Information System in an Organization

3 INFORMATION SYSTEMS IN AN ORGANISATION

3.1 DEFINITION OF INFORMATION SYSTEM

1.      Information System –is a set of devices, procedures and Operating Systems designed around user-based criteria to produce info and communicate it to the user for planning, control and performance

2.      Information System -  an arrangement of people, data, processes and communication          

technology that interact to support and improve operations in a business in a view of        

problem-solving and decision making needs of management and users

3.      Information System - it is a term that describes the combination of comp technology (HW / SW) with communication technology (data, images and voice networks). Thus an IS comprises computer technology and the operational structure in an organizational context,

·         Consider a computer-based IS that relies on the computer for handling business applications, problem solving and decision making.

·         The informal communication network of the employees in an organization is a useful source for examining systems, since computers cannot provide all the information and thus user staff support is important.

·         Since IS can be classified as an open system that allows inputs and facilitates interactions of users; and is characterized of input from outside, processing output , operating in cycles through feedback and feed-forward and , differentiation and equifinality

Finally, an Information System a system that uses resources to convert data into the information needed to accomplish the purposes of the business.

3.2 TYPES OF INFORMATION SYSTEMS

Departmental information systems or functional area information systems are designed to be operated within a single traditional functional department of an organization such as sales, human resources, or accounting. In the early days of CBIS, these were often the only kind of systems that were practical.

1.      Enterprise Resource Planning (ERP) systems are a relatively extreme reaction to the problem of poorly integrated functional area systems, offered by vendors such as SAP, Oracle, and PeopleSoft. They aim to support the entire organization’s needs with essentially a single integrated system. They have enormous potential benefits, but are also notoriously tricky and expensive to configure and install.

2.      Transaction Processing Systems (TPS) gather data about everyday business events in “real time” as they occur. Examples:  A shipment of coffee beans arrives at a local distribution center, A package is unloaded from a FedEx or UPS aircraft. All of these events are examples of transactions that may be immediately tracked by a TPS. Often, technology like barcodes and scanners makes tracking such transactions quicker, cheaper, and more detailed than it would otherwise be.

3.      An Inter-organizational System (IOS) connects two organizations – for example, it may allow a company to automatically share inventory and backlog data with suppliers or customers.

4.      Electronic Commerce or E-Commerce refers to sales transactions in which at least one side of the transaction (buyer or seller), and perhaps both, is performed by a CBIS without direct human help.

3.3 CATEGORIES OF INFORMATION SYSTEMS

1. Management Information System (MIS) - an IS that provides for management oriented reporting in             predetermined format that is the levels:-

·         Strategic - relates to long range planning policies and upper management, especially in making unstructured decisions

·         Managerial - info that helps middle management in policy implementation and control, resource allocation and coordination

·         Operational - daily info needed to operate the business and is established by data processing systems-produces mgt reports required for planning, monitoring and control.

2. Transaction Processing System (TPS) - is applications that capture and process data about                                        Business transactions especially the operational level.

3. Decision Support System (DSS) - is application that provides its users with decision oriented information whenever unstructured decision making situation arises.

4. Expert Systems (ES) - programmed IS that captures and reproduces the knowledge and expertise of an expert problem solver-decision maker by simulating thinking or actions of an expert.

NB.

• Data warehouse - a read only dbase that contains details of information that can be accessed by end users and managers
• Repository - is a location or store / database where system stakeholders keep all of the documentation associated with a project of a system.
• A database - is a non-redundant collection of interrelated data items that are processed through specific application programs

3.4 SYSTEMS IN ORGANIZATIONAL LEVELS

 Information is categorized in relation to the managerial levels for the respective decision making processes

• Strategic information - relates to the long range planning policies that are of direct interest to the top management
• Managerial information – mainly used for the implementation and control e.g. sales analysis, cash flows projections annual financial statements etc
• Knowledge information – mainly used for capturing and organizing data from the lower level of the organization
• Operational information – used to operate departments and enforces daily rules and regulations of the business

