Information system
A system is a set of artifacts that together achieve some outcome. An information system is a system that achieves a business outcome. An information system collects, manipulates stores and reports information regarding the business activates of an organization, in order to assists the management of that organization in managing the operations of the business.
Information systems and technologies have become a vital component of successful business and organizations. They constitute an essential field of study in business administration and management. It is just as important to have a basic understanding of information system, as it is also understand any other functional area in business.
Overview of information systems
Information systems play three fundamental roles in the business success of an enterprise.
1. Support of its business processes and operations.
2. Support of decision making by its managers.
3. Support of its strategies for competitive advantage.
Until 1960s, the role of information systems was simple: transaction processing, record keeping, accounting and other electronic data processing (EDP) applications. Then another role was added, as the concept of management information systems (MIS) was conceived. The new role focused on providing managerial end-users with predefined management reports that would give managers the information they need for decision making purpose.
By 1970s, the concept of decision making support systems was born. The new role focused on providing managerial end-users with ad hoc and interactive support of their decision-making processes.
In 1980s, several new roles for information systems appeared.
First, the rapid development of microcomputer processing power, applications software packages and telecommunications networks gave birth to the phenomenon of end user-computing. Now end-user can use their own computing resources to support their job requirements instead of waiting for the indirect support of corporate information services departments.
Second, the concepts of Executive information system (EIS) were developed. These information systems attempt to give top executives an easy way to get the critical information they want, then they want it, tailored to the formats they prefer. Third, breakthroughs occurred in the development and application of artificial intelligence (AI) techniques to Business Information Systems. Expert systems (ES) and other knowledge based systems forged a new role for information systems.
Types of information systems
The information system in the real world can be classified in several different ways. These classifications can be grouped in to two major categories, viz., operation support system and management support systems. The following figure illustrates this conceptual classification of information systems.
A) Operation support system:
Information systems have always been needed to process data generated by, and used in, business operations. Such operation support systems produce a variety of information products for internal and external use. It can be characterized by three types.
1. Transaction processing system: Operation support system includes the major category of Transaction processing systems (TPS). Transaction processing system records and processes data resulting from the business transactions. Typical example is information system that process sales, sales purchase and inventory changes. The result of such processing are used to update customer, inventory and organizational databases. Transaction processing systems process transaction in to two basic ways. In batch processing, transaction data are accumulated over a period of time and processed periodically. In real-time (or online) processing data is processed immediately after a transaction occurs.
2. Process control systems: Operation support systems are information systems that use a variety of information technologies to help people work together. Enterprise collaboration systems help to communicate ideas, share resource, and coordinate our cooperative work.
3. Enterprise collaboration systems: Enterprise collaboration systems are information systems that use a variety of information technologies to help people work together. Enterprise collaboration systems help us collaborate to communicate ideas, share resources, and coordinate our cooperative work.
B) Management support systems:
When information system focuses on providing information support for effective decision making by managers, they are called management support systems. The concept for management support systems was developed to counteract inefficient development and effective use of computers. Though tarnished by early failures, the MIS concept is still recognized as vital to efficient information system in the organizations for two major reasons.
1. It emphasizes the management orientation of information technology in business. A major goal of computer based information systems should be the support of management decision making, not merely the processing of data generated by business operations.
2. It emphasize that a system framework should be used for organizing information systems applications. Business applications of information technology should be viewed as interrelated and integrated computer based information technology should be viewed as interrelated and integrated computer based information systems and not as independent data processing jobs.
1. Management information systems: Management information systems are the most common form of management support systems. They provide managerial end user with information product that much of their day to day decision making needs. MIS provides a variety of reports and displays to management. MIS retrieve information about internal operations form databases that have been updated by transaction processing systems.
2. Decision support systems: Decision support systems are a natural progression from information reporting systems and transaction processing systems. Decision support system are interactive, computer based information systems that use decision models and specialized databases to assist the decision making processes of managerial end users. DSS provides managers with analytical modeling, simulation, data retrieval and information presentation capabilities. Managers generate the information they need for more unstructured types of decisions in an interactive, simulation based process.
3. Executive information systems: Executive information systems are management information tailored to the strategic information needs to top management. Top executives get the information they need from many sources, including letters memos, periodicals, and reports produced manually as well as by computer systems. Other sources of executive’s information are meetings, telephone calls and social activities.
The goal of computer based information systems is to provide top management with immediate and easy access to selective information about key factors that are critical to accomplishing a firm’s strategies objectives. Graphic display is used extensively and immediate access to the internal and external databases is provided.
Developing an information system solutions
The information system life cycle is the way that an information system is constructed. Because it is almost easier to perform a sequence of smaller tasks to build one large task, the overall life cycle is broken in to series of smaller steps called phases. The number of phases varies from organization to organization.
1. Requirement phase: In the requirement phase, the client’s requirements are extracted. That is, the client and the future users of the information systems to be developed interact with the information system development team in order to determine the client’s needs. The results of this study are presented in the form of the requirements document.
2. Analysis phase: The aim of the analysis phase is to draw up the specification document. The specification document lays out what the information has to do. Once the specification document has been signed off by the client, the project management plan can be drawn up. This detailed plan includes budget, staffing needs, and list of what will be delivered including the automatically generated orders, reports listing sales to the public, and reports listing purchases from the wholesalers.
3. Design phase: The members of the development team described how the information system is to be developed. Typically, the system is broken in to smaller pieces called modules. Each module is then designed in detailed. The development team has to describe the algorithms used by the modules and the data structures within the modules. The result is presented in the form of design document.
The specification document states that report must include the weekly sales of goods from each of the wholesalers, and the overall sales total. The design document on the other hand states where on the page the date is to appear, what the column headings are to be, how many characters to use for the name of the wholesaler, how many blank spaces to leave, and then how many digits to use for the total weekly sales from the wholesales, and so on.
4. Implementation phase: The design of the modules is given to be programming team to translate in to an appropriate programming language. COBAL is the world’s most widely used programming language, whereas modern information systems are often implemented in C++ or Java. The modules are integrated to form the complete information system.
5. Maintenance Phase: After the information system has been installed, it will need to be modified, either to remove any remaining faults from the system or because the system needs to be extended in some way according to the environmental changes and new requirements.
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