Information Systems, IT, and E-Commerce: Key Concepts

Posted on Apr 2, 2025 in Information Systems

Information System (IS)

An Information System (IS) refers to the collection, processing, storage, analysis, and dissemination of information for a specific purpose.

Types of IS

  • Operation Support System (Supports business operations)
  • Management Support Systems (Supports managerial decision-making)

Classifications of IS by Scope

  • Functional Business System: Focuses on operational & managerial applications of basic business functions (e.g., support accounting, finance, or marketing).
  • Strategic Information Systems: Provides a strategic advantage over competitors (e.g., shipment tracking, e-commerce web systems).
  • Cross-Functional Information System: A combination of several types of IS that provides support for many functions.

Roles of IT

Business: Many business operations rely on IT systems, especially computers, networks, and data management systems.

Education: Every level of education (primary, secondary, universities) uses IT. For example, teachers use smart boards to deliver lessons and prepare them on laptops. Students use smartphones & laptops to complete assignments & perform research online.

Banking: Many banks and financial institutions have websites and mobile apps that allow people to transfer money easily, make purchases, and perform transactions quickly without going to a bank. ATMs are another IT innovation that allows people to withdraw money.

E-commerce: It’s now possible to shop for different types of products online. You can buy and sell items online, deliver goods to consumers, and ship cargo to other countries.

Employment: The adoption of IT in diverse industries has led to the creation of new careers & an increase in employment. For example, companies that want to use digital marketing may require a social media manager to handle their social media channels.

Information Technology (IT)

IT encompasses the use, development, & management of computer systems, software, networks, & technology to store information.

Opportunities & Threats of IT in Education & Learning

Opportunities

  • Online Learning Platforms: IT facilitates access to online courses, allowing learners to access educational content from anywhere.
  • Collaborative Tools: IT enables collaborative learning with tools like video conferencing, document sharing, and online forums.
  • Remote Education Access: IT provides opportunities for remote and distance learning, making education accessible to a wider audience.

Threats

  • Digital Divide: Disparities in access to technology can create an educational divide, disadvantaging those without access to IT resources.
  • Cybersecurity Risks in Education Systems: Educational institutions are susceptible to cyber threats, putting student and faculty data at risk.
  • Loss of Human Interaction: Over-reliance on technology can lead to a reduction in face-to-face interactions and social skills development.
  • Digital Distractions: Access to technology can lead to distractions that hinder learning.

Data and Information

Data: Data refers to raw, unprocessed facts, figures, symbols, or any form of input that lacks context or meaning.

Information: Information is the result of processing, organizing, and interpreting data to make it meaningful, relevant, and useful.

Characteristics of Good Information

  • Accuracy
  • Relevance
  • Timeliness
  • Consistency
  • Clarity
  • Accessibility
  • Security and Privacy

Components of an IS Solution

Hardware: This includes all the physical equipment necessary for the IS to function. It encompasses computers, servers, networking devices (like routers and switches), storage devices (like hard drives and SSDs), and peripheral devices (like printers and scanners).

Software: Software refers to the programs and applications that run on the hardware. This includes operating systems, database management systems, application software, and specialized software designed for specific tasks within the organization.

Data: Data is the raw information that is input into the IS. It can be in the form of text, numbers, images, videos, or any other format. Data can be stored in databases, spreadsheets, files, and other formats.

People: People are the users and administrators of the IS. They interact with the hardware, software, and data to perform tasks and generate information.

Network: The network connects all the hardware components, allowing them to communicate and share information.

Role of IT in Business Success

There are roles that make a business successful:

  1. Implementing cloud-based solutions
  2. Facilitating Cyber Security
  3. Conducting data analysis
  4. Enabling Efficient Communication
  5. Enhancing Consumer Experience
  6. Reducing Operational Cost
  1. Implementing Cloud-Based Solutions: Cloud technology is a useful tool that helps businesses store their data.
  2. Facilitating Cyber Security: As more businesses store data online, the risk of cyber attacks arises. Businesses in the banking & finance sector need to be more concerned about cyber security because cyber attacks are more common nowadays.
  3. Conducting Data Analysis: Companies depend on IT professionals to gather, assimilate, segregate, and study relevant data to understand current market trends & customer behavior.
  4. Enabling Efficient Communication: IT software like emails, WhatsApp, feedback forms, etc., can be categorized as a form of communication.
  5. Enhancing Consumer Experience: Most businesses use IT to enhance their customers’ experience & maintain a great relationship with customers.
  6. Reducing Operational Cost: IT software & programs can help businesses reduce their operational costs by a large margin.

