Introduction to Information Systems
Information systems
An information system (IS) is an organized framework of components that collect, process,
store, and distribute information to support operations, decision-making, coordination,
control, analysis, and strategic planning within an organization. It combines technology,
people, and processes to manage data effectively.
Examples
The following are some commonly used information systems
Decision Support System (DSS): Decision Support System (DSS) are information
systems that assists in decision-making by analysing data.
Management Information systems (MIS): Management Information systems (MIS):
are information systems that focus on providing structured reports and summaries to
support managerial functions, such as planning, organizing, and controlling.
Transaction Processing Systems (TPS): Transaction Processing Systems (TPS) are
information systems that manages routine transactions like sales and payroll.
Enterprise Resource Planning (ERP): Enterprise Resource Planning (ERP) are
information systems that integrates core business processes, such as finance, HR, and
supply chain management (e.g., SAP, Oracle ERP).
Customer Relationship Management (CRM): Information systems that help
manage customer interactions and data
Components of Information Systems
An information system is made up of the following major components:
People / end users: People or end users are individuals who interact with the system
to perform tasks or make decisions, e.g. employees using payroll systems, customers
using e-commerce websites.
Hardware: Hardware are all the physical devices and infrastructure that support the
system, e.g. Computers, servers, network devices, smartphones, and peripherals like
printers. Hardware provides the foundation for data input, processing, storage, and
output of information.
Software: Software are programs and applications that run on hardware to perform
specific functions, e.g. System software such as operating systems like Windows or
Linux, application software, such as business applications like MS Office,
QuickBooks. Software automates processes and enables efficient operations.
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Introduction to Information Systems
Database: A database is an organized collections of data that are stored, managed,
and retrieved to meet user needs, e.g. SQL databases for customer records or NoSQL
databases for big data applications. Databases provides accurate, secure, and
accessible data for informed decision-making.
Procedures: Procedures are instructions and policies that guide system usage and
operation, e.g., data entry protocols, user authentication processes. Procedures ensure
consistency, reliability, and security in system operations.
Information Communication Technology (ICT)
Information Communication Technology (ICT) refers to the tools, devices, networks, and
software used to process, store, communicate, and manage information.
How ICT Relates to Information Systems:
ICT provides the infrastructure and tools necessary for developing, operating, and
maintaining information systems, e.g., communication networks (e.g., the internet) (ICT)
enable data sharing and facilitates communication within Information Systems (IS) such as
DSS, TPS and MIS.
Comparison Between Information Systems and ICT:
Aspect Information Systems (IS) Information Communication Technology (ICT)
Definition A structured system for managing Technologies enabling data communication and
and using information. processing.
Scope Includes ICT, people, processes, Focuses on hardware, software, and
and data communication tools.
Purpose Supports decision-making and Facilitates communication and technology
organizational operations. integration.
Information systems in organisations
Information is a critical asset for any organization. It drives decision-making, enhances
operational efficiency, and provides a competitive edge. Accurate and timely information
empowers organizations to:
Make informed decisions: Managers rely on data to evaluate options and select the
best course of action.
Monitor performance: Information helps measure progress toward goals and
identify areas for improvement.
Adapt to changes: Organizations use information to respond to dynamic market
conditions, customer needs, and regulatory changes.
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Introduction to Information Systems
Gain competitive advantage: By leveraging insights from information, companies
can innovate and outperform competitors.
Ensure compliance: Information ensures adherence to legal, financial, and
operational standards.
To manage and utilize information effectively, organizations implement information system,
which integrate technology, people, and processes to collect, process, store, and disseminate
(distribute) information.
Fundamental roles of Information Systems in organizations
Information systems play the following three fundamental roles in organizations:
Support organizational processes or business operations: Information systems
automate repetitive tasks like payroll processing and inventory management, e.g. a
retail POS system tracking sales and inventory.
Support decision making; Information systems provide real-time data and analytics
for better decision-making, e.g. Power BI dashboards helping managers identify
trends.
