Business systems


We must have been hearing about business systems in various places may be our places of work, schools, homes and so on; today we would talking about business systems, types, importance and so much more.

A business system is a combination of policies, personnel, equipments and computer facilities to co-ordinate the activities of a business organisation. It can also be seen as procedures, processes, methods, or course of action designed to achieve a specific result. Its component parts and interrelated steps work together for the good of the whole. Creating effective business systems is the only way to attain results that are consistent, measurable, and ultimately benefit customers including the organisation as a whole.

Lead GenerationCustomer ServicePurchasing
Sales ConversionHiringInventory Management
PricingAccountingInformation Systems
Order FulfillmentCollectionsCustodial
source:Box Theory

Types of business systems

Knowledge Management Systems: A knowledge management system is put in place in businesses to allow for easier creation and sharing of information. This type of business system is typically used in organizations where employees create new knowledge and expertise to be shared by their colleagues. A good knowledge management system allows for efficient classification and distribution of knowledge. Intranets are examples of knowledge management systems.

Inventory System: Inventory system monitors the status of items held in an inventory. These systems report on the quantities of goods on hand, as well as when items should be purchased to replenish stock and what critical items are needed. Inventory systems are crucial to organisations that maintain large and costly inventories.

Decision Making Systems: Also known as executive support systems, this type of business system enables higher management and executives to make long-term strategic decisions on the direction of the business. This type of system is flexible as it is not required for the daily operation of the business and only applies to particular situations. It collects, analyzes and sums up key internal and external data that is then used in the business by senior executives when developing their strategic plans.

Payroll Business System: A payroll system consists of all forms, procedures, files, equipment’s, personnel, and computer support necessary to completely process the payment of employees. A payroll system fully handles all tax deductions, personal deductions, and the update of payroll data related to each employee.

Personnel System: Personnel system describes varied aspects of an organisation’s work force. The outputs generated by personnel systems are frequently used in compiling progress reports.

Importance of business systems.

  • To cut down the operating costs and increase savings.
  • To smooth the flow data through various levels of the organisation.
  • To speed up the execution of results with the reliable data available in a system.
  • To monitor strengths and weaknesses.
  • To implement strategic planning, creation, and operation.
  • To meet and satisfy customer needs.

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