There is a difference between data and information. This is not just a semantic difference; this is the difference between facts that can do nothing to assist managers in their work and information that makes their work more efficient and more effective. All retailers have been able to collect huge amounts of data from customers, but Wal-Mart knew how to glean useful information from the data while the others lagged behind. Figure_1 shows how data is just raw information; data is processed to become information.

You should understand that any array of parts that work together make up a system. It may be a living organism, for example, one cell, or an animal; it may be a machine; or it may be a group of people (an organization). It may also be a combination of machines, people, and procedures. An IS is an example of such a combination. Figure_2 shows an example of an "Accounting System" comprised of several subsystems (Accounts payable, General Ledger, Accounts Receivable, and Report Generator).

Managers never perform physical work or operate machines. Almost their entire work day is devoted to planning and monitoring. They, managers, must have useful information for planning, they pass information (orders, instructions, and directions) to their subordinates, and they receive information that helps them monitor what is happening under their supervision. In other words, information is involved in almost everything managers do.

These systems are usually used merely for recording data. What happens to the data that are entered into a cash register when you check out in a supermarket? What happens to the data recorded in a bank when you use an ATM? Think about these two questions. All of the entered data will go into a TPS. Some TPSs are linked to Web pages and some are activated by devices, such as EZ-Pass and "pay-at-the-pump" transmitters.

Please be aware of the difference between the mere recording of data by a TPS and the processing of the data into information by MISs. Different MISs in the organization may use the same data to produce different information. For example, managers of product lines may want to know how the specific products their units manufacture are selling. They manipulate the sales data to produce totals by product. Regional sales managers use the same raw data to produce reports that show total sales of all products in specific regions. Figure_3 shows the different components that are part of an Information System (IS).

Growing number of the working force is made up of knowledge workers. Knowledge workers are people who are often called "professionals." Anyone whose work involves the production and use of information is a knowledge worker. Some of you will be knowledge workers you graduate and get a job. These people are increasingly dependent on IT for their work.

IS professionals should first of all understand business and management. In addition, they should be well versed in IT. A balanced knowledge in these areas is a prerequisite for a successful career.

Note that the text uses "strategic advantage" and "competitive advantage" interchangeably. The reason is that, in business, a strategic advantage almost always gives a business a competitive advantage. A competitive advantage allows the business to improve its performance and maintain a performance gap between it and other businesses. Competitive advantage is accomplished mainly by gaining and maintaining a large market share, and by gaining and maintaining a high margin of profit.

When explaining strategic moves, competitive advantages are not always gained by being the first to adopt a technology. Being on the leading edge may prove being on the "bleeding" edge; the first organization to adopt a technology may suffer because of the high cost of educating employees and training them, and because the technology may not deliver what its developers promised. Indeed, many businesses wait until another organization (often in the same industry) uses the technology for a while, and adopt it only if it proves successful. Of course, this is a risk, but one that many organizations are now willing to take. They can then adopt the new technology and be the best at using it.

The notion of strategy has its origin in warfare. Indeed, businesses always compete with other business for market share, and often the additional market share that they gain comes at the expense of other businesses. However, unlike in war, business strategy is not only about beating another business, but it is also much about creating new services and products that augment the market. IT combined with ingenuity can produce new products and services. In other words, organizations do not always operate in a zero sum game; a good strategy can create a new market.