CSCA0102
IT and Business Applications
Chapter 5
Information Systems
Information Systems

Information System (IS) is a set of interrelated
elements that:
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Collect (input)
Manipulate (process)
Store
Disseminate (output) data and information
Provide a corrective reaction (feedback mechanism)
to meet an objective
Information Systems
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An information system can be:
◦ Manual or computerized
Example:
◦ Investment analysts manually draw charts and
trend lines to assist them in making investment
decisions
Computerized information systems:
◦ Follow stock indexes and markets and suggest
when large blocks of stocks should be purchased
or sold
Information Systems

For many companies, IS is the name of the
department responsible for computers,
networking and data management. Other
companies refer to the department as IT
(Information Technology) and MIS (Management
Information Services).
Computer-based Information
Systems

A Computer(-Based) Information System
is essentially an IS using computer technology
to carry out some or all of its planned tasks.
Computer-based Information
Systems

The basic components of computer based
information system are:
◦ Hardware
◦ Software
◦ Databases
◦ Networks
◦ Procedures
Computer-based Information
Systems
Hardware

These are the devices like the monitor,
processor, printer and keyboard, all of which
work together to accept, process, show data
and information.
Computer-based Information
Systems
Software

The programs that allow the hardware to
process the data.
Computer-based Information
Systems
Databases

The gathering of associated files or tables
containing related data.
Computer-based Information
Systems
Networks

A connecting system that allows diverse
computers to distribute resources.
Computer-based Information
Systems
Procedures

The commands for combining the components
above to process information and produce the
preferred output.
Business Information Systems
An automated system that creates or manages
information about an organisation’s activities.
 Includes applications whose primary purpose is
to facilitate transactions between an
organisational unit and its customers
 Business information systems that create or
manage records should have the appropriate
functionally for these tasks, or they should
interface with other systems that manage the
records.

Business Information Systems
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Transaction processing systems
E-commerce systems
Management information systems
Decision support systems
Expert systems
Business Information Systems
Transaction Processing Systems
Transaction
◦ Any business-related exchange
◦ E.g., generating a weekly payroll
 Transaction processing system (TPS)
◦ An organized collection of people,
procedures, software, databases, and devices
used to record completed for for business
related exchanges

Business Information Systems
Transaction Processing Systems
Hours
worked
Payroll
transaction
processing
Pay
rate
Payroll
checks
E-Commerce Systems
E-commerce
Involves any business transaction executed
electronically
 Conducting business on-line
 For example, between…
◦ Companies
◦ Companies and consumers
◦ Business and the public sector
◦ Consumers and the public sector

E-Commerce Systems
Purchase Order - Traditional
E-Commerce Systems
Purchase Order – E-commerce
E-Commerce Systems
Traditional vs. E-commerce
Direct interaction
 Lower costs
 Reach

Management Information Systems
An organized collection of people, procedures,
software, databases, and devices used to provide
routine information to managers and decision
makers
 Management information systems are distinct
from other information systems because they
are used to analyze and facilitate strategic and
operational activities

Management Information Systems
The Five Primary Components
1.
2.
3.
4.
5.
Hardware
Software
Data (information for decision making)
Procedures (design, development and
documentation)
People (individuals, groups, or organizations)
Management Information Systems
Marketing
management
information
system
Financial
management
Information
system
Manufacturing
management
Information
system
Common
databases
Order
management
information
system
TPS
Management Information Systems
Benefits

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Companies are able to highlight their strengths and
weaknesses due to the presence of revenue
reports, employees' performance record etc. The
identification of these aspects can help the
company improve their business processes and
operations.
Giving an overall picture of the company and acting
as a communication and planning tool.
Management Information Systems
Benefits (cont.)
The availability of the customer data and feedback can
help the company to align their business processes
according to the needs of the customers. The effective
management of customer data can help the company to
perform direct marketing and promotion activities.
 Management Information Systems can help a company
gain a competitive advantage. Competitive advantage is a
firm’s ability to do something better, faster, cheaper, or
uniquely, when compared with rival firms in the market.

Management Information Systems
Benefits (cont.)

A good information system must be supported by
electronic data communication network systems that
are reliable as well. With the application of good
information systems, each party both inside and outside
the company can exchange information more effectively
and efficiently.
Development of Information
Systems
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Analysis
Feasibility Study
System Design
Testing
Implementation
Documentation
Development of Information
Systems
Analysis

Involves looking at an organisation or system
and finding out how information is being
handled at the moment.
Development of Information
Systems
Analysis (cont.)

It is possible to find out about existing systems
in a number of ways:
◦ Talking to the people who work with the
system.
◦ Questionnaires to existing users.
◦ Observing how people use the system.
◦ Reading existing manuals.
Development of Information
Systems
Feasibility Study
To see whether it is possible to develop a
system at a reasonable cost.
 At the end of the feasibility study a decision is
taken whether to proceed or not. A feasibility
study contains the general requirements of the
proposed system.

Development of Information
Systems
Feasibility Study (cont.)

The study might identify the following general
requirements for the system:
◦ To be simple and easy to use.
◦ To store all relevant details of the members.
◦ To produce membership lists, membership
cards and mailing labels.
◦ To produce posters, flyers and similar material
advertising.
Development of Information
Systems
Design

The areas that need to be considered in the
design process are listed below:
◦ Inputs
◦ Outputs
◦ File Design
◦ Hardware
◦ Software
Development of Information
Systems
Testing

Any new system needs to be thoroughly tested
before being introduced.
◦ First of all the system should be tested with normal data
to see if it works correctly.
◦ Secondly, the system is tested with data containing
known errors to try and make it fail ('crash').
◦ Thirdly, the system is tested with very large amounts of
data to see how it can cope.

It is important that processing time and response
rates remain acceptable with varying amounts of
data.
Development of Information
Systems
Implementation

Implementing or introducing a new system can
be done in two ways:
◦ Direct Implementation
◦ Parallel Running
Development of Information
Systems
Implementation – Direct Running
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The users stop using the manual system and start
using the computer system from a given date.
The advantage of this method is that it is less costly
in effort and time than any other method of
implementation.
The disadvantage of this method is that if problems
occur the users do not have any alternative apart
from returning to a manual system which may
prove difficult if it has been discontinued.
Development of Information
Systems
Implementation – Parallel Running
The new system is introduced alongside the
existing system.
 With parallel running both systems (manual and
computer, or old computer and new computer
system) will be in operation at the same time.
 This has the advantage that the results from the
new system can be compared with those of the
old system.
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Development of Information
Systems
Documentations – User Guide
User guides are written in plain English rather
than technical language. The guide should cover
how to run the system, how to enter data, how
to modify data and how to save and print
reports.
 The guide should include a list of error
messages and advice on what to do if something
goes wrong.

Development of Information
Systems
Documentations – Technical
Technical documentation is used to explain a
system to a specialist i.e. an analyst/programmer.
This document will be used if any changes have
to be made to the system.
 It is a very important document which needs to
be fully up-to-date.
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