INTRODUCTION TO SYSTEMS AND INFORMATION SYSTEMS IN ORGANIZATIONS

INTRODUCTION TO SYSTEMS AND INFORMATION SYSTEMS IN

ORGANIZATIONS

Lecture 4

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Definition- A System is:- A purposeful collection of

interrelated components that work together to achieve some objective.

A group of procedures, processes, methods, routines or techniques or components united by some form of regulated interaction to form an organized whole.

A set of items, equipment, processes and/or people working jointly with an aim of achieving a common goal(s).

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Examples of systemsEducation system, Economic system,

Political system, Transport system, Business system, Heating system, Security system, Lighting system, Water system, Waste system, Drainage system, Accounting system, Information system, all programs are systems, Library information system, even human beings are systems.

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N/B:A system is established to achieve

some specific objective(s) i.e. the system does some useful job/task and should be active and efficient in its operations e.g. banking system

All systems have a boundary within which they operate. Outside this boundary is the environment, from which (raw facts) inputs are communicated from and to which results or outputs (end/finished products) are communicated to.

Systems are made up of sub systems. The subsystems continually interact with each other.

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COMPONENTS OF AN OPEN SYSTEMInput The component that receives the raw facts

from the environment and introduce them into the system ready to be processed.

The raw facts e.g. data to be processed into information must first be collected and communicated from the external environment into the system (EDP) by the input function.

In an Electronic Data Processing system data is collected and communicated from the external environment and introduced into the system for processing into information. The input function in an EDP system involves data collection, data capture and data entry.

The nature of input is influenced by the nature of the system.

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ProcessThe component of an open system

which manipulates and transforms the raw facts (inputs) into finished/end products or end results/outputs.

In an EDP system input raw data is manipulated into information using the stored set of instructions. The process may be manual, mechanical or electrical (automatic) to derive information/end products.

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OutputInvolves communication of the end

products or outputs/results to the external environment to the recipient/end users for consumption or to another data processing (information) system.

In an EDP system information is produced in form of business report documents e.g. statements, invoices, result slips, transcripts, bills (water, electricity) e.t.c.

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StorageThe component which stores inputs

awaiting processing, intermediate results (semi processed input) and finished products awaiting delivery to the consumers in the environment. In an EDP system the storage media would be like tapes, compact disks, flash disks, cassette tapes etc which are used to store master files, transaction files, sort files etc.

The nature of storage is determined by the nature of the system and the nature of what is to be stored.

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Control This component includes the feedback

concept that furnishes descriptive information on the input, storage and output functions or components of the system.

Negative feedback, is when non standard or sub standard output is achieved, is meant to regulate the system. Positive feedback encourages further output the way they are.

The control system is usually stored within the system as programs, to relate and tie together all the system components, if the system is computer based.

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Importance of systems study

It provides a theoretical framework which allows performance of a system to be monitored.

It stresses that all sub systems must work in harmony in order to achieve the overall goals of a system.

It recognizes the fact that conflicts can arise in any system leading to sub-optimization thus making the system not to achieve its goals.

Cont’edIt allows an individual to recognize

that he is a sub system within a big system.

The design of sub system must support the goals of the entire/total system.

Classification of systemsSystems can be classified

according to their openness or closeness.

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Open system Is a system which communicates

(interacts) with its environment. E.g. Business System, Economic System, Information System, Transport System, Social systems etc. Open systems can get disorganized i.e. when the system can not reorganize itself according to its internal subsystem forces, the system therefore should be regulated. The process whereby the system is regulated is known as negative feedback.

Organisations as open systems attempt to monitor and anticipate environmental disturbances. Some disturbances are so great or unexpected that they threaten the existence of the organisation. All business organizations are open systems, for them to exist they must have the capability to adapt in the face of changing markets conditions; globalization, liberalisation, competition, technology, the law, conflict, etc.

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Characteristics of an open system It must be designed to achieve a predetermined objective.

A system contains a set of interacting elements or components.

An open system comprises of input, output, storage and processing as major elements.

A system operates within specified boundaries and interacts with other systems.

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Cont’edA system has some controls and these

controls help it not to operate beyond its boundaries.

A system must give priority to the objectives of the whole system as compared to the objectives of a subsystem.

Successful functioning of each system component depends on the functioning of some other components.

