An information system (IS) is a computerized system that, collects, processes, stores, analyzes and, disseminates information for a specific propose. This process is defined as an information processing cycle (IPC). The information processing cycle consists of four operations: input, process, output, and storage. Raw data retrieved from the environment and delivered to the computer is called input. After the computer receives data from the input device, it will manipulate, refine, and process the data to produce useful information for users. This step is called processing.
After data has been refined and manipulated into useful information, it is displayed to the end users as output. Finally,the information needs to be stored for future uses. All four processes make up the information processing cycle. Input consists of raw facts (data),while information is a collection of facts organized or processed in such a way that it has additional value for further usage. The information that is organized and processed to convey understanding,experience, learning, and expertise forms knowledge, which has a high value. All enterprises which have been in operation for any period of time have a wealth of information. However, this information often remains under-utilised because it is compartmentalised, either in the form of an individual entrepreneur or in the functional departments of larger businesses. That is, information is usually categorised according to its nature so that there are, for example, financial, production, manpower, marketing, stockholding and logistical data. Often the entrepreneur, or various personnel working in the functional departments holding these pieces of data, do not see how it could help decision makers in other functional areas. Similarly, decision makers can fail to appreciate how information from other functional areas might help them and therefore do not request it. Information system can link all this subsystem into unique system where needed data, information or knowledge would be easily accessed.
As information itself has value, commerce often involves the exchange of information (and knowledge), rather than tangible goods. Information is valuable and useful because it can help decision makers. For example, investors are using information to make multimillion-dollar decisions, and financial institutions employ information to transfer millions of dollars. Retailers use information to control inventory and process orders. Information technologies are constantly changing our society, our ways of doing business, and our lives. To fully understand what an information system is and how it works, it is necessary to examine its components. A complete information system should contain the following components: hardware, software, database, trained personnel, network and procedures.
• Hardware: a set of devices such as a processor, monitor, keyboard, and printer that accept data and information, processes them, and displays them.
• Software: a set of computer programs that enable the hardware to process data.
• Database: an organized collection of related files, records, etc. that stores data and the
associations among them.
• Network: a connecting system that permits the sharing of resources among different computers.
• Procedure: the strategies, policies, methods, and rules for using the information system.
• People: the most important element in information systems: include those persons who work with the information system or use its output.
Let’s look at all components in a successful computer-based information system (CBIS) that was deployed in pharmaceutical giant GlaxoWellcome Inc. The successful application of CBIS requires an understanding of the business and its environment, as well as an understanding of the business problem to which the CBIS is to be applied. When GlaxoWellcome revealed that a combination of two of its drugs, Epivir and Retrovir, was effective in treating AIDS, doctors began writing prescription en masse almost overnight. Such a big demand could have resulted in lower inventories to pharmaceutical wholesalers and shortage. But thanks to GWis (GlaxoWellcome Information System) market analysts were able to track the size and sources of demand and generate reports within hours. The result: Wholesalers around the world never ran out of Epivar and Retrovir.
GWis is the data warehouse application with decision support system relational online analytical processing (ROLAP) technology. GWis works directly with data stored in a relational database management system, integrating internal data with data from external sources. The application was implemented in GlaxoWellcome’s marketing analysis department. So users can analyze sales, inventory, and prescription data for drugs on the fly, helping GW streamline its distribution process and cut operational costs. An additional IS benefit is that users can access information from various databases and computers. They no longer create local databases on their PCs that ultimately interfere with data integrity or require IT support.
Computer software falls into two broad classes: system software and application software. The principal system software is known as the operating system. It manages the hardware, files, and other system resources and provides a systematic and consistent means for controlling the computer, most commonly via a graphical user interface (GUI). GWis software was built with MicroStrategy Inc. included data warehouse with DSS tools and database management. As usual big companies own various software packages. GWis is indeed database oriented system. Typical examples of databases include customer records and product catalogues, for GWis these are drugs sold, inventory, prescription data and so on. People who are supposed to use this system are primarily market analysts, but it can be accessed by managers as well and data warehouse application for pharmacists or wholesalers.
The internal records that are of immediate value to marketing decisions are: orders received, stockholdings and sales invoices. These are but a few of the internal records that can be used by marketing managers, but even this small set of records is capable of generating a great deal of information. Below, is a list of some of the information that can be derived from sales invoices.
• Product type, size and pack type by territory
• Product type, size and pack type by type of account
• Product type, size and pack type by customer (wholesaler)
• Average value and/or volume of sale by territory
• Average value and/or volume of sale by type of account
• Average value and/or volume of sale by sales person or wholesaler
By comparing orders received with invoices an enterprise can establish the extent to which it is providing an acceptable level of customer service. In the same way, comparing stockholding records with orders received helps an enterprise ascertain whether its stocks are in line with current demand patterns.
System can also include knowledge based tools: guidelines for prescriptions of certain drugs, previous marketing research and expertise. GWis transmits information through telecommunication network such as Internet. Various computer network configurations are possible, depending on the needs of an organization. Organizational IS are becoming more complex and advanced over time and its procedures, regarding use of IS, do the same. Whereas marketing research is focused, market intelligence is not.
A marketing intelligence system is a set of procedures and data sources used by marketing managers to sift information from the environment that they can use in their decision making. This scanning of the economic and business environment can be undertaken in a variety of ways that can cause a new ethic policy or policy for protection of sensitive information. GW has set a strategy for the IT organization design and management the disparate date sources.
Glossary of terms for business Information Systems
IS concepts and management a nice PDF chapter from Wiley's book
