Q1- As you learned in the Learning Activity titled Types of Information Systems (IS) and the Importance of IS, there is an endless number of different types of information systems. Identify the three levels of information systems that are present in an organization, according to the Learning Activity. If you were an IT Manager, what considerations would you take into account prior to selecting an information system that meets the needs of your organization? What factors would you consider to ensure that the system is able to support future growth?

Note-

Types of Information Systems (IS) and the Importance of IS

As you read this section, record your responses to these questions in your Learning Journal.

• What are the three hierarchical categories of business information systems?
• What type of platforms are businesses currently moving toward?
• Why should management use information systems, big data, and cloud computing for global business?

There may be as many types of information systems as there are colors in a rainbow. When all of the myriad variations of a rainbows colors and combinations of colors are taken into account, the number seems endless. However, just like a rainbows three primary and three secondary colors, information systems do fall into just a few very broad categories. And, just as most organizations can be broken broadly into a small handful of hierarchical categories, so too can information systems (Figure 1.2).

Generally speaking, a corporations or an organizations information systems can be divided into three levels:

• Strategic
• Management/Financial
• Operational

Figure 1.2 The Hierarchical Categories of Business Information Systems

Adapted from Laudon and Laudon, Management Information Systems, as in http://www.uh.edu/~mrana/try.htm.

At the base of the organization, the operational level system supports operational managers. This information system focuses on the daily and basic activities of the corporation (i.e. deposits, sales, payroll, etc.). While many of these functions and activities tracked are also, collectively, part of the higher two levels, separately they make up the day-to-day operations of the organization.

The next level or tier upward is the management (or financial) level system. Here, monitoring, controlling, and decision-making activities are served. What management is trying to determine at this level is whether things are working well. These systems incorporate both inside information and outside information, making them very useful to the manager who needs an answer to a what if question. There is some variation among these middle-level systems, but at the heart of each of them is a need to determine how the most basic functions of the organization are working together and how outside influences are affecting those basic functions.

The strategic level system is one that focuses on strategic and long-term goals, trends, and capabilities. This top-level system is employed and used by top-level managers to help get answers to such questions as where is this company going?, what level of profitability are we likely to achieve?, and what will our future hold?

Business intelligence systems are an expanding suite of tools spanning organizational levels. Historically, executive information systems were higher level decisions support systems that were geared toward executive management and included tools such as forecasting and more analytic tools than would be required by middle managers. Today, business intelligence systems provide strategic level modules that produce analytics for large collections of structured and unstructured data (big data), as well as important management level views on the data required by day-to-day decision makers. Business intelligence systems are beginning to permeate throughout the organization to provide data in a useful format where needed.

Importance of Information Systems

Within any of the three main types (or any of the countless sub-types) of information system is the ability to greatly improve efficiency, productivity, forecasting, and, finally, profitability and sustainability. Ask any level of manager to list important resources and theyll likely come up with some or all of the following:

• Money
• Customers
• Employees
• Technology
• Equipment
• Materials

Although most managers may not list or consider information among their most valued resources, their businesses and business models would have a very difficult time succeeding in this day and age without it. In fact, information is vital to all of the above resources individually as well as collectively.

Over the years, this reliance on information systems has been focused on large and small networks, computer databases, and desktop PCs. Today, businesses are relying more and more on mobile digital platforms, that is, big data and cloud computing.

To say that business is relying more on mobile digital platforms than it did in the past is to say that business is moving toward mobile, handheld, and non-stationary devices for communication, tracking, and a whole host of other tasks and responsibilities. Managers today are much more likely to communicate with their various teams via a Blackberry, iPhone, and the like than they ever would have been even in recent history. Likewise, small tablet computers such as the Apple iPad, Amazons Kindle Fire, and the Samsung Nexus are easy, fast, and convenient ways to stay on top of day-to-day operations, schedules, and other management responsibilities (Figure 1.3).

Figure 1.3 Communication Devices Used by Corporations in 2012

Adapted from Northwestern.edu (http://news.medill.northwestern.edu/chicago/news.aspx?id=199615&print=1).

Although data have always been an integral part of virtually any small business, large corporation, or organization, today these bodies are increasingly looking for insights from huge volumes of data. This data come from a wide array of sources: Web traffic, social media content, and even sensors or machines that collect, store, and analyze information. Big data is used in a host of ways to make managers better at researching, planning, coordinating, and, naturally, managing.

Cloud computing platforms, among the latest advancements in Information Technology, are fast becoming essential components to a managers or a corporations day-to-day responsibilities and operations. A virtual hard drive of information now exists via the Internet, making data accessible to employees, partners, customers, and other end-users across the globe. This technology alone has been responsible for a huge leap in the ever important and ever growing world of global business and global technology.