Michael Xia (Page 391 – 399)
Data, Information, and Information Systems
An effective information system can help answer questions.
Data consist of raw facts and figures that may or may not be relevant, or meaningful, to a
Information is knowledge gained from the processing of data.
Advancement in technology has allowed all business, small or large, to have access to data and
information, allowing them to be more competitive in the global arena.
An information system is an organized method for collecting, storing, and communicating past,
present, and projected information on internal operations and external intelligence.
The chief information officer (CIO) is typically responsible for managing an organization’s
o The CIO often reports directly to the firm’s CEO.
Information systems can assist many business functions and departments (eg. Accounting)
The right information can help a firm keep up-to-date with consumer demands, competitors’
activities, and recent government regulations.
Components and Types of Information Systems
Information systems today are typically computer-based information systems, which rely on
computer technology to store information electronically in an organized, accessible manner.
o They consist of four components: Computer hardware, computer software,
telecommunications and computer networks, and data resource management.
Computer hardware refers to machines that range from supercomputers to smartphones.
Computer software includes operating systems and applications programs.
Telecommunications and computer networks refer to the hardware and software needed to
provide wired or wireless voice and data communications.
A database is a centralized integrated collection of data resources, which acts as an electronic
A firm designs its databases specifically to meet their individual needs, and should update them
on an ongoing basis to continually meet these needs.
Firms obtain databases in many ways. They can outsource them, build them on-site, or buy
packaged ones from specialized vendors.
One problem is that databases often contribute to information overload – too much data for
people to absorb or data that are irrelevant, or not meaningful, to decision-making.
Data can also be found online through government data (eg. Statistics Canada) and company
websites. Types of Information Systems
Two broad categories of information systems: operational support systems and management
Operational support systems are designed to produce a variety of information on an
organization’s activities for both internal and external users.
o Examples include transaction processing systems and process control systems.
o Transaction processing systems record and process data from business transactions. (eg.
Point-of sale systems, electronic cash registers linked to computer centers)
o Process control systems monitor and control physical processes. (eg. Computer system
monitors steel production process)
Management support systems are information systems that are designed to provide support for
o Management information systems (MIS) are designed to produce reports to managers
and other professionals.
o Decision support systems (DSS) give direct support to businesspeople during the
decision-making process. (eg. How a product’s price change will affect sales and profits)
o Executive support systems (ESS) let senior executives access the firm’s primary
databases. Users can choose from many kinds of data, such as the firm’s financial
statements and sales figures or stock market trends for the company and industry.
o Expert systems are computer programs that imitate human thinking through complicated
sets of “if, then” rules. The system applies human knowledge in a specific subject area to
solve a problem.
Computer Hardware and Software
Hardware consists of all tangible, or physical, elements of a computer system – the input
devices, the components that store and process data and perform calculations, and the output
devices that present the results to users.
There are four broad classifications of the different types of computers: mainframe computers,
midrange systems, personal computers, and hand-held devices.
Mainframe computers are the largest computer systems. They have the greatest storage capacity
and the fastest processing speeds. (eg. Supercomputers)
Midrange systems consist of high-end network servers and other types of computers that can
handle large scale processing needs. A server is the heart of a midrange computer network. It
supports applications and allows networked users to share devices, software, and databases.
Personal computers are the computers that the typical consumer has.
o More than 2/3 of North American households have at least one personal computer.
Hand-held devices include PDAs and smartphones. They also include specialized devices used
for specific applications. (eg. Credit card swiping at restaurants and UPS/FedEx delivery
devices) Software includes all of the programs, routines and computer languages that control a computer
and tell is how to operate.
The operating system is the software that controls the basic workings of a computer system.
Application software is a software program that performs tasks that the user wants to carry out
such as writing a letter or looking up data.
Examples of application software include Adobe Acrobat and Microsoft PowerPoint.
Katie McLeon (Page400 – 408)
Local area networks and wide area networks allow businesses to communicate, transmit and
print documents, and share data.
Local area networks (LANs) – computer networks that connect machines within limited areas,
such as a building or several nearby buildings. LANs can link computers and allow them to share
printers, documents, and information.
Wide area networks (WANs) – computer networks that tie larger geographical regions together
by using telephone lines and microwave and satellite transmission. I.E. long distance telephone
services offered by companies such as Bell.
Wireless Local Networks - allows computers to be connected without a physical link to devices.
The standard for wireless networks is WiFi (wireless fidelity)
WiFi – a wireless network that connects various devices and allows them to communicate with