Nigerian Journal of Operations Research, Vol. 1, Pg 53-68, 2010.

INFORMATION SYSTEMS IN AN INNOVATIVE SOCIETY

Asaolu O. S. 1, Sosimi A. A. 2 and Akano T.T.3

Abstract

This work presents an overview of Information Systems (IS), tracing their development,

adaptations and effects or firms, governments and society. We differentiated between

individual, private, public and organizational information systems and outlined their

characteristics. The importance of innovations and the need to invest in both people and

those technologies that impact positively on the society are enumerated.

Keywords: Information, Systems, Technology, Innovation, Society

1.0 Introduction

In systems theory, an information system (IS) is a system, automated or manual, that

comprises people, machines, and/or methods organized to collect, process, transmit, and

disseminate data that represent user information. Basically an Information System handles

the flow and maintenance of information that supports a business or some other operation.

It contains information about significant people, places and things within the organization

or in the environment surrounding it. Information is derived from meaningful interpretation

of data [1]. Data consists of the raw facts representing events occurring in the organization

before they are organized into an understandable and useful form for humans. Information

is used to support human activity systems for promoting organizational efficiency to meet

present needs and newly evolving requirements. Three activities provide the information

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that organizations need. These activities are Input, Processing and Output. 'Input' consists

of acquisition of the 'raw data', which is transformed into more meaningful packets of

'Information' by means of 'Processing'. The processed information now flows to the users or

activities also called as 'Output'. The shortcomings are analyzed and the information is sent

back to the appropriate members of the organization to help them evaluate and refine the

input. This is termed as 'feedback'. Information systems have become a veritable tool for

companies when well integrated with existing computing environments; they are used to

manage people, processes, products and data. Information technology is a very important

malleable resource available to executives. Many companies have created a position of

Chief Information Officer (CIO) that sits on the executive board.

2.0 Literature Review

US researchers from World War II, the early days of simulation (Operations Research), and

new technologies birthed studies into the areas of what became known as Information

Systems [2]. By the mid-sixties, IS was already forging its way into business mainstream.

While computers remained out of reach for most businesses, telecommunications made its

mark with the TELEX machine. This step gave businesses the ability to communicate

within its own organization anywhere in the world at any time and effectively pass

instructions and information. The use of computer in business and industry usually started

off in the accounting departments [3]. It was assumed that this area would know the most

about using numerical machines and the lack of understanding in how important databases

could be other areas of the business. By this time a number of business schools began

developing Management Information System (MIS) programs to meet the growing need of

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IS managers [4]. During the seventies, more upper management recognized the importance

of IS and the flexibility it was bring to business. The TELEX became the standard of

information transfer and the mainframe computer became the standard for database

creation. As the need for organized and easy access to data became apparent, information

based businesses began moving the mainframes from under the accounting management to

it own department. Later, the Fax machine became ubiquitous. As IS begins to receive its

own autonomy and large budgets in corporations, many technical savvy managers of these

new departments begin spending huge amount of money on systems and software at their

own discretion and oftentimes with perceived little returns to the business. Information

systems (IS) have done more to expand business and industry into global markets than any

other convention in history [5]. Today the backbone of IS is known as the Internet (World

Wide Web and allied services integrated with a business Local Area Network), along with

lists of acronym buzz word; electronic data interchange (EDI), electronic information

system (EIS), electronic resource planning (ERP), software configuration management

(SCM) and host of others to describe new ways in which IS can be employed to grow

business.

There are six major types of IS corresponding to each organizational level [6]:

 Transaction Processing Systems (TPS): serve the operational level of an

organization.

 Knowledge Work Systems (KWS)

 Office Automation Systems (OAS) to serve the knowledge level of an organization.

 Decision-Support Systems (DSS)

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 Management Information Systems (MIS) serve the management level of the

organization.

 Executive Support Systems (ESS) serve the strategic level of an organization.

