INTRODUCTION TO INFORMATION SYSTEM

•Introduction:
•Vital component of successful businesses
•Helps businesses expand and compete
Chapter 1 - Foundations of •Improves efficiency and effectiveness of business processes
•Facilitates managerial decision making and workgroup
Information Systems in Business collaboration

Chapter 1 Foundations of Information Systems in Business 2

INTRODUCTION TO INFORMATION SYSTEM INTRODUCTION TO INFORMATION SYSTEM

•Information Systems:
•Information System: •All the components and resources necessary to deliver
•An organized combination of… information and functions to the organization
•People •Could be paper based
•Hardware and software •Information Technologies:
•Communication networks •Hardware, software, networking, data management
•Data resources
•Focus will be on Computer-Based Information Systems
•Policies and procedures
(CBIS)
•This system…
•Stores, retrieves, transforms, and disseminates
information in an organization

Chapter 1 Foundations of Information Systems in Business 3 Chapter 1 Foundations of Information Systems in Business 4
 INTRODUCTION TO INFORMATION SYSTEM INTRODUCTION TO INFORMATION SYSTEM
•Examples of Information Systems are: •Examples of Information Systems are:
•Smoke signals for communication were used as early as •The cash register at your favourite fast-food restaurant is part
recorded history and can account for the human discovery of of a large information system that tracks the products sold, the
fire. time of a sale, inventory levels, and the amount of money in
•Card catalogues in a library are designed to store data about the cash drawer
the books. •A paper-based accounting ledger as used before the advent of
•The book bag, day planner, notebooks, and file folders are all computer-based accounting systems is an iconic example of an
part of an information system designed to help to organize the information system.
inputs provided via hand-outs, lectures, presentations, and
discussions.

Chapter 1 Foundations of Information Systems in Business 5 Chapter 1 Foundations of Information Systems in Business 6

INTRODUCTION TO INFORMATION SYSTEM

INTRODUCTION TO INFORMATION SYSTEM
•The conceptual framework emphasizes to concentrate efforts
in the following five areas of IS knowledge:
•Foundation Concepts: Fundamental behavioural, technical,
business, and managerial concepts about the components and
roles of information systems.
•Information Technologies: Major concepts, developments, and
management issues in information technology—that is,
hardware, software, networks, data management, and many
Internet-based technologies.

Chapter 1 Foundations of Information Systems in Business 7 Chapter 1 Foundations of Information Systems in Business 8
 INTRODUCTION TO INFORMATION SYSTEM
INTRODUCTION TO INFORMATION SYSTEM Fundamental Roles of IS in Business: The three fundamental reasons for all
business applications of information technology are:
•Business Applications: The major uses of information systems • Support of business processes and operations.
for the operations, management, and competitive advantage of • Support of decision making by employees and managers.
• Support of strategies for competitive advantage.
a business.
•Development Processes: Business professionals and
information specialists plan, develop, and implement
information systems to meet business opportunities.
•Management Challenges: The challenges of effectively and
ethically managing information technology at the end-user,
enterprise, and global levels of a business.

Chapter 1 Foundations of Information Systems in Business 9 Chapter 1 Foundations of Information Systems in Business 10

E-Business
Trends in Information
Systems : •The Role of E-Business in Business: Using Internet and
INTRODUCTION TO INFORMATION SYSTEM
• Electronic Data Processing related technologies and applications have changed the
(EDP) Applications.
• Management Information •Business processes
Systems (MIS) •Electronic commerce
• Decision Support Systems
(DSS)
•Collaboration within a company
• End-User Computing •Collaboration with customers, suppliers, and other
• Executive Information business stakeholders
Systems (EIS)
• Expert Systems (ES) and •E-business as the use of Internet technologies to work
other Knowledge-based
Systems
and empower business processes, e-commerce, and
• Strategic Information enterprise collaboration within a company and with
Systems (SIS). its customers, suppliers, and other business
• Enterprise Resource
Planning (ERP) Systems.
stakeholders.
• Business Intelligence
(Bi)
•Any online exchange of information, money,
resources, services, or any combination thereof falls
under the e-business umbrella.
Chapter 1 Foundations of Information Systems in Business 11 Chapter 1 Foundations of Information Systems in Business 12
 E-Business E-Business
•The Internet and Internet-like networks—those inside the
enterprise (intranet) and between an enterprise and its trading
partners (extranet) — have become the primary information
technology infrastructure that supports the e-business
applications of many companies.
•These companies rely on e-business applications to
(1) reengineer internal business processes,
(2) implement e-commerce systems with their customers and
suppliers, and
(3) promote enterprise collaboration among business teams
and workgroups.

