INTRODUCTION TO INFORMATION SYSTEM

The term Information System (IS) sometimes refers to a system of persons, data records and
activities that process the data and information in an organisation, and it includes the
organisation's manual and automated processes. Computer-based information systems are the
field of study for information technology, elements of which are sometimes called an
"information system" as well, a usage some consider to be incorrect.
In this way, the term "information system" has different meanings:
In computer security, an information system is described by three objects (Aceituno, 2004):
STRUCTURE
Repositories, which hold data permanently or temporarily, such as buffers, RAM, hard
disks, cache, etc.
Interfaces, which exchange information with the non-digital world, such as keyboards,
speakers, scanners, printers, etc.
CHANNELS
Which connect repositories, such as buses, cables, wireless links, etc. A Network is a set of
logical or physical channels.
BEHAVIOUR
Services, which provide value to users or to other services via messages
interchange.
Messages, which carry a meaning to users or services.
In geography and cartography, a Geographic Information System (GIS) is used to
integrate, store, edit, analyse, share, and display georeferenced information. There are many
applications of GIS, ranging from ecology and geology, to the social sciences.
In knowledge representation, an information system consists of three components: human,
technology, and organisation. In this view, information is defined in terms of the three
levels of semiotics. Data which can be automatically processed by the application
system corresponds to the syntax-level. In the context of an individual who interprets the data
they become information, which correspond to the semantic-level. Information becomes
knowledge when an individual knows (understands) and evaluates the information
(e.g., for a specific task). This corresponds to the pragmatic-level.
In Mathematics, in the area of domain theory, a Scott information system (after its inventor
Dana Scott) is a mathematical 'structure' that provides an alternative representation of Scott
domains and, as a special case, algebraic lattices.
In Mathematics rough set theory, an information system is an attribute-value
system.
In sociology information systems are also social systems whose behaviour is
heavily influenced by the goals, values and beliefs of individuals and groups, as well as the
performance of the technology.
In systems theory, an information system is a system, automated or manual, that comprises
people, machines, and/or methods organised to collect, process, transmit, and disseminate
data that represent user information.
In telecommunications, an information system is any telecommunications and/or
computer related equipment or interconnected system or subsystems of equipment that is
used in the acquisition, storage, manipulation, management, movement, control, display,
switching, interchange, transmission, or reception of voice and/or data, and includes software,
firmware, and hardware.In organisational informatics, an information system is a system of
communication between people. Information systems are systems involved in the
gathering, processing, distribution and use of information and as such support human
activity systems. The most common view of an information system is one of Input-Process-
Output.

















