Business information

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What is business information system?

A business information system is a group of interrelated components that work collectively to carry out, processing, output and storage and control actions in order to convert data into information Products that can be used to support forecasting planning, control, coordination, decision making and operational activities in an organization.

Significance of Business information systems:

System forms an integral part of modern organization and business. Computer based information system are now used to support all aspects of an organization's normal functioning and activities. New technologies create new opportunities for company's higher level of automation, high speed communication and improved access to information. Information system will provide significant benefits to the modern business organization.

The modern business environment requires a new kind of manager often called as hybrid manager. The hybrid manager combines management and business skills with expertise in the areas of information technology and information systems. This type of manager is able to undertake a wide variety of roles and can operate across functional areas.

The study of information system plays an important part in development of an individual and effective manager as well as providing prospective managers with important problem solving skills that can be applied to range of situations and problems.

Specifically the hybrid manager will need to acquire the following

  • Define the information system strategy for their work group, department and company.
  • Identify potential uses of information system to improve the company performance.
  • Select and then acquire new information system from appropriate suppliers.
  • Manage the information system to ensure they are effective in delivering information of the appropriate quality to users.

Reference: text information from business information systems by paul, bochi, dave chaffey, Andrew greasily, simon hickie (2nd edition).


In modern business environment the business information system has become an integral part. The business information system is used by all the levels of management in the organization for decision making .the business information system will provide the information that is required for the smooth functioning of the organization. There are mainly three types of business information systems.

  1. transaction processing system
  2. management information system
  3. decision support system
  1. Transaction processing system:
  2. A transaction processing system is a type of information system that collect, stores, modifies and retrieve the data transactions of an organization. The transaction processing system will ensure the smooth functioning of the organization. In this transaction processing system it will capture all the daily transactions. It will allow the managers to monitor the status of operations and relation with the external environment. The TPS systems are designed to process transactions virtually to ensure that customer data is available for decision making. Usually the first level managers will use the transaction processing system for decision making purpose.

    ex: payroll attendance, employees attendance...etc

  3. Management information system:
  4. The management information system is designed for serving the middle level managers. The management information system provides reports on performance of the organizational transactions based on the data from the TPS. The MIS will be useful for decision making purpose.

  5. Decision support system:

Business intelligence system:

The business intelligence system will serve idle management. It will provide the information for taking non routine decision making purpose. Ex: it will provide the information on production schedule by introducing a new product. In this information system often use information from external factors like prices of products, competitor's information, share values of company ...etc and all the information from transaction processing system and management information system.

Executive support system:

Executive support system is usually serves top level management .the decisions taken by the top management will affect the existence of the organization. This type of decisions will require judgement, evaluation, and insight into lot of factors. This information system will include the incorporate data about external events. The management will take into consideration all external factors like social factors, economic factors, political factors...etc., that will be provided by the executive support system.

Ex: executive support system that provides the current financial position of the company and financial performance to the management as and when required. Based on the information the management can take financial decisions.

Reference: text information from business information systems by paul, bochi, dave chaffey, Andrew greasily, simon hickie (2nd edition).

Examples of information systems:

  1. Information technology and information systems:
  2. The information technology refers to technology while information systems not only refer to technology but also incorporate to business.

  3. Computer based information systems:

In today's business environments most of the organizations make the habit of usage of information technology, such as personal computer .the reasons why business information systems become popular are because of their advantages.

Advantages of use of information systems:

  • Speed processing
  • Accuracy : calculations can be done accurately
  • Reliability :
  • Programmability :
  • Disadvantages:

  • Computer based information system are incapable of solving problems using their own judgement and experience.
  • Computer based information systems are unable to react to unexpected situations and events .because most systems are created to fulfil a particular functions.
  • These are restricted in their ability to discover new ways of improving process or solving problems.
  • Not suitable for certain kind of situations ex: in certain social situations.

Use of information system for strategic advantages:

  1. Improving operational efficiency:
  2. By using computer based information system we can improve the operational efficiency to achieve competitive advantages.

    Ex: consider a typical manufacturing company wishing to adopt a cost based leadership strategy. The inventory control system might be used to manage stock levels, reducing storage and transformation costs. by the introduction of office automation systems might achieve higher level of productivity. The organization might also be able to acquire additional benefits such as improved customer service.

  3. Barriers to entry:
  4. Many organizations have improved operational efficiency by investing heavily in business information. The business information system will require heavy ongoing maintainenece and developments. The new comers into the industry must be prepared to make that much of large initial expenditure, and then only they can acquire the use of business information systems effectively. The level of expenditure needed may be so high than an entry .barrier that detects or prevent the new competitors from entering the industry. Even the existing competitors also have to invest heavily for the new technologies.

