Information System Development:Information systems and IT

1.1 Information systems and IT

In the 21st century, the idea of an information system that does not rely on sophisticated information technologies is almost unimaginable. Information systems have always been essential to an organization's survival and effective computer-based information systems have come to be recognized as essential business assets. Laudon & Laudon (2002) suggest four factors that have altered the business landscape and made information systems strategically important:

• The global economy: Foreign trade in the United States represents more than 25% of economic activity, and successful organizations must be able to operate globally, compete in world marketplaces, and manage distributors, suppliers, and customers 24 hours a day in many countries. To be successful in the global market, organizations need powerful information systems to support this activity

• Industrial transformation: Industrial economies are becoming knowledge-based service-oriented economies. Services are information and knowledge intensive, and many jobs rely on creating and distributing information. Obvious examples include education and healthcare. Even the most tangible of products, such as motorcars, are becoming more and more knowledge intensive both with regard to the processes for designing and building them and in terms of the products themselves. For example, the General Motors' OnStar programme allows remote operators to detect when an accident occurs (the air bag is triggered) and to call the emergency services (the car can even set in motion processes that arrange for its own servicing, such as brake pad replacement). Consequently, manufacturers need less 'metal-bashers' and more designers, engineers, and IT specialists

• Business transformation: Traditional businesses are organized hierarchically and rely on standard operating procedures to deliver mass-produced product and services. New business organizations have flattened organizational structures and flexible combinations of resources that are organized around customer requirements to deliver mass-customized products and services. Organizations need considerable investments in information technology to meet these coordination and communication needs

• Digital firms: E-businesses conduct relationships with customers, suppliers, and employees and are able to sense and respond to changes in their environment rapidly. An example of a digital firm is Egg, a provider of financial services online, including mortgages, savings, insurance, and investments. We consider new forms of digital business in chapter 4.

An information system is a set of interacting components – people, procedures, and technologies – that together collect, process, store, and distribute information to support control, decision-making and management in organizations. The information system contains information about the organization itself, for example, the state of its internal operations, and about its environment, for example, information about customers, suppliers, and competitors. Without an information system an organization would not survive. This does not mean that the information system must use information technologies in the form of computers and communication networks. There are other forms of information system. Organizations have always needed information systems, although the formal aspects of these information systems would have been implemented using paper-based filing systems in the pre-IT era.

Our concern in this book is with computer-based information systems. By and large we will address the formal aspects of information systems, but must remember that many information systems in organizations are informal – the office grapevine and conversations at the water-cooler are typical examples of these. Although the informal aspects of information systems are difficult to manage and are not amenable to an engineering approach, their influence should not be under-estimated.

The definition of 'technology' is not without difficulty. Technology can and does often apply to devices such as computers and communications networks, but can also be applied to practices (for example, the software development process), and techniques (for example, database design). Information systems can be expected to make use of information technologies, but are not synonymous with technology. An information system is in essence a human services (the car can even set in motion processes that arrange for its own servicing, such as brake pad replacement). Consequently, manufacturers need less 'metal-bashers' and more designers, engineers, and IT specialists

• Business transformation: Traditional businesses are organized hierarchically and rely on standard operating procedures to deliver mass-produced product and services. New business organizations have flattened organizational structures and flexible combinations of resources that are organized around customer requirements to deliver mass-customized products and services. Organizations need considerable investments in information technology to meet these coordination and communication needs

• Digital firms: E-businesses conduct relationships with customers, suppliers, and employees and are able to sense and respond to changes in their environment rapidly. An example of a digital firm is Egg, a provider of financial services online, including mortgages, savings, insurance, and investments. We consider new forms of digital business in chapter 4.

An information system is a set of interacting components – people, procedures, and technologies – that together collect, process, store, and distribute information to support control, decision-making and management in organizations. The information system contains information about the organization itself, for example, the state of its internal operations, and about its environment, for example, information about customers, suppliers, and competitors. Without an information system an organization would not survive. This does not mean that the information system must use information technologies in the form of computers and communication networks. There are other forms of information system. Organizations have always needed information systems, although the formal aspects of these information systems would have been implemented using paper-based filing systems in the pre-IT era.

Our concern in this book is with computer-based information systems. By and large we will address the formal aspects of information systems, but must remember that many information systems in organizations are informal – the office grapevine and conversations at the water-cooler are typical examples of these. Although the informal aspects of information systems are difficult to manage and are not amenable to an engineering approach, their influence should not be under-estimated.

The definition of 'technology' is not without difficulty. Technology can and does often apply to devices such as computers and communications networks, but can also be applied to practices (for example, the software development process), and techniques (for example, database design). Information systems can be expected to make use of information technologies, but are not synonymous with technology. An information system is in essence a human

scientific and engineering paradigm. Engineering was possibly a suitable reference discipline when development was concerned with hardware and software support for repetitive processes, but it is a crude approach when dealing with social systems.

It is also possible that the methodology becomes an end in its own right. Wastell (1996) noted that:

Methodology becomes a fetish, a procedure used with pathological rigidity for its own sake, not as a means to an end. Used in this way, methodology provides a relief against anxiety; it insulates the practitioner from the risks and uncertainties of real engagement with people and problems.

It is tempting to assume that a single methodology can be applied universally – to all types of project in all types of organization. Coupled with an inadequate recognition of developer-specific factors, IS development methodologies can become the 'one size fits all' solution. We do not suggest that the response to this should be to declare a free-for-all where IS development is tackled in an ad hoc manner, but it is important to be aware of the dangers of methodologically-induced blindness; a methodology helps organize and frame problems more clearly, but it can also be a way of not seeing.