Business Environment is the totality of all internal and external aspects such as workforces,

clients’ requirements and expectations, supply and demand, administration, customers, dealers, owners, actions of
government, modernization in technology, social developments, market developments, economic variations, etc. in
addition to this a few external influences are beyond your control. They are known as external constraints.
External constraints may be associated with the national level, regional level or international level. These
environmental constraints offer opportunities or pressures to the business community. Business organizations cannot
alter the external environment, they just respond to it.

Components of Business Environment

Internal
It brings together the aspects that occur within the firm. These are –
 Human resources
 Value system
 Vision & mission
 Labour union
 Corporate culture
External
An external Environment comprises those outside aspects that exert an influence on a business’s actions. It
is further differentiated into two groups. Micro and macro
1. Micro – The micro-environment is fundamentally the environment that can exert a direct impact on
your business. It is associated with the specific area where your company functions and can directly
concern all of your business procedures. They can impact your everyday dealings and the general
performance of the firm. Still, the impact that they have is not long-term. The micro-environment
comprises customers, suppliers, resellers, competitors, and the general public
Customers
The type of customer base that your firm appeals to, as well as the thought behind buying your merchandise,
are going to highly influence the techniques that you make for marketing campaigns. Your clients can be
B2C, B2B, international, local, and so on. Significant aspects associated with clients are:

 Stability of demand
 Prospects of sale growth
 Relative profitability
 Intensity of competition
Suppliers
If a supplier of a specific item for consumption is the major, or even the only one, they are going to have a
big effect on how fruitful your business is. The suppliers are very imperative factors as:
  Key link in the value delivery procedure
 Insurance that your corporation has the essential resources
 Essential determinants in terms of price rise or decline

Resellers
If you choose to trade your produce via a third-party reseller, or middlemen (wholesalers and retailers) then
the accomplishment of your marketing is going to be exceedingly reliant on them. If let’s say, a particular
retail seller has a solid reputation, it will pass on to your merchandise. As a connection between you and the
customer, they are vital in terms of these aspects:

 Promotion
 Sale
 Distribution
 Marketing
 Financial mediation

Competitors
Rationally, every business that trades the same kind of merchandise as you do is your competition on the
market. So, their sale and marketing strategies are significant enough to be noticed. You need to reply to
several inquiries, such as how their produce and its price concerns yours and how you can use that to attain
an edge over them. The vital aspects that matter in this case are:

 Desire competition
 Product form competition
 Brand competition

The general public

Every business organization has in its best interest to satisfy the general public. Every step that you take
should be observed from their point of view as well. It is very imperative how your activities concern others
because their judgement can be the one thing that either thrusts you towards victory or pulls you down from
the pedestal. So, the general public is tremendously vital in terms of:

 Public opinion
 Media
 Environmental pollution

2. Macro – The macro-environment is more universal. It influences how all business group’s function,
perform, arrive at decisions, and form plans simultaneously. It is quite active this means that a
corporation has to continuously track its changes. It comprises external aspects that the firm itself
doesn’t control but is disturbed by the aspects that make up the macro-environment are economic
features, demographic influences, technological aspects, natural and physical influences, political
and legal influences, and social and cultural influences.
Economic factors
Fundamentally, the very environment of the economy can have power on two important factors –your firm’s
amounts of production and the decision-making procedure of your clients. Some examples of economic
forces influencing business:
 Interest rates
 Exchange rates
 Recession
 Inflation
 Taxes
 Demand / Supply
Demographic forces
The market is very much influenced by general demographic factors. They are age, levels of education,
cultural features, nation and region, lifestyle etc. The vital features are:

 income variables
 Age variables
 Geographic Region Variables
 Education Level Variable

Technological factors
These features are linked to talents and abilities that are applied into production, as well as all the
ingredients and technology that a specific good requires to be made. They are vital and can have a big
influence on how well your business is operating. It boils down to even the most elementary features, such
as what type of maintenance trolleys you use to protect your tools and equipment for as long as possible.
Some of the most general technological features are:

 Automation
 Internet connectivity
 3D technology
 Speed/power of computer calculation
 Engine performance and efficiency
 Security in terms of cryptography
 Wireless charging

Natural and physical features

Every business must consider the very planet and the resources taken from it. Some of these resources can
be renewed, such as forests and agricultural produce. Some resources such as coal, minerals, oil, and the like
cannot be renewed. Both of them are very much connected to the manufacturing of goods and services. So,
natural and physical forces can be:

 Climate change
 Pollution
 Weather
 Availability of both non-renewable and renewable resources
 Laws that regulate the environment
 Survival of particular biological species

Political and legal forces

The market grows conferring to the political and legal environment in different regions. This means that
every corporate should be up to date with such aspects at the international level for them to be able to make
the correct decisions. This usually comprises legal aspects such as:

