Information Systems
We live in a world where automation has become a big part of our society. Rapid advances in technology have changed the way we live, not only for the average person but also for business owners who need to run their companies. The most effective business owners understand that time is valuable, and in order to be efficient, they must allocate their resources for the highest utility. The use of reliable information systems will do just that because they can automate and circumvent several processes in an organization.
Information Systems are simply software programs that store, distribute, and analyze data. They can be used for processing financial records, maintaining and collecting customer data, controlling your supply management and much more. When a company develops an information technology department that implements strong, reliable systems, it can develop a competitive advantage based on gathering data faster to make better decisions and improved lines of production, among other benefits.
Information Systems are simply software programs that store, distribute, and analyze data. They can be used for processing financial records, maintaining and collecting customer data, controlling your supply management and much more. When a company develops an information technology department that implements strong, reliable systems, it can develop a competitive advantage based on gathering data faster to make better decisions and improved lines of production, among other benefits.
How Information Is Handled at Different Levels of an Organization?
Let’s start with some simple definitions before we answer this question. There are 3 distinct levels of an organization: strategic, tactical, and operational.
Strategic: Provides the organization with overall direction and guidance (CEO, CFO, CIO).
Tactical: Develops the goals and strategies outlined by the strategic level.
Operational: Manages and directs the day-to-day operations and implementations of goals and strategies.
The functional areas in an organization are considered to perform specialized tasks in a business, such as accounting, marketing, finance, and information systems. An information system involves interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization. The only two required elements are information and a system, not even necessarily technology.
What is Information? What is Data? What is Knowledge?
Knowledge is information that has been organized and processed to convey understanding, experiences, accumulated learning, and expertise as it applies to a particular problem or process.
Data contains streams of raw facts (prior to manipulation or analysis) that represent events occurring in organizations or the physical environment.
Information is data that has been shaped into a form that is meaningful and useful to human beings.
As you can see, data must become information, and information transitions into knowledge. Once you understand this concept, we can move forward with how information moves throughout the organization and how its handled.
It really is rather simple. The handling of information begins with an Input then goes through a Process, after which is becomes an Output. Next, feedback occurs amongst the levels of the organization and decisions are made; therefore, the cycle repeats itself.
To further clarify, input captures or collects the raw data from within the organization or its’ external environment for processing. Processing converts, manipulates, and analyzes raw input into a form that is more meaningful to humans. Output is the distribution of processed information for the people who will use it or to the activities for which it will be used. Feedback allows the output to be returned to the appropriate members of the organization and helps them evaluate or correct input.
A Brief History of Information Systems
1950s: Computer departments known as Data Processing. Focus on technical changes
Head Person: DP Manager
1960s and 1970s: Same as 1950s, but focused on managerial control instead of technical processes.
1980s and early 1990s: Computer departments known as IS or MIS depts. Focus on institutional core activities and strategic importance of technology Head Person: IS Manager or CIO.
Mid 1990s to Present: E-initiatives (E-commerce and E-business) are the focus.
Systems by Level of Organization
There are various types of information systems, such as transaction processing systems, decision support systems, knowledge management systems, learning management systems, database management systems, and office information systems. Critical to most information systems are information technologies, which are typically designed to enable humans to perform tasks for which the human brain is not well suited, such as: handling large amounts of information, performing complex calculations, and controlling many simultaneous processes.
Transaction systems are used for daily operational tasks that used mostly by workers themselves. Database management systems will be used to create other systems such as knowledge and learning systems within the organization for workers and managers. While management information system is used by middle managers to see the workers progress through data or quotas, decision support systems are utilized by senior managers to see the organization as a whole and make decisions for their departments or send reports higher up the food chain. Executive information systems exist for senior executives to make a map of the overall big picture or strategic focus of the entire organization.
Strategic IT/IS Systems
A primary strategic information system commonly used is the enterprise resource planning (ERP) system. This is an integration of the management of the main business processes, often in real-time and mediated by software and technology. It allows organizations to collect, store, manage, and interpret data from their many business activities. The ERP also oversees core business processes using common databases maintained by the database management system.
ERPs can track business resources, including cash, raw materials, production capacity, and the status of business commitments: orders, purchase orders, and payroll. This enhances the organization’s efficiency. In order to run an efficient ERP, an organization will need the right computer hardware, network configurations, and links to databases or information repositories.
Why implement an ERP for Strategic Purposes?
An ERP covers all functional areas in business: financial accounting, management accounting, human resources, order processing, manufacturing duties, supply chain management, project management, data services, and the customer relationship management (CRM) system.
ERP will save your business time and money as it integrates all business processes into one system.
Databases and Quality Information
A database is a software system that enables users to define, create, maintain and control access. The core functionality of this system is the storage, retrieval and update of business records or customer records. The quality control of information will be handled inside the database but might have a separate system to analyze the data. This is usually handled by the IT department manager who reports to the CIO.
A data warehouse will be discussed more in the business analytics section. It is a system used for reporting and data analysis and is considered a core component of business intelligence.
CIO Responsibilities and IT Governance
A Chief Information Officer of an organization has many responsibilities in an organization. The most important of these is the role of a business leader. The CIO will make executive decisions regarding matters such as purchasing IT equipment, software, or the internal creation of new systems. A good CIO must have strong organizational skills to help keep information systems up to date for comparative advantages in the marketplace. The CIO should focus on driving the analysis and re-engineering of existing business processes, identifying and developing the capability to use new tools, reshaping the enterprise’s physical infrastructure and network access.
They will also establish the IT Governance Policy and create an ICT strategy as well. This covers future-proofing, procurement and the external and internal standards laid out by an organization. The policy will cover how the internal systems are to be utilized and applied by the employees. This helps protect the organization in the short and long term and ensures accountability and clearly defined roles for certain employees in a system.