Chapter 1 Foundations of Information Systems in Business 13 Chapter 1 Foundations of Information Systems in Business 14

Information Systems
E-Business
•Types of Information Systems: Several types of
•Enterprise collaboration systems information systems can be classified as either
• Support communications, coordination and coordination among
teams and work groups. For example, employees and external operations or management information systems
consultants may form a virtual team that uses a corporate intranet •Operations Support Systems
and the Internet for e-mail, videoconferencing, e-discussion groups,
and Web pages of work-in-progress information to collaborate on
•Efficiently process business transactions
business projects •Control industrial processes
•Electronic commerce •Support communication and collaboration
•E-commerce is the buying, selling, marketing, and servicing of •Update corporate databases
products, services, and information over a variety of computer •Management Support Systems
networks. For example, e-commerce systems include Internet
Web sites for online sales, extranet access to inventory •Provide information as reports and displays
databases by large customers, and the use of corporate •Give direct computer support to managers during
intranets by sales reps to access customer records for decision-making
customer relationship management.
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 INFORMATION SYSTEMS
Information Systems •Examples of Operations Support Systems:
•Transaction Processing Systems
• Record and process business transactions
• Example: sales processing, inventory systems, accounting systems
•Process Control Systems
• Monitor and control physical processes
• Example: using sensors to monitor chemical processes in a petroleum refinery
•Enterprise Collaboration Systems
• Enhance team and workgroup communication
• Example: email, video conferencing

Chapter 1 Foundations of Information Systems in Business 17 Chapter 1 Foundations of Information Systems in Business 18

Information Systems
INFORMATION Systems ⚫ Other Classifications of Information Systems:
⚫ Expert Systems - provide expert advice
•Types of Management Support Systems ◦ Example: credit application advisor
•Management Information Systems (MIS) ⚫ Knowledge Management Systems - support creation,
• Reports and displays
• Example: daily sales analysis reports
organization, and dissemination of business knowledge
throughout company
•Decision Support Systems (DSS)
• Interactive and ad -hoc support ◦ Example: intranet access to best business practices
• Example: a what-if analysis to determine where to spend advertising dollars ⚫ Strategic Information Systems - help get a strategic advantage
•Executive Information Systems (EIS) over customer
• Critical information for executives and managers
• Example: easy access to actions of competitors
◦ Example: shipment tracking, e-commerce Web systems
⚫ Functional Business Systems - focus on operational and
managerial applications of basic business functions
◦ Example: accounting, finance, or marketing

Chapter 1 Foundations of Information Systems in Business 19 Chapter 1 Foundations of Information Systems in Business 20
 MANAGERIAL Challenges OF INFORMATION
MANAGERIAL Challenges OF INFORMATION TECHNOLOGY
TECHNOLOGY • DEVELOPING IS SOLUTIONS:
• Developing successful information system solutions to business
problems is a major challenge for business managers and
professionals today.
• Several major activities must be accomplished and managed in a
complete IS development cycle.
• In this development process, end users and information
specialists design information system applications on the basis
of an analysis of the business requirements of an organization.
• Examples of other activities include investigating the economic
or technical feasibility of a proposed application, acquiring and
learning how to use any software necessary to implement the
new system, and making improvements to maintain the
business value of a system

Chapter 1 Foundations of Information Systems in Business 21 Chapter 1 Foundations of Information Systems in Business 22

Developing IS Solutions
Challenges and Ethics of IT
⚫ Application of IT
◦ Customer relationship management
◦ Human resources management
◦ Business intelligence systems
⚫ Potential Harm
◦ Infringements on privacy
◦ Inaccurate information
◦ Collusion
⚫ Potential Risks
◦ Consumer boycotts
◦ Work stoppages
◦ Government intervention
⚫ Possible Responses
◦ Codes of ethics
◦ Incentives
◦ Certification

