Lesson 1, Topic 1
In Progress

1.1. Introduction to Information Systems

ryanrori February 1, 2021

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Information systems are a strategic asset to any organisation. How information is organised, managed and made available to decision makers can be the key to gaining a competitive advantage. And the systems that capture, support and analyse a firm’s information can be the difference between a firm that survives and a firm that soars.

 Information Systems arranges people, data, processes, communications, and information technology to support and improve operations in a business. IS has contributed to changes in industry structure, led to dramatic increases in the productivity of firms, made markets more efficient, and transformed the competition structure in several industries. More than $2 trillion is invested in IT worldwide each year, which is over 50% of all capital expenditures.

These systems access, organise, summarise, and displayed information for supporting routine decision making in the functional areas. Geared toward middle managers, MIS are characterised mainly by their ability to produce periodic reports such as a daily list of employees and the hours they work, or a monthly report of expenses as compared to a budget 

Typical uses would be in Replenishment, Pricing Analysis (Markdowns) and Sales Management. The primary purpose of I.S. is to process data into information

Purpose and application of IS

Information systems are the software and hardware systems that support data-intensive applications. There are various types of information systems, for example: transaction processing systems, office systems, decision support systems, knowledge management systems, database management systems, and office information systems. 

Critical to most information systems are information technologies, which are typically designed to enable humans to perform tasks for which the human brain is not well suited, such as: handling large amounts of information, performing complex calculations, and controlling many simultaneous processes.

A Computer Based Information System is essentially an IS using computer technology to carry out some or all of its planned tasks. The basic components of computer based information system are:

  • Hardware– these are the devices like the monitor, processor, printer and keyboard, all of which work together to accept, process, show data and information.
  • Software– is the programs that allow the hardware to process the data.
  • Databases– are the gathering of associated files or tables containing related data.
  • Networks– are a connecting system that allows diverse computers to distribute resources.
  • Procedures– are the commands for combining the components above to process information and produce the preferred output.

The first four components (hardware, software, database and network) make up what is known as the information technology platform. Information technology workers could then use these components to create information systems that watch over safety measures, risk and the management of data. These actions are known as information technology services.

Certain information systems support parts of organisations; others support entire organisations, and still others, support groups of organisations. Recall that each department or functional area within an organisation has its own collection of application programs, or information systems. These functional area information systems (FAIS) are supporting pillars for more general IS namely, business intelligence systems and dashboards. As the name suggests, each FAIS support a particular function within the organisation, e.g.: accounting IS, finance IS, production/operation management (POM) IS, marketing IS, and human resources IS. In finance and accounting, managers use IT systems to forecast revenues and business activity, to determine the best sources and uses of funds, and to perform audits to ensure that the organisation is fundamentally sound and that all financial reports and documents are accurate. Other types of organisational information systems are FAIS, Transaction processing systems, enterprise resource planning, office automation system, management information system, decision support system, expert system, executive dashboard, supply chain management system, and electronic commerce system. Dashboards are a special form of IS that support all managers of the organisation. They provide rapid access to timely information and direct access to structured information in the form of reports. Expert systems attempt to duplicate the work of human experts by applying reasoning capabilities, knowledge, and expertise within a specific domain.

Information system is an integrated set of components for collecting, storing, and processing data and for delivering information, knowledge, and digital products. Business firms and other organisations rely on information systems to carry out and manage their operations, interact with their customers and suppliers, and compete in the marketplace. For instance, corporations use information systems to reach their potential customers with targeted offers or to process financial accounts, and to manage their human resources.