Support strategic advantages: Information systems offer competitive advantages by
improving efficiency and innovation, e.g. using AI in customer service to enhance
user experience.
Information systems and organizational levels of management
Organizational management operates at three levels: strategic, tactical, and operational as
shown in the following diagram.
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Introduction to Information Systems
Information systems play a pivotal role in supporting these levels by providing the right
information for decision-making. Different types of information systems are designed to meet
the specific needs of personnel at the strategic, tactical, and operational levels of
management. These systems provide the necessary tools and data for effective decision-
making and operations.
Strategic level / top level management
The strategic level management also known as top-level management focuses on long-
term planning, organizational strategy, and overall decision-making. It is responsible for
setting the organization’s vision, mission, and long-term goals. Personnel within the strategic
level include:
Chief Executive Officer (CEO): Oversees the overall strategic direction.
Chief Operating Officer (COO): Manages daily operations aligned with strategic
goals.
Chief Financial Officer (CFO): Handles financial planning, investments, and risk
management.
Board of Directors: Provides governance and policy oversight.
The above personnel focus on strategic planning and overall organizational direction
Decision type
The personnel within the strategic level are responsible for making unstructured decisions.
Unstructured decisions also known strategic decisions are complex decisions that lack
predefined rules or procedures. They are unique, involve uncertainty, and require judgment
and intuition.
Examples:
Deciding to enter a new market.
Launching a new product or service.
Mergers and acquisitions.
Information needs:
The strategic level of management requires summarized, predictive, and strategic data to
enable making of informed decision. This data includes:
Summarized and high-level data.
Predictive analytics and trend forecasts.
External market intelligence, e.g., competitor performance, economic conditions).
Internal performance summaries, e.g., revenue growth, employee productivity).
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Introduction to Information Systems
Types of information systems:
Some commonly used information systems at the strategic level of management include:
Executive Information Systems (EIS): Provides high-level summaries, dashboards,
and trend analysis to support strategic planning, e.g., a CEO using EIS to monitor
market trends or organizational performance.
Decision Support Systems (DSS): Analyses large datasets to assist in making
complex decisions, e.g., a DSS recommending potential markets for expansion.
Enterprise Resource Planning (ERP): Integrates data from all departments to
provide a unified view for strategic decision-making, e.g., SAP ERP offering financial
and operational insights for planning.
Business Intelligence Systems (BIS): Generates reports and visualizations to analyse
market trends, e.g., Tableau or Power BI providing visual analytics and reports.
Knowledge Management Systems (KMS): Helps store and retrieve organizational
knowledge for strategic purposes, e.g., portals containing best practices, case studies,
and policies.
Economic Forecasting Systems (EFS): Provides projections of future economic
conditions for planning purposes.
Tactical level / Middle level management
Tactical level management also known as middle-level management focuses on
implementing organisational strategies set by top management and managing departmental or
regional goals. It also responsible for overseeing departmental operations. Personnel within
the tactical level include:
Department managers: Lead specific departments such as HR, Marketing, or
Finance.
Regional managers: Oversee branch activities in specific geographical areas.
Project managers: Handle planning and execution of projects.
Operations managers: Coordinate resources and processes within operational areas.
Decision type
The personnel within the tactical level are responsible for making semi structured decisions.
Semi structured decisions also known tactical decisions are decisions that combine
structured and unstructured elements. They involve a mix of predefined rules and managerial
judgment.
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Introduction to Information Systems
Examples:
Budget allocation for departments.
Developing marketing plans.
Resource scheduling for upcoming projects.
Information needs:
The tactical level of management requires detailed and comparative data to facilitate resource
allocation and goal setting. This data includes:
Detailed and comparative data on departmental or regional performance.
Historical data for trend analysis.
"What-if" scenario analysis to predict outcomes of different options.
Regular updates on operational metrics.
