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The Importance of Management Information Systems in the Digital Transformation of the Current Companies

Currently, an increasing number of business organizations that rely on information systems to carry out the management of their operations, interact with suppliers and clients and compete in the market in which they operate. In the context of a company, the information systems fulfill the objectives of any other system in general, such as: the processing of entries, the storage of data related to the entity and the production of reports and other types of data summary instruments.

However, in the era of digital transformation, the use of information systems, and in particular those related to management-related custom eLearning, play a fundamental role in guaranteeing the technological integration of all administrative processes of the company, and thus gain access to the precise knowledge to make quick and accurate decisions. The term transformation, in this context, refers to a significant change in the key processes or businesses that are carried out daily in the company, which it ranges from the way of conceiving or managing the types of products and services it offers to the way in which delivery is made. In this scenario, it is vital to take into account that simply incorporating technology into the company does not produce digital transformation, it is only possible to achieve this goal if the organization changes everything in itself to take advantage of the potential of these technologies.

The companies have to redesign their underlying business models

According to Westerman, Bonnet and McAfee (2014), in a detailed compilation of studies carried out by Capgemini Consulting and the Center of the Massachusetts Institute of Technology (MIT) state that the experiences analyzed in more than 50 companies and 157 executives demonstrate that to achieve digital transformation. Organizations have to redesign most of their underlying business models, as well as all operational processes involving resulting products and services. It is also made clear that now is the time for digital transformation and that the longer companies wait, the more difficult it will be to carry out this process. The advances that will be seen in the next decade, the way to transform companies by countless technological innovations, will make everything that is happening today be seen as the beginning of change in the era of digital transformation. 

Information systems are a component derived from the General Systems Theory (Van Gigch, 1987; Bertoglio & Johansen, 1982), so they must be analyzed following the parameters of this theory. Hence, analysts are concerned primarily with studying the organizational system or entity in which information systems operate, to understand the context and implications of that environment globally.

Management Information Systems

Management Information Systems can be defined as a integrated set of components, which aims to collect, store, process and provide data and any other type of digital product. The main components of an information system are: (1) The hardware or components Physical, (2) Software or source code, (3) Telecommunications, (4) Databases and servers, and (5) Human resources and procedures.

Management Information Systems are located at an administrative level, which is related to monitoring, control, decision-making and resource management functions. It is at this level since the information it produces performs the function of a planning and decision-making tool that helps to improve the productivity of an organization, thus using its daily control operations. The systems that are at an administrative level aim to provide regular reports or summaries related to the operations or procedures that the company executes. 

The information systems (IS) must be adjusted according to the different levels, specialties and workers of an organization, which is why you can see the different types of IS from two points of view, one functional, which will depend on the activities carried out, and another that It will depend on the groups that are served.

In relation to the user’s perspective, there are Transaction Processing Systems (TPS) that generate information that allows tracking of basic transactions of the organization such as sales orders, payroll , orders, employee records, among others; in general, internal operations and relations of the company with abroad. These systems answer questions such as: How many products are in stock? What happened to the payment of the XYZ company? Among others that show transaction control reports.

Economic globalization is posing challenges, hardly achievable by the traditional company, if it does not bet on a complete transformation towards digital. This transformation goes through an organizational restructuring, of processes, systems and incentives, and must have the participation and involvement of the entire organization and its departments. This change must also take place at a strategic level, which implies thinking about the business model from a technological perspective. The use of technology should redefine the internal conception of the company, and how it affects the way in which income is generated, they relate to customers and suppliers.

The importance of digital transformation

Business digital transformation is about using technology and its advancements to modernize business strategy, models, operations, products, the marketing approach, the goal, etc. It is a comprehensive process that involves every business activity started, executed, and evaluated in the business. Adopting digital transformation can dramatically improve business results. The main reasons for affirming this are given because with this transformation it is possible to: (a) improve efficiency, (b) allow rapid and effective decision-making, (c) increase accessibility, (d) increase customer satisfaction, and ( e) Reload profits and return on investment.

A critical reason that slows down the performance of most companies’ business processes is poor or minimal communication between the workforce. Manual processes are time consuming and take great effort to make it work. A great advantage in adopting this strategy is that the efficiency of the workforce can be improved by leaps and bounds. By mobilizing the entire process, the latest tools such as workflow management solutions, mobile applications, intranets, communication, and collaboration among employees, can be seamlessly accomplished. This ensures better efficiency and productivity. In the end, the Management Information Systems are the backbone of digital transformation run by current companies.

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Soban Basra