5/27/2024

Chapter # 5

Information System

What is Computer
A computer is an electronic device that processes data, converting it into
information that is useful to people. Any computer, regardless of its type, is
controlled by programmed instructions, which gives the machine a purpose and
tell it what to do.
The following types of computers in this category are:
• Desktop computers
• Work stations
• Note book computers
• Tablet computers
• Hand held computers
• Smart phones
• Super computers
• Mainframe
• Mini computers

Computer System

INPUT Process OUPUT

Storage

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Hardware
Input Devices Memory
Output Devices Processor
• Keyboard Primary
• Mouse
• Monitor • CU
• RAM
• Mice/trackball • Speaker • ALU
• • ROM
Voice Date Entry
(VDE)
• Headphone • Cache
Secondary
• Light Pen • Projectors • RAM
•
• HD
Touch Screen • Printer
• Camera • FD
• Plotter
• Scanner • Magnetic Tape
➢ MICR
➢ BCR • CD-ROM
➢ OMR
➢ OCR • USB
Tertiary storage
Off-line

Computer Software
• System Software: meat system/ hardware requirement of computer.
Help to run computer hardware components especially
Processor/CPU.
Example
Operating systems (Windows, Unix, etc.)

• Application Software: Fulfill Business requirement.

Examples
➢Accounting Software
➢Sales Software
➢Purchase Software
➢Finance Software.

Summary
▪ System – a set of interacting components that operate together to
accomplish a purpose
▪ Business system – a collection of people, machines and methods
organised to accomplish a set of specific functions
▪ Information system – all systems and procedures involved in the
collection, storage, production and distribution of information
▪ Information technology – the equipment used to capture, store,
transmit and present information
▪ Information management – planning, the environment, control and
technology

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Systems
What is System?
A system is a collection of elements or components that are organized for a
common purpose or to perform a specified task. e.g. Sales system,
Purchase system, marketing system, Accounting system and Information
system.

System Elements
• Goals
• Inputs
• Processes
• Outputs
• The environment
• Boundary (this limits the system from its environment)

Basic Types of Systems

• Close systems
• A system which is not influenced by its external environment
e.g.
• Research centers
• Scientific labs
• Defense system
• Open systems
• Dynamically interact to their external environments. Mean change its internal
environment due to influences of external environment.
e.g.
• All businesses

Control Systems

A control system is a system that manages commands, directs or regulates

the behavior of other systems to achieve desired results.
Types of Control systems
• An open-loop control system takes input under the consideration and
output would be checked by other systems. There are no disturbances or
variations in this system and works on fix conditions.

• A closed loop system is also referred as a feedback control system. These

systems start input and same system recheck the output, if results are not
accordingly, modify it according to the need.

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The Elements of a Control System:

• Input, process, output

• Sensor- measures the output from the system and determines a new
value.
• Comparator- compares the new value with that of the standard
• Standard- the predetermined limit set within the system
• Effector- effects the feedback into the system which can be positive or
negative

Deterministic systems
• ¯ Use predetermined rules
• ¯ Therefore have predicted operations
System Adaptation
• ¯ Giving predictable outputs
• ¯ Examples include machines and computer programs
• ¯ These systems will follow a standard and often have a rule book.
Probabilistic systems
• ¯ Assign a probability to future events
• ¯ Their behaviour is less easy to predict
• ¯ Most businesses are examples of probabilistic systems
• ¯ When a business sales forecasts it will try to predict sales based on past evidence.
• ¯ In effect the business tries to change before the event has occurred.
Self-organising or cybernetic systems
• ¯ Most complex type of system
• ¯ Continually changing
• ¯ Adapts to the environment
• ¯ Example trade union negotiations
• ¯ These types of systems are the least likely to be computerised
• ¯ Rely heavily on interaction from people

Concepts of Data & Information

• Data:
• Database
• Database Management System
• Networking
• Integration of Data
• Securities
• Types of Information System

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Data:
• Data are a set of values of qualitative or quantitative variables about one or more persons or
objects.
• It can exist in various forms: as numbers or text recorded on paper, as bits or bytes stored in
electronic memory.
• Business data is all the information that is related to a company, such as sales data, customer
contact information, and even website traffic statistics.
• Such data is processed into meaningful and useful information, which is then used for
specific purposes, such as business analysis, control, and decision-making.

Database:
• Database is an electronic filing system that collects and organizes data and information.
• It is the core of business information systems.
• Key users tap into databases to access the information they need, whether for placing
inventory orders, scheduling production, or preparing long-range forecasts.
• For example, a customer database containing name, address, payment method, products
ordered, price, order history, and similar data provides information to many departments.
• Big size companies use very large databases called data warehouses and data marts.

