Analysis of Information Systems and ERP System Benefits in Business

This report provides an overview of different types of information systems (IS) and discusses the benefits of Enterprise Resource Planning (ERP) systems in business. It begins by defining IS and their role in organizing and analyzing data for effective decision-making at various organizational levels. The report then categorizes different IS types, including Transactional Processing Systems (TPS), Management Information Systems (MIS), Decision Support Systems (DSS), Executive Information Systems (EIS), Online Analytical Processing (OLAP), and Artificial Intelligence (AI) systems, highlighting their functions and applications. The report further elaborates on ERP systems, emphasizing their integrated applications, process automation, and resource planning capabilities. Key benefits of ERP, such as focused IT cost, total visibility, improved planning and efficiency, customer service enhancements, and customization options, are discussed. Additionally, the report outlines the specific advantages of ERP in business, including reduced IT costs, better integration of IT tools, improved communication, real-time data tracking, and enhanced customer relationships. The conclusion summarizes the importance of IS and ERP while providing recommendations for businesses to leverage AI, IoT, regular system updates, and data backup strategies to ensure security and efficiency.

Different types of information systems
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Table of Contents
INTRODUCTION...........................................................................................................................3
CATEGORIES OF INFORMATION SYSTEM.............................................................................3
ERP SYSTEM AND BENEFITS....................................................................................................4
BENEFITS OF ERP IN BUSINESS...............................................................................................5
CONCLUSION AND RECOMMENDATIONS............................................................................6
REFERENCES................................................................................................................................7
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INTRODUCTION
In era of technology it has become easy for business to store and process large data and info.
Also, it has enabled in storing data in segregated way and sharing it with all departments in
simplified way. there are other software and applications available as well used in it. This has
increased the efficiency of firms as they are able to process data in quick time. Apart from it,
centralised way of storing data is benefiting in ease in access of data (Chofreh, Goni and
Klemeš, 2018). Moreover, different department are now integrated and real time data is obtained
by them. However, with constant technology advancement new way of manging and handling
data is coming. These all are making it easy in collecting large data and storing in simplified
manner. Thus, there has come a new way of storing data that is IS. It is a software which helps in
organising and analysing data and information in systematic way. It is mainly used to convert
raw data into meaningful info. Through that it becomes easy for organisation to take effective
decision and develop plans and strategies accordingly. Apart form it, IS helps in evaluating
market conditions as well and taking proper decisions.
This report will describe about different types of information systems. Also, it will be
discussed about ERP system and its benefits. Moreover, benefit of ERP system in business will
be mentioned as well. At last some recommendations will be given
CATEGORIES OF INFORMATION SYSTEM
IS is a software which helps in organising and analysing data and information in systematic
way. It is mainly used to convert raw data into meaningful info (Costa, Ferreira and Aparicio,
2016 ). It is required at all levels within an organisation such as lower, middle and upper level.
Besides that, it is used for taking strategic, tactical and operational decisions. There are various
types of IS which is used by business as per their requirement. Each IS functions in different way
and is used for business functions. Alongside, they store different type of data and info (Types of
information system, 2018). Thus, the categories are as follows :
Transactional processing systems- As name depicts it is used to record daily transaction of
business. In this info regarding daily sales, expenses, etc is stored. Basically, the IS is used by
accounts and finance related work. The main purpose is to analyse data and take decision
regarding financial problem. Usually, TPS is useful for operational managers as they are able to
take decision for finance related work. Here, various examples are as point of sales, payroll
system, etc.
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Management information systems – This system is used for tracking the organisation status
and managing all task and activities. Also, it analyse input like algorithms and then evaluate it to
generate outcomes (Kukreja, Bajaj and Sachdeva, 2018). These outcomes are used by mangers
to monitor and predict future performance. Generally, the output of TPS is input of MIS. The top
and middle level management used MIS to take effective decisions. Here, examples are HRM
systems, MIS is used for making strategical decisions.
Decision support system- As name shows the systems are used in making an effective decision.
The DSS take input from MIS, TPS, etc. and from external sources as well to analyse info. They
solve complex problems with help of mathematical model and statistical techniques. Basically, it
is used by top management and for making operational and tactical decisions. Some examples
are financial management system.
Executive information system – They are those system which is used for analysing data and
information to take short term decisions. Usually, it is used by middle level management where
they have to make daily decisions.
OLAP- it is a query based system which helps in analysing data and then viewing it in different
ways or dimensions. The main objective of OLAP systems is to provide answers to ad hoc
queries within the shortest possible time regardless of the size of the datasets being used (Law,
2019).
Artificial intelligence system – they are used by companies toad hoc large data sets. Moreover,
it helps in identifying data patterns in data set which is relevant to use it. The use of AI system
has benefited in generating value to customers by offering them high quality products.
Hence, these all the various types of IS available and used by companies for their specific
purpose. It has supported in providing useful info and taking effective decisions.
ERP SYSTEM AND BENEFITS
ERP is a software that allows business to use its integrated applications and systems by
managing and automating several processes and functions. They are used to customize system
and process to streamline process. Furthermore, ERP is used to plan resources and use in
business. There are many benefits of ERP software which as explained as :
Focused IT cost – the use of ERP leads to decrease in cost required to maintain IT resources and
systems. This is because it is an integrated that require less staff, infrastructure, etc. So, the
requirement to implement and maintain other IT infra is less (Madanhire and Mbohwa, 2016).