 Copyright law
 Employment law
 Fraud law
 Discrimination law
 Health and Safety law
 Import/Export law

Social and cultural forces

Lastly, it is important to comprehend that the product that you introduce into the market can have a strong
influence on society. For example, your manufacturer needs to avoid all the practices that are dangerous to
society, and prove that it is socially responsible. There is an extensive variety of social and cultural aspects,
some of them are:

 Purchasing habits
 Level of education
 Religion and beliefs
 Consciousness about health issues
 Social classes
 Structure and size of a family
 Growth rate of the population
 Emigration and immigration rates
 Life expectancy rates and age distribution
 Different lifestyle

Corporate social responsibility (CSR)

Corporate social responsibility (CSR) is a type of global private business self-regulation to contribute to
societal aspirations of a philanthropic, activist, or charitable quality by involving in or upholding
volunteering or ethically-oriented systems. It was probable to describe CSR as an internal organizational
plan or a corporate ethic strategy at a time, that time is gone as various national and international rules have
been established and various organizations have used their power to spread it beyond individual or even
industry-wide enterprises.

What is an IT organization (information technology

organization)?
An IT organization (information technology organization) is the department within a company
that's charged with establishing, monitoring and maintaining information technology systems
and services.

In the broadest terms, an IT organization is a multifaceted business entity that facilitates almost
all aspects of enterprise operations. Although the specific duties and goals of an IT organization
vary depending on the size and goals of the enterprise, a typical IT organization involves the
following:

 IT infrastructure. This includes the servers, storage, networks and other physical
components and logical constructs, such as virtual machines or software-defined
networks, needed to host applications, store data and connect the infrastructure to
users. An IT infrastructure can be implemented locally in a traditional data center,
remotely within a colocation facility or public cloud provider, or a mix of these
options. The purpose of an IT infrastructure is to run business applications.

 Applications. This includes a broad range of software, such as business applications,

including databases, human resources (HR) and finance software, design and
collaboration software, and business email; all platforms and software designed for
 users, such as revenue-generating business websites, application programming
interfaces (APIs) and applications; the software development toolchain, such
as integrated development environments, version control and testing tools; and all
tools and platforms the IT organization uses to monitor and maintain the IT
infrastructure. All applications depend on the IT infrastructure.

 IT staff. This includes IT administrators, engineers, managers and executives, such as

the chief information officer (CIO) or chief technology officer (CTO), who are tasked
with planning, implementing, maintaining and updating the IT infrastructure and
applications to further the needs of the business and its users. The growth of
DevOps and other Agile software development and deployment paradigms means
that developers are increasingly part of the IT organization -- not just as application
creators, but also as operations experts who deploy and monitor applications created
for the business.

 Users. These include employees who depend on enterprise applications for daily
work, as well as business partners, customers and client users who provide revenue
for the enterprise. Without users, there would be no purpose or benefit to an IT
organization.

What does an IT organization do?

Today's IT organizations can be complex and far-reaching entities tasked with an array of goals
and responsibilities that are essential to the successful operation of a modern enterprise. Many of
those varied responsibilities can be categorized into the following six principal activities:

1. Build and manage the IT infrastructure. The IT organization is responsible for

planning, designing, building, monitoring and maintaining the infrastructure,
including the servers, endpoints, storage and networks that support the
organization's applications and IT services. Modern infrastructure includes traditional
local data centers, as well as hybrid and public cloud infrastructures. Even though an
IT organization might not be involved in the design and construction of cloud
infrastructures, it's responsible for designing and implementing how those cloud or
third-party resources and services are assembled for business use.

2. Deploy and manage applications. An IT organization is responsible for deploying,

monitoring and managing a broad range of enterprise applications, including both
internal applications used by employees, such as HR, productivity and collaboration
applications, as well as external applications used by clients or customers, such as
web portals, APIs and revenue-producing platforms. This responsibility is increasingly
shared with DevOps and other Agile software development teams.
 3. Store, manage and protect data. Data is one of the most valuable assets that a
business can possess, and an IT organization is responsible for ensuring that data is
stored reliably within the infrastructure, accessed safely and protected from loss due
to system failure, security breaches or disaster. This often includes data classification
to understand what data is present, where it's located, its importance to the business
and the retention requirements that apply to each type of data. IT organizations
often collaborate with data owners and legal teams to build security and retention
guidelines that ensure business data compliance.

4. Manage and maintain security. Security is a broad term, but the goal has evolved
into multipronged initiatives for IT organizations. Security efforts are required for user
accounts, employing credentials to ensure that only authorized users can access the
IT infrastructure, applications and data. Security implements monitoring
and countermeasures to identify and mitigate intrusions or blunt data theft. Security
oversees application and data integrity to find and eliminate viruses and other
malware. This involves using complex security tools and carefully crafted security
practices.

