Information Systems

• System Concept
• Information Systems
• Information Technology
• Activities of Information Systems
• Resources of Information Systems

3.1. System Concepts
What is a system? A system can be defined as a group of interrelated or interacting elements forming a unified whole.

According to James A O’Brien, “A system is defined as a set of interrelated components, with a clearly defined boundary, working together to achieve a common set of objectives by accepting inputs and producing outputs in an organized transformation process”.

Many examples of systems can be found in the physical and biological sciences, in modern technology, and in human society. Thus, we can talk of the physical system of the sun and its planets, the biological system of the human body, the technological system of an oil refinery, and the socioeconomic system of a business organization.

3.2. Information Systems
“Information System (IS) – A system that creates, processed, stores, and retrieves information”- Gupta

The information system receives the inputs of the data and the instructions, processes the data according to the given instructions, and gives the output of the processed results. Information systems contain information about significant people, places, and things within the organization or in the environment surrounding it.

According to Laudon and Laudon:
“An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization.

“An information system is an organized combination of people, hardware, software, communication networks, and data resources that collects, transforms and disseminates information in an organization.”-James A. O’Brien

When we use the term Information system we will be referring to Computer-based information system-which rely on computer hardware and software technology to process and disseminate information. People have relied on information system to communicate with each other using a variety of physical devices (hardware), information processing instructions (software), communications channels (networks), and stored data (data resources) since the dawn of civilization.

3.3. Information Technology
Information Technology (IT) refers to the resources used by an organization to manage information that needs to carry out its mission.

Information Technologies are tools and techniques that support the design and development of information system. IT consists of:
• Computer hardware
• Software
• Database and
• Telecommunication.

3.4. Differences between Information System and Information Technology
An Information System is a tool that creates, processes, stores, and disseminates information to help managers make decisions.

Information Technologies on the other hand, are technologies that support the design and development of information system.

3.5. Activities of an Information System
Three activities in an information system produce the information organization need for making decisions, controlling operations, analyzing problems, and creating new products and services.

a. Input
b. Processing
c. Output
d. Storage, and
e. Control

a. Input of data resources
Input involves capturing and assembling elements that enter the system to be processed i.e., raw materials. In information systems, input captures or collects raw data from within the organization or from its external environment. Data about business transactions and other events must be captured and prepared for processing by input or data entry activities such as recording and editing. End users typically record data about transactions on some type of physical medium such as a paper form, or enter it directly into a computer system. Once entered, data may be transferred magnetic disk or tape, until needed for processing.

For example, data about sales transactions may be recorded on source documents such as paper order forms. (A source document is the original formal record of a transaction.) Alternatively, salespersons might capture sales data using computer keyboards or optical scanning devices, they are visually prompted to enter data correctly by video displays. (O’Brien-New_33)

b. Processing of data into information
Processing involves transformation processes that convert input into output i.e., manufacturing process. Processing converts this raw input into a more meaningful form. Data is typically manipulated by such activities as calculating, comparing, sorting, classifying, and summarizing. These processing activities organize, analyze, and manipulate data, thus converting it into information for end users. The quality of any data stored in an information system must also be maintained by a continual process of correcting and updating activities.

For example, Data received about a purchase can be (1) added to a running total of sales results, (2) compared to a standard to determine eligibility for a sales discount, (3) sorted in numerical order based on product identification numbers, (4) classified into product categories (such as food and nonfood items), (5) summarized to provide a sales manager with information about various items, (6) used to update sales records. (O’Brien-New_33)

c. Output of information products
Output involves transferring elements that have been produced by a transformation process to their ultimate destination i.e. finished goods. In information systems output transfers the processed information to the people or activities where it will be used. Information in various forms is transmitted to end-users and made available to them in the output activity. The goal of information system is the production of appropriate information products for end users. Common information products are video displays, paper documents, and audio response that provide us with messages, forms, reports, listings, graphics, displays, and so on.

d. Storage of data resources
Storage is a basic system component of information systems. Storage is the information system activity in which data are retained in an organized manner for later use. For example, just as written text material is organized into work, sentences, paragraphs, and documents, stored data are commonly organized into a variety of data elements and databases. This facilitates their later use in processing or retrieval as output when needed by users of a system. (O’Brien-New_34)

e. Control of system performance
An information system activity is the control of system performance. An information system should produce feedback about its input, processing, output, and storage activities. (O’Brien-New_34)This feedback must be monitored and evaluate to determine if the system is meeting established performance standards. Then appropriate system activities must be adjusted so that proper information product is produced for end users. These activities are known as control. (O’Brien-34)

For example, a manager may discover that subtotals of sales amount in a sales report do not add up to total sales. This might mean that data entry or processing procedures need to be corrected. Then changes would have to be made to ensure that all sales transactions would be properly captured and processed by a sales information system. (O’Brien-New_34)

Information System Activities
• Input. Optical scanning of bar-coded tags on merchandise.
• Processing. Calculating employee pay, taxes, and other payroll deductions.
• Output. Producing reports and displays about sales performance.
• Storage. Maintaining records on customers, employees, and products.
• Control. Generating audible signals to indicate proper entry of sales data.

