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Dr. Sudhanshu Joshi

1. Introduction

Functionally, Information Systems are becoming the backbone of most business and non business organizations. Banks (to process payments, deposits etc.); Tax authority (for tax deposits, tax rebate or exemption and for final record keeping etc); Hospitals (For Patient entry, diagnosis and treatment and storage of his/her history in a database etc) or a superstore (for stock keeping, billing and payment at the Point of Sale (POS)).

Therefore, in every domain of life Information plays very critical role including education, finance, government/ non government. Service Industry including (Healthcare, Insurance, Traveling business etc.) or a manufacturing firm from small to large business.

Checkbox 1: Summary of Characteristics of High-Quality Information
Quality Characteristic	Description
Relevant	Information is either relevant or irrelevant to a decision. Irrelevant information interferes with the process—no matter how interesting it is—because it wastes time or causes confusion or delay. Irrelevant information is a persistent problem because ISs are good at generating lots of it
Timely	This characteristic means that the decision maker receives the information when he or she needs it—that is, when it would be meaningful to the decision.For example, the manager of a retail chain needs daily information on stores’ performance and products that are selling unusually high or low, so that immediate corrective action can be taken. Receiving performance information at the end of the month leaves thirty-day gaps in corrective actions
Reliable, accurate	This characteristic means that the information can be trusted and that the decision maker has confidence that information is free from errors, to the extent possible. For example, calculations are correct and data are in correct categories. When information is trusted, it eliminates wasting time having to verify it. Typically, it is more important for the information to be timely than to be perfect.
Easy to understand	This characteristic means that information is presented clearly, and concisely, and is well-documented.

(Source: Turban, 2010)

One example to understand the significance of Information could be a Supermarket store where IT is being used to track the stock based on incoming shipments and sales that are recorded at cash registers.

Youtube animation I : What is Information Systems

Following YouTube link explains the Nature and Scope of Information Systems https://www.youtube.com/watch?v=RdgFoFPTckw

The video highlights need and scope of information systems for the business organizations. (Source: study.com)

Organizations such as banks, online travel agencies, tax authorities, and electronic bookshops can be seen as IT companies given the central role of their information systems.

Checkbox 2: The significance of Information Systems in the Hospital setup

Checkbox 2 A patient when consults a doctor initially tells him all possible symptoms. With this information, the doctor examines the patient and makes a diagnosis. Afterward, the doctor determines the treatment to heal the patient. For example, based on the diagnosis, the doctor may write the patient a prescription for some medication. Finally, the doctor must document the symptoms, the diagnosis, and the treatments. In modern days, most doctors use a software system to record this information.

2. Definition

2.0 Data: Data, or raw data, refers to a basic description of products, customers, events, activities, and transactions that are recorded, classified, and stored. Data are the raw material from which information is produced; and the quality, reliability, and integrity of the data must be maintained for the information to be useful. Examples are the number of hours an employee worked in a certain week or the number of new Toyota vehicles sold in the first quarter of 2013.

2.0.1 Database: A database is a repository that consists of stored data organized for access, search, retrieval, and update.

2.1 Information:

Before we provide our definition of an information system, we first explain the term “information,” which can mean any of the following:

• The communication act of one agent—the term “agent” may refer to any entity ranging from a person or a software component to an organization— informing another agent (e.g., by exchanging messages);
• The knowledge or beliefs of agents as a part of their mental state;
• (Data) objects that represent knowledge or beliefs.

2.2 System:

The next term that we should understand is “system”, which could be defined as A Method, or process of grouping things together.

Information Technology

The collection of computing systems used by an organization is termed information technology (IT). In its broadest sense, IT describes an organization’s collection of information systems, their users, and the management that oversees them. Often the term information technology is used interchangeably with information system (IS). ISs collect (input) and process data, distribute reports (outputs), and support decision making and business processes.

Figure 3 shows how major types of ISs relate to each other and how data flows among them. In this example, 1. Data from online purchases are captured and processed by the TPS, or transaction processing system and then stored in the transactional database. 2. Data needed for reporting purposes are extracted from the database and used by the MIS, management information system, to create periodic, ad hoc, or other types of reports. 3. Data are output to a decision-support system (DSS) where they are analyzed using formulas, financial ratios, or models.

2.3 Information Systems:

Whereas, the term “Information Systems” Combining of users, technology and process to complete a given goal.

2.3 Business process:

Business Process consists of a set of activities that is performed in an organizational and technical environment. These activities are coordinated to jointly realize a business goal. Each business process is enacted by a single organization, but it may interact with business processes performed by other organizations.

2.5. Users: A user is   a    person   who    uses   a    computer   or      network service. Users generally use  a   system  or   a   software  product  without    the technical expertise required to fully understand it. Power users use advanced features of programs, though they are not necessarily capable of computer programming and system administration.

2.6. IT Infrastructure

The term infrastructure in an information technology (IT) context refers to an enterprise’s entire collection of hardware, software, networks, data centers, facilities and related equipment used to develop, test, operate, monitor, manage and/or support information technology services. Figure 1 illustrate interlinkage between various hardware and software components across the organization.

