Learning Objectives

  • Distinguish information technology (IT) from an information system (IS).
  • Explain what the Information Age means for organizations.
  • List the components of an IS and why managers care.

Later chapters: business in the Information Age, IS and organization, types of IS.

IT versus IS

IT is the toolkit: hardware, software, networks, and data technologies. IS is the organized combination of people, processes, data, and IT that supports decisions and operations. A laptop is IT; a college admission system that staff use to enroll students is an IS.

The Information Age

In the Information Age, data is treated as a productive asset, similar to capital or labor. Firms compete on how fast they turn data into information (processed, meaningful) and knowledge (applied in decisions). Knowledge workers—accountants, marketers, analysts—spend most of their day using IS.

Components of an information system

  1. Hardware — servers, PCs, phones, scanners.
  2. Software — applications and the operating system.
  3. Data — records about customers, inventory, marks.
  4. Procedures — rules for how work is done (who approves a payment).
  5. People — users, managers, IT staff.

If any one fails (for example, staff ignore procedures), the IS fails even if the software is excellent.

Why this unit matters in Nepal

Banks, digital wallets, IRD e-filing, and campus ERP systems are IS, not “just computers.” A BBA graduate who can name TPS, MIS, and ERP (later in this unit) can talk to both managers and vendors.

Key Takeaways

  • IT is technology; IS is technology plus people and processes.
  • The Information Age makes data a strategic resource.
  • Five IS components must work together.

Discussion Questions

  1. Give one campus example of IT and one of an IS.
  2. Why can a firm buy good IT and still have a weak IS?
  3. Who owns “data quality” in a small business?