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the basic concepts of information systems

Chapter · July 2021

DOI: 10.5772/intechopen.97644

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 Basic Concepts of information
systems
Leila, Zemmouchi-Ghomari, National Superior School of
Technology, Algiers, Algeria, [email protected]

Abstract

This chapter covers the basic concepts of the information systems (IS) field to
prepare the reader to quickly approach the book's other chapters: the Definition of
information, the notion of system, and, more particularly, information systems.
We also discuss the typology of IS according to the managerial level and decision-
making in the IS. Furthermore, we describe information systems applications
covering functional areas and focusing on the execution of business processes
across the enterprise, including all management levels. We briefly discuss the
aspects related to IS security that ensure the protection and integrity of
information. We continue our exploration by presenting several metrics, mainly
financial, to assess the added value of IS in companies. Next, we present a brief
description of a very fashionable approach to make the information system evolve
in all coherence, which is the urbanization of IS. We conclude this chapter with
some IS challenges focusing on the leading causes of IS implementation's failure
and success.

Keywords: information, system, information system, IS typology, Decision-

making, IS applications, IS security, IS evaluation, IS evolution, and IS challenges.

1. Information Definition

According to Russell Ackoff [1], a systems theorist and professor of

organizational change, the content of the human mind can be classified into three
categories:

1. Data represents a fact or an event statement unrelated to other things. Data

is generally used regarding hard facts. This can be a mathematical symbol or text
used to identify, describe, or represent something like temperature or a person.
The data simply exists and has no meaning beyond its existence (in itself). It can
exist in any form, usable or not. The data exists in different formats, such as text,
image, sound, or even video.

2. Information is data combined with meaning. Information embodies the

understanding of a relationship as the relationship between cause and effect [2].
Ex: The temperature dropped 15 degrees, then it started to rain. A temperature
reading of 100 can have different meanings when combined with the term
Fahrenheit or with the term Celsius. More semantics can be added if more context
for the temperature read is added, such as the fact that this temperature concerns
a liquid or a gas or the seasonal norm of 20 °. In other words, information is data
that has meaning through relational connection. According to Ackoff, information
is useful data; it provides answers to the questions: "who," "what," "where," and
"when."

3. Knowledge can be seen as information combined with experience, context,

and interpretation. Knowledge constitutes an additional semantic level derived
from information via a process. Sometimes this process is observational. Ackoff
defines it as applying data and information; knowledge provides answers to the
question "how" For example, what happens in cold weather for aircraft managers?
Observational knowledge engineers interpret cold by its impact, which is the ice
that can form on an aircraft by reducing aerodynamic thrust and potentially
hampering the performance of its control surfaces [2].
IF temperature <= 0 ° C THEN cold = true;
IF cold == true THEN notify personnel to remove ice from aircraft.

Indeed, knowledge is the appropriate collection of information such that it

intends to be useful. Knowledge is a deterministic process. Memorization of
information leads to knowledge. Knowledge represents a pattern and provides a
high level of predictability regarding what is being described or will happen next.
Ex: If the humidity is very high and the temperature drops drastically, the
atmosphere is unlikely to hold the humidity so that it rains.
This knowledge has a useful meaning, but its integration in a context will infer
new knowledge. For example, a student memorizes or accumulates knowledge of
the multiplication table. A student can answer 2 x 2 because this knowledge is in
the multiplication table. Nevertheless, when asked for 1267 x 300, he cannot
answer correctly because he cannot dip into the multiplication table. To answer
such a question correctly requires a real cognitive and analytical capacity that
exists in the next level ... comprehension. In computer jargon, most of the
applications we use (modeling, simulation, etc.) use stored knowledge.

2. System Definition

The system is an aggregated "whole" where each component interacts with at

least one other component of the system. The components or parts of a system can
be real or abstract.

All system components work toward a standard system goal. A system can
contain several subsystems. It can be connected to other systems.

A system is a collection of elements or components that interact to achieve

goals. The elements themselves and the relationships between them determine
how the system works. Systems have inputs, processing mechanisms, outputs, and
feedback mechanisms. A system processes the input to create the output [3].

• Input is the activity of collecting and capturing data.

• Processing involves the transformation of inputs into outputs such as

computation, for example.

• Output is about producing useful information, usually in the form of

documents and reports. The output of one system can become the input of another
system. For example, the output of a system, which processes sales orders, can be
used as input to a customer's billing system. Computers typically produce output
to printers and display to screens. The output can also be reports and documents
written by hand or produced manually.
 • Finally, feedback or feedback is information from the system used to modify
inputs or treatments as needed.

