Purpose of Information Systems
Information Systems (IS) are to help you and your company to find new strategies in order to gain competitive advantage in your industry. One way to do this is through adapting IS in your business. IS helps the organization to use its data, reduce workload and assist compliance with mandatory regulations.
3 Roles for IS
Information Storage and Analysis
Companies now use more advanced databases that contain all types of data about what they do. IS can store, update and analyze the information. From all the information that the agency has, they can figure out new solutions to both current and future problems. Information can also be integrated from different sources both in and outside of your company. This allows you to keep the company up to date with both internal performances and external opportunities or threats.
Assist with Making Decisions
Information Systems are all about helping you to make strategic plans for your business. The management team uses the information gathered to create plans and decisions for longevity and making more money. You use IS to measure and test all the information gathered from all sources. The analysis and comparison of market trends helps you to decide if your strategic decisions made are both adequate and are good quality.
Assist with Business Processes
IS helps businesses to create more value based systems for your company. Information Systems are integrated anywhere to measure out where tasks will make that department run better and for less money. Or it can make sure that everyone follows whatever regulations each department needs to follow to stay in compliance with government laws. It both simplifies business processes and gets rid of unneeded activities. They also add controls to employee processes. This in turn makes sure that only the ones who need to know have access to certain tasks. IS gets rid of repetitive tasks, increases accuracy and leads to better project planning and implementation.
Implementing new systems costs a lot of money. It includes not just the installation but also employee training sessions. Some employees might even resist the changes being brought on. This in turn can hinder your operations and employee turnover could increase. Just make sure to have strong leadership in place when doing this. It will help guide employees and managers through the transition while weighing cost against benefits to see if you would really like to do this.
You can define business by four primary functions: 1) Marketing and Sales, 2) Production 3) Accounting and Finance and 4) Human Resources (HR). It is all about finding ways of supporting your business operations and management.
Marketing and Sales IS
Information systems go towards planning, promoting and selling the products or services. They support decision-making through:
This is the entire marketing IS where it has to draw on many sources of results to find information. Completing marketing research helps focus on finding answers supporting decision-making. Marketing subsystems help support decision-making. The decisions are then integrated with the sales forecast and marketing plan, comparing sales results.
- Product subsystem – The planning of introductions of new products
- Place subsystem – Making the product available to the customer at the right place and time
- Promotion subsystem – Supports both personal selling and advertising
- Price subsystem – Contain industry prices and help set up pricing goals
- Sales forecasting – Forecasting and developing a full marketing plan comes with planned marketing and outstanding orders
Components for information systems for accounting include:
- Accounts receivable
- Accounts payable
- Payroll records
- Inventory control
- General ledgers
They rely heavily on online databases and reports custom-built. Essential functions of financial systems are:
- Financial forecasting and planning – Predicting funds coming into and out of your company long-term. Using cash-flow models help find needs of funds locations along with where they’re coming from.
- Financial control – Budgeting and Return on Investment (ROI)
- Funds management – Managing liquid assets for high yields with lowest degree of loss risk
- Internal auditing – Auditing reviews and shows independent appraisals of your accounting, financial, and operational procedures.
- Human Resources IS support through providing information to the HR office. It has grown immensely over the years to keep up with needs to adapt to new laws and regulations.
Giving access to stakeholders including:
- Employees of the HR department
- Personnel of your company wishing to see their records
- Workers wishing to see open positions and benefit plans
- People taking computer training classes for work and completing evaluations
- Managers can rate their subordinates and make decisions
- Executives creating tactical and strategic planning
Other databases include:
- Applicant databases
- Position inventory
- Skills inventory
- Benefits databases
- External databases
As we can see, all these different information systems have to work together smoothly to give superior results for your company. If not, it is bound to disappoint your customers. They expect timely delivery of products and services, perform QA to their own standards and flexible credit terms to name a few. Information systems offer support integrating business processes, cutting across functional lines to do it. In turn it makes everyone happy, from business partners to customers and suppliers.
Types of BI
Business Intelligence (BI) is extremely popular and is a top focus. There is the traditional software, cloud services, mobile apps and social media. What type do you need for your business that will help and not hinder progress? Choosing the wrong software to fix your business problem(s) or having end users who don’t understand the new programming will cause failures.
- Not defining the business problem(s) – Don’t jump the gun until you know exactly what you need. Buying for general capability is the worst mistake you can make. Look for defined problems that need solving.
- Not getting commitment from end users before choosing the BI solution – Make sure to get people’s opinions of the selections available as they’re the ones who will ultimately use it every day. Otherwise, the tools will be ineffective as no one will use the upgrades. They have to approve of what might become the new initiative, or they will never use it. Don’t tell them they have to use it, help them to understand why they’ll want to use it when it’s up and running.
