INFORMATION SYSTEMS

Information systems refers to technology designed to handle the data that institutions receive, process, generate, save, backup, disseminate, and use to make decisions. Designs for such systems vary according to the missions, goals, objectives, and global market conditions of the institutions investing in the technology.

DATA, INFORMATION, AND KNOWLEDGE

Information should not be confused with the related concepts of data and knowledge. Data are simply characteristics or descriptions of relevant objects or events that influence business decisions. Common examples include inventory, sales, receipts, and payments of transactional activities frequently stored and retrieved in databases.

Information is an extension of data by adding organization in ways that add value and relevance to the data. Institutional users are then able derive interpretation that leads to conclusions and implications. When data become more valuable than simple retrieval, information has been produced.

Knowledge exists when users understand how existing information can be applied in higher-order tasks such as explaining phenomena, predicting happenings, or projecting trends. These abilities allow users to become experts rather than simply perform operations.

THE SYSTEMS CONCEPT

A system consists of elements that have either been designed into particular configurations or evolved into configurations over time. For example, a computer system for one user may be just one element, a computer, and related peripheral elements, devices. A system for multiple users may have many computers and peripheral devices. The main point of such a system, however, is that the elements allow users to use the system in some concerted manner to achieve personal or institutional missions, goals, and objectives.

THE INFORMATION SYSTEM

An information system is a melding of the concept of information with a system of technology to best facilitate organizational needs. An information system requires designers and users capable of systems thinking to keep the system dynamic within an environment of constantly changing variables over time.

CLASSIFICATION OF INFORMATION SYSTEMS

The need for information systems creates various classifications. The areas of need reflected in these classifications are organizational levels, functional areas, support areas, and the information system architecture.

Organizational Level Classification

Many organizations are so complex that their technological systems are organized in a hierarchical structure representative of their organizational charts. For example, information systems may be classified by departments, divisions, and/or work units. A major point, however, is that organizational information systems must be interconnected.

Functional Area Classification

An information system can be classified by the major functions of the organization that cross organizational structure. Typical functional information systems are developed for accounting, finance, manufacturing, marketing, and human resource management.

Support Area Classification

Information systems all have a support role in facilitating the meeting of institutional missions, goals, and objectives. Examples of support classification information systems are transaction processing systems, management information systems, knowledge management systems, office automation systems, decision support systems, group support systems, and intelligent support systems.

Transaction processing system:

A transaction processing system (TPS) performs the routine functions of an organization, such as payroll, customer orders, billing, and expenses. A TPS provides support to the monitoring, collection, storage, processing, and dissemination need for these routine business processes.

Management information system:

A management information system (MIS) supports activities to make sure that business strategies are being efficiently employed. Those support activities include planning, monitoring,

and control. Specific technology activities might include providing periodic reports on operational efficiency, effectiveness, and productivity.

Data and reports from MISs are used in making decisions, such as projecting inventory and sales levels. Typical information from a MIS includes statistical summaries, exception reports, periodic as well as on-demand reports, comparative analysis, projections, early detection, routine reports, and communications. Human relations issues, such as projecting employee retirement liability, are important to long-term employment policy.

Knowledge management system:

Knowledge management is a collaborative organizational system wherein knowledge is shared and dispensed. Functions of a knowledge management system (KMS) include support for assisting organizations to identify, select, organize, disseminate, and transfer information that represents expertise. For example, some individuals know so much about their organizations that continuing to operate without them, as in the case of employees accepting employment elsewhere, dying, or experiencing diminished capacity, is difficult. Knowledge management as a technological information system allows organizations to pull together the collective knowledge of its employees. That collective knowledge is then available to all of the institution's employees for decision making.

Examples of KMS mechanisms include electronic bulletin boards for posting information needs, threaded discussion groups for sharing on a particular topic over electronic mail (e-mail), knowledge tracking, and creating space on an organization's Web site for information about the organization and for descriptions of the projects of its employees.

