume – Huge amount of data generated daily.
- Velocity – High speed of data generation and processing.
- Variety – Different data types (structured, unstructured, semi-structured).
- Veracity – Data accuracy and reliability concerns.
- Value – Extracting useful insights that support better business decisions.
13. What are the major drivers of mobile computing?
The main drivers of mobile computing include:
- Wireless technologies – Growth of Wi-Fi, 5G, and Bluetooth networks.
- Portable devices – Widespread use of smartphones, tablets, and laptops.
- Cloud computing – Enables data access and storage from anywhere.
- Mobile applications – Wide range of apps for business, entertainment, and education.
- Consumer demand – Need for anytime, anywhere connectivity and productivity.
14. How does information technology support supply chain management (SCM)?
Information technology (IT) enhances SCM by:
- Improving coordination among suppliers, manufacturers, and distributors.
- Providing real-time tracking of goods and inventory through ERP and IoT systems.
- Reducing operational costs by automating ordering, forecasting, and logistics.
- Enhancing decision-making through data analytics and demand prediction.
- Facilitating communication via online platforms and supply chain portals.
15. Why do managers need IT support?
Managers need IT support because:
- Decision-making: IT provides timely, accurate, and relevant information.
- Efficiency: Automates routine tasks and improves productivity.
- Communication: Enhances internal and external communication channels.
- Competitive advantage: Helps analyze trends, market data, and customer behavior.
- Problem-solving: IT tools support simulation, forecasting, and modeling.
16. Explain service-oriented architecture (SOA) in brief.
Service-Oriented Architecture (SOA) is a software design approach where applications are built as a collection of independent services that communicate over a network.
Key points:
- Each service performs a specific function (e.g., payment, login, shipping).
- Services are loosely coupled, reusable, and platform-independent.
- Enables integration of different applications across organizations.
- Example: Using a payment gateway API in an e-commerce website.
Group “C” — Long Answer Questions
(Attempt any THREE questions) [3 × 5 = 15 Marks]
17. How does IT impact organizations?
Information Technology (IT) has transformed how organizations operate, communicate, and compete in the modern world. Its impact can be categorized as follows:
1. Improved Efficiency and Productivity
- IT automates repetitive tasks, reduces errors, and speeds up operations.
- Tools like ERP (Enterprise Resource Planning) integrate business functions, improving coordination.
2. Better Decision-Making
- Decision Support Systems (DSS) and Business Intelligence (BI) tools analyze large data sets, helping managers make data-driven decisions.
3. Enhanced Communication
- IT enables fast and effective communication through email, video conferencing, and collaboration tools (e.g., Microsoft Teams, Slack).
4. Innovation and Competitive Advantage
- IT helps in product innovation (e.g., digital services, mobile apps).
- It supports new business models such as e-commerce and digital marketing.
5. Globalization and Connectivity
- IT allows businesses to expand globally, manage remote teams, and serve international customers efficiently.
6. Organizational Restructuring
- IT supports flexible structures like virtual organizations and remote work environments.
Conclusion:
Overall, IT acts as a strategic enabler of business growth, efficiency, and competitiveness in a dynamic global environment.
18. Describe how companies can use Big Data to gain competitive advantage.
Big Data refers to extremely large and complex datasets that traditional data processing tools cannot handle effectively. By leveraging Big Data, companies can gain insights into customer behavior, market trends, and operational performance, which can be used to achieve a competitive advantage.
1. Understanding Customer Behavior
Companies can analyze customer data from online interactions, social media, purchase history, and feedback to understand preferences and buying patterns.
- Example: Netflix uses Big Data analytics to recommend movies and shows based on user viewing habits, enhancing customer satisfaction and retention.
2. Enhancing Product and Service Innovation
Big Data allows companies to identify gaps in the market and develop products or services that meet emerging customer needs.
- Example: Amazon analyzes search trends and customer reviews to design new products or improve existing ones, staying ahead of competitors.
3. Optimizing Operations and Reducing Costs
Big Data helps companies monitor supply chains, production processes, and logistics in real time. Predictive analytics can forecast demand, manage inventory, and reduce wastage.
