Over the years, companies have incorporated integrated information systems in their duties because they affect the business’s ability to produce and analyze customer feedback and communication flow. Integrated information systems are a combination of various databases to make one system flow of information within the organization (Baskerville et al., 2018). The integrated information systems bring together the different software that receives, analyze and store data within an enterprise to form a single database for relaying all kinds of information. The management uses it to record all the activities within the organization and create an easy information flow within the business. Management information systems, decision support systems, and transaction processing systems are among the databases combined to form the single software, the integrated information systems. Integrated information systems are crucial for all businesses because they assure development in the ways discussed below.
Merits and Uses of Integrated Information Systems
Integrated information systems are used to assess risks within the organizations since they relay all the firm’s activities in easily accessed software. The management can predict the future direction of the business and indicate the possibility of risks that might arise based on the trends in the business operations (Jahanbakhsh et al., 2018). The integrated information systems relay data from all departments, instantly giving the management easy access to the transaction details and detecting a risk as early as possible. Every business targets making profits and achieving this goal; the direction should access information from all departments and analyze the risk occurrence probability. In response, the business strategizes on its reaction to prevent damages arising from the risks likely to occur. The company also takes preventive measures against the threat before it causes injuries to the business.
Second, businesses management reduces the operational costs in its departments. Integrated information systems need to have many employees distributed within the various departments such as the communication department, storage department, and more. Instead of having many employees in the organization, the integrated information system is headed by one main office containing fewer employees than when departments are used. Much of the money used to employ staff in the different departments are redirected towards the business’s production. The company also cuts the costs of installing databases in specific departments and uses the money to improve the investment capital. These advantages minimize the spending on less productive activities, leaving a higher amount of capital to enhance actual production processes. Management of operational costs is essential for every business because it improves the amount of stock available for sale.
All commercial enterprises involve the management of employees by the senior staff. The use of precise and well-analyzed information leads to efficient management of the firm’s activities. Such information is gained from the integrated systems since it has undergone compilation through a common platform. Businesses that employ integrated systems are well managed to accommodate the instant information gained through the software. The integrated information system comprises different databases from different business units to help the management efficiently execute its mandates. The managers must use relevant information to decide the distribution of work and resources among the employees. The administration also identifies the need for more or less human resources and implements the requirements using the software data. Thus, the management process is made straightforward using the compiled data to make management decisions, and all businesses benefit.
Another reason why integrated information systems are essential for companies is by the maintenance of a consistent information and communication flow system. The system ensures that there is evidence of communication within the businesses. It also provides that the mode of passing the information is uniform. For instance, the methods used to calculate profits and losses in the industry remain constant when the information systems are installed. A consistent information flow system creates accuracy in the business and assures the credibility of the information and the methods used to arrive at the final message. An integrated information system creates a platform for effective communications within the business. Above creating the venue, the information systems relay the information in a timely progression. The company, therefore, can respond and interact with the knowledge to come up with plans.
Businesses must incorporate integrated information systems in their operations because they contribute majorly to an increase in sales. The sales are improved through fast communication with the customers (Radhakrishnan et al., 2018). An integrated information system provides information about the goods being sold easily, quickly responding to customers’ needs. It allows easy and fast connection within all the departments involved with the product. It aids the seller in relaying information about the product purchased from the sales desk to the store desk easily for packaging and removal of the product from the store to the customers. Such a system makes working in complex industries and well small-scale businesses trouble-free and saves time to facilitate the movement of products bought. All these ensure that the company serves a broad customer base promoting the upgrade in the sales made within a specific period.
Integrated information systems preserve the production of the business because instead of the staff spending much of their time replicating information within the organization, they direct their energy towards more productive activities. The employees spend their time increasing their production activities. Engaging employees in more productive activities increases staff productivity, and the business enjoys more profits in the long run. Manipulating more productive activities creates an environment that assures the company’s continuity in years to come because it thrives on ventures that enlarge the profit. As a result, businesses interested in making more profits by increasing the quantity produced should involve integrated information systems in their management. Eventually, the company will encounter an increase in its production activities.
