DEFINITION:

Henry Lucas defined information system as “a set of organization producers that where the executed provides information to support decision making and control in the organization”.
The goal of any part of information system is thus to help managers to make accurate quick and timely decision. Modern information system consist of computer hardware, software, and information networks, data resources and human resources to store, retrieve transform and disseminate information in an organization.

IMPORTANCE OF INFORMATION SYSTEM:

To gain the maximum benefits from your company’s information system, you have to exploit all its capacities, information system 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. From the following points the importance the information system can be judge.

1.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 document in folders that they share with the employees who need the information. This type of communication lets employees collaborate in a systematic way. Each employees can communicate additional information and sends the newly revised document to his target audience.

2.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 customers 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.

3.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.

4.RECORDS:

Your company needs records of its activities for financial and regulatory purpose as well as for finding the causes of problems and taking corrective action. The information system stores the documents and revision histories, communication record 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. 

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