Information System (IS)

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Information System (IS) is the collection of technical and human resources that provide the storage, computing, distribution, and communication for the information required by all or some part of an enterprise. A special form of IS is a management information system (MIS), which provides information for managing an enterprise.[1]

An information system (IS) is a collection of multiple pieces of equipment to disseminate information. Hardware, software, computer system connections and information, information system users, and the system’s housing are all part of an IS. An information system commonly refers to a basic computer system but may also describe a telephone switching or environmental controlling system. The IS involves resources for shared or processed information, as well as the people who manage the system. People are considered part of the system because, without them, systems would not operate correctly.[2]

Background of Information System (IS)[3]

Business firms and other organizations rely on information systems to carry out and manage their operations, interact with their customers and suppliers, and compete in the marketplace. Information systems are used to run inter-organizational supply chains and electronic markets. For instance, corporations use information systems to process financial accounts, manage their human resources, and reach their potential customers with online promotions. Many major companies are built entirely around information systems. These include eBay, a large auction marketplace; Amazon, an expanding electronic mall and provider of cloud computing services; Alibaba, a business-to-business e-marketplace; and Google, a search engine company that derives most of its revenue from keyword advertising on Internet searches. Governments deploy information systems to provide services cost-effectively to citizens. Digital goods — electronic books, video products, and software—and online services, such as gaming and social networking, are delivered with information systems. Individuals rely on information systems, generally Internet-based, for conducting much of their personal lives: socializing, studying, shopping, banking, and entertainment. As major new technologies for recording and processing information were invented over the millennia, new capabilities appeared, and people became empowered. The invention of the printing press by Johannes Gutenberg in the mid-15th century and the invention of a mechanical calculator by Blaise Pascal in the 17th century are but two examples. These inventions led to a profound revolution in the ability to record, process, disseminate, and reach for information and knowledge. This led, in turn, to even deeper changes in individual lives, business organizations, and human governance. The first large-scale mechanical information system was Herman Hollerith’s census tabulator. Invented in time to process the 1890 U.S. census, Hollerith’s machine represented a major step in automation, as well as an inspiration to develop computerized information systems. One of the first computers used for such information processing was the UNIVAC I, installed at the U.S. Bureau of the Census in 1951 for administrative use and at General Electric in 1954 for commercial use. Beginning in the late 1970s, personal computers brought some of the advantages of information systems to small businesses and to individuals. Early in the same decade, the Internet began its expansion as a global network of networks. In 1991 the World Wide Web, invented by Tim Berners-Lee to access the interlinked information stored in the globally dispersed computers connected by the Internet, began operation and became the principal service delivered on the network. The global penetration of the Internet and the Web has enabled access to information and other resources and facilitated the forming of relationships among people and organizations on an unprecedented scale. The progress of electronic commerce over the Internet has resulted in a dramatic growth in digital interpersonal communications (via e-mail and social networks), distribution of products (software, music, e-books, and movies), and business transactions (buying, selling, and advertising on the Web). With the worldwide spread of smartphones, tablets, laptops, and other computer-based mobile devices, all of which are connected by wireless communication networks, information systems have been extended to support mobility as the natural human condition. As information systems enabled more diverse human activities, they exerted a profound influence over society. These systems quickened the pace of daily activities, enabled people to develop and maintain new and often more-rewarding relationships, affected the structure and mix of organizations, changed the type of products bought, and influenced the nature of work. Information and knowledge became vital economic resources. Yet, along with new opportunities, the dependence on information systems brought new threats. Intensive industry innovation and academic research continually develop new opportunities while aiming to contain the threats.

Components of Information Systems[4]

While information systems may differ in their use within an organization, they typically contain the following components. The first four components are part of the general information technology (IT) of an organization. Procedures, the fifth component, are very specific to the information needed to answer a specific question:

  • Hardware: Computer-based information systems use computer hardware, such as processors, monitors, keyboards, and printers.
  • Software: These programs organize, process, and analyze data.
  • Databases: Information systems work with data organized into tables and files.
  • Network: Different elements need to be connected to each other, especially if many different people in an organization use the same information system.
  • Procedures: These describe how specific data are processed and analyzed to get the answers for which the information system is designed.

