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Business Information Systems
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Information Technology > Business Information Systems & Technologies
Table of Contents
Abstract
Keywords
Overview
Applications
Terms & Concepts
Bibliography
Suggested Reading
Abstract
The influx of data enabled by the technologies of the Information
Age has literally transformed many businesses. Most businesses
today use information technology in some form to create, store,
and distribute information. There are three interdependent com-
ponents of information systems: Computers, communications
and expertise. These components must work together in order
for an information system to effectively support the organization
in its activities and mission. Information systems have several
basic functions, including the capture, processing, generation,
storage, retrieval, and transmission of data.
Overview
The influx of data enabled by the technologies of the Information
Age and with which we are bombarded every day has literally
transformed many businesses. At a basic level, much correspon-
dence today is not sent by mail or even faxed, but is transmitted
nearly instantaneously around the world via e-mail. Accounting
and project management tasks that used to be labor intensive
jobs done by hand have benefited from spreadsheet application
software that allows quick and easy manipulation of data, check-
ing of calculations, and monitoring of tasks. Huge databases
improve the ability of organizations to perform customer rela-
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tionship management to better serve the customer as well as data
mining to determine previously unknown relationships that help
the organization better market its products and services. Infor-
mation technology is the use of computers, communications
networks, and knowledge in the creation, storage, and dispersal
of data and information. Information technology comprises a
wide range of items and abilities for use in the creation, storage,
and distribution of information. Various technology components
are put together in an information system that facilitates the
flow of data (i.e., raw facts, figures, or details) and information
(i.e., organized, meaningful, interpreted data) and data between
people or departments.
There are several characteristics of the Information Age that set
it apart from other periods in history. First, the proliferation of
information technology has led to a situation where society in
many countries today is information-based, with more people
dealing with information than with agriculture or manufacturing.
As the number and range of available information technologies
increase, a concomitant number of businesses depend on infor-
mation technology to accomplish their work. This dependence
is on both the computer technologies that enable organizations
to gather, store, manipulate, and analyze data, and also on the
communication technologies that allow them to interconnect
more quickly and efficiently than ever before. In fact, the under-
standing of information technology and information systems is
so important in the Information Age, that in many situations it is
difficult if not impossible to be successful in the business world
without it. Information technology has become so much a part
of our lives today that it is often embedded in other products
and services that we take for granted. For example, the phone
call one makes for technical support may be enabled by network
technology and wireless communications systems so that the call
can be answered by a technician working halfway around the
world. The prevalence of information technology does not mean
that an organization needs to implement information technology
to be successful, however. Like the manufacturing technology
that came before it and the agricultural technology before that,
information technology is only a tool and must be understood in
order to optimize its usefulness in the organization.
 Business Information Systems & Technologies
Keywords
Application Software
Capture
Communications Network
Database
Information System
Information Technology
Processing
Transmission
Information technology does more than support our work. In
many cases it also transforms the way that we accomplish our
tasks and even allows us to do things that we would never have
been able to accomplish before. Work processes are constantly
being transformed through the application of information tech-
nology in order to improve productivity and free humans from
many repetitive tasks. For example, typewriters have given way
to word processors which, in turn, have given way to multitask-
ing computers that allow us to do more and do it more quickly
and efficiently than was ever possible before. However, infor-
mation technology not only allows humans to perform existing
processes more quickly or efficiently than ever before, in many
cases it also allows us to rethink and reengineer the way that we
do things in the workplace. Business process reengineering helps
organizations and managers rethink their practices and processes
and introduce radical improvements that benefit both the orga-
nization and its customers. For example, the division of labor
necessary to the Industrial Age is frequently being replaced by
teamwork, information sharing, and other ways of increasing the
interconnectedness of workers.
Three Components of Information Technology
As shown in Figure 1, information technology comprises three
interdependent components: Computers, communications and
expertise. The computer component of an information technol-
ogy system can be any electronic system that can be instructed
to accept, process, store, and present data. Although most people
are familiar with desktop computers for work and home, many
other devices meet this definition, including the microwave oven
in the kitchen, the timer for the front door lights, the auto-focus
digital camera, the ATM machine outside the bank, and the auto-
matic ticket kiosk at the cinema.
Computers
In general, computers can be classified into four size categories.
Microcomputers or personal computers are relatively compact.
This category of computers includes desktop computers that
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Essay by Ruth A. Wienclaw, Ph.D.
comprise a display unit and keyboard which sit easily on a desk
or table with the processing unit fitting on or under the desk.
Notebook or laptop computers are smaller versions of the desk-
top computer and are designed for portability. The keyboard,
display, and processing unit are all part of one unit, and weigh an
average of three to nine pounds, making them easy to transport
from site to site. Tablet personal computers weigh about three
pounds and are the size of a tablet of paper. Tablet personal com-
puters are available in a variety of shapes and sizes depending on