5. Provide training and support. IT organizations are typically responsible for providing
new and ongoing training to employees on such topics as account access, acceptable
use policies, data access and protection, or compliance. In addition, the IT
organization is the go-to team for technical questions, support and application help.

6. Strategic growth and transformation. Businesses rely on IT resources and services to

function. As technology evolves and new technologies emerge, the IT organization is
often responsible for reviewing and evaluating hardware and software to identify
new uses and competitive advantages for the enterprise and its business goals. It's
the IT organization that makes recommendations for upgrades and new platforms
that can enhance the organization's ability to do more business faster, yielding better
business outcomes at lower costs.

How is an IT organization structured?

An IT organization is typically designed as a hierarchical relationship of roles and
responsibilities intended to serve the information technology needs of the business and its user
base. In general terms, an IT organizational structure comprises the following three general
levels:

1. Executive level. The top of the IT organization includes a CIO, CTO or other
technology leader who reports to a chief executive, such as the chief executive officer
 or president. The executive is primarily responsible for translating the needs of the
business into strategic goals for IT teams.

2. Manager level. The management level can include leaders for each IT department,
including the infrastructure team, operations team and applications team. Other
relevant teams could include a customer relationship management team, analytics
team, services team, and project and development teams. The exact number of
teams can vary, depending on the size and complexity of the organization. IT
managers report to the executive level.

3. Execution level. These are the many varied IT professionals tasked with handling the
day-to-day tasks involved in their specific roles. For example, an operations team
might include system engineers and administrators, while an infrastructure team
might involve technicians, network engineers and administrators. Similarly, a project
team might have a project leader who directs numerous staff.

This IT organizational
chart example shows the various roles and responsibilities that serve the IT needs of the business and its users.

Every business is different, and the type and number of roles distributed across an IT
organization can vary. For example, a business that requires many applications might have a
team dedicated to deploying and maintaining those important applications, while another
business with strong application development needs might build a large team of in-house
developers, as well as quality assurance, testing, help desk and support staff. Still other
businesses with ambitions in artificial intelligence might employ data scientists and analysts to
complement the development teams. An enterprise with large and evolving hardware
infrastructures might employ IT architects and cloud specialists to help integrate public and
private clouds into hybrid offerings.
There are other variations to IT organizational structures, such as centralized versus distributed.
The examples above relate to a more traditional centralized IT structure. A distributed
organizational structure might place certain IT staff and management control within other
business units. For example, the HR and finance departments might each have dedicated
developers and IT staff available to address the specific needs of each department.

What are the benefits of organizational structure in IT?

An organizational structure that includes IT is critical to the successful operation of the
enterprise. A well-conceived and properly implemented IT organization can translate the
strategic goals of the enterprise into desirable and cost-effective results that can be
communicated back up the chain of command to management.

An organization brings the following benefits:

 Improved communication and coordination.

 Clear roles and responsibilities.

 Better paths to decision-making and problem-solving.

 Improved response times and business efficiency.

Although these concepts apply to any business organization, the benefits can be particularly
acute for an IT organization. Every modern business is built on IT. Consider just how much
money is invested in IT in hardware, applications, software development and data storage for the
business to function.

Now, imagine there's an IT outage -- a good IT organization has the tools, workflows and staff
in place to address and mitigate that outage quickly. Without a well-planned IT organization, it
might not be clear just who is responsible for handling the issue or even how that issue occurred,
and the business can founder until someone takes the reins and handles the issue. Such delays
can be costly for the business, its reputation and even its regulatory compliance posture.

Considerations for implementing an IT organizational

structure
There's no single right way to design and implement an IT organization. There are as many
variations of an IT organization as there are businesses. However, building an efficient and
successful IT organization should include the following broad considerations:
 Set realistic goals. Understand what IT needs to do. An IT organization expected to
deal with everything probably won't do everything particularly well. For example,
what tasks must be handled, or what problems -- whether technical or business --
must the IT organization solve? Money, talent and time are always finite resources, so
be pragmatic and objective about what the IT organization can and can't do. Many
tasks can be handled in-house, but a business might also depend on third-party
contractors for some goals until those efforts can be brought in-house. For example, a
business might have the IT resources to handle technical support for internal
employees but rely on a third-party provider to handle help desk support for outside
clients or customers.

 Seek business alignment. Understand the needs and objectives of the business, and
design an IT organization that best aligns with business goals. For example, a business
that emphasizes the role of cloud computing to offload traditional data center costs
might build an IT organization focused on creating a hybrid cloud and in-house
cloud center of excellence to help drive the use of cloud computing across the
business. Conversely, a business with strong regulatory compliance pressures, such as
a healthcare business, might focus its IT organization on initiatives such as data
security and data lifecycle management, including data retention and deletion. An IT
organization must facilitate the efforts of the business -- not vice versa.