Chapter 1 Foundations of Information Systems in Business 23 Chapter 1 Foundations of Information Systems in Business 24
 IS Function System Concepts: A Foundation
•The IS function is… • System concepts help us understand…
•A major functional area of business • Technology: Hardware, Software, data management,
•An important contributor to operational efficiency, telecommunications Networks
employee productivity, morale, customer service and • Applications: To support inter-connected information systems
satisfaction • Development: Developing ways to use information technology
•A major source of information and support for decision includes designing the basic components of information systems
making • Management: Emphasizes the quality, strategic business value, and
security of an organization’s information systems
•A vital ingredient in developing competitive products and • A system is…
services in the global marketplace • A set of interrelated components
•A dynamic and challenging career opportunity • With a clearly defined boundary
• Working together
•A key component of today’s networked business • To achieve a common set of objectives
• By accepting inputs and producing outputs
• In an organized transformation process

Chapter 1 Foundations of Information Systems in Business 25 Chapter 1 Foundations of Information Systems in Business 26

System A Business as a System

• Input: Capturing and assembling elements that enter the system to be
processed
• Processing: Transformation process that converts input into output
• Output: Transferring transformed elements to their ultimate destination
• All systems have input, processing, and output
⦿ A cybernetic system, a self-monitoring, self-regulating system, adds
feedback and control:
◼ Feedback is data about the performance of a system
◼ Control involves monitoring and evaluating feedback to determine
whether a system is moving toward the achievement of its goal

Chapter 1 Foundations of Information Systems in Business 27 Chapter 1 Foundations of Information Systems in Business 28
 System Components of an INFORMATION SYSTEM
•Information systems are made up of interrelated components:
•People, hardware, software, peripherals, and networks.
•Functions, modules, type of application, department, or end-user
group.
•Using raw materials, hiring new people, manufacturing products for
sale, and disseminating information to others.
•Error messages, dialog boxes, passwords, and user rights
management.
•Intelligent software agents, expert systems, and highly specialized
decision support systems.

29 Chapter 1 Foundations of Information Systems in Business 30

Chapter 1 Foundations of Information Systems in Business

COMPONENTS OF Information System INFORMATION SYSTEM Activities

• People Resources
• Specialists •Input of data resources
• End users •Data entry activities
• Hardware Resources •Processing of data into information
• Machines
• Media •Calculations, comparisons, sorting, and so on
• Software Resources •Output of information products
• Programs •Messages, reports, forms, graphic images
• Procedures •Storage of data resources
• Data Resources •Data elements and databases
• Product descriptions, customer records, employee files, inventory databases
• Network Resources •Control of system performance
• Communications media, communications processors, network access and •Monitoring and evaluating feedback
control software
• Information Resources
• Management reports and business documents using text and graphics
displays, audio responses, and paper forms

31 Chapter 1 Foundations of Information Systems in Business 32

Chapter 1 Foundations of Information Systems in Business
 KINDS OF SYSTEMS
• Organizations utilize different types of Information systems to
take their business decisions for their operations.
• The hierarchy levels of the organizations in general are
UNIT-II: Transactions Processing Operational, Knowledge, Management and Strategic.
Systems, Intelligence Information • The type of information systems in an organization are:
• Transaction Processing Systems
Systems, Decision Support Systems • Knowledge Work Systems
and Execution Information Systems • Decision-Support Systems
• Management Information Systems
• Executive Support Systems.

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KINDS OF SYSTEMS KINDS OF SYSTEMS

• Transaction processing systems: Function at the operational level of • Three main categories of information systems serve at different
the organization. organizational levels on hierarchy are:
• Knowledge work systems: Help create and integrate new knowledge • Operational-level systems: Information systems that monitors and
within the organization. support operational managers, keeping track of the elementary
activities and business transactions of the organization. E.g: Sales,
• Management information systems: Provide managers with reports
Receipts, Cash deposits, Pay-Roll, Credit Decisions and flow of
based primarily on data pulled from transaction processing systems,
materials in a factory.
have an internal orientation, and have limited flexibility.
• Management-level systems: Information systems that serves the
• Decision-support systems: Function at the management level and
monitoring, controlling, decision-making, and administrative
provide analytical models and data analysis tools to provide support
activities of middle managers of the business organization
for semi structured and unstructured decision-making activities.
• Strategic-level systems: Information systems that support the
• Executive support systems: Function at the strategic level, support long-range planning activities of senior management and help
unstructured decision making, and use advanced graphics and senior management tackle and address strategic issues to keep the
communications. strategic growth of the business firm.