  5. Locking in customers and suppliers:
  6. Computer based information systems can be used to provide higher level of customer service, there by encouraging clients to remain loyal to the company. A close integration with the suppliers is maintained. The usage of information system will result number of benefits like

    1. availability of raw materials,
    2. cost saving can be done through reduced administrative overheads,
    3. Competitors are excluded from the business relationship.
    4. The organization can negotiate favourable terms and prices.
  7. Promoting business innovation:

Introducing a new process control system, for example might ultimately result in the development of new product features or new product lines. The effective computer-based information systems will support for business innovation. On other hand an organization that failed to invest adequately in its information systems may lack essential resources, such as hardware, software and be unable to explore new methods.

In this manner there are many advantages like increasing switch costs...etc.

Reference: text information from business information systems by paul, bochi, dave chaffey, Andrew greasily, simon hickie (2nd edition).

Management strategies in an organization:

In any organization there are different levels of management

  1. Top level management
  2. Middle level management
  3. First level management
  2. These individuals are at the top level in the organization. the top level managers are also called as senior management or executives. The top management in the organization will take the important decisions which will affect the organization. They set the goals for the organization and direct the company to achieve them. The top managers are ultimately responsible for the performance of the organization. Managers at the top level should have managerial experience.

    The top management in an organization may be chief executive officer (CEO), chairperson of the board, president, vice president...etc

  4. Middle level managers are those in the level below top managers. the middle level managers are responsible for the implementation of goals set by the top management. The middle level managers will be responsible for motivating and assist the first-line managers to achieve the organizational goals. The middle level managers are more involved in the day-to-day workings of a company; they may communicate with the top level by offering suggestions and feedback to top managers.

    The number of middle level managers in a company will depend on the size of the company. In big organizations there may one middle manager for each department individually. The middle level managers may be the employees who were promoted from first-level managers.

    The middle level managers may be such as general manager, plant manager, regional manager...etc

  6. First line managers are responsible for daily management line workers. there are first line managers in every work unit in the organization. These are the managers that most employees interact with on daily basis. And if the managers perform poorly, employees may also perform poorly, may lack motivation.

    The first level managers are such as office manager, department manager, shift supervisor...etc.

Resources to the business information system:

  1. People resources:
  2. People resources include the users of information system and those who develop maintain and operate the system .ex: people resources might be include managers, data entry operators and technical support staff.

  3. Hardware resources:
  4. The term hardware resources refers to all types of machines , not just computer hardware .the hardware resources may include telephones, fax machines, switchboards are all valid.ex: of hardware are disks, papers, central processing units, monitors, Xerox machines..Etc

  5. Software resources:
  6. In the same way the term software resources does not only refer to the computer programs and the media on which they are stored. the term can also be used to describe the procedures used by people.ex: software include instruction manuals and company policies.

  7. Communication resources:
  8. Communication resources are used to transfer the data from one system to another system.

    Reference: text information from business information systems by paul, bochi, dave chaffey, Andrew greasily, simon hickie (2nd edition).

  10. Burger king is one of the famous burger manufacturing organizations which will be well known to all over the world. it has branches in all the areas of the world. Burger king have such a good reputation in burger manufacturing with good quality and taste.

    I am taking one of the branch that is situated in harrow . The specified burger king organization will have the daily transactions like this.

    the daily transactions that are taking place at the burger king is prep preparation, boiler ,making burgers ,making arrangements for cleaning, billing the products that are sold, saving the customers, making fries, chicken royal asking, cheese burger making ...etc

    In this organization there are one area manager, one manager, 2 swift managers, 40 employees are there , some of them are permanent employees and so of them are part-time employees. The area manager will look after all the braches that will come under his control. the manager will take the responsibility of his branch. The swift managers are those who will guide the employees of the organization towards the work.

    the manager will perform different tasks like issuing materials, scheduling the employees of organization as require because there are some part time employees in the organization, preparation of particular task that are to be performed for the smooth functioning, taking the backup of the daily sales details and all other details. Deposit of the money into the bank account. Submitting all the backup to the area manager....etc

    The swift manager in the organization will give motivation and guidance to the employees in their work. The swift manager will guide the towards the tasks that are specified by the manager. The swift manager will act as a mediator between the employees and manager. He ay gives the feedback to the manager.

    The employees in the organization are responsible for the performing the specific tasks as specified by the swift manager. The work that will be done by the employees in the organization may be manufacturing the burgers, fries, royal chicken, cleaning, billing the products, kitchen work, serving the customers.

    1. The management strategy in the burger king is like this
    2. The information system in the organization will capture all the information of tasks that are taking place in the organization. The data can be used by all the levels of management for decision making purpose.ech level of the management in the organization will require the information system regarding daily transactions. Each level of management needs information system for decision asking purpose.

      Decision support system is one information system that is used by the top management for decision making purpose. In burger king the area manager and manager will come under top management .the decisions that are taken by these top management will have more effect on the organization. The area manager can use the information system for taking this type of decision. Fixing the target sales for each day, introducing the new products, storing the backup data safely in the secondary location, for the introduction of any change into the organization...etc. the area manager will use data from the past data and information from the decision support system for these decision making purpose.