3. Information System Definition

An information system (IS) is a set of interrelated components that collect,

manipulate, store and disseminate information and provide a feedback mechanism
to achieve a goal. The feedback mechanism helps organizations achieve their goals
by increasing profits, improving customer service [3], and supporting decision-
making and control in organizations [4].
Companies use information systems to increase revenues and reduce costs.

Figure 1.Leavitt's diamond: a socio-technical view of IS

In organizations, information systems are structured around four essential

elements, proposed in the 1960s by Harold Leavitt (Figure 1). The pattern is known
as the "Leavitt Diamond."

1. Technology: The IT (Information Technology) of an IS includes the

hardware, software, and telecommunications equipment used to
capture, process, store and disseminate information. Today, most IS
are IT-based because modern IT enables efficient operations execution
and effective management in all sizes.
2. Task: activities necessary for the production of a good or service. These
activities are supported by the flow of material, information, and
knowledge between the different participants.
3. Person: The people component of an information system
encompasses all the people directly involved in the system. These
people include the managers who define the goals of the system, the
users, and the developers.
4. Structure: The organizational structure and information systems
component refers to the relationship between individuals people
components. Thus, it encompasses hierarchical structures,
relationships, and systems for evaluating people.

4. Typology of information systems

 A company has systems to support the different managerial levels. These
systems include transaction processing systems, management information
systems, decision support systems, and dedicated business intelligence systems.
Companies use information systems so that accurate and up-to-date
information is available when needed [5].
Within the same organization, executives at different hierarchy levels have very
different information requirements, and different types of information systems
have evolved to meet their needs. A common approach for examining the types of
information systems used within organizations is to classify them according to
their roles at different organizational structure levels, and this approach is called a
vertical approach. Indeed, the organization is considered a management pyramid
at four levels (figure 2):

Executive
Support
Systems (ESS)

Decision Support
Systems
(DSS)

Management Information
Systems (MIS)

Transaction Processing Systems

(TPS)

Figure 2. Information Systems Types according to Managerial Level

• On the lowest level, staff perform routine day-to-day operations such as

selling goods and issuing payment receipts.
• Operational management in which managers are responsible for
overseeing transaction control and deal with issues that may arise.
• Tactical management, which has the prerogative of making decisions on
budgets, setting objectives, identifying trends, and planning short-term business
activities.
• Strategic management is responsible for defining its long-term objectives
and positioning concerning its competitors or its industry.

4.1. The transaction processing system (TPS)

At the operational level, managers need systems that keep track of the
organization for necessary activities and operations, such as sales and material
flow in a factory. A transaction processing system is a computer system that
performs and records the routine (daily) operations necessary for managing
affairs, such as keeping employee records, payroll, shipping merchandise, keeping
records, accounting and treasury.
At this level, the primary purpose of systems is to answer routine questions and
monitor transactions flow through the organization.
 At the operational level, tasks, resources, and objectives are predefined and
highly structured. The decision to grant credit to a customer, for example, is made
by a primary supervisor according to predefined criteria. All that needs to be
determined is whether the client meets the criteria.

4.2. Management Information Systems (MIS)

Middle managers need systems to help with oversight, control, decision
making, and administrative activities. The main question that this type of system
must answer is: is everything working correctly?
Its role is to summarize and report on essential business operations using data
provided by transaction processing systems. Primary transaction data is
synthesized and aggregated, and it is usually presented in reports produced
regularly.

4.3. Decision Support Systems (DSS)

DSS supports decision-making for unusual and rapidly evolving issues, for
which there are no fully predefined procedures. This type of system attempts to
answer questions such as: What would impact production schedules if we were to
double sales for December? What would the level of Return on investment be if the
plant schedule were delayed by more than six months?

While DSSs use internal information from TPS and MIS systems, they also
leverage external sources, such as stock quotes or competitor product prices. These
systems use a variety of models to analyze the data. The system can answer
questions such as: Considering customer's delivery schedule and the freight rate
offered, which vessel should be assigned, and what fill rate to maximize profits?
What is the optimum speed at which a vessel can maximize profit while meeting
its delivery schedule?

4.4. Executive Support System (ESS)

ESS helps top management make decisions. They address exceptional decisions
requiring judgment, assessment, and a holistic view of the business situation
because there is no procedure to be followed to resolve a given issue at this level.