 Understand needs and resources. There are four main elements to any IT
organization: money, people, time and tools. A successful IT organization must
balance those four elements against the goals of the IT organization, which ideally
align with the needs of the business. For example, a business that needs
cybersecurity can't achieve that -- at least in-house -- without having the budget for
skilled people and an investment in suitable tools that can meet security objectives.
This is equally true for other IT goals, such as technical or help desk support, IT
architectural design and engineering, and everyday systems administration. A
business might need to adjust budgets and goals to meet the most important IT
objectives.

 Stay flexible. The only constant is change. Business challenges and goals evolve over
time, and IT organizations must also have the flexibility to grow and shift to meet
changing technical, legal, security and competitive landscapes. This means
periodically changing IT employee roles or adding staff, enabling ongoing IT staff
training and education, examining IT performance metrics and key performance
indicators, experimenting with new technologies and tools through proof-of-concept
projects, looking for new opportunities to use IT to transform the business, and
 making sensible changes to optimize the prevailing IT organizational structure over
time.

What is enterprise software?

Enterprise software, or enterprise application software, is computer software used by
organizations rather than individual users. Common types of enterprise software include
contact centre software, business intelligence, enterprise communication, inventory
management, marketing tools, online payments, and enterprise resource planning.
Organizations use enterprise software to run, scale, and optimize their day-to-day
operations and processes, as well as build their own unique applications.

Why is enterprise software important?

Enterprise software is central to day-to-day business functions and mission-critical
operations in many organizations. The following are some examples of how organizations
use enterprise software solutions:

Scale resources

Organizations use enterprise software to scale operations and direct resources to

functions that need them. They can scale up or down as necessary, keeping costs and
resources under control, and budgets in check. For example, you can use Amazon Chime
SDK to add scalable communications capabilities like video, voice, and text to your
existing enterprise applications.

Improve organizational efficiency

Enterprise application software introduces automation in areas such as HR, payroll,

marketing, and data entry, freeing up employees to focus on tasks that add more value to
the enterprise. It delivers a standard set of collaboration tools and workflow solutions that
reduce interdepartmental silos.

Enhance employee productivity

Technologies and tools such as process automation, project management software,

artificial intelligence (AI), data analytics, and machine learning (ML) make collaboration
between teams easier and deliver actionable insights. Teams can communicate with each
other wherever they are. This helps employees complete their day-to-day tasks more
efficiently.

Increase customer satisfaction

Enterprise software solutions such as customer relationship management, marketing

automation, and contact center software have made it possible for organizations to
develop a detailed understanding of their clients and their needs. By bringing together and
centralizing customer data, enterprises can deliver a personalized service experience that
meets customer demands.

What are some use cases of enterprise software

solutions?
A number of the world's leading enterprises integrate enterprise software into their
operations. We give some common use cases below.

Customer service

Organizations use enterprise software to deliver efficient customer service and improve
customer engagement. For example, financial software leader Intuit used Amazon Connect
to build an omnichannel cloud contact center that unifies multiple customer
communication channels such as voice, chat, messaging, and web. Intuit can thus deliver
efficient service to more than 16.5 million customers who contact them annually with
financial queries. All agents have a consistent view of customer data so they can deliver
support efficiently.

Communication

Enterprise application software improves both internal and external communication

through automation, data management, and optimum use of network resources. For
example, streaming giant Netflix swapped its in-house email solution for Amazon Simple
Email Service (Amazon SES), to solve communication challenges such as:

 Optimizing email service for each Internet Service Provider

 Reducing the overhead of running dedicated email servers

 Scaling globally for wider customer reach

Sales and marketing

Enterprise level software can reduce silos between sales and marketing, so companies
respond faster to the first contact new customers make. For example, technology services
provider World Wide Technologies achieves sales efficiency by responding to initial
customer requests with a quote management application.

Operation support

Enterprise software can reduce operational inefficiencies and save organizations

thousands of dollars in expenses. For example, Domino's is using AWS enterprise
software solutions to improve service delivery. With more than 70% of the organization's
sales coming from online orders, Domino's used Amazon SageMaker to build machine
learning (ML) models that could accurately predict which pizza the customer would order
next. The solution reduced pickup and delivery times and boosted customer satisfaction
scores.

What are the types of enterprise software?

There are several different types and brands of enterprise software available. The
software can be grouped into several broad categories. We give some examples below.