The Impact of Information Technologies on Organizations
The world is in the midst of the most radical and rapid transformation of commerce and
society since the invention of the automobile. During the next few years, electronic markets
will grow and begin operating over cheep, accessible public networks, the so-called
electronic highway. Whole industries will be destroyed and new ones born. Productivity will
leap and competitive advantage shift in the direction of small business. Thousands of jobs
will become obsolete and disappear, and thousands of others will be created. The electronic
frontier, like the frontiers that preceded it, is at once a realm of boundless opportunity and a
harsh, brutal place. The technological basis of electronic commerce is simultaneously simple
and complex. The simple part is that all images and sounds - a voice, a movie, a document, a
tune, can be expressed in a digital code, streams of ones and zeros. Once digitized, they can
be shipped electronically or stored in electronic memories and retrieved later.
The complex part lies in making the network easy to use, changing organizations to enable
them to incorporate the
network's benefits, developing the services it will make possible (examples - electronic
shopping malls, world-wide yellow pages), and training and developing the people necessary
to make the organizations function effectively within the electronic environment. The rise of
electronic networks is staggering. The market for networking between companies barely
existed few years ago; today it exceeds billions annually. Most stunning of all of this has
been the growth of the Internet, a loosely confederated network of networks, public and
private. According to Vinton Cerf, president of the Internet Society. "Internet is growing
faster than any other telecommunications system ever built, including the telephone
network." Internet reaches from Greenland to Antarctica, connecting more than 50 countries.
Internet's growth must invariably slow. At the current growth rate everyone on earth would
be connected by the year 2010. Even though a slowdown is inevitable, Cerf says a reasonable
estimate is that 100 million new users per year will be connected to the system in five years.
All that is needed is the construction of a high-capacity highway into the homes and
businesses of potential users. The enormous market for entertainment will pay for the
construction of this highway. Existing highways, Internet in particular, will connect with it,
widening its reach, driven by the burgeoning business-to-business markets. The so called
"information highway" is just one example of the many extraordinary advances in technology
which are affecting individuals and organizations throughout the world in a way never before
felt in the history of mankind. Information technology will reshape every organization that
survives through the 90s, every job within those organizations, and every individual that
holds those jobs. However, businesses will not be able to incorporate technology advances if
they do not find a way to make workers comfortable with computers. Additionally, workers
will not have the requisite skills and abilities to succeed and advance if they are not able to
work with computers.
With a good IS support, the management of marketing, finance, production and personnel
becomes more efficient, the tracking and monitoring the functional targets becomes easy. The
functional managers are informed about the progress, achievements and shortfalls in the
activity and the targets. The manager is kept alert by providing certain information indicating
the probable trends in the various aspects of business. This helps in forecasting and long-term
perspective planning. The manager'' attention is brought to a situation which is exceptional in
nature, inducing him to take an action or a decision in the matter. A disciplined information
reporting system creates a structured database and a knowledge base for all the people in the
organization. The information is available in such a form that it can be used straight away or
by blending and analysis, saving the manager's valuable time.
IT/IS creates another impact in the organization which relates to the understanding of the
business itself. The MIS begins with the definition of a data entity and its attributes. It uses a
dictionary of data, entity and attributes, respectively, designed for information generation in
the organization. Since all the information systems use the dictionary, there is common
understanding of terms and terminology in the organization bringing clarity in the
communication and a similar understanding of an event in the organization.
The MIS calls for a systemization of the business operations for an effective system design.
This leads to streamlining of the operations which complicate the system design. It improves
the administration of the business by bringing a discipline in its operations everybody is
required to follow and use systems and procedures. This process brings a high degree of
professionalism in the business operations.
Since the goals and objective of the MIS are the products of business goals and objectives, it
helps indirectly to pull the entire organization in one direction towards the corporate goals
and objectives by providing the relevant information to the people in the organization.
IMPACT OF IT ON MANAGERS
A well designed system with a focus on the manager makes an impact on the managerial
efficiency. The fund of information motivates an enlightened manager to use a variety of
tools of the management. It helps him to resort to such exercises as experimentation and
modelling. The use of computers enables him to use the tools and techniques which are
impossible to use manually. The ready-made packages make this task simpler. The impact is
on the managerial ability to perform. It improves the decision making ability considerably.
Executive managers are expected to be able to depict the advantages of IT as a key factor
enabling organizations to achieve their goals. Production technologies have profoundly
affected organizations in general and blue collar workers in particular. It is commonly argued
that information technology (IT) will have similar profound effects on white collar workers,
and on middle managers in particular (Drucker, 1988;
Leavitt and Whisler, 1958). It has been estimated that IT has eliminated almost a third of the
U.S.A middle management jobs or about two million managers (Byrne, 1988). A reduction of
over 60% of the middle management workforce has been forecasted for the next decade in
the
U.S. (Drucker, 1988). In the United Kingdom, recent lay-offs--11,000 at Nat West, 6,000 at
Lloyds, 5,000 at British Telecom, 4,500 at Philips, 4,300 at Barclays, and 1,000 at British
Petroleum--are attributed mainly to IT (Syedain, 1991). But some researchers believe that,
