The Six Components of an Information System (IS)
An Information System (IS) is a combination of information technology (IT) and human
activities using that technology to support business processes, operations,
management, and decision-making within an organisation.
A computer IS consists of six interacting components that must be managed carefully
to provide maximum benefit to the organisation.
The six components of an IS are:
1. Hardware: Any physical device used in a computerised IS, such as a CPU,
display, keyboard, processor, or printer.
2. Software: A set of machine-readable instructions (code) that directs a
computer's processor to perform specific operations, such as an operating
system (OS) or Internet browser. Software is non-tangible, unlike system
hardware.
3. People: Any person involved in developing, operating, and using an IS.
4. Procedures: Documentation that provides directions on how to use the other
components of an IS, such as an operational or user manual.
5. Network: A combination of wires and physical devices connected to create a
telecommunications network, enabling computing devices to exchange data.
6. Data: Raw or unorganised facts and figures that describe conditions, ideas, or
objects, such as invoices, orders, payments, or customer details.
Of these components, the data component is the most important, as an information
system would have no purpose or content without it.
The Di erence Between Data, Information, and Knowledge
These concepts represent a hierarchy in which raw inputs are processed to become
increasingly valuable intellectual assets.
Concept Definition Purpose/Context
The raw material from which information is
Raw facts and figures
produced. Examples include the number of
Data that are not organised in
hours an employee worked or the count of
any way.
vehicles sold over a period.
Data that have been Answers the questions "who, what, where,
Information processed, organised, or when". For example, summarising quarterly
put into context so that sales figures provides information that
, they have meaning and shows a sales trend. Information is
value to the person considered an organisation’s most
receiving them. important asset, second only to people.
Answers the question "how". It involves
determining how a trend identified in the
The fact or condition of information can be reversed, such as
knowing something with determining how to improve customer
Knowledge familiarity gained satisfaction or adjust pricing. Knowledge
through experience or can be explicit (easy to communicate,
education. stored in documents, e.g., policies) or tacit
(di icult to transfer, learned by doing, e.g.,
employee experiences).
A collection of values,
ethics, moral codes, and
Wisdom (Also Answers the question "why". It involves
prior experiences that
included in the corporate strategists evaluating reasons for
form an evaluated
source trends and developing innovative strategies
understanding or
hierarchy) to reverse them.
common-sense
judgment.
In What Ways Does a Transactions Processing System (TPS) Di er From Other IS
Types?
Information systems are classified according to the level of the organisation they
support. A TPS sits at the base of this hierarchy, supporting frontline workers and
feeding data to higher-level systems.
Managemen
Transaction t Decision Executive
Feature Processing Information Support Information System
System (TPS) System System (DSS) (EIS)
(MIS)
Line Lower and C-level
Senior
User Level workers/Operation middle managers/Executive
managers
s personnel managers s
Collects, monitors, Provides Supports Helps executives
Primary stores, processes, managers decision- and senior managers
Goal and distributes with making by analyse the
specific data input scheduled manipulating environment and
, from ongoing reports to and building identify long-term
transactions. track upon trends.
operations, information
monitoring, from MIS/TPS to
and control. generate
insights.
Knowledge
Information (output: Wisdom (output:
(output: insights, ad hoc trend analysis,
Input/Outpu reports). Built reports). Uses dashboards). Uses
Raw Data (input).
t on internal internal/externa internal data from
information l data, including lower-level IS and
from TPS. data added by external sources.
decision-maker.
Supports
Supports Supports semistructure Supports
Decision
structured, routine structured d or unstructured
Support
activities. decisions. unstructured decisions.
decisions.
Highly flexible;
Characterised typically operated
by the inclusion directly by
Focuses on Reporting is
Key of models (e.g., executives via easy-
operational fixed and
Distinction what-if and goal to-use,
e iciency. inflexible.
seeking customisable
analysis). interfaces
(dashboards).
What Distinguishes Batch Processing from Real-Time Processing?
TPS data can be processed and stored in a database in one of two ways: real-time
processing or batch processing.