ESS uses graphics and data from many sources through an interface that senior
managers easily understand. ESS is designed to integrate data from the external
environment, such as new taxes or competitor data, and integrate aggregate data
from MIS and DSS. ESSs filter, synthesize and track critical data. Particular
attention is given to displaying this data because it contributes to the rapid
assimilation of these top management figures. Increasingly, these systems include
business intelligence analysis tools to identify key trends and forecasts.

5. Decision making and information systems

Decision-making in companies is often associated with top management.

Today, employees at the operational level are also responsible for individual
decisions since information systems make information available at all company
levels.
So decisions are made at all levels of the company.
Although some of these decisions are common, routine, and frequent, the value
of improving any single decision may be small, but improving hundreds or even
thousands of "small" decisions can add value to the business.
 Not all situations that require decisions are the same. While some decisions
result in actions that significantly impact the organization and its future, others
are much less important and play a relatively minor role. A decision's impact is a
criterion that can differentiate between decision situations and the degree of the
decision's structuring. Many situations are very structured, with well-defined
entrances and exits. For example, it is relatively easy to determine the amount of
an employee's pay if we have the appropriate input data (for example, the number
of hours worked and their hourly wage rate), and all the rules of relevant decision
(for example, if the hours worked during a week are more than 40, then the
overtime must be calculated), and so on. In this type of situation, it is relatively
easy to develop information systems that can be used to help (or even automate)
the decision.
In contrast, some decision situations are very complex and unstructured, where
no specific decision rules can be easily identified. As an example, consider the
following task: "Design a new vehicle that is a convertible (with a retractable
hardtop), has a high safety rating, and is aesthetically pleasing to a reasonably
broad audience. No predefined solution to this task finalizing a design will involve
many compromises and require considerable knowledge and expertise.
Examples of Types of decisions, according to managerial level, are presented in
table 1.

Table 1. Types of decisions according to managerial level

Generally speaking, structured decisions are more common at lower levels of the
organization, while unstructured problems are more common at higher business
levels.
The more structured the decision, the easier it is to automate. If it is possible to
derive an algorithm that can be used to make an efficient decision and the input
data to the algorithm can be obtained at a reasonable cost, it generally makes sense
to automate the decision.

Davenport and Harris [6] proposed a framework for the categorization of

applications used for decision automation. Most of the systems they describe
include some expert systems, often combined with DSS and/or EIS aspects. The
categories they provided include Solution Configuration, Optimization of
Performance, Routing or Segmentation of Decisions, Business Regulatory
Compliance, Fraud Detection, Dynamic Forecasting, and Operational Control.
Many business decision situations are not very structured, and therefore cannot
(or should not) be fully automated.

A particular type of decision support system: geographic

information systems
Data visualization tools allow users to see patterns and relationships in large
amounts of data that would be difficult to discern if the data had been presented
in tabular form, for example.
Geographic Information Systems (GIS) helps decision-makers visualize issues
requiring knowledge about people's geographic distribution or other resources.
GIS software links the location data of points, lines, and areas on a map. Some GIS
have modeling capabilities to modify data and simulate the impact of these
modifications. For example, GIS could help the government calculate response
times to natural disasters and other emergencies or help banks identify the best
replacement for installing new branches or ATMs of tickets.
Geographic (or geospatial) information refers not only to things that exist (or
are being planned) on specific locations on the Earth's surface but also to events
such as traffic congestion, flooding, and other events such as an open-air festival
[7].
Its scope and granularity characterize this information:
• Location, extent, and coverage are essential aspects of geographic
information.
• Granularity, for example, geometric information, can be concise or fuzzy
depending on the application.

GIS is used to capture, store, analyze, and visualize data that describes part of
the Earth's surface, technical and administrative entities, and the results of
geosciences, economics, and ecological applications.
• It is a computer system with a database observing the spatial distribution
of objects, activities, or events described by points, lines, or surfaces.
• It is a comprehensive collection of tools for capturing, storing, extracting,
transforming, and visualizing real-world spatial data for applications.
• It is an information system containing all the data of the territory, the
atmosphere, the surface of the Earth, and the lithosphere, allowing the
systematic capture, the update, the manipulation, and the analysis of these
data standardized reference framework.
• It is a decision support system that integrates spatial data into a problem-
solving environment.
Other definitions of GIS exist depending on the point of view of application [7],
a GIS can be considered as
• A collection of spatial data with storage and retrieval functions
• A collection of algorithmic and functional tools
• A set of hardware and software components necessary for processing
geospatial data
• A particular type of information technology
• A gold mine for answers to geospatial questions
• A model of spatial relations and spatial recognition.
Typically, a GIS provides functions for the storage and retrieval, interrogation
and visualization, transformation, geometric and thematic analysis of information.
Indeed, geographic/geospatial information is ubiquitous, as seen on mobile
devices such as cell phones, maps, satellite images, positioning and routing
services, and even 3D simulations, gaining popularity from increasingly essential
segments of the consumers.
 Technological advances in recent years have transformed classical GIS into new
forms of geospatial analysis tools, namely:
• Web-based and service-oriented approaches have led to a client-server
architecture.
• Mobile technology has made GIS ubiquitous in smartphones, tablets,
and laptops (opening up new markets).