Digital products are being used now more than ever, meaning the CIO is faced with many product-oriented responsibilities. A CIO in an online business will run its online services and products with the established organizational policy. This position is an executive officer of the corporation, and requires near-perfect execution.
To summarize, information systems should be strategically implemented in every business. This should be done with a focus on how it will improve your processes and automate your daily operational needs.
Let’s start with some simple definitions before we answer this question. There are 3 distinct levels of an organization: strategic, tactical, and operational.
Strategic: Provides the organization with overall direction and guidance (CEO, CFO, CIO).
Tactical: Develops the goals and strategies outlined by the strategic level.
Operational: Manages and directs the day-to-day operations and implementations of goals and strategies.
The functional areas in an organization are considered to perform specialized tasks in a business, such as accounting, marketing, finance, and information systems. An information system involves interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization. The only two required elements are information and a system, not even necessarily technology.
What is Information? What is Data? What is Knowledge?
Knowledge is information that has been organized and processed to convey understanding, experiences, accumulated learning, and expertise as it applies to a particular problem or process.
Data contains streams of raw facts (prior to manipulation or analysis) that represent events occurring in organizations or the physical environment.
Information is data that has been shaped into a form that is meaningful and useful to human beings.
As you can see, data must become information, and information transitions into knowledge. Once you understand this concept, we can move forward with how information moves throughout the organization and how its handled.
It really is rather simple. The handling of information begins with an Input then goes through a Process, after which is becomes an Output. Next, feedback occurs amongst the levels of the organization and decisions are made; therefore, the cycle repeats itself.
To further clarify, input captures or collects the raw data from within the organization or its’ external environment for processing. Processing converts, manipulates, and analyzes raw input into a form that is more meaningful to humans. Output is the distribution of processed information for the people who will use it or to the activities for which it will be used. Feedback allows the output to be returned to the appropriate members of the organization and helps them evaluate or correct input.
A Brief History of Information Systems
1950s: Computer departments known as Data Processing. Focus on technical changes
Head Person: DP Manager
1960s and 1970s: Same as 1950s, but focused on managerial control instead of technical processes.
1980s and early 1990s: Computer departments known as IS or MIS depts. Focus on institutional core activities and strategic importance of technology Head Person: IS Manager or CIO.
Mid 1990s to Present: E-initiatives (E-commerce and E-business) are the focus.
Systems by Level of Organization
There are various types of information systems, such as transaction processing systems, decision support systems, knowledge management systems, learning management systems, database management systems, and office information systems. Critical to most information systems are information technologies, which are typically designed to enable humans to perform tasks for which the human brain is not well suited, such as: handling large amounts of information, performing complex calculations, and controlling many simultaneous processes.
Transaction systems are used for daily operational tasks that used mostly by workers themselves. Database management systems will be used to create other systems such as knowledge and learning systems within the organization for workers and managers. While management information system is used by middle managers to see the workers progress through data or quotas, decision support systems are utilized by senior managers to see the organization as a whole and make decisions for their departments or send reports higher up the food chain. Executive information systems exist for senior executives to make a map of the overall big picture or strategic focus of the entire organization.
Strategic IT/IS Systems
A primary strategic information system commonly used is the enterprise resource planning (ERP) system. This is an integration of the management of the main business processes, often in real-time and mediated by software and technology. It allows organizations to collect, store, manage, and interpret data from their many business activities. The ERP also oversees core business processes using common databases maintained by the database management system.
ERPs can track business resources, including cash, raw materials, production capacity, and the status of business commitments: orders, purchase orders, and payroll. This enhances the organization’s efficiency. In order to run an efficient ERP, an organization will need the right computer hardware, network configurations, and links to databases or information repositories.
Why implement an ERP for Strategic Purposes?
- Operates in real time
- A common database that supports all the applications
- Integrated System
- User-friendly interface (U/I) for the whole organization
- Easier implementation of elaborate application/data by the Information Technology (IT) department
An ERP covers all functional areas in business: financial accounting, management accounting, human resources, order processing, manufacturing duties, supply chain management, project management, data services, and the customer relationship management (CRM) system.
ERP will save your business time and money as it integrates all business processes into one system.
Databases and Quality Information
A database is a software system that enables users to define, create, maintain and control access. The core functionality of this system is the storage, retrieval and update of business records or customer records. The quality control of information will be handled inside the database but might have a separate system to analyze the data. This is usually handled by the IT department manager who reports to the CIO.
A data warehouse will be discussed more in the business analytics section. It is a system used for reporting and data analysis and is considered a core component of business intelligence.
CIO Responsibilities and IT Governance
A Chief Information Officer of an organization has many responsibilities in an organization. The most important of these is the role of a business leader. The CIO will make executive decisions regarding matters such as purchasing IT equipment, software, or the internal creation of new systems. A good CIO must have strong organizational skills to help keep information systems up to date for comparative advantages in the marketplace. The CIO should focus on driving the analysis and re-engineering of existing business processes, identifying and developing the capability to use new tools, reshaping the enterprise’s physical infrastructure and network access.
They will also establish the IT Governance Policy and create an ICT strategy as well. This covers future-proofing, procurement and the external and internal standards laid out by an organization. The policy will cover how the internal systems are to be utilized and applied by the employees. This helps protect the organization in the short and long term and ensures accountability and clearly defined roles for certain employees in a system.
Digital products are being used now more than ever, meaning the CIO is faced with many product-oriented responsibilities. A CIO in an online business will run its online services and products with the established organizational policy. This position is an executive officer of the corporation, and requires near-perfect execution.
To summarize, information systems should be strategically implemented in every business. This should be done with a focus on how it will improve your processes and automate your daily operational needs.
