What is an Information System?

An information system (IS) can be defined as an arrangement of people, data, processes, and interfaces that interact to support and improve day-to-day operations in an organisation as well as support the problem-solving and decision-making needs of management and users. Let us look at this definition in detail.

An interface is the means by which two or more entities interact with each other in a system. For instance, in a school, a student may request for a “Character Certificate” by filling a pre-defined form and submitting it to the Registrar. The form that is filled is the interface between the student and Registrar of the school.
In the above definition of information systems, note that we have considered

“problem solving” and “decision-making” needs in addition to our previous definition of a system - a collection on interrelated components (people, data, processes, and interfaces) that work together to achieve a goal (day-to-day operations in an organisation). Also, in the previous section, we have seen how information and data can assist in problem solving and decision- making in an organisation.

It is interesting to note that we have not mentioned the use of computers in information systems. Actually, an information system can exist without the use of computers (a manual information system) or using computers (a computerised information system or computer-based information system). We will study manual and computer-based information system in the next section.

Manual and Computer-based Information Systems

Manual information system: In a manual information system, all data processing is done manually. Filing cabinets, manual procedures and papers are vital components of a manual information system.

 With manual information systems, it is common to have
large number of filing cabinets to store records

In our school example, let us consider a student who is applying for a “Character Certificate”. The student fills a form stating information about his/her schooling history, which may include student’s academic records (O/L and A/L results), extra - curricular activities performed (member of a school sports team, being a prefect, etc.) and other relevant information. The form is submitted to the Registrar’s office with the student record book. The Registrar’s office verifies the information in the form by checking the student file in the filing cabinet. Then the character certificate is prepared by the Registrar’s office and sent to the principal for his/her signature. Finally, the “Character Certificate” is given to the student. This is an example of a manual information system.

We could store all the data and information of students in a computer. Then, we could check the records of students in a very fast manner (without the use of filing cabinets). Then, the system becomes a computer-based information system (CBIS). 

Computer-based information system: A computer-based information system is a single set of hardware, software, databases, telecommunications, people and procedures that are configured to collect, manipulate, store, and process data into information.

Let us look at each component in detail:

-Hardware consists of computer equipment.

- Software is the computer programs that govern the operation of the computer systems. There are two types of computer programs:

               (i.) System software that governs the basic computer operations such a startup etc. For example, the Operating System.
              (ii.) Application software allows specific tasks to be accomplished. For example, Word Processing software enables us to create documents – letters, books, etc.

- A database is an organised collection of data and information. As we discussed previously, data and information are critical for problem solving and decisionmaking in an organisation. Hence, most managers and executives consider a database to be the most valuable and important part of a computer-based information system.

- Telecommunications is the electronic transmission of signals (i.e. data) for communications. Telecommunications enable organisations to carry out processes and tasks through effective computer networks. Networks connect computers and computer equipment in different locations (i.e. places) and enable electronic communications. For example, the Internet is the world’s largest computer network, which connects computers around the world.

- People are the most important element in most computer-based information systems. These include users, people who manage, run, program, and maintain the system. Users are persons, who use information systems to get results.

- Procedures include the strategies, polic ies, methods, and rules for using a computer-based information system. Procedures may include methods such as
“how to perform a task by executing a particular program?” or policies such as
“who can have access to the database and what data?”
We have discussed computer-based information systems in general. Let us consider an example of a CBIS. In Sri Lanka, we are seeing many financial institutions, such as banks, using computer-based information systems.

A bank that uses a computer-based information system

A bank has a head-office and many branches located in different parts of the country. The bank and its branches have a large collection of computer equipment (hardware) ranging from computers to Automated Teller Machines (ATMs). There are many different programs (software) installed in these computer systems such as bank teller applications, Automated Teller Machine applications etc. The head office contains a database of relevant facts and information – such as account information, customer information and transaction information. All the branches are connected to the head - office by computer networks (telecommunications). Hence, now a customer can access his/her account information from any bank branch. There are many people who use the bank’s CBIS. The users include customers, bank tellers, bank managers, bank’s executives etc. Also, there are personnel who run, program, manage, and maintain the bank’s CBIS which consists of the bank’s IT department (such as database administrator, network administrators etc.). There are lots of procedures in the bank (for example, a customer can access only his/her account information, a bank manager can approve a housing loan etc.).

Manual vs. computer-based: Let us consider some important advantages and disadvantages of manual and computer-based information systems.

• Cost: The initial cost in installing a computer-based information system is higher than a manual system. In a computer-based information system, there is a cost for hardware, software, and computer networks (also called technology infrastructure) in addition to people and making up procedures. In a manual system, the initial cost is lower since this technology infrastructure is not required.

• Fast access to information: In a CBIS, information can be retrieved very fast when compared to a manual system. This is because computers store and access data electronically which is faster than a person looking through a cabinet of files.

In our example of the bank, since the bank is using a CBIS, a customer can check the balance in his/her account very quickly. If the bank was using a manual system and a cabinet of files, it will take a long time to obtain this information.

• Accuracy: In a CBIS, computers handle many repetitive data processing tasks. When programmed properly, computers are very accurate in data processing. In a manual system, humans handle these tasks. Humans get tired and bored and thus may result in errors.

• Distributed access to information: With computer networks, we can connect different computer systems and communicate between them. Hence, we can access information from many different places. In our previous example of the bank’s CBIS, a customer can access his/her account information from any branch (e.g. Anuradhapura or Kandy) because the computer networks connect the different branches and head office. Gaining efficient distributed access to information is difficult in a manual system.

• Availability: In a CBIS, since many tasks rely on computer systems, they are available throughout the day. In a manual information system, since many tasks rely on humans, they may not be available. Humans get tried and needs a rest so they work during daytime (for instance, 8am – 5pm). Computers do not get tired and can work all 24 hours a day. In our example of the bank, a customer can go to the ATM in the night when the bank is closed and still withdraw money from his/her account. This is because the bank is using a CBIS.

•  Reliability: In a CBIS, computers are used for many tasks. Computers rely on electricity to work. If there is a power failure or system failure, many tasks cannot be performed in a CBIS (unless alternative systems are in place). Sometimes, the entire system may come to a standstill! In a manual system, humans are performing the tasks and if a person gets ill another person may easily replace him/her during this period. However, if all persons gets-together and strike, then the entire system can come to a standstill!

• People resources: In a CBIS, since computers perform many tasks, there is a need for fewer people to operate a system. However, the people in a CBIS need to be well trained to operate the CBIS. In a manual system, larger number of people is needed to operate the system. Hence, some persons argue that CBIS replaces certain people’s jobs (such as clerks, office assistants etc.), while other’s claim that organisations are more efficient and productive and hence save more money by utilising a CBIS.

In today’s competitive business environments, many organisations believe that advantages of computer-based information systems far outweigh manual information systems and are required for an organisation’s survival. With the cost of hardware reducing with the advancement of technology, computer-based information systems are accessible to many organisations. Hence many organisations try to leverage the advantages of using computerised information systems in their daily operations to gain a competitive advantage. Thus learning computer-based information systems has become a necessity and a fruitful endeavour for students today. Hence, in the rest of this chapter, we will focus on computer-based information systems and we will use the term information system to refer to computer-based information system.