Information Systems (IS)

Information systems is an integrated or interconnected set of components used to collect, store, process and transmit data to provide information and help in decision-making. Information systems include hardware, software, data, procedures and people.

Consider an online shopping platform like Amazon. It uses information systems to manage product listings, process orders, track shipments, and handle customer inquiries. All these components work together seamlessly to provide users with a convenient and efficient shopping experience, which also helps Amazon to have all the insights they need to make strategic decisions.

Components of Information Systems

The five components that must come together in order to produce an information system are:

  • Hardware (like computers and servers)
  • Software (such as applications and databases)
  • Data (raw facts and figures)
  • Procedures (rules and protocols)
  • People (users and administrators)
  1. Hardware – refers to the physical components of a computer system that you can touch and see. This includes devices such as the computer itself, monitors, keyboards, printers, storage devices and other technology equipment.

Role in Information Systems: Hardware provides the necessary infrastructure for capturing, processing and storing data. It executes the instructions provided by software, processes data input, and delivers output to users.

  1. Software – consists of programs, applications, and other digital instructions that tell the hardware how to perform specific tasks. It includes operating systems, applications, and utilities.

Role in Information Systems: Software acts as the intermediary between the user and the hardware, enabling users to interact with the system. It controls the hardware components, manages data, and facilitates various functions and operations within the system.

  1. Data – refers to raw facts, figures, and other types data that represent information. It can be in the form of text, numbers, images, audio, or video.

Role in Information Systems: Data is the core component of an information system. It is collected, processed, and stored by the system to generate meaningful information that can be used for decision-making, analysis, and other business processes.

  1. Procedures – are the step-by-step instructions or guidelines that dictate how tasks and operations should be performed within an information system.

Role in Information Systems: Procedures ensure consistency, accuracy, and efficiency in performing tasks. They provide a structured approach to data entry, processing, reporting, and maintenance, helping to maintain the integrity and reliability of the system.

  1. People – refer to the individuals who interact with the information system, including users, administrators, developers, and other stakeholders.

Role in Information Systems: People play a crucial role in the successful operation and utilization of information systems. They input data, use software applications, follow procedures, and make decisions based on the information generated by the system. Their knowledge, skills, and actions significantly impact the performance, security, and effectiveness of the system.

Media Types in Presenting Information

Information can be presented in various forms, including text, images, audio, and video. Each type of media has its advantages and is suitable for different purposes. Text is excellent for conveying detailed information, while images and video are more engaging and can illustrate complex concepts effectively.

Think about a cooking recipe. It may be presented as a text document with step-by-step instructions. Alternatively, it could be a video tutorial showing each step visually. Both formats serve the same purpose of guiding you through the cooking process but appeal to different learning styles.

Attributes of a Good Information System

A good information system should possess certain attributes to be effective.

These include:

  • Accuracy (providing correct information)
  • Timeliness (delivering information when needed)
  • Relevance (offering information that is useful)
  • Completeness (including all necessary information)
  • Reliability (being dependable and consistent)
  • Security (protecting information from unauthorized access and breaches)

A banking app ensures accuracy by displaying up-to-date account balances and transaction history. It provides timely alerts for account activity and relevant offers based on the user’s spending patterns. The app also ensures security by encrypting sensitive data and requiring authentication for account access.

Processes for the Development of Information Systems

Developing an information system involves several stages, including:

  • Planning (defining goals and requirements)
  • Analysis (understanding user needs and system capabilities)
  • Design (creating the system architecture and interface)
  • Implementation (building and testing the system)
  • Maintenance (supporting and updating the system over time)

When a company decides to develop a new customer relationship management (CRM) system, they start by planning the features and functionalities they need to improve customer interactions. Then, they analyze customer feedback and market trends to understand user needs. The system is designed with a user-friendly interface and integrated with existing systems. After implementation, regular maintenance and updates ensure the system remains effective and up-to-date.

Distinguishing between Manual and Computerized Information

Manual information systems rely on paper-based processes, while computerized systems use digital technology to manage and process information. Manual systems are often slower and more prone to errors, whereas computerized systems offer automation, accuracy, and scalability.

Consider a library’s catalog system. In a manual system, librarians use paper cards to track books and borrowers, which can be time-consuming and prone to mistakes. In a computerized system, a digital database is used to manage book records and borrower information, allowing for quicker searches and updates.

Manual System

Computerised System

A Manual Information System also refers to as Bookkeeping System in which recording of data is done on paper stored in a File Cabinet.

An Electronic/Computerised Information System uses a computer system (Hardware & software) to store and process data.

Retrieving information from a manual information system is slower than on a computerised system.

Data on a computer database can easily be retrieved, sorted and filtered to help in decision making.

Information stored on manual system takes more space than on a computerised system. Manual Systems store information on File Cabinets that usually takes space.

