Information systems

Introduction to Information
systems
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 System

▰ A system is a collection of components that work

together towards a common goal.
▰ The objective of a system is to receive inputs and
transform these into outputs.
▰ The important things in systems include the following:
▻ Personnel
▻ Procedures
▻ Rules Governing Workers
▻ Resources in Carrying out activities 2
Information System

▰ Is a set/collection of people, data, procedures,

hardware and software that works together to
achieve the common goal of information
management.
▰ Set of interrelated components that collect (or
retrieve), process, store, and distribute information
to support decision making and control in an
organization.

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 Information System

▰ In addition to supporting decision making, coordination,

and control, information systems may also:
▻ Help managers and workers analyze problems,
▻ Visualize complex subjects, and
▻ Create new products.
▰ Information systems contain information about
significant people, places, and things within the
organization or in the environment surrounding it.
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Components of an Information system

▰ Made of five main components. Namely:

Hardware technology
Software
Data
People
procedures

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Components of an information system

▰ People
▻ Users of an information system.
▻ The main players in the information
system.

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Components of an information system

▰ Procedures
The rules or guidelines that users follow to
accomplish an activity.
▰ Software
▻ a series of instructions that tells a computer
what tasks to perform and how to perform
them.
▻ the purpose of software is to convert data into
information. 7
Components of an information system

▰ Hardware
▻ consists of the electric, electronic and
mechanical components of a computer
▻ The equipment that processes data to
create information.
▰ Data
▻ The raw unprocessed facts

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The role of information systems in an organization
or business

▰ Transformation of the business enterprise

▻ the internet and other related technology
has made it possible to conduct business
across firm boundaries almost as
efficient and effective as it is to conduct
business within the firm.
▰

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The role of information systems in an organization
or business

▰ Globalization
▻ Many businesses have begun to
participate in the global market.
▻ Information systems provide the
communication and analytic power that
firms need to conduct trade and manage
businesses on a global scale.

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The role of information systems in an organization
or business

▰ Rise of the information economy

The market value of many firms is based
largely on intangible assets such as
proprietary knowledge, information and
other intellectual capital other than physical
assets.

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The role of information systems in an organization
or business

▰ Information Storage and Analysis

Many companies no longer manage their data
and information manually with registers and
hard-copy formats. Through the adoption of
information systems, companies can make use
of sophisticated and comprehensive databases
that can contain all imaginable pieces of data
about the company.
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The role of information systems in an organization
or business
▰ Assist With Making Decisions
The business uses information systems to
evaluate information from all sources,
including information from external
references, which provide information on
the general economy. This analysis of and
comparison to market trends helps
organizations analyze the adequacy and
quality of their strategic decisions.
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The role of information systems in an organization
or business

▰ Assist With Business Processes

▻ Information systems aid businesses in developing a
larger number of value added-systems in the
company.
▻ Adoption of information systems simplifies
business processes and removes unnecessary
activities.
▻ Further, information systems eliminate repetitive
tasks and increase accuracy, allowing employees to
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concentrate on more high-level functions.
Anthony’s Pyramid: A classification of Business
Activities

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Types of information systems

▰ The types of information that users require often depend

on their employee level in the company.

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Transaction Processing Systems
▻ Every firm needs to process transactions in order to
perform their daily business operations.
▻ A transaction refers to any event or activity that
affects the organization.
▻ Depending on the organization’s business,
transactions may differ from one organization to
another.
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▻ In a manufacturing unit, for example, transactions
include order entry, receipt of goods, shipping, etc.,
while in a bank, transactions include deposits and
withdrawals, cashing of cheques etc.
▻ The transaction processing systems (TPS) used to
support the processing of business transactions in
the organizations.

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Office Automation Systems
▻ An office automation system (OAS) is a collection
of communication technology, computers and
persons to perform official tasks.
▻ It executes office transactions and supports official
activities at every organizational level.
▻ These activities can be divided into clerical and
managerial activities.
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▻ Clerical activities performed with the help
of office automation system include
▻ preparing written communication,
▻ typesetting,
▻ printing,
▻ mailing,
▻ scheduling meetings,

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▻ Under managerial activities, office
automation system helps in
▻ conferencing,
▻ creating reports and messages,
▻ controlling performance of organization.

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Management Information Systems
▰ Management information systems are especially
developed to support planning, controlling, and
decision-making functions of middle managers.
▰ A management information system (MIS) extracts
transaction data from underlying TPSs, compiles them,
and produces information products in the form of
reports, displays or responses.
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Decision Support Systems
▰ A decision support system (DSS) is an interactive
computer-based information system that, like MIS, also
serves at the management level of an organization.
▰ However, in contrast to MIS, it processes information to
support the decision making process of managers. It
provides middle managers with the information that
enables them to make intelligent decisions.
▰ A decision support system in a bank, for example, enable a
manager to analyse the changing trends in deposits and 23
loans in order to ascertain the yearly targets.
Executive Support Systems
▰ An executive support system (ESS) – an extension of
MIS – is a computer based information system that
helps in decision making at the top-level of an
organization.
▰ The decisions taken with the help of executive support
system are non-routine decisions that effect the entire
organization and, thus, require judgement and sight.
▰ As compared to DSSs, ESSs offer more general
computing capabilities, better telecommunications and 24
efficient display options
▰ Executive support systems help to monitor performance,
track activities of competitors, identify opportunities,
and forecast trends. They also assist senior managers in
answering the following question:
▻ What business should we do?
▻ How are our competitors doing the business?
▻ Which units can be sold and which new units are to
be bought?
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Expert Systems
 This IS captures and stores the knowledge of human
experts and then imitates human reasoning and decision-
making process for those who have less expertise.
 It has two main components:
i. Knowledge base:-this is combined subject
knowledge and experiences of the human experts.
ii. Inference rules:-these are set of logical judgments
applied to the knowledge base each time a user
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describes a situation to the expert system.