Computers provide the equipment for storing and processing information. Computer programming or software are sets of operating instructions that direct and control computer processing. An information system can be defined technically as elements that collect, process, store and distribute information to support decision-making and control in an organisation. Information systems can help managers and workers analyse problems, visualise complex subjects and create new products. As well as containing information about significant people, places and things within the organisation or in the environment surrounding it.
The difference between information and data is that, data are raw facts representing events occurring in organisations or the physical environment before that have been organised into a structure that people can understand and use. In contrast however, information is the raw data shaped into a form that is significant and useful to people.
Input, processing and output
are the 3 activities in an information system that converts raw data from within the organisation or its exterior surroundings. The processing activity converts the data into a more meaningful form, and finally, the output sends the processed information to the required people.After these 3 activities have taken place, feedback, which is output, is returned to members of the organisation to help them evaluate or correct the input stage.
To be information systems literate, you must understand information systems - thus, understanding the extensive organisation, management and information technology's measurement of systems and their power to supply solutions to problems in the business environment.
Using information systems effectively requires an understanding of the organisation, management and information technology shaping the systems. Organisation has several key elements that maintain it, namely, its people, structure, operating procedures, politics and culture. An organisation co-ordinates workers through a structured rank and formal standard operating procedures. Each organisation has its own unique way of doing things, which is accepted by at least the majority of its members.
Discovering business challenges and organising the appropriate method of response, are up to the manager. They allot the necessary resources in order that the method is achieved. Management organises plans and solves problems.
A considerable part of management is being able to be creative and produce new products and services and even recreate the organisation from time to time.
There are though, different levels of management, thus, at each stage the managers are appointed to different tasks to fulfil. Information technology is one of the many tools available to managers to cope with change.
The technical approach to information systems stresses toward a mathematically based approach, as well as the physical technology of these systems. Computer science, management science and operations research assist to the technological approach of information systems.
Computer science concerns itself with methods of efficient computation and data storage.
Management science, lays emphasis on developing models for management practices and decision making.
Lastly, operations research focuses on mathematical techniques for optimising selected parameters of organisations such as transportation, inventory control and transaction cost.
The behavioural approach of information systems deals with issues that arise in the development and long term maintenance of information systems. It concentrates on the changes in attitude, management, organisational policy and behaviour.
Sociologists study the way group and organisation mould the development of systems.
Psychologists study information systems to understand how formal information is perceived and used by people.
Economists study information systems to see how the system has an affect on the cost and control within the firm and markets.
Problems and solutions with information systems are rarely all technical or all behavioural. One should understand the perspective of both technical and behavioural components.
In order to achieve this, a sociotechnical approach is needed, meaning the performance of system is optimised when both the technology and the organisation mutually adjust to one another until a sufficient result is achieved.
Managers have an important role in organisations. Information systems play a vital role in the cash flow of organisations therefore mangers need to make important decisions regarding information systems as the organisation depends greatly on information systems.
Organisations have an extremely close link with information systems, as what information systems can do, reflect on how good business does.
If a business plans for the future it has to see on how developed its information systems are, and will be, to predict any sort of gain for the organisation.
Early systems brought out changes that were mainly technical, which affected few people and were easy to accomplish, later on, they affected managerial control and behaviour. But today, it concerns itself more with products, services, customers, markets and supplies.
The Internet is the world's largest and most widely used network. It is an international network of networks that is able to connect hundreds of thousands of different networks from all different countries around the world.
Information is exchanged; business transactions can be done all via the Internet. Anyone can use the Internet for private or business purposes, by simply linking their computer to a phone line.
The World Wide Web is a system in which its standards are universally accepted for storing, retrieving, formatting and displaying information in a networked environment.
Information is stored on electronic pages. These pages can be linked to one another by clicking on certain words or graphics. Any computers can view this.
