An artifact simply means any product of human workmanship or any object modified by man. It is used to denote anything from a hammer to a computer system, but it is often used in the meaning "a tool" in HCI or Interaction Design terminology.
The term is also used to denote activities in a design process. For example, in Unified Process (an object oriented system development methodology) a "design artifact" is sometimes used to denote the outcome of a process acitivity such as use cases (Larman 1998).
The antonym of "artifact" is a "natural object" - an object not made by man (Wordnet, Princeton University).
Please Note: Artifact may be spelled with an 'e' instead of the 'i'; artefact. According to Google.com, artifact with an 'i' is the most common spelling of the word. Searching for 'artifact' returns app. 500.000 search results whereas 'artefact' returns 90.000
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Larman, Graig (1998): Applying UML and Patterns: An Introduction to OO Analysis and Design. Prentice Hall
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Wordnet (version 1.7.1): A lexical database for the English language. Princeton University. [Accessible online]
Computer programs emerge as the outcome of complex human processes of cognition, communication and negotiation, which serve to establish the meaningful embedding of the computer system in its intended use context.
-- Floyd, 1992, p. 24
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Eva Hornecker explains the evolving concept of Tangible Interaction.
Read Eva's insightful entry here..