- Not considering security or legal requirements – Follow data governance when selecting new solutions. It protects both your company and customers.
- Don’t get swayed by features and forget legacy systems and integration – Most companies look and rank BI software by the features available. This is wrong. You need to look and see which app will be able to integrate with what system you use already. There has to be an ability to work with all your other business systems or it won’t work correctly.
More BI Mistakes
- Not choosing a program that can scale and adapt to change – Choosing a solution that isn’t flexible is one of the worst things you can do. Self-service analytics are now the norm, where they can work well with new data sources. The ability to scale is necessary is as the system grows, the software has to keep up. You don’t want to have to buy new software every time the business grows.
- Not considering the mobile workforce – You have to consider mobility. Being able to use the new BI solution on a smart phone is a great advantage and allows for more productivity.
- Rushing implementation – Never rush the upgrade. Mistakes are going to be made with possible cost increases.
- Insufficient training and underestimating costs of training – A few weeks of training isn’t going to cut it with today’s BI systems. The systems in place now are very complex. End users need a lot more training to work them. There’s also the need for ongoing training to keep the end users in the loop for changes to the programs.
- Not leveraging intelligence and reporting – If you’re going to collect all this data, then make sure to share, analyze and act on what is found. It’s a waste to buy the new BI solution if not used properly.
Uses for Upgrades
This software is used in many ways. It is used to build reports, find risks and opportunities and forecast trends. Don’t become complacent with pre-defined sets of reports. You’ll miss changes that are occurring in the business world.
Business Intelligence and Analytics
What is the biggest challenge today for upgrading your business? You’ll find the answer through using tools enabling business intelligence (BI) and analytics strategies. It seems that businesses are looking to adopt BI and more advanced analytics to achieve bigger gains. Upper management needs to explore more information to gather key areas that they feel need improvement.
The Biggest Challenges:
- Data Preparation – The ability to complete data management in putting together and cleaning data before compiling reports and analytics.
- Skills and Leadership – Is there a structure focused on needs of both BI and analytics along with more complex methods?
- Ease of Use – Can those who are less technically inclined be able to use the system?
The biggest gaps are in data prep. It is more difficult and more complex than it seems. The size of the company and how they are using BI and analytics doesn’t matter. They all see big gaps in how they filter, transform and prepare their data. Good data gathering and compiling is completed. It helps find both relationships and potential outcomes quickly. The information found here will help improve your company’s productivity and build competitive advantages. Consider automation and self-service also for those in the agency who are less technically inclined. Analytics are behind BI. Improvements are needed to be able to prepare, augment and explore the data gathered. This will help your agency to find root causes and trends. You can then build and update predictive models through using machine learning.
Skills and Leadership
Skills and leadership are key too. Agencies strong in these areas still say that there are many challenges in innovation, creativity, and leadership. Shown executive support enforces the need for upgrades or change just will not happen. If there’s no strong vision and support at this level, the initiatives will fail or underperform. A leader needs to make sure that they openly show the value of success from the new initiatives.
Ease of Use
Overworked data scientists or analysts already in your company because of changes being implemented need help. In this case, it’s better to create self-service and interactive tools where everyone can find them. Nontechnical users will need the guidance, and instead of overworking your data scientists and analysts, this can help. There’s software built to aid building systems that can detect relationships, correlations, segments, and outliers. It could use natural language to create queries. It could present context-based narratives of important findings. All sorts of things could be created with the new software to help the organization.
Increasing adoption of BI and Analytics
- Invest in data and data prep
- Nurture culture, skills, and leadership
- Keep self-service and Ease of Use in the Forefront
If the challenges of gathering and preparing data are not addressed, it will become more difficult to find a use for BI and analytics. If strong leadership isn’t used to make the employees excited to use the new technologies, the initiative will be a failure. And if ease of use with smart/automated capabilities isn’t used, it’ll hinder adoption of BI and more advanced analytics. Consider these things before upgrading your systems.
A very exciting time in your company might be when you realize that you have to upgrade your systems to keep with the times. It can be very frustrating and can take some time too depending on what needs to be updated. There’s a lot that has to go into the thought process before starting…
- The company in question always has to have the latest and greatest, who change their systems as soon as upgrades become available.
- The company in question goes through more traditional means. Why change what they have when it’s working perfectly fine? These companies upgrade only when forced to do so.
The upgrade plan has to focus on future growth and changes forecasted by the company. The question that needs to be asked when looking ahead is, how will the changes affect upgrade needs in the future?