Systems are hierarchical in that, they include other systems i.e. subsystems.

Note: Sub-systems can operate as independent systems in their own right.

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Closed systemThis is a system that doesn’t interact

with the environment at all, which means the system doesn’t communicate from (no inputs) or to (no outputs) its environment. Whatever happens in the system doesn’t affect the environment and vice versa. It corrects and controls itself. Is isolated from its environment. Are self-contained, environmental factors does not influence their behaviour.

They are more relevant to scientific, mechanical and physical systems else all social and economic systems have some interaction with their environment.

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Open systemIs a system which communicates

(interacts) with its environment. E.g. Business System, Economic System, Information System, Transport System, Social systems etc.

Open systems can get disorganized i.e. when the system can not reorganize itself according to its internal subsystem forces, the system therefore should be regulated. The process whereby the system is regulated is known as negative feedback.

All business organizations are open systems, for them to exist they must have the capability to adapt in the face of changing markets conditions; globalization,competition, technology, the law, conflict, etc.

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Characteristics of an open system It must be designed to achieve a predetermined

objective. A system contains a set of interacting elements

or components. An open system comprises of input, output,

storage and processing as major elements. A system operates within specified boundaries

and interacts with other systems. A system has some controls and these controls

help it not to operate beyond its boundaries. Successful functioning of each system

component depends on the functioning of some other components.

Systems are hierarchical in that, they include other systems i.e. subsystems.

Note: Sub-systems can operate as independent systems in their own right.

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Closed system• This is a system that doesn’t interact

with the environment at all, which means the system doesn’t communicate from (no inputs) or to (no outputs) its environment. Whatever happens in the system doesn’t affect the environment and vice versa. Example system in manufacturing, chemical reaction in a sealed, insulated container.

It corrects and controls itself. Is isolated from its environment. Are self-contained, environmental factors does not influence their behaviour.

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Differences between Open and Closed system

OPEN SYSTEM CLOSED SYSTEM1. Interacts with environment

constantly

1. Doesn’t interact or react

with the environment at

all.

2. Has an infinite scope 2. Has limited scope

3. Relevant variable keep on

interacting

3. The variables are self

contained

4. Generally flexible and

abstract.

4. Rigid

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Types of SystemsSystem can also be classified as: Deterministic (Mechanistic)

SystemProbabilistic SystemCybernetics/stochastic System

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Deterministic (Mechanistic) SystemIs a system that functions according to

some predefined/predetermined procedures and hence their future behaviour can be predicted accurately or with 100% certainty depending on the situation events.

Is a system where you can foretell their output by their input.

All computer base information systems (CBIS) like financial accounting system, inventory control system, payroll system etc. may be described as deterministic, and they are consequently much easier to control than systems involving people, whose behavior may be unpredictable. 21

   Probabilistic or stochastic systemsSystem which depend on probability. You can’t foretell their future behaviour with 100% accuracy/certainty.

Expected output from its input can’t be predicted definitely because they have a variety of uncertainties, therefore a lot of control effort need to be directed to these systems. E.g. Business systems, Economic systems, Political systems, Industrial systems etc.

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Cybernetic systemsAlso described as adaptive, self-

regulating or self-organizing systems.

Are systems that have to adapt to the environment for their survival. They adapt and react to inputs or stimuli. The method of adaptation is uncertain and the same inputs do not always produce the same responses. E.g. Social groups like human beings, plants and organisations which have to react to their environment.

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NATURE OF INFORMATION SYSTEMS

Data -are the facts, events, transactions and figures which have been recorded. Data represent unstructured facts about events, objects, or people.

Information-Data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or prospective decisions. Information refers to data which is organized and meaningful to the person who receives it.

Information System Is a set of persons, procedures, technological and other resources that collects, transforms and disseminates information in an organization. Computer Based Information System/EDP uses hardware, software and live ware to provide information. 24

ManagementIs a process, in the sense of a sequence

of operations or functions necessary to achieve certain end results.

Functions of managementPlanning – management’s

responsibility that requires the manager to formulate goals and objectives, and develop short-term and long-term plans to achieve these goals. Planning is the managerial process of deciding in advance what is to be done, how it is to be done, when to do it and by who(m) to do it. It is done on both a formal and informal basis and the planning process uses information from internal and external sources.

