What Is an Information System?

Learning Objectives

Introduction
Welcome to the world of information systems, a world
that seems to change almost daily. Over the past few
decades information systems have progressed to being
virtually everywhere, even to the point where you may not
realize its existence in many of your daily activities. Stop
and consider how you interface with various components
in information systems every day through different
Chapter 1: What Is an Information System? | 9
electronic devices. Smartphones, laptop, and personal
computers connect us constantly to a variety of systems
including messaging, banking, online retailing, and
academic resources, just to name a few examples.
Information systems are at the center of virtually every
organization, providing users with almost unlimited
resources.
Have you ever considered why businesses invest in
technology? Some purchase computer hardware and
software because everyone else has computers. Some even
invest in the same hardware and software as their business
friends even though different technology might be more
appropriate for them. Finally, some businesses do
sufficient research before deciding what best fits their
needs. As you read through this book be sure to evaluate
the contents of each chapter based on how you might
someday apply what you have learned to strengthen the
position of the business you work for, or maybe even your
own business. Wise decisions can result in stability and
growth for your future enterprise.
Information systems surround you almost every day. Wi-fi
networks on your university campus, database search
services in the learning resource center, and printers in
computer labs are good examples. Every time you go
shopping you are interacting with an information system
that manages inventory and sales. Even driving to school
or work results in an interaction with the transportation
information system, impacting traffic lights, cameras, etc.
Vending machines connect and communicate using the
Internet of Things (IoT). Your car’s computer system does
more than just control the engine – acceleration, shifting,
and braking data is always recorded. And, of course,
everyone’s smartphone is constantly connecting to
available networks via Wi-fi, recording your location and
other data.
Can you think of some words to describe an information
system? Words such as “computers,” “networks,” or
“databases” might pop into your mind. The study of
information systems encompasses a broad array of
devices, software, and data systems. Defining an
information system provides you with a solid start to this
course and the content you are about to encounter.
Defining Information Systems
Many programs in business require students to take a
course in information systems. Various authors have
attempted to define the term in different ways. Read the
following definitions, then see if you can detect some
variances.
• “An information system (IS) can be defined
technically as a set of interrelated components that collect,
process, store, and distribute information to support
decision making and control in an organization.” [1]
• “Information systems are combinations of
hardware, software, and telecommunications networks
that people build and use to collect, create, and distribute
useful data, typically in organizational settings.”[2]
• “Information systems are interrelated components
working together to collect, process, store, and
disseminate information to support decision making,
coordination, control, analysis, and visualization in an
organization.”[3]

