Business Information System - Literature review Example

Business Report Business Information System BSA101 Your Name Here 04 May 2018 Table of Contents Chapter Page No. 1 Introduction to Information Systems 2 1.1 Information Systems in Business 5 2 Types of Information Systems 6 2.1 Executive Support Systems 6 2.2 – Management Information Systems 6 2.3 – Decision Support System 6 2.4 – Knowledge Management Systems 7 2.5 – Transaction Processing Systems 7 2.6 - Office Automation Systems 7 3 Legacy Systems 7 3.1 The Legacy Systems 7-8 3.2 Background and Existence 8 3.3 Problems with Legacy Systems 8-9 4 Open Source Systems 9 4.1 Introduction to Open Source 9 4.2 Open Source vs. Proprietary Software 9 4.3 Security Issues and Stability Comparison 9-10 4.4 Advantages and Disadvantages in Business 10 5 Bibliography 11 1.0. – Introduction to Information Systems The term information systems vary in approach and are interpreted based on specific purpose. It is a term with numerous meanings (Mora, 2003). The most common interpretation of the term is interconnected set of information resources that are under the same direct management control that shares common functionality. In other words, it is a logical and physical interaction between hardware, software, data, information, communication, applications, and people. To present an acceptable concept of information systems and its application to businesses, it is essential to isolate speculative interpretations and come up with a near accurate meaning. Majority of textbooks according to Mora (2003), refer to some system concepts such as input/output procedures, control mechanisms, and open systems that are all non-standard definition of the term. In addition, although these definitions is sufficient to explain the central components and functions of IS, recent studies in field of Information Systems reveals the lack of basic standardized concepts (Alter, 2001). Furthermore, a considerable number of theories produced a vague impression vision of a unified theory of Information Systems (Barkhi and Sheetz, 2001). In this respect, a formal definition of Information System’s fundamental concept is required. Information System is based on the term “system” which according to Alter (2001) is a set of interacting devices that function together to accomplish a given objective. A “Work System”1 where humans and machines are participants who carry out a business process by means of information, technology and other resources to produce products or services for end users. 1 - is the general term use by Alter (2001) page 14 to name a set of interacting components that work together to accomplished a purpose. Alter (2001) partial interpretation is in a way more practical because it covers key components found in other definitions such as business process, information, participants, and technology. However, the definition is still not universal because the essential of “systems” concept was used only to some extent thus loses generality. For instance, “inputs” for the system are not specified and components like system customers outside the systems are not considered part of its environment. “Any system is part of a larger system”2 (Mora, 2003, p.18). This means Information Systems cannot be define correctly if it is isolated from the larger system. IS are systems included in business processes that in turn will be part of an organization and consequently of their environment. In other words, the definition must be related to the larger whole to which it belongs thus Information System is a subsystem of a larger system (Business Process) that also belongs to a larger whole (Organizations). No part of the system can be change without affecting the larger system as a whole and they do not operate in isolation (Bee, 2005). The definition of Information Systems is now complete using the concepts of systems, attributes, events, and item relations. Bee (2005) confirms our formal definitions by saying systems are essentially made up of different parts that are interconnected in a particular way to enable interaction of parts to reach a specific goal. Further, the “function of a system is to receive inputs and transform them into outputs”3. Undeniably, it is true that without “inputs” an information systems definition is meaningless. In an Information Systems, that “inputs” means data such sales, production, and people. The “outputs” are the valuable information that can be use for management’s decision-making. The process involves the use of computers and communications technology to store and manipulate 2 -is Mora (2003) argument that is based on the principle of hierarchy from the Systems Theory. 3 -taken from Bee (2005) interpretation of Systems Approach Theory wherein systems are combination of parts interacting together to attain specific goals. raw data and transform them into usable information. Since systems do not operate alone, a system works within an “environment” of other systems and external organizations. Everything within the system is part of the system boundaries and all that is outside this boundary are part of the system’s environment. In real practice, the usual concern is those parts of the environment that affect the system or influenced by the system. 