Types of Information System (IS): The Pyramid Model (See Figure 1.)[5]

A 'type' or category of information system is simply a concept. This abstraction has been created to simplify a complex problem by identifying areas of commonality between different things. The different types of information systems that can be found are identified through a process of classification. Depending on how you create your classification, you can find almost any different types of information system. However, it is important to remember that different kinds of systems exist to deal with the particular problems and tasks found in organizations. Consequently, most attempts to classify Information systems into different types rely on the way in which tasks and responsibilities are divided within an organization. As most organizations are hierarchical, the way in which the different classes of information systems are categorized tends to follow the hierarchy. This is often described as "the pyramid model" because the way in which the systems are arranged mirrors the nature of the tasks found at various different levels in the organization. A four-level pyramid model of different types of Information Systems based on the different hierarchy levels in an organization. The first level represents transaction processing systems for workers. The second level represents management information systems for middle managers. The third level represents decision support systems for senior managers. The fourth level represents executive information systems for executives.

The Four Level Pyramid Model
Information System -The Four Level Pyramid Model
Figure 1. source: Concept Draw

  • Transaction Processing Systems: Transaction Processing Systems are operational-level systems at the bottom of the pyramid. They are usually operated directly by shop floor workers or front-line staff, which provide the key data required to support operations management. This data is usually obtained through the automated or semi-automated tracking of low-level activities and basic transactions.
  • Management Information Systems: For historical reasons, many of the different types of Information Systems found in commercial organizations are referred to as "Management Information Systems." However, within our pyramid model, Management Information Systems are management-level systems used by middle managers to help ensure the smooth running of the organization in short to medium term. The highly structured information provided by these systems allows managers to evaluate an organization's performance by comparing current with previous outputs.
  • Decision Support Systems: A Decision Support System can be seen as a knowledge-based system used by senior managers, which facilitates the creation of knowledge and allow its integration into the organization. These systems are often used to analyze existing structured information and allow managers to project the potential effects of their decisions into the future. Such systems are usually interactive and are used to solve ill-structured problems. They offer access to databases and analytical tools, allow "what if" simulations, and may support the exchange of information within the organization
  • Executive Information Systems: Executive Information Systems are strategic-level information systems at the top of the Pyramid. They help executives, and senior managers analyze the environment in which the organization operates to identify long-term trends and plan appropriate courses of action. The information in such systems is often weakly structured and comes from internal and external sources. Executive Information Systems are designed to be operated directly by executives without the need for intermediaries and are easily tailored to the preferences of the individual using them.

Features of Information Systems[6]

  • Data: The key feature of any information system is data. Data is information stored in its raw (or most basic) form. The reason why information is stored like this is so that only the information that is needed for specific functions can be used. For example, if a company held information on one of its main products and they just wanted to see what the product number is then there would be no point in finding a thirty-page document about the product. By using an information system the user would be able to search for the product name and return the product number only. This is a simple example, but the key point is that data is used to store information in its simplest form. A range of different data items can be used together then to form valid information by selecting the data that is needed.
  • People: People are another key feature of information systems, and we need to understand how the system works to maximize the potential of the data stored in the information system. Firstly technical people are required actually to design the information system and must have a strong knowledge of database design and programming so that the requirements of the system can be implemented successfully. Management needs to make decisions on how the information system works based on the types of reports and information that they need to analyze and run the business successfully. Employees in various departments must inform management and technical staff what they require from an information system. For example, purchasing would need to have a list of items that are ordered on a regular basis. In contrast, personnel needs the ability to store a range of information about employees’ personal details. Data entry clerks need to ensure that the information system is kept up to date with the most recent data so that details required by management are accurate. If purchasing did not enter everything they ordered into the system before the end of the month then the financial department would not be able to process accurate tax returns.
  • Hardware: Information systems need to run on computer systems that meet the needs of the systems. The hardware requirements need to be analyzed before the system is built so that the long-term needs of the system can be met. Different hardware components, such as a server and networking components, such as routers and switches, will be required for the system to work over a network. If the information system is internal only, then LAN (local area network) technologies are needed. Still, if the system needs to be available to run the internet across a range of sites then additional security measures and a range of web servers may be needed. A hardware firewall will be needed to block unauthorized attempts to access data stored in the information system illegally.
  • Software: A range of software packages may be needed to create an information system. Software is a key component of any information system as it lets the end user access the system to enter and find information. The key software component of any information system will definitely be a database or DBMS (database management system). The database will store data that can be accessed in many different forms to create valid and up-to-date information by running complex queries on the database. If the information system needs a multi-user feature then the design will probably mean that the database runs in the background and cannot be accessed directly. Application software will run on top that will allow the end user to access the data stored in the system through a gateway. Programming languages such as or PHP might be used to write front-end programs that for the user interface of an information system. These programs will be designed to make the system as simple as possible for the end user. The software will be used to allow users to run a relevant report on the system without needing to have any knowledge of how the database works on the back end.
  • Telecommunications: For hardware and software to run over a network, we need telecommunications, such as networking technologies. For a range of people to access information on an information system then, the system needs to run over a network, and as previously mentioned, hardware components to create a telecommunications network are needed to do this. In summary, we can see that there are many key features of an information system that need to work together for the system to run successfully. If we look back at people then technical people need to constantly monitor, back up, and upgrade the system so that valuable data is not lost. The best hardware and software applications and networking technologies should be used to design the system based on the budget.