Difference Between DB & DBMS

• Database(DB): A physical or logical place where data is stored.

• Database Management system(DBMS): A tool through which database is

created, managed, edited and Updated. Basically it is a programming tools.

❖ MySQL, Microsoft Access, Oracle, Dbase, FoxPro

❖ Types:
• Hierarchical database
• Network database
• Relational database
• Object-Oriented database

Networking Several computers/Devices linked together through medium with server/s

Medium: Through which data is transmitted.
e.g. Cable (Twisted/Coaxial/Fiber optics)
Waves ( Radio/Micro/Satellite)

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Networking
Objectives
• Facilitate communication via email, video conferencing, instant messaging, etc.

• Enable multiple users to share a single hardware device like a printer or scanner.

• Enable file sharing across the network.

• Allow for the sharing of software or operating programs on remote systems.

• Make information easier to access and maintain among network users.

System architecture

• The term system architecture refers to the way in which the

components of a computer system such as printers, PCs and storage
devices are linked together and how they interact.
• A centralized architecture involves all processing being performed on
a single central computer.
• Decentralized architectures spread the processing power throughout
the organization at several different locations. This is typical of the
modern workplace given the significant processing power of modern
PCs.

Network Terminologies/Components
• Server: A central computer in a network manage the request of every terminal
or client (e.g. file servers, network servers, print servers, e-mail servers and fax
servers.)
• Terminal: End user work station linked with server.
• File servers manage the data files that are accessible to users of the network.
All the shared data files for the system are held on a file server or are accessible
through a file server.
• Network server: network servers manage and control the routing of messages
within computer networks.
• Client Server Computing: The client is the application that runs on a personal
computer or workstation. It relies on a server that manages network resources
or performs special tasks such as storing files, managing one or more printers,
or processing database queries. Any user on the network can access the
server’s capabilities.

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Difference Between LAN & WAN

LAN
1.LAN (Local Area Network) is a computer network covering a small geographic area, like a
home, office, schools, or group of buildings.
2. LAN has high speed.
3. LAN is owned, controlled, and managed by a single person or organization
4. LAN is easier to maintain at relatively low costs.
5. LAN experiences fewer data transmission errors.

WAN
1. WAN (Wide Area Network) is a computer network that covers a broad area.
2. WAN has less speed.
3. WAN's are not owned by any one organization but rather exist under distributed ownership.
4. WAN Maintenance is difficult because of wider geographical coverage and higher
maintenance costs.
5. WAN, experiences more data transmission errors due to long distance.

Contemporary Technologies

• Internet: A global network of networks

• Intranet: An organisational specific network based on internet
• E-Commerce: Online selling & buying of goods via internet.
• E-Business: Online selling & buying of goods, services, thoughts &
ideas via internet.
• Virtual Private Network (VPN): Many companies use VPN to connect
two or more private networks (such as LANs) over a public network,
such as the internet. VPNs include strong security SYSTEM

Integrated I.S.

• Integrated System is a process that connects the various IT systems and

applications in an enterprise so that they work cohesively in a coordinated
and unified manner.

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Integrated I.S. Application

Advantages of integrated systems
• Save Money & Time.
• Enhance Efficiency.
• Offers a more complete view.
• Enables better informed decisions.
• Should ultimately lead to a more efficient operations.
• Which would lead to greater customer satisfaction and hence profitability

Disadvantages of integrated systems

• Greater risk that if central module fails the whole system could fail
• More complex and high chance of errors
• More expensive than standalone systems

Security and Privacy:

Unauthorized access into a company’s computer systems can be expensive, and not
just in monetary terms but as a reputational risk also.
Threats include worms, viruses, and Trojan horses; computer theft; financial fraud;
and unauthorized network access.
Whereas early cybercrooks were typically amateur hackers working alone, the new
ones are more professional and often work in gangs to commit large-scale internet
crimes for large financial rewards.

Securities
▪ Unauthorized access and security breaches.
▪ Computer viruses, worms, and Trojan horses.
▪ Deliberate damage to equipment or information.
▪ Spam
▪ Software and media piracy

Information
Sources of Information
• Internal
• External
Types of Information

• Strategic Information that helps Top Management of organization.

• Tactical Information that helps Middle Management of organization.

• Operational Information that helps Low Management of organization.

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Information System

Definition
A set of inter-related components working together to collect, filter,
process, distribute, store and reuse data or information for the
purpose of organizational planning, controlling, co-ordination &
decision making.