Five Steps to Planning Upgrades
1. Categorize and Prioritize: Categories include
i. Client Computer Systems
iii. Client Software
iv. Server hardware and software
vi. Network devices
vii. Network Infrastructure
Here items can be picked and chosen as to what the organization decides to upgrade. In this if needed subcategories can be created in order to create a more organized plan.
2. Set Priorities: Prioritize based on the costs and benefits ratio. What items need to be upgraded first? Is it an urgent need or a want? Make sure to not upgrade needlessly, make sure that it’s really needed.
3. Consider Dependencies: When the company is upgrading their systems they need to take into consideration what might be dependent on others. This might create more upgrades in order for the system to work with the new equipment. Or if applications are being upgraded, the system might need to be upgraded in order to work with them.
4. Phased Rollout: Don’t rush it. Testing and discovering of bugs need to be worked out before starting to use the new system. After the tests are completed use small groups of employees to test the upgrades in the production environment. If there’s a learning curve use the fast learners first as they can then learn the new system and assist/teach the others when it rolls out.
5. Keep it Scalable: Write out the plan. Get input from other departments and different levels to help create the plan. Plans for expansion of the company and any restructuring needs to be taken into account here too.
If the organization follows proper planning with scalability included in the process, it can create a very smooth upgrade environment for the company. It would help immensely as upgrading systems can be very costly and stressful if not done correctly. Never rush the process and take time to consider all options before jumping in.
The first thing you should do after buying a product for the business analysis solution is to verify if the software will work with your vision. Will it do what it is supposed to do? When it is being verified the testing team who can be anyone from developers, QA and business analysts work with the software to make sure that it really works for what it was bought and/or created for. There are many phases to be completed in order to ensure the new product will work well with your system.
The Test Phases
The Smoke Test comes before anything. It’s a pretest to find out if full testing can begin. This test shows simple failures that could keep further tests from being executed in the next 3 phases.
- Unit Test: Here every unit is tested separately to find any possible bugs before moving on. It’s another name for the smoke test. Don’t just have the development team test it here, but others to so there will be unbiased testing completed.
- Integration Test: This part makes sure that all the individual parts can work together; either as a subsystem or linked units. Here you would want to find problems with how components will work together in the software architecture design. This includes multiple levels of integration where subsystems might be brought in to see if they would work, then attached to larger subsystems when in compliance. The development team and possibly business analysists work here.
- System Test: Here is where problems are found with how the new system meets users’ needs. It’s ran through the entire system, auditing everything from linear perspective’s. It’s the last chance before turning over to a user acceptance test, and verifies if the software meets original requirements. The business analyst works here for the most part.
Other Tests to Be Completed
There are numerous other tests that have to be completed during these 3 phases.
- Requirements validation test: Verifies system logic, making sure that it supports system analysis.
- Regression Test: Retesting to ensure changes don’t break what is working. There’s usually more than one test completed to make sure all the applications work.
- Dynamic Test: Testing of the software in different circumstances. There are 3 tests completed here:
- The Performance Test: How fast can the system complete functions?
- The Stress Test: Push the software to its limits to see how it handles levels of users, rates of input and speed of response.
- Volume Test: Can the new software handle growth projections?
- Security Test
- Installation Test
- Configuration Test
- Usability Test
Why Test and a Way To Help Implement
With all these tests completed it will help you to not have problems down the road. There’s a need to make sure that everything will work before turning it loose for everyone to use in your company or sell online to your customers. Click here to get an awesome partition assistant from AOMEI to help maximize disk space and improve the performance of your computer(s). This will be needed when growing your system, implementing new programs and applications. The best part of this is that it has the Windows to Go Creator which would help immensely in the long run too.
Define Enterprise Agility
To be able to operate and be strategic, there are tons of factors to consider. Hyper-competition, higher demands from customers, advances in tech and changes in regulations have to be considered when upgrading. There’s something called enterprise agility. It’s comprised of two things. Being able to sense what is going on and respond to it. The timelier the response, the more likely the company will succeed in difficult times. Dynamic capabilities are included here. One has to consider how to build the new system that will respond to the new environment. In order to keep up with competition capabilities have to be able to adapt to new changes.
Market orientation deals with market intelligence focusing on new and current customer needs. The information gathered will be spread across all departments so there can be company-wide responsiveness to changes. Absorptive capacity deals with how well the company assimilates, transforms and uses the knowledge gathered. Strategic flexibility is how well the agency manages both economic and political risks to market threats. It also looks for future opportunities. The flexibility has to include both reactive and proactive approaches to problems. Organizations need to be watchful for and respond to competitors’ actions. They need to look at consumer preferences. There has to be a focus on economic shifts. The agency needs to look out for changes in regulations and advances in technology too.