rather than depressing middle management employment, IT increases it substantially
(Gillman, 1966; Pfeffer and Leblebici, 1977). They propose that present decrease in the
number of middle managers are not caused by IT, but by other factors. One is
the transformation of modern organizations from multi-layered, hierarchical, fat ones to
networked, flat, thin ones. Another is greater horizontal centralization (bringing business
units together) and vertical centralization (bringing decision authority to the top of the
hierarchy),
taking place in organizations. Still another is organizational downsizing to reduce operating
costs and organizational re-engineering to decrease the time between strategy formation and
implementation. Both are aimed at helping organizations to face adverse environmental
conditions such as economic recession, foreign competition, or industry regulation. In the
process of making these transformations, organizations tend to reduce the managerial
workforce, particularly middle managers. While not caused by IT, such changes are likely to
be facilitated by IT.
INFLUENCE OF IT ON ORGANIZATIONS ACTIVITIES.
Information technology (IT) has changed the way the world does business and has had a great
affect on traditional management functions. Management no longer has to rely on manual
processes and a paper trail to perform everyday transactions. IT has automated many of these
key management activities. For instance, e-mail has accelerated communication while the
Internet allows instant access to branch offices, bank accounts and information. While
beneficial, IT has also created a host of new challenges, such as data security and compliance.
Because of the explosion of electronic data, many executives are feeling the pressure to better
manage critical information.
IT mainly serves to cut down the amount of resources spent on repetitive and time consuming
tasks. IT increases worked productivity and frees up employees time to spend on value added
services
We live in a digital era where the global community relies on Information Systems to
conduct all kinds of operations, including averting or responding to unanticipated risks and
disasters. This can only happen when there is a robust information exchange facilitation
mechanism in place, which can help in taking quick and legitimate steps in dealing with any
kind of emergent situation. Prior literature in the field of information assurance has focused
on building defense mechanisms to protect assets and reduce vulnerability to foreign attacks.
Nevertheless, information assurance does not simply mean building an impermeable
membrane and safeguarding information, but also implies letting information be securely
shared, if required, among a set of related groups or organizations that serve a common
purpose.
It is, of course, not information itself which is useful, but the ability of people to
exploit it for business advantage. However, unless information is collected, organized and
made available, then opportunities for exploitation are limited. One approach to enabling
better recognition and identification of information value is to define information as an
asset.
Attributes of information as an asset
Many of the attribute are summarized by Repo (1986):
- Information is human. It exists only through human perception;
- Information is expandable. The free flow of information maximizes its use;
- Information is compressible;
- Information is substitutable. It may save money by substituting the use of other resources;
- Information is easily transportable by using applications of new information technology;
- Information is diffusible. It tends to leak though we try to contain it;
- Information is shareable; giving it away does not mean losing it (Repo, 1986:374).
While all of these attributes are significant, two of them have long histories in the
information and economics literature making them particularly interesting for thinking about
the value of information. These are the attributes shareable and expandable. Arrow
(1984) explains that information cannot enter into traditional economic exchange because it
becomes the possession of both buyer and seller. Information is not lost when given to others.
It is Shareable. As such it is unlike any other resource. The second economic attribute
identified by Repo is Expandable. Information expands as more uses are found for it. This
does not mean that Information cannot be out of date or defunct, but even out of date
information can be reused and it is this reusability of information which again makes it
unique as an asset.
Attributes of information assets relating to utility are also well documented.
According to Boisot (1998:83) the value of an information asset is derived partly from the
utility of the service and partly from its positional status. Currency and Accuracy are
necessary attributes for information assets (Burk and Horton, 1988:91-99).Another attribute
related to quantity of information proposed by Burk and Horton (1988:91-99) is
comprehensiveness. This was redefined as sufficiency for purpose on the recommendation of
the information managers discussion group. Even a comprehensive information collection is
not useful if it does not fulfill its purpose. These attributes form the rows of the matrix of
information assets. These various attributes crosscut the different information assets.
Approaches to information need and uncertainty
Information need
Traditionally, information scientists have preferred the term need, not motive or
motivation while approaching the triggers and drivers of information seeking. More
specifically, the term information need has been employed to label the factors giving rise to
information seeking.
Since the mid 1980s, a growing criticism was directed to the assumption that
information needs would be described as relatively stable and entity-like factors that explain
why people engage in information seeking (Dervin and Nilan 1986). Harter (1992) argued
that to talk about an individual's information need is virtually the same as describing his or
her current psychological state, because needs shift stochastically as each relevant piece of
information is encountered. This suggests that information needs are not something fixed and
long-lasting.
The interest in the conceptual issues of information need decreased in the 2000s. This
may be due to the fact that the research focus shifted from the motivators of information
seeking to the processes and strategies of information seeking. Most recently, based on the
careful analysis of Taylor's (1968) classic model, Cole (2011) has proposed a theory of
information need for information retrieval. The theory proposes, for example, that
information need is made up of levels, not phases and that the user's information need
manifests itself to the user differently over the course of performing a task.