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 INFORMATION SYSTEM IN AN TRANSACTION PROCESSING SYSTEMS
ORGANIZATION • Transaction processing was one of the first business processes
to be computerized and without information systems, recording
and processing business transactions would consume huge
amounts of an organizations resources.
• Transactions are events that occur as part of doing business,
such as sales, purchases, deposits, withdrawals, refunds, and
payments.
• TPS serves the operational level. These systems include order
entry, inventory control, payrolls, accounts payable, accounts’
receivable, and general ledgers to name a few.
• The input to these systems includes basic business transactions
such as customer orders, purchase orders, receipts, time
records, invoices and customer payments.

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TRANSACTION PROCESSING TRANSACTION PROCESSING

INFORMATION SYSTEMS INFORMATION SYSTEMS
• The result of processing business transactions is that the • Cross-functional information systems that process data resulting
organizations records are updated to reflect the status of the from the occurrence of business [Link] kinds of
operation at the time of the last process transaction. transaction processing system are:
• Automated TPSs consist of all the components of Computer • Batch Processing System: All transactions were collected in
Based Information, including databases, telecommunications, group called batches and processed together. Business
people, procedures, software and hardware devices used to transactions are accumulated over a period of time and then
process transactions. processed.
• The processing activities include data collection, data edit, data • Online Transaction Processing (OLTP): With this form of data
correction, data manipulation, data storage and document processing, each transaction is processed immediately, without
production. the delay of accumulating transactions in to batch.
• Real-time Processing Transaction: Data are processed
immediately after they are generated and can provide
immediate output to end-users.
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 Transaction Processing INFORMATION The Transaction Processing Cycle
Systems

42
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APPLICATIONS OF TRANSACTION APPLICATIONS OF TRANSACTION

PROCESSING SYSTEMS
Three main categories of application are:
PROCESSING SYSTEMS
• • Inventory control system that updates the computerized
• Order processing systems - includes order entry, sales configuration, inventory records to reflect the exact quantity on hand of
shipment planning, shipment execution, inventory control, invoicing, each stock keeping unit
customer relation management etc. • An output of the invoicing system, a customer invoice
• Order entry system captures the basic data needed to process a reflects the value of the current invoice, as well as which
customer order products customer purchased.
• Sales configuration system ensures that the product and services
• Customer relationship management systems – a collection of
ordered are sufficient to accomplish the customers objectives and
will work well together
people, processes, software and internet capabilities that
helps an organization manage customer relationships
• Shipment planning system determine which open orders will be
filled and forms which location they will be shipped
efficiently and systematically
• Shipment execution system coordinates the outflow of all products • Purchasing systems includes inventory control, purchase order
and goods from the organization processing, receiving and accounting
• Accounting systems includes budget, accounts receivable,
payroll, asset management and general ledger.
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 INFORMATION SYSTEMS FOR
Tps – a payroll system MANAGERS
• An MIS produces information products that support many of the
day-to-day decision-making needs of managers and business
professionals.
• Reports, displays, and responses produced by management
information systems provide information that these decision
makers have specified in advance as adequately meeting their
information needs.
• For example, sales managers rely heavily on sales analysis
reports to evaluate differences in performance among
salespeople.
• Managers and other decision makers use an MIS to request
information at their networked workstations that supports their
decision-making activities.

45
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INFORMATION SYSTEMS FOR INFORMATION SYSTEMS FOR

• Web
MANAGERS
browsers, application programs, and database • MANAGERS
The original type of information system that supported managerial
decision making
management software provide access to information in the • Management Reporting Alternatives
intranet and other operational databases of the organization. • Produces information products that support many day-to-day
• Four major reporting alternatives provided by such systems are: decision-making needs
• Produces reports, display, and responses
• Management Reporting Alternatives
• Satisfies needs of operational and tactical decision makers who
• Produces information products that support many face structured decisions
day-to-day decision-making needs • Management Reporting Alternatives
• Produces reports, display, and responses • Periodic Scheduled Reports – Pre-specified format on a regular basis
• Exception Reports
• Satisfies needs of operational and tactical decision makers • Reports about exceptional conditions
who face structured decisions • May be produced regularly or when an exception occurs
• Examples of such periodic scheduled reports are daily or weekly • Demand Reports and Responses
sales analysis reports and monthly financial statements. • Information is available on demand
• Push Reporting - Information is pushed to a networked computer

