Introduction
Nowadays, it is hard to imagine the world of business without a properly developed information system. People find it helpful to develop such systems for several different purposes regarding the needs and objectives of the business. The types of information systems vary management information systems (also known as MIS), decision support systems (known as DSS), expert systems, transaction processing systems, and knowledge management systems (Al-Mamary, Shamsuddin & Aziati 2014). Each system is used at a certain level of an organisation and performs the functions that make the whole system work.
There is no need to compare the worth of each information system. It is enough to comprehend that any organisation wants to achieve its competitive advantage and become a market leader in a certain industry, and the adoption of successful information systems is the key to success. The goals of information systems include the reduction of workload, gathering, storage, and analysis of data, the introduction of regulations, support and improvement of decision-making processes, and management of the work of each department accurately and easily.
In the world today, the role of information cannot be neglected because people feel lost and challenged as soon as they are deprived of the required portion of information. Any information system is a combination of information technologies and human activities. Being so confident in their independence and abilities, people cannot understand one truth that they have already made themselves vulnerable to an increased dependence on information and the existing communications technologies (Chaffey & White 2010). The information has to be properly introduced in all spheres of human life including education, travelling, communication, politics, industry, and business. Information systems in business play a crucial role in business because they help to develop operations, interact with customers, competitors, and other stakeholders, share and store information, and improve the current conditions to stay competitive in future.
Aims and Objectives
This paper aims at investigating information systems in the world of today’s business. Besides, it is necessary to clarify the roles of these systems in regards to their types and categories. The integration of information systems in business cannot be underestimated because they help to gather and store information about customers, suppliers, competitors, and other stakeholders, improve decision-making processes, and develop operations that make companies competitive. The objective of this paper is to combine the theoretical data with real-life examples that show how information systems may influence the work of companies and the roles of each manager or other workers in the system. There is a close relationship between data, knowledge, and people that promote the development of new relations. Information systems consist of several resources, and the task is to clarify the importance of each element in the system and help people achieve good results and business success.
Relationship between Data and Knowledge in Modern Business
Any business organisation has to define the quality of the relationship that could exist between data and knowledge to create and promote information systems. Information and technology remain to be two increasingly important resources for organisations that seek to change and improve their performances. Current investigations show that certain industries have already achieved changed and moved from an ordinary production of goods and products to the creation and distribution of knowledge and information (Chaffey & White 2010). The best examples of such changes may be observed in the work of such organisations Financial Times where the exchange of business news and market data occurs at the global level, Questia where users could use sources without buying a certain item but paying for certain services, and Experian, an information service group that offers credit ratings and profiles of customers in approximately 40 countries.
Chaffey and White (2010) offer the term “the information age” to underline the peculiarities of the modern period and the necessity to choose the priorities and resources in regards to the population needs. Organisations stop focusing on the goods and things they could use. They aim at getting as much information as possible to clarify the needs of people and support the development of services. For example, BBC News is a famous operational business division that is used by millions of people. People could buy no services offered by the BBC. Still, they cannot stop reading and using the information introduced by the BBC just to stay informed.
At the same time, it is necessary to understand that information system introduce the combinations of codes and data that could be broken or changed. Therefore, the more people know, the more chances they get to be under threat of being attacked and destroyed. For example, recently, two of Nissan’s main websites have been attacked as a revenge move (Anonymous drives Nissan offline 2016). The company was not afraid of the financial outcomes of the threat. It was important to make sure that information systems continued working and saving information about customers and the services offered. In other words, the relationship between data and information is tight indeed, and IT specialists or other stakeholders have to be careful when they decide to create a new system and make it available online.
Types of Information Systems
There are three main roles in information systems. First, any system participates in any kind of work with information. It is necessary to gather, store, analyse, and use data. The creation of databases is the step that should be taken by all modern organisations. Another purpose is assistance in decision-making processes. The evaluation of the data from different sources makes a decision thoughtful and clear. Finally, a business process could be considerably improved with the help of information systems. Employees and leaders should know what system should be used and when. Activity systems infrastructures may be different based on the procedures chosen by organisations (Beynon-Davies 2013). Therefore, there are several types of information systems that have to be taken into consideration in terms of control processes that could be spread in organisations.
