Information System (IS)

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) refers to a collection of multiple pieces of equipment involved in the dissemination of 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, to manage their human resources, and to reach their potential customers with online promotions. Many major companies are built entirely around information systems. These include eBay, a largely 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—such as 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: for socializing, study, 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 organization, 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 the global network of networks. In 1991 the World Wide Web, invented by Tim Berners-Lee as a means 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 how they are used 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, keyboard and printers.
  • Software: These are the programs used to 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 in order 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, an abstraction, which has been created as a way to simplify a complex problem through identifying areas of commonality between different things. The different types of information system that can be found are identified through a process of classification. Depending on how you create your classification, you can find almost any number of different types of information system. However, it is important to remember that different kinds of systems found in organizations exist to deal with the particular problems and tasks that are found in organizations. Consequently, most attempts to classify Information systems into different types rely on the way in which task 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 levels of hierarchy 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 System 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 the management of operations. 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 that are used by middle managers to help ensure the smooth running of the organization in the 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, 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 that are found 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 to plan appropriate courses of action. The information in such systems is often weakly structured and comes from both internal and external sources. Executive Information System are designed to be operated directly by executives without the need for intermediaries and 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 their 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 to remember 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 on the data that is needed.
  • People: People are another key feature of information systems and need to understand how the system works to maximize the potential of the data stored in the information system. Firstly technical people are required to actually 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 need to make decisions on how the information system works based on the types of reports and information that they need to analyse and run the operation of the business successfully. Employees in a range of different departments need to inform management and technical staff of 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 whereas personnel need the ability to store a range of information about employee’s 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 that 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 analysed 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 but if the system needs to be available to run of 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 any 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 is what 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 be used to store data that can be access in many different forms to create valid and up to date information by running complex queries on the database. If the information system needs 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 use of the system as simple as possible for the end user. Software will be used to allow users to run relevant report on the system without needed 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 in order 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 application 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 considered 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 and a piece of paper. Separate, the objects are just tools. Used together, they create a system for recording information. Although information systems are heavily reliant 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 themselves. 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 the overall business goals.

Information Systems Research[9]
Information systems research is generally interdisciplinary concerned with the study of 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 which is a set of propositions or statements expressing relationships among constructs.
  • A method which 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 including:

  • 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 that focuses on the interplay between social and technical aspects of IT that is embedded into a dynamic evolving context. A third view calls on IS scholars to pay balanced attention to both the IT artifact and its context. Since the study of information systems is an applied field, industry practitioners expect information systems research to generate findings that are 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 increasing of Information Systems Function (ISF) role, especially with regard the enterprise strategies and operations supporting. It became a key-factor to increase productivity and to 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, the majority of which are peer reviewed. The AIS directly runs the International Conference on Information Systems (ICIS) and the Americas Conference on Information Systems (AMCIS), while 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 Australasian Conference on Information Systems (ACIS), Information Systems Research Conference in Scandinavia (IRIS), Information Systems International Conference (ISICO), Conference of the Italian Chapter of AIS (itAIS), 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, it is essential that managers within organization are completely aware and receptive to evolving changes. One the quickest evolving change is within information systems. This change in information systems is contributed to advances in computing and information technology. Applying a concept that information system is strictly under the purview of IT department can lead to adverse situation for the company. Therefore, it is essential for organization to recognize information systems contribution in 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. Organization needs to develop strategies, which can best utilize information systems to increase overall productivity. The most common practice with regards to information systems is automation. Though automation is helpful, innovation using information systems give the organization a competitive edge.
  • Systems and Customer Delight: Organizations are fully aware that proliferation of information systems has reduced product life cycle, reduced margin and brought in new products. In such scenario customer satisfaction alone will not suffice, organization needs to strive for customer delight. Information systems with data warehousing and analytics capability can help organization collect customer feedback and develop products, which exceed customer expectation. 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 process and requirements. Efficient business transaction systems make organization productive. Business transaction systems ensure that routine process are captured and acted upon effectively, for example, sales transaction, cash transaction, payroll, etc. Further, information systems are required for executive decision. Top leadership requires precise internal as well as external information to devise a strategy for 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 introduction of email, video conferencing and shared white board collaboration across organization and departments have increased. This increased collaboration ensures smooth execution and implementation of various projects across geographies and locations.
  • Information systems as a Value Add for Organization: Organization use information systems to achieve its various strategy as well as short-term and long-term goals. Development of information systems was to improve productivity and business effectiveness of organization. Success of information systems is highly dependent on the prevalent organization structure, management style and overall organization environment. With correct development, deployment and usage of information systems, organization can achieve lower costs, improved productivity, growth in top-line as well as the bottom-line and competitive advantage in the market. The readiness of workers into accepting the information systems is the key in realizing the full potential of them. Development and deployment of information systems have revolutionized the way business is conducted. It has contributed to business effectiveness and increased in productivity.

See Also


  1. Definition of Information System (IS) Techtarget
  2. What is Information System (IS) Techopedia
  3. Background of Information System (IS) Britannica
  4. What are the Components of Information Systems?
  5. Types of Information System (IS): The Pyramid Model EMSM
  6. The Key Features of information Systems Content Writer
  7. What are the various approaches to developing information systems?
  8. Information Systems vs. Information Technology FloridaTechOnline
  9. Information Systems Research Wikipedia
  10. Information System (IS) for Business Effectiveness Management Study Guide

Further Reading