Houses are built with hammers, nails, and wood, but these alone do not make a house. The architecture, design, setting, landscaping, and all of the decisions that lead to the creation of these features are part of the house and are crucial for solving the problem of putting a roof over one’s head. Computers and programs are the hammer, nails, and lumber of computer-based information systems, but alone they cannot produce the information a particular organization needs. To understand information systems, you must understand the problems they are designed to solve, their architectural and design elements, and the organizational processes that lead to these solutions.
To understand information systems fully, you will need to be aware of the broader organization, people, and information technology dimensions of systems and their power to provide solutions to challenges and problems in the business environment. We refer to this broader understanding of information systems, which encompasses an understanding of the people and organizational dimensions of systems as well as the technical dimensions of systems, as information systems literacy . Information systems literacy includes a behavioral as well as a technical approach to studying information systems. Computer literacy , in contrast, focuses primarily on knowledge of information technology.
The field of management information systems (MIS) tries to achieve this broader information systems literacy. MIS deals with behavioral issues as well as technical issues surrounding the development, use, and impact of information systems that managers and employees in the firm use. Information systems are an integral part of organizations and, although we tend to think about information technology changing organizations and business firms, it is, in fact, a two-way street. The history and culture of business firms also affects how the technology is used and how it should be used. To understand how a specific business firm uses information systems, you need to know something about the structure, history, and culture of the company.
Organizations have a structure that is composed of different levels and specialties. Their structures reveal a clear-cut division of labor. A business firm is organized as a hierarchy, or a pyramid structure, of rising authority and responsibility. The upper levels of the hierarchy consist of managerial, professional, and technical employees, whereas the lower levels consist of operational personnel. Experts are employed and trained for different business functions, such as sales and marketing, manufacturing and production, finance and accounting, and human resources. The firm builds information systems to serve these different specialties and levels of the firm.
An organization accomplishes and coordinates work through this structured hierarchy and through its business processes , which are logically related tasks and behaviors for accomplishing work. Developing a new product, fulfilling an order, and hiring a new employee are examples of business processes. Most organizations’ business processes include formal rules that have been developed over a long time for accomplishing tasks. These rules guide employees in a variety of procedures, from writing an invoice to responding to customer complaints. Some of these business processes have been written down, but others are informal work practices, such as a requirement to return telephone calls from coworkers or customers, that are not formally documented. Information systems automate many business processes. For instance, how a customer receives credit or how a customer is billed is often determined by an information system that incorporates a set of formal business processes.