Real-time processing occurs when transactions are processed as they happen
(as they occur) to keep account balances and inventories immediately up to
date. This is also referred to as Online Transaction Processing (OLTP). An
example is processing seat reservations for airlines or theatres to verify
immediate availability.
Batch processing occurs when transactions collected over a period of time
(e.g., a day or shift) are processed together (batched) at a predetermined time
, and then updated in the data store. Processing payroll weekly or biweekly is an
example of batched data processing. Batch processing costs less than real-time
processing, but the disadvantage is that the data are inaccurate some of the time
because they are not updated instantly.
Which Type of MIS Report Is Most Likely to Be Read by Its Recipients? Why?
The source material explicitly addresses which type of MIS report is likely to be read:
Exception reports are more likely to be read by workers.
This is because exception reports are generated only when something is outside
the norm—either higher or lower than expected. Workers know that some
unusual event or deviation has occurred, prompting them to review the report.
In contrast, periodic reports (created according to a preset schedule, such as
daily or weekly reports) are easily distributed but can also be easily ignored if
workers do not find them worth the time to review.
Why Are Structured Decisions Easier to Make Than Unstructured Decisions?
Decisions typically range along a continuum from structured to unstructured.
Structured decisions are easier to make because they possess two key
characteristics that allow for consistent resolution and often automation:
1. Defined Method: Structured decisions have a well-defined method for solving
the problem.
2. Required Data Availability: The necessary data required to reach a sound
decision are readily available.
Because they are straightforward and made on a regular basis, an IS can ensure they
are executed consistently. An example is determining if an applicant qualifies for an
auto loan, as the criteria and required inputs are fixed.
Unstructured decisions, conversely, lack this clarity and depend instead on human
intelligence, knowledge, and experience, coupled with data and models, to solve.
Examples include deciding which new products to develop or which new markets to
enter, tasks which lack a straightforward, predefined solution path.
The concept of Enterprise Architecture (EA) is central to an organization's long-term IT
strategy, guiding its growth and maximizing the value derived from its technology
investments.
What is Enterprise Architecture (EA)?
An Information System (IS) is a combination of information technology (IT) and human
activities using that technology to support business processes, operations,
management, and decision-making within an organisation.
A computer IS consists of six interacting components that must be managed carefully
to provide maximum benefit to the organisation.
The six components of an IS are:
1. Hardware: Any physical device used in a computerised IS, such as a CPU,
display, keyboard, processor, or printer.
2. Software: A set of machine-readable instructions (code) that directs a
computer's processor to perform specific operations, such as an operating
system (OS) or Internet browser. Software is non-tangible, unlike system
hardware.
3. People: Any person involved in developing, operating, and using an IS.
4. Procedures: Documentation that provides directions on how to use the other
components of an IS, such as an operational or user manual.
5. Network: A combination of wires and physical devices connected to create a
telecommunications network, enabling computing devices to exchange data.
6. Data: Raw or unorganised facts and figures that describe conditions, ideas, or
objects, such as invoices, orders, payments, or customer details.
Of these components, the data component is the most important, as an information
system would have no purpose or content without it.
The Di erence Between Data, Information, and Knowledge
These concepts represent a hierarchy in which raw inputs are processed to become
increasingly valuable intellectual assets.
Concept Definition Purpose/Context
The raw material from which information is
Raw facts and figures
produced. Examples include the number of
Data that are not organised in
hours an employee worked or the count of
any way.
vehicles sold over a period.
Data that have been Answers the questions "who, what, where,
Information processed, organised, or when". For example, summarising quarterly
put into context so that sales figures provides information that
, they have meaning and shows a sales trend. Information is
value to the person considered an organisation’s most
receiving them. important asset, second only to people.
Answers the question "how". It involves
determining how a trend identified in the
The fact or condition of information can be reversed, such as
knowing something with determining how to improve customer
Knowledge familiarity gained satisfaction or adjust pricing. Knowledge
through experience or can be explicit (easy to communicate,
education. stored in documents, e.g., policies) or tacit
(di icult to transfer, learned by doing, e.g.,
employee experiences).