6. Information systems Applications

IS applications cover functional areas and focus on the execution of business

processes across the enterprise, including all management levels.
There are several categories of business applications: Enterprise Resource
Planning (ERP), Supply Chain Management systems (SCM), Customer
Relationship Management systems (CRM), electronic commerce or e-commerce,
Knowledge Management systems or KM, and Business Intelligence or BI. The
categories of business applications dealt with in this section cover all managerial
levels since KMS are mainly intended for top management (ESS), SCMs, CRMs,
and BI for mid-level management (MIS and DSS), ERP and e-commerce dedicated
to the transactional level (TPS or basic or operational).
However, it is useful to specify that some ERP systems, such as the global giant
SAP, offer versions of its software package covering these different categories,
including SCM and CRM.

6.1. ERP, Enterprise Resource Planning

ERPs allow business processes related to production, finance and accounting,

sales and marketing, and human resources to be integrated into a single software
system. Information that was previously fragmented across many different
systems is integrated into a single system with a single, comprehensive database
that multiple business stakeholders can use.

An ERP system centralizes an organization's data, and the processes it applies

are the processes that the organization must adopt [8]. When an ERP provider
designs a module, it must implement the rules of the associated business
processes. ERP systems apply best management practices. In other words, when
an organization implements ERP, it also improves its management as part of ERP
integration. For many organizations, implementing an ERP system is an excellent
opportunity to improve their business practices and upgrade their software
simultaneously. Nevertheless, integrating an ERP represents a real challenge: Are
the processes integrated into the ERP better than those currently used?
Furthermore, if the integration is booming, and the organization operates the same
as its competitors, how do you differentiate yourself?

ERPs are configurable according to the specificities of each organization. For

organizations that want to continue using their processes or even design new ones,
ERP systems provide means for customizing these processes. However, the burden
of maintenance falls on the organizations themselves in the case of ERP
customization.
Organizations will need to consider the following decision carefully: should they
accept the best practice processes embedded in the ERP system or develop their
processes? If the choice is ERP, process customization should only concern
processes essential to its competitive advantage.
 6.2. E-commerce, Electronic commerce

Electronic commerce is playing an increasingly important role in organizations

with their customers.
E-commerce enables market expansion with minimal capital investment,
improves the supply and marketing of products and services. Nevertheless, there
is still a need for universally accepted standards to ensure the quality and security
of information and sufficient telecommunications bandwidth.
The three main categories of e-commerce are Business-to-Consumer (B2C),
Business-to-Business (B2B), and Consumer-to-Consumer (C2C).
• Business-to-Consumer (B2C) e-commerce involves the retailing of products and
services to individual customers. Amazon, which sells books, software, and music
to individual consumers, is an example of B2C e-commerce.
• Business-to-Business (B2B), e-commerce involves the sale of goods and services
between businesses. The ChemConnect website for buying and selling chemicals
and plastics is an example of B2B e-commerce.
• Consumer-to-Consumer (C2C), this type of e-commerce involves consumers
selling directly to consumers. For example, eBay, the giant web-based auction site,
allows individuals to sell their products to other consumers by auctioning their
goods, either to the highest bidder or through a fixed price.

6.3. SCM, Information systems for Supply Chain Management

Information systems for the management of the supply chain or SCM make it
possible to manage its suppliers' relations. These systems help suppliers and
distributors share information about orders, production, inventory levels, and
delivery of products and services so that they can source, produce and deliver
goods and services efficiently.
The ultimate goal is to get the right amount of products from their suppliers at a
lower cost and time. Additionally, these systems improve profitability by enabling
managers to optimize scheduling decisions for procurement, production, and
distribution.

