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.