      The manager also will use data for some decisions like appointing new employee, scheduling the parties employees, they may check whether the specified targets are reaching every day, if not what are the reasons for decrease in the sales, in what time we have to purchase the raw materials, what is the existing stock of raw materials, list of employees who will work regularly and who are irregular...etc

      Ex: the sales for this branch in week days may be up to £2000 , the sales on Saturdays may be more than £3000 and in Sundays the sales may be up to £1000 only .so based on these targets the can estimate how any employees are need and can plan for that day.

      Ex: at the end of each day by taking the backup of data he may come to know that whether the target sales are reached or not.

      The management information system is used by the middle level managers .the swift managers are idle managers in burger king .he is responsible for to guide the employees and give the feed back to the manager. For allotting work to the employees he may use the past data.

      Transaction processing system is one information system that will use by the first level management for decision making. The employees in the burger king will use the data from the information system for various decisions like which products have more sales, which are having low sales, on what factors we have make more concentration...etc.

      In this way the business information system in the burger king will used by the different levels of management for decision making purpose.

      Reference: information from the employees of burger king.

  11. Level of security to business information system:
  12. In today's business environment the business information system is very important for decision making. The information system will capture all the information .it is used by all the levels of management for decision making. so the security level for the information system is compulsory. If there is no proper security someone may be hack the data of the information system and can misuse the data. so not only the maintainenece of information system but also providing security to the information system is compulsory.

    Ex: if there is any failure in providing the security to the data it will affect all the management and all the customers of the bank. So any bank will provide high security levels to the data and for the online transaction.

    Different companies will provide the Security in different methods such as

    1. Accessing through passwords:
    2. The security to the information in an organization can provide through password.

      Ex : in burger king the security can made by the manager by accessing through password .so the manager only can access to the data. But there is problem that some hackers can hack the password, so we have to provide better security.

    3. Accessibility options:
    4. The security to the information system can provide by providing accessibility options that is giving accessibity to only to some of the persons in the organization. if there is information system in an organization the accessibility will be given to the manager or any other managerial persons who will use the data for the decision making process.

    5. Secondary location:
    6. One of the Security methods is taking backup of daily transactions data and store in secondary location. If the company fails to take backup of data, some accidents happened or any authorised person accessing the data, someone may delete the data, if any virus problem occurs we cannot access the system. In this way there different types of problems may arise. To prevent this entire problem taking backup of data in each day is compulsory.

    7. Pin/tan:
    8. Usage of PIN number is one of the security methods to access the data. Any manager who is willing to access the data has to enter the secret PIN number.

      Ex: accessing of ATM's at any place using pin number. These are one-time passwords that will be sent to the user by postal letter...etc

Cloud computing:


Cloud computing is a general term that involves for providing required services over the internet the services over the internet. The services provided by cloud computing way of infracture as services, platform as a service can be private or public. Cloud computing plays a significant role in different areas including virtual worlds, pilots, e-business and social network. A cloud computing may be private or public. A public cloud computing can be provide services to any one on the internet. A private cloud computing is a data enter that supplies hosted services to limited number of people.

  1. Infracture -web service:
  2. There are web servers with unique id addresses and blocks of storage on demand. To start the server, stop and to configure their server and store .The customers use the provider's application program interface. This computing allows a company to pay for only as much capacity as in needed.

    Ex: generating electricity, water, and gas bills based on quantity of consumption.

  3. Plat form-as a service:
  4. In this, a set of software and product development tools that are hosted on the providers fragment. The user can create the application on the provider's platform over the internet.

    Ex:, Google apps...etc

  5. Software -as - service:
  6. In this, the cloud computing vendor will provide the software as service. The user can get the permissions from the vendors for the usage of software.

    Reference: text information from business information systems by paul, bochi, dave chaffey, Andrew greasily, simon hickie (2nd edition).

Advantages of cloud computing:

  1. Private cloud architected elements
  2. cloud computing forces the adoption of innovations
  3. Cloud computing method allows enterprise to archive more effective use of the IT hardware and software investments.
  4. Cloud computing method can allow enterprises to achieve ore efficient use of their IT hardware and software investments.
  5. A cloud infractures can be a cost efficient model for providing information services, reducing complexity and increasing responsiveness.
  6. Can access the data from any place.
  7. Reduced cost: cloud computing will save the money when compared with other technologies.
  8. Increased storage: the cloud computing will provide the benefit of increased storage of large amount of data.
  9. Availability at any time: the cloud computing will provide data always as and when required by the employees and management of the organization.

Disadvantages of cloud computing:

  1. Data security
  2. For the data that is stored in cloud computing security is not good. It can be accessed by any person .any unauthorised person also can access the data .any person can load the data.

  3. Application availability:
  4. we Cannot switch from existing legacy application. Equivalent cloud application does not exist.

  5. more expensive :
  6. For getting services through the cloud computing every company has to pay more cost. This cost is not suitable for the small organizations.


So the business information system plays a vital role in any organization. It will include all the transaction data of the concern .the data from the information system will be used by all the levels of the management for decision making purpose. so every organization has take care of maintaining the information system and they have to provide proper


  • text information from business information systems by paul, bochi, dave chaffey, Andrew greasily, simon hickie (2nd edition).