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The Anatomy of an Information System

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When you hear the term 'information system', what comes to mind? Many people would instantly think about computers and software, but they would only be half-right.

Google defines a system as 'a set of connected things or parts forming a complex whole' or 'a set of principles or procedures according to which something is done; an organized scheme or method'. Therefore, no single entity (a computer or a single program) is an information system in itself. Compared to the human body, one might choose to view your software as the brain. However, the brain is useless without the eyes, ears, hands, feet, and internal organs.

As with many systems, there is more to an information system than meets the eye. Software plays a big role, but the people and the processes keeping it together are just as important. When one intends to implement an information system in your business, there are numerous areas to be taken into account; without proper analysis, you may well end up wasting money. Good software alone is not sufficient; you need to have supporting software in place, your staff need to be well-trained on the functions of the system, your information needs to be kept up-to-date, and most importantly, the system should fit into your business.

Before making any financial investment in a system (using the example of an ERP system), consider the following:

The ERP itself
This is likely to be the first thing that you'll look at and it's likely to require a lot of capital. Beware of selecting a program based only on the initial cost - with many ERP systems, you'll have to pay annual licence fees (for the software and for each user thereof). Make sure that you take these fees into account; you don't want to be forced to stop using your expensive software a year or two down the line because you can't afford the licence fees.

Supporting software
We already know that a system consists of a number of interrelated components. Typically, the ERP itself is not responsible for storing information. The ERP defines the structure in which the information is stored and it reads, writes and processes information, but behind the scenes, you'll find a database management system (DBMS) which is responsible for actually storing the information. You may have heard the term 'multi-tier architecture', this is what it refers to: in a 3-tier architecture you have a data tier (database), server or business logic tier (logic, could run inside an application server) and a presentation tier (client application, could be a web browser). Well-known DBMS applications include Microsoft SQL Server and MySQL.

In addition to your DBMS, you'll also need operating systems on all of your users' computers, your email client and your regular office programs (MS Word, Excel, etc). Your ERP could also be dependent on other third-party software (reporting comes to mind). When you set up a budget for implementing an information system, be sure to keep licence fees for supporting applications in mind. Ultimately MS SQL Server licences, MS Windows licences and MS Office licences could end up costing just as much (if not more) than the ERP licence fees. Alternatively, you could look at ERPs which utilise open-source (i.e. free) software in the background, such as MySQL Server, Linux and In the long run, the total cost of these systems (e.g. EMC by ASD) can be much lower than that of comparable systems restricted to running on proprietary software (e.g. Microsoft Dynamics AX).

All computers are equal, but some are more equal than others. Be sure that your hardware infrastructure supports the requirements of your software. Your software vendor should be able to give you the exact hardware requirements for their software. One cannot expect ancient computers to run the latest systems, especially if you consider that you will be running a DBMS, ERP server and a number of client applications. Depending on the size of your organization, you can opt to have each tier of your ERP running on a different machine. This will require a greater capital outlay, but it's a cost vs. performance trade-off. You should also ensure that your network is up to the task; you can run the latest and greatest computers, but a network bottleneck will still slow everything down. When purchasing new hardware, keep in mind that you may have to update it at some stage (e.g. when you purchase more user licences for your ERP). Therefore, leave some leeway, particularly in terms of RAM and hard drive space on your server machines.

I cannot stress the importance of training enough. You'll gain very little from an expensive system if no-one is using it as it's intended to be used. Keep in mind that even today, many people (especially older people) are still intimidated by computers. You'll have to offer these people some guidance. Lastly, the system is there to help people, not to replace them. Make sure that they know that.

This is the lifeblood of an information system; the live-giving substance running through its electronic veins. Raw data, which is meaningless on its own, is transformed into meaningful information by the system. As an example, the number 10 doesn't mean anything outside of a particular context. However, the system can give meaning to the number 10 by telling the user that there are ten units of a particular item in stock - this is the purpose of an information system; giving meaning to data.

This includes everything that is relevant to the information system, including sales figures, bills of materials, etc. It also includes the output of the system; such as reports and invoices.

It goes without saying that the information being fed into the system should be correct and up-to-date; if not, your system will not be able to give sensible output. In short: Garbage In, Garbage Out.

If you've been running a company for a while, you probably have quite a few well-established processes. Before installing a new system, ensure that it will fit in with the existing processes of your company. Look at the simple things - if you're used to giving your customers 45 days to pay their invoices, don't buy a system that supports only 30, 60 and 90 days (no joke, I've heard of systems like that). If you run a factory, don't buy a system aimed exclusively at retail outlets. Don't be fooled by marketing jargon; see things for yourself, and make sure that the software will work for you.

In conclusion, there is more to information systems than that which one sees at first glance; information systems are complex beasts consisting of many parts, but when all of those parts work together, they can help to take your business from good to great. Aristotle was right; the whole is indeed greater than the sum of its parts.

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Updated 07-Feb-12 at 10:13 AM by rfnel



  1. Dave A's Avatar
    Thanks so much for this well thought out, very informative blog entry. You really cover the main points very well!
  2. rfnel's Avatar
    Thanks Dave, I'm glad you liked it!
    Updated 07-Feb-12 at 10:54 PM by rfnel