their purpose. For example, many police departments use tablet
computers for writing tickets while insurance agents often use
other models to sketch details of situations or prepare damage
claims in the field. Handheld computers (including both per-
sonal digital assistants and palm personal computers) are small
computers that weigh less than a pound, yet are both fast and
powerful. These micro computers can be used to keep track of
extensive contacts lists, jot down notes during a meeting, send
and receive e-mail, or even carry streamlined versions of major
word processing, spreadsheet, and software application software
available on desktop computers.
Figure 1: The Three Components of Information
Technology
(Adapted from Senn, p. 15)
Personal computers are prevalent in most businesses. In addition,
many medium to large sized business also may have midrange or
mainframe computers. Midrange computers (sometimes called
minicomputers) are used to interconnect people and large sets of
information. Midrange computers can be used across the entire
organization (i.e., enterprise-wide) or within a specific depart-
ment. Midrange computers typically are dedicated to performing
specific functions. In addition, mainframe computers – which are
typically larger, faster, and more expensive than midrange com-
puters – allow the interconnection of larger numbers of people
or processing of larger amounts of data. As opposed to midrange
computers, mainframe computers typically perform several
functions at once. In addition to these classifications of comput-
ers, supercomputers are available to solve problems comprising
long and difficult calculations. Supercomputers are important
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 Business Information Systems & Technologies
various complex applications including scientific research and
real-world simulations for the design of complex equipment
such as new aircraft.
In order for a computer to do the work it is intended to do, it
needs software as well as hardware. Computer software is a set
of instructions that controls the computer or communications
network and which manages the hardware in the system. Oper-
ating systems are sets of software programs that coordinate the
actions of the computer and its peripheral devices (e.g., printer).
Application software performs functions not related to the run-
ning of the computer itself. Application software includes word
processing, electronic spreadsheets, computer graphics, and
presentation software. Application software packages focus on
particular types of tasks such as word processing, graphic design,
or database management.
Communications Networks
In addition to computer systems, information technology also
includes various communications networks. These are sets
of locations (or nodes) with concomitant hardware, software,
and information that are linked together to form a system that
transmits and receives information and data. Communications
networks include local area networks (LANs) that comprise mul-
tiple computers that are located near each other and linked into a
network that allows the users to share files and peripheral devices
such as printers, fax machines, and storage devices; metropoli-
tan area networks (MANs) that transmit data and information
citywide and at greater speeds than a local area network; and
wide area networks (WANs) that comprise multiple computers
that are widely dispersed and are linked into a network. Wide
area networks typically use high speed, long distance commu-
nications networks or satellites to connect the computers within
the network.
Organizations, by definition, involve groups of people working
together to accomplish work. Information technology can aid
organizations in their tasks by linking together multiple comput-
ers to share files and peripheral devices such as printers. This
capability allows multiple people to work on the same docu-
ment (e.g., inputting data, commenting on a document, creating
reports from a database). Wide area networks – which typically
use high speed, long distance communications networks or sat-
ellites to connect the computers within the network – can also
allow employees to communicate and cooperate not only with
colleagues in the next office, but across the globe.
Expertise
Just as computer hardware and software are useless without each
other, both require the additional input of the user’s expertise
in order to be able to optimize the work that they can do. This
expertise includes familiarity with the tools of information tech-
nology, the skills needed to use these tools, and an understanding
of how and where information technology can best be imple-
mented. When all three of these components of information
technology are working together, they can create an information
system that facilitates and optimizes the flow of information and
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Essay by Ruth A. Wienclaw, Ph.D.
data between people or departments. Information technology
and systems can support the organization in its processes and
help it to maximize the use of its other resources and be more
effective.
Basic Functions of Information Technology
As shown in Figure 2, information technology has several basic
functions. These functions may occur sequentially or simulta-
neously. First, information technology captures data, that is, it
compiles detailed records of activities for later analysis or pro-
cessing. Examples of data capture include the collection of patron
information and book information when a book is checked out of
the library; the assignment of seats on an airplane or in a theatre;
and the collection of customer information for orders taken over
the Internet. Captured data are processed (i.e., converted, ana-
lyzed, or synthesized) into information that can be used by the
organization and its employees. Data processing comprises the
handling and transformation of data into information. Informa-
tion processing involves the transformation of collected data from
one form into another. Word processing allows users to create
documents and other text-based documents. Image processing
converts visual information such as graphics and photographs
into a format that can be stored or manipulated in the information
system and/or transmitted across the network. Voice processing
systems transform and transmit spoken information to enable
virtual meetings and other applications. Information technology
can also be used to generate data through processing. The gener-
ation function organizes data and information into a useful form
such as in the generation of a document or multimedia presenta-
tion. Data and information are also stored on a computer so that
they can be retrieved and processed at a later time. Finally, data
and information can also be transmitted by information systems
and distributed to other parties via a communications network.
Figure 2: The Functions of Information Technology