A collection of values,
ethics, moral codes, and
Wisdom (Also Answers the question "why". It involves
prior experiences that
included in the corporate strategists evaluating reasons for
form an evaluated
source trends and developing innovative strategies
understanding or
hierarchy) to reverse them.
common-sense
judgment.
In What Ways Does a Transactions Processing System (TPS) Di er From Other IS
Types?
Information systems are classified according to the level of the organisation they
support. A TPS sits at the base of this hierarchy, supporting frontline workers and
feeding data to higher-level systems.
Managemen
Transaction t Decision Executive
Feature Processing Information Support Information System
System (TPS) System System (DSS) (EIS)
(MIS)
Line Lower and C-level
Senior
User Level workers/Operation middle managers/Executive
managers
s personnel managers s
Collects, monitors, Provides Supports Helps executives
Primary stores, processes, managers decision- and senior managers
Goal and distributes with making by analyse the
specific data input scheduled manipulating environment and
, from ongoing reports to and building identify long-term
transactions. track upon trends.
operations, information
monitoring, from MIS/TPS to
and control. generate
insights.
Knowledge
Information (output: Wisdom (output:
(output: insights, ad hoc trend analysis,
Input/Outpu reports). Built reports). Uses dashboards). Uses
Raw Data (input).
t on internal internal/externa internal data from
information l data, including lower-level IS and
from TPS. data added by external sources.
decision-maker.
Supports
Supports Supports semistructure Supports
Decision
structured, routine structured d or unstructured
Support
activities. decisions. unstructured decisions.
decisions.
Highly flexible;
Characterised typically operated
by the inclusion directly by
Focuses on Reporting is
Key of models (e.g., executives via easy-
operational fixed and
Distinction what-if and goal to-use,
e iciency. inflexible.
seeking customisable
analysis). interfaces
(dashboards).
What Distinguishes Batch Processing from Real-Time Processing?
TPS data can be processed and stored in a database in one of two ways: real-time
processing or batch processing.
Real-time processing occurs when transactions are processed as they happen
(as they occur) to keep account balances and inventories immediately up to
date. This is also referred to as Online Transaction Processing (OLTP). An
example is processing seat reservations for airlines or theatres to verify
immediate availability.
Batch processing occurs when transactions collected over a period of time
(e.g., a day or shift) are processed together (batched) at a predetermined time
, and then updated in the data store. Processing payroll weekly or biweekly is an
example of batched data processing. Batch processing costs less than real-time
processing, but the disadvantage is that the data are inaccurate some of the time
because they are not updated instantly.
Which Type of MIS Report Is Most Likely to Be Read by Its Recipients? Why?
The source material explicitly addresses which type of MIS report is likely to be read:
Exception reports are more likely to be read by workers.
This is because exception reports are generated only when something is outside
the norm—either higher or lower than expected. Workers know that some
unusual event or deviation has occurred, prompting them to review the report.
In contrast, periodic reports (created according to a preset schedule, such as
daily or weekly reports) are easily distributed but can also be easily ignored if
workers do not find them worth the time to review.
Why Are Structured Decisions Easier to Make Than Unstructured Decisions?
Decisions typically range along a continuum from structured to unstructured.
Structured decisions are easier to make because they possess two key
characteristics that allow for consistent resolution and often automation:
1. Defined Method: Structured decisions have a well-defined method for solving
the problem.
2. Required Data Availability: The necessary data required to reach a sound
decision are readily available.
Because they are straightforward and made on a regular basis, an IS can ensure they
are executed consistently. An example is determining if an applicant qualifies for an
auto loan, as the criteria and required inputs are fixed.
Unstructured decisions, conversely, lack this clarity and depend instead on human
intelligence, knowledge, and experience, coupled with data and models, to solve.
Examples include deciding which new products to develop or which new markets to
enter, tasks which lack a straightforward, predefined solution path.
The concept of Enterprise Architecture (EA) is central to an organization's long-term IT
strategy, guiding its growth and maximizing the value derived from its technology
investments.
What is Enterprise Architecture (EA)?
