Importance of Information System for Operating a Business

This article discusses the importance of information system for operating a business, including its role in decision making and gaining competitive advantage. It also explains the steps involved in management information system and the components of an information system.

Introduction
Walmart is an American based multinational company doing retail business. Its
functions as providing a chain of supermarkets. In the year 1962, the company was
established by Sam Walton. The company expanded itself in 28 different countries with a
total of 11,718 stores by 31 January 2018. The weekly analysis states that approximately 270
million customers visit the Walmart stores located in different location and the official
ecommerce website. Walmart follows a particular business strategy for its work. The strategy
is based on ‘selling more for less’ (Walmart corporate 2018). In the past 50 years, it is
observed that Walmart is trusting the information system for its business process and
achieving competitive benefits in the global market. An information-based system is a
beneficial tool which is used in every business. The system is beneficial as it is less time
consuming, cost-effective and helps the manager in the decision making process.
1st Part
MIS
The entire operations going on within the business need reviewing and controlling
which is done with the help of computer related tool. The main objective of the system is
related to the collection and arranging of data from all the level and analyse it to get the best
quality of decision making (Beal, 2017).
Importance of Information system for operating a business
 With the help of the information system, the managers can achieve a great level of
output.
 Information system acts as a tool that helps in making a new model which can help in
the business by providing the structure to produce, distribute and trade products.
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 An information system is a type of bank storing all the data which help the managers
in the decision making by offering real time data.
 Information system helps in gaining competitive advantage (Bidgoli, 2017).
Steps of Management Information System
(Source: McLeod & Schell, 2007)
 In the first step, the users related to information are supposed to answer the
amount of information they require to complete their task successfully.
 In the second stage of the process, the users need to clear the objective related
to the use of the data must be cleared.
 In the third step, the source of data needs to be determined — for example,
accounts, files, and government publications sector.
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 In the fourth step source, frequency, quantity and time of information is
finalised
 In the fifth stage, how the information will be communicated is decided. For
example, report use of chart and statements.
 In the last step cost and profit, analysis is performed.
 Once the information system, is implemented it requires its assessment within
a range of three to six months (McLeod & Schell, 2007).
Components of Information system
People: The users of the system are from the top level qualified professionals such as
human resource management, level managers, accountants who utilise the record of the
information for their everyday business purpose.
Organisational: To work effectively and efficiently the organisation components
introduced a certain process which guides the users and to all other elements related to the
system. The instructions are developed with the help of the users and consultants.
Technology: The components related to the information system comprises hardware,
software components. The technological tools are used for gathering of the data and
managing the records for the requirement of the management.
Steps involved in solving problems related to information system
 Identification of problem: The identification of the problem is related to searching
for problems in specific areas. The system is capable of automatically identifying the
problems as soon as it arises and starts showing alerts in the system screen.
 The solution to the problem: Once the problem is identified the system starts
generating different solutions which are relevant to the issues.
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 Solution evaluation: After the solution is received the managers have to provide the
best solution for the problem.
 Implementation: After the selection of the solution by the mangers the next process
is the implementation of the solution to resolve the problems (Post & Anderson
2015).
How Information system affects business
With the help of the information system and the tool used for data processing helps in
managing the business more effectively. The key factors that give a positive way to the
business are:
 Cost Reduction: Once the information enters the system, the system analyses the data
and starts making the best suitable decision without the involvement of any further
steps.
 Quick access: With the help of the system the data can be transferred at a much faster
rate to the top level management, all the complex result, statistical data can be easily
shared within few minutes.
 Interactive: To make the system more interactive and to create optimal decision the
user can structure and create their own statement with the help of the stored
information.
 Flexible: Management manages and deals with the problems related to decision
making, such kind of problems can be solved with the help of algorithms, application
and through various procedures (Yeh, 2018).
Skills required for using an information system
There are different skills which are required for using and managing the information
system in a proper way. The skills are critical thinking, good listening ability, power to
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represent strongly, monitoring capability, decision making, communicating in an effective
manner, coordinating ability, ability to solve complex problems, evaluation of the system and
material resource, proper management of time, troubleshooting, quality control analysis,
persuasion programming and knowledge related to the technology design.
Knowledge required for using the Information system
The knowledge which is required before using the information system is knowledge
in the field of electronics, computer, personal and related to the customer service. Knowledge
about the Management and administration, related to English, Human Resources. Knowledge
about the telecommunication process, Mathematics and designing (Mymajore, 2016).
2nd Part
Information System tools
 Email: Electronic mail is an electronic platform for sending the information and
documents which is known as mail globally with just a click. It is one of the useful
tools which is utilised for marketing, creating and promoting a product in the global
marketplace.
 Messaging: It is a process of communication. The process helps in communicating
with the buyers and the sellers. It helps on communication between various level
associated with the business and helps in the promotion of the brand. The text
involved in the message must give a clear idea about the quality of the products to
attract customers.
 Social Networking: Social media is the emerging platform which gives opportunities
for all the business organisation for marketing its products and business. It is also
used to promote the business and brand. It helps in establishing a relationship with the
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customers. It also helps in getting feedback from the customers and attract more
customers.
 Mobile and Smart devices: Mobile marketing is a type of market involving the use
of smartphones, tablets and electronic devices for digital marketing. The social media
helps in attracting and engaging more customers with the brand (Tiago & Veríssimo,
2014).
3rd Part
Inputs, processing and outputs of Walmart package tracking system
 Inputs: The input comprises the information related to packaging, information
regarding customers signature, packaging details, the pickup and delivery times,
information related to the payments, the location and the billing address with the
required documents.
 Processing: The processing of the data involves the transferring of the data to the
main system and then store the data for the recovery. The information can only be
tracked by the customers if the data is well and systematically organised.
 Outputs: The output information stores the pickup time, the time of delivery of the
product, the exact location of the package, and specific details related to the package.
The output also comprises of the different reports related to the package (Bohn &
Atherton, 2008).
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Technologies used by Walmart and the relation of the technologies with the
Walmart strategies
Walmart uses different technologies for upgrading its business process. The
technologies include the use of a computer, barcode scanning machine, all sorts of
communication networks, and different types of storage system to deliver and package data.
Walmart uses an in house built software for tracking, maintaining accounts and for managing
the logistics service. One of the biggest advantages of online shopping is that the customers
can track the packages on the official webpage of Walmart. The upgradation of the Walmart
system eventually makes the work of the staff much easy and productive.
What would happen if Walmart information system were not available?
The absence of technology in the business process of Walmart would lead to an
immense loss to the company. Walmart would have lacked in the global market and may not
provide the lower price product as the data would be managed manually. Without technology
and marketing, it would have been difficult for Walmart to promote its brand at a global
platform. Technologies help in the business process and provide lots of opportunities by
making the task easy which will be impossible in the absence of technology (Walmart,
corporate 2018).
Conclusion
From the discussion, it is concluded that Management information is useful
equipment that helps in the day to day business process. It helps the business process in
decision making, in identifying the problems and finding solutions to resolve the problems.
Walmart is using the management information system from the past 50 years, and the use of
management information system by Walmart is one of the biggest reason behind its success.
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The system of Walmart is effective and efficient, which is helping Walmart in achieving a
position in the global market.
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