Anomalies in the supply chain, such as parts shortages, underutilized storage

areas, prolonged storage of finished products, or high transportation cost, are
caused by inaccurate or premature information. For example, manufacturers may
stock an excessive amount of parts because they do not know precisely the dates of
upcoming deliveries from suppliers. Alternatively, conversely, the manufacturer
may order a small number of raw materials because they do not have precise
information about their needs. These supply chain inefficiencies squander up to 25
percent of the company's operating costs.
If a manufacturer has precise information on the exact number of units of the
product demanded by customers, on what date, and its exact production rate, it
would be possible to implement a successful strategy called "just in time" (just-in-
time strategy). Raw materials would be received precisely when production needed
them, and finished products would be shipped off the assembly line with no need
for storage.
However, there are always uncertainties in a supply chain because many events
cannot be predicted, such as late deliveries from suppliers, defective parts or non-
conforming raw materials, or even breakdowns in the production process. To cope
with these kinds of contingencies and keep their customers happy, manufacturers
often deal with these uncertainties by stocking more materials or products than
they need. The safety stock acts as a buffer against probable supply chain
anomalies. While managing excess inventory is expensive, a low stock fill rate is
also costly because orders can be canceled.

6.4. CRM, Information systems for Customer Relationship

Management
CRM aims to manage customer relationships by coordinating all business
processes that deal with customers' sales and marketing. The goal is to optimize
revenue, customer satisfaction, and customer loyalty. This collected information
helps companies identify, attract and retain the most profitable customers, and
provide better service to existing customers and increase sales.
The CRM captures and integrates the data of the company's customers. It
consolidates data, analyzes it, and distributes the results to different systems and
customer touchpoints throughout the company. A point of contact (touchpoint,
contact point) is a means of interaction with the customer, such as telephone, e-
mail, customer service, conventional mail, website, or even a sales store, by retail.
Well-designed CRM systems provide a single view of the company's customers,
which is useful for improving sales and customer service quality. Such systems also
provide customers with a single view of the business regardless of their contact
point or usage.

CRM systems provide data and analytical tools to answer these types of
questions: "What is the value of a customer to the business" "Who are the most
loyal customers?" Who are the most profitable customers" and "What products are
profitable customers buying?"

Businesses use the answers to these questions to acquire new customers,

improve service quality, support existing customers, tailor offerings to customer
preferences, and deliver escalating services to retain profitable customers.

6.5. KM, Knowledge management

Some companies perform better than others because they know how to create,
produce, and deliver products and services. This business knowledge is difficult to
emulate, is unique, and can be leveraged and deliver long-term strategic benefits.
Knowledge Management Systems or KMS enable organizations to manage
processes better to collect and apply knowledge and expertise. These systems
collect all the relevant knowledge and experiences in the company and make them
available to everyone to improve business processes and decision management.
Knowledge management systems can take many different forms, but the
primary goals are: 1) facilitating communication between knowledge workers
within an organization, and 2) to make explicit the expertise of a few and make it
available to many.
Consider an international consulting firm, for example. The company employs
thousands of consultants across many countries. The consultancy team in Spain
may be trying to resolve a client's problem, very similar to a consultancy team in
Singapore that has already been solved. Rather than reinventing the solution, it
would be much more useful for the Spain team to use the Singapore team's
knowledge.
One way to remedy this situation is to store case histories from which
employees worldwide can access (via the Internet) and search for cases (using a
search engine) according to their respective needs. If the case documentation is of
good quality (accurate, timely, complete), the consultants will share and benefit
from each other's experiences, and the knowledge gained.
Unfortunately, it is often difficult to get employees to contribute meaningfully
to the knowledge base (as they are probably more concerned with moving forward
on their next engagements with customers rather than documenting their past
experiences). For such systems to have any chance of success, the work
organization must change, such as establishing a reward system for cases captured
and well documented.

6.6. BI, Business Intelligence

The term Business Intelligence (BI) is generally used to describe a type of
information system designed to help decision-makers learn about trends and
identify relationships in large volumes of data. Typically, BI software is used in
conjunction with large databases or data warehouses. While the specific
capabilities of BI systems vary, most can be used for specialized reporting (e.g.,
aggregated data relating to multiple dimensions), ad-hoc queries, and trend
analysis.
As with knowledge management systems, the value of business intelligence
systems can be hampered in several ways. The quality of the data that is captured
and stored is not guaranteed. Besides, the database (or data warehouse) may lack
essential data (for example, ice cream sales are likely to correlate with
temperature; without the temperature information, it may be difficult to identify
why it is. There has been an increase or decrease in sales of ice cream). A third
challenge is the lack of mastery of data analysts over the context of the
organization's operations, even if they are proficient in BI software. In contrast, a
manager has mastery of the organization but does not know how to use BI
software. As a result, it is common to have a team (a manager associated with a
data analyst) to get the most information (and/or knowledge) from a business
intelligence system.

