IT tools to produce management information are plentiful and varied in their complexity. These tools (some of which outlined below) all contain features and functionality all designed to help produce useful management information…
Databases
Databases are key components in any information system. A database is a storage space for all the information in a company, held on a hard drive or server. It helps to organise and index data which speeds up the retrieval of information.
Organising information can be assisted by using something called a Data Model which is the first step in the database design process. A data model analyses data objects that are used in a business and identifies the relationships between those data objects. For example when a supermarket needs to find information on a product, the system would find the product and tell the user how much stock there is and the price of the product. Each individual product needs a price and a stock quantity.
AI (artificial intelligence) is a method of making work easier by making a computer or system do the work. AI systems have rules that are changeable and that affect how the AI system tries to simulate actions of an employee with expert skills. Using the supermarket example from earlier, this system can monitor the stock level of products and the fluctuation of the price as it changes. If there is a large amount of products in stock, the system can then lower the price of the products so that they can sell more, but if there is a low amount of stock, then the system can raise the price.
Predictive Modelling
Predictive modelling is an important part of an information system as it can help businesses with predictions and help them understand what can happen in the future. This system looks at data over a long time period of about 10 years and compares it to see how the data has changed over that time. It uses this information in order to create and estimate what profit projections may be like over the next 10 years. Other values are also taken into account such as buying premises or hiring more staff but most companies use predictive modelling to forecast profits over the next few years.
The Internet
A good way to make an information system better is to make it accessible over the internet. A business should, however, take into account access permissions before doing this unless they want it accessed by the general public. The benefits of using an information system online is that it may remove problems that any business can face when using their own network. It can also make life easier for staff as they can work from home and have 24/7 access to the system. Businesses that use information systems on the internet include Amazon and eBay. They use a sales system online along with information such as pricing, product specs and stock levels. A certain amount of information is publicly accessible (stored on online databases) and a certain amount is only accessible by staff.
Data Mining Systems
A data mining system is a tool that is used in an information system in order to help organizations analyse huge amounts of data with a view to detecting common patterns and learning new things.
For example retail stores use customer shopping habits/details to optimize the layout of their stores in order to improve customer experience and increase profits. The store might track the best selling products and then move them to the part of the store which is furthest away from the main entrance in order to maximise the chances that customers will buy something else on their way to getting that product.