Module 1 Introduction to

information system
Information Systems
⚫ Why Do People Need Information?

◦ Individuals - Entertainment and enlightenment

◦ Businesses - Decision making, problem solving and control

•
Data, Information,
and Systems
⚫ Data vs. Information

◦ Data
● A “given,” or fact; a number, a statement, or a picture
● Represents something in the real world
● The raw materials in the production of information

◦ Information
● Data that have meaning within a context
● Data in relationships
● Data after manipulation
Data, Information,
and Systems
⚫ Data Manipulation

◦ Example: customer survey

● Reading through data collected from a customer survey with questions in
various categories would be time-consuming and not very helpful.
● When manipulated, the surveys may provide useful information.
Data, Information,
and Systems
⚫ Generating Information
◦ Computer-based ISs take data as raw material,
process it, and produce information as output.

Figure 1.1 Input-process-output

Data, Information,
and Systems
⚫ Information in Context

Figure 1.2 Characteristics of useful information

 Information Systems in the Enterprise

Types of Information Systems

ESS

MIS &
DSS

KWS

TPS

Figure 2-1
 Managers

● Senior managers- People occupying the topmost hierarchy in an organization who are
responsible for making long –range decisions.

● Middle managers – people in the middle of the organizational hierarchy who are
responsible for carrying out the plans and goals of senior management.

● Operational managers- people who monitor day to day activities of the

organization.
 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

• Executive Support Systems (ESS)

• Decision Support Systems (DSS)
• Management Information Systems (MIS)
• Knowledge Work Systems (KWS)
• Office Systems
• Transaction Processing Systems (TPS)
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Figure 2-2
 Operational-level Systems

● Support operational managers by keeping track of the elementary activities and

transactions of the organization.

● The principle purpose of systems at this level is to answer routine questions and
track the flow of transactions through the organization.

● Covers things such as sales, receipts, cash deposits, payroll, credit decisions,
flow of materials.
 MAJOR TYPES OF SYSTEMS IN
ORGANIZATIONS

Transaction Processing Systems (TPS):

• Basic business systems that serve the operational level

• A computerized system that performs and records the daily
routine transactions necessary to the conduct of the business
• Example : sales and inventory processing and accounting
systems
 Transaction Processing Systems (TPS):

● A TPS collects and stores information about

transactions, and controls some aspects of
transactions.
● A transaction is an event of interest to the organisation.
e.g. a sale at a store.
● It is a basic business system. serves the most
elementary day-to-day activities of an organisation;
● supports the operational level of the business;
● supplies data for higher-level management decisions.
● is often critical to survival of the organization.
● mostly for predefined, structured tasks
MAJOR TYPES OF SYSTEMS IN
ORGANIZATIONS
Types of TPS Systems

Figure 2-4
Office Automation Systems (OAS)
● Transformation of traditional manual office methods and paper communications
media

● They collect, process and transmit data and information in form of electronic
office communications.
 Office Automation Systems…
● OAS -collection of communication technology, computers,
persons to perform official tasks.
● Executes office transactions, supports official activities at
every organizational level. These activities can be divided into
clerical and managerial activities.
● Clerical activities -preparing written communication,
typesetting, printing, mailing, scheduling meetings, calendar
keeping.etc.
● Under managerial activities -conferencing, creating reports,
messages, and controlling performance of organization.
● Many applications like word processing, electronic filing and
e-mail are integrated in office automation system.
 Knowledge-level Systems

● Support knowledge and data workers in an organisation.

● The purpose of these systems is to help the organisation discover, organise and
integrate new and existing knowledge into the business.

● These systems, specially in the form of collaboration tools, workstations, and

office systems, are the fastest growing applications in business today.
 Knowledge Work Systems (KWS):

● KWS are used by technical staff.

● KWS use modelling functions to convert design specifications into graphical

designs.
 MAJOR TYPES OF SYSTEMS IN
ORGANIZATIONS

Knowledge Work Systems (KWS):

-Information system that aids knowledge workers in the creation and integration of
new knowledge in the organization
Knowledge level

● Inputs: Design specifications

● Processing: Modeling

● Outputs: Designs, graphics

● Users: Technical staff and professionals

Example: Engineering work station
 Role of Knowledge Workers

● Keep organization up-to- date in knowledge

-technology
-science
-thoughts
-the arts
● Internal consultants in their areas

● Change agents

○ Evaluating
○ Initiating
○ Promoting change
 Management Information
System (MIS)
● Information systems at the management level of an organization that serves the
function of planning, controlling and decision making by providing routine
summary reports.