Enterprise resource planning

Enterprise resource planning (ERP) software helps organizations to manage their various
business processes, including sales, HR, supply chain, project management, and payroll
from within a single centralized system. Organizations use ERP software to:
  Centrally manage organizational data from different sources

 Automate tasks and simplify business processes

 Deliver operational efficiency and boost profitability

Customer relationship management

Enterprises use customer relationship management (CRM) and contact center software to:

 Better manage customer relationships

 Develop insights into customer needs through data

 Deliver better experiences to existing customers

 Make informed decisions about new prospects

With information about existing and potential clients in one place, businesses can
personalize their communications and build deeper relationships. They can also bring
together data from different departments to build out their sales pipelines and make
financial forecasts.

Business intelligence

Business intelligence is enterprise application software that brings together data held in
multiple sources—the cloud, on-premises data centers, and spreadsheets—for analysis
and reporting. Everyone within an organization gets a consistent view of the data through
interactive dashboards. Business intelligence software also highlights patterns and trends
so that teams can:

 Gain valuable insights into business processes

 Make strategic decisions with confidence

 Avoid time-consuming manual analysis

Supply chain management

Today's supply chains are highly complex global networks of manufacturers, suppliers,
logistics, and retailers that work together to deliver goods and services. Every
organization requires efficient digital infrastructure to co-ordinate and manage supply
chain tasks such as:

 Goods tracking

 Production updates

 Supplier invoicing

 Supplier auditing

Effective supply chain management tools, such as Amazon Managed Blockchain and
Amazon Forecast, give organizations complete visibility over their supply chains to
improve forecasting, reduce inventory costs, and improve capacity utilization.

Human resource management

Enterprise application software for human resource (HR) management is typically made up
of tools to oversee and control HR functions like:

 Recruitment and training

 Annual leave management

 Payroll

 Talent retention and engagement

By bringing together all of the functions that a modern enterprise HR department has to
oversee, organizations can work more efficiently and deliver greater value to the
enterprise.

How can AWS help with enterprise software?

AWS provides a range of enterprise software solutions that can help organizations scale,
become more efficient, and increase revenues. For example, AWS business applications
are scalable, pay-as-you-go enterprise software services that run in the cloud. There are a
number of services available to you with solutions for contact centers, communication and
collaboration, remote and hybrid work, and no-code applications, such as the following:

 Using Amazon Connect, you can provide superior customer service at a lower cost
with an omnichannel contact center. Benefits of Amazon Connect include scalability
and artificial intelligence.

 Amazon Pinpoint is a flexible and scalable communication service for inbound and
outbound marketing. You can use Pinpoint to connect with your customers through
channels like email, SMS, push, voice, and in-app messaging. You can also create
customer segmentation with personalized messaging for maximum impact and keep
delivery results and campaign data at your fingertips to measure campaign
success.

 Amazon WorkDocs is a fully managed service to seamlessly and securely

collaborate, create content, and store your documents. Using Amazon WorkDocs,
you can access your documents across devices and set up approval workflows to
streamline document management. Amazon WorkDocs also offers the technology for
enterprises to develop their own content apps using the service.

Information Age
The Information Age is the idea that access to and the control of information is the defining
characteristic of this current era in human civilization.
The Information Age -- also called the Computer Age, the Digital Age and the New Media Age
-- is coupled tightly with the advent of personal computers.
The modern business environment is one which is encouraging companies to grow
exponentially, yet doing so, even at a local level, presents obstacles. Everyday
problems can soon become prohibitive to further development if not handled
effectively.
Fortunately for them, technology is here to help. Solutions such as Content Services
allow firms to remove issues which can prove difficult to overcome on a daily basis. In
particular, it eases the pressure of paper documentation which poses three of an
organization’s top six identified challenges.
Thousands of companies from across Europe have taken part in a study which forms
Kyocera Document Solutions Europe’s Business Digitalisation in Europe Outlook
2019, providing insight into just how digital transformation strategies can help them to
overcome difficulties. These are the key takeaways…
1. Document storage
Information is invaluable to companies. Some types of data must be stored in order to
learn from performance and improve, whilst other kinds of information have to be
protected and retained due to legal obligations such as the European Union’s General
Data Protection Regulation.
This implements a substantial cost. Firms must budget not only for the filing cabinets
that store the paperwork, or online storage space in a Cloud or server, but also for the
extra space that it takes up in their office. This poses a challenge to 28% of companies
who admit to lacking the physical space that they need to store all of their
documentation.

