Information system

Overview

An information system (IS) is a formal, sociotechnical, organizational system designed to collect, process, store, and distribute information. In a sociotechnical perspective, information systems are composed by four components: task, people, structure (or roles), and technology.

History

The history of information systems coincides with the history of computer science that began long before the modern discipline of computer science emerged in the twentieth century. Regarding the circulation of information and ideas, numerous legacy information systems still exist today that are continuously updated to promote ethnographic approaches, to ensure data integrity, and to improve the social effectiveness & efficiency of the entire process.

Types of Information Systems

There are several types of information systems, including the following common types:

Transaction processing systems

Transaction processing systems (TPS) process the company's business transactions and thus support the operations of an enterprise. The goal of a TPS is to process transactions and produce outputs that are beneficial to the user.

Management information systems

Management information systems (MIS) are used to design, implement, manage, and utilize an information system in a business environment. MIS are made up of applications and database systems that support business processes.

Decision support systems

Decision support systems (DSS) are a type of information system that supports business or organizational decision-making activities.

Expert systems and neural networks

Expert systems and neural networks are information systems that support decision-making and problem-solving.

Data warehouses and data marts

Data warehouses and data marts are used to store data that are used for creating reports such as trend reports, exception reports, and reports that show actual performance versus goals.

Office automation systems

Office automation systems (OAS) support communication and productivity in the enterprise by automating workflow and eliminating bottlenecks. OAS may be either horizontal or vertical.

Enterprise collaboration systems

Enterprise collaboration systems (ECS) are information systems used to facilitate efficient sharing of documents and knowledge between teams and individuals in an enterprise.

A photo of a computer system showcasing different components of an information system.

Components of Information Systems

Information systems consist of the following components:

Hardware

The term hardware refers to machinery. This category includes the computer itself, which is often referred to as the central processing unit (CPU), and all of its support equipment.

Software

The term software refers to computer programs and the manuals (if any) that support them. Computer programs are machine-readable instructions that direct the circuitry within the hardware parts of the system to function in ways that produce useful information from data.

Data

Data are facts that are used by programs to produce useful information. Like programs, data are generally stored in machine-readable form on disk or tape until the computer needs them.

Procedures

Procedures are the policies that govern the operation of a computer system. "Procedures are to people what software is to hardware" is a common analogy that is used to illustrate the role of procedures in a system.

People

Every system needs people if it is to be useful. Often the most overlooked element of the system is the people, probably the component that most influence the success or failure of information systems.

Information Systems and Organizational Departments

Information systems are used in various organizational departments, including the following:

Finance and Accounting

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 organization is fundamentally sound and that all financial reports and documents are accurate.

Human Resources

In human resources, information systems are used for developing, maintaining, and managing human resources. This includes employee training, employee development, recruiting, planning, and performance evaluation.

Manufacturing and Production

Information systems play a vital role in the manufacturing sector where it helps in understanding, visualizing and analyzing the various processes involved in the production of goods.

Sales and Marketing

In sales and marketing, systems are used in reaching potential customers, selling the product or service to them, processing their orders, and maintaining relationship with them.

Customer Relationship Management

Customer relationship management (CRM) systems use information systems to coordinate all of the business processes surrounding the firm’s interactions with its customers in sales, marketing, and service.

Challenges in Information Systems

There are several challenges that are commonly experienced in information systems, including the following:

Security

Security of information systems is a significant challenge. Unauthorized access, damage to the system and data, and theft of information are some of the threats that information systems face.

Scalability

Scalability is another challenge that information systems face. As the organization grows, the information system must be able to handle an increasing amount of work.

Cost

The cost of installing, maintaining, and updating an information system can be high.

Change Management

Change management is a challenge in all information system implementations. Employees must be willing to work with the new system and to learn the new process.