What is an Information System?

1. What is an Information System?

2. Why is the study of Information Systems important?

3. What are some of the ways information systems can improve our lives?

4. What are some of the benefits organizations seek to achieve through using information systems?

5. Define input, processing, output and feedback in relation to a real word example?

1. Information system can be considered as a collection of hardware and software elements which are able to process data and generates information required for conducting various organizational activities [6]. However trained people are an integral part of information system [5]. Information System is a medium used by organizations to collect and analyze data. Organizations also use information system for controlling business performance parameters and developing business strategies. Applications of information systems which are used generally for business purpose are business intelligence system, transaction processing system (TPS), knowledge management system (KMS), customer relationship systems etc.

2. The current trends of executing business activities indicate that most of the organizations are using information system for improving their performance. Use of information   systems enables an organization to make their decision development process more effective. However, organizations also use information systems for measuring business performance   parameters. Often growth of a business is restricted by different internal and external factors [10]. These factors require to be controlled for minimizing their impacts on profitability of an organization. Controlling of such parameters is also done by information systems. The current analysis indicates that use of information system is increasing in all levels of companies.

Study of information system is not just limited to subjects of computer software and hardware [9]. Information system provides a student to gain knowledge from wide area [12]. Subjects which are needed to learn for gaining knowledge on IS include computer programming and business management. Apart from these subjects, a student of   information system also needs to study mathematics and software development.  The discussion on area of information system indicates that study of this subject provides a student opportunity of attaining expertise in different interrelated domains which are essential for running a business.

Trained employees are an important part of information systems [1]. Organizations which are using IS to execute their business activities always require employees who have in depth knowledge in the subject. However, organizations also tend to train their existing employees for optimizing usefulness of information system infrastructure.  As information system is being implemented in all levels of an organization, employees of every department need to posses the knowledge in this subject. It is evident that study on IS will not only enable employees to execute their tasks with efficiency, it will also enable them to get better position in company. As the organizations are using several applications of information systems including TPS, KMS, decision support systems (DSS), knowledge on these techniques will enable the students to do both operational and managerial tasks in an organization with efficiency. Apart from these areas, a student with knowledge of IS can work as system analyst, network engineer, database administrators and information officers [14]. On other hand, applications of information systems are required in a different sectors fro operational activities to management decision making process. Hiring employees with required knowledge is more cost effective than training them. Expertise in the area of IS also increases the chance of getting job in an organization as the companies always prefer to hire   such candidates.

Why is the study of Information Systems important?

3. Use of information system is not only increasing, but it is being applied even in the lower levels of companies [3]. Roles of information systems played in an organization can be broadly classified in three categories. The areas of a business where information system is used extensively include   storage of information, analysis of data, executing different processes and tasks in business and decision making.

Storing and analyzing information:  Due to increase in the availability of software and online storage mediums, most of the organizations prefer to soft copy of information [4].  In an organization data on various topics require to be stored. Organizations also need to ensure that   the data can be accessed easily whenever required.  On other hand, safe storage of important information is important for smooth execution of business activities. In case of large organizations same data can be used by different departments. It indicates that the stored data needs to be distributed in various locations.

Use of information system enables the organizations to gather data from different sources. It also enables companies to develop a well structured database for storing data. Use of databases and KMS can improve the accessibility of information within organization. Implementation of employee management system (EMS) also improves the process of analyzing performance of employees [6]. Applications provide organization with the facility of centralized data storage, data access becomes easier.  As the result, chances of interruption in business process reduce and smooth execution of operational activities enhances profitability of the company. Data analysis is also another important task   in business. Management can set their present and future activities on basis of the findings obtained from data analysis. However, information system facilitates business entities to analyze data with high accuracy.

Supporting operational processes:  Profit of a business depends on its efficiency of executing operational activities [8]. As   the size of organization increases, the complexity in its operational activities also increases. However, completion of every task manually will require significant time. On other hand in case of manual execution of tasks, chances of getting erroneous result also increases. It reduces the efficiency of overall business process. Execution of operational tasks with high efficiency not only increases revenue, it also impacts on long term business strategies. However, the operational tasks can be executed with high accuracy by using information systems. The current discussion indicates that information systems play an important role in execution of daily activities in business. Use of TPS improves the recording and analyzing process of all transactions within organization [6]. On other hand, use of office automation system enhances productivity of employees [4]. Use of IS in daily activities increase makes these process more effective for   increasing profitability.

