Difference between Data and Information

Introduction to Information Systems (IS) and it’s Major Components

A computer information system is a system composed of people and computers that processes or
interprets information. The term is also sometimes used in more restricted senses to refer to only the
software used to run a computerized database or to refer to only a computer system.

The purpose of an information system is to turn raw data into useful information that can be used for
decision making in an organization.

There are some general types of information systems. For example, a Database Management
System (DBMS) is a combination of software and data that makes it possible to organize and
analyze data. DBMS software is typically not designed to work with a specific organization or a
specific type of analysis. Rather, it is a general-purpose information system. Another example is an
Electronic Spreadsheet. This is a tool for basic data analysis based on formulas that define
relationships among the data. For example, you can use a spreadsheet to calculate averages for a
set of values or to plot the trend of a value over time.

Types & Levels of Information Systems (IS)

A typical organization has five types of information systems with each supporting a specific
organizational level. These systems include-
1. Transaction Processing Systems (TPS) at the operational level,
2. Office Automation / Support Systems (OAS / OSS)
3. Management Information Systems (MIS) and
4. Decision Support Systems (DSS) at the management level and
5. The Executive Support Systems (ESS) at the strategic level.

1. Transaction Processing Systems

Every firm needs to process transactions in order to perform their daily business operations. A
transaction refers to any event or activity that affects the organization. Depending on the
organization’s business, transactions may differ from one organization to another. In a manufacturing
unit, for example, transactions include order entry, receipt of goods, shipping, etc., while in a bank,
transactions include deposits and withdrawals, cashing of cheques etc.

However, some transactions, including placing orders, billing customers, hiring employees, employee
record keeping, etc., are common to all organizations. To support the processing of business
transactions, the transaction processing systems (TPS) are used in the organizations.

2. Office Automation Systems

An office automation / support system (OAS / OSS) is a collection of communication technology,

computers and persons to perform official tasks. It executes office transactions and supports official
activities at every organizational level. These activities can be divided into clerical and managerial
activities.
Clerical activities performed with the help of office automation system include preparing written
communication, typesetting, printing, mailing, scheduling meetings, calendar keeping.etc. Under
managerial activities, office automation system helps in conferencing, creating reports and messages,
and controlling performance of organization. Many applications like word processing, electronic filing
and e-mail are integrated in office automation system.

Word Processing

Word processing is used for the preparation of documents like letters, reports, memos, or any type of
printable material by electronic means. The text is entered by keyboard and displayed on the
computer’s display unit. This text can be edited, stored, and reproduced with the help of commands
present in the word processor. Word processors have facilities for spell checking, grammar checking,
counting (character, lines, pages, etc.), automatic page numbering, index creation, header and footer,
etc.

Email

E-mail or electronic mail facilitates the transfer of messages or documents with the help of computer
and communication lines. This helps in speedy delivery of mails and reduces time and cost of
sending a paper mail. E-mail supports not only the transfer of text messages but it also has options
for sending images, audio, video, and many other types of data.

Voice Mail

Voice mail, an important call service, allows recording and storing of telephone messages into the
computer’s memory. The intended person can retrieve these messages any time.

3. Management Information Systems

Management information systems are especially developed to support planning, controlling, and
decision-making functions of middle managers. A management information system (MIS) extracts
transaction data from underlying TPSs, compiles them, and produces information products in the form
of reports, displays or responses.

These information products provide information that conforms to decision-making needs of managers
and supervisors. Management information systems use simple routines like summaries and
comparisons, which enable managers to take decisions for which the procedure of reaching at a
solution has been specified in advance.

Generally, the format of reports produced by MIS is pre-specified. A typical MIS report is a summary
report, such as a report on the quarterly sales made by each sales representative of the organization.
Another type of management information system report is an; for example, exception report that
specifies the exception conditions the sales made by some sales representative is far below than
expected.

Usually, management information systems are used to produce reports on monthly, quarterly, or
yearly basis. However, if managers want to view the daily or hourly data, MIS enables them to do so.
In addition, they provide managers online access to the current performance as well as past records
of the organization.
4. Decision Support Systems

A decision support system (DSS) is an interactive computer-based information system that, like MIS,
also serves at the management level of an organization. However, in contrast to MIS, it processes
information to support the decision making process of managers. It provides middle managers with
the information that enables them to make intelligent decisions. A decision support system in a bank,
for example, enable a manager to analyze the changing trends in deposits and loans in order to
ascertain the yearly targets.

Decision support systems are designed for every manager to execute a specific managerial task or
problem. Generally, they help managers to make semi-structured decisions, the solution to which can
be arrived at logically. However, sometimes, they can also help in taking complex decisions. To
support such decisions, they use information generated by OASs and TPSs.

Decision support systems have more analytical power as compared to other information systems.
They employ a wide variety of decision models to analyze data or summarize vast amount of data
into a form (usually form of tables or charts) that make the comparison and analysis of data easier for
managers. They provide interactive environment so that the users could work with them directly, add
or change data as per their requirements, and ask new questions.