Figure 1: Block diagram on IT Infrastructure support across organization.

2.7. Information Systems

The term “Information System” combining of users, IT Infrastructure (hardware and software), technology and process to complete a given goal. An information system is a software system to capture, transmit, store, retrieve, manipulate, or display information, thereby supporting people, organizations, or other software system.

2.7.1. Components of Information Systems

Information Systems use software, hardware, data and procedures to process large amounts of information and to perform complex calculations.

2.7.1. Types of Information Systems

1. Transaction processing systems, such as online air ticket booking systems, collect data from users and generate an airline ticket and a bill.
2. Customer relationship systems, track customer activities, purchasing trends, product defects and customer inquiries. They allow customers to interact with companies for service, product feedback and problem resolutions.
3. Business intelligence systems, predict future sales patterns, summarize current costs and forecast revenues.
4. Knowledge management systems, analyze, organize and share knowledge with organization members for innovation and improved performance.
5. Personal Information Systems, Such an information system can manage and store information for a private person. Examples are an address book or address database and an audio CD collection.
6. Enterprise (or organizational) information systems, An enterprise information system is tailored toward the support of an organization. We distinguish between generic types and technologies of information systems and information systems for certain types of organizations. The former class of enterprise information systems supports functionality that can be used by a wide range of organizations.Various types of enterprise information systems

(a). Enterprises Resource Planning Systems – An enterprise resource planning (ERP) system is an information system that supports the main business processes of an organization— for example, human resource management, sales, marketing, management, financial accounting, controlling, and logistics.

(b). Enterprises Resource Planning Systems- A procurement system is an information system that helps an organization automate the purchasing process. The aim of a procurement system is to acquire what is needed to keep the business processes running at minimal cost. With the available inventory, the expected arrival of ordered goods, and forecasts based on sales and production plans, the procurement system determines the requirements and generates new orders.

(c). Manufacturing Systems- Manufacturing systems support the production processes in organizations. Driven by information, such as the bill of materials (BOM), inventory levels, and available capacity, they plan the production process. With increasing automation of production processes, manufacturing systems have become more and more important.

(d). Sales and Marketing Systems– Sales and marketing systems need to process customer orders by taking into account issues such as availability. These systems are driven by software addressing the four p’s: product, price, place, and promotion.

(e). Delivery System- A delivery system is an information system that supports the delivery of goods to customers. The task of these systems is to plan and schedule when and in what order customers receive their products.

(f). Finance System– Among the oldest information systems are finance systems. These systems support the flow of money within and between organizations. Finance systems typically provide accounting functionality to maintain a consistent and auditable set of books for reporting and management support.

(g). Product Design Systems – Enterprise information systems not only support the production of products, they also support the design of products. Examples are computer-aided design (CAD) systems and product data management (PDM) systems.

(h). Workflow Management Systems. Many organizations aim to automate their business processes. To this end, they have to specify in which order the activities of a business process must be executed and which person has to execute an activity at which time.

(i). Data Warehouses. A data warehouse is a large database that stores historical and up to-date information from a variety of sources.

(j). Business Intelligence Systems. A business intelligence system provides tools to analyze the performance—that is, the efficiency and the effectiveness— of running business processes. These tools extract information on the business processes from the data available in an organization.

A more functional classification of information can be done on the basis of types of decisions.

Information required at different levels of Management (see figure 1(a)) can be classified into (i) Operational; (ii) Tactical; (iii) Strategic

Figure 1(b), illustrate a simplified form of information requirement at various levels of management

• (i) Operational Information:

Definition and Scope: Operational information relates to the day-to-day operations of the organization and thus, is useful in exercising control over the operations that are repetitive in nature. Since such activities are controlled at lower levels of management, operational information is needed by the lower management.

Nature of Information current and historical data Source of data: internal source of data.

Example
Function Area	Use of Information
Treasuring Function	The information regarding the cash position on day-to-day basis is monitored and controlled at the lower levels of management
Marketing function	Daily and weekly sales information is used by lower level manager to monitor the performance of the sales force.

(ii) Tactical Information:

Definition and Scope: Tactical information helps middle level managers allocating resources and establishing controls to implement the top level plans of the organization.

Nature of information: Predictive, focusing on short-term trends. It may be partly current and partly historical.

Source: internal as well external sources

Function Area	Use of Information
Finance Function	Information regarding the alternative sources of funds and their uses in the short run, opportunities for deployment of surplus funds in short- term securities

(iii) Strategic Information:

Definition and Scope: Strategic information is used by managers to define goals and priorities, initiate new programmes and develop policies for acquisition and use of corporate resources.Needed for making choices among the business options.

Nature of information: Predictive in nature, relies heavily on external sources of data, has a long-term perspective, and is mostly in summary form. Source: internal as well external sources

Example
Function Area	Use of Information
Project Management	Future project planning (including Project Financing Decision)

3. Applications of Information Systems

3.1 Operations Support Systems (OSS) produce a variety of information products for internal and external use, such as processing business transactions, controlling industrial processes, supporting enterprise communications and collaborations, and updating corporate databases effectively. They do not emphasize the specific information products that can best be used by managers. Further processing by management information systems is usually required.

