Is - Lecture 1

Information System

Course ContentsChapter 1 : Introduction to Information SystemChapter 2: Basic components of Information SystemChapter 3: Conceptual & Detailed system designChapter 4: Implementation , Evaluation & Maintenance of IS

Chapter 5: Parts of information systemChapter 6: Management of Information SystemChapter 7: System Design methodologyChapter 8: IS & InternetsCourse Contents contd

ReferencesJ Kanter, Managing with information System, Prentice Hall of India, 1992V Rajaraman, Analysis of Information System, Prentice Hall of India, 1998R.G. Hardick, J.E. Ross & J.R. elaggett, Information System for modern management, PHIDavid Kroenke, Management Information Systems, Mc Graw Hill

Grading Guidelines Theory - Full marks 20Continuous tests - 8 marks,Final assessment 4 marks,Attendance 4 marks, class presentation, assignments 4marks

Todays objectiveTo introduce Information systemBackgroundDefinitionsWhy IS is important to an organization?Components of ISSources of information system & its various types

BackgroundOperational efficiencyComputers replacing manual activitiesSpeed, accuracy, efficiency, capacityInformation a key business assetInformation initially as a by-productThe realization about information potential & the need to manage it for competitive advantageThe Early ISShow computingTime consuming system development & Information managementFailure stories

Chapter 1: Introduction to IS

Introduction to IS contdWhat are these systems?Definition:provides information to people in the organization to the right people, at the right time & at the right placeAn organized combination of interrelated components: computer hardware, communication systems (telecommunications), software, people and dataInformation Technology that interact to support & improve day to day operations in a business as well as to support problem solving & decision making needs of the management & users

Introduction to IS contdAn information system collects, processes, stores, analyzes, and disseminates information for a specific purpose.Information system are the basic heart of most organizations.For e.g. banks & airlines cannot function without Information SystemInformation System accepts input & process data to provide information to decision makers and help them produce their result.

Activities in an Information System

Introduction to IS contdINPUTOUTPUTPROCESS

The Primary Functions of Information Systems

Perform on Information collectionPresentationStorage & RetrievalProcessingDistribution

What make Information Systems Valuable?

Facilitates DataCapturingStorageProcessing TransformationSharing and exchanging

Why IS is important to an organization?Understand the role & relevance of an information system aid decision making.Identifying & evaluating appropriate IS.Managing the process information gathering, processing, storage & retrieval.Managers make decisions using information available to them at a time

Organization require information system forPlanningControllingRecording transactionPerformance measurementDecision makingWhy IS is important to an organization?

Components of ISIS is composed of Hardware, Software, Data, People & ProceduresThese can be better understood with an example a computer operated check out station at a store.

Hardware- Consists of a bar code scannerTouch screen monitorSome kind of a sound outputA receipt printerA money handling device to accept payment & dispense changeA credit card scanner

Components of IS

Software-s/w is what the customer/cashier interacts withTelling the customer what button to pressWhen to scanHow to pay etc.People-Are the customers that use the system &The employees who serve in support roles. Components of IS

Data Includes barcodes that are scanned for prices ,Prices that are associated with each barcode &The amount of money paid.Procedure -Includes built in rules for sales tax orHandling credit card approvalsProcedure also includes manual procedure such as having employees manually check credit card signatures.

Sources of Information systemData: Streams of raw facts representing events about the organization & its business transactions.A critical component of information systemsInformation systems typically, collect, store and process dataBusiness data is collected in a number of different waysPrimarily via the system input devices such as keyboards, a mouse, scanners, etc..Typically stored in the various associated computer system storage devicesA Databases for exampleNo longer data gives a meaningful information e.g. 5002100

Sources of Information system contdInformation: Clusters of facts that are meaningful and useful to human beings in the processes such as making decisions

Information systems transforms data into informationData shown earlier transformedCustomer ID: 5002100Product Code:1001-10Quantity:15Price: 97.99Date:10-8-06 Sources of Information system contd

Information system typesFor most businesses, there are a variety of requirements for information. Senior managers need information to help with their business planning. Middle management need more detailed information to help them monitor and control business activities. Employees with operational roles need information to help them carry out their duties.

As a result, businesses tend to have several "information systems" operating at the same time. This note highlights the main categories of information system and provides some examples to help you distinguish between themInformation system types contd

Information system types contdFour main types of information systems serve different organizational levels: operational-level systems, knowledge-level systems, management-level systems, and strategic-level systems.

Operational-level systems support operational managers bykeeping track of the elementary activities and transactions of the organization, such as sales, receipts, cash deposits, payroll, credit decisions, and the flow of materials in a factory. The principal purpose of systems at this level is to answer routine questions and to track the flow of transactions through the organization.

Information system types contd

Knowledge-level systems support the organization's knowledge and data workers.The purpose of knowledge-level systems is to help the business firm integrate new knowledge into the business and to help the organization control the flow of paperwork.Knowledge-level systems, especially in the form of workstations and office systems, are among the fastest-growing applications in business today.Information system types contd

Management-level systems serve the monitoring, controlling, decision-making, and administrative activities of middle managers.The principal question addressed by such systems is, Are things working well?Management-level systems typically provide periodic reports rather than instant information on operations.

Information system types contd

An example is a relocation control system that reports on the total moving, house-hunting, and home financing costs for employees in all company divisions, noting wherever actual costs exceed budgets.Some management-level systems support non routine decision making (Keen and Morton, 1978).

Information system types contd

They tend to focus on less-structured decisions for which information requirements are not always clear. These systems often answer "what-if" questions: What would be the impact on production schedules if we were to double sales in the month of December? What would happen to our return on investment if a factory schedule were delayed for six months? Information system types contd

Answers to these questions frequently require new data from outside the organization, as well as data from inside that cannot be easily drawn from existing operational-level systems.Strategic-level systems help senior management tackle and address strategic issues and long-term trends, both in the firm and in the external environment. Information system types contd

Their principal concern is matching changes in the external environment with existing organizational capability. What will employment levels be in five years?What are the long-term industry cost trends, and where does our firm fit in? What products should we be making in five years?Information system types contd

Information systems also serve the major business functions, such as sales and marketing, manufacturing, finance, accounting, and human resources. A typical organization has operational-, management-, knowledge-, and strategic-level systems for each functional area.Information system types contd

Figure below shows the specific types of information systems that correspond to each organizational level. The organization hasexecutive support systems (ESS) at the strategic level; management information systems (MIS) and decision-support systems (DSS) at the management level; knowledge work systems (KWS) and office systems at the knowledge level; and transaction processing systems (TPS) at the operational level. Information system types contd

It should be noted that each of the different systems may have components that are used by organizational levels and groups other than their main constituencies. A secretary may find information on an MIS, or a middle manager may need to extract data from a TPS.Information system types contd

1. Transaction processing systems (TPS) are the basic business systems that serve the operational level of the organization. A transaction processing system is a computerized system that performs and records the daily routine transactions necessary to the conduct of the business. Examples are sales order entry, hotel reservation systems, payroll, employee record keeping, and shipping.At the operational level, tasks, resources, and goals are predefined and highly structured. The decision to grant credit to a customer, for instance, is made by a lower-level supervisor according to predefined criteria. All that must be determined is whether the customer meets the criteria.

Information system types contd