Management Information Systems
Different theorists and researchers offer their types of information systems (Al-Mamary, Shamsuddin & Aziati 2014). Still, management information systems (MIS) remain to be a common type that helps to collect and process information taken from different sources. Specialised research organisations aim at developing databases that contain population data, economic and financial forecasts, the results of organisational performance, and the description of the business environment. The best-known databases are ProQuest or Lexis-Nexis. Such management information systems introduce banks of information that could be used to promote the benefits of one group of people and underline the weaknesses of other groups, increase sales, and avoid risks. For example, Marks & Spencer Company uses MIS to generate information about its customers and offer the services in regards to their needs and possibilities. Middle managers use such systems in their work.
Transaction Processing Systems
Transaction processing systems (TPS) introduce another type of operational information systems that could be used by organisations in business to make the process of placing orders and paying for services possible (Beynon-Davies 2013). These are basic systems that record all daily transaction and promote the development and growth of business possible. Day-to-day operations include customer and purchase orders and transactions people regularly do (Al-Mamary, Shamsuddin & Aziati 2014).
Decision Support Systems
Decision support systems (DSS) help to support all types of decisions made by managers in their work. DSS are computerised systems that facilitate such processes as modelling situations, formulation of the rules and standards, calculating, comparing and contrasting, and selecting the best ideas in regards to the given conditions (Al-Mamary, Shamsuddin & Aziati 2014). Chats and video-conferences are the best examples of communication-based DSS. There are also many document-driven and knowledge-driven DSSs that support the needs of people and organisations and elaborate on the results to introduce the more appropriate solution.
Expert systems
Numerous commercial applications are based on the experts’ systems that aim at providing people with appropriate solutions and the possibilities to change their activities. The peculiar feature of these systems is the necessity to make the decisions at the human expert level. It is not enough to have a solution. It is more important to have a solution that is based on the opinions of the specialists (Al-Mamary, Shamsuddin & Aziati 2014).
Knowledge Management Systems
Finally, there are knowledge-based information systems with the help of which the creation and organisation of business knowledge could be offered. Employees and managers have to know how to use different tools and methods to promote successful management and growth. KMS cannot be neglected because they not only promote the decisions but enhance the level of knowledge that is critical for many organisations and their abilities to compete.
Integration of Information Systems in Business
Information systems are based on a successful combination of hardware, software, networks, data, and people who can elaborate on all those pieces of information with the help of the tools available. Due to the globalisation process, the world continues moving from isolated markets and scales to open markets and unlimited trade barriers (Worthington & Britton 2015). Many people consider information systems and technology as a serious evil to humanity because it diminishes human abilities and the importance to participate in serious events. Information technology and information systems promote revolutions in the business world because they change the economies, expand trades, and introduce a new idea of hyper globalisation that touches upon different aspects of human life (Worthington & Britton 2015). At the same time, the effects of information systems remain to be crucial for business because they deal with data, knowledge, and people.
Effects on Gathering Information
Information systems have considerable effects on gathering information. At the end of the 1980s, organisations concluded that it was possible to unite their systems and share the resources. Such a union could promote the fast exchange of information, the possibility to find customers, and the necessity to add and store the facts. Software applications for communication were developed, and people were eager to create their systems to facilitate their working processes.
Effects on Decision-Making Capabilities
Many organisations need tactical decisions that could be made fast. It is hard to find out the experts that may promote a correct solution to the problem. The current environmental changes and uncertainties make decision-making processes more difficult (Worthington & Britton 2015). Therefore, the effects of information systems remain to be crucial because they help organisations to make business decisions in a short period relying on the information taken from different sources.
Information Systems and Competitive Advantage
Many UK organisations, as well as the companies from other different countries, want to know if information systems could bring competitive advantage. Though there is an assumption that information systems have to be implemented to bring that type of advantage, people cannot neglect the possibility of shortages and weaknesses developed as soon as certain computer programs and applications are installed. However, it is impossible to neglect the example of Wal-Mart and its achievements as a global retailer. The implementation of Retail Link was the key point of the company’s existence. This supply-chain management system helped suppliers have direct access to all inventory levels and sales information. The company achieved competitive advantage by the successful development of applications ahead of the packaged vendors (Chaffey & White 2010). Therefore, the idea that information systems influence competitive advantage is proved and has to be developed in companies throughout the whole world.