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Thus, company can focus on ERP as it works in all areas such as HR, SCM, CRM, etc. Besides,
it also reduced need o f training cost for staff.
Total visibility – The main benefit of ERP is that here data and info of all department is
managed and accessed. This makes it easy to monitor daily activities. Alongside, as ERP is
centralised database thus it allows in increase collaboration and streamlined completion of
activities. Therefore, it provided clear visibility of work flow and processes and enhanced
efficiency. Hence, quick decisions are taken.
Improved planning and efficiency – Alongside centralised implementation ERP transform the
reporting system into centralised way. the data is analysed in effective way and reports are
prepared easily. Furthermore, it helps in comparing department performance easily. However,
financial report like CFS is generated. The BI facility provides an insight about business
operations in more clear way. In addition to it, with less time and effort require to monitor and
maintain ERP other activities is carried out in efficient way. thus, manual processes are
eliminated along with repetitive tasks (Masa'deh and Alrowwad, 2017).
Customer services – As ERP is centralised system the sales and CRM team is able to access
customers info easily. This helps in giving insight about customer needs and solving their
problem. With that strong relations are maintained with them and it leads to retaining them for
long time. It improves the experience of customer and quality of services.
Customisation
ERP systems can take care of regulation and security issues with efficiency. It can provide a
publicly traded company with the necessary compliance to ensure security.
BENEFITS OF ERP IN BUSINESS
ERP is mainly used for doing business planning and analysing resources that are required.
Besides that, there are many other benefits as well of using ERP in business. They are mentioned
as :
The ERP system benefit in reducing IT cost that is required in it. Also, it convert it into
centralised data server where data is stored. This helps in easily analysing data and providing
useful info. It leads to business process and reducing inefficiency.
Cloud technology ERP makes things easy to integrate IT tools and provide effective solutions.
Moreover, it promotes better inter personnel communication and resource sharing.
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Furthermore, ERP allows in providing a visualise how products and services within pipeline.
Besides that, with help of inventory can be tracked, order tracing, etc. Alongside, transaction can
be stored in ERP system (Saade and Nijher, 2016)
ERP helps business to track real time data and inventory. By this it is easy to find out how fast is
delivery process. Thus, according to it changes can be made in inventory process. It will help in
reducing overhead cost.
The integration of BI with ERP helps in making strategic decisions. Here, ERP simplifies entire
process and saving time. Moreover, accurate data is obtained from it and quick decision is taken.
ERP help in enhancing front and end service user relationship. The process is streamlined and it
increases customer experience. Thus they are able to retain and valued.
CONCLUSION AND RECOMMENDATIONS
From report it can be summarised that IS is used for organising and analysing data and
information in systematic way. It is mainly used to convert raw data into meaningful info. There
are various types of IS such as MIS, DSS, EIS, etc. and is used at various levels within an
organisation. ERP is software which allows business to integrate its systems and automate it.
Moreover, there are various benefits of ERP such as focused IT cost, total visibility
customisation, etc. Similarly, ERP has benefited business by improving its efficiency and
reducing cost.
However, there are certain recommendations that can be followed by business. They are as
follows:
The company can use AI and IOT in IS which will help in effective monitoring and
controlling of systems. Besides that, it will make it easy to maintain IS as well.
The IS should be regularly updated and maintained so that its security is maintained and the risks
of any data loss or breach is reduced.
They must form a policy or issue guidelines regarding the use of IS so that each employee is
given authorised access and there is no involvement of any third party in retrieving the data.
Moreover, confidential info must be kept secured and protected.
The data stored in IS should be regularly backed up in server so that in case of data loss it can be
retrieved easily. Backing up data will also ensure that IS is safe and maintained properly.
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REFERENCES
Books and journals
Chofreh, A.G., Goni, F.A. and Klemeš, J.J., 2018. Sustainable enterprise resource planning
systems implementation: A framework development. Journal of cleaner production, 198,
pp.1345-1354.
Costa, C.J., Ferreira, E. and Aparicio, M., 2016. Enterprise resource planning adoption and
satisfaction determinants. Computers in Human Behavior, 63, pp.659-671.
Kukreja, S., Bajaj, A. and Sachdeva, R., Accenture Global Services Ltd, 2018. Enterprise
resource planning tool. U.S. Patent 10,049,331.
Law, C.H.C., 2019. Managing Enterprise Resource Planning Adoption and Business Processes:
A Holistic Approach. Cambridge Scholars Publishing.
Madanhire, I. and Mbohwa, C., 2016. Enterprise resource planning (ERP) in improving
operational efficiency: Case study. Procedia CIRP, 40, pp.225-229.
Masa'deh, E.Y.R.A. and Alrowwad, A.A., 2017. The impact of ERP system's usability on
enterprise resource planning project implementation success via the mediating role of
user satisfaction.
Saade, R.G. and Nijher, H., 2016. Critical success factors in enterprise resource planning
implementation. Journal of Enterprise Information Management.
Online
Benefits of ERP, 2019. [online] Available through : <https://www.selecthub.com/enterprise-
resource-planning/erp-advantages-and-disadvantages/>
Types of information system, 2018 [online] Available through : <https://www.guru99.com/mis-
types-information-system.html>
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