Chapter 1

Information System

1
 Definition
Data
• Raw facts such as an employee’s name and
number of hours worked in a week, inventory
part numbers or sales orders.
Information
• A collection of facts organized in such a way
that they have additional value beyond the
value of the facts themselves.
2
 Data Vs Information

Data Information

$35,000 12 Units Salesperson: J. Jones Sales

$12,000 J. Jones Western Territory: Western Region
Region $100,000 100 Data Processing
Current Sales:
Units 35 Units
147 Units = $147,000

3
 Information System
• Information System is the study of
complementary networks of hardware and
software that people and organizations use to
collect, filter, process, create, and
distribute data.
• The IS’s designer is concerned with how to use
computer systems effectively in producing
data for the right person at the right time.

4
 Definition
Information Systems
• An information system is typically considered
to be a set of interrelated elements or
components that collect(input),
manipulate(processes), and disseminate
(output) data and information and provide a
feedback mechanism to meet an objective.
– Open System – no feedback
– Closed System - feedback

5
Information System

6
 Computer-based Information System
An Information System is an organized combination of
people, hardware, software, communication
networks and the data resources that collects,
transforms and disseminates information in a
organization.

7
 IS Vs IT Payroll
System

INFORMATION
TECHNOLOGY Inventory
System
Hardware
Software are used to build
INFORMATION
Databases SYSTEMS
Networks
Marketing
Other related System
components

Customer
Service
System

8
 Expanding Roles of IS

1. Data Processing: 1950s-1960s

2. Management Reporting: 1960s-1970s
3. Decision support: 1970s-1980s
4. Strategic and End User Support: 1980s-1990s
5. Global Internetworking: 1990s-2000s

9
 Data Processing: 1950s-1960s
The first business application of computers (in
the mid- 1950s) performed repetitive, high-
volume, transaction-computing tasks. The
computers "crunched numbers” summarizing
and organizing transactions and data in the
accounting, finance, and human resources
areas. Such systems are generally called
transaction processing systems (TPSs)

10
Management Reporting: 1960s-1970s
Management Information Systems (MISs): these
systems access, organize, summarize and
display information for supporting routine
decision making in the functional areas. Office
Automation Systems( OASs): such as word
processing systems were developed to
support office and clerical workers.

11
 Decision support: 1970s-1980s
Decision Support Systems: were developed to
provide computer based support for complex,
non-routine decision.

12
 Strategic and End User Support:
1980s-1990s
• The use or development of information systems by the
principal users of the systems’ outputs, such as
analysts, managers, and other professionals.
• Intelligent Support System (ISSs): Include expert
systems which provide the stored knowledge of
experts to non-experts, and a new type of intelligent
system with machine- learning capabilities that can
learn from historical cases.
• Knowledge Management Systems: Support the
creating, gathering, organizing, integrating and
disseminating of organizational knowledge.

13
 Global Internetworking: 1990s-2000s
• Mobile Computing: Information systems that
support employees who are working with
customers or business partners outside the
physical boundaries of their company; can be
done over wire or wireless networks.

14
 Classification of IS
Information Systems

Operations Support
Management Support
System
System

Transaction Process Office Management Decision Executive

processing automation information support information
Control systems
systems systems systems systems systems

15
1. Operations support systems process data generated by business
operations
Major categories are:
i) Transaction processing systems
ii) Process control systems
iii) Office automation systems
2. Management Support Systems provide information and
support needed for effective decision making by managers
Major categories are:
i) Management Information System
ii) Decision Support Systems
iii) Executive Information System
16
1. Operations Support System
i) Transaction processing systems

• Process business exchanges

• Maintain records about the exchanges
• Handle routine, yet critical, tasks
• Perform simple calculations

ii) Process control systems monitor and control industrial

processes.

iii) Office automation systems automate office procedures and

enhance office communications and productivity.

17
2. Management support systems provide information and support
needed for effective decision making by managers
Major categories are:

i) Management information systems

• Routine information for routine decisions
• Operational efficiency
• Use transaction data as main input
• Databases integrate MIS in different functional areas

18
ii) Decision Support System
• Interactive support for non-routine decisions or problem
• End-users are more involved in creating a DSS than an MIS

iii) Executive information systems

provide critical information tailored to the information needs of
executives

19
 Functional Aspects
MIS is an integrated collection of functional
information systems, each supporting
particular functional areas.

20
 Internet An Organization’s
MIS

Financial
MIS
Business
transactions

Drill down reports

Accounting
Transaction Databases MIS Exception reports
processing of
Demand reports
systems valid
transactions Key-indicator reports
Marketing
MIS Scheduled reports

Business
transactions
Databases Human
of
Resources Etc.
external
data MIS
Extranet
Etc.

