FUNDATIONS OF INFORMATION SYSTEMS PART1

FUNDATIONS OF INFORMATION SYSTEMS

1 Introduction

In today’s world of ever increasing complexities of business, technology and management, every business organization wants to grow and keep the firm in good strategic position. This is possible only if the firm has adequate, quick and reliable information about the contemporary business environment. Information technology and information system is one such tool to provide information required by the business organization and its stake holders so that managers can initiate decisions which help growth of the organization. The globalization context makes the product and market as global.

The organizations are highly dependent on information technology and systems to make the business. In this context business managers and professionals rely on a variety of information systems that uses information technologies. In this chapter we understand the concepts of data, information, system’s concept, information systems, and its resources, role of information in business, dimensions and attributes of information, different perspectives of information system and strategic objectives of information systems.

2 Concept of Data and information

Data: Data consists of raw facts, such as an employee’s name and number of hours worked in week, inventory part numbers. Several types of data can be used to represent to represent these facts which are organized or arranged in a meaningful manner, they become information.

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information such as the total sales of soap or the total sales revenue from soap for a specific stores or sales territory.

2.1 Information

Information can be defined as the data which is organized and presented at a time and place so that the decision maker may take necessary action. Information in other wards is the result/product of processing data.

2.2 Different types of information

a. Environmental information

i. Government policies

ii. Economic trends

iii. Technological environment

iv. Factors of production

b. Competitive information

i. Industry demand

ii. Firm demand

iii. Competition

iv. Past performance

v. Present activity

vi. Future plans

c. Internal information

i. Sales forecast

ii. Financial plan

iii. Supply factors

iv. Policies

2.3 Data versus Information

Data: Streams of raw facts representing events such as business transactions. Once, enterprises get their data into shape, that data can more easily be turned into information.

Information: Data that has been put into a meaningful and useful context. Usually, help to make a decision. Information is a cluster of facts that are meaningful and useful to human beings in the processes such as making decisions. “Information is power”: Mission of the Information is put the right information, in the right hands, at the right time, in the right format.

3 Concept of System

3.1 Introduction to Systems

Systems are diverse in nature like economic system, computer system, decision support system, communication system, transport system, educational systems. This means use live in an era of systems.

A system is composed with set of interrelated components which has a clearly defined boundary and working together to achieve a common set of objectives by accepting inputs and producing outputs in an organized transformation process. The simple system is shown in figure 1.1.

Figure: 1.1. System

The figure 1.1 shows the system has a set of elements like input, processing, output, feedback and control element. The output of the system is subjected to variations and will pass to the notice of input and processing stage to initiate corrective actions. The feedback element will do this job. A control element will exercise the control over the elements of the system to take care of feedback. Such a system is called closed loop or cybernetic system which has two important characteristics. One is self monitoring and other is self regulation to maintain the system objectives.

Thus a system is a group of elements or components joined together to fulfill certain functions. A system is an assemblage of procedures, processes, methods, routine techniques.

A system is made up of sub systems. These subsystems may be composed of further subsystems.

Various types of systems

3.2 Characteristics of a system

In general, the characteristics of a system is may be listed as follows.

1. A set of interrelated components

2. With a clearly defined boundary

3. Working together

4. To achieve a common set of objectives

5. By accepting inputs and producing outputs

6. In an organized transformation process

4 Information system

An information system has a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. An information system has an organized combination of People, Hardware and Software, Communication networks, Data resources and Policies and procedures.

Therefore, information system is stores, retrieves, transforms, and disseminates information in an organization. The simple information system is shown in figure 1.2.The Information System transforms the input of data resources into an output of information and its products. The processed data as information shall be stored for further uses.

Figure 1.2.Information system

4.1 Components of Information System

Various components of Information Systems is presented in Figure 1.3. Components of Information Systems are Data, Hardware, Software, Telecommunications and network, People and Procedures. Table 1.1 indicates the roles of various Components of Information Systems.

Table 1.1. The roles of various Components of Information Systems.

Data: Input that the system takes to produce information

Hardware: A computer and its peripheral equipment: input, output, and storage devices. Hardware includes data communication equipment

Software: Set of instructions that tell the computer how to take data in, how to process it, how to display information, and how to store data and information

Telecommunications and transmission and reception electronic data

network: Hardware and software that of text, pictures, sound and animation

facilitate fast in the form of

People: Information systems professionals and users who analyse organisational information needs, design and construct information systems, write computer programs, operate the hardware, and maintain software.

Procedures: Rules for achieving optimal and secure operations in data processing. Procedures include priorities in dispensing software applications and security measures.

5 Classification of Information Systems

Information Systems may be broadly classified as Operations support systems and Management Support Systems. They may be further classified as mentioned below. The figure 1.4 represents the classification of Information Systems.

1. Operations support systems process data generated by business operations Major categories are:

i) Transaction processing systems

ii) Process control systems

iii) Office automation systems

2. Management Support Systems provide information and support needed for effective decision making by managers Major categories are

i) Management Information System

ii) Decision Support Systems

iii) Executive Information System

6 Major roles of business applications of information systems

The three important roles business applications of information systems which are the vital roles that information can perform for the enterprises are mentioned below.

1. Support Business Process and Operations.

2. Support Business Decisions.

3. Support strategies for competitive advantages

The three important roles business applications of information systems are illustrated in Figure 1.5.

Support Business Process and Operations: information system support the Business Process and Operations of an organization. For an example even a small medical retail shop today depends on an information system. As the consumer enquires the medicine to buy, the retailer would log into the information systems to see the availability of the medicine, to know the cost and billing of the medicine. Therefore every business transactions and business process need the support of the information systems.

Support Business Decisions: An Information system not only support business process and operations but also provides information that helps the mangers or end user to make the decisions related to the business. With reference to the above example, in a retail medical store, the Information system provides the stores manager status of the inventory, transactions of the products, fast moving products, sales details of the specific period etc., with the help of which he can take decisions to order or to keep stock, discounts, investments and so on.

Support strategies for competitive advantage: Information system provides its innovative applications and competitive advantage. For helps the organizations to gain Support strategies for an example in a large book house, stores manger may initiate to establish electronic kiosks to help customer for their quick references and to save their time in their purchases. This may differentiate the book competitors and creates an opportunity to increase the firms business. Information system (IS) and Information Technology (IT) house from its Although, people often interchange the terms Information system and Information Technology which goes hand in hand, the distinction may be noted as follows.

Information system refers all the components and resources necessary to deliver its information and functions to the organization, While, Information Technology refers the various hardware components necessary for the systems to operate. Figure 1.6 presents the role of IT in IS.