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Functions of ManagementOrganizing and Coordinating – involves the development of an organizational structure and a framework of standards, procedures and policies designed to carry out ongoing business activities to achieve the required objectives.

Controlling – refers to managements’ responsibility to monitor and evaluate organisational performance and the business environment so that steps can be taken to improve performance and modify, as necessary in response to the marketplace. This includes keeping alert to new opportunities in the marketplace and recognizing new business opportunities.

Staffing – refers to management’s responsibility for identifying the personnel needs of the organisation and selecting the personnel as well as training staff. Many organizations have personnel (Human Resource) managers to take charge of these activities.

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Functions of ManagementSupervising – refers to management’s

responsibility to provide employees with the supervision, guidance and counselling necessary to keep them motivated and working productively toward the achievement of the organisation’s objectives. This involves recognition of good work, e.g. through trips, certificates, bonuses, cash awards or other awards and suggestions on how to improve performance. Educational seminars. Workshops may also be held to upgrade employee knowledge of the company.

Motivating – Meeting the social and psychological needs of employees in the fulfilment of organisational goals.

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Levels of Information Systems

28Figure 2-1

Levels of Information Systems1. Operational-level systems: support operational managers, keeping track of the elementary activities and transactions. e.g. foremen, supervisor, chief clerk, data entry clerk, data preparation clerk, computer operator, media librarian,

2. Management-level systems: serve the monitoring, controlling, decision-making, and administrative activities. e.g. all types of middle management, departmental managers, like human resource manager, sales manager, accountant

3. Strategic-level systems: help senior management tackle and address strategic issues. e.g. CEO, board of directors, board of trustee, board of governors

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Types of Information systemInformation System includes;Decision Support System (DSS)Executive Support System ( ESS)Management Information Systems

(MIS)Expert Systems (ES)Office Automation Systems (OAS)Transaction Processing System

(TPS)

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Transaction Processing System (TPS)/Operations Information System (OIS)TPS represents the lowest level in an organisation’s use of information systems. They provide management with basic raw materials used for DSS to produce management reports such as sales analysis figures etc. They mainly keep track of elementary and routine activities and transactions of the organisation, such as sales receipts, cash deposit, payroll, credit decisions. Support of day-to-day business operating activities or transactions is the first and most important objective of an information system.

A computer-based TPS/Operations Information System or EDP system is focused at the operational level of the business.

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Decision Support Systems ( DSS)Is a type of IS that is more user friendly, It’s a set of programs and hardware that allows managers to interact with it to help make decisions.

Its intended to help high level managers in their decision making. Its used in planning, modelling, analyzing alternatives and decision making. It’s designed to improve the analytical capability of the decision maker.

This system helps to solve semi-structured problems. A semi-structured problem is one in which only parts of the problem have a clear-cut answer produced by a well accepted methodology.

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Executive Support Systems (E.S.S)Is a special easy-to-use IS designed for

top management people who are not familiar with computer systems.

They use graphics and touch screens to aid senior executives in collecting and obtaining the information they want.

ESS provides managers with a flexible means of accessing information of tactical and strategic levels. ESS helps the managers to drill into the data, present the information in appropriate formats and find the information they need whenever they need it.

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Provides middle management with reports that summarize and categorise information derived from all the organizations’ databases.

The purpose of the report is to allow management to spot trends and to get an overview of current activities, as well as to monitor and control operational-level activities.

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Management Information Systems (MIS)

Expert Systems (ESsAre currently the most commercially

successful products of AI research. Have emerged from the field of AI, which is the branch of computer science that is attempting to create computer systems that simulate human reasoning and sensation.

Are computer programs that copy the knowledge of human expertise in a particular field. Acts as a consultant or expert to the user.

An ESs is a knowledge intensive program that solves a problem involving human expertise. It can assist in decision making activities by asking relevant questions and explaining the reasons for adopting certain actions.

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Office Automation Systems (OAS)This describes the phenomenon of merging computing and telecommunication technologies to produce the electronic office.

OAS involves intensive and extensive application (use) of ICT in modern offices. ICT/OAS is the acquisition, processing, storage, and dissemination of vocal, pictorial, textual and numeric information by a micro-electronic based combination of computing and telecommunication systems.

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