3.0 Areas of work

Information systems originated as a sub-discipline of computer science, in an attempt to

understand and rationalize the management of technology within organizations [7]. It has a

number of different areas of work, namely:

 Information Systems Strategy

 Information Systems Management

 Information Systems Development

Each of these branches out into a number of sub disciplines, that overlap with other science

and managerial disciplines such as computer science, pure and engineering sciences, social

and behavioral sciences, and business management. People with managerial and some

technical (computing) skills are needed by today’s firms and governments thus the ability

to recognize and utilize information is imperative for career prospects.

4.0 Innovation

Discoveries emerge when the time is ripe - they're contingent on some prior innovation,

perhaps in another field. Some everyday artifacts - laptop computers, camcorders, even

supermarket bar codes - depend on basic science that dates back a few decades or so.

Applications that are transforming the way we live are based on research that required only

modest investment; and research only pays intellectual or economic dividends if it is truly

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at the leading edge. It demands intuition, imagination and of course, perseverance. In the

post-industrial information age, the focus of companies has shifted from being product-

oriented to knowledge-oriented in the sense that market operators today compete in process

and innovation rather than in products: the emphasis has shifted from the quality and

quantity of production to the production process itself--and the services that accompany the

production process. The biggest asset of companies today is their information--represented

by people, experience, know-how, innovations (patents, copyrights, trade-secrets). For a

market operator to be able to compete, such must have a strong information infrastructure,

at the heart of which lies the information technology infrastructure. Similarly,

governments’ policy implementers handle “Top Secret/Classified” information files and

defense operatives keep certain information from the general public or other countries in

“national security interest.” Hardly do nations willingly transfer technology; it is usually

either bought or stolen!

Nigeria has witnessed a surge in adaptation of IS since the late eighties with the emergence

of the new generation banks that are technology driven, the licensing of Internet Service

Providers in the early nineties and the deregulation of the telecommunications sector by the

beginning of this millennium. These have led to government initiatives such as Servicom,

AutoReg and the proposed e-Payment for all government financial transactions. The firms

have equally introduced e-Polling, e-marketing, mobile banking, online registration and

recruitments, etc. It is good that one may now subscribe to watch a favorite TV show on his

mobile phone screen, it would be even better if sending money to others could be as

seamless as sending a phone SMS via the integration of an ATM card to each phone

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account. This shows that IS influence the productivity and standard of living in any society

and, ultimately is a factor in distinguishing between third world and first world countries.

The need to improve our educational sector becomes imperative as this is a requisite to

relevant innovations that will directly impact our environment.

5.0 Individual, Private, Public and Organizational Information Systems

Individual information systems

We define Individual information systems are those maintained by individuals such as

personal information managed from personal computers or mobile phones/PDAs or even

remote records over which they have substantial or over-riding control such as web-based

e-mail accounts, personal websites, etc. Such systems are pervasive and inevitable for one

to actively participate in the ‘e-world.’ They must continually be guarded against

unauthorized intrusion and backed-up in case of system collapse.

Private and Public information systems

Public information systems are information systems available for public use. Orman [8]

defines public information systems as systems designed for use by the general public, rather

than specialists in a particular field or organization. He identifies three generations of

public information systems:

 information packaging systems, which provide minimal sharing

 information retrieval systems, with provision for the sharing of data but not of

processes

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 information processing systems, which provide maximal sharing of data and

processes

Public information packaging systems include automated bank tellers, library checkout

systems, and airline reservation systems. He predicted (before the Internet was widely

adopted) that the major impact of information retrieval systems will be in public education.

Public management information system is usually defined as an information system used in

public management, that is, by organizations belonging to the public sector. Conversely,

private information systems are defined as information systems used by organizations

belonging to the private sector, mainly profit-seeking private businesses. An organization is

public to the extent that it exerts or is constrained by political authority [9, 10].

