The 4 Components of Information Systems

When you withdraw cash from the ATM, you use an Information System. When you scan your groceries at the local store, you are using an Information System. When you post on Facebook, Twitter, Snapchat, or a Blog, you are using an Information System. When you buy a book from Amazon, you use an Information System. And the list goes on. But what exactly is an Information System? Let’s see what Wikipedia has to say.

Definition of an Information System

Wikipedia defines Information Systems in two different ways:

1. An information system (IS) is a formal, sociotechnical, organizational system designed to collect, process, store, and distribute information. From a sociotechnical perspective, information systems are composed of four components: task, people, structure (or roles), and technology.

2. Information systems can be defined as an integration of components for collection, storage and processing of data of which the data is used to provide information and contribute to knowledge as well as digital products that facilitate decision making.

Wikipedia defines sociotechnical as:

1. Sociotechnical systems (STS) in organizational development is an approach to complex organizational work design that recognizes the interaction between people and technology in workplaces.

2. The term also refers to coherent systems of human relations, technical objects, and cybernetic processes that inhere to large, complex infrastructures.

3. Social society, and its constituent substructures, qualify as complex sociotechnical systems.

That's a lot of words! So, let's come up with a simpler definition. For our purposes, we will define an Information System as a purposefully designed software application that collects, manipulates, and stores transactional data regarding the day-to-day operations of an organization. Technically this is called a Computer Information System as an Information System can also exist without the presence of a computer. For this series when I say Information Systems, I mean Computer Information Systems.

To build an effective Information System, we need to focus on four components: Technology, Processes, Users, and Roles.

We have already discussed the technology component in the article titled "The 5 Components of Information Technology". The five technology components are Data, Hardware, Software, Networking, and People. Check that out if you need a refresher.

So let us look at the rest of the components: processes, users and roles.

Processes

We can define processes as the things a business does that make it that particular business. For example, a supermarket implements specific procedures such as procurement, storage, display, selling, and disposal of goods. These processes differ vastly from those of an insurance company, for example. Insurance companies have processes for underwriting policies, handling claims, and premium collections, to name a few.

Organizations in the same industry usually have similar, although not necessarily identical, processes. The continuous fine-tuning of these processes can give one organization a competitive edge over the other as they may be able to deliver better, quicker, and cheaper services. These processes form part of a company' Intellectual Property and are generally protected at all costs.

Users

The business processes are usually people and machine-driven, where the machine can be anything from a manufacturing plant to a computer application or a combination of the two.

The people interacting with the Information System are called users, who can be employees, clients, or suppliers. Another application can also act as a user of an Information System.

For example, a supermarket can have an automatic ordering system. Once stock levels fall below a certain level, an application will automatically place an order by communicating directly with a supplier’s application. You will learn how to build applications like these.

Roles

So, we have the technology. We have the processes. We have the people. Now we need control.

Organizations store data for various reasons, such as legal and accounting purposes. More importantly, they can analyze this data and use that information for decision-making. It is essential that this data is as accurate as possible and cannot be tampered with. This is where Authentication and Authorization can help us.

Organizations cannot allow everybody to access their Information Systems. For example, as a client of Amazon, you will be able to purchase a book, but you will not be allowed to change the price of the book. That function is reserved for admin staff of the procurement department only (I think).

First, we need Authentication. The Authentication process confirms that the user is who they claim to be. Remember from earlier that the user can also be another application. The Information System does this Authentication process usually via a username and password combination, security token, or biometrics such as a fingerprint or retina scanners. If the system identifies a user as valid and active, the user is called an authenticated user.

Once authenticated, users cannot have carte-blanche with a company's data. Many systems contain data of a sensitive nature, such as personal and banking details of individuals. This is where Authorization comes into play.

Authorization is the process that determines what a user is allowed to see and do on a system. For example, the authorization process will prevent me as a client of Amazon from changing the prices of the items I want to buy.

Categories of Information Systems

There are two categories of information systems: transactional and analytical. The boundaries between these types are sometimes blurred, though.

Transactional systems are all about getting data into the system by capturing the transactions of the organization's day-to-day operations. We call this type of information system a Transaction Processing System, or TPS for short.

Analytical systems are about getting data from the system to middle and senior management and executives for decision-making purposes. We call these Management Information Systems (MIS), Decision Support Systems (DSS), and Executive Information Systems (EIS), respectively.

I will teach you how to build Transaction Processing Systems because they come first. Analytical systems cannot exist without transactional systems as they need the data produced by the transactional systems.

Conclusion

I have described Information Systems very superficially in this article. Studying Information Systems is a university subject in its own right, and one can major in such.

Next, we will look at the architecture of a typical Information System. This will be an important article as the Becoming a Programmer series is designed according to this architecture. See you there!