INFORMATION TECHNOLOGY AND INFORMATION SYSTEM

INFORMATION TECHNOLOGY (IT)

Information is the finished product for which data is the raw material. The dictionary defines information as processed data, which is used to trigger certain actions or gain understanding of what the data implies. 

Information has also been defined as data that have been put into a meaningful and useful context and communicated to a recipient who uses it to make decisions. Information involves the communication and reception of intelligence or knowledge. It apprises and notifies; surprises and stimulates, reduces uncertainty, reveals additional alternatives or helps eliminate irrelevant or poor ones, and influences individuals and stimulates them to action. The information must be received by the recipient within the required time frame and the information must be free from errors. 

The technology plays an important role in delivering timely and error free information to its recipients. Technology includes hardware, software, databases, and communication system. Hardware is a set of devices such as processor, monitors, keyboard, and printer that accept data, process them, and display them. Software is a set of programs that enable the hardware to process data. Database is also an integral part of IT system, which is a collection of related files, tables, relation etc. that stores data and the association among them. Network connects computing resources of an organization and facilitates sharing of hardware and software. The organization processes and people are integral part of an IT System. 

Information Technology means the collection, storage, processing, dissemination, and use of Information. It is not confined to hardware and software but acknowledges the importance of man and the goals he sets for his technology, the values employed in making these choices, the assessment criteria used to decide whether he is controlling the technology and is being enriched by it. 

Information Technology Serving Society, USA in 1979, has given the above definition. The above definition clearly states that IT is an important tool, which must be used properly. At one time, 60% people used to work in agriculture. Nowadays, in a developed country, about 10% people work in agriculture and 40% people work in information related fields. In a developed country such as US, 50% households have computers and Internet connection. In India, only about 18 people out of every 1000 have access to computers. However, India is making steady progress. 

As far as history of computing is concerned, people tried to invent a computing machine as early as 800 BC. Abacus is one of the oldest computing devices that are still in use. Every child in China learns to use abacus in school. Our ancestors had built various other mechanical machines using gears. All these efforts laid foundation for better computing machines. The diode tubes, transistors, integrated circuits (ICs) and now very large integrated circuits (VLSI) are the electro-mechanical devices that have been invented over a period of time. The technology has improved since World War II many folds. The improved technology has been the key factor in making better computing devices. Along with improvement in computing technology, the communication technology has also improved in parallel. The software also improved and became user friendly. The spreadsheets, the word processing packages, database packages, simulation software packages, and decision support systems made IT popular among managers as well. The terms Information Systems (IS) and Information Technology (IT) are used synonymously. IS has evolved considerably since 1960. 

TYPES OF INFORMATION SYSTEM

There are various types of information systems as listed below:

Transaction Processing Systems (TPS)

A TPS is used primarily for record keeping which is required in any organization to conduct the business. Examples of TPS are sales order entry, payroll, and shipping records etc. TPS is used for periodic report generation in a scheduled manner. TPS is also used for producing reports on demand as well as exception reports. 

Decision Support System (DSS)

DSS serves the management of an organization. A decision support system has sophisticated data analysis tools, which support and assist all aspects of problem specific decision-making. DSS may use data from external sources such as current stock prices to enhance decision-making. DSS is used when the problem is complex and the information needed to make the best decision is difficult to obtain and use. DSS is developed with the help of decision makers. DSS helps in decision-making process and does not make any decision. 

Executive Information System (EIS)

An Executive Information System is also called Executive Support System. Senior managers of an organization use the EIS. Therefore, it must be easy to use so that executives can use it without any assistance. EIS can do trend analysis, exception reporting and have drill down capabilities. The results are usually presented in a graphical form tailored to executive’s information needs. EIS has on-line analysis tools and they access a broad range of internal and external data. 

Management Information Systems (MIS)

MIS provides the management routine summary of basic operations of the organization. The basic operations are recorded by the TPS of the organization and MIS consolidates the data on sales, production etc. MIS provides routine information to managers and decision makers. The main objective behind installing an MIS in the organization is to increase operational efficiency. MIS may support marketing, production, finance etc. 

Work Flow System

A workflow system is a rule based management system that directs, coordinates, and monitors execution of an interrelated set of tasks arranged to form a business process. A workflow system is also known as a document image management system. For example, a workflow system is used by banks for loan sanction process. An applicant fills out an electronic application form for a bank loan at a bank’s web site. The application is then upload to the bank loan officer’s site. The loan officer conducts an interview and fills in his feedback and passes the application form to the credit check unit. The credit unit checks the credit limit and fills in the details. The application is now complete and a final decision is made. 

There are three types of workflow software. Administrative workflow systems focus on the tracking of expense reports, travel requests, massages. An Ad-hoc workflow system deals with the shaping of product, sales proposals, and strategic plans. Production workflow systems are concerned with mortgage loans and insurance claims. A workflow system may be Internet based and may be combined with e-mail. A workflow system may be based on client/sever architecture that may use a database/file server. 

Enterprise Resource Planning (ERP)

ERP system is a set of integrated programs capable of managing a company’s vital business operations for an entire multi-site, global organization. 

Expert Systems

The system has the ability to make suggestions and act like an expert in a particular field. An expert system has an extensive knowledge base.