Besides enjoying a proper management system, companies that use integrated information systems in their operations apply modern accounting techniques. The business creates a system that is consistent in the formulation of accounting data (Jajja et al., 2018). Accounting in the industry is done using a premade format and compiles data from each department once a transaction is made. The process is flexible to serving accounting purposes because the accountant is already aware of what they need to record and where they record the numbers. The financial accounting department experiences positive outcomes of the utilization of non-segregated information systems. On the other hand, the management accounting system is aware of the transactions in the bid to process the goods and services, such as packaging. Generally, the speed and accuracy of the accounting process are boosted and save time for other essential activities of the accounting department in the industry.
A business that applies integrated information systems in its management is assured security of its information. The information processed is not received by many people; thus, privacy is of high quality (Termeh et al., 2018). The improvement in privacy helps the business make plans about its operations without leaking data about the course of action being put in place to see the company succeed in its endeavors. Secure location of information facilitates easy protection from intrudes wanting to know the progress of the business. Firms are encouraged to engage with integrated information systems to evade the negative impacts of sharing information about the interaction with anyone. Only trusted members are given access to sensitive information such as profits, expenses, and spending. This kind of information should be kept away from strangers to secure the company from individuals wishing for the failure of the business. The business manages to control its image because its credentials are hidden, and no intruder can spread unreliable information.
Businesses should embrace the use of integrated information systems because they are crucial for decision-making. Since the industry’s management easily accesses the information, the decision-making process is hastened. Managers can rely on the data relayed by the system to decide the following action in response to the demand, production, sales, sales returned, and more. The company combines the databases to get direct information from all the departments to facilitate the decision-making task. From the knowledge gained, for instance, if the demand is higher than the production, the managers may opt for a directive to increase production. The management decides the rate of input and output production in the business. This system also helps in financial decision-making; the administration may request additional or reduced input of funds from the shareholders. Businesses depend on the information provided by various departments to make decisions that lead to the business’ growth. The faster the decision-making process is, the more the company enjoys a competitive advantage.
It is difficult for businesses to survive without setting goals and objectives within a specified period. Therefore, the firm has to make known its vision and mission in the industry. For already existing companies, they utilize the data gained from information systems to locate their objectives. The business aims to meet the objectives set at the right time and monitor the company’s continuity as per the set goals. The information used to scrutinize the progress is gained from the information system. As an ongoing activity, the business has to use updated information which is only quickly gained from the integrated information systems. Integrated information systems are used to prepare and scrutinize the advancement of company goals. Any upcoming or existing business must have integrated systems to ensure workflow towards meeting the objectives at the projected time through strategic planning.
After a long working period, the business needs to evaluate its performance and compare it with previous years. Evaluation of the routine helps the company identify areas that need improvement and those that are satisfactory to the growth of the business. Corporates often attribute their development to the wise use of information relayed to acknowledge their strengths and weaknesses in their day-to-day activities. The industry can only identify the strengths and weaknesses by analyzing the info brought forward through the integrated system because it is reliable, flexible, and easy to access. Businesses need to use integrated approaches to identify critical areas of concern because the systems give accurate and reliable data that is usable in rating the performance in all departments. The installation of integrated information systems is paramount for all businesses that see the need for recognizing their strengths and weaknesses for the business’ prosperity.
Moreover, any commercial enterprise that needs to gain a competitive advantage over its competitor should embrace the use of an integrated information system in its operations. Such a business would overcome competition by getting relevant information that affects the market trends appropriately. This integrative approach would facilitate timely response by taking the appropriate measures to move with the trends. Competitive advantage is also gained through better communication services that engage the managers in continuous communication with their customers for feedback on the quality of services offered (Dubey et al., 2019). Therefore, the management directs the business’s direction in achieving quality service for their clients. Companies with competitive advantage enjoy high consumer foot flow and make an increased number of sales quickly.
Additionally, businesses should conduct problems identification exercises to pinpoint areas that need special attention. The process involves gaining information from relevant sources and compiling it together to correct the problematic areas (Theorin et al., 2017). After locating the sources of problems in the business, the management focuses on finding alternative solutions for them. Among the relevant sources of information to be used in the activity is the integrated information system. It allows the researcher to easily access the data since it is chronically arranged from the oldest engagements of the business to the latest. The business’ researcher acknowledges the positions that are impacting the industry negatively and provides strategies for troubleshooting.
