Foundations of

Information Systems
in Business

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 What is a System?

Definition:
A group of interrelated components, with
a clearly defined boundary, working
together toward a common goal by
accepting inputs and producing outputs in
an organized transformation process.

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 System Components

• Input – capturing and assembling

elements that enter the system to be
processed

• Processing – transformation steps that

convert input into output

• Output – transferring elements that have

been produced by a transformation
process to their ultimate destination
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Information Systems: Turn Data into Information

Data Information
• Raw material • Processed material
• Unformatted information • Formatted information
• Generally has no context • Data given context

Individual time cards for Examples Department Labor Report,

factory workers entered Project Status Report,
into the payroll system Employee Payroll Checks

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 Data VS Information
BASIS FOR
DATA INFORMATION
COMPARISON

Meaning Data means raw Facts, concerning

facts gathered a particular event
about someone or or subject, which
something, which are refined by
is bare and processing is
random. called information.
What is it? It is just text and It is refined data.
numbers.
Based on Records and Analysis
Observations
Form Unorganized Organized
Useful May or may not be Always
useful.
Specific No Yes
Dependency Does not depend Without data,
on information. information cannot
be processed.
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Attributes of Information Quality

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 Why Study Information Systems?

• The Information system can be defined as a collection

of software, hardware, and telecommunications
network that people develop and use to gather,
create, and distribute useful data, mainly in
organizational settings.
• Information technology can help all kinds of businesses
improve the efficiency and effectiveness of their
business processes, managerial decision making, and
workgroup collaboration, thus strengthening their
competitive positions in a rapidly changing marketplace.
• Youtube Link:-
• https://www.youtube.com/watch?v=Qujsd4vkqFI

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IS Resources & Activities

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 Information System Resources

• People – end users and IS specialists

• Hardware – physical devices and

materials used in information processing
including computer systems, peripherals,
and media

• Software – sets of information processing

instructions including system software,
application software and procedures
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Information Systems Resources (con’t)

• Data – facts or observations about

physical phenomena or business
transactions

• Network – communications media and

network infrastructure

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 TYPES OF NETWORK
• LAN(LOCAL AREA NETWORK)
• MAN(METROPOLITAN AREA NETWORK)
• WAN(WIDE AREA NETWORK)

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 LAN VS MAN VS WAN
LAN stands for Local Area MAN stands for Metropolitan WAN stands for Wide area
Network. Area Network. network.

MAN’s ownership can be private While WAN also might not be

LAN’s ownership is private.
or public. owned by one organization.

The transmission speed of LAN While the transmission speed of Whereas the transmission
is high. MAN is average. speed of WAN is low.

The propagation delay is short There is moderate propagation Whereas there is long
in LAN. delay in MAN. propagation delay.

While there is more congestion Whereas there is more

There is less congestion in LAN.
in MAN. congestion than MAN in WAN.

While MAN’s design and Whereas WAN’s design and

LAN’s design and maintenance
maintenance is difficult than maintenance is also difficult
is easy.
LAN. than LAN as well MAN.

In WAN, there is also less fault

There is more fault tolerance in While there is less fault
tolerance.
LAN. tolerance.
Example: Internet
Example: A college campus Example: cable TV network in a
network city.
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 Information Systems Activities

• Input of Data Resources

• Processing of Data into Information
• Output of Information Products
• Storage of Data Resources
• Control of System Performance

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Types of Information Systems

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 Operation Support Systems

Definition:
• Information systems that process data
generated by and used in business
operations
• Goal is to efficiently process business
transactions, control industrial processes,
support enterprise communications and
collaboration, and update corporate
databases

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 Examples of Operations Support Systems

• Transaction Processing Systems (TPS) –

process data resulting from business
transactions, update operational databases, and
produce business documents.
• Process Control Systems (PCS) – monitor and
control industrial processes. Example: using
sensors to monitor industrial processes.
• Enterprise Collaboration Systems – support
team, workgroup, and enterprise
communications an collaboration.

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• Transaction processing systems
• Includes set of procedures for handling transaction
activities – calculation, classification, sorting, storage,
summarization
• High volume but similar with few exceptions
• Serve predefined, structured goals and decision
making
• A computerized system that performs and records
the daily routine transactions necessary to the
conduct of the business

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 PCS

• Process Control Systems (PCS) – monitor

and control industrial processes.
• Example: using sensors to monitor
industrial processes.
• An example of a simple process that is
controlled is keeping the temperature of a
room at a certain temperature using a
heater and a thermostat.

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 Enterprise Collaboration Systems

• An enterprise collaboration system is an

information system that collects,
processes, stores, and shares information
between individuals at an enterprise.
• It's an all-in-one stop where workers
come together to communicate, share and
access documents, and keep track of
tasks.

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 Management Support Systems

Definition:
• Information systems that focus on
providing information and support for
effective decision making by managers

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 Management Support Systems

• Management Information Systems (MIS) –

provide information in the form of pre-specified
reports and displays to support business
decision making.

• Decision Support Systems (DSS) – provide

interactive ad hoc support for the decision
making processes of managers and other
business professionals.

• Executive Information Systems (EIS) – provide

critical information from MIS, DSS, and other
sources tailored to the information needs of
executives.
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 MIS

• Management information systems

• Serve middle management
• Provide reports on firm’s current
performance, based on data from TPS
• Provide answers to routine questions with
predefined procedure for answering them
• MIS provides information to the users in the
form of reports
• Typically have little analytic capability

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 Management Information Systems
• Management level

• Inputs: High volume transaction level data

• Processing: Simple models

• Outputs: Summary reports (Types)

• Users: Middle managers for Structured & Semi-structured

Decisions

• E.g. Annual Budgeting

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 DSS

• A decision support system (DSS) is a

computerized information system used to
help in decision-making activities in an
organization or a business by analyzing
large datasets.
• It compiles the information that can be
used to solve problems and make better
decisions.
• Support nonroutine decision making

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 DSS

• Management level

• Inputs: Transaction level data & MIS Reports

• Processing: Interactive

• Outputs: Decision analysis

• Users: Middle & Top-Level Managers, Professionals

• MC D’s case study: https://youtu.be/1bWRr5ojMEs

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Components of DSS

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 Advantages of DSS

1. Facilitating Communication

2. Increasing Organizational Control

3. Improving Personal Efficiency

4. Promoting Learning or Training

5. Improving Problem Solving

.

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 EIS

• An Executive Information System (EIS) is

a kind of decision support system (DSS)
used in organizations to help executives
in decision making.
• It does so by providing easy access to
important data needed in an organization
to achieve strategic goals. An EIS usually
has graphical displays on a user-friendly
interface.

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Executive Information System-Key Characteristics

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 OLAP

• Online analytical processing (OLAP)

• Supports multidimensional data analysis
• Viewing data using multiple dimensions
• Each aspect of information (product, pricing, cost,
region, time period) is different dimension
• E.g., how many washers sold in East in June
compared with other regions?
• OLAP enables rapid, online answers to ad hoc
queries

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 Specialised Information Systems:
Expert systems
• Expert Systems – provide expert advice for operational chores or
managerial decisions
• They are used for the real world problems like expert quality advice,
diagnosis and recommendations.

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Classification of IS by organizational levels

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Classification of IS by organizational levels

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• THANK YOU…

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