Figure 3.1: Business examples of the basic activities of information systems

3.6. Information System Resources (Revised O’Brien-New_31-33)
Information system consists of five major resources:
a. People
b. Hardware
c. Software
d. Data, and
e. Networks
You should be able to recognize these five components at work in any type of information system you encounter in the real world. Figure outlines several examples of typical information system resources and products.

a. People Resources
People are the essential ingredient for the successful operation of all information systems. People are required for the operation of all information system. These people resource include end users and IS Specialists.

• End users (also called users or clients) are people who use an information system or the information it produces. They can be accountants, salespersons, engineers, clerks, customers, or managers. Most of us are information system end users.

• IS Specialists are people who develop and operate information system. They include system analysts, programmers, computer operators, and other managerial, technical, and clerical IS personnel. System analysts design information system based on the information requirements of end users; programmers prepare computer program based on the specification of system analysts; and computer operators operate computer system.
b. Hardware Resources
Hardware resources include all physical devices and materials used in information processing. Specifically, it includes not only machines, such as computers and calculators, but also all data media, that is, all tangible objects on which data is recorded from sheets of paper to magnetic disks. Examples of hardware in computer-based information system are:
• Computer System, which consist of central processing units (CPUs) and a variety of interconnected peripheral devices. Examples are laptop, desktop microcomputer system, and large mainframe computer system.
• Computer Peripherals, which are devices such as a keyboard or electronic mouse for input of data and commands, a video screen or printer for output of information, and magnetic or optical disks for storage of data resources.

c. Software Resources
The concept of software resources includes all sets of information processing instructions. This generic concept of software includes not only the sets of operating instructions called program, which direct and control computer hardware, but also the sets of information processing instructions needed by people, called procedures. The following are examples of software resources:
• System Software, such as an operating system programs which controls and supports the operations of a computer system. Microsoft Windows and Unix are but two examples of popular computer operating systems.
• Application Software, which consists of, programs that direct processing for a particular use of computers by end users. Examples are a sales analysis program, a payroll program, and a word processing program.
• Procedures, which are operating instructions for the people who, will use an information system. Examples are instructions for filling out a paper form or using a software package.

d. Data Resources
Data is more than the raw material of information system. The concept of data resources has been broadened by managers and information system professionals. They realize that data constitute valuable organizational resources. Data can take many forms, including:
• Alphanumeric Data composed of numbers and alphabetical and other characters that describe business transactions and other events and entities.
• Text Data, consisting of sentences and paragraphs used in written communication.
• Image data, such as graphic shapes and figures.
• Audio Data, the human voice and other sounds, are also important forms of data.

e. Network Resources
Telecommunications technologies and networks like the Internet, intranets, and extranets are essential to the successful electronic business and commerce operations of all types of organizations and their computer-based information systems. Telecommunications networks consist of computers, communications processors, and other devices interconnected by communications media and controlled by communications software. The concept of network resources emphasizes that communications technologies and networks are a fundamental resource component of all information systems. Network resources include:
• Communications media: Examples include twisted-pair wire, coaxial and fiber-optic cables, and microwave, cellular, and satellite wireless technologies.
• Network infrastructure: The generic category emphasizes that many hardware, software, and data technologies are needed to support the operation and use of a communications network. Examples include communications processors such as, modems and internetwork processors, and communications control software such as network operating systems and Internet browser package.

Information Systems Resources and Products
People Resources
• Specialists-systems analysts, software developers, system operators.
• End Users-anyone else who uses information systems.
Hardware Resources
• Machines- computers, video monitors, magnetic disk drivers, printers, optical scanners.
• Media-floppy disks, magnetic tape, optical disks, plastic cards, paper forms.
Software Resources
• Programs-operating system programs, spreadsheet programs, word processing programs, payroll programs.
• Procedures-data entry procedures, error correction procedures, paycheck distribution procedures.
Data Resources
• Product descriptions, customer records, employee files, inventory database.
Network Resources
• Communications media, communications processors, network access and control software.

Figure 3.2: Examples of information system resources and products.

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