Uncertainty
Since the 1940s, information and communication scientists have also acknowledged
uncertainty as a persistent characteristic and motivator of information seeking (Anderson
2010). In the context of information seeking, uncertainty may manifest itself as cognitive or
affective uncertainty. The former can appear as unclear thoughts or gaps in meaning
(Kuhlthau 1993). The affective uncertainty is a feeling of unease due to the presence of
cognitive uncertainty and it can be experienced as irritation, frustration, and anxiety.


The motivational attributes of information need and uncertainty
The cognitive attribute
The term cognition is generally used to describe the intellectual or perceptual
processes occurring within the mind when an individual analyses and interprets both the
world around herself and her own thoughts and actions (Petri and Govern 2004: 248).
Cognitive attributes of motivation typically include factors constitutive of planning, inferring,
comparing and evaluating. Therefore, for example, an individual's cognitive abilities, beliefs,
goals and values are important constituents of the cognitive attribute (Pintrich and De Groot
1990: 33-34). Naumer and Fisher (2010: 2455) point out that under the constructivist or
cognitive view, people's information needs are often conceptualised in terms of lack of
knowledge about a topic.

The affective attribute
The definition of affective attribute of motivation is rendered difficult in that there is
no consensus among researchers about the ultimate nature of emotions and affects. Appraisal
theories exemplify perhaps the most influential psychological perspective on emotions
(Ellsworth and Scherer 2003). These theories suggest that actors constantly evaluate the
relevance of environmental changes for their own well-being, checking whether significant
stimuli are present or absent, beneficial or harmful and easy or difficult to approach or avoid.
These appraisals result in action tendencies, which are experienced as emotions. However,
thinking and feeling are inextricably interrelated most of the time: most ways of interpreting
one's environment are inherently emotional and emotions influence thinking. Thus, reason
(cognition) and passion (emotion) are not independent domains.
In the context of the present study, the affective motivational attribute may be
conceived as an emotional reaction to the information-seeking task.
Table 1: Comparison of the cognitive and affective attributes of information need and
uncertainty
Information need Uncertainty

Cognitive component
1:ability to perform the
information-seeking task
The ability to seek for
information is dependent on the
degree to which the actor's
knowledge structure is
appropriate (Allen 1997)
The ability to seek for information is
dependent on the extent to which the
actor's construct of the topic is limited
(Kuhlthau 1993)

Cognitive component
2:Beliefs about the
importance of the
information-seeking task
Seeking information is
important because it makes it
possible to solve the problem at
hand (Allen 1997)
Seeking information is important because it
can reduce uncertainty by clarifying one's
thoughts (Kuhlthau 1993)

Affective
component:actor's
emotions about the
Actor's emotions render it
meaningful why certain
information sources are seen
Both positively and negatively coloured
emotions may influence the decision to
start or continue information seeking
information-seeking task more attractive than others
(Wilson 1981)
(Kuhlthau 1993)

The relationships
between the cognitive
and affective
components
The nature of interaction
between cognitive and affective
needs depends on contextual
factors such as performance of
particular tasks and the
individual's personality
structure (Wilson 1981)
The interaction between cognitive and
affective components depends on
contextual factors such as the stage of the
information search process. For example,
at the early stages of the process, negative
affective symptoms of uncertainty such as
anxiety are associated with vague thoughts
(Kuhlthau 1993)

