Why Are Information Systems So Essential For Running And Managing A Business Today?

1458 WordsFeb 27, 20176 Pages
Assignment One 1. Why are information systems so essential for running and managing a business today? An organization’s information system is capable of very important tasks and it is important for any business to exploit its capabilities. Information systems are important to businesses because they process data from the businesses’ input to generate information that is crucial for managing operations. The following points will explain why information systems are important to businesses: • Operational Excellence: Higher profitability can be achieved through improving efficiency of operations. Businesses can achieve this by constantly having the correct amount of stock in stores to make sure customers can always get want they want. •…show more content…
This creates a good relationship between the supplier and the customer leading to a strong goodwill for the supplier. • Decisions: A company’s information system can help make better decisions by delivering all the information and by modeling the results of decisions. A decision involves choosing a course of action from several alternatives and carrying out the corresponding tasks. Information systems deliver up-to-date and accurate information, giving the ability to make choices with confidence. If there are many choices, information systems can be used to drive different scenarios. Information systems have the ability to calculate key indicators such as sales, costs and profits to help determine which alternative gives the most beneficial result. • Survival: Businesses invest in information systems to make jobs easy. A great example is Citibank. It introduced the first ATM machine to make it easier for customers to access their money and cut down queues in their banks. • Records: Every organization needs records of its activities for financial and regulatory purposes and for finding the causes of problems in order to take corrective actions. Information systems store documents and revision histories, communication records and operational data. These systems can exploit this recording capability and organize the data and present it as useful historical information. Organizations further can use such

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