Thursday, 14 April 2022

The fundamental role of information systems in business

 In the Morden area, the competition is very high and organizations strive to be the market leader in their industry. A lot of factors can hinder the achievement of this goal like huge competition, pressure, inflation, and many more. Businesses look for effective strategies that will help to lead a competitive market. An information system is one of the great strategies for business operation. An information system can help the management of the company and improvement in performance, but we have to know what functions we need to get the full benefits. There are three fundamentals that an information system can play in business. 

Requirement of information storage and analysis 

In todays time, the business no longer manages their data manually with hard copies formats. That is the reason for adopting information systems. Companies can make their compressive database that can contain all the adequate data of the company. The information system should be adequate. An information system has to be networked and secured, and have adequate speed and storage capacity as well. The information of companies and businesses should be updated from time to time and analyze the information that will help companies detect the problems and provide pinpoint solutions. These systems are a combination of data from various sources, the companies need to keep eye on their internal performance, external opportunity, and threats. The security of the system means that only authorized personnel have access to data and functions and the system keeps track of authorized activities. 

Assist in business operation 

Information system plays a crucial role in the operation of the business. Especially, small business and companies improve their productivity, efficiency, customer service, and many more. Network information system enables companies to share their knowledge, giving managers, executive, projects teams, and many other who required information about companies. It helps the leader to operate in the business. There are several types of systems that perform distinct services, and how they help in the operation of the business.

  • Transaction process; the information of transaction processing system provides decision-makers with up to date information regarding distinct types of transaction, for example, Order processing system, this system guides enable sales administration to input details of the customer to a central database and transmit order details of manufacturing, accounting, and customer service department. 
  • Customer management; the system provides information about the preference of consumers and purchasing patterns. Such a system hold information on sales, inquiries, responses to marketing campaigns, service request, and complaints. The sales marketing team use the data for analyzing the types of products customer choose their purchasing frequency and make strategy according to the data. They can use the data to create personalized offers for individuals customers or respond quickly to consumer inquiries.
  • Decision support: decision support system provides managers with access to financial, marketing, and operational data that helps them to make better faster decisions. Manager can select the data and analyzes it and prepare reports for various sectors.  
  • Supply chain management: a supply chain management system enables companies to share information via the secured network with suppliers and business partners, improving efficiency and controlling costs through a supply chain. It will help eliminate middleman costs in the supply chain. Business can plan effectively their manufacturing and cut down on waste of inventories.

Information systems help in decision making 

Management information systems combine hardware, software, and network products in an integrated solution that provides managers with data in a format suitable for analysis, monitoring, decision making, and reporting. The system collects the data from different databases and makes it available for users over a secured network.

  • Information collection: managers need rapid access to information to decide about the strategic, financial, marketing, and operational issues. Companies collect a vast amount of information, including customers records, sales data and market search, financial records, manufacturing and inventories data, human resources records, and many more. All this information quick access makes it easy to decision making. 
  • Collaboration: in a situation where decision-making involves groups, as well as individuals, managements information systems, make it easy for the team to make a collaborative decision. 
  • Interpretation: management information systems help decision-makers understand the implication of their decision. The system can collect data from the raw reports in a format that enables the decision-maker to quickly identify patterns and trends that would not be identifiable in the raw data. 
  • Presentation: the reporting tools within the management information system enable decision-makers to tailor reports to the information need of other parties. If a decision is required for approval by a senior executive, the decision-maker can create a brief executive summary for review. If the managers want to share the details of any project with colleagues then they can make full reports and provide different levels of supplementary data.  


All the mentioned information about the information system is a set of components that work together to manage data processing and storage. I hope this information can guide the role of supporting the key aspects of running an organization like decision making, operation, and many other cases.        




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