CHAPTER 1
INTRODUCTION TO INFORMATION SYSTEM
SHEIKH JEFRIZAL BIN JAMALUDDIN
1
LEARNING OUTCOMES
• After complete this lesson, you would be
able to:
– Understand about information system.
– Describe about business systems,
characteristics of business systems and types of
business systems.
– Find the levels of organization.
– Explain the different roles of an Information
Technology (IT) department.
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Definition Of System
• System is a group of related component
interacting with each another to perform
some tasks in order to achieve the goals set.
• Information system is a kind of system
that makes use of new technology to
perform tasks.
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Definition Of System
• For example, information systems handle
daily business transactions, improve
company productivity and help managers
make sound decisions.
• Business Information Systems are systems
are used specifically to help in the business
related function.
4
Information System Concept
• Five key elements of an information system
(IS) are:
Data
Software
Hardware
Procedures
People
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Information System Concept
• Hardware
– Hardware refers to the physical layer of the
information system.
– These
include
computers,
networks,
communication equipment, scanners, printers,
digital capture devices, Global Positioning
Satellite (GPS) equipment and other
technology-based infrastructure.
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Information System Concept
• Software
– Software consists of system software and
application software.
– System software controls the hardware and
software environment and includes the
operating system and utility programs that
handle common function such as sorting data,
converting files into a different format and
making backups.
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Information System Concept
• Software
– Application software consists of program that
process data into information. These might
includes spreadsheets, word processors,
database management systems, payroll, order
entry and accounts receivable program
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Information System Concept
• Data
– Data is all information either is produced
directly or derived from other data, which is
related to a particular system or business.
– Data is served as the source to be brought into
the information system for processing and so to
produce information after that.
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Information System Concept
• Procedures
– Procedures define the tasks that must be
performed by people who work with the
system, including users, managers and
information system staff.
– Procedures typically are described in written
documentation / manuals or online reference
material.
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Information System Concept
• People
– Primary purpose of an information system is to
provide valuable information to users.
– Information system requires the efforts of
skilled professional, such as system analysts,
programmers and IS managers to build it.
– Users, who are sometimes called end users,
include employees, customers, vendors or
others who directly interact with the system.
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Business Information System
• Business information system of a company
normally consists of a series of subsystems.
• Each of the subsystems is a smaller IS that
processes data into useful information.
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Characteristics Of Business
Information System
Relationships with other systems
• Business Information Systems often are
interdependent.
• For instance, output information from the
purchasing system becomes data input to
the production and finance systems.
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Characteristics Of Business
Information System
Relationships with other systems
Boundaries / Scope
• A boundary between two systems indicates
where one system ends and the other begin.
• The boundary between two systems is not
always clear-cut.
• It takes coordination and proper system
definition to set these boundaries correctly.
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Characteristics Of Business
Information System
Relationships with other systems
Specialized business needs
• In addition to the typical type of Business
Information Systems, each system has their own
purpose and functions.
• Two same category of Business Information
System might use different procedures in
producing the information. Thus, knowing the
accurate user requirement is critical.
.
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Characteristics Of Business
Information System
Relationships with other systems
Specialized business needs
• Size of the companies in the same industry may
have very different information systems
requirements as well.
• For example, banks can range in size from a local
operation with a main office and one or two
branches to a multinational bank with branches in
many states and foreign countries.
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Types
Of
Systems
Business
• Six broad categories
Information Systems are: -
Information
of
Business
– Operational Systems / Transaction Processing Systems
(TPS)
– Management Information Systems (MIS)
– Decision Support Systems (DSS)
– Expert Systems (ES)
– Office Automation Systems (OAS)
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Management Information Systems
(MIS)
• A computer-based system that generates timely
and accurate information for low and middle
management in order to monitor and control the
internal operations of an organization.
• Usually, the information generated by an MIS
helps managers understand the day-to-day
operations of the company, such as weekly sales,
daily production, monthly operating expenses, etc
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Management Information Systems
(MIS)
• For example, MIS reports could highlight slow or
fast-moving items, customers with past due
balances and inventory items that need reordering.
• With this kind of information, better management
decisions can be made.
• Input – TPS & other internal company sources.
• Output – Summary & exception report*
• Eg. Bank manager – receives a summary report of
yesterday’s deposits & withdrawals.
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Decision Support Systems (DSS)
• Frequently, top management needs information
that is not provided routinely by operational and
management information system.
• For instance, management might want to know the
effect on company profits if sales increase by 10
percent and costs go up by 5 percent. This type of
information sometimes called the what-if analysis,
and it needs a DSS to support.
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Decision Support Systems (DSS)
• DSS helps make business decisions by
analyzing internal or external data.