The Role of IT
The role information technology (IT) plays in this is very important. Responses are completed through direct and indirect means of digital options. Through direct means IT can anticipate and sense changes dealing with businesses. IT systems help as sheer volume of information processed goes further than can be handled otherwise. Indirect means are more pronounced though. This is where product development, manufacturing and supply chains add to performance of the organization.
Digital options can be considered indirect too due to them being work processes and knowledge systems. Knowledge reach is the comprehension and accessibility of codified knowledge available. If the system is built correctly it can help companies to gather and use the knowledge gained. Knowledge richness is when IT gives out high-quality information in a timely manner. IT also reviews real-time pattern recognition and monitors data. It helps create strategic scenarios assisting strategic decision making. Process reach is when IT integrates customers, suppliers and partners internally. The richness of these processes are improved by quicker timeliness of delivery. They become more accurate and relevant.
Depending on how the new systems are deployed and managed, IT could hurt as well as help businesses. The older the technology being used means responses could be limited by the range available. Everything would have to be updated, not just programming. Systems might restrict the ability to retrieve and interpret data being gathered for analyzing. Or processes could be incompatible with new systems. This would mean that they would have to be upgraded. It’s up to the firm as to how well IT is going to work for them if at all. Agility is the ability to respond quickly to change that comes up. The company has to understand the updates in order to create and implement them correctly. If not, they could fall behind from their competition even more.
Define Information Systems
What exactly is an Information System (IS)? Let’s look at the definition here…an information systems focus on networks of hardware, software that people and organizations use daily to handle their data and information. These components are used in order to gather, analyze, store and disseminate information. The information in turn helps to support strategic decisions being made for the agency.
As for a competitive advantage, it can go either way. It seems that there’s an ongoing debate as to how much of an advantage IS gives, if at all. But as an example, Walmart has used it to a great advantage. One key to success for them was implementing a brand new supply-chain management system. It’s unique for them only to where suppliers can go in and review how well their products are selling at Walmart, in any of their stores at any location. Suppliers can petition them if they feel products are being sold to quickly so inventory levels can be increased for their products. It’s pretty interesting how it all works…so Walmart can drive prices down and respond to the market more quickly due to this new management system.
The Main Goal
The main goal of IS is to be able to change data into information that can be used in strategic decision making. Databases are what is considered collections of related information. Examples of this are MySQL and Microsoft Access, where data is inputted and organized into records as one example. A database has to be created in order for an IS to be built that will work correctly. The question is, where can big data be collected, sorted out and put into reports?
Competitive advantage is when said company can sustain profits over average for the industry they’re in. Differentiation comes to play also. The key is to learn how to use information systems to build competitive advantage. This is where SISP comes to play. The information system has to try to do one or more of the following:
- Deliver products or services at lower cost
- Deliver products/services differentiated from others
- Assist companies to focus on specific markets
- Allows for innovation
Examples of IS falling into this category are:
- Electric Data Interchange – Integrate supply chain electronically
- Collaborative Systems – Google Drive, Microsoft SharePoint, or Cisco WebEx
- Decision Support Systems – Helps companies to make strategic decisions
It has been shown through studies that information technology (IT) has assisted in increasing differences between companies instead of reducing them. Technology has sped up and heightened the amounts of differences. It also helps with increasing good management abilities in organizations. Through figuring out the right types of innovations to include with the upgrades, it can greatly increase competitive advantage in their industry.
Questions to Answer
What the company in question has to answer before upgrading anything though is, what exactly has to be changed in order to allow for competitive advantages? Is it the hardware that needs to be upgraded? CPU’s hard drives, devices? Or does the software have to be upgraded? Which new programs need to be implemented and to which department? What languages do the programs need to be written in? What kind of databases will be used? Are they going to create all new programs tailored specifically for them and maybe suppliers like Walmart did? These are just some of the questions that have to be answered before they begin anything, or there will be a mess of confusion at some point.
Whether or not a company wants to believe it, information systems (IS) are a very important part of how the business runs now. This includes how data is stored, transferred and understood by all the different departments in the agency. The problem is, it seems that business owners are not really aware of how important IS to their companies in being able to be managed in designated systems.
