Information, in a broad sense, is structured, processed and organised information. It gives context to data and enables decision making by people involved in decision making processes. For instance, a single consumer’s sale in a restaurant is information-this becomes information when the company is able to identify which dish is the most popular or least common. Similarly, the sale of a vehicle is information and the process of acquiring the vehicle, maintenance and repair and insurance is information. Therefore, the definition of information also includes all the processes that are needed to extract meaning from data.
Knowledge Management is a discipline on which the application of formal information systems theory is based. The discipline aims to build up a model of knowledge and use it in decision making, providing meaning and availability to data and in providing solutions to complex problems. Knowledge in this context is taken to be knowledge related to a particular activity (e.g., purchasing a car) or idea (e.g., designing a new building). Knowledge may be procedural, structural, interpersonal or relational. Decision makers use knowledge management to build up knowledge on issues related to their organization to support informed decisions.
In short, an information system is a collection of knowledge sources. It enables users to extract meaning from large amount of data, presenting it in a meaningful way so as to allow decision making and other relevant activities. An effective information system must satisfy three objectives: it should be effective, it should be comprehensible to users and it should be easy to modify. An information system can be effectively implemented through various approaches such as utilization of available technologies, use of information sources holistically, compilation of results in forms that are easy to understand and adapt for diverse purposes.