• Internal data comes from an organization's
own files, while external sources might
include information on interest rates,
population trends or new housing
construction from external bodies.
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Decision Support Systems (DSS)
• Internal Data
– Cost of raw material
– No. of people required for the job
– Time needed to finish the job
• External Data
– State and federal taxes
– Regulatory requirements
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Expert Systems (ES)
• Also called a (knowledge-base or rule-based
system) is one in which the knowledge of one or
more human experts along with the rules for
applying that knowledge are stored and later
accessed for use in decision making.
• It is simulate to human reasoning by combining a
knowledge base and inference rules that determine
how the knowledge is applied.
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Expert Systems (ES)
• An expert system examines a problem,
defines and assesses solutions to it, and
suggests which solutions are better.
• There is increasing use of expert system
technology to solve real-world problems in
many industries.
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Office Automation Systems (OAS)
• Office automation systems have empowered
employees and made them more productive in
their tasks.
• Office systems might include local and wide area
networking, electronic mail, voice mail, fax, video
conferencing, word processing, automated
calendars, electronic filing, database management,
spreadsheets, desktop publishing, presentation
graphics, company intranets and Internet access
throughout the company.
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Executive Information System (EIS) or
Executive Support System (ESS)
• Software that analyzes and presents information to
executive decision makers in a useful, friendly and
customized format and their need to make
unstructured decisions.
• It consists of a set of tools and techniques such as
color graphics, touch screens and voice-activated
commands that help managers to retrieve, analyze,
navigate, summarize and distribute large volumes
of data quickly and efficiently.
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Executive Information System (EIS) or
Executive Support System (ESS)
• EIS combines the features and capabilities
of both management information systems
and decision support systems, but with more
flexibility
and better support for
unstructured decision making.
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Executive Information System (EIS) or
Executive Support System (ESS)
• Different between EIS and DSS
– EIS – used to deliver and display information
(Information Delivery)
– DSS – more appropriate for analyzing problem
(Problem Solving)
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Structured,
Semi-Structured
Unstructured Decisions
And
• Many management decisions are periodic
and predictable.
• For example, companies regularly make
decisions regarding minimum inventory
levels or customers with past due accounts.
• The information required for these decisions
can be predefined and alternative actions
can be specified in advance.
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Structured,
Semi-Structured
Unstructured Decisions
And
• These decisions are called structured decision,
because they occur regularly, have predefined
information
requirements
and
result
in
predetermined actions.
• Unstructured decision cannot be predicted and
whose information needs cannot be predefined.
• Unstructured decision making is very common for
top managers, where complex issues of corporate
strategy and policy are involved.
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Structured,
Semi-Structured
Unstructured Decisions
And
• For instance, corporate researchers often try to
predict consumer tastes and spending patterns for
the next five to ten years.
• Semi-structured decisions are not as predictable
and definable as structured decisions.
• An example of a semi-structured decision might
involve the impact of inflation on production
costs.
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Organizational Levels
• Most companies organize with operational
personnel reporting to lower managers, who
report to middle managers, who report to
top managers.
• In a corporate structure, top managers report
to the board of directors who are elected by
the shareholders.
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Organizational Levels
Operational Personnel
• Spend most of their time performing repetitive,
day-to-day functions that follow well-defined
procedures.
• Production-line
workers,
clerks,
sales
representatives and auditors are examples of
operational personnel.
• Operational employees use information system to
enter and receive data they need to perform their
job.
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Organizational Levels
• Lower Management
– Supervisors or team leaders who supervise the
operational employees and carry out day-to-day
plans.
– They direct operations, ensure that the right
tools, materials and training are available, make
necessary decisions and take corrective actions.
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Organizational Levels
• Most lower-manager decisions are highly
structured.
• A supervisor's information needs usually are
narrow, because he or she only requires
information in one area of responsibility.
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Organizational Levels
• Middle Management
– Focus on a longer period plans, usually ranging from
one month to one year.
– They develop plans and allocate company resources to
achieve organizational objectives in a process called
tactical planning.
– Middle managers delegate authority and responsibility
to first-line supervisors and work closely with them to
provide direction, necessary resources and feedback on
performance.
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Organizational Levels
• Most middle management decisions are semistructured and occur in routine patterns.
• Compared to supervisor, middle managers need
less detail and more exceptions and summary
information.
• Exception reports identify variances from set
targets and help managers identify situations that
require action.
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Organizational Levels
• Top Management
– They responsible for long-range planning and they
establish the overall company mission, policies and
goals, including future products and services.
– This type of planning is called the strategic planning,
which ensures that the company will survive and grow
in the future.
– Because top managers are concerned with the entire
company, they need information from the entire
company.