● Structured and semi-structured decisions

● Report control oriented

● Past and present data

● Internal orientation

● Lengthy design process

 Management Information System
(MIS):

Management level
● Inputs: High volume data
● Processing: Simple models
● Outputs: Summary reports
● Users: Middle managers
Management Information System
(MIS)

Figure 2-5
 Decision Support System(DSS)

● A decision support system (DSS) is a computer-based information system that

supports business or organizational decision-making activities.

● DSSs serve the management, operations, and planning levels of an organization

and help to make decisions, which may be rapidly changing and not easily
specified in advance.
 Decision Support System(DSS)…

● A DSS is a coherent system of computer based technology used by managers

as an aid to their decision making in semi-structured tasks.

● DSS use sophisticated analysis and data modelling tools to solve

semi-structured problems
 Decision Support System (DSS)…
provide interactive and ad hoc support for
-

decision making processes of managers

and other business professionals
Management level
● Inputs: Low volume data
● Processing: Interactive
● Outputs: Decision analysis
● Users: Professionals, staff

Example: Contract cost analysis, product

pricing, profitability forecasting
 Tools used in a DSS

● What-If analysis tools (found in most spreadsheets) What-if analysis allows

users of a system to quickly calculate and display the results of many
combinations of input values in a model.
 Executive support system (ESS)

● Top level management

● Designed to the individual

● Ties CEO to all levels

● Very expensive to keep up

● Extensive support staff

 Executive support system (ESS)
● It provides executives information in a readily
accessible, interactive format.
● An EIS/ESS usually allows summary over the entire
organisation and also allows drilling down to specific
levels of detail.
● Used by top level (strategic) management. They are
designed to the individual.
● They let the CEO of an organisation tie in to all levels
of the organisation. They are very expensive to run
and require extensive staff support to operate.
 General Properties of an EIS

● Used for strategic business planning

● Relatively long time-frame considered

● Unstructured and open-ended (many variables can be considered)

● For accurate results EIS require information from inside and outside the business

● Graphically oriented to provide readily understandable views of complex data

● Tailored to suit an executive’s decision making style

● provides rapid access to current information and filters and tracks critical data

● Its major activity is information scanning and evaluation, it deals mainly with the
intelligence phase of decision-making.
 Benefits of executive information systems

● Improved financial and operational control

● Enhances business problem solving

● Helps in the identification of new opportunities Increases

● IT awareness among senior management.

 8/e

Executive Support System (ESS):

● Inputs: Aggregate data

● Processing: Interactive
● Outputs: Projections
● Users: Senior managers

Example: 5-year operating plan

INTERRELATIONSHIPS AMONG SYSTEMS

Figure 2-9
 Business Processes and Information
Systems

Business processes

● Manner in which work is organized, coordinated,

and focused to produce a valuable product or service

● Concrete work flows of material, information, and

knowledge—sets of activities
 Business Processes and Information
Systems
● Unique ways to coordinate work,

information, and knowledge

● Ways in which management chooses

to coordinate work
 Business Processes and Information
Systems
Information systems help organizations

● Achieve great efficiencies by automating parts of processes

● Rethink and streamline processes

 Examples of Business Processes

● Manufacturing and production: Assembling product, checking quality,

producing bills of materials

● Sales and marketing: Identifying customers, creating customer awareness,

selling
 Examples of Business Processes…

● Finance and accounting: Paying creditors, creating financial statements,

managing cash accounts

● Human Resources: Hiring employees, evaluating performance, enrolling

employees in benefits plans
Expanding Role of Information system in Business
Organisation

● Enterprise Resouce planning and Business Intelligence

● Electronic business and end-user support
● Decision support
● Management Reporting
● Data Processing
Impact of Information system on organisations

● Better Flow of information

● Improves transaction Processing
● Support decision making
● Supports work group and team activity
● Improves quality of goods and services
● Provide executive support
● Provides effective data management
● Improves competitiveness
Impact of Information system on society

Positive Impact

● Effective communication system

● Availability of information
● Improving globalization and reducing cultural gap
● Getting better services
● Getting range of online services

Negative Impact

● Availability of too much information

● Increasing fraud
● Lack of job security
● Security threat
Role of information system in forming organisational
strategy and bringing competitive advantage

● Engaging customers and suppliers

● Building switching cost
● Rasing barriers to entry
● Utilize investment in information system technology