Modern times present new challenges for business and commerce in the context of informational technology. Vast quantities of data are being generated, sent, and processed every second. Currently, the proper utilization of complementary assets, which are vital for economic growth, is impossible without information systems. This means that business managers need a deep understanding of information systems to have a competitive advantage, and this understating starts with the definition.
The term “system” is used in multiple disciplines in all fields of study. In general, the system is defined as the object of a particular design (Zannah, 2022). This definition reflects the main component of a system – the intentionality behind its creation. All the components united as a system, serve a common system objective. Therefore, it is possible to define the system as a set of components integrated in an intentional manner to achieve a predefined objective (Piccoli & Pigni, 2018). Information is defined as knowledge obtained from investigation, study, or instruction; data; facts (Information). Therefore, the information system is a collection of data, facts, or knowledge integrated in an intentional manner for the purpose of collecting, processing, and storing.
The definition of an information system can be viewed from different points. For example, it is possible to find technological, sociological, socio-technological, and process dimensions of the term. The prevalent method of handling information is through informational technologies. Thus, most of the time, the information systems are reduced to their technological component – computer hardware and software, used for handling the information. The sociological view emphasizes the aspect of human relationships in the information system. It represents the information system as a part of human society. The process dimension purely states the abstract concept of the information system as an organized way of processing data.
The most plausible way of viewing the information system seems to be the socio-technological view. It takes into account all nuances of the phenomena without overly emphasizing one or having a mechanistic approach to a process view. Indeed, currently, the material basis for most information systems is information technology. However, the societal relationships define which data to collect, in what quantity and quality, and how to store and represent it.
Information systems are a vital component of any economic activity on a noticeable scale. Economic growth is tied to the process of innovation, which is may found by combining factors and resources that were previously viewed as unconnected to multiply the economic potential of all used resource designs (Zannah, 2022). This phenomenon is called complementary assets when the investment in one asset increases the marginal return on the other asset. An example of this is the automobile, which would be the main asset, and all infrastructure that facilitates the use of automobiles, such as roads or gas stations, which would be the complementary assets.
Modern businesses have a complex structure that supports the process of deriving value from their main assets. The complementary assets, in this case, would be anything from office spaces to corporate structures, such as human resources, sales and marketing, and manufacturing (Zhou, 2019). Considering the widely adopted data-driven approach to management, it is possible to see how information systems are an integral part of utilizing said complementary assets.
In conclusion, it is possible to define an information system as a collection of data, facts, or knowledge integrated in an intentional manner for the purpose of collecting, processing, and storing. Analyzing vast amounts of raw data is necessary for finding the most optimal way to ensure the maximum return on investment. Therefore, the widespread data use for business purposes calls for the adoption of information systems, which will allow a data-driven approach to business.
References
Information (n.d.). Merriam-Webster Dictionary. Web.
Piccoli, G., & Pigni, F. (2018). Information systems for managers: with cases (Edition 4.0). Prospect Press.
Zannah, S. (2022). Information Systems. Global text.
Zhou, X. L. (2019). A Review of Complementary Assets.American Journal of Industrial and Business Management, 09 (01), 1772-1780. Web.