Supporting decision making system: Organizations always prefer to implement business strategies on basis of their effectiveness to meet business targets [4]. However, decisions are made by managers and these effects of implementing these decisions cannot be effective always.  If a business strategy fails to serve its purposes, organizations faces huge financial loss. Information system can be used to judge the suitability of such decisions made by management before implementing in practical field. Use of information system in business strategy implementation not only makes the strategies more effective, it also reduces the risks caused by these strategies. It reflects that use of information system is important to analyze risks. Management of an organization can improve the efficiency of reporting process by using MIS (management information system) [6].On other hand, risks associated with strategies developed by management can be analyzed using DSS (decision Support System) [4].

Ways Information Systems can improve our lives

4. Use of information system can benefit the organization in various ways. Information system can be used as an essential resource for both long term and short terms strategy planning.

Effective strategic planning: Development of strategies using IS can reduce the risks associated with implementation of these decisions. Using IS the management can determine whether the strategy which is going to be implemented will be­­­­ effective or not. On other hand, the organization can be benefitted by identifying the requirement of any modification in business decisions. Information regarding the modification process of strategies can also be obtained from feedbacks of information system. Daily sales reports collected by electronic terminals are used for forecasting market condition and thus it helps in strategic planning.

Efficient market analysis: Information system can benefit organization by providing information regarding trends in market [7]. Analysis of market trend is important for a company to set proper business strategies. On other hand forecasting of market trends is also important to understand future customer requirements. Execution of the tasks related to market trend analysis is generally conducted manually. As a result, it cannot be guaranteed that   the findings of market analysis are accurate. Use of information system to analyze market trend can generate accurate results and thus it can make the processes more effective. Large stores and supermarkets use electronic point of sales to store information on sales. Such information is not only useful for ensuring product availability in stores, but it is also used for analyzing market trends.

Efficient operational activities: Not only in strategic planning IS can benefit organizations by providing information on proper budget plans. It can also store data regarding supply chain activities and can ensure uninterrupted execution of processes. Findings of data analysis conducted with the help of IS are useful for an organization to make proper marketing and promotional plans. Organizations apply Expert System in biometric recognition modules for storing data on employee attendance. On other hand Transaction processing system (TPS) is used by banks to record information on payments and deposits.

5. All major players in global market use IS as a tool for attaining competitive advantages in business. Although the competition is increasing in every sector, increase in competition among global supermarkets is becoming more prominent. Tesco, a UK based supermarket, is expanding their business all over the world. Apart from UK Tesco have stores European and Asian countries [13]. However, everyday large number of products is sold in Tesco stores. Use of Electronic Point of Sale (EPOS) Information system enables Tesco management to store the information regarding sold items. Each Tesco store possesses POS terminals. Before being delivered to the customer, each product is scanned by the POS. Description and quantity of the product are used as input of POS. Details of club card and gift voucher used by customers are also read by POS. After processing the information, database containing information of product stocks is updated. Output of EPOS system is used to update the database containing customer information. After each sale, store management receives information on availability of products as feedback.

Conclusion:

The current analysis on   information system   reflects   that   the need of using information system is increasing in changing business environment. As a result the need for studying information system is also increasing. Information system can be considered as a wide subject. Knowledge on computer software, programming and management .Discussion on current recruitment trends in global market indicates that the organizations prefer to hire employees who have knowledge n information system. However, the organizations are also showing interest on training employees so that they can posses expertise required for using IS infrastructure of business.  Information system is being more applicable in all business areas and it can be considered as one of the main reasons behind increasing popularity of this technique. However, use of information system is still limited in case of small business as it requires highly advanced IT infrastructure.

References

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[13] Tesco plc, ‘Tesco plc’, 2015. [Online]. Available: https://www.tescoplc.com/index.asp?pageid=71. [Accessed: 28- Feb- 2015].

[14] Foster.washington.edu, ‘Career Options – Information Systems’, 2015. [Online]. Available: https://www.foster.washington.edu/undergradcareers/Pages/CareerOptions_InformationSystems.aspx. [Accessed: 03- Mar- 2015].