Information Systems Operations and Maintenance

WHAT IS INFORMATION SYSTEM? DEFINITION, EXAMPLES, & FACTS

An information system is a combination of software, hardware, and telecommunication

networks to collect useful data, especially in an organization. Many businesses use
information technology to complete and manage their operations, interact with their
consumers, and stay ahead of their competition. Some companies today are
completely built on information technology, like eBay, Amazon, Alibaba, and Google.

Typical components of information systems

Five components of Information System – hardware, software, data, and

telecommunications.

1. Hardware – This is the physical component of the technology. It includes computers,

hard disks, keyboards, iPads, etc. The hardware cost has decreased rapidly while its
speed and storage capacity has increased significantly. However, the impact of the
use of hardware on the environment is a huge concern today. Nowadays, storage
services are offered from the cloud, which can be accessed from telecommunications
networks.

2. Software – Software can be of two types, system software and application software.
The system software is an operating system that manages the hardware, program files,
and other resources while offering the user to control the PC using GUI. Application
software is designed to manage particular tasks by the users. In short, system software
makes the hardware usable while application software handles specific tasks.
An example of system software is Microsoft windows, and an example of application
software is Microsoft Excel.
Large companies may use licensed applications which are developed and managed
by software development companies to handle their specific needs. The software can
be proprietary and open source, available on the web for free use.

3. Data – Data is a collection of facts and is useless by themselves, but when collected
and organized together, it can be very powerful for business operations. Businesses
collect all the data and use it to make decisions that can be analyzed for the
effectiveness of the business operations.

4. Telecommunications – Telecommunication is used to connect with the computer

system or other devices to disseminate information. The network can be established
using wired or wireless modes. Wired technologies include fiber optic and coaxial
cable, while wireless technologies include radio waves and microwaves.
Examples of information systems

Information systems have gained immense popularity in business operations over the
years. The future of information systems and their importance depends on automation
and the implementation of AI technology.

Information technology can be used for specialized and generalized purposes. A

generalized information system provides a general service like a database
management system where software helps organize the general form of data. For
example, various data sets are obtained using a formula, providing insights into the
buying trends in a certain time frame.

On the contrary, a specialized information system is built to perform a specific function

for a business. For example, an expert system that solves complex problems. These
problems are focused on a specific area of study like the medical system. The main aim
is to offer faster and more accurate service than an individual might be able to do on
his own.

Types of information systems

1. Knowledge Work System

There are different knowledge management systems that an organization implements
to ensure a continuous flow of new and updated knowledge into the company and its
processes. A knowledge work system (KWS) is one of the knowledge management
systems that ease the integration of new information or knowledge into the business
process.
Furthermore, KWS also offers support and resources to various knowledge creation
techniques, artificial intelligence applications, and group collaboration systems for
knowledge sharing, among others. It also uses graphics, visuals, etc., to disseminate
new information. Below are some of the applications that work on the core
fundamentals of KWS.

• Designers often use computer-aided design systems (CAD) to automate their

design process.
• Financial workstations are used to analyze huge amounts of financial data with
the help of new technologies.
• Virtual reality systems are found in the scientific, education, and business fields for
using graphics and different systems to present data.

2. Management Information System

The management information system provides aid to managers by automating
different processes that were initially done manually. Business activities like business
performance tracking and analysis, making business decisions, making a business plan,
and defining workflow. It also provides feedback to the managers by analyzing the
roles and responsibilities.
A management information system is considered a significant application that helps
managers immensely. Here are some of the advantages of the information system:

• It enhances the efficiency and productivity of the company

• It provides a clear picture of the organization’s performance
• It adds value to the existing products, introduces innovation and improves
product development
• It assists in communication and planning for business processes
• It helps the organization provide a competitive advantage

3. Decision Support System

A decision support system is an information system that analyses business data and
other information related to the enterprise to offer automation in decision-making or
problem-solving. A manager uses it in times of adversities arising during the operation of
the business. Generally, the decision support system is used to collect information
regarding revenue, sales figures or inventory. It is used across different industries, and
the decision support system is a popular information system.

4. Office Automation System

An office automation system is an information system that automates different
administrative processes like documenting, recording data, and office transactions,
among others. The office automation system is divided into managerial and clerical
activities. Here are some of the business activities that are done under this type of
information system:

• Email
• Voice mail
• Word processing

5. Transaction Processing System

The transaction processing system automates the transaction collection, modification,
and retrieval process. The peculiar characteristic of this type of information system is
that it increases the performance, reliability and consistency of business transactions. It
helps businesses perform daily operations smoothly without hassle.
Once you are well-versed with different types of information systems, understanding the
application of these systems becomes easy to comprehend. Therefore, in the last part
of the article, we will look into applying information systems.

6. Executive Support System

An Executive Support System or ESS helps top-level executives to plan and control
workflow and make business decisions. It is very similar to Management Information
System or MIS.
Here are some of the unique characteristics of ESS:
 • It provides great telecommunication, better computing capabilities, and
effective display options to executives.
• It enables them with information through static reports, graphs, and textual
information on demand.
• It helps monitor performances, track competitors’ strategies, and forecast future
trends, among others.