The Internet and the World Wide Web allow information to be instantly distributed within and beyond the organisation, this allows the redesigning and reshaping of organisation. Conducting business electronically has become increasingly easier.
Information systems can reduce the number of levels in an organisation by providing managers with information to supervise larger numbers of workers and by giving lower-level employees more decision-making authority.
The update in information technology allows organisations to work globally, while remaining locally, thus, entire parts of organisations are no longer needed.
Products and services of a company are not limited to its physical location or their own organisational boundaries.
Electronic workflows have replaced manual, and have cut cost of operations in many companies.
Information systems give the ability of organisations the added flexibility to overcome some limitations as the result of their size. For example small organisations can use information systems to be able to perform tasks that usually only large organisations are able to do, and vice versa, large organisations use information systems for their advantage in a situation where a small organisation would be ideal for the task(s) in question.
New and powerful capabilities are allowing mangers to organise and control organisations in a much more fast and efficient way.
ERP (Enterprise Resource Planning) is a business management system that allows the integration of the various parts of business such as, planning, manufacturing, sales and finance, in order that they can become more co-ordinated by sharing information with each other.
Electronic commerce and electronic business can change the way business is conducted. Electronic commerce is an electronic way of buying and selling goods and services using the Internet, networks and other digital technologies electronic business distinguishes these uses of Internet and digital technology for the management and co-ordination of other business processes from electronic commerce.
Electronic networks allow information to be distributed, thus, management can have their limits extended through electronic business.
Information technology takes a certain form in an organisation, known as information architecture, which achieves specific goals or functions.
There are five key management challenges in building, operating and maintaining information systems.
CASE STUDY CHAPTER 1:
GMER (Green Mountain Energy Resources) is located in Vermont. To a great extent GMER became a virtual organisation. The company was able to target customers in California as soon as deregulation came into effect.
To gain customers they offered them an environmentally conscience customised product in the hope that they will commit to the company for that reason.
GMER buys its electricity from organisations that generate it from water, wind, solar and geothermal sources.
Information systems play a vital role in the company. It identifies potential customers. The company had to build a powerful data-gathering information system. Potential customers fill out an on-line form, or use the phone, providing personal details which included giving their meter number. The number is then transmitted electronically to the customers former utility company, which in turn returns a profile of the customer's twelve-month energy use. That information is used by GMER for customer analysis.
GMER need good information systems to be able to achieve a high technological system of billing methods and customer support.
In order for potential clients to sign up with GMER they fill out an on-line form providing details which include their meter number. The meter number is in turn transmitted electronically to the customer's former utility company, which returns a profile of the customer's twelve-month energy use.
This information is used by GMER for customer analysis, as well as for a supply forecasting program that guides purchases of electricity.
To place an order with an electricity wholesaler, about forty electronic conversations per customer is required between GMER and its suppliers.
Billing and acceptance of payment can also be done via the Internet.
In order for traditional power companies to be able to compete in the deregulated environment, these companies will have to emphasise service and price. Customer information is extremely necessary to gain success. Market and sales will have to become a key issue in order to gain customers. Prices are what potential customers are mainly interested in.
Marketing and sales organisation must be able to react fast to the changing, competitive market conditions.
Fast and effective information systems are needed in order to obtain, store and access up-to-date and detailed information on customers and potential customers.
GMER may have succeeded without investing largely in information systems if they kept their prices very low, after all, the main concern of customers is how much of their money is being spent.
Basing the company on a low-cost scheme, customers will be interested in the company, regardless of the methods used to lure them. Relying entirely on computer systems could have dire effects if the systems crash or distribute the wrong information required. It could take a long time to retrieve or fix the systems, that is, if it is possible to fix or retrieve them. Apart from the fact that not investing in these systems does save a lot of money for the cost of the system.
Since GMER portrays the fact they use an environmentally conscience way of power distribution in order to gain customers, they could eventually face strong competition from rival companies who will boast the same tactics, but for cheaper.