What is an information system and what are its characteristics – WAU
Understand what an information system is and see how to use it to be more efficient and effective in managing your company.
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Every person who wishes to undertake has difficulty managing the business.
Even having knowledge in the area of administration and financial management, it is difficult to apply the theory in practice and the day-to-day situations go beyond the knowledge we have.
So, what to do to be more efficient and effective in managing your company? The tip is to understand what information system is.
This system has information as a fundamental element and, therefore, its purpose is to treat, store and supply data and information that can support the processes and functions carried out in the company, in addition to supporting decision-making.
To understand more, follow the reading with us!
What is information system?
The first issue to think about in this regard is that the information system is not restricted to hardware or software.
This is a very common concept that scares some people, but it needs to be deconstructed, since these systems are much more comprehensive.
In fact, the objective of information systems is to understand and analyze how the impact of the adoption of information technologies occurs in the management and administrative decision processes of companies.
For this reason, as already stated, its main element is information, since this is what will support decision making. But where does this information come from?
Basically, the interaction that occurs between procedures, people and technologies, which work together with information systems to achieve the goals defined by the company.
In this sense, it is worth noting that the system is divided into subsystems.
One is social (including people, information, processes and documents) and the other is automated (composed of machines, communication networks and computers).
This demonstrates that people are really fundamental to this tool.
What are the characteristics of this system?
The information system can work with several elements. Among them are software, hardware, database, expert systems, management support systems, etc.
That is, all computerized processes are included, which can provide the correct information and make the company work properly.
However, there are some characteristics inherent to this system that must be taken into account. See what they are.
The system should generate relevant and necessary information for the company, which must be generated in a timely manner and be reliable.
Thus, this information has a cost close to that expected by the organization and meets the company’s management and operation requirements.
There must be an integration between the information system and the company structure.
This makes it easier to coordinate departments, sectors, divisions and other types of organizational units.
In addition, this integration process facilitates and streamlines decision-making.
This characteristic is quite different, because, at the same time that there is a flow of data processing, which occurs internally and externally, there is also a flow independent of information systems.
It is integrated with existing subsystems and therefore acts faster and at less cost.
It is not mandatory, but the information systems may contain internal control tools, whose purpose is to ensure that the information generated is reliable and to act in a way to protect the controlled data.
They serve to ensure that the company’s objectives will be achieved in an objective, efficient and direct manner.
What are the types of information systems?
As there are different types of information and they are categorized at level, there are also different types of systems.
Each of them has specificities and particularities, being aimed at providing a certain type of information.
These different types of systems work in an integrated manner, serving diversified business interests. They operate at the strategic, operational, knowledge and tactical levels.
To simplify, there are 4 main information systems. They are well known and used in organizations around the world. See what they are.
Enterprise Resource Planning systems (or enterprise resource planning) are software that integrate different processes and company data, bringing them together in one place.
In this way, data from all departments in the organization are integrated and stored.
The data provided by the ERP software helps to bring more agility to the processes and allows to fulfill the production on demand, also called just in time.
The goal is to reduce inventories and even eliminate it, avoiding storage costs.
An example of how ERP software works is when selling merchandise.
While the sale is taking place, the production and purchasing departments are automatically alerted.
Thus, it is possible to check whether there are all products or whether it will be necessary to purchase something. In addition, it is possible to identify the need to replenish stocks.
Customer Relationship Management software (or customer relationship management) automates all functions related to contacting customers, allowing organizations to collect and store contact data, customer preferences, purchase history, etc.
Thus, the company can contact customers for specific strategies, with the main objective of meeting the needs of consumers in advance.
Supply Chain Management systems (or supply chain management) integrate the different processes related to service, product and information providers.
The purpose is to create value for the consumer, satisfying him when he purchases a product or service.
Thus, this type of software integrates data related to manufacturers, suppliers and points of sale, ensuring that products are delivered in the necessary quantities and on time, avoiding the lack of goods and excess stock.
Thus, a good level of service is achieved while spending is reduced.
It is important to note that this software consists of the supply and component management systems, the supply chain, the product structure, the source and use tracking and supply chain control.
Thus, it is possible to do everything from sales forecasting, inventory and item classification to reducing the cost of handling and creating parts.
Management Information Systems are highly focused on supporting decision making and operate at the strategic, operational and tactical levels.
Information can be provided through charts, spreadsheets or, more commonly, reports.
In the case of reports, they can be categorized into 4 types, as you will see below.
They are one of the most traditional ways of providing information. As the name says, they are programmed, that is, they are generated according to a schedule.
Some examples of scheduled reports are sales by day and week and monthly financial statements, for example.
They are generated in exceptional situations for the purpose of obtaining specific information.
For example, a report focused on the list of defaulters or one that presents customers who exceed the offered credit limit.
Reports and responses by request
They present the information according to the entrepreneur’s request.
Therefore, they do not provide specific data, but rather an overview so that the manager can analyze the data quickly and find immediate solutions.
The information is placed in a pile in the networked area of the manager or entrepreneur. Thus, he can access the report whenever he wants or needs.
How does the information system help the company’s operations?
As we have seen, information systems have different levels and functionalities. Therefore, it is evident that these software help the company to function more properly.
Through the adoption of these systems, the manager is able to gather a series of important information, which can impact both customer service and internal processes.
In addition, obtaining this data allows the manager or the entrepreneur to analyze the data and interpret it.
In this way, information can be used for strategic decision making, controlling information and data and ensuring that the company is operating at maximum efficiency.
As a result, the result is a gain in competitiveness, since the entrepreneur is able to identify failures and opportunities, meeting unsolved demands and specific market niches and differentiating himself from the competition.
Considering everything that was seen in this post, we can understand that information systems, regardless of their type or characteristics, are fundamental for any company, from the smallest to the largest corporations.
In the case of small and medium sized companies, it serves as a guide for decision making. For large companies, it helps to organize data, gather information and organize decision-making, which becomes more strategic.
Now that you know what an information system is, how about knowing a little more about the world of Financial Management? See our spreadsheet on tools for marketing, sales and management!