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Organizational Levels
• Top Management
– Many top management decisions are
unstructured, top managers also need what-if
information from decision support systems to
make unstructured decision.
– Top management need information from
outside the company to address issues involving
economic trends, technology, competition,
governmental agencies and shareholders.
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Organizational
Level
Responsibility
Decision
Making
Information
Requirements
Systems
Top Management
Develop long-range goals, plans
and strategies
Unstructured
EIS, MIS
DSS, OAS
Middle
Management
Develop short-range goals, plans
and tactics
Semistructured
MIS
summaries
exceptions, DSS
OAS
Lower Management
Develop day-to-day plans and
supervise operational personnel
Structured
TPS details, some MIS
summaries
and
exceptions, OAS
Operational
Personnel
Perform routine functions
Structured
TPS details, ES, OAS.
summaries,
and
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Information Technology Department
• Information Technology (IT) Department develops
and maintains a company’s information systems.
• The structure of the IT department is varies among
companies, as does its name and placement within
the organization.
• In a small firm, one person might handle all
computer support activities and services, whereas
a large corporation might require many people
with specialized skills to provide information
system support.
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Information Technology Department
• The IT group provides technical support,
which includes six main functions:
application development, systems support,
user support, database administration,
network administration, and web support.
• These functions overlap considerably and
often have different names in different
companies.
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Information Technology Department
• Application Development
– Traditionally, IT departments had an application
development group composed of systems
analysts and programmers who handled
information system design, development, and
implementation.
– Today, many companies use development teams
consisting of users, managers, and IT staff
members for those same tasks.
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Information Technology Department
• Systems Support and Security
– Systems Support provides vital protection and
maintenance services for system h/w and s/w
support including enterprise computing
systems, network, transaction processing
systems, and corporate IT infrastructure.
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Information Technology Department
• Systems Support and Security
– The systems support and security group
implement and monitors physical and electronic
security hardware, software and procedures.
– They install and support operating systems,
telecommunications s/w, and centralized
database mgmt systems.
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Information Technology Department
• User Support
– User support provides users with technical
information, training, and productivity support.
– This function usually called a help desk or
information center (IC).
– A helpdesk staff trains users and managers on
application s/w such as e-mail, word
processors, spreadsheets, and graphic packages.
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Information Technology Department
• User Support
– In many companies, the user support team also
installs and configures s/w applications that are
used within the organization.
– Although user support specialists coordinate
with other technical support areas, their primary
focus is user productivity and support for user
business process.
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Information Technology Department
• Database Administration
– Database administration involves database
design, mgmt, security, backup, and user access
in a large company.
– However, in small and medium-sized
companies, IT support persons perform those
roles in addition to other duties.
– Regardless of company size, mission-critical
database applications require full-time attention
and technical support.
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Information Technology Department
• Network Administration
– Business operations often depend on networks
that enable multi-user data access and
processing.
– It includes h/w and s/w maintenance, support,
and security.
– In order to controlling user access, network
administrators install, configure, manage,
monitor, and maintain network applications.
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Information Technology Department
• Web Support
– Web support specialists, often called
webmasters, support a company’s Internet and
intranet operations.
– It involves design and construction of Web
pages, managing h/w and s/w, and linking Webbased applications to the company’s existing
information systems.
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Information Technology Department
• The Systems Analyst position
– A system analyst investigates, analyzes,
designs, develops, installs, evaluates, and
maintains a company’s information systems
– To perform those tasks, systems analyst
constantly interacts with users and managers
within and outside the company.
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Information Technology Department
• The Systems Analyst position
– On large projects, the analyst works as a
member of IT department team, whereas he or
she might work alone on smaller assignments.
– As a member of a functional team, an analyst is
better able to understand the needs of that group
and how information systems support the
department’s mission.
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Information Technology Department
• Responsibilities
– The systems analyst’s job overlaps business and
technical issues.
– An analyst translate business requirement into practical
IT projects that meet the company’s needs.
– They perform a wide array of tasks, such as building
business profiles, reviewing business process, selecting
h/w and s/w packages, designing information systems,
training users, and so on.
– They also plan projects, develop schedules, and
estimates costs.
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Information Technology Department
• Skills required
– A systems analyst needs solid technical knowledge,
strong oral and written communication skills, problem
solving skills, good analytical ability, and an
understanding of business operations and processes.
– They need to have good interpersonal skills to deal with
people at all levels, from operation staff to senior
executives, including people outsider like s/w and h/w
vendors, customers, and government officials.
– Analyst also maintains their skills by attending training
courses and workshops.
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Review Questions
• Define information system.
• Explain the organizational levels in an
organization.
• Differentiate between Executive Information
System (EIS) and Decision Support System
(DSS).
• Discuss the roles of information technology
department.
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