What is the difference between information technology and information systems

Information Technology (I.T.) is often used interchangeably with Information Systems (I.S.) but in reality, they are two different things.

1, Information Technology (IT) Information Technology (IT) consists of hardware such as desktop, laptops and mobile technologies PDAs and even Mobile phones. IT comprises the software that is used on all these devices ranging from System Software (operating systems e.g. Windows, Macintosh and Linux) to Application softwares or productivity management software (e.g. Microsoft office and Accounting packages).

IT also includes enterprise software such as Enterprise Resource Planning (ERP) programs, Supply Chain Management (SCM) programs and Customer Relations Management (CRM) softwares. Most IT systems are looked on as support activities to the business.

They mechanize operations for better efficiency, control and effectiveness, but they do not in themselves increase corporate profitability. They are basically used to provide management with sufficient dependable information to keep the business running smoothly and they are used for analysis to aid in planning new directions.

2, Information Systems

Information Systems (IS) also includes all the systems that aid in inputting data (raw facts), processing it into meaningful information and outputting it in the form e.g. print out for decision making. Any computer system has the input, process and output parts from a technical standpoint but compared to good information systems as well as behavioral standpoint and not just simply from technical standpoint, thus the way and manner the people in the organization will interact with information technology to achieve the business objectives.

The final stage of information is feedback. Feedback ensures the determination that the information systems properly process the data input and the output, in turn is appropriate and timely. A good information system is determined by it ability to change data into appropriate useful information. Therefore, information systems (IS) skills are management skills, they are not primarily technological as seen above, but rather include:

1. An understanding of strategic and operational business planning and associated IT issues;

2. The ability to perform appropriate analysis of IT investments;

3. An understanding of IT related benefits and risks;

4. The ability to stimulate and manage organizational change and

5. The ability to communicate effectively about IT issues.

Current Trends

Strategic information systems has become an integral and necessary part of business that is aimed at directly influencing market share, earnings and all other aspects of marketplace profitability. They may even bring in new products, new markets and new ways of doing business.

They directly affect competitive stance of organizations, giving them advantages against their competitors.

As a result of the above analysis, it is important for us to be able to differentiate between being computer literate and information literate.These phrases are also sometimes used interchangeably but strictly speaking, they are not the same.

Computer Literacy and Information Literacy:

a. Computer literacy

Computer literacy is possession and ability to use of hardware devices such as PCs, Desktop computers and other powerful mobile devices as well as communication media such as the internet to perform some tasks (This coincides with IT knowledge as seen above).

b. Information Literacy

Information literacy is the ability to use Hardware, software and network technologies to identify your business problems and to create solutions to assist your business organization to achieve its objectives (This coincides with Information systems skills as above). In conclusion, there are three dimensions of business information systems, thus:

1. Technology,

2. People and

3. Organization.

The Use of Information Systems in Business Problems Below are the four steps in using information systems to solve business problems:

1. Identification of problem exactly – this could prove to be challenging as we normally attribute symptoms to the cause of the problems and therefore the next stage is flawed leading to a bad result.

2. Solution design – where appropriate problem identification has been done, then the necessary design of the solutions approach could be arrived.

3. Choosing the best solution – since there could be many options in the solution design stage, careful analysis of the organization, technology and people will assist the choice of the most appropriate solution.

4. Implementation – this is about business process change management and it requires a more in-depth approach.

Information Technology Systems in the Accounting profession: Why IT/IS in Accountancy:

Information technologies are changing the nature and economics of accounting activities. Information Technology (IT) is rapidly gaining presence in the workplace. All areas in the business arena are achieving expansion in IT and investing huge sums money in this area. Within this changing environment, several key strategic trends have defined a new role for computers.

The career plans of accountants and related training systems must refocus on the changing nature of accounting, the changing role of the accountancy profession in providing services to businesses, governments and the community at large as well as the knowledge and skills required for future success as professional accountants.

Societies expect accountants who accept engagements or in the accounting fraternity to have reasonable level of competences to perform the work required. The accountant of today should endeavor to possess the needed knowledge and skills to demonstrate competence.
The competences of accountants in IT strategy must be enhanced and preserved in order to maintain both the accountancy profession’s credibility and capability in supporting new strategic information technology initiatives.

Information technology is also affecting the way in which businesses are being managed, structured and operated. One dramatic development affecting organizations is the fusion of business and IT strategies. Organizations can no longer develop business strategies separate from IT/IS strategies and vice versa.

Accordingly, there is a need for integration of sound business and information technology planning and the incorporation of effective finance and management controls within business systems. (Dr. S-Anomah & Associates).

Trends and Implications of the Accountancy profession
Accountants have traditionally produced information to enhance management decision-taking. With the advent of new information technologies and expanded sources and means of access to information, accountants can help bring richer sets of information to bear on specific managerial decisions and screen out unnecessary information.

One of the implications of the growth of such services is the need to expand accountants’ perspectives beyond their traditional focus on accounting information to other relevant types of information and performance indicators, including non-financial information.

The body of knowledge and skills required of accountants entail a variety of important areas and IT/IS is not exception. This area presents a challenge to accountants it requires special attention due to its explosive growth and the high rate of change.

By: Daniel Kusi

Strategic information systems
Strategy is the art of creating value which ‘provides the intellectual frameworks, conceptual models and governing ideas that allow a company’s managers to identify opportunities for bringing value to customers and for delivering that value at a profit’. Strategic information systems concern planning and implementing business strategies with computerized systems so as to obtain the benefits resulting from reduced operational costs, innovativeness and profitability as a result of the use of IT. These are also systems where information resources are applied to tap strategic business opportunities in such a way that the computer systems impact on the organization’s operations, products and services.

People & Computers
Though artificial intelligence is being introduced in all sectors of the economy and labor is being replaced with computerized systems, the emotional and the financial intelligence of the accountant is still needed to interpret financial statements for management decisions-taking purposes. The accountant must adopt news technologies especially working on ERPs in order to remain relevant at post.