Types of information systems:
Some commonly used information systems at the tactical level of management include:
Management Information Systems (MIS): Generates structured reports and
summaries based on transaction data to monitor performance, e.g., monthly sales
reports from MIS used by a regional manager.
Decision Support Systems (DSS): Supports semi-structured decision-making, such
as resource allocation or departmental planning, e.g., a DSS used to optimize
production schedules in a manufacturing unit.
Customer Relationship Management (CRM): Helps manage and analyse customer
interactions for marketing and sales strategies, e.g., a CRM system tracking customer
engagement for a marketing campaign.
Enterprise Resource Planning (ERP) Systems: Integrates data across departments,
ensuring smooth communication and resource management, e.g. SAP or Oracle ERP
systems for coordinating supply chain and finance.
Supply Chain Management Systems (SCM): Manages the flow of goods and
resources.
Inventory Management Systems: Helps optimize stock levels and procurement.
Operational Level / Lower-level management
Lower-level management focuses on day-to-day tasks and routine operations, ensuring
efficiency and adherence to procedures. Personnel within the operational level include:
Team leaders: Supervise small teams performing specific tasks.
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Introduction to Information Systems
Supervisors: Monitor frontline employees in operational areas like production or
sales.
Shift managers: Manage operations during specific shifts in industries like
manufacturing or retail.
Office administrators: Handle day-to-day administrative duties.
Decision type
The personnel within the operational level are responsible for making structured decisions.
Structured decisions also known operational decisions are routine decisions based on
established rules, procedures, and predefined criteria.
Examples:
Approving leave requests.
Scheduling employee shifts.
Replenishing inventory when stock levels fall below a threshold.
Information needs:
The operational level of management requires transaction-focused, real-time data to ensure
operational efficiency. This data includes:
Real-time data for monitoring ongoing operations.
Detailed transaction records for accuracy.
Alerts or notifications for predefined thresholds (e.g., low inventory levels).
Reports on daily activities and task completion.
Types of information systems:
Some commonly used information systems at the operational level of management include:
Transaction Processing Systems (TPS): Automate and record routine transactions
like payroll, order processing, or inventory management, e.g., a POS system used to
record daily sales in a retail store.
Enterprise Resource Planning (ERP): Offers integrated tools to streamline routine
operations across departments, e.g., an ERP managing procurement and supply chain
logistics.
Office Automation Systems (OAS): Enhances productivity by automating office
tasks like document creation and communication, e.g., Microsoft Office Suite or
Google Workspace.
Workflow Management Systems (WMS): Manages and tracks daily workflows and
task assignments, e.g., Trello or Asana for assigning and monitoring team tasks.
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Introduction to Information Systems
Supply Chain Management (SCM) Systems: Supports inventory tracking and logistics operations, e.g., Systems that track stock levels
and coordinate deliveries.
The following table summarizes Information systems and organizational levels of management
Management Level Personnel Decision Type Information Needs Information Systems
Strategic (Top-Level) CEO, COO, CFO, Unstructured Summarized data, trends, EIS, DSS, ERP, Business
Board of Directors forecasts Intelligence, Economic
Forecasting
Tactical (Middle-Level) Department Managers, Semi-Structured Comparative data, MIS, CRM, DSS, SCM,
Regional Managers, historical trends, scenarios Inventory Management
Project Managers, Systems
Operations Managers
Operational (Lower-Level) Team Leaders, Structured Real-time data, detailed TPS, ERP, OAS, WMS
Supervisors, Shift records
Managers,
Advantages of information systems
Improved efficiency: Information systems automate repetitive tasks, saving time and reducing errors.
Better decision-making: Information systems provide accurate, real-time data for informed choices.
Enhanced communication: Information systems integrate systems to facilitate seamless collaboration.
Scalability: Information systems can grow with the organization, adapting to increased demands.
Data security: Information systems implement measures to protect sensitive information.
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Introduction to Information Systems
Disadvantages: of information systems
High initial cost: Implementing and maintaining Information systems can be
expensive.
