The Role of IS 6 / 9

There are 2 main roles of information system in organisations

  1. Support operations through the processing and storing of transactions

  2. Support managerial activities such as a decision making, planning, performance measurement, and control.

Purposes why Organisations require information:

  1. Recording transactions

  2. Decision making

  3. Planning

  4. Performance measurement

  5. Control

Recording Transactions

Information about each business transaction or event is required for a number of reasons:

  • Documentation of transactions can be used as evidence in a case of dispute

  • There may be a legal requirement to record transactions, for example for accounting and audit purposes.

  • Detailed information on production costs can be built up allowing a better assessment of profitability

Decision making

  • Information is required to make informed decisions

  • Information used by information systems may be classified as internal and external

Planning

  • Planning requires a knowledge of available resources, possible timescales for implementation.

Performance measurement

  • Overall performance must be measured in order to enable comparisons against budget or plan to be made.

  • This may involve the collection of information on:

    - costs
    - revenues
    - volumes
    - profitability

  • This collection, analysis and presentation of such data can be performed by information systems

Control

  • Once a plan is implemented, its actual performance must be controlled.

  • Information is required to assess whether it is proceeding as expected or whether there is some unexpected deviation from  the plan.

  • Information systems can be used to monitor and control the outcomes of plans.