2. Finding what you’re looking for

Moreover, the study revealed that 16% of businesses confessed to finding themselves
in the dreaded situation of struggling to locate the right information. This leads to a
substantial waste of resources in employee time as, rather than working on challenging
tasks putting their full skills to use, they are manually searching through files and
folders, whether digitally or in a paper filing cabinet.
In many cases, finding the data you need is not the end of the dilemma as 28% of
businesses have found themselves in a situation of double clicking on the file to end
their search only to discover that it is an incompatible format and they can’t access the
data. This implies a major cost for businesses, whose staff waste their time tediously
searching through files and folders, both digital and in paper, rather than using their
skills to help the company to advance.
For organizations looking to reduce their costs and become more efficient, this is a
quick-fire way to improve productivity. With the implementation of a solution like
Content Services, this wasted time can be easily removed from processes and
significantly streamlines workflows.
3. Resistance to change
The introduction of new technologies to the workplace is often enough to have
workers biting their nails with the fear of the unknown. In fact, according to the study,
as many as 28% of businesses believe that user resistance is a major obstacle to the
introduction of innovative new technology.
Many of these issues can be easily overcome with the appropriation of the correct
technology. The key to success in our modern business
environment lies in using the right technology to extract value
from data.

An information system is a combination of software, hardware, and

telecommunication networks to collect useful data, especially in an organisation. Many businesses use
information technology to complete and manage their operations, interact with their consumers, and stay
ahead of their competition. Some companies today are completely built on information technology, like
eBay, Amazon, Alibaba, and Google.

Typical components of information systems

Now that you know what an information system is, let’s look at its components. It has five components –
hardware, software, data, and telecommunications.
1. Hardware – This is the physical component of the technology. It includes computers, hard disks,
keyboards, iPads, etc. The hardware cost has decreased rapidly while its speed and storage capacity has
increased significantly. However, the impact of the use of hardware on the environment is a huge concern
today. Nowadays, storage services are offered from the cloud, which can be accessed from
telecommunications networks.
2. Software – Software can be of two types, system software and application software. The system software
is an operating system that manages the hardware, program files, and other resources while offering the user
to control the PC using GUI. Application software is designed to manage particular tasks by the users. In
short, system software makes the hardware usable while application software handles specific tasks.
An example of system software is Microsoft windows, and an example of application software is Microsoft
Excel.
Large companies may use licensed applications which are developed and managed by software development
companies to handle their specific needs. The software can be proprietary and open source, available on the
web for free use.
3. Data – Data is a collection of facts and is useless by themselves, but when collected and organised
together, it can be very powerful for business operations. Businesses collect all the data and use it to make
decisions that can be analysed for the effectiveness of the business operations.
4. Telecommunications – Telecommunication is used to connect with the computer system or other devices
to disseminate information. The network can be established using wired or wireless modes. Wired
technologies include fiber optics and coaxial cable, while wireless technologies include radio waves and
microwaves.
Examples of information systems
Information systems have gained immense popularity in business operations over the years. The future of
information systems and their importance depends on automation and the implementation of AI technology.
Information technology can be used for specialised and generalised purposes. A generalised information
system provides a general service like a database management system where software helps organise the
general form of data. For example, various data sets are obtained using a formula, providing insights into the
buying trends in a certain time frame.
On the contrary, a specialised information system is built to perform a specific function for a business. For
example, an expert system that solves complex problems. These problems are focused on a specific area of
study like the medical system. The main aim is to offer faster and more accurate service than an individual
might be able to do on his own.
Types of information systems
There are various information systems, and the type of information system a business uses depends on its
goal and objective. Here are the four main types of information systems:
1. Operations support systems – The first type of information system is the operation support system.
Such type of information system mainly supports a specific type of operation in a business. An
 example is the transaction processing system used in all banks worldwide. This type of information
system enables the service provider to assess a specific process of business.
2. Management information systems – This is the second category of information systems, consisting of
hardware and software integration allowing the organisation to perform its core functions. They help
in obtaining data from various online systems. The data thus obtained is not stored by the system;
rather, it is analysed in a productive manner to help in the management of an organisation.
3. Decision support systems – An organisation can make an informed decision about its operations
using decision support systems. It analyses the rapidly changing information that cannot be
determined in advance. It can be used in completely automated systems and human-operated
systems. However, for maximum efficiency combination of human and computer-operated systems
is recommended.
4. Executive information systems – EIS or executive support system is the last category that serves as
management support systems. They help in making senior-level decisions for an organisation.

Facts of information systems

The products of information technology are part of our daily lives. Here are some of the facts about
information systems.
• Necessary for businesses to grow
Every organization has computer-related operations that are critical to getting the job done. In a business,
there may be a need for computer software, implementation of network architecture to achieve the
company’s objectives or designing apps, websites, or games. So, any company that is looking to secure its
future needs to integrate a well-designed information system.
• Better data storage and access
Such a system is also useful for storing operational data, documents, communication records, and histories.
As manual data may cost a lot of time, information systems can be very helpful in it. Information system
stores data in a sophisticated manner, making the process of finding the data much easier.
• Better decision making
Information system helps a business in its decision-making process. With an information system, delivering
all the important information is easier to make better decisions. In addition, an information system allows
employees to communicate effectively. As the documents are stored in folders, it is easier to share and
access them with the employees.

