Use of information systems in the business world
Many who come across the term information system for the first time think of it as some software based on information storage or something like that. Well, the name does sound that way. However, an information system is way bigger than that. So, what is an information system?
An information system is a combination of software, hardware, and telecommunication networks to collect useful data, especially in an organisation. Many businesses use information technology to complete and manage their operations, interact with their consumers, and stay ahead of their competition. Some companies today are completely built on information technology, like eBay, Amazon, Alibaba, and Google.
Typical components of information systems
Now that you know what an information system is, let’s look at its components. It has five components – hardware, software, data, and telecommunications.
1. Hardware – This is the physical component of the technology. It includes computers, hard disks, keyboards, iPads, etc. The hardware cost has decreased rapidly while its speed and storage capacity has increased significantly. However, the impact of the use of hardware on the environment is a huge concern today. Nowadays, storage services are offered from the cloud, which can be accessed from telecommunications networks.
2. Software – Software can be of two types, system software and application software. The system software is an operating system that manages the hardware, program files, and other resources while offering the user to control the PC using GUI. Application software is designed to manage particular tasks by the users. In short, system software makes the hardware usable while application software handles specific tasks.
An example of system software is Microsoft windows, and an example of application software is Microsoft Excel.
Large companies may use licensed applications which are developed and managed by software development companies to handle their specific needs. The software can be proprietary and open source, available on the web for free use.
3. Data – Data is a collection of facts and is useless by themselves, but when collected and organised together, it can be very powerful for business operations. Businesses collect all the data and use it to make decisions that can be analysed for the effectiveness of the business operations.
4. Telecommunications – Telecommunication is used to connect with the computer system or other devices to disseminate information. The network can be established using wired or wireless modes. Wired technologies include fiber optics and coaxial cable, while wireless technologies include radio waves and microwaves.
Examples of information systems
Information systems have gained immense popularity in business operations over the years. The future of information systems and their importance depends on automation and the implementation of AI technology.
Information technology can be used for specialised and generalised purposes. A generalised information system provides a general service like a database management system where software helps organise the general form of data. For example, various data sets are obtained using a formula, providing insights into the buying trends in a certain time frame.
On the contrary, a specialised information system is built to perform a specific function for a business. For example, an expert system that solves complex problems. These problems are focused on a specific area of study like the medical system. The main aim is to offer faster and more accurate service than an individual might be able to do on his own.
Types of information systems
There are various information systems, and the type of information system a business uses depends on its goal and objective. Here are the four main types of information systems:
- Operations support systems – The first type of information system is the operation support system. Such type of information system mainly supports a specific type of operation in a business. An example is the transaction processing system used in all banks worldwide. This type of information system enables the service provider to assess a specific process of business.
- Management information systems – This is the second category of information systems, consisting of hardware and software integration allowing the organisation to perform its core functions. They help in obtaining data from various online systems. The data thus obtained is not stored by the system; rather, it is analysed in a productive manner to help in the management of an organisation.
- Decision support systems – An organisation can make an informed decision about its operations using decision support systems. It analyses the rapidly changing information that cannot be determined in advance. It can be used in completely automated systems and human-operated systems. However, for maximum efficiency combination of human and computer-operated systems is recommended.
- Executive information systems – EIS or executive support system is the last category that serves as management support systems. They help in making senior-level decisions for an organisation.
Facts of information systems
The products of information technology are part of our daily lives. Here are some of the facts about information systems.
• Necessary for businesses to grow
Every organisation has computer-related operations that are critical to getting the job done. In a business, there may be a need for computer software, implementation of network architecture to achieve the company’s objectives or designing apps, websites, or games. So, any company that is looking to secure its future needs to integrate a well-designed information system.
• Better data storage and access
Such a system is also useful for storing operational data, documents, communication records, and histories. As manual data may cost a lot of time, information systems can be very helpful in it. Information system stores data in a sophisticated manner, making the process of finding the data much easier.
• Better decision making
Information system helps a business in its decision-making process. With an information system, delivering all the important information is easier to make better decisions. In addition, an information system allows employees to communicate effectively. As the documents are stored in folders, it is easier to share and access them with the employees.
Since you have been reading about information systems, a career in information technology (IT) could interest you. We have collated some information to give you an idea about the field of IT.
Building a career in IT
It should be no surprise that a career in IT will help one grow significantly in the coming years. It is considered one of the most highly paid industries. There’s a constant need for skilled and qualified professionals to meet the IT industry requirement, a great opportunity for ambitious and hard-working people.
But ambition and hard work alone is not enough. Having strong fundamentals, a creative mindset, and the ability to communicate effectively is highly important to become successful in such a technical field.
Attaining certifications is another way to get a competitive advantage in this field. Employers are always looking for people who never stop learning, so having a few certifications shows that you are always up for new learning. Getting a certification from a reputed institute offers a better understanding of the field, and a chance to interact with industry experts and is considered more valuable during growth assessment.
Emeritus is a leading educational platform that offers various IT certificate courses in collaboration with premium institutions like ISB and IIT. The courses offered by Emeritus allow you to transform and accelerate your career.