Today, we live in a world where information is promptly presented to us effectively and efficiently through the use of systems, and this agile communication process is possible thanks to Information Technologies (IT), which is at the centre of the information revolution. Systems are sets of connected parts that work together to achieve an organization’s purpose, which in most cases involves the gathering of inputs, processing and manipulating the material to produce the desire output. This output is then transferred or delivered to a destination or to another system and so on (Beekman, G. & Beekman, B., 2012). A business organization is a system within an environment and this system is designed for the purpose of creating products and services for customers. The figure bellow illustrates the relationship between the organization and its environment and the resources used to produce goods and services for customers (Beekman, G. & Beekman, B., 2012). Information Systems being in the centre of a larger system, it “plays a key role in the feedback and control functions, collecting data from each of the primary activities and processing that data into information needed by managers to make decisions” (Beekman, G. & Beekman, B., 2012), diving into Management Information Systems (MIS), which is being discussed in a dedicated article. Click here to read. The Value Chain Model Proposed by Harvard Business School professor Michael Porter, the value chain model is a series of activities that a firm performs to add value to a product or service. The idea is that when the value added by an activity exceeds the cost of that activity, the business then makes a profit. From inbound logistics to customer service (Primary activities) and from Management and administrative services to Procurement of supplies and raw materials (Support activities), “an organization’s efficiency increases when its primary and support activities produce the desired output with lower costs and effectiveness is how customers rate the output of the organization’s value chain” (Beekman, G. & Beekman, B., 2012). According to Beekman’s textbook, there are many ways a company can improve their efficiency and effectiveness by using information technology. Be it in providing employees with training to work quickly and avoid mistakes, as well as improving communication between customers and the business. A company should make their product or service available and attractive to the customer’s eyes, make it easier for them to choose the product or service that meet their needs, and providing flexible and reliable payment options. All of these goals can be attained by using information technology systems (Beekman, G. & Beekman, B., 2012). Information Systems Information System is a subsystem containing all the information needed in an organization. It generally helps people in the organization to gather and use data to communicate with their customers, intermediaries, suppliers, and other people inside the organization, helping them make effective decisions. Like we have mentioned earlier, an information system performs input, processing, and output function and contains feedback and control functions. Information systems have been of vital importance to organizations, and they could not operate without the support of information systems. For example, when you visit a travel agency to book a flight or a holiday pack, a collection of interconnected information systems is used to check availability of the flight or the hotel that you have chosen (Aalst, W. & Stahl, C., 2011). Aalst and Stahl (2011) define information system as “a software system to capture, transmit, store, retrieve, manipulate, or display information, thereby supporting people, organizations or other software systems” (Aalst, W. & Stahl, C., 2011). A discussing on the importance and benefits of Information Systems to an organization are on the next article. Click here to read. REFERENCES
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