All businesses share one common asset, regardless of the type of business. It does not matter if they manufacture goods or provide services. It is a vital part of any business entity, whether a sole proprietorship or a multinational corporation. That common asset is information.
Information enables us to determine the need to create new products and services. Information tells us to move into new markets or to withdraw from other markets. Without information, the goods do not get made, the orders are not placed, the materials are not procured, the shipments are not delivered, the customers are not billed, and the business cannot survive.
But information has far lesser impact when presented as raw data. In order to maximize the value of information, it must be captured, analyzed, quantified, compiled, manipulated, made accessible, and shared. In order to accomplish those tasks, an information system (IS) must be designed, developed, administered, and maintained.
An information system is a computer system that provides management and other personnel within an organization with up-to-date information regarding the organization's performance; for example, current inventory and sales. It usually is linked to a computer network, which is created by joining different computers together in order to share data and resources. It is designed to capture, transmit, store, retrieve, manipulate, and or display information used in one or more business processes. These systems output information in a form that is useable at all levels of the organization: strategic, tactical, and operational.
Systems that are specifically geared toward serving general, predictable management functions are sometimes called management information systems (MIS). A good example of an MIS report is the information that goes into an annual report created for the stockholders of a corporation (a scheduled report). The administration of an information system is typically the province of the MIS or information technology (IT) department within an organization.
Some applications have infringed on the familiar MIS landscape. Enterprise resource planning (ERP) software and executive information systems (EIS) both provide packaged modules and programs that perform the same functions as traditional MIS, but with greater functionality, flexibility, and integration capabilities.
The original computerized information systems were based on mainframes. "Mainframe" is a term originally referring to the cabinet containing the central processor unit or "main frame" of a room-filling computer. After the emergence of smaller mini-computer designs in the early 1970s, the traditional large machines were described as "mainframe computers," or simply mainframes. The term carries the connotation of a machine designed for batch rather than interactive use, though possibly with an interactive time-sharing operating system retrofitted onto it.
It has been conventional wisdom in most of the business community since the late 1980s that the mainframe architectural tradition is essentially dead, having been swamped by huge advances in integrated circuit design technology and low-cost personal computing. Despite this, mainframe sales in the United States enjoyed somewhat of a resurgence in the 1990s, as prices came down and as large organizations found they needed high-power computing resources more than ever. Supporters claim that mainframes still house 90 percent of the data major businesses rely on for mission-critical applications, attributing this to their superior performance, reliability, scalability, and security compared to microprocessors.
The Internet has opened up further developments in information systems and the exchange of information via web-based e-mail, intranets, and extranets. These technologies allow for much faster data and information exchange and greater access for more users. Web-casting and videoconferencing allow for real-time information exchanges. Mobile computing technologies accessed by handheld devices, such as multi-functional mobile phones, personal digital assistants, and podcasting (via iPods), are offering further modes of communication.
The design of an information system is based on various factors. Cost is a major consideration, but there certainly are others to be taken into account, such as the number of users; the modularity of the system, or the ease with which new components can be integrated into the system, and the ease with which outdated or failed components can be replaced; the amount of information to be processed; the type of information to be processed; the computing power required to meet the varied needs of the organization; the anticipated functional life of the system and/or components; the ease of use for the people who will be using the system; and the requirements and compatibility of the applications that are to be run on the system.
There are different ways to construct an information system, based upon organizational requirements, both in the function aspect and the financial sense. Of course, the company needs to take into consideration that hardware that is purchased and assembled into a network will become outdated rather quickly. It is almost axiomatic that the technologies used in information systems steadily increase in power and versatility on a rapid time scale. Perhaps the trickiest part of designing an information system from a hardware standpoint is straddling the fine line between too much and not enough, while keeping an eye on the requirements that the future may impose.
Applying foresight when designing a system can bring substantial rewards in the future, when system components are easy to repair, replace, remove, or update without having to bring the whole information system to its knees. When an information system is rendered inaccessible or inoperative, the system is considered to be "down."
A primary function of the maintaining an information system is to minimize downtime, or hopefully, to eradicate downtime altogether. The costs created by a department, facility, organization, or workforce being idled by an inoperative system can become staggering in a short amount of time. The inconvenience to customers can cost the firm even more if sales are lost as a result, in addition to any added costs the customers might incur.
Another vital consideration regarding the design and creation of an information system is to determine which users have access to which information. The system should be configured to grant access to the different partitions of data and information by granting user-level permissions for access. A common method of administering system access rights is to create unique profiles for each user, with the appropriate user-level permissions that provide proper clearances.
Individual passwords can be used to delineate each user and their level of access rights, as well as identify the tasks performed by each user. Data regarding the performance of any user unit, whether individual, departmental, or organizational can also be collected, measured, and assessed through the user identification process.
The OSI seven-layer model attempts to provide a way of partitioning any computer network into independent modules from the lowest (physical/hardware) layer to the highest (application/program) layer. Many different specifications can exist at each of these layers.