As you can see these definitions focus on two different

ways of describing information systems: the components
that make up an information system and the role those
components play in an organization. Each of these need to
be examined.
The Components of Information Systems
Information systems can be viewed as having five major
components: hardware, software, data, people, and
processes. The first three are technology. These are
probably what you thought of when defining information
systems. The last two components, people and processes,
separate the idea of information systems from more
technical fields, such as computer science. In order to
fully understand information systems, you will need to
understand how all of these components work together to
bring value to an organization.
Technology
Technology can be thought of as the application of
scientific knowledge for practical purposes. From the
invention of the wheel to the harnessing of electricity for
artificial lighting, technology has become ubiquitous in
daily life, to the degree that it is assumed to always be
available for use regardless of location. As discussed
before, the first three components of information systems
– hardware, software, and data – all fall under the
category of technology. Each of these will be addressed in
an individual chapter. At this point a simple introduction
should help you in your understanding.
Hardware
Hardware is the tangible, physical portion of an
information system – the part you can touch. Computers,
keyboards, disk drives, and flash drives are all examples
of information systems hardware. How
12 | Information Systems for Business and Beyond (2019)
these hardware components function and work together
will be covered in Chapter 2.
Software
Software comprises the set of instructions that tell the
hardware what to do. Software is not tangible – it cannot
be touched. Programmers create software by typing a
series of instructions telling the hardware what to do. Two
main categories of software are: Operating Systems and
Application software. Operating Systems software
provides the interface between the hardware and the
Application software. Examples of operating systems for a
personal computer include Microsoft Windows and
Ubuntu Linux. The mobile phone operating system market
is dominated by Google Android and Apple iOS.
Application software allows the user to perform tasks such
as creating documents, recording data in a spreadsheet, or
messaging a friend. Software will be explored more
thoroughly in Chapter 3.
Data
The third technology component is data. You can think of
data as a collection of facts. For example, your address
(street, city state, postal code), your phone number, and
your social networking
account are all pieces of data. Like software, data is also
intangible, unable to be seen in its native state. Pieces of
unrelated data are not very useful. But aggregated,
indexed, and organized together into a database, data can
become a powerful tool for businesses. Organizations
collect all kinds of data and use it to make decisions
which can then be analyzed as to their effectiveness. The
analysis of data is then used to improve the organization’s
performance. Chapter 4 will focus on data and databases,
and how it is used in organizations.
Networking Communication
Besides the technology components (hardware, software,
and data) which have long been considered the core
technology of information systems, it has been suggested
that one other component should be added:
communication. An information system can exist without
the ability to communicate – the first personal computers
were stand-alone machines that did not access the
Internet. However, in today’s hyper-connected world, it is
an extremely rare computer that does not connect to
another device or to a enetwork. Technically, the
networking communication component is made up of
hardware and software, but it is such a core feature of
today’s information systems that it has become its own
category. Networking will be covered in Chapter 5.
People
When thinking about information systems, it is easy to
focus on the technology components and forget to look
beyond these tools to fully understand their integration
into an organization. A focus on the people involved in
information systems is the next step. From the front-line
user support staff, to systems analysts, to developers, all
the way up to the chief information officer (CIO), the
people involved with information systems are an essential
element. The people component will be covered in
Chapter 9.
Process
The last component of information systems is process. A
process is a series of steps undertaken to achieve a desired
outcome or goal. Information systems are becoming more
integrated with organizational processes, bringing greater
productivity and better control to those processes. But
simply automating activities using technology is not
enough – businesses looking to utilize information
systems must do more. The ultimate goal is to improve
processes both internally and externally, enhancing
interfaces with suppliers and customers. Technology
buzzwords such as “business process re-engineering,”
“business process management,” and “enterprise resource
planning” all have to do with the continued improvement
of these business procedures and the integration of
technology with them. Businesses hoping to gain a
competitive advantage over their competitors are highly
focused on this
component of information systems. The process element
in information systems will be discussed in Chapter 8.
The Role of Information Systems
You should now understand that information systems
have a number of vital components, some tangible, others
intangible, and still others of a personnel nature. These
components collect, store, organize, and distribute data
throughout the organization. You may have even realized
that one of the roles of information systems is to take data
and turn it into information, and then transform that
information into organizational knowledge. As technology
has developed, this role has evolved into the backbone of
the organization, making information systems integral to
virtually every business. The integration of information
systems into organizations has progressed over the
decades.
The Mainframe Era
From the late 1950s through the 1960s, computers were seen as a way to more
efficiently do calculations. These first business computers were room-sized
monsters, with several machines linked together. The primary work was to
organize and store large volumes of information that were tedious to manage by
hand. Only large businesses, universities, and government agencies could afford
them, and they took a crew of specialized personnel and dedicated facilities to
provide information to organizations.
Time-sharing allowed dozens or even hundreds of users to simultaneously access
mainframe computers from locations in the same building or miles away. Typical
functions included scientific calculations and accounting, all under the broader
umbrella of “data processing.”
Registered trademark of International Business Machines
In the late 1960s, Manufacturing Resources Planning (MRP) systems were
introduced. This software, running on a mainframe computer, gave companies the
ability to manage the manufacturing process, making it more efficient. From
tracking inventory to creating bills of materials to scheduling production, the MRP
systems gave more businesses a reason to integrate computing into their processes.
IBM became the dominant mainframe company. Continued improvement in
software and the availability of cheaper hardware eventually brought mainframe
computers (and their little sibling, the minicomputer) into most large businesses.
Today you probably think of Silicon Valley in northern California as the center of
computing and technology. But in the days of the mainframe’s dominance
corporations in the cities of Minneapolis and St. Paul produced most computers.
The advent of the personal computer resulted in the “center of technology”
eventually moving to Silicon Valley.