A system in business is a collection of elements that work together to perform a specific function. A closed system has no interaction with external elements, and it can be used to protect confidential information or for long-term analysis purposes. However, an open system is generally more useful for a business to interact with other companies, customers, and suppliers.
In business terms, a system is a collection of elements within the business that work together to perform a specific function. Elements of a system include employees, software, external vendors, individual business departments, and a myriad of other elements of the business working in tandem. A closed system is defined as a system that has no interaction with any element external to the system itself. For most businesses, a completely isolated system is rarely practical, but in some cases a closed system makes sense in the context of the business and the system’s function within that business. In other cases, the term “closed system” is used to refer to a business system that is not fully closed but has minimal interaction with external elements.
There are several reasons why closed systems exist in companies. For example, if a particular system is highly proprietary, containing confidential information about the company or its employees, it could be established as a closed system in order to prevent that information from being compromised or stolen through interaction with external systems. Another similar system could be installed to protect it from viruses or electronic intrusions. Systems are often set up to prevent the addition of unauthorized software by partially locking them down to protect system data.
Another reason a company might choose to create a closed system is for long-term analysis purposes. A department within the company may want to analyze specific data, separating it from any influence of interaction with the external environment. In this case, such a system would be the best way to provide information for this type of analysis. A partially closed system can also provide insight into how the business responds to very specific environmental changes. This type of data can be used to determine how the company should respond to these changes.
Aside from very specific uses, a closed system approach is generally much less popular and much less useful to a business than the open system approach. An open system allows a company to interact with other companies, customers and suppliers. The system may have too many limitations for a large company to perform all of its necessary functions and is also prone to entropy as the data within the system becomes irrelevant over time. In general, companies operate using a variety of systems with varying degrees of open and closed approaches, allowing the various systems to provide targeted data and a variety of functionality.
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