7. Information systems Security

Unlike physical assets, the information does not necessarily disappear when it
has been stolen. If an organization holds confidential information such as a new
manufacturing process, it may be uploaded by an unauthorized person and remain
available to the organization.
Exposing information to unauthorized personnel constitutes a breach of
confidentiality.
Another type of system failure happens when the integrity of information is no
longer guaranteed. In other words, rather than unauthorized exposure of
information, there are unauthorized changes of information. A corporate website
containing documentation on how to configure or repair its products could suffer
severe financial harm if an intruder could change instructions, leading to
customers misconfigure or even ruin the purchased product.
Finally, the denial of access to information or the unavailability of information
represents another type of information failure. For example, if a doctor is
prevented from accessing a patient's test results, the patient may suffer needlessly
or even die. A commercial website could lose significant sales if its website were
down for an extended period.
Understanding the potential causes of system failure enables appropriate
action to be taken to avoid them. There are a wide variety of potential threats to an
organization's information systems.
Human threats are the most complicated to manage because they include a
wide variety of behaviors. To illustrate how the level of detail can vary, some
relevant subcategories include:
• Accidental behavior by members of the organization, technical support staff,
and customers of the organization
• Malicious behavior by someone inside or outside the organization
Other categories of threats include:
 • A natural event: flood, fire, tornado, ice storm, earthquake, pandemic flu
• Environmental elements: chemical spill, gas line explosion.
• Technical Threat: Hardware or software failure
• Operational Threat: a faulty process that unintentionally compromises the
confidentiality, integrity, or availability of information. For example, an
operational procedure that allows application programmers to upgrade software
without test or notification system operators can result in prolonged outages.
It is possible to categorize the various checks intended to avoid a failure, such
as:
1. Management controls management processes that identify system
requirements such as confidentiality, integrity, and availability of information and
provide for various management controls to ensure that these requirements are
met.
2. Operational controls: include the day-to-day processes associated with the
provision of information services.
3. Technical controls: concern the technical capacities integrated into the IT
infrastructure to support the increased confidentiality, integrity, and availability of
information services.

A widely cited Gartner research report concludes that"people directly cause

80% of downtime in critical application services. The remaining 20% are caused
by technological failures, environmental failure or a natural disaster».
Often, these failures are the result of software modifications such as adding new
features or misconfiguring servers or network devices.
IT professionals should ensure that system changes are prioritized and tested
and that all interested parties are notified of proposed changes.

8. Information systems assessment

Perceptible benefits can be quantified and assigned a monetary value.

Imperceptible benefits, such as more efficient customer service or improved
decision making, cannot be immediately quantified but can lead to quantifiable
long-term gain [4].
System performance can be measured in different ways.
8.1. Efficiency
Efficiency is often referred to as "doing the things right" or doing things right.
Efficiency can be defined as the ratio of output to input. In other words, a company
is more efficient if it produces more with the same amount of resources or if it
produces the same amount of output with a lower investment of resources, or -
even better - produces more with less input. In other words, the company achieves
improvements in terms of efficiency by reducing the waste of resources while
maximizing Productivity.

Each time an item is sold or ordered, the manager updates the quantity of the
item sold in the inventory system. The manager needs to check the sales to
determine which items have been sold the most and restocked. This considerably
reduces the manager's time to manage his stock (limit input to achieve the same
output). So efficiency is a measure of what is produced divided by what is
consumed [3].

8.2. Effectiveness
Effectiveness is measured based on the degree achieved in achieving system
objectives. It can be calculated by dividing the objectives achieved by the total of
the objectives set.
 Effectiveness is denoted as"doing the right thing" or doing the things necessary
or right. It is possible to define effectiveness as an organization's ability to achieve
its stated goals and objectives. Typically, a business more significant is the one that
makes the best decisions and can carry them out.

For example, to better meet its various customers' needs, an organization may
create or improve its products and services founded on data collected from them
and information accumulated from sales activities. In other words, information
systems help organizations better understand their customers and deliver the
products and services that customers desire. Collecting customer data on an
individual basis will help the organization provide them with personalized service.

