WESLEYAN UNIVERSITY-PHILIPPINES Mabini Extension, Cabanatuan City, Nueva Ecija THE VITAL ROLE OF INFORMATION SYSTEMS IN BUSINESS TODAY Kaila Beatrice R. Magtalas Masters in Business Administration Summer 2020-2021 Employing information systems in big companies are necessary nowadays. Information system is designed to help organizations to collect process, store, and distribute their needed information across different departments who needed it (Techopedia, 2020). Unlike before, when computer is still not invented or widely used, people rely on paper, they document everything on paper, personally deliver important documents, every transaction is on paper. Now, everything or most things are being digitally managed. In order to go with the current flow and not to be left behind, organizations have to adapt to these changes. Although employing information systems is expensive and a huge adjustment will be needed, but in the long run, there are more benefits gained from it. Organizations have different kinds of information employed within their organizations depending on what functionality is needed. As enumerated by Nordmeyer (2019), there are different types of information systems in a business organization and one of those is the Transaction Processing System. In this type of system is used for transactions that happen in the day-to-day business such as making paychecks, or purchasing orders. Organizations can use this to automatically send their employees their paycheck direct to their ATM without the owner directly going to the bank and depositing the amount one by one. Management information system is another type of system used by organizations. Organizations use this system to record and access historical operational data like sales for the past years or inventories. By using this system, they are able to easily identify which item is selling fast at what location for example. The system provides them information vital for decision making. 1 The system used by organization to support their operations planning and problem-solving decisions is called the decision support system. The users of this system are able to acquire answers to their question and means to evaluate what the possible impact of one decision may have before it is enacted. The information may be in the form of a data summary report or usual sales report. The last system defined by Nordmeyer (2019) is the executive support system. This system contains predefined report which aid them in identifying the long-term trends in support of their strategic planning. This system also enables the owner or user to be briefed on the issues such as market trends and buyer preferences and other issues faced by the organization. Davoren (2019) added customer relationship management system, business intelligence systems, and knowledge management systems. In the customer relationship management systems synchronize the sales and marketing efforts of the organization. They use this system to accumulate and track customer activities which includes the items they purchase or their complaints or questions and the product defects. Business intelligence systems on the other hand provides predictions on future sales patterns, forecast of sales revenues and others. They collect the data from various data warehouse and they provide the management with analyses that the organization need. The last information systems that were discussed was the knowledge management system which helps the organization to organize data, separate the needed knowledge and distribute the information across the organization depending on who and what department needs it. As stated by Davoren (2019) “KMS information systems serve as a central 2 repository and retain information in a standard format. These systems can help business owners maintain consistency and enable speedy responses to customer and partner inquiries.” There are a lot of different information systems available depending on the needs of the organization. The discussed types are only some of the information systems widely used by different organization. Some of them use just one, but most of them use multiple. Some organization create their own information systems to best fit their organization. They combine different types which makes the distribution of information more efficient. These information systems make it easier for companies to receive and distribute information taking note of the fact that there is a significant amount of lag that was eliminated because of these systems. Without these systems, organization would still rely on paper to distribute their information and analyzing thousands of data will take a longer time to finish. With the help of information systems and modern technology, they were able to make the processes easier and more efficient making it easier for organizations to understand their customers which translate for better profits for them. 3 References Billie Nordmeyer MBA, M. A. (2019, March 5). Types of information systems in a business organization. Small Business - Chron.com. https://smallbusiness.chron.com/typesinformation-systems-business-organization-66974.html. Davoren, J. (2019, March 6). Small Business - Chron.com. https://smallbusiness.chron.com/types-information-systems-business-organization66974.html. Techopedia. (2020, August 7). What is an Information system? - definition from Techopedia. Techopedia.com. https://www.techopedia.com/definition/24142/information-system-is. 4