Complexity: Advanced Information systems require skilled personnel to operate.
Security risks: Information systems are vulnerable to cyberattacks and data breaches.
Over dependence on information systems: Organisations depend so much on
Information systems in the daily routine operations and hence system failures can
disrupt operations.
Resistance to change: Employees may hesitate to adopt new Information systems
Information systems stakeholders and their roles
Information systems stakeholders are individuals or groups who have an interest in the
design, development, implementation, and operation of the system. Their roles are critical for
ensuring that the system meets organizational goals and user needs. They include:
System owners
System owners are individuals or groups responsible for funding, approving, and overseeing
the system’s overall objectives. Typically, they are executives or department heads.
Roles:
Define system objectives: Set the vision, purpose, and goals of the system.
Allocate resources: Approve budgets and allocate financial and human resources for
the system.
Approve requirements: Ensure user and business needs align with system goals.
Monitor progress: Oversee system development to ensure milestones are met.
Approve changes: Make decisions about scope adjustments or feature additions.
Evaluate system performance: Assess whether the system meets its intended
objectives.
Ensure compliance: Verify that the system adheres to legal, regulatory, and
organizational policies.
Authorize deployment: Give final approval for the system’s implementation.
System users
System users are individuals or groups who interact with the system to perform tasks or
achieve objectives. Users can be:
Internal users: These are systems user who are within the organisation, e.g.
employees.
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Introduction to Information Systems
External: These are systems user who are without (outside) the organisation, e.g.
customers, suppliers.:
Roles:
Provide requirements: Share feedback on system needs and expectations.
Test features: Participate in user acceptance testing (UAT) to ensure the system meets
requirements.
Operate the system: Use the system for daily operations, such as data entry or report
generation.
Report issues: Identify and communicate problems or inefficiencies.
Offer feedback: Suggest improvements or enhancements.
Comply with procedures: Follow established protocols for system usage.
Train new users: Help onboard and train colleagues or team members.
Support organizational goals: Use the system effectively to contribute to the
organization’s objectives.
System analysts
A system analyst is a professional who bridges the gap between business needs and technical
solutions, ensuring the system fulfills user requirements.
Roles:
Gather requirements: Work with stakeholders to understand system needs.
Document processes: Create detailed documentation, such as use cases or workflow
diagrams.
Evaluate feasibility: Assess technical, economic, and operational feasibility of
proposed solutions.
Design specifications: Translate requirements into system specifications.
Collaborate with designers and developers: Ensure requirements are implemented
correctly.
Test system performance: Validate that the system functions as intended.
Resolve issues: Address discrepancies between user needs and system capabilities.
Provide recommendations: Suggest solutions to optimize system performance.
System designers
System designers are individuals responsible for designing the architecture, interface, and
technical components of the system.
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Introduction to Information Systems
Roles:
Create blueprints: Develop system design documents, such as data flow diagrams.
Plan architecture: Define the system's hardware, software, and network structure.
Design interfaces: Create user-friendly and intuitive system interfaces.
Define data models: Structure data storage and retrieval mechanisms.
Incorporate security measures: Design systems with robust security features.
Ensure compatibility: Ensure the system integrates seamlessly with existing
systems.
Optimize performance: Design for scalability, reliability, and efficiency.
Collaborate with developers: Work closely with developers to implement designs.
System developers
System developers professionals who build, test, and implement the system based on design
specifications.
Roles:
Write code: Develop the system using programming languages.
Test features: Perform unit and integration testing to ensure functionality.
Fix bugs: Debug issues during development.
Document code: Maintain clear and comprehensive documentation for future
reference.
Deploy the system: Oversee system installation and setup.
Collaborate with analysts: Ensure technical solutions meet user needs.
Integrate components: Combine different modules into a functional system.
Provide maintenance: Update and troubleshoot the system post-implementation.
