The earliest information systems were developed in the early 1960s. Ever since its first appearance, the field of IS has been changing very significantly. ISs of today represent a totally different set of aims, means and responsibilities than were typically used in organizations of the 1970s, 1980s or even in the 1990s.
To analyse all those changes, researchers usually divide the short history of IS development into different eras and study how ISs evolved during the years.
However, the division differs among researchers because they focus on different aspects. For example, DeSanctis, Dickson and Price (2000) depict the IS history in five eras. You should study what happened in the very first era in the following reading.
Any systematic development began after the period of chaos. The next four eras in DeSanctis, Dickson and Price (2000) form the core of their model. The essential characteristics of these eras are summarized below.
3.3.1 Centralization Era
This era is dominated by information systems that function primarily as the processing of predefined (business) transactions to produce fixed-format reports on schedule. Their principal use is to automate the basic business processes under the supervision of the organization. Typical transactions handled by these systems are payroll records, customer orders and purchase orders. To help management, these systems could also provide predefined exception reports based on the transactions processed. Many such systems process transaction data of the organizations; they are called transaction processing systems or data processing systems. It also explains why this era is sometimes called the data processing (DP) era.
Technologically speaking, the era is marked by the development of direct access storage devices (DASD) and database management systems (DBMS).
Another type of application developed in this era is management information systems (MISs). They provide two new capabilities to the users:
3.3
Dickson and DeSanctis (Eds), pages 2–5 in Chapter 1 of Information Technology Management, the section entitled ÂFirst era: Pioneers, Penetration, and Chaos (1954-1963)Ê by DeSanctis, G, Dickson, G and Price, R.
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1. enquiry, i.e. flexible data base access initiated by ad hoc user requests (for searching an item of information); and
2. analysis, i.e. flexible user-driven processing (such as generating Âwhat ifÊ scenarios for testing implications of planning models).
These capabilities were mainly useful for managers and professionals in satisfying their information needs.
This was a period of rapid growth · the main objective was to replace the manual systems with the automated ones. Opportunities for developing new ISs were identified by inspection, by observing the performance of routine tasks and concluding that computers could be programmed to perform them. With experience, systems were also developed in other areas such as manufacturing, marketing and purchasing. However, development of such systems was so expensive that the efforts were usually centralized under managementÊs control.
DP systems and MISs were adequate when the environmental challenge was to deploy the newly arrived information (mainly computer) technology to automate manual operations, and to develop efficient applications that could reduce or avoid organizational costs. But these systems, apart from processing the transaction data, did not meet the information needs of managers and professionals as organizations began to flatten and globalization began to take shape in the late 1970s.
3.3.2 Decentralization Era
It was the emergence of personal computers and low-cost software around 1980 that opened the era of decentralization. People with abundant supplies of user-friendly software tools found themselves able to develop applications (small information systems) for their own use even without the leadership of skilful technicians or formal methodologies for software development. This was the beginning of end-user computing. The control of development and application was decentralized to individual managers who were able to solve their ad hoc problems by building simple but useful software solutions with little effort on their PCs or mainframes, thereby avoiding the long backlog of requests to the MIS department.
Dickson and DeSanctis (eds), pages 5–7 in Chapter 1 of Information Technology Management, the section entitled ÂSecond era: gaining control · centralization and a technical monoploy (1964–1976)Ê by DeSanctis, G, Dickson, G and Price, R.
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The MISs in the earlier period evolved to add new light to information business management. MISs in the 1908s depended primarily on time-sharing and on powerful microcomputer technology. Common users for MIS were managers and professionals rather than the clerical and supervisory level staff. These systems were aimed at supporting the managers and professionals, rather than replacing them by automating their tasks. A new breed of MISs supporting specific decisions came to be known as decision support systems (DSS). These systems were not simply to provide higher quality information from the use of decision models and databases, rather they were meant to improve the quality of the managerial decision process itself. Similarly, other systems that were specifically designed for top management (executives) were called executive information systems (EIS).
Nowadays, EIS are being introduced at an increasing rate. Many organizations in Hong Kong such as Hospital Authority, Hong Kong University, HALT and HSBC have them helping the senior management in various functions (e.g. budgeting).
There are two reasons for this worldwide growth of EIS. Firstly, modern IT makes these systems both more powerful and more palatable than the old paper-based MIS. Secondly, the accelerating pace of business and the simultaneous need to make organizations more flexible by reducing layers of management is met by EIS.
