Role of Information Systems in Business

A. Information system is very essential for running and managing a business today. Information technology is helpful in managing important production data and based on the data it helps the production, management, and owners of the company to better run their business and earn maximum profits. The six reasons are operational excellence; business models; customer/supplier intimacy; improved decision-making; competitive advantage, and day-to-day survival.

What exactly is an information system? How does it work? What are its people, organization, and technology components?

A. Information system is a way to collect, store and share data related to your business. This can be related to financial planning, purchasing, manufacturing, and finally sale. With the help of various programs such as SAP (System, Application, Products). The SAP system allows different areas of business to view and share pertaining information that is stored in one centralized location using its various components, such as material management-primarily used by warehouse functions related to purchasing, finance-primarily used by the finance department etc. From my readings, I have learned that the people component relates to solving issues such as training, management behavior, and job attitudes. I have also learned that the organization component relates to the specialty of functions that individuals perform business procedures, business culture, and the organizations hierarchy. Technology component relates to the company’s computer system, data management, telecommunicating, internet, and intranet. Information system literacy helps employees store data and information that relates to their job performance. Computer literacy is important to understand the various programs that are used in the information system. Internet is a service that helps stay connected with the world, your customers, and your stockholders. With a World Wide Web address, which is generally accessible via the internet, you can sell products that your company produces, with only one centralized warehousing facility, eliminating multiple warehousing costs.

How will information systems affect business careers and what information system skills and knowledge are essential?

A. The role of information systems is very important for careers in accounting, finance, marketing management, and operations management. An information system helps each career in different ways to achieve one common company goal, which is to be profitable. New technologies in the information systems are helping businesses be more productive, cut operating costs, manage efficiently, and earn maximum profit. However, countries like, India, Japan, and China who have developed their information systems and have a large highly qualified work force that is much cheaper in labor costs are causing local businesses to outsource some part of their business and its functions to those countries.

How do information systems support the major business functions: sales and marketing, manufacturing and production, finance and accounting, and human resources?

A. Sales and marking systems are helpful in indentifying customer base for your products that your company sales. The data related to demand helps market appropriate products to their respective markets. This helps achieving maximum sales and profit from the sales. Manufacturing and production system deals with planning, development, and production part of the product your company manufactures. This system also helps plan and maintain the flow of production to avoid over or under production to meet consumer demands on a consistent basis. Finance and accounting systems help keep track of funds and the use of funds related to manufacturing and sale of products produced. It also helps track the profits and losses. Human resource system helps maintaining employee personal and professional records, track their skill levels, job performance, and any required training to keep your staff up to date with the latest technology. This system is also used to employee compensation and their career development.

How do systems serve the various levels of management in a business and how are these systems related?

A. Operational management level uses the system for transaction processing system (TPS), for example, payroll, and order processing. Middle management uses the decision-support systems, this helps take decisions related to production, workforce etc. These are not a very complex or analytical. However, executive support systems are very analytical. They are generally in the forms of graphs and charts that are delivered by presentations to senior management to make executive level decisions.

How do enterprise applications, collaboration and communication systems, and intranets improve organizational performance?

A. There are multiple applications in the enterprise. I am going to define each of them individually. Enterprise applications are a group of functions tied into one software system to help improve synchronizing, efficiency, and decision-making. These applications are designed to coordinate multiple functions that are used in a business. Supply chain management system is helpful for material management, resource planning, manufacturing, and delivering final products and services to the sales channel or in some cases directly to the customers. Customer relationship management is a part of information system, and is used to plan and communicate business processes to its customers to help obtain maximum revenue and customer satisfaction. Collaboration and communications systems are a part of knowledge management system. They help enable companies to optimize their product creation, sharing, and distribution of product knowledge. Intranet is a part of web page that is only available for internal company use. The company can also have an Internet site, which is available to access for anyone with World Wide Web access. Often times companies that sale their products directly to the consumers, use Internet as a major part of their sales system. Companies also have Extranets that are available for use to the companies vendors for the access related to material management, ordering raw material etc.

What is a role of the information systems function in a business?

A. Information systems function in a business is usually the technology department in a business. This department is also known as Information Technology (IT). These groups of professionals are responsible for maintaining the hardware, software, data storage, network that the company uses for its infrastructure.