Conclusion and Recommendations
In general, the evaluation of the concept of information systems proves that people have already entered the information age successfully. There are several important components of the system that have to be constantly developed: people, technology, hardware, software, and process. Communication is another factor that promotes the development and exchange of information. Any information system helps to gather, analyse, and store data that could be used in services and cooperation between different people. There are many goals set by the users and developers of information systems because each time a new achievement and need has to be taken into consideration. Therefore, many types of information systems are used in business.
It is recommended for business organisations not to neglect the fact that each information system is a helpful tool for its people. However, it is wrong to implement as many systems as possible at the same time just to gain a competitive advantage. It is necessary to investigate the situation, clarify the needs and opportunities of an organisation, rely on several sources, and make the most effective decision. This is the process of how an information system works, and this is how people should choose an information system.
Some companies continue asking questions if it is effective to develop information systems. Still, these systems help to transform various ideas from different sources to business and visible achievements that stabilise the economy, support globalisation, and assist people in understanding all new trends. Many day-to-day business activities help to achieve strategic business objectives. It is not enough to use the Internet. It is more important to learn how to develop a system in terms of which the decisions could be made, and the best solutions could be found.
Nowadays, companies could have access to several ideas that could increase the effectiveness of different information systems. Some of them touch upon possible human resource improvements, and some of them include technological changes.
- People have to continue improving their understanding of information systems and the opportunities they get as soon as they decide to use them. The examples of different companies, theoretical material, and personal reflections should help to comprehend what hardware and software may be used to facilitate a working process and make a correct decision.
- Management improvements are also required. Information systems help to find and organise information for working processes. However, people have to be ready to establish the categories and set the requirements that create the basis for information systems. Therefore, information systems may assist people in making decisions. However, people should not forget about their abilities to influence the directions of how these systems work.
- It is necessary to never stop monitoring information systems due to the possibility to omit significant information. Tough systems work independently, people have to compare the results offered and clarify if the required portion of success has been achieved.
- Additional training and education is the main recommendation that could be offered to all business organisations. Many people understand that MIS or DSS is crucial for their work. Still, they cannot realise what they can do to develop such systems. Therefore, the combination of practice and learning is obligatory. Development through action learning is the solution that may be used by different organisations.
Taking into consideration the evaluations and recommendations, several conclusions could be made. First, it is wrong to neglect the fact that information, technology, and people are in close relations that cannot be broken or changed without leaving certain outcomes. Second, many people are afraid of the outcomes information technologies and systems could have on their work. However, though information systems influence human decisions, people are those who can control and improve those systems. Finally, some opportunities could be used to understand and use information systems.
The examples of Wal-Mart and ProQuest prove that the implementation of information systems could be beneficial and helpful. On the one hand, they help to have enough information about customers, suppliers, and other stakeholders who can promote the development of business. On the other hand, the same systems may improve communication. Besides, people could share their opinions and integrate the services that are crucial for them. MIS, DSS, expert and knowledge-based systems are unique products that provide people with numerous approaches to manage information and the work of employees.
Still, regardless numerous possibilities and improvements offered by the developers of information systems, constant observations and modifications have to be organised to meet the needs of companies that choose those systems and the expectations of people, who believe that they can benefit with information systems chosen for the business. MISs help to manage people’s activities and the information gathered from different sources. DSS helps to focus on the details. Expert systems introduce services that improve ordinary decisions up to the professional level. It is not difficult to create an information system regarding current technological and human resource opportunities. Still, it seems to be complicated to prove the worth of such systems to ordinary users and developers.
Reference List
‘Anonymous drives Nissan offline in dolphin hunting protest’, BBC News, Web.
Al-Mamary, YH, Shamsuddin, A & Aziati, N 2014, ‘The role of different types of information systems in business organizations: a review’, International Journal of Research, vol. 1, no. 7, 1279-1286.
Beynon-Davies, P 2013, Business information systems, Palgrave Macmillan, Basingstoke.
Chaffey, D & White, G 2010, Business information management: improving performance using information system, Pearson Education, Essex.
Worthington, I & Britton, C 2015, The business environment, Pearson Education, Essex.