Organisations - Systems - Management Concepts

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1. INTRODUCTION

Information Systems (IS) are systems that use Information Technology (IT) to capture, transmit, store, retrieve, manipulate or display information used in one or more business processes.

It is important to look at IS from the view point of businesses or business professionals, a person in a business professionals, a person in a business or government organisation who manages other people or performs professional work in fields such as engineering, sales, manufacturing, consulting and accounting.

Understanding IS from this viewpoint is important because involvement with IS is virtually inevitable in today’s business world.

2. What are ORGANISATIONS?

Organisations shape IS in several different ways:

• Business firms are formal organisations
• They consist of specialised units with clear-cut division of labour and experts employed and trained for different business functions
• Organisations are (mostly) hierarchical and structured
• One can observe a rising level of authority
• Each person being accountable to another above them in the hierarch

3. What is INFORMATION?

In different literature you may come across a number of definitions for data. For example:

• Data that has been processed so that they are meaningful (Bocij et al, 1999)
• Data that has been shaped into a form that is meaningful and useful to human beings (Laudon and Laudon, 2000)
• Data whose form and content are appropriate for a particular use (Alter, 1999)

All these definitions indicate that information is generated from data.

3.1 What do you understand by DATA?

• Data consists of raw facts
• Raw material that is not useful in its present format for a particular task
• For example, facts, images, sounds, collected from a variety of sources both from within the company and outside
• Several types of data can be used to represent these facts

If IS are to be useful to the organisation, that is, if they are to successfully serve their intended purpose, they should be continually fed with the required data, in order to produce business information.

When data are organised or arranged in a meaningful manner they become information.  In other words interpretation of data results in information.

The process of defining relationships between data requires knowledge.

Knowledge is the body of rules, guidelines, and procedures that affect data.

3.2 Information can have Tangible or Intangible Values

The value of information may be measured by the improvements it brings to decision making or in terms of providing better customer service.  The quality of information can be described by specific attributes such as: accuracy, relevance, completeness, cost of production, flexibility, reliability, clarity, timeliness, verifiability, accessibility, etc.  In order to make sound decisions Organisations need information.

Good business information is without doubt one of the most important assets that an organisation may possess.  It is, however, an intangible or invisible asset, that is, one which an accountant or a valuer cannot easily place a price upon.  Business information embraces all information flows both within the organisation and between the organisation and external parties such as customers, suppliers, the government, the public, etc.  It can be considered as an item of fact used by an individual to make a
decision which will improve his or her performance and thus improve the performance of the organisation.

It also includes outward flowing information about the organisation to, for instance, a potential customer so that s/he can make an informed purchasing decision (Stair and Reynolds, 1999).

There are three main categories of information: Strategic, Tactical and Operational. These categories indicate the usage.

4 What is an INFORMATION SYSTEM?

The purpose of an organisation's IS is to support the business process or part of it.  Systems Theory (the study of the behaviour of and interactions within and between systems) provides a powerful means of analysing and improving business processes.  It is one of the fundamental concepts required to gain a good understanding of the field of IS (Bocij et al, 1999).

4.1.1 What do we understand by the term SYSTEM?

A system is a set of interacting components that operate together to accomplish a purpose (Alter, 1999). The components of these systems can be organisations, people, machines, and other systems.  A component of a system that is a system in its own right is called a sub-system.  Since IS serve as sub-systems of other systems, understanding of IS requires at least some understanding of the larger systems it supports.

A system’s purpose is the reason for its existence and the reference point for measuring its success. A system’s boundary defines what is inside the system and what is outside. A system’s environment is everything pertinent to the system that is outside its boundaries. A system’s inputs are the physical objects or information that cross the boundary to enter it from its environment.  A system’s outputs are the physical objects and information that go from the system into its environment (Alter, 1999).

In order for information to flow from its source to an individual who can use it, some sort of system, physical or otherwise, is required to collect, store and then to move the information within the organisation.

There are three basic activities, which occur in every Information:
1. Input of data: facts, figures, rumours, etc
2. Processing of data into information: arranging, aggravating, interpreting, etc
3. Output of information: providing user with information in the most suitable form

5. BUSINESS INFORMATION SYSTEMS

Information Systems play an important role in today’s business and society. The key to understanding the existing variety of systems begins with learning their fundamentals.

Where does the IS come within the organisational structure?

The most powerful explanation as to why businesses build systems is to solve organisational problems and to respond to the changing environment.  As external forces and organisational problems change, new systems are required and old systems must be modified.  No single system governs or caters for all the activities of an entire business.  Businesses have different kinds of IS to address different levels of
problems and different business functions.

Specialised IS serve different functions and organisational levels:

• Strategic-level systems help senior management plan the firm's long-term course of action.
• Tactical systems help middle managers supervise and co-ordinate (control and organise) day-to-day business activities. Knowledge and data workers (engineers and office workers) use knowledge systems to design products, streamline services, and cope with paperwork, while operational systems deal with day-to-day production and service activities.

Systems can be classified according to the type of organisational problem they solve.  This usually corresponds to the organisational level they serve.  An IS consists of 3 basic activities - input, processing, and output - that transform raw data into useful information.

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Reference(s)
	Book		Alter, S. (1999) Information Systems: A Management Perspective. 3rd Edition. Pearson Education - Addison-Wesley: United States of America (USA), Massachusetts (MA), Suffolk, Boston. [ISBN: 9780201521085]. [Available on: Amazon: https://amzn.to/3z9oO05].
	Book		Bocij, P., Chaffey, D., Greasley, A. & Hickie, S. (1999) Business Information Systems: Technology, Development and Management for the E-Business. 4th Edition. Financial Times Prentice Hall: United States of America (USA), New York (NY). [ISBN: 9780273638490]. [Available on: Amazon: https://amzn.to/3TTKFk1].
	Book		Laudon, K. C. & Laudon, J. P. (2007) Management Information Systems: Managing the Digital Firm. 10th Edition. Pearson Prentice Hall: United States of America (USA), New Jersey (NJ), Bergen, Upper Saddle River. [ISBN: 9780132415798]. [Available on: Amazon: https://amzn.to/3UhgqDH].
	Book		Stair, R. M. & Reynolds, G. W. (1999) Principles of Information Systems: A Managerial Approach. 4th Edition. Thomson Course Technology: United States of America (USA), Massachusetts (MA), Middlesex, Cambridge. [ISBN: 9780760010792]. [Available on: Amazon: https://amzn.to/3F8ncY4].

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Reference (or cite) Article
	Kahlon, R. S. (2012) Organisations, Systems & Management Concepts [Online]. dkode: United Kingdom, England, London. [Published on: 2012-03-10]. [Article ID: RSK666-0000038]. [Available on: dkode | Ravi - https://ravi.dkode.co/2012/03/overview-of-organisations-systems.html].

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