Decision Making
There are some of the critical decisions that top managers face every day. How to decide
whether to sell or spin off a business? Should the supplier relationships be renegotiated?
What can be done to improve decision-making competency throughout your organization?
To capture maximum value, executives not only must make the right decisions, but also must
negotiate skillfully. Since most business decisions involve other parties, it is essential for
managers to understand their individual role as it relates to other decision makers, as well as
how to use this knowledge to create the strongest possible negotiating position. Hence,
keeping in mind the importance of decision making for managers, information systems are
also designed in a way to help them out to control operations and perform their managerial
responsibilities more effectively.
Decision making is the cognitive process of selecting a course of act ion from among multiple
alternatives. Cognitive process is the mental process of knowing, including aspects such as
awareness, perception, reasoning, and judgment.
Every decision-making process produces a final choice. It can be an action or an opinion. It
begins when we need to do something but we do not know what.
A decision-making is a reasoning process which can be rational or irrational, and can be
based on explicit assumptions or tacit assumptions.
Types of Problems
Nature of problem determines the approach to decision making to be followed to solve it.
There are three broad categories.
Structured: Well-structured problems are constrained problems with convergent solutions
that engage the application of a limited number of rules and principles within well-defined
parameters.
Unstructured: Problems possess multiple solutions, solution paths, fewer parameters which
are less manipulateable, and contain uncertainty about which concepts, rules, and principles
are necessary for the solution or how they are organized and which solution is best.
Semi-structured a gray area lies between the structured and unstructured range. Here part
of the decision can be specified allowing for certain factors out of control.
Types of problems
A newly formed organization may be taken as an unstructured organization due to lack of
defined organizational structure, operating procedures. The question that a problem is
structured or unstructured is not dependant on the organization being structured or
unstructured. Even a highly structured organization can face novel and unprecedented
problems.
Types of Organizational Decisions
One of the key ways to improve the management function in an organization is to improve
the decision-making process. IT is commonly used to support and streamline decision making
in an organization. IT can be used to address decisions about how to structure job tasks,
organize production operations, manage inventory flow, and so on.
After reading this lesson, you should be able to:
Compare and contrast structured and unstructured decisions and their relationship to
information technology systems.
Describe operational, tactical, and strategic decision making.
Automating Structured Decisions
Decisions that are simple and/or highly structured are good candidates for automation. A
structured decision is one in which the inputs, decision criteria, method to process those
inputs, and specific outputs are well-defined. For example, it is a relatively straightforward
task to develop a computer program that will generate late payment notices for those
customers who have not paid their monthly telephone bill on time. The program requires
certain input data about billing information, decision rules about what constitutes a missed
payment, and output instructions to generate a form letter and/or billing notice to be sent to
the customer.
The automation of structured decisions is also used to improve communication and decision
making between organizations. Not long ago, it was necessary for retailers to call credit card
companies every time a customer wished to charge a purchase using a credit card. A
representative working for the credit card company would examine the customer's record to
determine whether or not to approve each purchase. Today, this process has been automated
so that information and decisions related to purchases using a credit card are transmitted
electronically.
Now consider the many benefits of automating this simple process. First, automating this
process has reduced the cost of operations for credit card companies. Card issuers have
streamlined and downsized their staff since fewer customer representatives are needed to
handle purchase approvals/disapprovals. Second, the automated process has sped up the
approval process so that retailers can deliver prompt and reliable service to their customers
(improving customer satisfaction) and process more financial transactions within a given time
period. Thirdly, the communication between retailers and card issuers has been improved.
More purchases can be approved with greater accuracy using the IT-enabled system.
Automating Unstructured Decisions
Many situations involve more complex decisions called unstructured decisions. As you would
expect, these decisions are much more difficult to automate. Management science is a field of
research that seeks to impose structure on unstructured decision-making situations. The intent
is to apply IT, mathematical models and high-power statistical analysis to support - though
not replace - the decision-making process. For example, simulation spreadsheets are used to
identify potential solutions by testing a variety of decision-making assumptions (e.g.,
deciding whether interest rates will go up vs. interest rates will go down based on stock
prices, the value of the dollar, and inflation rates), and optimization models which are used to
determine a "best" solution given a predefined set of resource constraints.
Information Systems and Management Support
Management decisions are made at many levels of the organization. However, for the
purposes of this section, we will highlight the three main types of decisions that managers
make: operational decisions, tactical decisions, and strategic decisions.
Operational decisions are the day-to-day decisions needed to operate the organization.
These decisions affect the organization for short periods of time - perhaps for a few days or
weeks. In a clothing store, an operational decision is whether or not to order more white
shirts. This type of decision is typically made by a lower-level manager. Operational
decisions are distinct from tactical and strategic decisions in that they are made frequently.
The decisions to order white shirts may be repeated on a weekly basis. In addition,
operational decisions tend to be very structured, meaning the decision is well-structured and
there are well-defined procedures and mathematical formulas to assist the manager.
Tactical decisions, on the other hand, are those decisions that involve formulating and
implementing policies for the organization. Policy decisions have more lasting effects in the
organization, perhaps for months or years. Tactical decisions are usually made by mid-level
managers. For example, deciding whether or not to sell white shirts the following year is a
form of tactical decision. In addition, tactical decisions are usually semi-structured. The
procedure for making tactical decisions is not as well-defined.
Strategic decisions are made by top managers and involve setting long-term organizational
goals and objectives. Strategic decisions affect the business direction of a company and help
determine what markets to play in and how. Because of the long-term affects, these types of
decisions are made less frequently, in some cases every five to ten years. The decision to get
out of the clothing business and sell outdoor sports equipment instead is a strategic decision
with long-term consequences. Strategic decisions are generally unstructured. There are few
foolproof procedures for determining corporate strategy and deciding what business to be in.
In summary, management decisions differ, depending on what level they are made at, who
makes the decision, how long term the affects are, how frequently the decision is made, and
how structured the decisions are. Highly structured decisions indicate the degree to which
someone can specify a formula to help make decisions. Operational decisions tend to be
highly structured, and therefore are prime candidates for developing a formula or procedure
to help make the decision. Tactical decisions are semi-structured. The decision about whether
or not to reorder white shirts is not as well-formulated. However, statistical methods can be
used to help with making the decision. Strategic decisions are much unstructured and thus are
not easily assisted by systems or procedures.
Lesson Wrap-Up
Organization survival and success depends on making the right decisions at the right time and
place. Many organizations are using information technology to support the decision-making
process. However, as we have learned, there are many different types of decisions, and not all
decisions are good candidates for technology support. Structured decisions are easier to
automate than unstructured decisions. With more effort, and more advanced information
technology, unstructured decisions can also be automated. The bottom line is there are
different categories of decisions in an organization, and different types of technologies are
required to support each category.
Now that you have completed this lesson, you should be able to:
Compare and contrast structured and unstructured decisions and their relationship to
information technology systems.
Describe operational, tactical, and strategic decision making.