Facts of information systems

The products of information technology are part of our daily lives. Here are some of the
facts about information systems.

• Necessary for businesses to grow

Every organization has computer-related operations that are critical to getting the job
done. In a business, there may be a need for computer software, implementation of
network architecture to achieve the company’s objectives or designing apps, websites,
or games. So, any company that is looking to secure its future needs to integrate a well-
designed information system.

• Better data storage and access

Such a system is also useful for storing operational data, documents, communication
records, and histories. As manual data may cost a lot of time, information systems can
be very helpful in it. Information system stores data in a sophisticated manner, making
the process of finding the data much easier.

• Better decision making

Information system helps a business in its decision-making process. With an information
system, delivering all the important information is easier to make better decisions. In
addition, an information system allows employees to communicate effectively. As the
documents are stored in folders, it is easier to share and access them with the
employees.

Since you have been reading about information systems, a career in information
technology (IT) could interest you. We have collated some information to give you an
idea about the field of IT.

Building a career in IT

It should be no surprise that a career in IT will help one grow significantly in the coming
years. It is considered one of the most highly paid industries. There’s a constant need for
skilled and qualified professionals to meet the IT industry requirement, a great
opportunity for ambitious and hard-working people.
But ambition and hard work alone is not enough. Having strong fundamentals, a
creative mindset, and the ability to communicate effectively is highly important to
become successful in such a technical field.

Attaining certifications is another way to get a competitive advantage in this field.

Employers are always looking for people who never stop learning, so having a few
certifications shows that you are always up for new learning. Getting a certification
from a reputed institute offers a better understanding of the field, and a chance to
interact with industry experts and is considered more valuable during growth
assessment.

The Value of Information: Does More Data Mean Better Decisions?

The value of information is the improvement in the outcomes of our actions that we
would expect if we could reduce or eliminate uncertainty before making a decision.
Previously applied in engineering, economics and healthcare planning, VOI is also
intuitively appealing for environmental management, where decisions must be made in
the face of ubiquitous uncertainty. Knowing the value of information can assist in
designing monitoring and experimental programs, implementing adaptive
management and prioritizing sources of uncertainty. In other words, it can help applied
ecologists and conservative managers find a focused, transparent way to address the
inevitable need for “more data”.

In summary, three things determine the value of information:

1. How much we already know (the more we know, the less beneficial it is to
collect more information.)
2. Whether and how we would react to that extra information by changing actions,
and how much better would the updated action be
3. How good is the information we can actually get (think about sample sizes,
imperfect detection, time lags, etc.)

What is needed to calculate VOI?

To calculate the value of information we need to have the right process in place. First,
we need to clearly state what the decision is, and specify our objectives; then define a
set of available management actions; third, we need to clearly formulate uncertainty
as a series of hypotheses (competing models or states of the system of interest); fourth,
we need to predict the expected outcomes of those actions, with particular attention
to how they are expected to differ under different hypotheses.
Source Evaluation and Information Reliability

Information provided by a source does not necessarily objectively represent the reality.
The first factor is the reliability of the source and second it's ability to manage this type
of information. As a result, the need for rating sources and the information they provide.
We suggest teams incorporate the NID1 model that is widely used in government and
some of commercial entities. According to this model the sources are classified in order
of decreasing reliability from "A" to "E", where "F" is designated for the case where
judgement cannot be made.

In turn, the specific piece of information itself is ranked in decreasing order from "1" to
"5", where "6" is reserved for the case where judgement cannot be made.

Source reliability2
Rating Description

A Reliable No doubt about the source's authenticity, trustworthiness,

or competency. History of complete reliability.

B Usually Minor doubts. History of mostly valid information.

reliable

C Fairly reliable Doubts. Provided valid information in the past.

D Not usually Significant doubts. Provided valid information in the past.

reliable

E Unreliable Lacks authenticity, trustworthiness, and competency. History of

invalid information.
 Rating Description

F Cannot be Insufficient information to evaluate reliability. May or may not be

judged reliable.

Information reliability2
Rating Description

1 Confirmed Logical, consistent with other relevant information, confirmed by

independent sources.

2 Probably true Logical, consistent with other relevant information, not

confirmed.

3 Possibly true Reasonably logical, agrees with some relevant information, not
confirmed.

4 Doubtfully true Not logical but possible, no other information on the subject, not
confirmed.

5 Improbable Not logical, contradicted by other relevant information.

6 Cannot be The validity of the information can not be determined.

judged
References:

2020. What are Information Systems, and How Do They Benefit Business? Washington
State University Carson College of Business.

2022. The 6 Types of Information Systems And Their Applications. Emeritus.org.

2023. Source Evaluation and Information Reliability. first.org

Stephenson, I. (2015). The Value of Information: Does More Data Mean Better Decisions?
methodsblog.com

2022. What is Information System? Definition, Examples, & Facts

Prepared By:

Julius Estes Paris Guevarra Manabat, RCrim.

Instructor