- Example: UPS uses Big Data to optimize delivery routes, reducing fuel consumption and improving delivery times.
4. Improving Marketing Effectiveness
Analyzing Big Data enables personalized marketing campaigns and targeted advertisements, increasing conversion rates and customer engagement.
- Example: Coca-Cola uses social media and sales data to tailor marketing campaigns for specific demographics and regions.
5. Risk Management and Fraud Detection
Big Data analytics helps identify patterns of fraud, security breaches, or operational risks before they escalate.
- Example: Banks use Big Data to detect unusual transaction patterns and prevent credit card fraud in real time.
19. Define IoT. Provide any two examples of how the Internet of Things benefits organizations.
The Internet of Things (IoT) refers to a network of interconnected physical devices, sensors, and objects that can collect, exchange, and analyze data over the internet. These devices communicate with each other and with centralized systems to automate processes, improve efficiency, and provide real-time insights.
Examples of How IoT Benefits Organizations
- Improved Operational Efficiency
IoT devices can monitor machinery and equipment in real time, enabling predictive maintenance and reducing downtime.
- Example: A manufacturing company uses IoT sensors on production machines to detect wear and performance issues before they cause breakdowns, reducing maintenance costs and production delays.
- Enhanced Supply Chain Management
IoT devices track inventory, shipments, and assets in real time, improving logistics and reducing losses.
- Example: A retail company uses IoT-enabled RFID tags to monitor stock levels and track deliveries, ensuring products are replenished on time and reducing stockouts.
20. What are the benefits and risks of social commerce?
Social commerce refers to the use of social media platforms to facilitate buying and selling of products and services, integrating social interactions, user-generated content, and e-commerce. While it offers significant advantages, it also carries certain risks for businesses.
Benefits of Social Commerce
- Increased Customer Engagement
Social commerce allows businesses to interact directly with customers through likes, comments, shares, and reviews. This engagement strengthens relationships and builds brand loyalty.
- Example: A fashion brand uses Instagram shopping features to engage customers with live product demonstrations.
- Wider Reach and Market Expansion
Social platforms enable businesses to reach global audiences without the need for traditional physical stores. This helps small and medium enterprises expand their market presence.
- Example: Etsy sellers can promote products to international buyers via Facebook and Pinterest.
- Cost-Effective Marketing
Promotions and advertisements on social media are often cheaper than traditional media, allowing targeted campaigns based on customer demographics and interests.
- Example: A startup can run Facebook ads targeting specific age groups or regions to increase sales efficiently.
- User-Generated Content and Reviews
Customer reviews, ratings, and testimonials on social platforms provide social proof, enhancing credibility and influencing purchase decisions.
- Example: Amazon and Shopify stores use social sharing of reviews to boost consumer trust.
- Data Insights and Analytics
Social commerce provides valuable data on customer behavior, preferences, and trends, helping businesses tailor offerings and make data-driven decisions.
- Example: Analytics from Instagram and TikTok shops help brands identify best-selling products.
Risks of Social Commerce
- Security and Privacy Concerns
Social commerce involves collecting customer data for payments and personalization. Breaches or misuse of data can lead to identity theft, fraud, and loss of customer trust. - Reputation Management Challenges
Negative reviews or complaints can spread quickly on social media, potentially damaging a brand’s reputation. - Dependence on Social Platforms
Businesses relying heavily on a single social platform may face risks if platform policies change, accounts are suspended, or algorithms reduce visibility. - Fraud and Counterfeit Products
Social commerce platforms may attract fraudulent sellers or counterfeit products, affecting buyer confidence and brand image. - High Competition
The ease of entry on social platforms leads to intense competition, making it challenging for businesses to stand out without strong marketing efforts.
Group “D” — Comprehensive Questions
(Attempt all questions) [2 × 10 = 20 Marks]
21. What are strategic information systems? What strategies can companies use to achieve competitive advantage? What is business-IT alignment?
Strategic Information Systems (SIS) are information systems that organizations use to gain a competitive advantage, improve market position, and support long-term strategic goals.
- Unlike operational or functional systems, which focus on day-to-day activities, SIS are designed to influence the organization’s strategy, shape industry dynamics, and create unique value that competitors cannot easily replicate.