Information Technology & Its Role in the Modern

Organization
Information technology (IT) has become a vital and integral part of every business plan. From multi-
national corporations who maintain mainframe systems and databases to small businesses that own a
single computer, IT plays a role. The reasons for the omnipresent use of computer technology in business
can best be determined by looking at how it is being used across the business world.

Communication Between Employees, Suppliers and

Customers
For many companies, email is the principal means of communication between employees, suppliers and
customers. Email was one of the early drivers of the Internet, providing a simple and inexpensive means
to communicate. Over the years, a number of other communications tools have also evolved, allowing
staff to communicate using live chat systems, online meeting tools and video-conferencing systems. Voice
over internet protocol (VOIP) telephones and smart-phones offer even more high-tech ways for employees
to communicate.

Inventory Management Systems

When it comes to managing inventory, organizations need to maintain enough stock to meet demand
without investing in more than they require. Inventory management systems track the quantity of each
item a company maintains, triggering an order of additional stock when the quantities fall below a pre-
determined amount. These systems are best used when the inventory management system is connected to
the point-of-sale (POS) system. The POS system ensures that each time an item is sold, one of that item is
removed from the inventory count, creating a closed information loop between all departments.

Data Management Systems

The days of large file rooms, rows of filing cabinets and the mailing of documents is fading fast. Today,
most companies store digital versions of documents on servers and storage devices. These documents
become instantly available to everyone in the company, regardless of their geographical location.
Companies are able to store and maintain a tremendous amount of historical data economically, and
employees benefit from immediate access to the documents they need.

Management Information Systems

Storing data is only a benefit if that data can be used effectively. Progressive companies use that data as
part of their strategic planning process as well as the tactical execution of that strategy. Management
Information Systems (MIS) enable companies to track sales data, expenses and productivity levels. The
information can be used to track profitability over time, maximize return on investment and identify areas
of improvement.
Managers can track sales on a daily basis, allowing them to immediately react to lower-than-expected
numbers by boosting employee productivity or reducing the cost of an item.

Customer Relationship Management

Companies are using IT to improve the way they design and manage customer relationships. Customer
Relationship Management (CRM) systems capture every interaction a company has with a customer, so
that a more enriching experience is possible. If a customer calls a call center with an issue, the customer
support representative will be able to see what the customer has purchased, view shipping information,
call up the training manual for that item and effectively respond to the issue.
The entire interaction is stored in the CRM system, ready to be recalled if the customer calls again. The
customer has a better, more focused experience and the company benefits from improved productivity.

Six Types Of Information Systems And Their Application

Although many information systems offer various benefits, typically, businesses use these five applications
in their company. Whichever information system you plan to implement in your business, here are the
benefits it will offer:
 It will induce innovation in business activities through its research and development.
 It will enable automation, reducing steps undertaken to complete a task.
 It helps keep the hardware, software, data storage, and networking system safe and up to date.
Now that you know the changes information systems can bring about in an organization, let’s look at the
application that yields the power to change the business process- types of information systems.
What Are The Types Of Information Systems?
1. Knowledge Work System
There are different knowledge management systems that an organization implements to ensure a continuous
flow of new and updated knowledge into the company and its processes. A knowledge work system (KWS)
is one of the knowledge management systems that ease the integration of new information or knowledge into
the business process.
Furthermore, KWS also offers support and resources to various knowledge creation techniques, artificial
intelligence applications, and group collaboration systems for knowledge sharing, among others. It also uses
graphics, visuals, etc., to disseminate new information. Below are some of the applications that work on the
core fundamentals of KWS.
 Designers often use computer-aided design systems (CAD) to automate their design process.
 Financial workstations are used to analyze huge amounts of financial data with the help of new
technologies.
 Virtual reality systems are found in the scientific, education, and business fields for using graphics
and different systems to present data.
2. Management Information System
The management information system provides aid to managers by automating different processes that were
initially done manually. Business activities like business performance tracking and analysis, making
business decisions, making a business plan, and defining workflow. It also provides feedback to the
managers by analyzing the roles and responsibilities.
A management information system is considered a significant application that helps managers immensely.
Here are some of the advantages of the information system:
 It enhances the efficiency and productivity of the company
 It provides a clear picture of the organization’s performance
 It adds value to the existing products, introduces innovation and improves product development
 It assists in communication and planning for business processes
 It helps the organization provide a competitive advantage
3. Decision Support System
A decision support system is an information system that analyses business data and other information related
to the enterprise to offer automation in decision-making or problem-solving. A manager uses it in times of
adversities arising during the operation of the business. Generally, the decision support system is used to
collect information regarding revenue, sales figures or inventory. It is used across different industries, and
the decision support system is a popular information system.
4. Office Automation System
An office automation system is an information system that automates different administrative processes like
documenting, recording data, and office transactions, among others. The office automation system is divided
into managerial and clerical activities. Here are some of the business activities that are done under this type
of information system:
 Email
 Voice mail
 Word processing
5. Transaction Processing System
The transaction processing system automates the transaction collection, modification, and retrieval process.
The peculiar characteristic of this type of information system is that it increases the performance, reliability
and consistency of business transactions. It helps businesses perform daily operations smoothly without
hassle.
Once you are well-versed with different types of information systems, understanding the application of these
systems becomes easy to comprehend. Therefore, in the last part of the article, we will look into applying
information systems.
6. Executive Support System
An Executive Support System or ESS helps top-level executives to plan and control workflow and make
business decisions. It is very similar to Management Information System or MIS.
Here are some of the unique characteristics of ESS:
 It provides great telecommunication, better computing capabilities, and effective display options to
executives.
 It enables them with information through static reports, graphs, and textual information on demand.
 It helps monitor performances, track competitors’ strategies, and forecast future trends, among
others.
How To Apply Information Systems in Business?
Here are some of the business activities that require the intervention of an information system.
 Enterprise resource planning (ERP)
Applying information systems to enterprise resource planning helps automate business administration and
planning functions.
  Supply chain management (SCM)
Information systems provide a common forum to connect with different parties in supply chain
management. Moreover, it makes communication between parties easy and resourceful.
 Customer relationship management (CRM)
Many information systems help in realizing customer requirements. Furthermore, other information
applications help companies interact with their audience easily and hassle-free.

