Information systems are generally used in organizations to help provide for the information needs of the organization. An information system can be defined as: a set of interrelated components that collects, stores, and processes data from various sources to provide information necessary to support and improve the day-to-day operations in a business.
Thus graphically, the expression would look like this:
By the end of this unit, you should be able to:
- Describe the components of a computerized information system.
- Distinguish between information system and information technology.
- Explain the objectives of an information system in an organization.
- Classify major categories of information systems.
Information systems transform data into useful information and include both technology and people. An information system generally incorporates one or more computers and the software to control them. In this case, the information system is said to be a computerized information system.
Components of CIS
A computerized information system (CIS) can be understood as having the following parts:
- Users – the people who add information to the system and request information from the system
- Hardware – not only the computers in the system but also any networks linking the computers, input devices like keyboards and mice, output devices like monitor and printers.
- Data – what the system stores and processes.
- Software – the electronic coding which controls all aspects of the hardware and the data.
- Documents – manuals on how to use the system, sometimes even files of data which should not or could not be stored electronically.
- Information System (IS) vs. Information Technology (IT)
Information System (IS): The flow of information in an organization and between organizations encompassing the information the business creates, uses and stores. Concerns with efficient use of resources for providing the required level of information support for the management of business operations. Represents the applications perspective.
Information Technology (IT): The enabling mechanism which facilitates the processing and flow of this information, as well as the technologies used in the physical processing to produce a product or provide a service. Includes telecommunications, computers and automation technologies, represents the technical perspective. Information technology has significantly expanded the power and potential of most information systems. Information technology is a contemporary term that describes the combination of computer technology (hardware and software) with telecommunications technology (data, image, and voice networks). Technology has created a data and information explosion in virtually all businesses. The ability of businesses to harness and manage this data and information has become a critical success factor in most businesses.
- Objectives of Information Systems in an Organization
Information systems in an organization are dedicated to improving the performance of knowledge workers in organizations through the application of information technology.
- Improving the performance is the ultimate objective of information
systems – not the storage of data, production of reports, or even ‘getting the right information to the right person at the right time.
- Knowledge workers (managers, professionals, staff analysts and clerical workers) are the clientele.
- Organizations are the context. Focus is on information handling in goal seeking organizations.
- The application of information technology is the challenge and opportunity facing the IS professional.
Major Categories of Information Systems
It is automated information systems that we are going to study. However, these still cover a huge variety of systems. It is useful to break them down into the following categories:
Classification by functional areas:
- Marketing Information System
- Manufacturing Information System
- Accounting and Finance
Early stages saw ad hoc development with private ownership of data and programs. Current wisdom is to build “integrated systems” with common databases.
Classification by support provided:
- Transaction Processing System (TPS): A system that processes data resulting from business transactions, updates operational databases, and produces business documents.
- Management Information System (MIS): A system or group of systems which collects and presents management information relating to a business in order to facilitate its control. Management Information Systems are those that support all management levels in the conduct of their functions, such as operations, administration, or planning and programming.
- Office Automation System (OAS): A system that automates office procedures and enhances office communications and productivity.
- Decision Support Systems (DSS): A system that provides interactive ad-hoc support for the decision making process of managers.
- Expert System (ES): A knowledge-based system that provides expert advice and acts as expert consultants to users.
- Executive Information Systems (EIS): A system that provides critical information tailored to the information needs of top management.
Relationship among TPS, MIS, DSS, EIS and ES:
- The technologies can be viewed as being unique classes of information technology.
- They are interrelated.
- They each support some aspects of managerial decision making.
- The evolution and creation of the newer tools help expand the role of IT for the betterment of management in organizations.
- The interrelationship and co-ordination between these tools is still evolving.
The Complexity of Information Systems
Information systems can be very complex even in a small organization:
- Many components (lots of information).
- Much interaction between components.
- Systems within systems.
- The intangibility of information (it is hard to define).
- The subjective nature of information.
The Benefits of Information Systems
A good information system ensures that:
System Conceptsptsthe right information is provided.
- to the right degree of accuracy
- when it is required
- in the right format/layout
- to the right people
- in the most efficient way possible.
The major function of information in an organization is to improve organizational efficiency. This can best be done through the effective use of information technology. The variety and categories of classifying information clusters definitely call for a more sustained process of creating information sharing interfaces that enhance organizational efficiency.