Office automation systems:

One of the earliest information systems to emerge was the office automation system (OAS). Functions of the office such as document processing, imaging, photocopying, data transfer, data storage, and communications have been forged into single software systems.

The effects of OAS have had a tremendous impact on who does the work. In much of the business environment, positions such being a secretary to an individual or being in a pool of clerical office workers have changed. Most employees in organizations do much of their own clerical work on their own desktops. Employees who were formerly isolated in offices and pools now have a much richer array of job duties and responsibilities.

Decision support systems:

Decision support depends on how structured a particular problem that needs solving is. For example, some problems are unstructured in that similar problems have not occurred before and no ready routine exists for problem solving. Other problems have occurred routinely and a decision process exists for the problem.

Decision support systems (DSS) contain decision-modeling routines, such as what-if analysis, whereby users can try particular decisions in simulations before actual implementation. Problems needing decisions can be developed into scenarios where users enter what they know about the problem, enter possible decision designs, make choices among the designs, implement decisions, and observe effects. Once the effects are within the level of tolerance set by management, the decision is made.

Group support systems:

Group support systems (GSS), sometimes called groupware, are interactive computer-based systems that allow groups of people throughout an institution to work on the same projects. The software contains routines for generation of ideas, resolution of conflicts, and freedom of expression.

A major problem encountered in group work is the development of negative behaviors, such as destructive miscommunication. Another problem is groupthink, a condition in which group work emerges as unimaginative and the members resist taking responsibility for the work. GSS contain functions that make information instantaneous and build consensus to make sure that members remain excited about the project. GSS also provide for early and continuous voting.

Intelligent support systems:

Intelligent support systems (ISS), sometimes referred to as expert systems, are one of the more advanced forms of information systems. The premise of such systems is that they can apply reasoning—sometimes called artificial intelligence—to a particular area of problems and generate advice, recommendations, and solutions.

Problem areas for which ISS has been applied include early detection of conditions, patterns to identify fraud in accounting, voice recognition, computer security and password encryption, health diagnosis and prognosis, and disaster planning.

SYSTEM ARCHITECTURE CLASSIFICATION

Information architecture is the conceptualization of the information requirements of a core business of an organization as well as the ways in which those requirements are met. Information architecture can be centralized, such as for communications architecture, data architecture, and business architecture. Other strategic, managerial, and operational architectures may be decentralized.

System architecture is the specific technologies—such as computers, networks, databases, and communication devices—that anchor the information system. For example, an insurance company or an inventory company may have a system architecture that anchors the remainder of the institution's information system.

A frequent way of classifying information systems by system architecture is by focusing on the device structure where the actual computing or calculating happens. For example, the anchor technology may be a mainframe computer, strategically located stand-alone computers, or a distributed or networked system of desktop computers.

Mainframe Computers

A mainframe computer contains the computing power of the system. Computer terminals that have no computing power contend for access to the mainframe computer for computing that is then sent back to the respective computer terminal. Information systems using a mainframe are referred to as distributed because computing results must be distributed to users at various locations. Mainframe architecture is frequently used where the applications place heavy mathematical demands on the computer's brain, the central processing unit (CPU).

Stand-Alone Desktop Computers

Desktop computers, also known as personal computers, have the CPU in the unit on the users' workspace. The desktop stand-alone may come with devices on board such as compact disks, digital video devices, and digital video recorders, in addition to input and output devices such as keyboards, storage devices, monitors, and printers. Since a stand-alone with such devices represents multiple elements, it is also an information system.

Networked Desktop Computers

Desktop computers can be wired together in various ways to produce a network, sometimes called a local area network. In a network, devices and information can be shared by desktop users. A main desktop computer, called a server, maintains traffic over the writing schemes to make sure that documents, e-mail, and other communications arrive at the designated destination computer intact. A system of servers can be used for added capacity or for distinct purposes, such as e-mail and printing.

The information systems described here are all technological mechanisms tailored to meet both enterprise-wide and specific-need missions, goals, and objectives.