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 INFORMATION SYSTEMS FOR Online Analytical Processing
MANAGERS • OLAP
An example of the components in a marketing intelligence system that uses the
Internet and a corporate intranet system to “push” information to employees. • Enables managers and analysts to examine and manipulate large
amounts of detailed and consolidated data from many perspectives
• Done interactively, in real time, with rapid response to queries
• Online Analytical Operations
• Consolidation
• Aggregation of data - Example: data about sales offices rolled up to
the district level
• Drill-Down
• Display underlying detail data Example:sales figures by individual
product
• Slicing and Dicing
• Viewing database from different viewpoints
• Often performed along a time axis

DSS & EIS 49 50

Online Analytical Processing Online Analytical Examples

Online analytical processing may involve the use of specialized servers and • The real power of OLAP comes from the combination of
multidimensional databases. OLAP provides fast answers to complex queries posed data and models on a large scale. Common business
by managers and analysts using traditional and Web-enabled OLAP software.
areas where OLAP can solve complex problems include:
• Marketing and sales analysis
• Clickstream data
• Database Marketing
• Budgeting
• Financial reporting and consolidation
• Profitability analysis
• Quality analysis

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INTELLIGENCE INFORMATION SYSTEMS INTELLIGENCE INFORMATION SYSTEMS
• Artificial intelligence (AI) technologies are being used in a variety
of ways to improve the decision support provided to managers
and business professionals.
• Artificial intelligence (AI) is a field of science and technology
based on disciplines such as computer science, biology,
psychology, linguistics, mathematics, and engineering.
• The goal of AI is to develop computers that can simulate the
ability to think, as well as see, hear, walk, talk, and feel.
• Artificial intelligence is the simulation of computer functions
normally associated with human intelligence, such as reasoning,
learning, and problem solving

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INTELLIGENCE INFORMATION SYSTEMS INTELLIGENCE INFORMATION SYSTEMS

• For example, British AI pioneer Alan Turing in 1950 proposed a • A CAPTCHA is sometimes described as a reverse Turing test
test to determine whether machines could think. because it is administered by a machine and targeted to a
• According to the Turing test, a computer could demonstrate human, in contrast to the standard Turing test that is typically
intelligence if a human interviewer, conversing with an unseen administered by a human and targeted to a machine.
human and an unseen computer, could not tell which was • The process involves one computer (such as a server for a retail
which. Web site) asking a user to complete a simple test that the
• One derivative of the Turing test that is providing real value to computer is able to generate and grade.
the online community is a CAPTCHA.
• A CAPTCHA (Completely Automated Public Turing test to tell
Computers and Humans Apart) is a type of challenge-response
test used in a wide variety of computing applications to
determine that the user is really a human and not a computer
posing as one.

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 INTELLIGENCE INFORMATION SYSTEMS INTELLIGENCE INFORMATION SYSTEMS
• The major domains of AI research and development. AI • Fuzzy logic systems can process data that are incomplete or
applications can be grouped under three major areas—cognitive ambiguous, that is, fuzzy data .
science, robotics and natural interfaces. • Thus, they can solve semi-structured. problems with incomplete
• Cognitive Science: This area of artificial intelligence is based on knowledge by developing approximate inferences and answers,
research in biology, neurology, psychology, mathematics, and as humans do.
many allied disciplines. • Neural network software can learn by processing sample
• It focuses on researching how the human brain works and how problems and their solutions.
humans think and learn. • Genetic algorithm software uses Darwinian (survival of the
• Applications in the cognitive science area of AI include the fittest), randomizing and other mathematics functions to
development of expert systems and other knowledge-based simulate evolutionary processes that can generate increasingly
systems that add a knowledge base and some reasoning better solutions to problems.
capability to information systems.
• Chess-playing systems are primitive examples of such
applications.
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INTELLIGENCE INFORMATION SYSTEMS INTELLIGENCE INFORMATION SYSTEMS

• Intelligent agents use expert system and other AI technologies to
serve as software surrogates for a variety of end-user
applications.
• Robotics: AI, engineering, and physiology are the basic
disciplines of robotics .
• This technology produces robot machines with computer
intelligence and computer controlled, humanlike physical
capabilities.
• This area thus includes applications designed to give robots the
powers of sight or visual perception; touch or tactile capabilities;
dexterity or skill in handling and manipulation; locomotion or
the physical ability to move over any terrain; and navigation or
the intelligence to find one’s way to a destination.

