Information system in business PDF

Preview

Summary

An Information System can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. Another definition of an Information system (by Buckingham et al (1987b) is : A syst...

Description

An Information System can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. Another definition of an Information system (by Buckingham et al (1987b) is : A system that assembles, stores, processes, and delivers information relevant to an organization (or to society), in such a way that the information is accessible and useful to those who wish to use it, including managers, staff, clients, and citizens. An information system is a human activity (social) system, which may or may not involve the use of computer systems. Also, in addition to supporting decision-making, information systems help workers and managers to analyze complex problems, develop new products, and integrate the various modules and departments. Moreover, the 'transmission losses inter-departmental communication are reduced considerably leading to better coordination and improved transparency (information sharing) within the organization as a whole. Three activities provide the information that organizations need. These activities are Input, Processing, and Output. 'Input' consists of the acquisition of the raw data, which is transformed into more meaningful packets of 'Information' employing 'Processing'. The processed information now flows to the users or activities also called 'Output'. The shortcomings are analyzed and the information is sent back to the appropriate members of the organization to help them evaluate and refine the input. This is termed 'feedback'.

Examples of 'Information Inputs' would be Transactions, events that would undergo 'processing' in the form of sorting, listing, merging, and updating resulting in 'outputs' such as detailed

reports, lists, and summaries. Another example would be in the manufacturing environment with 'information inputs' such as design specs, material requirements and SOPs (standard operating procedures). These would be 'processed' by the information system by modeling and simulation techniques and would result in standard production models along with the overall cost of the production process which is calculated by the information system from the knowledge base containing material costs, hourly labor costs, and other indirect costs. Hence almost eliminating a distinct costing function in the scheme of things.

Now, consider we have graphics cards as our product. To remain competitive businesses must find ways to increase efficiency while maintaining quality standards for our products. For that reason, our first step would be collecting essential data like where we can get graphic cards from, product capacity, product quality, customer demands, and the status of business commitments: orders, purchase orders, payroll, customer demands. The second step is processing all the data we collected to the processing unit. Processing is a series of steps for acquiring the desired goal. And processing data consists of classifying, arranging, or calculating data. A computer system would convert our data to information. In the third step, the computer system would provide us with output. Output is considered as the solution we gave through input. The output can be in graphical form, reports, or textual information. Using them we can make proper decisions regarding our product which is graphics cards and our marketing strategy. Now it’s time for feedback which is the fourth step. Feedback is output returned to appropriate people or activities in the organization to evaluate and refine the input. From the feedback, we can get to know where we need to improve our business. Then again this feedback includes input as a chain. Other than these main steps there are some other influences too which are known as stakeholders in the information system. There are mainly five stakeholders. Such as suppliers, customers, regulatory agencies, stockholders, competitors. These influence a business in a lot of aspects. That’s why we have to be concerned about these factors to survive in the marketplace with our products, graphic cards.

Here is another important part of our business which is organization management.

If we make three parts of our human resources they would be operation control. They collect all the primary data and work in the field. Then comes management control. These systems assist lower management in problem-solving and making decisions. They use the results of transaction processing and some other information also. It is a set of information processing functions. It should handle queries as quickly as they arrive. An important element of MIS is a database. These systems assist higher management to make long-term decisions. These types of systems handle unstructured or semi-structured decisions. A decision is considered unstructured if there are no clear procedures for making the decision and if not all the factors to be considered in the decision can be readily identified in advance....