In the contemporary world, information technologies are becoming increasingly important in all spheres of human life. One of the main aspects in which they prove immensely useful is the creation of information systems – organizational structures designed to store and use information effectively for a given purpose. Information systems may be of use in many fields of human activity, including facilitating business decisions. They consist of four major components – namely, hardware, software, database, and network – and are particularly useful for accounting or analyzing the market.
Before discussing the importance of information systems for business decisions, it is necessary to briefly cover what they are and what they consist of. The first component of an information system is hardware – the broad range of physical devices that provide the technical possibility for storing and using the information in the first place (AlSamawi, 2016). The second component is software, including an operating system that manages hardware and all other programs and applications (AlSamawi, 2016). The third essential component is the database, which may refer to either traditional relational databases based on interrelated tables and Big Data, which is used for large amounts of unstructured information (AlSamawi, 2016). Finally, the fourth component is a network that interconnects a number of devices (AlSamawi, 2016). Even from this description, it is already evident that each and every component of the four deserves due consideration. Without hardware and software, the system would not be able to function at all, without databases, it would have nothing to work with, and without networking, there would be no effective access to the information.
Information systems are fairly useful in making decisions in many aspects of doing business. One obvious use for the information systems is accounting for the firm’s assets and liabilities. Traditional relational databases are particularly useful in this respect and are generally good instruments for managing a given firm’s cash flow (Aryawibawa & Syaroni, 2020). Since precise information about the company’s finances and other resources is necessary for making the right decisions, it is a clear example of how information systems are useful in this respect. Another crucial way in which information systems can facilitate decision-making is market analysis. In this age, people’s digital footprints contain a wealth of information regarding their needs and preferences. Analyzing this information with the help of Big Data may provide firms with a better understanding of the current market and a resulting competitive advantage (AlSamawi, 2016). It is yet another example of how information systems are definitely useful in making business decisions nowadays.
As one can see, information systems are quite important in facilitating effective and swift decision-making in business. When hardware, software, database, and network are all effectively combined, it creates an information system that creates information management capabilities. These capabilities may be used to facilitate correct decisions based on accounting for the firm’s assets and liabilities with the help of relational databases or to analyze the market by using Big Data technologies.
References
AlSamawi, Y. (2016). Choosing components of information technology infrastructure for business information systems. International Journal of Computer and Information Technology, 5(6), 548-555.
Aryawibawa, D. R., & Syaroni, D. A. W. (2020). Information system components for designing financial applications in small and medium enterprises. International Journal of Education, Information Technology, and Others, 3(2), 286-291.