Now you should read the textbook and study how decentralization is related to flattening of management hierarchy.
3.3.3 Architecture Era
The continued proliferation of PC and communications technologies, including the Internet technology in the period 1985 to 1996, offered corporations a chance to re-adjust the role played by their IT. This was the time when many saw the importance of so-called strategic information systems (SISs). They are systems capable of supporting or shaping the competitive strategy of the organization. Frequently, the accomplishment of SISs extends beyond the bounds of the organization itself, to its customers or clients, suppliers and competitors. Making use of communications technologies, SISs were often large information systems connecting business partners and various functions of the organization to a large-scale database. They were central to the IS architecture of the organization, which was how the era got its name.
Dickson and DeSanctis (eds), pages 7–9 in Chapter 1 of Information Technology Management, the section entitled ÂThird era: letting loose · distribution and decentralization (1977–1984)Ê by DeSanctis, G, Dickson, G and Price, R.
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In the early years of this era, SIS might have just been a management information system (MIS). It was distinguished from the other MISs in the way that it directly supported or shaped the competitive strategy of the organization. With the introduction of business process re-engineering (BPR), management started to realize that simply focusing on the strategic advantages brought about by an MIS was not sufficient. Organizations needed to analyse their strategic needs before investing in the design of an SIS. You should now study the text to find how IT and IS evolved during this period.
You must have noticed the term enterprise resource planning (ERP) in the reading.
This type of system could be implemented on a mainframe or in a distributed network, and were regarded as a strategic tool by many organizations. You can see some of the major functions of an ERP system in Figure 3.2.
Sales
Dickson and DeSanctis (eds), pages 9–11 in Chapter 1 of Information Technology Management, the section entitled ÂFourth era: distribution · a free market with issues of architecture and management (1985–1996)Ê by DeSanctis, G, Dickson, G and Price, R.
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3.3.4 Internet Era
The Internet arrived long before 1997, which is the beginning of the Internet era as indicated in DeSanctis et al. However, it didnÊt receive as much attention as it does today when every organization (business, government or otherwise) tries to get the benefit out of the Internet.
The Web, as the Internet is often called, originated as a communication network among universities and research laboratories. It remained for a long time as a convenient means for email, file transfer, discussion group, telnet, etc. until the graphical user-friendly browser, Netscape, appeared in the market. The Internet is accessible for anyone, no matter whether they use a PC or a mainframe. A new kind of business, the Internet Service Provider (ISP) emerged and has helped millions of people surf on the Web.
While many businesses were still looking at the Internet as a playground for childrenÊs games, success stories of many online companies (e.g. Amazon.com) were finding their way into magazines and textbooks. The Internet era was transformed into an era of electronic commerce. Suddenly people saw new threats and opportunities on the Web. You can read some of the happenings during the Internet era from the following paragraphs.
A much more detailed discussion on the strategic issues of the Internet will be left to the latter half of this course. By now, we should be satisfied with being able to identify the five eras of IT/IS development and deployment.
LetÊs re-emphasize here that these eras do not actually represent sequential relationships in time; i.e. it is not that the era of centralization ended when the era of decentralization started. In fact, an era derives its name from the state-of-the-art IT systems available at that time. As such, during the decentralization era, decentralized ISs were the state-of-the-art but still some (rather many) organizations continued to use centralized IS and thereby stayed in the centralization era.
Similarly, even now in the Internet era, there are many organizations which are still in the architecture, or even in the centralization, era!
Dickson and DeSanctis (eds), pages 11–12 in Chapter 1 of Information Technology Management, the section entitled ÂFifth era: the world Wide Web and anytime/anyplace computing (1997 into the Twenty-First Century)Ê by DeSanctis, G, Dickson, G and Price, R.
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Note that many of the information systems that we use today are SISs that first appeared in the architecture era. These systems have three essential characteristics:
(a) they significantly change the business performance of the firm; (b) they contribute to attaining a strategic goal; and (c) they fundamentally change the way the company does business or the way it competes.
SISs are of particular importance, as their deployment is related to whether the strategic goal of the firm can be achieved. An SIS may be either a data processing system or a management information system (or management support system). The dimension that makes a system strategic is that it directly supports or shapes the competitive strategy of the organization.