Information System Capabilities and Firm Performance

The world’s dependence on technologies influences the growth of information systems. Notably, the combination of hardware, software, and telecommunications networks that people develop and use to gather, analyze, produce, and disseminate relevant information is defined as an information system. Companies and organizations utilize information systems to monitor resources and enhance performance. An organization’s collective information system includes four fundamental components. According to Mayer et al. (2019), the architecture of systems consists of hardware, software, data, and people. Aydiner et al. (2019) suggest that in today’s corporate climate, the innovative use of information systems is critical for success and survival. Consequently, a company’s information system’s resources refer to hardware and software, infrastructure, human assets, skills, devotion to their employment, and intangible assets like corporate culture, skills, and experiences.

The first crucial component of an information system is hardware. The physical pieces of an information system compose the hardware component of the system. Essentially, hardware is tangible; people can touch and sense the technology. These processes, equipment, and wiring enable the functioning of computers, cellphones, and tablets. Hardware such as microprocessors, disk drives, power supply units, and portable storage allows computers data storing and processing. The second component is software, built directly on an information system’s hardware. Intangible programs that control information system operations such as input, output, processing, and storage are referred to as software (Master’s in Data Science, 2020). Consequently, system software, such as the macOS or Microsoft Windows operating systems, serves as a foundation for software applications.

Moreover, data is a vital component of any organization’s information system. Data are intangible, raw facts that are saved, transported, evaluated, and processed by other information system components (Master’s in Data Science, 2020). Hence, data is frequently kept as numerical facts that indicate qualitative or quantitative information. A corporation with timely and reliable data improves its ability to assess and evaluate business prospects and make strategic decisions based on facts rather than intuition (Aydiner et al., 2019). A flexible IT architecture also positively promotes information system’s capabilities by building a network system to interface with other systems and offering a platform ready to obtain the required data.

The qualified individuals who impact and modify the data, software, and hardware in information systems are referred to as the fourth component. Aydiner et al. (2019) state that an information system is not concerned with IT only but also includes people to manage the technologies, procedures, and information effectively. Hence, people access incredibly powerful technology, such as highly professional corporate programs to improve strategies and decision-making.

To conclude, information systems enable organizations to access information that is readily available, quick, accurate, and complete in order to identify problems and capitalize on market possibilities. Important to note that some businesses create a competitive advantage and compete in global markets by relying on information systems. Information systems are crucial to obtain information and knowledge and make proper choices for business to succeed.

References

Aydiner, A. S., Tatoglu, E., Bayraktar, E., & Zaim, S. (2019). Information system capabilities and firm performance: Opening the black box through decision-making performance and business-process performance. International Journal of Information Management, 47, 168–182. Web.

Master’s in Data Science. (2020). What is an information system? Web.

Mayer, N., Aubert, J., Grandry, E., Feltus, C., Goettelmann, E., & Wieringa, R. (2019). An integrated conceptual model for information system security risk management supported by enterprise architecture management. Software & Systems Modeling. 18, 2285–2312. Web.

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