Information System (IS) Development Approaches (See Figure 2.)[7]

As illustrated in Figure 2. the different approaches to developing Information Systems include the following:

  • Traditional Systems Life Cycle (SDLC)
  • Prototyping
  • Software packages
  • End-user development
  • Outsourcing

Information System (IS) Development Approaches
Information System (IS) Development Approaches
Figure 2. source: University of Kentucky

Information Systems vs. Information Technology[8]

Information systems (IS) and information technology (IT) are often synonymous. In reality, information technology is a subset of information systems. Information systems is an umbrella term for the systems, people, and processes designed to create, store, manipulate, distribute, and disseminate information. The field of information systems bridges business and computer science. One of the reasons people may not distinguish between IS and IT is that they assume all information systems are computer-based systems. An information system, however, can be as simple as a pencil or paper. Separate, the objects are just tools. Used together, they create a system for recording information. Although information systems heavily rely on computers and other technology-based tools, the term predates computers and can include non-technological systems. Information technology (IT) falls under the IS umbrella but deals with the technology involved in the systems. Information technology can be defined as the study, design, implementation, support, or management of computer-based information systems. IT typically includes hardware, software, databases, and networks. Information technology often governs the acquisition, processing, storage, and dissemination of digitized information, or data, generated through the disciplines of computing and telecommunications. Information technology focuses on managing technology and improving its utilization to advance overall business goals.

Information Systems Research[9]

Information systems research is generally interdisciplinarily concerned with studying the effects of information systems on the behavior of individuals, groups, and organizations. Hevner et al. (2004) categorized research in IS into two scientific paradigms including behavioral science, which is to develop and verify theories that explain or predict human or organizational behavior, and design science, which extends the boundaries of human and organizational capabilities by creating new and innovative artifacts.

Salvatore March and Gerald Smith proposed a framework for researching different aspects of Information Technology, including outputs of the research (research outputs) and activities to carry out this research (research activities). They identified research outputs as follows:

  • Constructs which are concepts that form the vocabulary of a domain. They constitute a conceptualization used to describe problems within the domain and to specify their solutions.
  • A model is a set of propositions or statements expressing relationships among constructs.
  • A method that is a set of steps (an algorithm or guideline) used to perform a task. Methods are based on a set of underlying constructs and a representation (model) of the solution space.
  • An instantiation is the realization of an artifact in its environment.

Also, research activities include:

  • Build an artifact to perform a specific task.
  • Evaluate the artifact to determine if any progress has been achieved.
  • Given an artifact whose performance has been evaluated, it is important to determine why and how the artifact worked or did not work within its environment. Therefore, theorize and justify theories about IT artifacts.

