Over the last decade businesses, especially large ones have undertaken a huge a shift in where they invest their money and their resources. One of these investments is information systems. Information systems span the entire hierarchy of large businesses with each system being used by a specific level in order to complete a particular function within the organisation. If you aren’t sure how information systems are transforming businesses, don’t worry, we’re here to help.
What Are Information Systems?
The term for information system is a broad term that is used to explain a central location where all functions of the business feeds into. The functions can vary depending on the organisation, but at its base level you will have hardware, software, networks, data and people all feeding into it. The idea being that the more information you have about the different functions of the business, the more you can develop strategy to ensure continued performance. The other reason for using systems such as this is to ensure that no tacit knowledge within the organisation is lost, this is especially important in organisations that have long standing employees that are experts in their particular role.
What Is Tacit Knowledge?
Tacit knowledge is the type of knowledge that is built in human minds. It’s the physical network that is built, knowing who to go to when you need to sort out a particular problem and also knowing which systems work for what job. All of this information is kept in employees’ minds and often isn’t recorded, monitored or tracked. Larger businesses have recognised the importance of tacit knowledge and how it increases the running of the businesses. When long standing employees leave the organisation, that knowledge is then lost, which is years’ worth of experience of working within a particular business function. This is where information systems come in. One part of a solid information system is recording activities of its users, this could be through emails that they send within the organisation or to external contractors. It could be keystrokes when they are using a particular software which can highlight short cuts that they use.
How Do Information Systems Work?
Knowing that tacit knowledge is an integral part of business structure, large businesses have put in extensive systems to ensure that they maximise the retention of this knowledge. When you look at the hierarchy of businesses, all systems gather information pertaining to performance. At the base level, businesses have systems for transactional purposes. These record sales, times and transactions. This data feeds into the information system and allows staff higher up to assess items such as sales volume, time between sales and any other information that they may need for reporting. The next level is management support systems. The information garnered from these systems is extensive. These are emails, meeting notes, forecasts and any other data that the business needs in order to perform. It is all of this information that led to the top level of the information system, the executive information system. It is the accumulation of this information that helps key decision makers assess current strategy, trajectory and horizons through leveraging information about past performance.
Creating A Snapshot
One of the reasons that information systems are so important to businesses is because they give you a snapshot in time. Information systems allow the upper echelons of management to assess what strategies are or aren’t working at any given point and can develop and implement ideas from there. It allows management to see the processes that their employees use to get the job done, where productivity lags and what links are made with internal and external stakeholders. All of this data is pulled into one centralised location which can be accessed by management, strategists and executives. It all works together to give a snapshot in time of a particular activity, likewise it can be used to spot trends within the organisation.
With the COVID-19 pandemic, information systems have become more important than businesses could have previously imagined. This has resulted in organisations needing to leverage data and information more than ever. Remote working has provided its own unique set of challenges with employees no longer being in the office, so organisations want to make sure that not only employees are performing, but important links and opportunities are still being made. Software also feeds into the information system, so it is helpful to assess whether or not the current software is working for the situation at hand. Decisions can then be made as to whether or not current software is applicable in the new home working environment. The more data you have, the more informed decisions you make and the better the growth of the organisation.
Previously businesses would make decisions based on limited information and data and strategies would take a while to be realised. With information systems the impact of decisions and new strategies can be seen exceptionally quickly, as well ensuring that management can access important links internally and externally to the business. It all works together to build a cohesive narrative around the business and the trajectory it is taking. It also serves to ensure that no knowledge it lost when it comes to staff leaving the organisation as everything is stored in the central system.
When it comes to the transformation of businesses in 2021, information system is taking the lead in this. Not only are they a vital central point of information for management and the upper levels of the business. They can also help to retain information from all the staff that have worked in the business. The stronger the information system, the better the snapshot in time they can provide. All functions of the business can feed into this one centralised location where the information is stored, categorised and disseminated when it is required. Knowledge is power and leveraging information systems to increase knowledge can help towards growth in a business.