Information Systems

Information systems have become the backbone of most

organizations.
Banks
could
not
process
payments,
governments could not collect taxes, hospitals could not treat
patients, and supermarkets could not stock their shelves
without the support of information systems. In almost every
sectoreducation,
finance,
government,
health
care,
manufacturing, and businesses large and smallinformation
systems play a prominent role. Every day work,
communication, information gathering, and decision making
all rely on information technology (IT). When we visit a travel
agency to book a trip, a collection of interconnected
information systems is used for checking the availability of
flights and hotels and for booking them. When we make an
electronic payment, we interact with the banks information
system rather than with personnel of the bank. Modern
supermarkets use IT to track the stock based on incoming
shipments and the sales that are recorded at cash registers.
Most companies and institutions rely heavily on their
information systems. Organizations such as banks, online
travel agencies, tax authorities, and electronic bookshops can
be seen as IT companies given the central role of their
information systems.
Source:
https://mitpress.mit.edu/sites/default/files/9780262015387_sc
h_0001_0.pdf

Importance of Information Systems

Information systems gain their importance by processing the data
from company inputs to generate information that is useful for
managing your operations. To increase the information system's
effectiveness, you can either add more data to make the information
more accurate or use the information in new ways.
Communication
Part of management is gathering and distributing information, and
information systems can make this process more efficient by
allowing managers to communicate rapidly. Email is quick and
effective, but managers can use information systems even more
efficiently by storing documents in folders that they share with the
employees who need the information. This type of communication
lets employees collaborate in a systematic way. Each employee can
communicate additional information by making changes that the
system tracks. The manager collects the inputs and sends the newly
revised document to his target audience.
Operations
How you manage your company's operations depends on the
information you have. Information systems can offer more complete
and more recent information, allowing you to operate your company
more efficiently. You can use information systems to gain a cost
advantage over competitors or to differentiate yourself by offering
better customer service. Sales data give you insights about what
customers are buying and let you stock or produce items that are
selling well. With guidance from the information system, you can
streamline your operations.
Decisions
The company information system can help you make better
decisions by delivering all the information you need and by
modeling the results of your decisions. A decision involves choosing
a course of action from several alternatives and carrying out the
corresponding tasks. When you have accurate, up-to-date
information, you can make the choice with confidence. If more than
one choice looks appealing, you can use the information system to
run different scenarios. For each possibility, the system can

calculate key indicators such as sales, costs and profits to help you
determine which alternative gives the most beneficial result.
Records
Your company needs records of its activities for financial and
regulatory purposes as well as for finding the causes of problems
and taking corrective action. The information system stores
documents and revision histories, communication records and
operational data. The trick to exploiting this recording capability is
organizing the data and using the system to process and present it
as useful historical information. You can use such information to
prepare cost estimates and forecasts and to analyze how your
actions affected the key company indicators.

Source:
http://smallbusiness.chron.com/importance-information-systemsorganization-69529.html

Role in the Organization

Information systems play a vital role in an
organizations overall performance. They provide many
advantages to their users which range from simple
transaction processing at the operational level to
difficult tasks such as making important and competitive
decisions at the strategic level of the organization.
Several roles played by information systems in an
organisation can be identified but OBrien and Marakas
(2008) have identified three fundamental roles played
by information systems in businesses. These are;
Information systems support business processes and
operations. Secondly, they support decision making of
employees and managers and lastly, they support
strategies for competitive advantage. These three
fundamental roles encompass any other roles played by
information systems in an organisation.
Information systems support business processes
and operations of an organization in many ways. In a
hotel for instance, customer check - ins and check-outs
are done by computers and software which makes work
easy unlike the traditional method of using notebooks
and paper to record such information. Customers can

now even make their own bookings through the hotels

website instead of visiting the hotel in person to do so,
which may lead to pressure on front office staff. Systems
have now been developed to gather customer
information easily and quickly. Now, because of
information systems, the various departments of an
organization work
together
with ease.
The
housekeeping department of a hotel can now inform the
front office about which rooms are ready for use and
which are not, without personal interactions of staff as a
result of information systems. The running of an
organization has now become smoother with well
integrated information systems.
Information systems also help employees and
managers of a business to make well informed
decisions. This is because information systems have the
capability of analyzing data that has been collected from
both within the organization and from external sources
into useful information which can be used by employees
and managers in their decision making process.
Decision-making is an integral part of management and
occurs in every function and at all levels. Decisions are
better made when accurate information is available
which aids the decision maker in making an objective
decision (Terry Lucey 2005). Information systems types
like Management Information System (MIS), Decisions
Support Systems (DSS) and Executive Information
Systems (EIS) are specially designed to help
management of an organization in their decision making
process. These systems generate typical reports and
graphs on issues such as trend of orders, customer
analysis, product profitability, finished stock positions
and forecasts, accident and absentee reports, job
evaluation reports and many more. Managers and
employees use these reports and graphs as a basis for
their decisions. For example, decisions on which meals
that need to be added or removed from a hotel menu
may be taken by the food and beverage manager after a
typically analysis is made by the help of a Decisions
Support System.
Finally,
information
systems
also
support
strategies for competitive advantage. Competition in
todays business is keen and what will become
important is how quickly companies can convert their
reams of information they collect into knowledge so that
they can provide services and products that are ahead
of their competitors. Strategic information systems can
help provide hospitality operations with the innovative

mediums they need to provide products and services

that will give them comparative advantage over their
competitors. Nhyiem et al (2005) observes that, in the
hospitality industry, competitive advantages may result
in increased room sales ( through efficient reservation
systems and organisational websites), decreased cost of
goods ( through reduction in operating cost and less
expensive distribution channels), brand awareness
(through effective advertising campaigns targeted at the
appropriate customer and delivered through the most
appropriate cost effective medium), good customerorganisational relationship (by keeping database of
customers and their needs) and effective decisions
making that are timely.
Source:
http://www.academia.edu/4433329/Role_of_Information_Syste
m_in_an_Organization

FUNCTIONS IN THE ORGANIZATION

Input
Storage
Processing
Output Control and feedback loops
Closed and open systems
Source: http://www.slideshare.net/Bronte666/1st-knowthe-features-functions-of-information-systems