Information systems and organizations

Chapter 01 Website – www.isoncc.weebly.com

What is information?

Information is the data that has got some meaning in it. An information may be very useful to one person, but the same may not be useful to the other.

For example a supermarket like TESCO – information is customers’ purchasing behavior, their preferences and tastes.

Banks – information is about the customer preferences.

Media, communication and financial services – information systems are the business itself, because customers use them for information and not for the products.

Medical staff – here information about the patient condition, history are important for appropriate treatment.

Different organizations, different functions and different information systems.

There are different organizations around us and each of them having different functions. For example a supermarket is enabling us to purchase necessary items for daily life, where as a hospital helps us to get treated whenever we are sick.

Again, in the same organization we have different functions or departments. For example

Human Resource Department

Marketing and Sales Department

Financial Department

Each of them use different information for their operation.

Why organizations need information?

All organizations perform the same operation as below:

INPUTS OUTPUTS

All organisations get resources or inputs from external environment, here we need information. All organisations change or transform inputs into outputs. Here, all organizations need information for the transformation process.

Let us evaluate the inputs and outputs next….

Inputs – people, finance, materials

Outputs – goods, services

Information required for inputs – information regarding the cost, availability of materials, staff e.t.c.

Information required for outputs – customer satisfaction, sales e.t.c.

So, all organizations/people need information;1. to manage inputs 2. to manage transformation of inputs into outputs 3. to manage outputs

General view on Information Systems

There are three core elements in information;

Data

Information

Knowledge

Data – is a raw form of description of things, events, activities and transactions. It may or may not convey information.

Information – information is derived from data or it is a processed data, which has some meaning for the receiver.

Knowledge – knowledge is derived/coming from the information. It is making people to act according to the information.

We use knowledge to manage resources. For example someone with accurate, relevant knowledge of a market will use that to interpret information about the current sales.

(To make it simple, follow my example)• DataI think of data as a basic atomic unit. In its purest form, data can't be subdivided, but

what we think of as a single piece of data is often many pieces tied together. As an example, take the following piece of data: 40

Not very interesting, is it? In general, raw data is dull as it doesn't really tell us anything. Is it a temperature? A price? A rate? Without further clarification it's not very useful.

• InformationBy combining our raw data with other data, we can attempt to move toward

information. Look at this: $40 Well, that at least a little more informative. We at least know we're talking about money

now. A little more data yields some real information: Bob's net worth is $40. While this is certainly informative about Bob, we still don't know enough for it be

actionable. You can store it, manage it, and massage it, but you can't reliably take action upon it. And that's the problem with information: it is seldom anything you can use to choose a course of action.

KnowledgeThe piece of information above isn't really useful because we know nothing about Bob. If Bob is a 4 year-old, a net worth of $40 isn't a real shocker. But what about the following: Bob is 65 years old, has no job, no retirement, and his net worth is $40.

At this point, we probably know more about Bob than we really want to, but there is still no real actionable path for us to take. This is still just information. We must add more information to complete enough of a picture to be actionable: Bob, my father, is 65 years old, has no job, no retirement, and his net worth is $40. This is still just information, but it leads to knowledge.

(follow the diagram in the text book p.p 7

Now, lets define Information systems

An information system is a set of people, procedures and resources that collects data which it transforms and disseminates.

There are different types of IS in business;

Manual information systems

Computer based information systems

Formal information systems

Informal information systems

The technology infrastructure or IS model

Daily business activities depend on the foundation that support the flow of information between individuals within the organization, between the organizations and between organizations and individuals.

Therefore, there are five components in information technology infrastructure or IS Model such as;

Computer hardware

Computer software

Data management technology

Networking and telecommunication technology

Technology services

Computer hardware – is the technology for processing and storing data, and for gathering and distributing it as output. For examples CD-ROM, DVD, USB, Mouse, computer screen, printer, scanner e.t.c.

Computer software – is a set of instructions that controls the operation of the computer. For example windows, Unix and Linux.

Data management technology – many systems capture the data that each customer transacts and pass it to the people who can analyze the same. This is known as database, in other words the files that are related to each other.

These database can be stored and distributed in different locations, but the data remains the same. The database that designed around the major/core elements of business such as customers, vendors or activities are known as data warehouse.

Using these data to discover the patterns or trends of customer behavior is known as data mining.

Networking and communications technology – networking and communications technologies enable data in digital form to pass between users who are located in different places. For example LAN and WAN(Internet)

Technology services – organizations employee people to manage and run the IS infrastructure.

The unification of Voice, Image, and Data technologies

The emergence of telephone, television, internet and network computer united voice, image and data together which reduced the time and cost of transmitting data and information.

Information systems are used to add value to;physical products information products

IS to add value to physical products

Organizations that deliver physical products and services need coordination between people and resources. The informal methods such as meetings, telephone calls letters are becoming complicated when the organization becomes bigger where computer based information systems help to perform business tasks.

For example planning, ordering and payments are done electronically. For example companies maintains human resource information in an electronic data base which can be accessed from different locations. Again, companies use online payment systems, companies selling information through websites e.t.c.

Information systems is used to add value to information products

Companies that provide customers with information and knowledge such as financial consultants collect, create and distribute information to their customers. For example airlines selling tickets online, Facebook enable people to share personal information with others.

Computer based information system consists of;

Hardware- printer, monitor, key boards

Software – to analyze the data, to print or transmit electronically

People – to enter data

These processes or activities together known as information system management. It means the activities of planning, acquiring and developing.

An interaction model of Information Systems

Refer figure 1.5 p.p 15

An information system project starts with the advise from the stakeholders, who would like to improve the performance of the organization. For example a supermarket deciding to start online shopping. Now necessary changes will be brought into the organization with software, hardware and people.

The next step is the implementation and learning process to turn the idea into reality. This implementation takes place in the external and internal environments. The success or failure of this information system project depends on how stakeholders design and how other react to this changes.

The contexts of IS

There are 3 different levels of contexts for the stakeholders to operate.

Prior to the implementation stakeholders must evaluate these contexts properly.

They are;

External contexts – political, economic, technological

Internal contexts - the structure and culture of the organization

Historical contexts – past experiences as how people react to and interpret.

The challenges of implementing IS There are technological and organizational challenges to face.

There are 4 main challenges for implementing Information Systems such as;

1. The challenges from the complexity of changes needed – while implementing information systems, certain changes should happen. Handling this changes is the first challenge. For example if a supermarket introduces the online shopping, the managers should decide the structure of the operation, delivery, people/working practices to be adopted.

2. The second challenge is the nature of Information Systems – most of the technologies changing rapidly, so how to use the best of the technology?

3. Third challenge is that the stakeholders do not share the same definition of problems faced by an organization, so they do not share the same solutions.

4. The final challenge is to make people learn from implementing systems and increase the efficiency.

Eight dimensions to assess the success of an information system

Organizations invest for IS for a purpose- to achieve some benefit. It may be cost benefit, quality benefit, transformation process benefit e.t.c.

There are eight dimensions to assess them easily.

Project quality – on time and budget?

System quality - reliability and response time.

Information quality –accurate?

Information use - duration of use.

User satisfaction - satisfaction?

Individual impact – work satisfaction?

Organizational impact - return on investment?

Preparing for the future - is the organization prepared for future opportunities?

(refer p.p 25)

Strategic business objectives of information systems

There are six strategic objectives for an organization to invest in information systems;

Operational excellence

New products, services and business models(how a company produce, deliver and sell the product is business model)

Customer and supplier intimacy

Improved decision making

Competitive advantage

Survival

( Refer to the new reference book 42,43,44,45)