A crucial aspect of administering information systems is maintaining communication between the IS staff, who have a technical perspective on situations, and the system users, who usually communicate their concerns or needs in more prosaic terminology. Getting the two sides to negotiate the language barriers can be difficult, but the burden of translation should fall upon the IS staff. A little patience and understanding can go a long way toward avoiding frustration on the part of both parties.
There is more to maintaining an information system than applying technical knowledge to hardware or software. IS professionals have to bridge the gap between technical issues and practicality for the users. The information system should also have a centralized body that functions to provide information, assistance, and services to the users of the system. These services will typically include telephone and electronic mail "help desk" type services for users, as well as direct contact between the users and IS personnel.
Document and record management may well be the most crucial aspect of any information system. Some examples of types of information maintained in these systems would be accounting, financial, manufacturing, marketing, and human resources. An information system can serve as a library. When properly collected, organized, and indexed in accordance with the requirements of the organization, its stored data becomes accessible to those who need the information.
The location and retrieval of archived information can be a direct and logical process, if careful planning is employed during the design of the system. Creating an outline of how the information should be organized and indexed can be a very valuable tool during the design phase of a system. A critical feature of any information system should be the ability to not only access and retrieve data, but also to keep the archived information as current as possible.
Collaborative tools can consist of software or hardware, and serve as a base for the sharing of data and information, both internally and externally. These tools allow the exchange of information between users, as well as the sharing of resources. As previously mentioned, real-time communication is also a possible function that can be enabled through the use of collaborative tools.
Data mining, or the process of analyzing empirical data, allows for the extrapolation of information. The extrapolated results are then used in forecasting and defining trends.
Query tools allow the users to find the information needed to perform any specific function. The inability to easily create and execute functional queries is a common weak link in many information systems. A significant cause of that inability, as noted earlier, can be the communication difficulties between a management information systems department and the system users.
Another critical issue toward ensuring successful navigation of the varied information levels and partitions is the compatibility factor between knowledge bases. For maximum effectiveness, the system administrator should ascertain that the varied collection, retrieval, and analysis levels of the system either operate on a common platform, or can export the data to a common platform. Although much the same as query tools in principle, intelligent agents allow the customization of the information flow through sorting and filtering to suit the individual needs of the users. The primary difference between query tools and intelligent agents is that query tools allow the sorting and filtering processes to be employed to the specifications of management and the system administrators, and intelligent agents allow the information flow to be defined in accord with the needs of the user.
Managers should keep in mind the following advice in order to get the most out of an information system:
An information system is more than hardware or software. The most integral and important components of the system are the people who design it, maintain it, and use it. While the overall system must meet various needs in terms of power and performance, it must also be usable for the organization's personnel. If the operation of day-to-day tasks is too daunting for the workforce, then even the most humble of aspirations for the system will go unrealized.
A company will likely have a staff entrusted with the overall operation and maintenance of the system and that staff will be able to make the system perform in the manner expected of it. Pairing the information systems department with a training department can create a synergistic solution to the quandary of how to get non-technical staff to perform technical tasks. Oft times, the individuals staffing an information systems department will be as technical in their orientation as the operative staff is non-technical in theirs. This creates a language barrier between the two factions, but the communication level between them may be the most important exchange of information within the organization. Nomenclature out of context becomes little more than insular buzzwords.
If a company does not have a formal training department, the presence of staff members with a natural inclination to demonstrate and teach could mitigate a potentially disastrous situation. Management should find those employees who are most likely to adapt to the system and its operation. They should be taught how the system works and what it is supposed to do. Then they can share their knowledge with their fellow workers. There may not be a better way to bridge the natural chasm between the IS department and non-technical personnel. When the process of communicating information flows smoothly and can be used for enhancing and refining business operations, the organization and its customers will all profit.
SEE ALSO: Knowledge Management
Jeffrey A. Moga
Revised by Monica C. Turner
Caldelli, A., and M.L. Parmigiani. "Management Information System: A Tool for Corporate Sustainability." Journal of Business Ethics 55, no.2 (December 2004): 159–171.
Denton, D.K. "Focus on Data Context, Not Content." Communications News 40, no. 12 (December 2003): 50.
Lail, P.W. "Improving IT's Support of Business Strategy." Pulp & Paper 79, no.1 (January 2005): 23.
Lawrence, F.B., D.F. Jennings, and B.E. Reynolds. ERP in Distribution. Mason, OH: Thomson/South-Western, 2005.
Pawlowski, S. D. and D. Robey. "Bridging User Organizations: Knowledge Brokering and the Work of Information Technology Professionals." MIS Quarterly 28, no. 4 (December 2004): 645–672.
Zehir, C. and H. Keskin. "A Field Research on the Effects of MIS on Organizational Restructuring." Journal of American Academy of Business 3 (September 2003): 270–279.