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Exam 1

MIS637 - Information Technology for Management

Adugna J. GENETI
ID# 198674

What is Information technology (IT)?

Information technology (IT) is a study that deals with software applications and computer
hardware. It deals with information processing, storing, protecting, retrieving, converting and
transmitting. Information Technology might have different types of naming in different
organizations. Information Technology has got branches such as computer science; applications
of computer science; information and communications; and computer engineering. The concept
of information technology was first used in November 1981“Growth of Information Technology:
Computer & Technology” as a renovation of the old fashioned phrase "data processing".

Information technology has reached a vital position in that the world today and it is
becoming a global village. Current events of the world today can reach everywhere in minutes
through applications of Information Technology.

Value of Information Technology

The applications of Information Technology are numerous and varied in different sectors.
Organizations make use of information technology to achieve their goals and objectives. They
can use IT to create components that do not exist in conventional form like virtual stores and
inventories. Through groupware applications, electronic mails and video/electronic conferencing
it is possible to form links within and across all organizational boundaries.

IT also enables to have virtual organization structures in contrast to physical presence.

Successful organizations have strong IT leadership by incorporating IT strategy to their
organizational strategy. Thus key management decisions can be facilitated by making use of IT.
Technology can be used to gain a strategic, competitive advantage.

Information Technology can transform organizations and industries when used in strategic
applications. Many industries, demonstrate the power of modem information technology to
change businesses because IT also impacts business models. The nature of business changes as
technology becomes integrated with strategy. IT interacts with organizations and can be used to
change the structure of the organization and its subunits.

IT also has the power to increase a firm’s performance as well as transform the
opportunities and challenges facing established manufacturing and service firms.

Basic types of information systems and how they are used

An information system is a collection of hardware, software, data, people and procedures

that are designed to generate information that supports the day-to-day, short-range, and long-
range activities of users in an organization. For most businesses, there are a variety of
requirements for information. Senior managers need information to help with their business
planning. Middle management needs more detailed information to help them monitor and control
business activities. Employees with operational roles need information to help them carry out
their duties. As a result, businesses tend to have several "information systems" operating at the
same time. Information systems generally are classified into five categories: office information
systems, transaction processing systems, management information systems, decision support
systems, and expert systems.

Office Automation Systems (OIS) are systems that try to improve the productivity of
employees who need to process data and information. OIS uses hardware, software and networks
to enhance work flow and facilitate communications among employees. With an office
information system, for example, a registration department might post the class schedule on the
Internet and e-mail students when the schedule is updated. There are a wide range of software
systems that exist to improve the productivity of employees working in an office. Some of them
are processing, spreadsheets, databases, presentation graphics, e-mail, Web browsers, Web page
authoring, personal information management, and groupware. OIS also uses communications
technology such as voice mail, facsimile (fax), videoconferencing, and electronic data
interchange (EDI) for the electronic exchange of text, graphics, audio, and video. The variety of
hardware an OIS uses include computers equipped with modems, video cameras, speakers, and
microphones; scanners; and fax machines.
Transaction Processing Systems (TPS) is an information system that captures and
processes data generated during an organization’s day-to-day transactions. A transaction is a
business activity such as a deposit, payment, order or reservation. TPSs are designed to process
routine transactions efficiently and accurately. It refers to billing systems to send invoices to
customers, calculation systems of payroll and tax payments, production and purchasing system
and other activities associated with transaction processing.

Management Information Systems (MIS) is mainly concerned with internal sources of

information. MIS usually takes data from the transaction processing systems and summarizes it
into a series of management reports to be used by middle management and operational
supervisors. Therefore, MIS is an information system that generates accurate, timely and
organized information so managers and other users can make decisions, solve problems,
supervise activities, and track progress. In many cases MIS generates three basic types of
information: detailed, summary and exception.

Decision-support systems (DSS) are information systems designed to help users reach a
decision when a decision-making situation arises. DSS comprise tools and techniques to help
gather relevant information and analyze the options and alternatives. A special type of DSS,
called an executive information system (EIS), is designed to support the information needs of
executive management.

Expert system (ESS) is an information system that captures and stores the knowledge of
human experts and then imitates human reasoning and decision-making processes for those who
have less expertise. Expert systems help senior management make strategic decisions. They are
composed of two main components: a knowledge base and inference rules. Expert systems are
one part of branch of computer science called artificial intelligence (AI).

Although expert systems still operate primarily as separate systems, organizations

increasingly are consolidating their information needs into a single, integrated information
system because of current development of sophisticated hardware, software and communications
Works Cited

Growth of Information Technology, contributed by Raghunathan, 08 Feb 2010.

Discovering Computers 2000 – Concepts for a Connected World by Shelly, Cashman…

Tutor2U.net: Types of Information Systems http://www.tutor2u.net/business/ict/

Book: "Essentials of Contemporary Management"; Gareth R. Jones, Jennifer M. George; 2003