Although Information Systems as a discipline has been evolving for over 30 years now, the core focus or identity of IS research is still subject to debate among scholars. There are two main views around this debate: a narrow view focusing on the IT artifact as the core subject matter of IS research and a broad view focusing on the interplay between social and technical aspects of IT embedded in a dynamic evolving context. A third view calls on IS scholars to pay balanced attention to the IT artifact and its context. Since studying information systems is an applied field, industry practitioners expect information systems research to generate findings immediately applicable in practice. This is not always the case, however, as information systems researchers often explore behavioral issues in much more depth than practitioners would expect them to do. This may render information systems research results difficult to understand and has led to criticism. In the last ten years, the business trend is represented by the considerable increase in Information Systems Function (ISF) role, especially regarding enterprise strategies and operations support. It became a key factor to increase productivity and support new value creation. To study an information system itself, rather than its effects, information systems models are used, such as EATPUT. The international body of Information Systems researchers, the Association for Information Systems (AIS), and its Senior Scholars Forum Subcommittee on Journals (23 April 2007) proposed a 'basket' of journals that the AIS deems as 'excellent' and nominated: Management Information Systems Quarterly (MISQ), Information Systems Research (ISR), Journal of the Association for Information Systems (JAIS), Journal of Management Information Systems (JMIS), European Journal of Information Systems (EJIS), and Information Systems Journal (ISJ). A number of annual information systems conferences are run in various parts of the world, most of which are peer-reviewed. The AIS directly runs the International Conference on Information Systems (ICIS) and the Americas Conference on Information Systems (AMCIS). At the same time, AIS-affiliated conferences include the Pacific Asia Conference on Information Systems (PACIS), European Conference on Information Systems (ECIS), the Mediterranean Conference on Information Systems (MCIS), the International Conference on Information Resources Management (Conf-IRM), and the Wuhan International Conference on E-Business (WHICEB). AIS chapter conferences include the Australasian Conference on Information Systems (ACIS), the Information Systems Research Conference in Scandinavia (IRIS), the Information Systems International Conference (ISICO), the Conference of the Italian Chapter of AIS (itAIS), the Annual Mid-Western AIS Conference (MWAIS) and Annual Conference of the Southern AIS (SAIS). EDSIG, which is the special interest group on education of the AITP, organizes the Conference on Information Systems and Computing Education and the Conference on Information Systems Applied Research, which are both held annually in November.

Information System (IS) for Business Effectiveness[10]

In this digital age with fierce competition, managers within organizations must be completely aware and receptive to evolving changes. One of the quickest evolving changes is within information systems. This change in information systems is contributed to advances in computing and information technology. Applying the concept that information system is strictly under the purview of the IT department can lead to an adverse situation for the company. Therefore, organizations need to recognize information systems' contribution to business effectiveness.

  • Systems and Innovation Opportunities: Development in information systems has brought opportunities but also threats. The onus is on the organization to identify opportunity and implement it. The organization needs to develop strategies that can best utilize information systems to increase overall productivity. The most common practice with regard to information systems is automation. Though automation is helpful, innovation using information systems gives the organization a competitive edge.
  • Systems and Customer Delight: Organizations are fully aware that the proliferation of information systems has reduced product life cycle, reduced margin, and brought in new products. In such a scenario, customer satisfaction alone will not suffice; the organization must strive for customer delight. Information systems with data warehousing and analytics capability can help organizations collect customer feedback and develop products that exceed customer expectations. This customer delight will lead to a loyal customer base and brand ambassador.
  • Systems and Organizational Productivity: Organizations require different types of information systems to mitigate distinctive processes and requirements. Efficient business transaction systems make organizations productive. Business transaction systems ensure that routine processes are captured and acted upon effectively, for example, sales transactions, cash transactions, payroll, etc. Further, information systems are required for executive decisions. Top leadership requires precise internal and external information to devise a strategy for the organization. Decision support systems are designed to execute this exact function. Business transaction systems and executive decision support systems contribute to overall organizational productivity.
  • System and Workers Productivity: Information systems have facilitated the increase in workers’ productivity. With the introduction of email, video conferencing, and a shared whiteboard, collaboration across organization and departments have increased. This increased collaboration ensures the smooth execution and implementation of various projects across geographies and locations.
  • Information systems as a Value Add for Organization: Organizations use information systems to achieve their various strategy and short-term and long-term goals. The development of information systems was to improve the productivity and business effectiveness of the organization. The success of information systems is highly dependent on the prevalent organizational structure, management style, and overall organizational environment. With correct development, deployment, and usage of information systems, organizations can achieve lower costs, improved productivity, growth in the top-line as well as the bottom line, and competitive advantage in the market. The readiness of workers into accepting information systems is key to realizing their full potential of them. The development and deployment of information systems have revolutionized how business is conducted. It has contributed to business effectiveness and increased productivity.

See Also


Further Reading