- The primary purpose of a strategic information system is to enable the organization to achieve business objectives such as increasing revenue, improving customer loyalty, reducing costs, or entering new markets.
Strategies Companies Can Use to Achieve Competitive Advantage
Companies can gain a competitive advantage by leveraging resources, capabilities, and strategies that allow them to outperform competitors. Key strategies include:
- Cost Leadership
Focusing on becoming the lowest-cost producer in the industry. Companies achieve this through efficient operations, economies of scale, and cost-cutting measures.
- Example: Walmart uses efficient supply chain management and bulk purchasing to offer low prices.
- Differentiation
Offering unique products or services that customers perceive as superior in quality, features, or brand value. Differentiation allows companies to charge premium prices.
- Example: Apple differentiates its products through design, innovation, and brand reputation.
- Focus Strategy
Targeting a specific market segment, geographic area, or customer group and tailoring products or services to meet their unique needs.
- Example: Tesla focuses on the electric vehicle market and high-end customers, providing specialized features and services.
- Innovation
Introducing new products, services, or processes to meet changing customer needs or disrupt the market. Innovation can create a first-mover advantage.
- Example: Netflix used streaming technology to transform the entertainment industry.
- Operational Effectiveness
Improving internal processes to enhance efficiency, reduce costs, and improve quality. Companies that excel operationally can deliver better value to customers.
- Example: Toyota’s lean manufacturing system reduces waste and improves production efficiency.
- Customer Relationship Management
Building strong relationships with customers through personalized services, loyalty programs, and superior customer support.
- Example: Amazon uses CRM systems to recommend products and enhance customer satisfaction.
Business-IT Alignment
Business-IT alignment refers to the process of ensuring that an organization’s IT strategy and systems are fully aligned with its business goals, objectives, and processes. The purpose is to make IT an enabler of business strategy rather than just a support function.
22. What do you mean by enterprise resource planning system? Identify advantages and drawbacks to businesses implementing an enterprise resource planning system.
Enterprise Resource Planning refers to an integrated information system that is designed to manage and coordinate all the major resources, activities, and processes of an organization through a single, unified system.
- ERP combines data and processes from different functional areas such as finance, human resources, production, sales, procurement, and inventory into one centralized database.
- This integration is essential because it allows the entire organization to work more efficiently, avoid mistakes, and respond quickly to changing conditions.
B. Advantages of ERP Implementation
- Integration of Business Processes
- ERP systems integrate various functional areas such as finance, human resources, sales, and production into a single platform. This ensures seamless flow of information across departments and reduces data silos.
- Improved Efficiency and Productivity
- By automating routine tasks and standardizing business processes, ERP reduces manual work, errors, and delays, allowing employees to focus on value-added activities.
- Enhanced Decision-Making
- ERP provides real-time data and analytics, enabling managers to make informed strategic and operational decisions.
- Better Collaboration and Communication
- Since all departments access the same system and data, ERP improves coordination, communication, and transparency across the organization.
- Cost Savings in the Long Term
- Although initial implementation costs are high, ERP can reduce operational costs over time by optimizing resource allocation, inventory management, and supply chain processes.
- Regulatory Compliance and Reporting
- ERP systems help organizations comply with financial, legal, and industry regulations by providing accurate reports and audit trails.
C. Drawbacks/Challenges of ERP Implementation
- High Implementation Costs
ERP systems require significant investment in software, hardware, consulting, and training. Small or medium-sized businesses may find these costs prohibitive. - Complex Implementation Process
ERP implementation can be time-consuming and complex, often requiring changes in business processes and organizational culture. - Resistance to Change
Employees may resist adopting the new system due to fear of job changes or lack of familiarity, affecting system effectiveness. - Customization Challenges
Customizing ERP to fit unique business needs can be difficult, expensive, and may lead to system complexity or upgrade issues. - Dependence on Vendor Support
Organizations often rely on ERP vendors for maintenance, updates, and troubleshooting, which may affect system reliability and flexibility. - Potential for Implementation Failure
Without proper planning, training, and change management, ERP projects can fail, leading to wasted resources and operational disruption.