Information systems are collections of multiple information resources, such as software, hardware, telecommunications networks, system housing and users. These systems are used by businesses and organizations to collect, process and disseminate data and information.
Tangible Benefits of an Information System
The tangible benefits of an information system are those that can be easily quantified, such as increased revenues and cost savings. These benefits can be monetized through the use of payback methods, which calculate the amount of time required for an investment to repay itself through net cash inflows.
Improved decision making: Organizations need information to make the best decisions possible, and information systems allow managers to access and analyze the data they need. This allows them to make better decisions about their products, services and operations, which helps them stay competitive.
Increased customer service: Information systems can help businesses keep track of their customers’ preferences and needs, which can result in happier customers and increased loyalty. They can also assist businesses in understanding their market and improving their offerings to better suit the needs of the community.
Reduced costs and improved efficiency: Information systems can help businesses cut down on time spent on mundane tasks, freeing up employees to focus on more value-added activities. This can lead to increased productivity and efficiency, which can in turn help businesses become more profitable.
While it is not easy to quantify all intangible benefits, they are still important to consider when making a decision on an information system. Using stakeholder involvement to value intangible benefits is one way to do so.