UNIT V
6 Stages in Information Systems Development

What is Information System?

The system is a collection of various elements or entities that are used to process input into
an output. Inputs and outputs can be either raw or intact data into information — depending
on the processing designed to work in the system.
Meanwhile, information is the result of data processing used for a particular purpose. As for
what data means is raw facts that have not been processed and can not provide stimulus for
users to take action.
Thus, an information system can be interpreted as a set of interconnected elements to
process a given input into a particular output produced. The next stage of an information
system is a MIS (Management Information System) which has a higher complexity with the
final goal being used for the needs of analysis and decision making.

What is Information Systems Development?

As the name suggests, information system development or commonly known as SLC

(Systems Life Cycle) or SLDC (Software Development Life Cycle) is a process of making and
changing the system and the model and methodology used. In other words, an SDLC is the
preparation of a new system to replace the old system, both in whole and only partially.
Development of information systems is generally done because of problems that cannot be
accommodated by the old system. For example, the hospital where you work make an
overhaul SIMRS (Sistem Informasi Manajemen Rumah Sakit/Hospital Management
Information System) because of applications that previously could not do bridging with
BPJS. Considering the fact that the government has required it, then inevitably the hospital
must adjust the SIMRS it already has.
As for carrying out an information system development, the related team will consist of
several personnel, namely the project coordinator, system analyst and design, network
designer, programmer, technician (hardware), administrator, software tester, graphic
designer, and documentary.

Information System Development Stages

An information system development consists of six important stages, it is system survey,

needs analysis, design, implementation, testing, change and maintenance.

1) System Survey
The SLDC phase also consists of three main points: system identification, selection, and
system planning.
1) System Identification
This process is to identify the problems facing the company and the system it has. The team
will look for any opportunities that can be done to overcome this.
2) Selection
The selection phase will apply evaluation points to the development project to ensure the
solutions are created in accordance with the company’s expected targets.
3) System Planning
This step is the step of developing a formal plan to start working on and implementing the
information system development concept that has been chosen.

2) Needs Analysis

System requirements analysis is a technique for solving problems by decomposing the

components of the system. The aim is none other than to find out more about how each
component works and the interaction between one component with other components.
Some aspects that need to be targeted in the needs analysis in the development of
information systems include business users, job analysis, business processes, agreed rules,
problems and solutions, business tools, and business plans.

3) Design

The design or design of system development is intended to provide a complete blueprint as a

guideline for the IT team (especially programmers) in making applications. Thus the IT team
no longer makes decisions or works in a sporadic way.

4) Implementation

The stage of developing this information system is to work on a previously designed

development.

5) Testing
A system needs to be tested to ensure that the development carried out is appropriate
or not with the expected results. Tests that are applied are various, such as
performance, input efficiency, syntax (program logic), output, and so on.

This information system development stage requires preparation of various supporting

aspects. In addition to applications, hardware readiness and several other related facilities
also need to be prepared. As for implementation, several activities carried out include data
migration (conversion), training for users, and trials.

6) Change and Maintenance

This step covers the whole process in order to ensure the continuity, smoothness and
improvement of the system. In addition to monitoring the system at a certain time,
maintenance also includes activities to anticipate minor bugs (bugs), system improvements,
and anticipation of some risks from factors outside the system.