Database Administrators (DBAs)
Database Administrators (DBAs) are professionals responsible for managing and maintaining
the organization’s databases.
Roles:
Design databases: Create efficient and secure database schemas.
Manage data storage: Ensure data is stored and organized effectively.
Optimize performance: Tune databases for fast and reliable access.
Backup data: Implement backup and recovery solutions.
Ensure security: Protect databases from unauthorized access.
Monitor performance: Track database usage and address performance issues.
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Introduction to Information Systems
Implement updates: Apply patches and upgrades to database software.
Support users: Assist system users with data-related queries or issues.
Web developers
Web developers are professionals who design, develop, and maintain websites and web-based
systems.
Roles:
Create websites: Develop functional and visually appealing web applications.
Ensure responsiveness: Design websites optimized for different devices.
Integrate backend systems: Connect websites with databases and servers.
Maintain security: Protect websites from threats like hacking or data breaches.
Monitor performance: Ensure websites load quickly and operate reliably.
Optimize SEO: Implement strategies to improve search engine rankings.
Collaborate with designers: Work with graphic designers to create visually engaging
websites.
Provide updates: Regularly update content and features to meet user needs.
Information systems development
Information systems development refers to the process of designing, creating,
implementing, and maintaining systems that collect, process, store, and distribute information
to meet organizational goals. It involves analysing user needs, defining system requirements,
and integrating technology with business processes. System development is guided by
methodologies like the System Development Life Cycle (SDLC) or Agile frameworks.
Key features of information systems development:
Problem solving: Addresses inefficiencies, bottlenecks, or gaps in existing processes.
User-centric approach: Focuses on meeting the needs of end users and stakeholders.
Scalability and adaptability: Ensures systems can grow and adapt to changing
organizational needs.
Integration of technology: Combines software, hardware, and networks to achieve
optimal functionality.
Importance:
Organizations develop information systems to enhance efficiency, improve decision-making,
and maintain competitiveness in a dynamic environment.
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Introduction to Information Systems
Reasons for information systems development
Organizations invest in information systems development for various reasons. These reasons
include:
Automation of processes: Information systems streamline repetitive and manual
tasks, reducing the need for human intervention, e.g. automating payroll processing or
inventory tracking saves time and minimizes errors.
Improved decision making: Information systems provide accurate, real-time data
and analytical tools to support informed decisions, e.g. dashboards in a Decision
Support System (DSS) allow managers to analyse trends and predict outcomes.
Enhanced communication and collaboration: Information systems improve
communication within and between teams through integrated platforms, e.g. tools like
Microsoft teams or slack enable seamless collaboration, even in remote settings.
Competitive advantage: Developing advanced systems helps organizations
outperform competitors by improving efficiency and customer experience, e.g. a
CRM system like Salesforce enhances customer service and boosts retention rates.
Cost reduction: Automating processes and optimizing resource allocation reduce
operational costs, e.g. ERP systems consolidate financial, HR, and supply chain
processes, reducing duplication of effort.
Scalability and flexibility: Modern systems are designed to adapt to growth and
changing business needs, e.g. cloud-based systems like AWS allow organizations to
scale resources up or down as needed.
Regulatory compliance: Systems are developed to ensure organizations meet legal,
industry, or financial regulations, e.g. systems designed to comply with General Data
Protection Regulation (GDPR) or Health Insurance Portability and Accountability Act
(HIPAA) laws, ensure data privacy and security.
Better customer experience: Information systems provide personalized services and
faster response times, improving customer satisfaction, e.g. chatbots powered by AI
deliver instant support to customers on e-commerce websites.
Data security and integrity: Development of secure systems helps protect sensitive
information from breaches or unauthorized access, e.g. system with encryption and
multi-factor authentication safeguard financial data.
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Introduction to Information Systems
Integration of legacy systems: Organizations develop new systems to integrate older
systems, ensuring data consistency and operational efficiency, e.g. migrating legacy
databases to modern ERP systems for better accessibility and functionality.
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