Introduction to Information System within an Organization

  Introduction to Information System

Information system was derived from IT, but it is not just a part of IT anymore. Today, IS has provided highly productive results, thus becoming more efficient. Essentially, it provided the necessary information for business operations. It has been designed to support all business functions. Currently, complex business functions get help from various types of IS to sustain and grow in the ever- changing business environment.

IS is made up of two terms, namely, information and system, information can be defined as a well -structured data with a specific meaning, and a system is an arrangement that takes input and provides output after completing the required process. Thus we can defines IS, in others words, as an arrangement that processes data and provides meaningful information. Essentially, it is a set of several components that process data to derive information. So, it can also be defined as a set of interrelated components that collect, store, process, generate, and disseminate information for effective business functioning. This information supports decision making and helps in controlling various organizational departments and their functions. IS can be useful for both individuals department and for all departments collectively. Figure shows the interrelationship between the components of an IS:

                                                       Figure: Displaying the IS Model

The data for an IS can be collected from various inter- organization and intra- organization sources such as employees personal details and competitors performance. This data can be stored in both paper and electronic format. The processing of this data includes calculations, logical analysis, and other statistical methods, depending upon the information to be derived. After the data is processed, it is transformed into information. This information is disseminated to various end users to support their decision making, problem solving, strategy forming, and controlling functions in an organization.

For example, the data about individual sales by each sales associate in a month, the general sales target for each associate, and markets sales trends for that month can be put to use. This data can be sorted, classified, calculated, and analyzed to produce information. This will provide information about the sales for individual associates, and the aggregate sales based on teams. The same data can be utilized to predict the next month’s sales, target setting for the next month, strategy for future sales, and the expected production level.

IS components:

An IS has various components, which are mainly grouped under two heads. The first head is system resources and the other is system activities, as shown in figure:

 

IS and Business Organization:

IS has become an integral part of business organization. For example, those organization involved in share trading are highly dependent on IS. Figure shows how IS integrates various functions and users of an organization:

  Figure: IS and Business Organization

It can be seen in figure that IS has become a core component of a business organization. It plays a vital role in providing coordination between internal and external organizational factors. The internal organizational factors include various departments and organizational behavioral factors such as culture, objectives, structure, policies, and procedures. The external organizational factors include suppliers, competitors, consumers, and legal system.

IS supports the following business processes:

Ø Operations support process: use of IS in various business at the operational level. For example, running of plant and machinery for production and purchase of material. Organization certainly depend on IS for productive business processes.

Ø Decision support process: Use of IS for business decision making. IS provides useful and relevant information after processing data from various inter and intra- organizational sources. This information helps in effective decision making and logical functioning of a business.

Ø Strategic support process: Gaining competitive advantage by providing critical information to management at the top level. With the help of information on various inter and intra organizational factors, management can work on various business strategies to improve productivity and profit. For example, quick delivery of orders by Domino’s Pizza without unnecessary delay.

IS Failures and Causes:

System failure refers to system stoppage and accidents that do not allow a system to run correctly. For correct functioning of the ISs, it is essential to provide timely, accurate, and relevant information. Ant failure in adequately performing its functions is an IS failure. The results of an IS failure can prove fatal for productivity and may lead to a significant drop in the organizational success curve. For example, any problem in the server of an organization results in the waste of productive working hours.

The following factors can lead to a system failure:

§  Insufficient system development practice:  Refers to the inefficiency of system developers. At times, systems development lifecycle fails to perform a proper system testing, which results in failures such as system stoppage or slow processing.

§  Untrained or poor system usage: Refers to an improper user interface. Any untrained user can harm or produce undesirable results an IS. Poor usage may cause internal and external system damage.

§  And many other causes etc…