For decades, many business decisions have been based on the intuition or experience of their managers. While managerial judgment remains very valuable, nowadays the purely intuitive approach is insufficient.
In an increasingly competitive and complex business environment, the ability to make sound decisions at the right time has become a key asset for organizational sustainability. Faced with this challenge, information systems have ceased to be merely operational tools to become strategic allies that drive organizational intelligence. This article provides an initial approach to information systems and aims to highlight the importance of selecting a system that contributes to improving the decision-making process and strategic planning of the company.
Information systems allow organizations to:
- Identify patterns and trends in advance.
- Measure the impact of past decisions and learn from the results.
- React quickly to market signals (changes in demand, prices, competition…).
What are information systems and what are their main types?
Information systems are organized sets of technological, human and procedural resources that allow collecting, processing and distributing useful information for decision-making. According to the classic model, these systems are classified according to the hierarchical levels they serve:
- ESS and DSS (Executive Support Systems, Decision Support Systems) → Strategic level: They are oriented to executives and focus on unstructured strategic decisions. Example: Corporate strategic dashboards (Balanced Scorecard).
- MIS (Management Information Systems) → Management and administration level (tactical level): They support the tactical level by providing operation summaries. Example: Sales dashboards, cost analysis systems or reporting tools.
- KWS and OAS (Knowledge Work Systems, Office Automation Systems) → Knowledge level: Knowledge work and office automation systems that create and distribute knowledge. Example: Office suites, document management systems (like SharePoint), Computer-Aided Design (CAD) software.
- TPS (Transactional Processing Systems) → Operational level: They respond to daily operational needs. Example: ERPs, MES (Manufacturing Execution System), SCADA/DCS/PLC (Industrial process control and supervision).
In this section we would like to highlight the existence of the ISA-95 standards (also known as IEC 62264), which are a reference framework (not a tool or information system as such) whose purpose is to organize or standardize the integration between control systems (plant level) and business systems (management level).
Notable advantages of using information systems in SMEs
The use of information systems (hereinafter IS) by organizations brings a series of advantages, among which the following could be highlighted:
- Greater speed in decision-making: Although sometimes this is not the case, there is a clear trend in the perception that the use of IS accelerates decision-making.
- Improved analysis: The possibility of accessing more information sources and exploring diverse alternatives represents a relevant improvement in decision-making.
- Increased organizational learning: individual competencies, collaboration and knowledge creation are strengthened.
- Better strategic planning: IS allow reducing uncertainty, foreseeing problems and adjusting strategies dynamically.
Challenges for using information systems
But it’s not all advantages, there are also some challenges that companies must face, for example:
- Learning curve: The benefits depend on the time of use and the degree of maturity of the system in the organization. In fact, the frequency of use of IS is much more influential than the accumulated time of use for generating tangible benefits in decision-making.
- Unequal perception of benefits: Influenced by cognitive styles (how a person perceives, processes, stores, remembers and uses information), corporate culture and degree of technological training.
- Cost and complexity: Some initiatives may fail due to lack of integration, usage difficulties or high costs without clear return.
- Data quality and governance: An information system is only as useful as the quality of the data it processes. Incomplete, duplicate, obsolete or inconsistent data can lead to erroneous decisions.
- Resistance to change in internal processes: Beyond technology, information systems often involve changes in routines, workflows and responsibilities. This can generate resistance, both due to fear of losing control and the perception of loss of autonomy.
In summary, information systems are much more than technological tools: they are strategic levers that allow companies to be more intelligent, fast, competitive and resilient. In times when every decision counts, having relevant, timely and reliable information is what makes the difference between improvising and leading.
Digital transformation does not begin with large investments, but with a change of approach: deciding less by instinct and more by evidence. Because in a world saturated with data, the true competitive advantage is not having more information, but knowing how to use it better.
Don’t hesitate and request the free advisory services from the Economic Office of Galicia and an expert person will contact you to help you.