I.S. Explanation

Tasks Objectives
Components
▪ Planning
▪ Collection
• Data ▪ Controlling
▪ Processing

• Technology ▪ Co-ordination
▪ Storing
▪ Decision Making
• Human ▪ Reusing

Types of Information System

• TPS: Transaction Processing System
• MRS: Management Reporting System
• MIS: Management Information System
• MSS: Management Support System
• DSS: Decision Support System
• EIS: Executive Information System
• ESS: Executive Support System

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Types of Information System

Levels of Examples
Types of I.S Explanation
Management (Accounting)

Converts all reports in

Strategic EIS/ESS to graphical / Financial Statement
summarized reports
Identify the reason of
uncertainty and
DSS Bad debts
produces exceptional
Tactical reports
Generates all possible
MRS/MIS routine reports Ledgers

Collects & Record Daily

Operational TPS data Daybooks

Transaction Processing System (Types of Processing)

Batch processing
Definition: Batch processing is a non-continuous (non-real time) processing of data,
instructions, or materials. In data transmission, batch processing is used for very large files
or where a fast response time is not critical. The files to be transmitted are gathered over
a period and then send together as a batch.
Real time Processing
Definition: Data is processed immediately while it is entered, the user usually only has to
wait a short time for a response. (ex. games, word processing, booking systems).
Interactive or online processing requires a user to supply an input.
Real-time processing is the processing and output of data as soon as input is received. In
contrast, batch processing occurs after all input has been received, with the processing and
output completed at a specified time. Whether a company decides to use either real-time
or batch processing, there are advantages and disadvantages to both methods.

Expert System (Artificial Intelligence)

• A software used to replace human expertise. It is considered as

human (expert) alternative.
• Application
• Medical science (doctors)
• Construction estimation (Engineering)
• Credit card issuance (Banks)
• Immigration process
• Psychology
• Lawyers

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Successful Expert System Essentials

• A subject area which can be suitably defined.

• The problem cannot be solved through conventional transaction
processing system.
• An expert who can provide the knowledge.
• Users who know what they want and how they want to use it.
• A knowledge engineer who can translate the expertise into facts and
rules for the system.
• A short but useful glossary of technical terms.

The advantages of an Expert System

• A lay man can take expert decision using this software.

• Consistent Decision Making.
• Flexibility to change input & explore alternative solutions.
• Can handle several problems simultaneously through a multi-access
system.
• Reduce Staff costs.
• It gives the opportunity to capture expertise before it is lost.
• Resolve complex issues.
• Expert advice is available all the time.

The Disadvantages of an Expert System

• Expensive to make.
• Not easy to make.
• Experts not easily available.
• Updating problems.
• Frequent updation not possible.
• Decisions based on available data.
• Hardware dependent. In case of failure…….

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Real-time
Information systems

Financial Reporting System (FRS)

Financial accounting and reporting involves:
• Maintaining accounting records for business transactions.
• Reporting the financial position and the financial performance of an organization.
• Many businesses operate a system of recording their business transactions in
accounting records, called a book-keeping system or ledger accounting system.
• Book-keeping system are also analysed and summarised periodically, typically each
year, and the summarised information is presented in financial statements.
• Financial statements provide information about the financial position and
performance of the entity.
• Financial reporting systems must be reliable, accurate and complete. Access to data
entry should be strictly controlled to authorised personnel only.

Order Processing System

• The order processing system should be capable of recording all orders

accurately and in a timely fashion.
• Airlines and hotels the information needs to be updated immediately.
• Some businesses update at the end of day update.
• The system will typically be linked to the inventory control system so
that the sales person can establish whether the organisation is
capable of fulfilling the order received.

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Inventory System
The objective of the inventory control system is to ensure that the business
maintains an appropriate amount of inventory at all times.
• Accurately report the current inventory level at any time.
• A rule should be associated with each item that will trigger a reorder such as
minimum inventory level
• The age of the inventory can be tracked. How long.
• Highlight shortages.
• Show individual and total cost of items.
• Maintain supplier details
• Delivery dates both inwards and outwards must be maintained.
• The location of the inventory should be recorded.

Personnel System

• Job Analysis
• Job Description:
• Job Specification:
• Recruiting:
• Training:
• Development
• Motivation:
• Coordination:
• Firing:

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What is ERP?
• Enterprise resource planning (ERP) is a platform companies use to
manage and integrate the essential parts of their businesses.
• Many ERP software applications are critical to companies because
they help them implement resource planning by integrating all the
processes needed to run their companies with a single system.
• An ERP software system can also integrate planning, purchasing
inventory, sales, marketing, finance, human resources, and more.
• Combines all software and all databases across departments

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