BUS303: Strategic Information Technology

As can be seen from the above example, information technology and information system are two related but separate concepts. In our example the IT component seems to be working quite well, yet the organization is not reaping the benefits of the time saved by human resources staff and employees. In other words, the system fails to achieve its objectives due to the failure of other components.

Let's look at another example. When the most famous banker in the Ching Dynasty, Mr. Hu Syue-Yan, established his first bank, Fu-Kang, in the mid-1800s, we can be absolutely sure that there were no computer systems in the bank! At that time, the services a retail bank provided were very similar to those offered today: a customer could deposit money in the bank and earn interests, borrow money, or remit money orders. All these activities had to be recorded to reflect a customer's current balance in the bank. That is, an information system needed to be in place in order to keep track of how much the customer deposited, how much the customer withdrew, how much the customer borrowed, and how much the customer transferred into other accounts.

How did Mr. Hu Syue-Yan's employees do so? Relevant information was collected, processed, stored, and distributed using pen and paper. Thus, although a computerized technology was unavailable at the time, the bank's information system still achieved its goals - enabling the business to serve its customers. Again, here is evidence that information technology is not information system. Even though IT is often at the core of modern information systems, information technology, and information system are two different concepts. But what is the difference? What are the components of an information system?