Computerised system store information on a computer hard drive which takes less space.

May require to make a copy of all papers which is insufficient.

It’s easier to make backups on a Computerised System than on a manual system

Manual systems may be cheaper than computerised systems.

May require machines, software and trained personnel to operate the system.

Types of Information Systems

Information systems are categorized into different types based on their functions and scope. Transaction processing systems (TPS) handle day-to-day transactions like sales and purchases. Office Automation Systems (OAS) automate routine office tasks such as document creation, scheduling, and communication, enhancing productivity and organizational efficiency. Management information systems (MIS) provide managers with reports and analysis for decision-making. Decision support systems (DSS) assist in complex decision-making processes. Executive Information Systems (EIS) offer consolidated views of key performance indicators and critical data to facilitate strategic decision-making by top-level executives.

Transaction Processing System

Transaction Processing System (TPS) is a type of information system that captures and processes data generated during an organization’s day-to-day transactions. These transactions could be related to sales, purchases, inventory management, payroll, and more. The primary purpose of a TPS is to ensure that data is recorded accurately, processed efficiently, and stored securely.

Examples of Transaction Processing System:

  • Supermarket Point of Sale System: When you go to a supermarket and purchase items, the Point of Sale (POS) system captures the transaction details, such as the items purchased, quantities, prices, and payment information. This data is processed in real-time, updating inventory levels and generating sales reports.
  • Online Banking System: When you transfer funds, pay bills, or check your account balance through an online banking system, these transactions are processed by a TPS. The system ensures that the transactions are executed accurately and securely, updating your account information in real-time.

Office Automation System

An Office Automation System (OAS) is a type of information system that uses hardware, software, and network technologies to automate and streamline office tasks and processes. The primary goal of an OAS is to enhance productivity, improve communication, and facilitate efficient information management within an organization.

Examples of Office Automation System:

  1. Microsoft Office Suite: Microsoft Office Suite, including tools like Microsoft Word, Excel, PowerPoint, and Outlook, is a popular OAS used by businesses worldwide. These tools facilitate document creation, spreadsheet analysis, presentation development, and email communication.
  2. Workflow Management Systems: Tools like Trello, Asana, and are examples of OAS that help organizations manage projects, tasks, and workflows. These platforms allow users to create tasks, assign responsibilities, set deadlines, and track progress, ensuring efficient project management.

Management Information System

A Management Information System (MIS) is a type of information system that provides managers and decision-makers with the tools and information they need to make informed decisions and manage organizational resources effectively. MIS collects, processes, stores, and disseminates information related to various aspects of an organization, such as operations, finance, marketing, human resources, and more.

Examples of Management Information System (MIS):

  1. Human Resources Information System (HRIS): An HRIS manages employee data, payroll processing, benefits administration, and recruitment processes. It provides managers with insights into employee performance, attendance, training needs, and organizational structure to support workforce planning and management.
  2. School Management System: A School Management System manages student records, attendance, grading, scheduling, and communication between teachers, students, and parents. It provides administrators and educators with insights into student performance, attendance trends, and academic progress.

Decision Support System

A Decision Support System (DSS) is a specialized information system designed to assist decision-makers in making complex decisions by providing relevant data, analyses, and interactive tools. DSS enables managers and executives to evaluate different alternatives, analyze scenarios, and make informed decisions based on comprehensive insights and information.

Examples of Decision Support System (DSS):

  1. Healthcare Decision Support System: A Healthcare DSS assists healthcare professionals in diagnosing diseases, planning treatments, and managing patient care. It integrates patient data, medical research, and clinical guidelines to provide recommendations and insights that support clinical decision-making.
  2. Educational Decision Support System: An Educational DSS assists educators, administrators, and policymakers in analyzing educational data, evaluating teaching methods, and making decisions related to curriculum development, student performance, and educational policies. It integrates student data, assessment results, and educational research to provide insights into educational outcomes and support informed decision-making in the education sector.

Executive Information Systems

An Executive Information System (EIS) is a specialized information system designed to support the strategic information needs of top-level executives and decision-makers within an organization. EIS provides critical data and trends across various departments and functions to enable executives to make informed decisions and drive organizational strategy.

Examples of Executive Information System (EIS):

  1. Business Performance Dashboard: An EIS may include a business performance dashboard that displays key metrics, such as sales revenue, profitability, market share, customer satisfaction, and operational efficiency. Executives can monitor these metrics in real-time, track performance trends, and identify areas that require attention or improvement.
  2. Human Resources Dashboard: An EIS may include a human resources dashboard that displays workforce analytics, employee engagement, talent management metrics, and organizational culture insights. Executives can use this information to make informed decisions regarding recruitment, talent development, employee retention, and organizational development.
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