A system is a set of interdependent elements that together accomplish specific objectives. A system must have organization, interrelationships, integration, and central objectives. Each part of a system is known as a subsystem. Within limits, any subsystem can be further divided into its component parts or subsystems. A system’s basic objectives depend on its type—natural, biological, or human-made— and on the particular system. For example, the human circulatory system is a biological system whose purpose is to carry blood containing oxygen and carbon dioxide to and from the organs and extremities of the body. Determination of the purpose of man-made systems—such as governments, schools, and business organizations—is necessary to understanding how best to create and evaluate the processes that comprise each system. Many businesses, however, establish goals other than financial return to the owners. For example, a business might strive to improve the quality of life of its employees, or to use its natural resources responsibly. We must know a business organization’s objectives to understand that business as a system and to understand the actions and interactions of that business’s components or subsystems. This is a central theme of the study of IS.
Information System
An Information System is a man-made system that consists of an integrated set of computer-based and manual components established to facilitate an organization’s operational functions and to support management decision making by providing information that managers can use to plan and control the activities of the firm. An IS often divides into components based on the organizational function being supported. Other typical IS components include personnel, production, finance, and accounting. Input data are data received by the Information System from the external environment or from another area within the Information System. Data input includes capturing data and, if necessary, conversion of the data to machine-readable form. Input data are normally recorded in business event data stores. These business events comprise the activities of the organization, such as purchasing goods from vendors and collecting cash from customers. Business event data are used often as a key source of data to update various master data. A master data update is an information processing activity whose function is to incorporate new business event data into existing master data. Updating includes adding, deleting, and replacing master data and/or records. Master data updates are recorded on master data stores. Master data stores are repositories of relatively permanent data maintained over an extended period of time. Master data contain data related to entities—persons, places and things. Master data include such data as the accounts receivable master data, the customer master data, and the inventory master data. Two types of updates can be made to master data: information processing and data maintenance. Information processing includes data processing functions related to economic events such as financial events, and internal operations such as manufacturing. Data maintenance, on the other hand, includes activities related to adding, deleting, or replacing the standing data portions of master data. Master data standing data include relatively permanent portions of master data, such as the credit limit on customer master data and the selling price and warehouse location on inventory master data.
Elements in the Study of Information Systems
Hardware and Software Tab: The ability to plan and manage business operations depends partly on knowledge of the hardware and software available. It goes without saying that technological developments have a profound effect on information systems; enterprise systems, e-business, databases, and business intelligence systems are but a few examples. Hardware and software technology provides the foundation on which IS and business operations rest. Databases Tab: Important to a complete understanding of IS are databases, both internal and external to the company; the quantity and type of data available in these databases; and methods of retrieving those data. To perform analysis or to prepare information for management decision making, a business professional must be able to access and use data from internal and external databases. Reporting Tab: To design reports generated by an information system, the business professional must know what outputs are required or desirable. A user might prepare a report on an occasional basis using powerful report-generating tools or a database query language. Scheduled reports appear periodically as part of normal IS function. Other reports, such as sales analysis, are useful internally. Control Tab: Traditionally, internal auditors and IS professionals have been charged with controlling business processes. However, this responsibility has expanded to others because of the difficulty of controlling modern, complex business processes. Today’s business process owners need to work with internal auditing and the IS staff, and also business process owners in partnering companies, to ensure that the activities in their business processes are secure and reliable. A business process is a set of business events that together enable the creation and delivery of an organization’s products or services to its customers. Knowledge of these processes is essential for success as a technology user, consultant, business process owner, or Information Technology (IT) specialist. Business Operations Tab: Organizations engage in activities or operations, such as hiring employees, purchasing inventory, and collecting cash from customers. An IS operates in concert with these business operations. Many IS inputs are prepared by operating departments—the action or work centers of the organization—and many IS outputs are used to manage these operations. For example, to advise management and to prepare reports for management decision making, a marketing manager must understand the organization’s product cycles. Events Processing Tab: As organizations undertake their business operations, events, such as sales and purchases, occur. Data about these events must be captured and recorded to mirror and monitor business operations. The events have operational, managerial, and IS aspects. To design and use the IS, the business professional must know what event data are needed and how they are processed. Management Decision Making Tab: The information used for a decision must be tailored to the type of decision under consideration. Furthermore, information is more useful if it recognizes the personal management styles and preferences of the decision maker. For example, the manager of Department A prefers to receive a monthly cash flow statement that groups receipts and payments into broad categories. The manager of Department B, on the other hand, wants to see more detailed information in the form of an analysis of payments by vendors. Systems Development and Operation Tab: Information Systems that process business events and provide information for management decision making must be designed, implemented, and effectively operated. Business professionals often participate in systems development projects. They may be users or business process owners contributing requests for certain functions, or auditors advancing controls for the new system. Choosing the data for a report, designing that report, or configuring an enterprise system are examples of systems development tasks that can be accomplished by a business professional. Communications Tab: To present the results of their endeavours effectively, business professionals must possess strong oral and written communication skills There are few easy answers in the study of IS. Professionals must evaluate alternatives, choose solutions, and defend their choices. Technical knowledge won’t be enough for the last task. Business Principles Tab: To design and operate the IS, a business professional must understand the use to which the information will be put. As an illustration, suppose you were designing an IS for the billing function at XYZ, Inc. Would you invoice customers at the time the customer’s purchase order was received, or would you wait until XYZ’s shipping department notified you that the goods had been shipped? You need to know the situations for which the former is normally correct and for which the latter is correct.
Summary
A system is a set of interdependent elements that together accomplish specific objectives. A system must have organization, interrelationships, integration, and central objectives. Each part of a system is known as a subsystem. Within limits, any subsystem can be further divided into its component parts or subsystems. Page 2: The ability to plan and manage business operations depends partly on knowledge of the hardware and software available. Important to a complete understanding of IS are databases, both internal and external to the company; the quantity and type of data available in these databases; and methods of retrieving those data. Page 3: To design reports generated by an information system, the business professional must know what outputs are required or desirable. A user might prepare a report on an occasional basis using powerful report-generating tools or a database query language. Traditionally, internal auditors and IS professionals have been charged with controlling business processes. However, this responsibility has expanded to others because of the difficulty of controlling modern, complex business processes. Page 4: A business process is a set of business events that together enable the creation and delivery of an organization’s products or services to its customers. Organizations engage in activities or operations, such as hiring employees, purchasing inventory, and collecting cash from customers. An IS operates in concert with these business operations. Page 5: As organizations undertake their business operations, events, such as sales and purchases, occur. Data about these events must be captured and recorded to mirror and monitor business operations. The information used for a decision must be tailored to the type of decision under consideration. Furthermore, information is more useful if it recognizes the personal management styles and preferences of the decision maker. Page 6: Information Systems that process business events and provide information for management decision making must be designed, implemented, and effectively operated. Business professionals often participate in systems development projects. To present the results of their endeavours effectively, business professionals must possess strong oral and written communication skills There are few easy answers in the study of IS. Page 7: Input data are data received by the Information System from the external environment or from another area within the Information System. Master data stores are repositories of relatively permanent data maintained over an extended period of time. Master data contain data related to entities—persons, places and things. Information processing includes data processing functions related to economic events such as financial events, and internal operations such as manufacturing.