The manager can also ask customers what kind of products and services
customers would like to buy in the future, trying to anticipate their needs. With the
information gathered, the manager will order the customers' products and stop
ordering unpopular products.

In what follows, we present several formulas established to measure efficiency and

effectiveness resulting from the information systems use. Indeed, the impact of an
information system on an organization can be assessed using financial measures.

8.3. Financial measures of managerial performance

When the information system is implemented, management will certainly want
to assess whether the system has succeeded in achieving its objectives. Often this
assessment is challenging to achieve. The business can use financial metrics such
as Productivity, Return On Investment (ROI), net present value, and other
performance metrics explained in the following:

8.3.1. Return on investment

Return on investment, denoted as a Return rate, is a financial ratio that
measures the amount gained or lost compared to the amount initially invested.
An information system with a positive return on investment indicates that this
system can improve its efficiency.
The advantage of using Return on investment is that it is possible to quantify
the costs and benefits of introducing an information system. Therefore, it is
possible to use this metric to compare different systems and see which systems can
help the organization be more efficient and / or more effective.

8.3.2. Productivity
Developing information systems that measure Productivity and control is a
crucial element for most organizations. Productivity is a measure of produced
output divided by required input. A higher production level for a given entry-level
means greater Productivity; a lower output level for a given entry-level means
lower Productivity. Values assigned to productivity levels are not always based on
hours worked. Productivity may be based on the number of raw materials used, the
quality obtained, or the time to produce the goods or services. According to other
parameters and with other organizations in the same industry, Productivity's value
has to mean only compared to other Productivity periods.

8.3.3. Profit growth

Another measure of the SI value is the increase in profit or the growth in
realized profits. For example, a mail-order company installs an order processing
system that generates 7 percent growth in profits over the previous year.

8.3.4. Market share

 Market share is the percentage of sales of a product or service relative to the
overall market. If installing a new online catalog increases sales, it could help
increase the company's market share by, for example, 20 percent.

8.3.5. Customer satisfaction

Although customer satisfaction is difficult to quantify, many companies
measure their information systems performance based on internal and external
feedback. Some companies use surveys and questionnaires to determine whether
investments have resulted in increased customer satisfaction.

8.3.6. Total cost of ownership

Another way to measure the value of information systems has been developed
by the Gartner Group and is called the Total Cost of Ownership (TCO). This
approach allocates the total costs between acquiring the technology, technical
support, and administrative costs. Other costs are added to the TCO, namely:
retooling and training costs. TCO can help develop a more accurate estimate of
total costs for systems ranging from small computers to large mainframe systems.

9. Information Systems Evolution

The evolution of information technologies leads to the reflection on new

approaches that set up more flexible, more scalable architectures to meet its agility
needs. The urbanization of information systems is one such approach.

9.1. Definition of the urbanization of information systems

The company's information system's urbanization is an IT discipline consisting
of developing its information system to guarantee its consistency with its
objectives and business. By taking into account its external and internal
constraints while taking advantage of the opportunities of the IT state of the art.

This discipline is based on a series of concepts modeled on those of the

urbanization of human habitat (organization of cities, territory), concepts that
have been reused in IT to formalize or model the information system,
Town planning defines rules and a coherent, stable, and modular framework,
to which the various stakeholders refer for any investment decision relating to the
management of the information system.

In other words, to urbanize is to lead the information systems' continuous

transformation to simplify it and ensure its consistency.

The challenges of urbanization consist of managing complexity,

communicating and federating work, considering organizational constraints, and
guiding technological choices.

9.2. Stages of urbanization

9.2.1. Definition of objectives: define and frame the objectives of the project,
define the scope, develop the schedule

9.2.2. Analysis of the existing situation: Carry out the inventory, organize the
work, and present the deliverables. More precisely, list the assets and map the
different layers (business, functional, application, and technical):
 Business Architecture
Identify "business processes": Who does what and why? The
description of the processes is done with BPMN, EPC formalisms, etc.
 This step is tricky and may require the use of exploration methods.
However, it does improve the overall understanding and increase the
possibilities for optimization
 Functional architecture
Identify the "functional block": What do we need to carry out the
business processes? Here, we are based on a classic division into zones
(exchanges, core business, reference data, production data, support
activities, management). This step's difficulty lies in choosing the right
level of detail and remaining consistent with business processes.
However, it provides a hierarchical presentation and makes it easier to
break down the work.
 Application Architecture
Identify the applications: How to achieve the functionalities? This step
is based on a classic N-Tiers division. However, it is not easy to provide
value and solutions compared to functional architecture. This stage
lays the foundations for the realization (major technological choices,
etc.).
 System Architecture
Identify the technical components: With what and where the
applications work, it is based on a classic division into technical areas
(security, storage, etc.). It is not easy to make the connection between
applications and servers. This step brings concrete and structuring and
is essential to assess the cost of the system.