10 Reasons to Have New Information Systems
10 reasons that it is so important for companies are:
- Control Creation and Growth of Records – Less paper wasted as everything becomes computerized
- Reduces Operating Costs – Storing inactive records in IS costs less per linear foot for the company
- 3. It Improves Both Efficiency and Productivity – Helps to upgrade record keeping so retrieval of information needed is vastly improved
- Assimilate New Records Management Technologies – Can be used in any area of the company, helps analyze manual recordkeeping and applied automation
- Ensures Regulatory Compliance – Companies have to be able to make sure that they are in regulations by having a good IS that is responsible for regulatory compliances
- Minimize Litigation Risk – The main reason IS is used is to reduce the risk of litigation and penalties. A newer system put in place will help to ensure this happens.
- Safeguard Vital Information – This is necessary in order to protect records and information as all agencies are susceptible to attack or natural disasters. This will provide backups and save the information in a safe place of the company’s choosing, for retrieval later.
- It Helps to Support Better Management Decision Making Capabilities – A newer system put into place will help managers and executives to better find information that they need when they need it to make critical business decisions. ERP systems would be perfect here instead of doing everything manually.
- It Helps to Preserve Corporate Memory – This is done through everyday activities and record keeping.
- Foster Professionalism in Running the Company – Neatness and cleanliness are key in running a smooth organization
Why Update at All?
Good, solidly built IS means that companies that use it will be able to align their strategies together into a clear point of view as to where they want to go. It also helps to find relationships that would be considered critical and gaps in their company culture and infrastructure. Good information systems find answers on how to gain competitive advantage against their competition by improving alignment to strategic decision making.
This all started back in the day. Someone would need a system made specifically for them to handle one problem. Soon enough that it was discovered that different problems needed similar solutions, but not always in the same manner of getting them. This is where defining of the information systems began and why it is still needed. When the company in question decides that they need to upgrade, they have to go through a process in order to find the right applications and hardware to handle their data. Classification comes to play here, so that categorizing information can be completed correctly. This will help to make the data one unit instead of many.
How Do You Identify Different Types of Systems?
There is no simple answer to the question. Every company builds an information system (IS) that is tailored to their specific needs. There are many different types of IS that are used in some manner or another. Classifying IS relies on how tasks are performed and responsibilities are divided in the agency. This becomes a pyramid model as most companies are hierarchical, so classes of IS are categorized following the hierarchy going down.
To compare different information systems:
- Transaction Processing Systems (TPS)– These are operational level systems. They are used by shop floor workers and front line staff. Data is gained here through tracking of low-level activities and basic transactions. They function as simple data processing systems only. This is the system that produces information for other systems to use. They are used internally and externally, are used by operational personnel and supervisors and are focused on efficiency. Examples: Payroll, Order processing, Reservations, Payments and Funds Transfers.
- Management Information Systems (MIS) – Management level used by middle managers. This system ensures smooth running of the company for short to medium terms. Information is given out highly structured and helps managers to evaluate the company’s performance through comparison of outputs. MIS is built on data given by TPS. They are based on internal information flow, support structured decisions, but are inflexible with not much analytical ability. Examples: Sales Management, Inventory control, Budgeting, Management Reporting, and Personnel.
- Decision Support Systems (DSS) – Knowledge based system used by senior managers. They analyze existing structured information, allowing managers to estimate any potential effects on decisions they are thinking of implementing. These systems are interactive and are used to solve problems. They can access databases, offer analytical tools, allow simulations to be completed, and can support exchanges of information in the company. This system can alter and build solutions provided by MIS and TPS, that can create insights plus new information to go off on. DSS helps to support badly or semi-structured decisions already being built, and have analytical and modeling capacities. Examples: Group Decision Support Systems (GDSS), Computer Supported Co-operative work (CSCW), Logistics, and Financial Planning.
- Executive Information Systems (EIS) – Strategic level used by executives and senior managers. These systems analyze environments that the company works in, find long-term trends, and plan courses of action. The information gathered is gathered from internal and external sources, and is weakly structured. These systems are designed to be able to be used directly by the executives and are user friendly with the ability to be customized to whomever is using it. EIS gathers and presents data from the MIS or TPS so senior management and executives can see what is going on a make decisions based off what they see. The people who use this want ease of use and being able to predict what will happen to the company in the future. It has to be effective, flexible, and support unstructured decisions. Examples: There are none. These systems are tailored to individual wants of the user, in other words are custom made. There are off the shelf packages that can be customized too.
The Importance of Planning
There is no easy way to explain why there are so many different types of information systems. Every company out there is not the same, or runs their agency in the same manner as others. This is why modifications are made to the systems in order for them to work specifically with what said company uses and the data they keep. Also every level of the agency uses different systems. Not everyone has to have a need to know of everything going on. It is better to keep it at the level that the systems are going to be used at the most. This is why planning for upgrades is so important. If the wrong system is used, or the wrong programs…