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Fundamentals of Information Systems:

Information is a key requirement of every organization. It is used for specific purposes in the organization and affects the decision-making at various levels in the organization. Data is often misinterpreted as information but there is a marked difference between the two. Data is represented by facts and figures such as transactions, in a database. With reference to an organization, data refers to a structured record of transactions. Data is discrete, that is, it does not make much sense by itself. Information, on the other hand, is processed data in a structured and meaningful format as represented by documents and reports. Data presented in a good format enhances the value of information.

An Information System (IS) is a system that accepts inputs in the form of data resources, processes them, and provides output in the form of information products. Its components include people, equipment, communication networks, and data resources. These components are responsible for collecting, transforming, and disseminating information in an organization. People rely on information systems to communicate with each other, using a variety of physical devices (hardware), information processing instructions and procedures (software), communication channels (networks), and stored data (data resources).

In the present scenario, information systems play a vital role in the success of an organization. Information technology (IT) is transforming the way business is done. Customer service, operations, product and marketing strategies, and distribution are heavily, sometimes even entirely, dependent on IT. For example, the Internet, the internal organizational network called the intranet, and external inter-organizational networks called extranets, provide the information infrastructure that a business organization needs to make its operations more efficient and effective.

Before defining information, it is essential to know the meaning of data and its relationship with information. Data can be called the raw form of information. It is in an unorganized, unprocessed, and uninterpreted form. It refers to raw facts, concepts, or instructions that can be interpreted, stored, and processed into meaningful and useful information. This data is usually stored in data structures, files, or databases.

Information, on the other hand, is processed data that is presented in a usable form. This information is useful for decision-making and taking action. According to Gordon B. Davis and Margrethe H. Olson, information can be defined as, "Data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or prospective actions or decisions." This definition includes the value of information for taking specific decisions.

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