3.1.1. Classification within Operations Support Systems (OSS)-

1. Specialized Processing System
2. Transaction Processing System
3. Process Control System
4. Enterprise collaboration System

3.2 Management Support System (MSS) is more specifically focus on the process of providing information and support for decision-making by different levels of responsibilities of the managers and business professionals Under Management Support System (MSS) various Information systems are covered as mentioned following:

3.2.1 Management Information Systems (MIS): provide information in the form of reports and displays to managers and many business professionals that support their day-to-day decision-making needs. Usually the information has been specified in advance to adequately meet the expectations on operational and tactical levels of the organization, where the decision making situations are more structured and better defined.

3.2.2 Decision Support Systems (DSS) are computer-based information systems that provide interactive information support to managers and business professionals during the decision-making process. DSS use analytical models, specialized databases, a decision maker’s own insights and judgments, and an interactive, computer-based modeling process to support semi-structured business

3.2.3 Executive Information Systems (EIS)or Executive Support Systems (ESS) are information systems that combine many of the futures of MIS and DSS. Here the information is presented in forms tailored to the preferences of the executives using the system, such as graphical user interface, customized to the executives graphics displays, exception reporting, trend analysis, and abilities to ‘drill-down’ and retrieve displays of related information quickly at lower levels of detail.

3.2.4 Specialized Processing Systems (PS) are information systems characterized as functional business systems, strategic information systems, knowledge management systems, and expert systems.

It is important to realize that business applications of information systems in the real world are typically integrated combinations of all these types of information systems. In practice, all these different types and roles of information systems are combined into integrated or Cross-Functional Business Information Systems that provide a variety of functions. Thus, most information systems are designed to produce information and support decision making for various levels of management and business functions, as well as perform record-keeping and transaction-processing chores. Whenever you analyze or work with an information system, you probably see that it provides information for a variety of managerial levels and business functions.

4. Management Information Systems and Decision Making

The functional areas or departments—accounting, finance, production/operations, marketing and sales, human resources, and engineering and design—are supported by ISs designed for their particular reporting needs.

General-purpose reporting systems are referred to as management information systems (MIS). Their objective is to provide reports to managers for tracking operations, monitoring, and control. Typically, a functional system provides reports about such topics as operational efficiency, effectiveness, and productivity by extracting information from databases and processing it according to the needs of the user. Types of reports are the following:

Periodic: These reports are created or run according to a pre-set schedule. Examples are daily, weekly, and quarterly. Reports are easily distributed via e-mail, blogs, internal web sites (called intranets), or other electronic media. Periodic reports are also easily ignored if workers don’t find them worth the time to review.

Exception: Exception reports are generated only when something is outside the norm, either higher or lower than expected. Sales in hardware stores prior to a hurricane may be much higher than the norm. Or sales of fresh produce may drop during a food contamination crisis. Exception reports are more likely to be read because workers know that some unusual event or deviation has occurred. Ad hoc: Ad hoc reports are unplanned reports. They are generated to a screen or in print on an as needed basis. They are generated on request to learn more about a situation, problem, or opportunity

5. Information System Life Cycle (ISLC)

Figure 4: The Life Cycle Model (Software Development Life Cycle) of an enterprises system

Definition of SDLC: The systems development life cycle (SDLC) is a conceptual model used in project management that describes the stages involved in an information system development project, from an initial feasibility study through maintenance of the completed application.

Various SDLC methodologies have been developed to guide the processes involved, including the waterfall model (which was the original SDLC method); rapid application development (RAD); joint application development (JAD); the fountain model; the spiral model; build and fix; and synchronize-and-stabilize.

Frequently, several models are combined into some sort of hybrid methodology. Documentation is crucial regardless of the type of model chosen or devised for any application, and is usually done in parallel with the development process. Some methods work better for specific types of projects, but in the final analysis, the most important factor for the success of a project may be how closely the particular plan was followed.

In general, an SDLC methodology follows the following steps:

• The existing system is evaluated. Deficiencies are identified. This can be done by interviewing users of the system and consulting with support personnel.
• The new system requirements are defined. In particular, the deficiencies in the existing system must be addressed with specific proposals for improvement.
• The proposed system is designed. Plans are laid out concerning the physical construction, hardware, operating systems, programming, communications, and security issues.
• The new system is developed. The new components and programs must be obtained and installed. Users of the system must be trained in its use, and all aspects of performance must be tested. If necessary, adjustments must be made at this stage.
• The system is put into use. This can be done in various ways. The new system can phased in, according to application or location, and the old system gradually replaced. In some cases, it may be more cost-effective to shut down the old system and implement the new system all at once.
• Once the new system is up and running for a while, it should be exhaustively evaluated. Maintenance must be kept up rigorously at all times. Users of the system should be kept up-to-date concerning the latest modifications and procedures.