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Qn 2: Waring, A.(1996) defines an information system as “a recognizable whole which consists of a number of parts (called components and elements) that are connected up in an organized way.” Further discuss this definition in relation to key concepts presented in the course, e.g. Purpose, boundary, stake holders, etc. Information technology is the important weapon to improve and keep an enterprises’ competitiveness in ever-changing business environment. It is a systematic methodology that is mostly required as a supporting tool achieving complicated activities connected with introduction of information systems. Information technology (IT) consists of all the hardware and software that a firm needs to use in order to achieve its business objectives. 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 (Kenneth & Jane, 2007, p.10). In addition to supporting decision making, coordination, and control, information systems also help managers and workers analyze problems, visualize complex subjects, and create new products. Information systems contain information about significant people, places, and things within the organization or in the environment surround it. By information we mean “data that is organized and meaningful to the person receiving it. Data is therefore raw material that is transformed into information by data processing. Information can be defined in terms of its surprise value. It tells the recipient something he did not know (Davis & Olsen, 1985, p.30). A brief example (Figure 1-1) contrasting information and data may prove useful. Raw data from a supermarket checkout counter can be processes and organized to produce meaningful information, such as the total unit sales of dish detergent for a specific store.

331 Brite Dish Soap 1.29 863 BL Hill Coffee 4.69 173 Meo Cat .79 331 Brite Dish Soap 1.29 . .

Data

Sales Region: Northwest Store: Superstore #122 Item No. Description Units Sold 331 Brite Dish Soap 7,156 YTD Sales : $9,231.24

Information

Figure 1-1 Information is seen as the result of a transformation, conversion or encoding process; data, as the raw material, must be transformed into information. Information always has a recipient or user; the recipient must experience that which is received as meaningful or of value.

The conclusion that the only condition for data to become information is that it must be meaningful to the recipient follows from these two assumptions: that the conversion of data makes it more meaningful to the recipient; and that meaningful data should have an effect on the recipient. The meaningful to the recipient condition is necessary and sufficient. One information scientist cited “Data, as distinct to information, simply means something is given. It is an assumed to be fact. The fact is not necessarily accurate or inaccurate; it is simply a given. Information assumes a level of understanding and interpretation with respect to that fact or those facts. …. Human interaction with the data system, as I’ll call it, is significant in determining whether the result is information or data (Wurman, 1989, p.36).” Three activities in an information system produce the information that organizations need to make decisions, control operations, analyze problems, and create new products or services. These activities are input, processing, and output (see Figure 1-2). Input captures or collects raw data from within the organization or from its external environment. Processing converts this raw input into a meaningful form. Output transfers the processed information to the people who will use it or to the activities for which it will be used. Information systems also require feedback, which is output that is returned to appropriate members of the organization to help them evaluate or correct the input stage.

Figure 1-2 An information system contains information about an organization and its surrounding environment. Three basic activities- input, processing, and output; produce the information organizations need. Feedback is output returned to appropriate people or activities in the organization (stakeholders) to evaluate and redefine the input. Mitroff

(1983) defined stake holders as “all those parties who either affect or who are affected by an organization’s actions, behaviors and polices”. In order to understand the relationship between inputs, outputs and processes, one need to understand the environment in which all of this occurs. The environment represents everything that is important to understanding the functioning of the system, but is not part of the system. The environment it is that part of the world that can be ignored in the analysis except for its interaction with the system. It includes: competition, people, technology, capital, raw materials, data, regulation and opportunities. The boundary defines the difference between the environment and the system; the correct boundary is a function of the problem under consideration. In SSMC’s (Systems on Silicon Manufacturing Co.Pte.Ltd) system for the application of leave, E-leave system, through its intranet, the raw input consists of date of application, number of days to apply, applicant’s name, employee’s ID and the covering officer. SSMC’s computers store these data in the Leave DBMS and process them to calculate leave taken to date, calculate current application and format into an email request. The output consists of approval/disapproval of leave application in the form of email, reason in the case of disapproval and number of leave taken in total. The system provides meaningful information, such as the number of leave taken in a year for the HR to compute into the payroll. To fully understand information systems, one will need to be aware of the broader organization, people, and information technology dimensions of systems (see Figure 13) and their power to provide solutions to challenges and problems in the business environment. Information systems literacy requires an understanding of the organizational and people dimensions of information systems as well as the technical dimensions addressed by computer literacy. Information systems literacy draws on both technical and behavioral approaches to studying information systems.

Figure 1-3

An information system provides a solution to a problem or challenge facing a firm and represents a combination of people, organization, and technology elements. The people dimension of information systems involves issues such as training, job attitudes, and management behavior. The technology dimension consists of computer hardware, software, data management technology, and networking/telecommunications technology. The organization dimension of information systems involves issues such as the organization’s hierarchy, functional specialties, business processes, culture, and political interest groups. To sum up, Waring, A (1996) definition of information system as “a recognizable whole which consists of a number of parts that are connected up in an organized way”. Each components and elements (mentioned above) plays an important role in order to achieve the six major objectives in business today: operational excellence; new products, service, and business models; customer/supplier intimacy; improved decision making; competitive advantage; and day-to-day survival. This explains the need of information systems for conducting business today.

Reference: Davis, G.B. and Olsen, M.H. (1985), Management Information Systems: Conceptual Foundations, Structure and Development, McGraw-Hill. Kenneth C.Laudon and Jane P.Laudon (2007), Essentials of Business Information Systems, Pearson International Edition. Lucas D. Introna(1997), Management, Information and Power, Macmillan Press Ltd. Mitroff I.I. (1983), Stakeholders of the Organizational Mind, Jossey-Bass, San Francisco. Wurman R.S. (1989), Information Anxiety: what to do when informal doesn’t tell you what you want to know, Bantam Books.