Integrating information systems empowers businesses to run their activities to equip the business with the power to streamline the workflows (Asmae et al., 2017). The business gains experience in its dealings and is protected from fraudulent operations by outsiders. Engaging with the systems forms a base for a better understanding of the business structure and culture. Companies identify areas that require specialized attention and strengthen the bond between employees and their peers, promoting the business culture. The integrated system also helps businesses keep records about the business and employees in files that are easy to retrieve if the need arises (Paschen et al., 2020). The management system is involved in identifying the strengths and weaknesses of employees and helps in assigning duties to them on the grounds of their best-perfected work. The integrated information system favors division and specialization of labor in the organization. The business is empowered to control its affairs wisely and candidly without failing to recognize its employees’ power.
Disadvantages of Integrated Information Systems
Despite the merits of having an integrated system in commercial industries, some negative reasons make it inapplicable in some businesses. First, some companies are too small to accommodate the systems in their operations (Yousefizadeh and Molanazari, 2018). Small-sized enterprises find it challenging to incorporate the information systems in their operations because some of their activities do not need delicate designs for day-to-day running. The enterprises prefer to employ their friends and family, especially for work that human resources can do. In such a case, the business sees it inappropriate to install delicate systems to carry out the work.
Second, small-scale businesses prefer not to use integrated systems in their activities because they require a high installation capital and regular maintenance, which is costly. The standard maintenance policies consume an amount of money that the business may use to improve its capital base or employ more labor. Although the databases are combined to get one system, the user has to purchase them individually. As a result, the enterprises consider maximizing their profits by avoiding the integrated information systems entirely. The problem of double-costing goes hand-in-hand with the inappropriate occasional and complex upgrading. Many activities involving purchases, installation, and regular maintenance are quite ambiguous for small-scale investors.
Integration of information systems has left many unemployed by occupying most of the roles initially done by human resources. The influx of the systems in business operations has reduced job opportunities for accountants and communication specialists. It is difficult for companies to maintain an excellent public image because once it accommodates the use of the system, it has to lay off some of its employees to reduce the cost spent on the running of the business. Unfortunately, businesses have to dismiss employees to pave the way for robotic apparatus. In the end, the economy fails due to high prevailing unemployment rates. Employees should be encouraged to upgrade their knowledge to prevent instances of job losses. The business should also consider the employees in danger of losing jobs and educate them on coping measures with the current technological advancement.
Integrated information systems help businesses to identify areas to polish and work on for the betterment of the organization and involvement of the organization’s staff in the direct activities of the company. It enhances the proper flow of information both horizontally and vertically in the business. Adequate flow of information grows a good relationship between the business employees and the management. The management is mandated to ensure that the information systems are up to date to increase their reliability and display quality information that leads to the enlargement of the business. Information systems are crucial in every organization because they give the industry a sense of direction. The management uses the data passed to make decisions and set goals that the organization desires to meet in the coming production periods.
Information systems ensure the growth of commercial enterprises despite the few challenges businesses face to have them incorporated into the work. The entire industry enjoys minimized operational costs because much of the time used in data entry is reduced. Constant communication between the management and employees ensures they are equipped with the correct information and encounter a conducive workplace environment. Risks in the business are reduced immensely as the management focuses on the instant information brought forward through the system. Another reason why information system helps all sizes of commercial enterprises is by influencing decision-making speed. The business manages the speedy response to business actions that prepare all individuals for creative response in all departments based on their performance, demand quantity, and supply. All sized businesses benefit from integrated information systems by positively engaging in more productive actions and relating with their customer base.
Integrated information systems benefit all businesses by creating a favorable environment that empowers them with corporate competitive advantages over their competitors. These businesses manage their duties effectively and adequately store data that is easily accessible when the information users are in need. Such enterprises manipulate their strengths and weaknesses to gain the best competing experience and power. Alternatively, they control the expenditure of the business on operations by using speedy, accurate, and reliable information systems. Adopting an integrated approach to industrial information system provision is beneficial to all commercials in all industries despite the few costs incurred in purchases, installation, and frequent maintenance of the individual databases.
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