1.1- Information System in Business Since Information Systems is part of the system as a whole in which business process is connected, investing in IS can pay off for a company in many ways. In a customary business environment, the business operation is done manually which is often time-consuming, and labor-intensive. This primarily includes exhaustive processes such as requests for quotation, purchase order submissions, order approval and verification, shipping, billing and payment. Information Systems investment can help build brand quality, boost production processes, and allow flexibility in its output levels. It supports business processes and operation, decision making by employees and managers, and importantly strategies for competitive advantage. A business can gain better position in tough competition through gathering, synthesizing, and sharing of information. It has the ability to facilitate the progress of business activities with massive amount of information and organized resource and the ease of transaction in terms of speed and cost. The company’s information system gathers and stores customer information as well as product specifications. The information collected is available anytime and with the help of simple database application can do wonders for any business. A properly managed information systems boost business operation and efficient use of resource (Hunter, 2005). One of the benefits of Information System is the strategies for competitive advantages to meet the extensive and diverse market competition. These strategies are cost leadership, differentiation, and focus. Cutting labour and administration cost during business operation results in low priced goods and services thus gaining cost leadership in the market. The company with an Information Systems will have a higher chance of success (Hunter, 2005). Information Systems are applied in various ways in the business enterprise to help specific levels of management. (The following definitions as explained in Webopedia) 2.0 - Types of Information Systems 2.1 At higher level is the Executive Support System that collects and condenses the internal and external data used in business to help senior management make strategic and productive decisions. Information Systems enables executives to see the status of important business activities and help them come to a decision through automated data analysis and modelling tools. 2.2 The Management Information Systems or MIS is for the middle management. MIS job is to deal with domestic sources of information that are frequently from a transaction processing system. The data will be summarizing into a series of management reports for the middle management and supervisors. 2.3 The DSS or Decision-support systems as the name implies help management decide in business circumstances where there is doubt regarding the potential outcome of earlier decisions made by the management. It uses tools and techniques usually multifaceted databases and spreadsheets to collect relevant information and analyze the various choices and alternatives. 2.4 KMS or Knowledge Management Systems job is to create and share information for businesses. This kind of systems is usually in law firms, accounting, and management consulting agencies because employees of these firms usually create new knowledge and expertise that can be shared to other people in the organization to generate further commercial opportunities. KMS allows well-organized categorization and allocation of knowledge and facilitate collaboration in a network or an intranet. 2.5 Specifically designed to process routine transaction efficiently and accurately, the Transaction Processing Systems (TPS) allows the calculation of weekly and monthly payroll including required tax payments. In production and purchasing, TPS calculates the raw material requirements and control of stocks in and out of the business. 2.6 Probably the most common of all is the Office Automation Systems intended to improve data processing and productivity of employees working in an office. An example of OAS is office productivity packages like Microsoft Office XP that allows employees to work remotely at home. 3.0 – Legacy Systems 3.1 – The Legacy Systems Old software systems are critical assets for companies because it keeps the organization’s priceless information over a long period. The long existence of these software systems is very important for the company and remains in use for many years. Organizations rely heavily on the services provided by these systems and failure of these services will have a great impact on its daily operation. These old software systems are commonly called Legacy Systems for their lengthy existence and great service to the company (Chowdhury and Iqbal, 2004). 3.2 - Background and Existence Legacy Systems through the passing of time incorporate a large number of changes to reflect evolving business practices. They are modified repeatedly to satisfy new business requirements thus becoming more and more complex and hard to maintain. Legacy Systems represent considerable corporate assets and scrapping them would mean significant business risk. Replacing legacy system with modern software is nearly impossible because they rarely have a complete specification thus no new identical system can be made. Legacy system’s design is only for immediate needs and constructed to render services for a few years. Further, they are not design to accommodate changes in the future and therefore even integration is not possible (Chowdhury and Iqbal, 2004). 