Do you know what an information system is? Their foundations can be found in our daily lives – whenever you access an app, log on to your favorite social network, enter your bank’s website to pay a bill or read the news, you are sending and receiving information through systems which are designed for this purpose.
As a rule, the concept of an information system is applicable to any mechanism designed with the purpose of collecting, processing, storing and transmitting information, in order to facilitate the access of interested users, solve problems and meet their needs.
To structure an information system, it is necessary to develop solutions that meet the desired purposes – highlighting, for example, the control of internal processes, such as sales volume or the disposition of items in stock – when we talk about companies. You can use a flowchart maker for free to help you to organize this process.
Although each component performs a specific function, they are all interrelated in the fulfillment of a common goal.
Another thing that stands out is the conversion of data into information; in other words, obtaining knowledge from raw data, which is essential to make assertive decisions these days, as large masses of data are distributed online.
What are the characteristics of this system?
Information systems can work in tandem with a number of different elements, including software, hardware, databases, expert systems, management support systems and much more. All of these are computerized processes which can provide correct information and make companies function smoothly.
Here are some key shared characteristics inherent to information systems:
Integration: information systems must be integrated with the company’s structure, as this makes it easier to coordinate departments, sectors, divisions and other types of organizational units. This integration process also facilitates and accelerates decision-making.
Relevance: the system must generate relevant and necessary information for the company, in a timely and reliable manner. This information should have a cost which is close to that expected by the organization, and meet the company’s management and operation requirements.
Independent flow: as the internal and external data processing flow occurs, so does the independent flow of information systems, integrated with existing subsystems and therefore acting faster and at a lower cost.
Control: while not mandatory, information systems may contain internal control tools, the purpose of which is to ensure that the information generated is reliable, and to protect the controlled data.
Guidelines: these serve to guarantee that the company’s objectives will be achieved in an objective, efficient and direct manner.
What leads companies to invest in information systems?
As companies learn to adapt to increasingly high standards, exploring the fundamentals of information systems has become an important differential capable of enhancing competitiveness.
This is because the computerization of systems drastically reduces the occurrence of failures, and allows them to be identified and corrected more quickly. Furthermore, it centralizes the management of a company’s processes, allowing the results achieved to be analyzed individually or in an integrated manner.
Furthermore, given the high volume of information produced by a company, it is worth remembering that checking by human beings wastes a lot of time. Automation lets employees focus their efforts on activities where their intervention is genuinely needed.
What are the different types of information systems?
Information systems can be divided into four types, each of which has specificities and particularities aimed at providing a certain type of information. These different types of systems work in an integrated manner, serving a multitude of business interests, and operate on a strategic, operational, knowledge and tactical levels.
1 – Enterprise Resource Planning (ERP): these systems are comprised of software that integrates different processes and data of the company in question, bringing them together in one place so that data from all departments is integrated and stored.
The data provided by ERP software helps to bring more agility to processes and allows businesses to fulfill production on demand, a.k.a. “just in time”. The objective is to reduce stocks and even eliminate them, thus avoiding storage costs.
2 – Customer Relationship Management (CRM): this software automates all functions related to contacting customers, allowing organizations to collect and store contact data, customer preferences, purchase history and more.
In this way, the company can contact customers for specific strategies, with the main objective of meeting consumer needs in advance.
3 – Supply Chain Management (SCM): this software integrates processes related to service, product and information providers, to create value for the consumer when they purchase a product or service.
This type of software integrates data relating to manufacturers, suppliers and points of sale, ensuring that products are delivered in the required quantities and on time, thus avoiding shortages and excess stock while ensuring a good level of service and reducing costs.
This software is composed of supply and component management systems, supply chain, product structure, origin and use tracking and supply chain control.
4 – Management Information Systems (MIS): these are very focused on supporting decision-making and operate at the strategic, operational and tactical levels. Information can be provided through graphs, spreadsheets or – more commonly – reports.
Reports can be categorized into 4 types:
- Exception reports: generated in exceptional situations in order to obtain specific information;
- Scheduled reports: one of the most traditional ways of providing information, generated according to a schedule;
- Reports and responses by request: present information according to the request of the entrepreneur. They do not provide specific data, but rather an overview so that the manager can quickly analyze the data and identify immediate solutions;
- Stack reports: the information is stacked on the manager or entrepreneur’s network desktop, so they can access the report whenever they need it.
Benefits of information systems
An efficient information system can have a great impact on corporate strategy and company success, benefiting the company and its users.
The success of an information system should not be measured only by its efficiency in terms of minimizing costs, time and use of information resources. Success should also be measured by how effective an organization is in supporting business strategies, training your business processes, the reinforcement of its organizational structures and culture and increased enterprise value in a dynamic business environment.
Some of the benefits of information systems include:
- Increased security;
- Competitive advantages;
- Reduced mistakes;
- Greater accuracy and efficiency;
- Improvement of communications;
- Increased productivity;
- Improved decision making;
- Greater control over operations.
Clearly, these systems can help companies to function more efficiently. By adopting these systems, managers are able to gather a series of important information, impacting both internal processes and external customer service.
In addition, obtaining this data allows managers to analyze and interpret it, for use in strategic decision-making, controlling information and data, and ensuring that the business is running at peak efficiency.
The end result is an increase in competitiveness, as managers are able to identify failures and opportunities, meet unresolved demands and specific market niches, and make their business stand out from the competition. Hence the importance of understanding what an information system is, and what its characteristics are.
