Benefits of Information Systems
As you may have noticed from the illustration on fund-raising, information systems matter to nonprofit organizations in almost the same way they do to for-profit businesses. Obviously, nonprofit organizations do not have the luxury of for-profit businesses to make large capital investments in information technology. However, even modest investment in information technology can be beneficial to nonprofit organizations, because information systems:
- Redefine the way business is being done in the world, including nonprofit organizations that have to compete for fewer financial resources with more nonprofit competitors;
- Help organizations achieve greater productivity, efficiency, and effectiveness, thus contributing to enhance their path toward financial sustainability;
- Provide strategic opportunities and competitiveness to organizations that differentiate themselves from competitors based on new options and services linked to the use of new technologies;
- Provide real economic value to the operations of an organization through cost reduction, increases in revenues, strategic positioning, and access to data and networking that help make better decisions to improve process.
Dimensions of Information Systems
An information system is articulated around technology, but is also linked to organization and management.
Technology: As previously indicated, technology is at the heart of an information system. Organizations use computer hardware (e.g., central processing units, storage devices, and physical media), computer software (e.g., operating system, application and enterprise software, and Internet platforms), storage technology (e.g., database management systems, data warehouse), and communication technology (e.g., network, Internet) to create information technology infrastructures (ITI) that help cope with change in their external environments. In that context, technology is at the core of an information system, because the information infrastructure serves as the foundation on which any specific information system can be built to serve particular needs of the organization. In other words, once an ITI is built, any unit in the organization can create a micro-information system that can inform data-driven decision making to improve processes, services, efficiency, or effectiveness.
Organization: An information system does not exist in a vacuum. It is part of an organizational structure that includes people, politics, culture, and process. Therefore, the creation of an information system must take into account the internal and external environments of an organization. An information system is not an end in itself. It is a system of support. Therefore, its development or transformation must be collaborative and integrative, and consider the overall mission or purpose of an organization. A well thought-out information system is an asset for any organization, including nonprofit organizations. A nonintegrative information system can turn into a disaster that costs an organization its existence. This applies also to nonprofit organizations. In other words, organization is an important dimension of information systems.
Management: The role of management is to support an organization in making decisions and developing action plans that can support strategic foci and help organizations overcome current and potential challenges. Part of management s responsibility is to initiate organizational change whenever it is necessary to further the interests or the mission of an organization. The development and maintenance of information systems is part of management's roles. Further, information systems are essential to helping managers gather data to make strategic and operational decisions. For example, the development of new products, programs, or services by an organization can be disruptive unless it has an information system that can not only inform the decision-making process, but also provide the flexibility to integrate new initiatives into the system without destroying existing assets. It is the role of management to facilitate changes and transitions in the information systems of an organization. Management has a key role to play in deciding which technology investments to pursue.