5. Executive Support / Information Systems (ESS / EIS)

An executive support system (ESS) – an extension of MIS – is a computer based information system
that helps in decision making at the top-level of an organization. The decisions taken with the help of
executive support system are non-routine decisions that affect the entire organization and, thus,
require judgement and sight.

As compared to DSSs, ESSs offer more general computing capabilities, better telecommunications
and efficient display options. They use the advanced graphics software to display the critical
information in the form of charts or graphs that help senior executives to solve a wide range of
problems. To make effective decisions, they use summarized internal data from MIS and DSS as well
as data from external sources about events like new tax laws, new competitors, etc. They filter,
compress, and track data of high importance and make it available to the strategic-level managers.

Executive support systems help to monitor performance, track activities of competitors, identify
opportunities, and forecast trends. They also assist senior managers in answering the following
question:

• What business should we do?

• How are our competitors doing the business?

• Which units can be sold and which new units are to be bought?

ESS gives guideline for taking decisions to executives with a strong backing based on information.

Computer- Based Information System (CBIS)

A computer- based information system, or CBIS, uses computers to collect, process, store, analyze
and distribute information for a specific purpose, such as meeting a business objective.

A computer-based information system (CBIS) is an information system in which the computer plays a
major role. Such a system consists of the following Main components

• Hardware: The term hardware refers to machinery. This category includes the computer itself,
which is often referred to as the central processing unit (CPU), and all of its support equipment.
Among the support equipment are input and output devices, storage devices and communications
devices.

• Software: The term software refers to computer programs and the manuals (if any) that support
them. Computer programs are machine-readable instructions that direct the circuitry within the
hardware parts of the CBIS to function in ways that produce useful information from data. Programs
are generally stored on some input / output medium-often a disk or tape.

• Data: Data are facts that are used by program to produce useful information. Like programs, data
are generally stored in machine-readable from on disk or tape until the computer needs them.

• Procedures: procedures are the policies that govern the operation of a computer system.
"Procedures are to people what software is to hardware" is a common analogy that is used to
illustrate the role of procedures in a CBIS.

• People: Every CBIS needs people if it is to be useful. Often the most over-looked element of the
CBIS is the people: probably the components that most influence the success or failure of information
system.

Types of CBIS
1. Executive Information Systems (ESS / EIS) Explained previously.
2. Office Automation Systems
3. Knowledge based System’
4. Expert System

3. Knowledge based Systems-

A Knowledge based Work System (KWS) is a specialized system built to promote the creation of
knowledge and to make sure that knowledge and technical skills are proper integrated into business.
It helps the knowledge workers in creating and propagating new information and knowledge by
providing them the graphics, analytical, communications, and document management tools.
The knowledge workers also need to search for knowledge outside the organization.
Thus, knowledge work system must give easy access to external databases. In addition, knowledge
work systems should have user-friendly interface to help users to get the required information quickly
and easily.
Some examples of knowledge work systems are computer-aided design (CAD) systems, virtual
reality systems, and financial workstations.
Computer-aided design (CAD) systems: These systems are used for automating the creation and
revision of designs using computers and graphics software. The CAD software has the capability to
provide design specifications for tooling and manufacturing process. This saves much time and
money while making a manufacturing process.
Virtual Reality System: These systems have more capabilities than CAD systems for visualization,
rendering and simulation. They make use of interactive graphics software to build computer-
generated simulations, which almost look like real. They can be used in educational, scientific and
business work.
Financial Workstations: They are used to combine a wide range of data from internal as well as
external sources. This data includes contact management data, market data and research reports.
Financial workstations help in analysing trading situations and large amount of financial data within no
time. It is also used for portfolio management.

4. Expert System-

It is an artificial intelligence program that has expert-level knowledge about a particular subject and
knows how to use its knowledge to respond properly. Expert system is made to think like human brain
and to get best solution for the given task, lots of knowledge is incorporated in expert system. Expert
systems are developed to replace human experts to handle the situations.

Expert systems typically consist of three parts:

(1) A knowledge base, which contains the information acquired by interviewing experts, and logic
rules that govern how that information is applied;
(2) An Inference engine that interprets the submitted problem against the rules and logic of
information stored in the knowledge base; and
(3) Interface that allows the user to express the problem in a human language such as English.

Success and Failure of Information Technology

Information technology is developed to make life easy and to achieve some objectives for business
and society. If IT project run successfully serving its core purpose it can be termed as success of it.
The elements like proper future proof planning, well documentation, precise & timely execution and
perfect maintenance contributes to the success of IT projects.

Failure of IT project is identified with failure to achieve its goals and this may happened due to
improper evaluation of objectives, improper planning, wasteful utilization of resources, erroneous
execution of project and poor maintenance.

For better life style and happy and prosperous society, projects of Information Technology must be a
success story.