Whether you realize it or not, you’ve likely encountered information systems in most organizations you’ve communicated with in one way or another. Whether auto-generated texts, emails, marketing campaigns, or much more sophisticated designs, information systems are a crucial part of every business. They help businesses manage their operations, customers, and data. In recent years, information systems have undergone a transformation. They’ve become more complex and yet easier to use. This has led to a surge in their popularity and usage. Read on to learn the basics of information systems — including the types, uses, and skills you need to operate them — and how they’re impacting the world of business.
What Are Business Information Systems?
Business Information Systems (BIS) supports the day-to-day operations of a business. At their core, information systems are a series of parts that secure, hold, synthesize, and determine the appropriate actions for given data. Britannica defines information systems a step further, noting they are “integrated” and provide information, knowledge, and even digital products. The more complex the system, the more capable the functions become.
Why Are Business Information Systems Important?
Information systems have revolutionized the way businesses operate. By automating tasks and processes, Alegria & Company points out information systems help businesses save time and money. They also allow businesses to communicate more effectively with customers, suppliers, and employees. Information systems are important because they provide a means for businesses to manage their operations efficiently. In addition, information systems can help businesses to make better decisions by providing accurate and up-to-date information.
Who Uses Information Systems in Business?
Depending on who you ask, you will get many different answers to who uses info systems within a business and for what. Guru99 breaks down the who and what into three major categories of people in an organization — upper, middle, and lower management — who will have different requirements for information and their corresponding systems. As you become more senior (that is, sophisticated) in your management role, your decision-making becomes less structured, therefore changing the type of information systems you’ll have in place for your role.
What Are the Types of Information Systems?
Given the above categorization of info systems, this framework would look like the following:
- Lower management/Operational (structured): Transaction processing system
- Middle management/Tactical (semi-structured): Management information system
- Upper management/Strategic (unstructured): Decision support system
Transaction Processing Systems
Transaction Processing Systems (TPS) are the most entry-level of information systems and are a great place to start. With transaction in the name, it makes sense that Techopedia defines a TPS as “an information processing system for business transactions involving the collection, modification, and retrieval of all transaction data.” Strong TPS will help you improve performance, reliability, and consistency in transactional processes. Some examples include Point of Sale (POS) systems, which capture data such as credit cards and provide invoices or receipts. Not only do these TPS improve work speed and agility, but they also improve your accuracy.
Management Information Systems
Taking it to the next level, Management Information Systems are processes that capture and analyze data to aid in making better business decisions.
https://smallbusiness.chron.com/management-information-system-2104.htmlhttps://smallbusiness.chron.com/management-information-system-2104.html the goal of a Management Information System is to give managers the information they need to make informed decisions about their company’s operations. To do this, information systems must be designed to collect and store data from various sources, such as financial transactions, sales records, customer information, and production data. This information is then analyzed and presented to managers in a format that is easy to understand.
Management Information Systems can be used to track financial data, sales information, customer profiles, and production data. This information can be used to improve decision-making in a number of different areas, such as marketing, product development, and customer service.
So, in the above example of a POS framework used as a transaction processing system, Management Information Systems would utilize data gathered from the TPS to inform decisions.
Decision Support Systems
At the top of sophisticated information systems are Decision Support Systems — computerized programs designed to support decision-making and courses of action. Decision Support Systems sift through massive amounts of data and compile information to make the best determinations in a given situation. They are used in products including video games, medicine, and more.
In the business world, information systems are used for a wide variety of purposes. They can track inventory levels, customers, sales, and much more. Businesses use these advanced systems to make decisions about their operations. For example, they might use information systems to determine where to open new stores or how to allocate resources.
To support strategic decision-making, a company might use decision support systems to study its customer base and figure out ways to better serve them. If most transactions occur in a certain geographic location (based on data gathered by a TPS), for example, decision support systems might indicate the logical and best environment to open another POS would be at that destination. Having a series of these systems in place can greatly transform an organization.
How Are Info Systems Used in Business?
There are many information systems in business you might recognize. Some of the most common include Customer Relationship Management (CRM) systems, Enterprise Resource Planning (ERP) systems, and data warehouses. CRM systems help businesses manage their relationships with customers and potential customers. ERP systems help businesses manage their operations. Data warehouses help businesses store and analyze their data.
Information systems give businesses a competitive advantage by helping them save time and money, and they can help businesses make better decisions by basing their strategies and tactics on concrete data and mitigating mistakes that may happen throughout the regular course of business.
What Skills Do You Need to Build Info Systems?
Businesses are increasingly using information systems to transform their operations, and they will need professionals to run this transformation. If you have the right skills, a degree in information systems can open up a world of opportunities. Further, Zippia outlines some essential skills that will help you become successful in information systems, including:
- Communication: You will need to be able to communicate effectively with users, developers, and managers in order to ensure everyone is on the same page.
- Documentation: Detailed documentation is essential in information systems, as it allows others to understand the system and its components.
- Requirements gathering: One of the most important aspects of information systems is understanding the needs of users and business processes. Without this information, it would be impossible to develop effective solutions.
- Systems analysis: In order to understand how a system works, you must be able to analyze it. This includes understanding data flows, process flows, and other relationships between components.
- Systems design: Once the requirements have been gathered and the system has been analyzed, you must design a solution that meets all the needs. This includes both logical and physical design.
- Implementation: Once the system has been designed, it must be implemented in order to make it operational. This includes both hardware and software installation, as well as data conversion.
- Testing: Before the system can be put into production, it must be thoroughly tested to ensure it meets all the requirements and works as intended.
- Training: Once the system is operational, users must be trained on how to use it. This includes both formal training and on-the-job training.
- Support: Even after the system is up and running, there will still be a need for support in order to answer user questions, resolve problems, and make changes.
- Lifecycle management: Information systems must be regularly maintained and updated throughout their lifecycle in order to keep them current with changing business needs