Achieving Efficiency and Effectiveness through Systems

This chapter discusses the four components of information systems and the role information technology plays in business. Read it to gain a basic understanding of these two critical topics, then attempt the two case studies and answer the questions that accompany each case.

IS budgeting

Information usage

Once an information system is implemented, the behaviors of acquiring and using information may be directly influenced. For example, a restaurant manager would not be able to make good staffing decisions without information about forecasted business. An information system which collects data of past business patterns and forecasts future business can provide the restaurant manager with sufficient information to make competent staffing decisions. Therefore, we can measure effectiveness by assessing information usage. Information usage can be evaluated by

  • the extent to which the system is used
  • the correlation between the system inputs and the business objectives

The system usage can be measured by the amount of queries needed to make managerial decisions. The correlation between the system inputs and the business objectives should be assessed to ensure the inputs serve their purpose. For example, an information system would not be effective if it was designed to forecast future business, but only allowed the input of supplier information.