9.2.3. Identification of the target IS: impact on the different layers,

consideration of constraints (human, material, etc.), design of costed scenarios,
and arbitration of the choice of a target.

9.2.4. Development of the trajectory: how to organize the work, frame and then
refine the budgets, design and plan projects, define the support strategy, set up an
organization, contributions, roles, and responsibilities of actors.
At the end of this process, a Land Use Plan (LUP) is defined. It is a report
consisting of:
• Summaries of the orientations chosen as well as the justifications for the
options selected.
• A definition of areas, neighborhoods, and blocks.
• Existing and target maps (process, functional, application, and technical
mapping).
• Additional documents (interview reports, list of people and organizational
entities, etc.)
The goal is to identify the gaps between the existing and the principles of
urbanization and establish changes by describing the actions and their
corresponding cost.
In practice, the urbanization process is very cumbersome to implement. On the
one hand, it requires the participation of many actors in the organization, and on
the other hand, the analysis is very long. As a result, needs to change, and LUP is
no longer necessarily suitable.

10. Information Systems challenges

The reasons for a successful or unsuccessful IS implementation are complex

and contested by different stakeholders and from the various perspectives
involved. Developers tend to focus on the system's technical validity in terms of
execution, operation, and evolution. Other qualities are often considered, such as
security, maintainability, scalability, stability, and availability. All of these criteria
are considered to be signs of successful IS Development.

The failure of an IS can be defined as: either the system put in place does not
meet the user's expectations or does not function properly. The reasons for failure
are as divergent as the projects.

The perspective of project management, on the other hand, tends to focus on

the consumption of resources. The project delivered with the initial budget and
within the allotted time is considered a successful project. Nelson [9] analyzed 99
SI projects and identified 36 classic errors. He categorized these errors into four
categories: process, people, product, and technology. The last category concerns
the factors leading to IS failures based on the misuse of modern technologies.

The seminal article by DeLone and McLean [10] suggested that IS success
should be the preeminent dependent variable for the IS domain. These researchers
proposed a taxonomy of six interdependent variables to define the IS' success as
the system's quality, the quality of information, the IS, user satisfaction, individual
impact, and organizational impact.
One of the significant extensions to this proposition is the dimension of the IT
department's quality of service [11].

Either way, the use of the system is seen as a sign of its success. The IS use level
is incorporated into most IS success models [11], [12]. These models show the
complexity of measuring user satisfaction because, even in the same organization,
some user groups may be more or less enthusiastic than others to use the new
information system.

In the current global context of the covid pandemic, it appears clear that
information systems that integrate web and mobile technologies can positively
contribute to the monitoring of contaminated cases and therefore minimize the
risks of contamination provided that users adhere to this movement for the benefit
of all [13]. A truly global, rapid, and efficient decision-making process is enabled
by the integration of information systems from distributed sources [14].

Conclusion

To conclude this introductive chapter, we present its key ideas:

 Levels of information are data, information, and knowledge.

 The system is an aggregated "whole" where each component interacts
with at least one other system component to achieve a goal.
 An information system can be defined as a set of interconnected
components that gather, process, store and dispense information to
support decision making and control in an organization. An IS can be
seen as a socio-technical system. The technical part includes the
technology and the processes, while the social part includes the people
and the structure.
 The role of information systems is to solve an organization's problems
concerning its information needs
 A company has systems to support the different managerial levels:
transaction processing systems, management information systems,
decision support systems, and systems dedicated to business
intelligence.
  Decisions can be operational or strategic.
 There are several categories of business applications: enterprise
resource planning, supply chain management systems, customer
relationship management systems, knowledge management systems,
and business intelligence.
 Among the failures that can affect IS a violation of confidentiality,
integrity, and availability of information.
 The controls intended to avoid the IS's security failures include
management controls, operational controls, and technical controls.
 The information system's performance can be measured according to
efficiency, effectiveness, Return on investment, Productivity, customer
satisfaction, etc.
 Urbanizing an information system means directing its continuous
transformation to guarantee its consistency
 The reasons for a successful or unsuccessful implementation of an IS
are complex and contested by the various stakeholders and from the
various perspectives involved.

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