INFORMATION TECHNOLOGY FOR COMPETETIVE ADVANTAGE AND
BUSINESS PROCESS
Organizations of all sizes are using various information technology tools
and applications in order to become more competitive. In many organizations, a percentage
of total sales is usually devoted to the information technologies budget. Experts believe, if
information technologies are employed properly, they should make organizations more
efficient and effective.Information systems can help organizations reduce the cost of products
and services and, if designed correctly, assist with differentiation and focus strategies, too.
For example, Wal-Mart has been using overall cost leadership strategies successfully.
Information technologies can help bottom-line and top-line strategies.
The focus of a bottomline strategy is to improve efficiency by reducing overall costs. A top-
line strategy focuses on generating new revenues by offering new products and services to
customers or increasing revenues by selling existing products and services to new customers.
For example, e-commerce businesses are adapting business models to reduce distribution
costs dramatically. A good example is antivirus vendors using the Internet to distribute
software. For a subscription fee of around $30, you can download the software and get
updates for a year. Without the Internet for easy, inexpensive distribution, vendors couldnt
afford to offer software at such a low price.
Many organizations use enterprise systems, such as supply chain
management, customer relationship management, enterprise resource planning, and
collaboration software, to reduce costs and improve customer service. The goal of these
systems is to use information technologies to create the most efficient, effective link between
suppliers and consumers. A successful CRM program, for example, helps improve customer
service and create a long-term relationship between an organization and its customers.
For differentiation strategies, organizations try to make their products
and services different from their competitors. Apple has been successful with this strategy by
designing its computers to look much different from PCs and focusing on its computers ease
of use. As another example, Amazon.com has differentiated its website by using certain
information technologies, such as personalization technologies to recommend products to
customers based on their previous purchases. Amazon.com also uses the one-click system for
fast checkout. With this system, customers can enter credit card numbers and addresses once,
and in subsequent visits simply click once to make a purchase, without having to enter
information again.
With focus strategies, organizations concentrate on a specific market
segment to achieve a cost or differentiation advantage. Apple has also used this strategy to
target iPhones to consumer users rather than business users. Similarly, Macintosh computers
are heavily marketed to creative professionals such as designers, photographers, and writers.
Remember that focus and differentiation strategies work only up to a
certain point. Customers are often willing to pay more for a unique product or service or one
with a specific focus. However, cost still plays a major role. If a product or service becomes
too expensive, customers might not be willing to purchase it.