The Importance of Information Technology in Business

Data is described as the collection of raw facts and details like numerals, words, or symbols entered into a computer which then processes to generate meaningful information. Data itself can be seemingly useless with little or no intrinsic value, but when interpreted and processed to reveal its true meaning, the output (called information) is useful and can be used as a basis for decision making.


Definition of Information


Information is simply data that has been converted into a more meaningful or comprehensible form. It is the final product obtained by processing data. When a computer accepts data input, it processes, determines, and presents it back to the user as information for direct utilization. Information supports decision making, decisions prompt actions, and actions determines the achievements or performance of an individual or organization (Laudon & Laudon, 2015).


Key Differences between Data and Information


There exists a subtle difference between data and information. Whereas data is an unsystematic input for the computer system, information is the output of the data, which is systematic and meaningful. Data consists of unprocessed facts and details about something and does not depend on information. On the other hand, information produced depends entirely on the data provided. For instance, data may come in the form of numbers like fractions, integers or decimals. But once they are interpreted and given meaning, they generate information such as pie charts, bar charts and histograms. Accurate and reliable data will output reliable information while inaccurate data will yield misleading information (Laudon & Laudon, 2015). Additionally, while information is specific, data is not. For example, data in the form of student names and marks obtained are just random titles and figures which make no sense alone. It is until they are processed into report cards that they acquire meaning and can be used to make inferences.


Definition of Information Systems (IS)


Information system can be defined as a coordinated network of equipment, people and processes, which act together towards creating, disseminating and/or processing information (Robson, 2015). It incorporates all of the systems involved in the distribution of information within an organization. Even though, IS greatly relies on computers and other technological equipment, the term goes beyond computers and can be as simple as a pencil and a piece of paper.


Definition of Information Technology (IT)


Information technology is a term used to refer to the analysis, design, development, application, or management of technology-based information systems (Robson, 2015). It falls under the Information System umbrella, but deals mainly with the technology-based tools and telecommunication equipment integrated in the systems involved. It basically includes hardware, software, database and networks. IT greatly influences the performance of an economy as it provides a platform to solve social issues along with making information system easily accessible and affordable.


Differences between IT and IS


The main difference between Information Technology (IT) and Information Systems (IS) is that IS is focused on the business domain where it concentrates on applications and implications of technology and information. Any coordinated network of people, hardware, software, telecommunication networks and databases can be an IS.


On the other hand, IT does not concentrate on a particular domain of practice, but rather focuses on the selection, incorporation and implementation of technology and computing. It falls under Information System’s umbrella dealing with only four of the technological components of information systems; hardware, software, communications networks and databases. It stresses on managing technology and assisting users make the most of its functionality.


References


Laudon, K. C., & Laudon, J. P. (2015). Management information systems (Vol. 8). Prentice Hall.


Robson, W. (2015). Strategic management and information systems. Pearson Higher Ed.

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