Applications
Linking computers into networks can enhance the productivity
and effectiveness of the entire enterprise. A common example
of this being done can be seen in the information systems used
in many modern retail stores. Computerized cash registers in a
retail store or other point of sale can be linked together so that
sales clerks can search across the network to see what other store
may have a particular item in stock. In addition, the computers at
the point of sale can be linked directly to the corporate headquar-
ters so that the store’s closing data each evening can be directly
and immediately shared with corporate management. Informa-
tion technology can also help individual stores keep track of
their inventories including what items they have in stock, what
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 Business Information Systems & Technologies
products are most in demand, when it is time to reorder, and even
assist in automatically ordering stock. Information technology
can also be used to automatically invoice customers and do other
billing tasks.
It is not just the enterprise that uses computers to improve the
effectiveness and efficiency of its processes. Individual employ-
ees, too, increasingly turn to information technology to help
them in their tasks. For example, application software can help
people keep track of their calendars, including scheduling of
appointments, meetings, and tasks to be done. Other application
software is available for project management to help employees
keep track not only of their own tasks but the tasks and processes
of large projects. These software applications allow project man-
agers to track and control schedules for complex projects and
to communicate status, risks, and other information about the
project to customers and team members.
Another important use of information technology for businesses
is database management systems. These systems are computer
software application programs that allow the user to create,
change, and administer a collection of data items that are related
to each other. Databases are distinguished from other collections
of data by the fact that the data in a database are used for multi-
ple purposes. In a database management system, data are placed
into a series of tables that are keyed to each other and that can
be manipulated into a variety of reports that display only that
portion of the database in which the user is currently interested.
The data in the system are managed through inputting data into
the database, updating the data, and representing all or part of
the data in various reports that meet the user’s specific needs.
Information technology enables the creation and manipulation
of large databases that could not be managed through another
medium.
Database management systems have a wide range of applications
for business. Inventory control systems in retail stores or chains
are one example of a database management system. Similarly,
medical records management systems in hospitals can help a hos-
pital or physician’s office control, organize, and manage a wide
range of demographic information about their patients and their
medical histories, information about their medical insurance cov-
erage, and other data that are important to the healthcare system.
These systems can allow users to pull together the information in
a variety of ways for various forms and records. Database man-
agement systems are also used in marketing. Database systems
can help marketers better understand their target market, collect
and analyze data on prospective customers, keep track of cur-
rent customers’ buying history, needs, and other characteristics.
Database management systems can be used to develop targeted
mailing lists for new products based on customer demographics
or buying history or track customer purchases so that better solu-
tions can be offered or new products developed to better meet
their needs.
Another way that organizations are meeting the increasing
demands for communication and information exchange is
through communications networks. These networks can be used
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Essay by Ruth A. Wienclaw, Ph.D.
for a number of purposes. One of the most common uses of this
application of information technology is the electronic trans-
mission of messages and documents. These capabilities include
e-mail, voice mail, electronic document exchange, electronic
funds transfer, and access to the Internet or other networks.
Communications networks can also be used for purposes of
e-commerce to buy and sell goods or services – including prod-
ucts and information retrieval services – electronically rather
than through conventional means. Networks can also be used to
support group activities such as the ability to hold meetings with
participants at geographically dispersed sites. Audio and video-
conferencing capabilities combined with electronic document
exchange capabilities can often obviate the need for extensive
travel to meetings.
Terms & Concepts
Application Software: A software program that performs func-
tions not related to the running of the computer itself. Application
software includes word processing, electronic spreadsheets,
computer graphics, and presentation software.
Business Process Reengineering (BPR): A management
approach that strives to improve the effectiveness and efficiency
of the various processes within an organization.
Capture: The process of collecting various types of data and
information for later processing and transmission.
Communications Network: Sets of locations (or nodes) with
concomitant hardware, software, and information that are linked
together to form a system that transmits and receives information
and data.
Customer Relationship Management: The process of iden-
tifying prospective customers, acquiring data concerning these
prospective and current customers, building relationships with
customers, and influencing their perceptions of the organization
and its products or services.
Data Mining: The process of analyzing large collections of data
to establish patterns and determine previously unknown relation-
ships. The results of data mining efforts are used to predict future
behavior.
Database: A collection of data items used for multiple purposes
which is stored on a computer.
Enterprise: An organization that uses computers. Although
this term is often applied to large organizations, the term can be
applied to both small and large organizations.
Information System: A system that facilitates the flow of infor-
mation and data between people or departments.
Information Technology: The use of computers, communi-
cations networks, and knowledge in the creation, storage, and
dispersal of data and information. Information technology com-
prises a wide range of items and abilities for use in the creation,
storage, and distribution of information.
Page 4
 Business Information Systems & Technologies Essay by Ruth A. Wienclaw, Ph.D.

