Information System -An information system (IS) - is any combination of information technology and people's activities that support

operations, management and decision making. In a very broad sense, the term information system is frequently used to refer to the interaction between people, processes, data and technology. In this sense, the term is used to refer not only to the information and communication technology (ICT) that an organization uses, but also to the way in which people interact with this technology in support of business processes. Information systems inter-relate with data systems on the one hand and activity systems on the other. An information system is a form of communication system in which data represent and are processed as a form of social memory. An information system can also be considered a semi-formal language which supports human decision making and action. - An integrated set of components for collecting, storing, and processing data and for delivering information, knowledge, and digital products. Business firms and other organizations rely on information systems to carry out and manage their operations, interact with their customers and suppliers, and compete in the marketplace. For instance, corporations use information systems to reach their potential customers with targeted messages over the Web, to process financial accounts, and to manage their human resources. Governments deploy information systems to provide services cost-effectively to citizens. Digital goods, such as electronic books and software, and online services, such as auctions and social networking The 5 components that must come together in order to produce a Computer-Based Information system are: 1.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 equipments. Among the support equipments are input and output devices, storage devices and communications devices. 2. 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. 3. Data: Data are facts that are used by programs to produce useful information. Like programs, data are generally stored in machine-readable form on disk or tape until the computer needs them. 4. 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.

5. 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 component that most influence the success or failure of information systems. Types of information system 1. Transaction Processing Systems What is a Transaction Processing System? Transaction Processing System are operational-level systems at the bottom of the pyramid. They are usually operated directly by shop floor workers or front line staff, which provide the key data required to support the management of operations. This data is usually obtained through the automated or semi-automated tracking of low-level activities and basic transactions. Functions of a TPS TPS are ultimately little more than simple data processing systems. Functions of a TPS in terms of data processing requirements Inputs Processing Validation Sorting Listing Merging Updating Calculation Outputs Lists Detail reports Action reports Summary reports?

Transactions Events

Some examples of TPS o o o o o The role of TPS o o o o Produce information for other systems Cross boundaries (internal and external) Used by operational personnel supervisory levels Efficiency oriented Payroll systems Order processing systems Reservation systems Stock control systems Systems for payments and funds transfers

2. Management Information Systems What is a Management Information System? For historical reasons, many of the different types of Information Systems found in commercial organizations are

referred to as "Management Information Systems". However, within our pyramid model, Management Information Systems are management-level systems that are used by middle managers to help ensure the smooth running of the organization in the short to medium term. The highly structured information provided by these systems allows managers to evaluate an organization's performance by comparing current with previous outputs. Functions of a MIS MIS are built on the data provided by the TPS Functions of a MIS in terms of data processing requirements Inputs Processing Outputs Summary reports Action reports Detailed reports Internal Transactions Sorting Internal Files Merging Structured data Summarizing Some examples of MIS o o o o o The role of MIS o o o o o o Based on internal information flows Support relatively structured decisions Inflexible and have little analytical capacity Used by lower and middle managerial levels Deals with the past and present rather than the future Efficiency oriented? Sales management systems Inventory control systems Budgeting systems Management Reporting Systems (MRS) Personnel (HRM) systems

DSS manipulate and build upon the information from a MIS and/or TPS to generate insights and new information Functions of a DSS in terms of data processing requirements Inputs Processing Outputs Summary reports Forecasts Graphs / Plots Modelling Internal Transactions Simulation Internal Files Analysis External Information? Summarizing Some examples of DSS o o o o o The role of DSS o o o o o Support ill- structured or semi-structured decisions Have analytical and/or modelling capacity Used by more senior managerial levels Are concerned with predicting the future Are effectiveness oriented? Group Decision Support Systems (GDSS) Computer Supported Co-operative work (CSCW) Logistics systems Financial Planning systems Spreadsheet Models?