The purpose of a public information system is to provide some kind of service or support to

a public process, or process involving society (citizens) at large. In contrast, a private

information system provides services to some rather specific users closely associated with a

particular organization, performing some specific tasks that are often internal to the

organization, e.g. internal administrative processes. The actors involved in a public

information system will usually belong to the following three categories:

 private persons and households/families in their roles as citizens, clients, customers

 business companies and other types of organizations, e.g. non-profit organizations

 government agencies and institutions on different levels (central, regional, local)

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The data used and produced by a public information system may be categorized thus [11];

Operative data are data that are necessary in an absolute sense for the processing and

completion of a particular task. For example, in an e-commerce application, the buyer must

provide name, address, product/service ordered, etc, and the must provide availability and

price information, among other things. Operative data may be provided by a process

participant during the execution of the task, or they may be obtained from an already

existing database, but they must be provided one way or the other. There is no room for

negotiation of the necessity of the data.

Directive data, in contrast to operative data, are not necessary, in an absolute sense, for the

proper functioning of the supported process, but directive or analytical data, as they are

also called, are supposed to be valuable for the efficiency of the process, and for the quality

of the results. For example, statistical data and indicators in some form or other (single

figures, tables, graphs, etc) are often used in decision processes, the presumption being the

improvement of the quality of the decisions.

Procedural data are descriptions and other representations of rules of some kind. They may

emanate from legislation processes, administrative processes, or design processes, for

example. Sometimes the rules are embedded in the software used by a data processing

system; sometimes the rules are more clearly separated from the procedures by being stored

in separate knowledge bases interfacing procedural algorithms and processes.

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Metadata are briefly defined as .data about data. The relationship between data and

metadata may often be quite straightforward, as for example when metadata describe

certain technical aspects of stored data. The relationship between data and metadata, as well

as the form of the metadata, may be much more complex when the metadata aim at

describing the contents and meaning of data, the quality of data as regards relevance,

accuracy, comparability with other data, etc. Metadata should help people with tasks such

as;

 understanding other people in communication processes; the communication

processes may be direct (face-to-face) or indirect (through data stored in databases,

for example)

 retrieving data they are looking for the exploratory role of metadata

 interpreting data the explanatory role of metadata

 performing specific tasks and operations the instructional role of metadata

Process data, or Paradata as they are also called, are data that are fed back from the

process they inform about. For example, Paradata may inform about whether a certain

transaction was successfully processed or not, and if not, what kind of error occurred.

Paradata may be used to signal problems in the design or operation of a public information

system, and they may be used as a point of departure for improvements. Paradata may also

be systematically collected in order to see how different kinds of actors behave on vis-à-vis

a website: who the users are, their degree of satisfaction, etc. Whereas Paradata primarily

inform about (the performance of) processes, they indirectly also inform about (the quality

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of) data produced by the processes. Thus Paradata may be regarded as a subcategory of

metadata.

Archival data, also called records by modern archivists, should have a more important role

in future systems than they usually have today. If properly collected and organized, archival

data should become the permanently stored reflection of the real-world processes that are

supported by public information systems. In order to make archival processes as little

resource-consuming as possible, they should be integrated with the business processes,

about which they inform, and they should be automatically generated by those processes.

Such an approach would also ensure completeness and good quality of the archived

records.

A public information system should primarily contain the data necessary for fulfilling the

tasks of the system in question. For example, a system helping a citizen or a company to

obtain a government permit of some kind should contain as much relevant information as

possible to enable the government to make its decision. The government authority may

already be in possession of certain data about the applicant, and if so, the system does not

have to ask the applicant for this data. But it may offer the applicant the possibility of

checking that the data are correct. The system should also contain rule-based information

relevant to the case to be managed, e.g. laws and policies.