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INTELLIGENCE INFORMATION SYSTEMS INTELLIGENCE INFORMATION SYSTEMS
• Natural Interfaces: The development of natural interfaces is
considered a major area of AI applications and is essential to the
natural use of computers by humans.
• For example, the development of natural languages and speech
recognition are major thrusts of this area of AI. This goal
involves research and development in linguistics, psychology,
computer science, and other disciplines.
• Virtual reality involves using multisensory human–computer
interfaces that enable human users to experience
computer-simulated objects, spaces, activities and “worlds” as if
they actually exist.

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INTELLIGENCE INFORMATION SYSTEMS INTELLIGENCE INFORMATION SYSTEMS

• A knowledge-based information system (KBIS) adds a knowledge • The components of an expert system include a knowledge base
base to the major components found in other types of and software modules that perform inferences on the
computer-based information systems. knowledge in the knowledge base and communicate answers to
• An expert system (ES) is a knowledge-based information system a user’s questions.
that uses its knowledge about a specific, complex application • The following components are:
area to act as an expert consultant to end users. • Knowledge Base: The knowledge base of an expert system
• Expert systems provide answers to questions in a very specific contains (1) facts about a specific subject area (e.g., John is an
problem area by making human like inferences about analyst ) and (2) heuristics (rules of thumb) that express the
knowledge contained in a specialized knowledge base. reasoning procedures of an expert on the subject (e.g., IF John is
• They must also be able to explain their reasoning process and an analyst, THEN he needs a workstation ).
conclusions to a user, so expert systems can provide decision • Examples are rule-based, frame-based, object-based and
support to end users in the form of advice from an expert case-based methods of knowledge representation.
consultant in a specific problem area.

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INTELLIGENCE INFORMATION SYSTEMS INTELLIGENCE INFORMATION SYSTEMS
• Software Resources: An expert system software package • Using an expert system involves an interactive computer-based
contains an inference engine and other programs for refining session in which the solution to a problem is explored, with the
knowledge and communicating with users. expert system acting as a consultant to an end user.
• The inference engine program processes the knowledge (such as • The expert system asks questions of the user, searches its
rules and facts) related to a specific problem. It then makes knowledge base for facts and rules or other knowledge, explains
associations and inferences resulting in recommended courses its reasoning process when asked, and gives expert advice to the
of action for a user. user in the subject area being explored.
• User interface programs for communicating with end users are
also needed, including an explanation program to explain the
reasoning process to a user if requested.
• Knowledge acquisition programs are not part of an expert
system but are software tools for knowledge base development,
as are expert system shells , which are used for developing
expert systems.
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INTELLIGENCE INFORMATION SYSTEMS INTELLIGENCE INFORMATION SYSTEMS

• Neural networks are computing systems modelled after the
brain’s mesh like network of interconnected processing
elements, called neurons .
• Of course, neural networks are a lot simpler in architecture (the
human brain is estimated to have more than 100 billion neuron
brain cells!).
• Like the brain, however, the interconnected processors in a
neural network operate in parallel and interact dynamically. This
interaction enables the network to “learn” from data it
processes.

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INTELLIGENCE INFORMATION SYSTEMS INTELLIGENCE INFORMATION SYSTEMS
• Virtual reality (VR) is computer-simulated reality and a
fast-growing area of artificial intelligence that had its origins in
efforts to build more natural, realistic ,multisensory
human–computer interfaces.
• So virtual reality relies on multisensory input/output devices
such as a tracking headset with video goggles and stereo
earphones, a data glove or jumpsuit with fiber-optic sensors that
track your body movements, and a walker that monitors the
movement of your feet.
• Then you can experience computer simulated “virtual worlds”
three-dimensionally through sight, sound, and touch.
• Virtual reality is also called telepresence . For example, you can
enter a computer-generated virtual world, look around and
observe its contents, pick up and move objects, and move
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INTELLIGENCE INFORMATION SYSTEMS INTELLIGENCE INFORMATION SYSTEMS

