In an organization, an information system consists of data,hardware,software,people and procedure. All with the strengths and weaknesses.
Information System does not have to include electronic equipment. However, information system has become synonymous with computer-based information system. A system with a computer at its center to which peripheral equipment is connected. Without exception,every business function in every business sector uses information system from government agencies to manufacturing from accounting to marketing. Information system are key tools in transaction processing, decision making, problem solving and operation of all organization.
Information system in functional Business Areas
Different types of ISs serve different purposes throughout an organization in what are known as functional business area in house services, that support an organization.
Accounting. In accounting, information system help record business transaction, produce periodic financial statements, and create reports required by law, such as balance sheets and profits-and-loss statements. They also help create reports that may not be legally required but help managers understand changes in an organization's finances. Accounting ISs contain control to ascertain adherence to standards, such as double entry.
Finance While accounting systems focus on recording and reporting financial changes and states, the purpose of financial systems is to facilitate financial planning and business transactions.In finance, information system help organize budgets, manage cash flow,analyze investments and make decision that could reduce interest payments and increase revenues from financial transactions.
Marketing Marketing's purpose is to pinpoint the people most likely to purchase what the organization sells and to promote the appropriate products and services to those people. Foe instance, marketing information system help analyze demand for various products in different regions and population groups, to more accurate market the right product to target consumers. It provide information that help management decide how many sales representatives to assign to specific products in geographical areas.
Human resources Human resource management system help mainly in record keeping and employee evaluation. Every organization must maintain accurate employee records. Human resource management system maintain such record including employee's picture and other data that other system maintain such as payroll may use. Evaluation system provide essential checklists that managers can use to assess their subordinates. These systems also offer a scoring utility to quantify worker's strength and weaknesses.
Manufacturing Information system are used throughout a manufacturing operation, from inventory control to paying suppliers. ISs help allocate resources such as personnel, raw material, and time, to optimize productivity. Inventory control system help plan optimal reorder quantities of raw materials, so that the company does not pay much for materials that it will not use for a long time, while ensuring that materials are available when required.Manufacturing operations use information system to process orders, prepare production schedules, perform quality assurance, and prepare shipping documents.
Service Information system play such a central role in the service sector that they are often the backbone of service organizations. Imagine an airline without ab information system--it would be unable to reserve seats for passengers and schedule flights.
New Business Information system impact on business goes beyond mere automation. Many firms implemented ISs to provide new products and services that become economical only with the development of information technology.Credit history firms, such as Experian, Equifax and TransUnion, use information system to record important credit information on millions of credit-card holders and borrowers.
Government Over the past four decades governmental and commercial organizations have installed computer-based information system to automate processes and replace human labor.The business of government depends heavily on information system foe collecting taxes, paying social security, and purchasing goods and services for various department.Defense departments also depend on information system to plan equipment procurement and training activities.