Characteristics of public information systems

 the user community is large, partially unknown, and usually heterogeneous

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 because of the user heterogeneity, several channels between users and producers

often have to be available in parallel

 since the users are partially unknown (and changing over time), rather sophisticated

methods have to be used in order to develop and continuously alter the system

according to user behavior and user preferences

 many public information systems will fit the description of a public good and will

thus be associated with the problems of collective financing

 public information systems will often contain both public data and highly sensitive

private data (about persons and/or companies)

 many public information systems have to be viewed and analyzed both from a

user/customer/client perspective and from a producer/authority/organization

perspective; the requirements will not be identical, and they may sometimes even be

contradictory; such intrinsic conflicts have to be managed. It is usually impossible

to completely eliminate them

 public information systems serving citizens and companies, who have a task to

complete, must often be able to communicate in a seamless manner with

information systems belonging to different "stovepipes" in one or more

organizations/agencies

 public information systems are often dependent on well functioning and well

integrated information infrastructures in the responsible organizations; these

infrastructures must ensure that the public information systems concerned are all

continuously and correctly kept up-to-date with regards to the data they rely on.

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Organizational IS Application Models

An increase in company size results in an increase in information collection, processing and

distribution. Hence it becomes necessary to handle many customer accounts and production

records with many more interrelationships. In addition to increased information records,

information needs and associated difficulties, there arises the problem of delegation of

authority and responsibilities. The common models are:

Basic Information System: The basic functions of the company such as production, sales,

finance and management functions will not change. However the introduction of an MIS

will facilitate fantastic improvement in the information communications network. The

objective of developing or improving a management information system can be stated as

below:

 To provide the type of information environment that will integrate the basic

operating functions and

 To provide management with access to information relative to complex activities in

decentralized organizations.

As the company grows and becomes more complex much of the basic functions and

information needs remain the same. Some of these internal information needs are shown as

follows: accounting control, plans and budgets, payroll by hourly and salaried groups,

inventory of materials, in-process and finished goods, sales by product salesman, customer

and area, Purchasing records, vendors, commitments, distribution-transportation and

warehousing, production by product, customer, cost, overruns and backlog, engineering-

new products, schedules, equipment, costs and R&D etc.

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Financial Information System: The financial system is probably the most important single

management information system, and in most companies it is the oldest and the best

developed. These systems basically deal with large amounts of data and involve planning in

the financial sector. However the budgeting function performed is wholly futuristic.

Periodically the management approves a financial plan (the master budget) that assigns

responsibility for maintaining incomes, investments and costs within standard limits. These

plans are the basis for periodic financial reports and these reports are used by the system for

exercising control and for futuristic planning.

Production/Operation System Model: From an operating standpoint, such a system is

crucial in a manufacturing company. It is concerned with information about the physical

flow of goods or the production of goods and services. It covers such activities as

production planning and control, inventory control and management, purchasing,

distribution and transportation. Since the quantities of data are so large and the timing of

information so essential, the production/operations system is the most adaptable to

automation and yields the largest benefits in terms of immediate solution of critical and

costly problems. This functional area usually offers immediate pay-offs in Sales Analysis,

Engineering, Inventory Control and Production Scheduling Production/Operations

Facilities, Purchasing Financial Sales and Distribution which are subsystems of the

Production/Operations System process.

Marketing Management Information System: The basic areas of the marketing function that

lend themselves to improvement through information systems include: Forecasting/Sales

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planning, Market research, Advertising, Operating and control information. Examples

include sales reports and distribution cost reports. A marketing systems should also take

into account of the necessity elsewhere in the organization concerning for information

concerning market sales, and other internal information that affects decisions in other

subsystems of the company. Three types of marketing systems may be summarized as

Control systems, Planning systems and Market research systems.

6.0 Conclusion

Information systems are intrinsically innovative. However, by “innovative,” we mean those

applications that represent the current frontier, from a technical, economic, or domain

perspective. They show how the technology can successfully be transferred and

implemented in operational environments. These applications also directly contribute to

demonstrate the role of IS techniques in a wider scope of human problems, encompassing

both the natural and management sciences. Information systems are technology driven.

Without it, business and governance would not be what they are today. It is imperative to

continually invest in the educational and research institutions, not only to develop tools and

appropriate technologies to meet modern challenges but also to prepare the end-users and

society for the changes and benefits.

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