• Thus, virtual reality allows to interact with computer simulated • This scientific-visualization capability is also used by
objects, entities, and environments as if they actually exist. pharmaceutical and biotechnology firms to develop and observe
• Current applications of virtual reality are wide-ranging and the behavior of computerized models of new drugs and
include computer-aided design (CAD), medical diagnostics and materials and by medical researchers to develop ways for
treatment, scientific experimentation in many physical and physicians to enter and examine a virtual reality of a patient’s
biological sciences, flight simulation for training pilots and body.
astronauts, product demonstrations, employee training and • VR becomes telepresence when users, who can be anywhere in
entertainment, especially 3-D video arcade games. the world, use VR systems to work alone or together at a remote
• CAD is the most widely used industrial VR application. It enables site.
architects and other designers to design and test electronic 3-D • Typically, this involves using a VR system to enhance the sight
models of products and structures by entering the models and touch of a human who is remotely manipulating equipment
themselves and examining, touching, and manipulating sections to accomplish a task.
and parts from all angles. • Examples range from virtual surgery, where surgeonand patient
may be on either side of the globe, to the remote use of
71 equipment in hazardous environments such as chemical plants 72

or nuclear reactors.
INTELLIGENCE INFORMATION SYSTEMS INTELLIGENCE INFORMATION SYSTEMS
• Intelligent agents are growing in popularity as a way to use
artificial intelligence routines in software to help users
accomplish many kinds of tasks in e-business and e-commerce.
• An intelligent agent is a software surrogate for an end user or a
process that fulfills a stated need or activity.
• An intelligent agent uses its built-in and learned knowledge base
about a person or process to make decisions and accomplish
tasks in a way that fulfills the intentions of a user.
• Sometimes an intelligent agent is given a graphic representation
or persona such as Einstein for a science advisor, Sherlock
Holmes for an information search agent, and so on.
• Thus, intelligent agents (also called software robots or “bots”)
are specialpurpose, knowledge-based information systems that
accomplish specific tasks for users.
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INTELLIGENCE INFORMATION SYSTEMS Decision Support in Business

• Companies are investing in data-driven decision support
application frameworks to help them respond to
• Changing market conditions
• Customer needs
• This is accomplished by several types of
• Management information
• Decision support
• Other information systems

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Levels of Managerial Decision Making Levels of Managerial Decision Making
• The Levels of Managerial Decision making is supported by • Allocate resources and monitor the performance of their
Information Technology in a successful organisation are: organizational subunits, including departments, divisions,
• Strategic Management: process teams, project teams, and other workgroups.
• A board of directors and an executive committee of the • Operational Management:
CEO and top executives develop overall organizational • Members of self-directed teams or operating managers
goals, strategies, policies, and objectives as part of a develop short-range plans such as weekly production
strategic planning process. schedules.
• Monitor the strategic performance of the organization. • Direct the use of resources and the performance of tasks
• Tactical Management: according to procedures within budgets and schedules
• Business professionals in self-directed teams, Business unit they establish for the teams and other work-groups of the
managers develop short and medium range plans, organization.
schedules, and budgets and specify the policies,
procedures, and business objectives for their subunits of
the company.
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Levels of Managerial Decision Making Decision STRUCTURE

• Structured (Operational):
• The procedures to follow when decision is needed can be
specified in advance

• Unstructured (Strategic):
• It is not possible to specify in advance most of the decision
procedures to follow

• Semi-structured (Tactical):
• Decision procedures can be pre-specified, but not enough
to lead to the correct decision

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Information Quality and Its Attributes Information Quality and Its Attributes
Time Dimension
• Information products made more Timeliness Information should be provided when it is needed.
Currency Information should be up-to-date when it is provided.
valuable by their attributes, Frequency Information should be provided as often as needed.
Time Period Information can be provided about past, present, and
characteristics, or qualities future time periods.
Content Dimension
• Information that is outdated, Accuracy Information should be free from errors.
Relevance Information should be related to the information needs of a
inaccurate or hard to understand specific recipient for a specific situation.
has much less value Completeness All the information that is needed should be provided.
Conciseness Only the information that is needed should be provided.
• Information has three dimensions Scope Information can have a broad or narrow scope, or an internal or
external focus.
• Time Performance Information can reveal performance by measuring
activities accomplished, progress made, or resources accumulated.
• Content Form Dimension
Clarity Information should be provided in a form that is easy to
• Form understand.
Detail Information can be provided in detail or summary form.
Order Information can be arranged in a predetermined sequence.
Presentation Information can be presented in narrative, numeric,
graphic, or other forms.
Media Information can be provided in the form of printed paper
documents, video displays, or other media