Network: A set of computers that are electronically linked Suggested Reading

together.

Processing: The activity of converting, analyzing, computing,

DeJarnett, L. R. (2000). Knock, knock!...Who’s there?...The
and synthesizing data or information stored in a computer so that
twenty-first century century! Information Strategy:
it is in a useful form.
The Executive’s Journal, 16(2), 3-5. Retrieved June 20,
Spreadsheets: A table of values arranged in rows and columns 2007, from EBSCO Online Database Business Source
in which the values have predefined relationships. Spreadsheet
Complete. http://search.ebscohost.com/login.aspx?direct=
application software allows users to create and manipulate
true&db=bth&AN=2510654&site=ehost-live
spreadsheets electronically.

Technology: The application of scientific methods and knowl-

edge to the attainment of industrial or commercial objectives.
Technology includes products, processes, and knowledge.
Transmission: The process of distributing data or information
over a communications network.
Bibliography
Lucas, H. C. Jr. (2005). Information technology: Strategic
decision making for managers. New York: John Wiley and
Sons.
Senn, J. A. (2004). Information technology: Principles, prac-
tices, opportunities (3rd ed.). Upper Saddle River, NJ:
Pearson/Prentice Hall.
Peterson, K. (2007). Organizing business staff for greater
productivity. Kitchen & Bath Design News, 25(4), 40.
Retrieved May 11, 2007, from EBSCO Online Database
Business Source Complete. http://search.ebscohost.com/
login.aspx?direct=true&db=bth&AN=24791674&site=eh
ost-live
Mohamed, A. (2007, 6 Feb). How to get it right when shopping
for a database management system. Computer Weekly,
30-32. Retrieved May 12, 2007, from EBSCO Online
Database Business Source Complete. http://search.ebsco-
host.com/login.aspx?direct=true&db=bth&AN=24344224
&site=ehost-live

Essay by Ruth A. Wienclaw, Ph.D.

 
Ruth A. Wienclaw holds a Doctorate in industrial / organizational psychology with a specialization in organization development from the
University of Memphis. She is the owner of a small business that works with organizations in the public and private sectors, consulting
on matters of strategic planning, training, and human / systems integration.

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