An information system comprises of all constituents that collect, proliferate and disseminate data. In most cases, these comprise the hardware, people, software, communication systems and the information itself. Information systems conduct various activities that include processing data in to information, input of data, data storage and the production of outputs (Moin, 2006). For these reasons, most contemporary businesses have integrated systems of information technology in their management.
Benefits of information Systems to a business
Correct utilization of information systems by the management of a business can offer a great deal of operational effectiveness and accurateness. In contemporary business world, this is similar to the competitive advantage of the business (Sharrieff, 2011). Moin (2006) affirms that in most cases, information systems sustain and sometimes comprise the competitive advantage of a business. In this case, information systems sustain all the sustainable competitive advantages of a business.
Incorporation of information systems helps employees to give greater level of services to their consumers, especially the employees who are in contact with customers. This means that information systems are at most times fundamental in running business activities in the modern world since the employees offer better services to the consumers.
Businesses achieve more productive business decisions that have positive influence on the company’s bottom line due to suitable utilization of the information systems offered by the company (Sharrieff, 2011).
Information systems can decrease the number of administrative employees as well as the number of hours an employee will work in comparison with the manual performance of a similar process. This occurs since the duty that an employee was supposed to perform happen to be performed by the machine.
This effectiveness permits the organization to gather benefits in other areas. For instance, a company can offer a lower bid for a certain contract than its rival company due to the reduced costs linked with the execution of effective information systems (Webster, 2011).
In the modern world, computer networks permits the multinational companies to offer real time services at all times all over the world. Improved technology of the computers and the information systems helps in meeting consumers’ requests and their relocation across the nations and time zones even without the customers’ consent.
For instance, the Sealand Services Inc. which is a global based shipping company in the United States executed a new proprietary shipping management system that mechanized customer transactions worldwide. These customer transactions included order taking and document management (Stephens, 2011).
Information systems play a major role in supporting business processes and operations. They achieve this through recording and storing sales information, acquisition data, savings data, payroll data, and other accounting information. Information systems also aid in storing and recording inventory data, equipment repair and maintenance data, work in process data, supply chain data and other production records.
The human brain is not capable of storing all the necessary data that a company requires and thus the use of information systems is relevant. Information systems are also helpful in recording and storing customer purchase histories, market data, customer profiles, marketing research data, advertising data and other marketing records (Moin, 2006).
In most companies, execution of information systems occurs in order to offer self-services to employees and the consumers. If companies and businesses grant permission to customers and employees to gain access and make changes to their own account data rather than presenting a paper request, the response time will radically decrease. Electronic communications such as email reach the receiver faster than communication sent through traditional paper modes (Webster, 2011).
For a company to ensure that their management information system is pertinent and offers the greatest level of profit, they must plan purposely for their business entity. Even though most software packages offer a level of usefulness to a business venture, it is essential that the system that a business executes addresses the informational necessities and utilization behavior of every person who will take part in the operational effort (Sharrieff, 2011).
Information technology mechanizes some of the information systems. For instance, Dell Computers has a system where there is no human interference in their various operations including taking orders from customers, delivery of constituents to the Dell factory for assemblage as well as shipment to the consumers. Through the company’s website, the company can acquire an order for a personal computer directly from a customer (Moin, 2006).
Information systems aid in reducing errors that are common when performing processes manually. The access to error-free reports guarantees that the organizational leaders have access to the required information needed to make well-informed decisions. Reduction of response time enables leaders to make better verdicts than they might have otherwise done. With the aid of effective information systems, leaders can make efficient decisions in an appropriate manner (Webster, 2011).
It is evident that information systems are vital components of a business. They increase the competitive advantage of a business in various ways. In addition, information systems accelerate the globalization of business and trade. This offers multinational companies a suitable ground to reach many customers. In contemporary business world, most businesses have integrated information systems in their business management to accelerate their business performance and eventually increase sales.
Moin, U. (2006). Information Systems and Technology. Retrieved from http://ezinearticles.com/?Information-Systems-and-Technology&id=203626
Sharrieff, M. (2011). The Impact of a Management Information System. Retrieved from http://www.ehow.com/about_5673049_impact-management-information-system.html
Stephens, D.O. (2011). The Globalization of Information Technology in Multinational Corporations. Retrieved from http://www.allbusiness.com/technology/internet-technology/376381-1.html
Webster, A. (2011). Tangible Benefits of Information Systems. Retrieved from http://www.ehow.com/info_8449598_tangible-benefits-information-systems.html