4. Executive Information Systems What is an EIS? Executive Information Systems are strategic-level information systems that are found at the top of the Pyramid. They help executives and senior managers analyze the environment in which the organization operates, to identify long-term trends, and to plan appropriate courses of action. The information in such systems is often weakly structured and comes from both internal and external sources. Executive Information System are designed to be operated directly by executives without the need for intermediaries and easily tailored to the preferences of the individual using them. Functions of an EIS EIS organizes and presents data and information from both external data sources and internal MIS or TPS in order to support and extend the inherent capabilities of senior executives.

3. Decision Support Systems What is a Decision Support System? A Decision Support System can be seen as a knowledge based system, used by senior managers, which facilitates the creation of knowledge and allow its integration into the organization. These systems are often used to analyze existing structured information and allow managers to project the potential effects of their decisions into the future. Such systems are usually interactive and are used to solve ill structured problems. They offer access to databases, analytical tools, allow "what if" simulations, and may support the exchange of information within the organization.

Functions of a DSS

Functions of a EIS in terms of data processing requirements Inputs Processing Outputs Summary reports Forecasts Graphs / Plots External Data Summarizing Internal Files Simulation Pre-defined models "Drilling Down"

Some examples of EIS Executive Information Systems tend to be highly individualized and are often custom made for a particular client group; however, a number of off-the-shelf EIS packages do exist and many enterprise level systems offer a customizable EIS module. The role of EIS o o o o o o o Are concerned with ease of use Are concerned with predicting the future Are effectiveness oriented Are highly flexible Support unstructured decisions Use internal and external data sources Used only at the most senior management levels

Six reasons why information systems are so important for business today include: 1. Operational excellence. Business improves the efficiency of their operations in order to achieve higher profitability. Information systems are important tools available to managers for achieving higher levels of efficiency and productivity in business operations. A good example is WalMart that uses a RetailLink system, which digitally links its suppliers to every one of Wal-Mart's stores. as soon as a a customer purchase an item , the supplier is monitoring the item , knows to ship a replacement to the shelf. 2. New products, services, and business models. Information system is a major tool for firms to create new products and services, and also an entirely new business models. A business model describe how a company produces, delivers, and sells a product or service to create wealth. Example: Apple inc transformed an old business model based on its iPod technology platform that included iPod, the iTunes music service, and the iPhone. 3. Customer/supplier intimacy. When a business serves its customers well, the customers generally respond by returning and purchasing more. this raises revenue and profits. The more businesses engage its suppliers, the better the suppliers can provide vital inputs. This lower cost. Example: The Mandarin Oriental in Manhattan and other high-end hotels exemplify the use of information systems and technology to achieve customer intimacy. they use computers to keep track of guests' preferences, such as their preferred room temperature, check-in time, television programs.

4. Improved decision making. Many managers operate in an information bank, never having the right information at the right time to make an informed decision. These poor outcomes raise costs and lose customers. Information system made it possible for the managers to use real time data from the marketplace when making decision. Example: Verizon Corporation uses a Web-based digital dashboard to provide managers with precise real -time information on customer complains, network performance.. Using this information managers can immediately allocate repair resources to affected areas, inform customers of repair efforts and restore service fast. 5. Competitive advantage. When firms achieve one or more of these business objectives( operational excellence, new products, services, and business models, customer/supplier intimacy, and improved decision making) chances are they have already achieved a competitive advantage. Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales, and higher profits. Example: Toyota Production System focuses on organizing work to eliminate waste, making continues improvements, TPS is based on what customers have actually ordered. 6. Day to day survival. Business firms invest in information system and technology because they are necessities of doing business. This necessities are driven by industry level changes. Example: Citibank introduced the first automatic teller machine to attract customers through higher service levels, and its competitors rushed to provide ATM's to their customers to keep up with Citibank. providing ATMs services to retail banking customers is simply a requirement of being in and surviving in the retail banking business. Firm turn to information system and technology to provide the capability to respond to these.