The lack of structure and incomplete information make it difficult to secure computer support. Thus an analyst has to determine the following

·         Type of information required at different managerial levels

·         Application of information at its respective level

·         Structure and format of representing information

Generally, the decision making at operational level is highly structured, at managerial level is semi-structured and at the strategic level it is unstructured

3.4.1 STRATEGIC LEVEL

The characteristics of the information at the strategic level is as follows

• Unstructured - concerned with long term goals of an organization and that decisions will provide guidelines on which the firm will run
• Source – the information is obtained from both internal and external sources and help in the policy formulation
• Complex - high uncertainty requiring experience and good sense of judgement for the strategic planning and allocation of resources
• Summarized – info usually in the form of reports and records and less qualitative and quantitative

3.4.2  MANAGERIAL LEVEL

The characteristics of the information at the strategic level is as follows

• Semi-structured - concerned with medium range goals of an organization
• Source – usually of medium quality and obtained from restricted range of sources 
• Largely quantitative – based on routine operations and non procedural decision making process
• Less summarized – information is obtained from both internally and less externally and helps in resource allocation

 3.4.3 OPERATIONAL LEVEL

The characteristics of the information at the strategic level is as follows

• Structured – decisions associated with activities that are routine and cover short time Source – info derived internally and is relevant in short term
• Highly quantitative – information is obtained from quantitative data, highly detailed and help in the daily routines and procedures

3.5 INFORMATION SYSTEM STAKEHOLDERS

An IS architecture provides a unifying framework into which various people with different perspectives can organize and view the fundamental components of an information system i.e. system stakeholders.

• System owners - sponsors and advocates responsible for funding into develop, operate and maintain an IS i.e. pay for the system to be built and maintain.
• System users - use the system to perform or support the work to completion by capture, validate, enter, store and exchange data and info.
• System Designers - design a system to meet the user’s requirements              
• System Engineers - translate users or business requirements and constraints into technical solutions.                     
• System Builders - construct, test and deliver the new system into the operation.
• Vendors / Consultants – sell system hardware, software and services to business for incorporation into their information systems.
• System Analyst - facilitator to the development of IS and computer applications by bridging the communication gap that exists between non technical system owners and users as well as the technical system designers and builders.

3.6 RELATIONSHIP BETWEEN PEOPLE AND INFORMATION SYSTEMS

·         Top management usually make strategic decisions

·         Managerial decisions are usually made by middle managers and line managers

·         Operators make operational decisions

·         The relationship between the people supported and the decision type is as follows:

 

                                                Strategic                      Top managers

                                                Systems                                                                      

 

                                                Staff Support              Knowledge workers professionals                 

 

                                          Managerial Systems                                  Middle managers

           

                                          Operational Systems                                             Line  Managers

 

                           Office Automation and Communication Systems                           Clerical staff

 

The staff support that is between the top and middle managers are professional people like financial and marketing analysts.  They act as advisors to both top and middle management.  Many of these professional people can be thought of as knowledge workers.

3.6.1 KNOWLEDGE WORKERS

·         Knowledge workers are people who create information and knowledge as part of their work and integrate it into business e.g. engineers, financial and marketing analysts, production planners, lawyers and accountants, etc.

·         They are responsible for finding or developing new knowledge for the organization and integrating it with existing knowledge.  They are alert on all developments and events related to their profession

·         They also act as advisors and consultants to the members of the organization

·         They also act as change agents by introducing new procedures, technologies or process

·         Knowledge workers can be supported by a variety of information systems: Search engines that help them find information; Expert systems that support information interpretation; Computer aided design and hyper text that help them increase their productivity and quality of work

They also need information systems that are built in a networked/distributed architecture environment so that they can be able to access the internet

3.6.2 CLERICAL WORKERS

·         Clerical workers who use manipulate or disseminate information are referred to as data workers and support managers at all levels

·         They include bookkeepers, secretaries who work with word processors, electronic file clerks, insurance claim processors

·         Clerical employees are supported by office automation and communication systems including e-mail, co-ordination software document management, work flow