Management Information System (MIS)

MIS is a software tool that gives a holistic report of processed information based on which management can take certain crucial decisions on which strategy & tactics could be figured out.

Purpose of MIS in an Organization

The purpose of Management Information Systems (MIS) in an organization is to facilitate effective decision-making and improve the overall efficiency and effectiveness of operations. Key purposes include:

  • Data Management and Storage: MIS helps in the systematic collection, storage, and retrieval of data relevant to the organization’s operations.
  • Information Processing and Analysis: MIS processes raw data into meaningful information through various techniques like data aggregation, sorting, filtering, and analysis.
  • Decision Support: MIS provides managers with the information they need to make informed and timely decisions.
  • Innovation and Research: MIS can support innovation by providing data and insights that can lead to new product development, process improvements, and other innovative initiatives.
  • Coordination and Communication: MIS facilitates communication and coordination among different departments or units within the organization.

MIS Activities Based on Level/Positions in the Company

Operational Level

  • Focus: Short-term, day-to-day activities and tasks, specific tasks and processes within a department or functional area.
  • Personnel: Frontline employees, supervisors, and team leaders.
  • Activities: Data Entry and Processing, Report Generation, Inventory Management, Order Processing.

Tactical Level

  • Focus: Medium-term planning and decision-making to achieve specific objectives. Involves coordination across departments or functions to support the organization’s overall strategy.
  • Personnel: Middle managers, department heads.
  • Activities: Performance Analysis, Resource Allocation, Forecasting, Budgeting.

Strategic Level

  • Focus: Long-term planning and decision-making to achieve the organization’s overall mission and vision. Involves setting the organization’s direction, goals, and objectives.
  • Personnel: Senior management, executives.
  • Activities: Strategic Planning, Business Intelligence, Risk Management, Investment and Expansion Decisions, Policy Formulation.

These MIS activities ensure that information is provided at the right level of the organization, supporting decision-making and operations at each level.

E-commerce

What is it? E-commerce consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks.

Types of E-commerce

  • B2B (Business-to-Business)
  • B2C (Business-to-Consumer)
  • C2B (Consumer-to-Business)
  • C2C (Consumer-to-Consumer)
  • B2B: It includes the exchange of goods and services, as well as information between businesses in a supply chain. Examples include wholesale marketplaces and procurement platforms.
  • B2C: In B2C e-commerce, businesses sell products or services directly to individual consumers. This is the most common form of e-commerce and includes online retailers, service providers, and digital content creators.
  • C2B: C2B e-commerce allows individual consumers to offer products or services to businesses. This model is often seen in freelancing platforms.
  • C2C: C2C e-commerce facilitates transactions between individual consumers. Online marketplaces, auction sites, and classified ad platforms are examples where individuals can buy and sell from each other.

M-commerce (Mobile Commerce)

M-commerce refers specifically to the buying and selling of goods and services through mobile devices like smartphones and tablets.

E-business (Electronic Business)

E-business is a broader term that encompasses all business activities conducted electronically, which includes not only buying and selling but also other business processes like marketing, customer service, supply chain management, and more.

Vital Role of E-commerce in Business Today

E-commerce plays a vital and transformative role in modern business across various industries.

  • E-commerce allows businesses to reach a global audience, transcending geographical boundaries.
  • Customers can shop online 24/7, providing them with unprecedented convenience.
  • Operating an online store generally incurs lower overhead costs compared to a physical storefront. There are no expenses related to physical space, utilities, or maintenance.
  • E-commerce platforms can gather and analyze customer data to provide personalized shopping experiences.
  • E-commerce platforms enable direct communication with customers through features like live chat, reviews, and feedback.