Features and Functions of Information Systems

What are information systems?  Information systems consist of software, hardware and communication networks. They collect, organise and distribute information.  Good decision making comes when this information is reliable and is presented usefully.  Information systems can also provide a competitive advantage and also promote efficiency.

Tools  Databases  Artificial Intelligence  Internet  Data Mining

Database  At the heart of each system is a database.  A data model must be designed first. This describes every piece of information that is stored within the system, what it means and how it relates to the rest of the data.  It is a business document and works just as well as a manual system based on paper.

Data model Employee Job Pay Rate

Database Showing Linked Tables or Files Empl-1Job-1 Job-2 Job-3 Rate-1 Rate-2 Rate-3 Rate-4 Employees Database Jobs Database Pay Rates Database

Artificial Intelligence & expert systems  AI and expert systems have rules, which may be changed to model business actions taken by an expert.  E.g. an airline fare management system. Its objective is to sell all the seats on a flight for the most money. High demand increases the price, while low demand reduces it.

 The expert system increases the fare each time a ticket is sold, if no seats are sold it reduces the price as the data of the flight approaches.  Rules in place will say how quickly the price changes and if there is a maximum or minimum fare for the flight.

Internet  Most systems provide internet access. Some may be for general public or subscriber use. Many are restricted to members of the organisation and will be protected often by a user ID and password.  Providing access to the internet reduces many network issues that an organisation may face.  It can also reduce development time as part of the system can be built using one of many easy to use internet development tools.

Data Mining  When directed by an expert user this finds patterns in sets of data.  They can be used to identify groups of customers, for example: a supermarket may know its total sales and total customers per day. However this simple statistic hides the fact that a large number of its customers come in to buy just a newspaper and a few low value items.  This means that the average sale per customer would be much less than the value of a weekly shopping trolley.

Activity  Select any functional department in an organisation and describe how it makes effective use of an information system to its benefit.  Describe what software it may use.  Describe the data it may use to produce the information.