3.3 – Problems with Legacy Systems Business processes and legacy systems are usually entwined to each other and therefore changing one would mean changing the other along with potentially unimaginable consequences and massive cost. Aside for specifications, lone copies of important business rules or strategies may be also inside the software. A business rule is a control that applies to some business function and breaking that control can have erratic consequences for the business. For instance, an insurance company may have implanted its rules for assessing the risk of a policy application in its software. In summary, LS has high maintenance cost, complex structure, obsolete support software and hardware, lack of technical expertise, business critical, poorly documented, embedded business knowledge, and importantly, poorly understood (Chowdhury and Iqbal, 2004). Businesses with such systems are therefore face with a deep dilemma and a new system may not give the same efficient business support as the Legacy systems. 4.0 - Open Source Software 4.1 – Introduction to Open Source Free and Open-Source Software or simply FOSS systems has change the world of computers and Information Technology. FOSS at first are only limited to academia, research lab, and technical groups but today they are developed for mass consumption. FOSS systems are normally from volunteer programmers and released to the public free. These unpaid programmers also provide support through mailing list and websites. In contrast, a team of paid designers, programmers, technical writers, and quality assurance engineers executes the design and development of customary proprietary software. After completing the quality assurance testing and other software development formalities, neatly packed as a product, the system will be release and sold or licensed for a fee. The system developer provides the support and other after sales customer services (Boulanger, 2005). 4.2 – Open Source vs Proprietary Open-Source Software and Free Software are often treated as the same but there more significant differences concerning licensing and ideology of its practitioners. OSS normally released with a GNU or General Public License. Their source codes are included in the package and available for further modification and redistribution (Scacchi, 2006). The security of OSS is often the subject of heated debates between OSS advocates and supporters of proprietary software. They argue that closed-source proprietary system has superior security than OSS. The arguments security and reliability are normally centred on two major issues: availability of source code and software defect levels (Boulanger, 2005). 4.3 – Security Issues and Stability Comparison The assumption is that publicly shared sources codes are vulnerable to hackers and open to malicious exploitation. On the other side, many OSS systems have significantly lower rates of vulnerabilities than its counterpart does. Take for example the case of web servers, Apache (an OSS) has substantially fewer published vulnerabilities than its proprietary counterpart Microsoft IIS does. This only proved that the assumption about publicly available source codes is not entirely true and hidden source codes is not a guarantee of additional security. Software defect levels are unavoidable in any software package, proprietary or not, are likely to have some flaws. For instance, Red Hat Linux 7.1 distribution contains an estimated 30 million lines of codes (LOC) and Microsoft XP has 40 million LOC. It is estimated that both operating system will have at least 40,000 and 30,000 defects respectively (Boulanger, 2005). 4.4 - Advantages and Disadvantages in Business The main advantages of OSS in business are its ability to deliver new services faster. On the other hand, proprietary software often cannot be as agile as their method is limited by their own marketing plan. A large number of businesses are now convinced by experience that enterprise integration by open industry standards deliver real value. OSS handles common problems businesses face in the real world of system integration thereby reducing the number of variables, cost, uncertainty, and risks. In addition, actual experience by operator’s shows that OSS is helpful in supporting business processes workflows through open standard API (Advanced Programmers Interface) that provides messages autonomously and promotes user interactions (Boulanger, 2005). 5.0 – Bibliography Alter, S. (2001). Are the fundamental concepts of information systems mostly about work systems? CAIS, 5(11), [online], 03/30/07,http://www.ais-net.org. Barkhi, R. and Sheetz, (2001). The State of Theoretical Diversity of Informations Systems. Communication of the Association for Information Systems, 7(6), [online], 03/30/07, http:www.ais-net.org. Bee Frances and Roland, 2005, Information Systems Concepts, Chapter 2, Managing Information and Statistics, Published by the CIPD, United Kingdom Boulanger, A., 2005, Open-source versus proprietary software: Is one more reliable and secure than the other?, IBM Systems Journal, Vol. 44, No. 2, 2005 Chowdhury and Iqbal, 2004, Integration of Legacy Systems in Software Architecture, Department of Computer Science, University of Victoria, BC, Canada Hunter Scott, 2005, Benefit of Information System for Business, Article, Associated Content, online, 03/30/07, http://www.associatedcontent.com Mora Manuel et.al., 2003, A Systemic Approach for the Formalization of the Information Systems Concept: Why Information Systems are Systems?, Chapter I, UAA & DEPFI-UNAM, The Idea Group Inc., Mexico Scacchi et. al., 2006, Understanding Free/Open Source Software Development Processes, Software Process Improvement and Practice, Software Process Improvement Practice. 2006; 11: 95–105, Published online in Wiley InterScience, [online], 03/30/07, www.interscience.wiley.com, DOI: 10.1002/spip.255 Webopedia, n.d.,Executive Support System, [online], 03/30/07, http://www.webopedia.com /TERM/E/Executive_Support_System.html Read More