21
 MIS
Financial MIS
• Provides financial information to all financial
managers within an organization.
Marketing MIS
• Supports managerial activities in product
development, distribution, pricing decisions,
and promotional effectiveness

22
 MIS
Human Resource MIS
• Concerned with all of the activities related to
employees and potential employees of the
organization.
Accounting MIS
• Provides aggregated information on accounts
payable, accounts receivable, payroll, and
other applications.

23
A Framework For Information Systems Architecture
 What is an Information Systems Architecture?
 An information systems architecture provides a unifying
framework into which various people with different perspectives
can organize and view the fundamental building blocks of
information systems.
 Stakeholders have different views of the system and each has
something “at stake” in determining the success of the system.
 Stakeholders can be broadly classified into four groups:
 System Owners

 System Users

 System Designers

 System Builders

24
 INFORMATION SYSTEMS FRAMEWORK

INFORMATION SYSTEM FOCUSES

SYSTEM INFORMATION SYSTEM SCOPE

OWNERS
(purpose and vision; goals and objectives; costs and benefits)

S
Y
S SYSTEM INFORMATION SYSTEM REQUIREMENTS
USERS
T (WHAT the system "is" and "must do" independent of technology)
E
M

A
N
A
L
Y SYSTEM INFORMATION SYSTEM DESIGN
S DESIGNERS
T
(HOW the system will be implemented using technology)
S

SYSTEM INFORMATION SYSTEM COMPONENTS

BUILDERS
(the actual, technical implementation of the system)

Software Interface Networking

Data Technology Technology Technology
Technology

25
Perspectives - The People Side of Information Systems

 What are Information Workers?

 The term information worker (also called knowledge worker)
was coined to describe those people whose jobs involve the
creation, collection, processing, distribution, and use of
information.
 System Owners
 System owners are an information system's sponsors and chief
advocates. They are usually responsible for budgeting the money
and time to develop, operate, and maintain the information system.
They are also ultimately responsible for the system’s justification
and acceptance.

26
Perspectives - The People Side of Information Systems
 System Users
 System users are the people who use (and directly benefit from)
the information system on a regular basis – capturing, validating,
entering, responding to, storing, and exchanging data and
information.
 There are many classes of system users including:
 Internal Users
• Clerical and service workers
• Technical and professional staff
– Knowledge workers are a subset of information workers
whose responsibilities are based on a specialized body of
knowledge.
• Supervisors, middle managers, and executive managers

27
Perspectives - The People Side of Information Systems

 System Users
 There are many classes of system users including: (continued)
 Remote and Mobile Users

 External Users

 System Designers
 System designers translate users' business requirements and
constraints into technical solutions. They design the computer files,
databases, inputs, outputs, screens, networks, and programs that
will meet the system users' requirements. They also integrate the
technical solution back into the day-to-day business environment.

28
Perspectives - The People Side of Information Systems
 System Builders
 System builders construct the information system components
based upon the design specifications from the system designers. In
many cases, the system designer and builder for a component are
one and the same.
 The applications programmer is the classic example of a system
builder.
 The Role of the System Analyst
 For the system owners and users, the analyst typically constructs
and validates their views.
 For the system designers and builders, the analyst (at the very
least) ensures that the technical views are consistent and
compatible with the business views.

29
 Qualities of Information System
Management information systems (MIS) is an organized
approach to gathering information from company
operations and making a strategic management decision.
Developing quality characteristics for gathering information
is essential to making solid management decisions.
The main qualities of good management information system are:
1.Relevance
2. Accuracy
3. Timely

4. Exhaustive (must include all information)

5. Cost-Effective

30
 Main Qualities of Good Management
Information System
1. Relevance: Information should be relevant to the strategic decision that company
management is currently reviewing. Because companies may review several business
opportunities at one time, avoiding information not relating to the decision is essential.
2. Accuracy: MIS information should be accurate and avoid any probable costs. Making
decisions based on estimates can lead to cost overruns or lower profits from future
operations.
3. Timely: Many management decisions are based on information from a certain time
period, such as quarterly or annual periods. Information outside of the requested time
frame may skew information and lead to an improperly informed decision.
4. Exhaustive: MIS information gathering should resemble an upside-down triangle. The
early stages of information gathering should be exhaustive, including all types of company
information. As management narrows its decision-making process, the information is refined
to include only the most relevant pieces.
5. Cost-Effective: The MIS needs to be a cost-effective and efficient system for gathering
information. Most of these systems are developed internally, creating costs that cannot be
passed to clients.

31
 IS Resources
• The individual data being processed through
the use of hardware and software and shared
through network connection has allowed us
to utilize more information in less time.
 Information Systems Resources

• Networks …connected in some manner that

allows to sharing of resources
• Hardware and Peripheral Devices …tangible
and can be touched
• Software …intangible and can’t be touched
physically
• Data …one piece of a record
• People …work together to create usable
information