Abstract
An information system translates data into information to support business decision making. Data, raw unorganized facts, are gathered relative to a business event. The resulting information, which has meaning in the hands of a user, must be complete and accurate in order to support timely decision making. The acquisition of an information system by a small business will be a relatively costly endeavour. The small business manager will tend to rely upon an internal individual or external organization for advice when acquiring an information system. Further, the information system will be employed to improve the efficiency of daily operations of a small business. This chapter describes information systems. In general, an information system turns data into information to support decision making. The information must be timely, complete, and accurate relative to the decisions which must be made.
TopThis section provides an overview introduction to the terms and concepts of information systems. There are many material sources on this subject which provide very extensive coverage. However, the goal of the material presented here is to provide an appreciation for information systems and to supply a context for the subsequent discussion of the relationship between small business and information systems.
To begin, a system is a set of components that interact to accomplish a goal. For example:
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The human nervous system contains a network of specialized cells which transmit signals to co-ordinate actions
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The economic system involves producing, distributing, and consuming goods and services along with the compensation for the exchanges
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The transportation system consists of entities (ie. planes, trains, and automobiles) involved in the movement of people
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The monetary system employs government policies and institutions to monitor and control the supply of money in order to affect economic activity.
Two common terms, Information Technology and Information System, tend to be used to mean the same thing. However, in the context presented here these terms will be described to relate to different aspects of computer-based technology. Figure 1 presents a way to differentiate the two terms.
Figure 1.
Information systems and information technology
Information Technology relates to the more technical aspects of computers. Thus, Information Technology is composed of Hardware; the Networks that allow computers to communicate with each other; and Systems Software which controls the Hardware and acts as an interface with the Application Software. The term Information Technology may also be referred to as the platform upon which rests the Information System.