81 82

Examples of Decision Structures Decision Support Systems

Management Information Decision Support

Systems Systems
Decision Provide information about the Provide information and
support performance of the organization techniques to analyze
provided specific problems
Information form Periodic, exception, demand, Interactive inquiries and
and frequency and push reports and responses
responses
Information Prespecified, fixed format Ad hoc, flexible, and
format adaptable format

Information Information produced by Information produced by

processing extraction and manipulation of analytical modeling of
methodology business data business data

83 84
 Decision Support Trends Decision Support Trends
• The emerging class of applications focuses on • Information retrieval (IR):
• Personalized decision support (PDSS): • Activity of obtaining information system resources that
• Consists of databases, model-based expertise, and intelligent are relevant to an information need from a collection of
interfaces, along with wireless communications, Internet those resources.
resources, and personal computing,
• An IR system is a software system that provides access to
• Provides sufficient resources to assist informed individuals and
groups in solving problems. books, journals and other documents; stores and manages
those documents.
• Modeling:
• Management Information Systems (MIS) provide management • Data warehousing :
with information necessary for decision making in all areas of • Effective and efficient use of data and information by
the firm. analysts and managers.
•A conceptual approach to construction • A "data warehouse" is a repository of historical data that
of MIS simulation models are used for efficient structuring of are organized by subject to support decision makers in the
real world systems. organization.

85 86

Decision Support Trends Decision Support Trends

• Business Intelligence (BI):
• What-if scenarios: • BI tools are used by the suppliers, Customers and other business
• Decision making method that helps to make the right decision stakeholders of a company for Customer relationship Management,
Supply Chain Management and other e-business applications.
and think about what effect it will have beforehand.
• Examples of business intelligence tools include data visualization,
• This method is a suitable way for both companies and data warehousing, dashboards, and reporting.
individuals to come up with different scenarios. • Decision Support Trends:
• A business must meet the information and data analysis
• Reporting: requirements of its stakeholders with more personalized and
• Business managers at all levels of an organization, from proactive Web based decision support.
assistant managers to executives, rely on reports generated
from these systems to help them evaluate their business'
daily activities or problems that arise, make decisions, and
track progress.

87 88
 Decision Support Trends
• Business analytics (BA): Business Intelligence Applications
• Refers to the skills, technologies, applications, and practices
applied to a continuous iterative exploration and • Major information technologies that are
investigation of a business’s historical performance being customized, personalized, and
• To gain insight and drive the strategic business planning Web-enabled to provide key business
process. information and analytical tools for
• Business analytics makes much more extensive use of data, managers, business professionals, and
statistical and quantitative analysis, explanatory and business stakeholders.
predictive modeling, and fact-based management to drive • Business intelligence applications are
based on personalized and Web enabled
decision making.
information analysis, knowledge
• Analytics may be used as input for human decisions or may management, and decision support
drive fully automated decisions. technologies.
• Business intelligence is more associated with querying,
reporting, online analytical processing (OLAP)

89 DSS & EIS 90

Decision Support Systems DSS Model Base

• Decision support systems are computer-based information systems that
provide interactive information support to managers and business • Model Base
professionals during the decision making process. • A software component that consists of
• Decision support systems use the following to support the making of models used in computational and analytical routines that
semi-structured business decisions mathematically express relations among variables
• Analytical models • Spreadsheet Examples
• Specialized databases
• Linear programming
• A decision-maker’s own insights and judgments
• Multiple regression forecasting
• An interactive, computer-based modeling process
• DSS systems are designed to be ad hoc,
• Capital budgeting present value
quick-response systems that are initiated and controlled by decision • For example, a spreadsheet program might contain models
makers. that express simple accounting relationships among variables,
• Sales managers typically rely on management information systems to such as Revenue 2 Expenses 5 Profit.
produce sales analysis reports. These reports contain sales performance
figures by product line, salesperson, sales region, etc.
91 92
 DSS Components DSS Components
• DSS software packages can combine model components to
create integrated models that support specific types of decisions.
• DSS software typically contains built-in analytical modeling
routines and also enables you to build your own models.
• Electronic spreadsheet packages also provide some of the model
building (spreadsheet models) and analytical modeling (what-if
and goal-seeking analysis) offered by more powerful DSS
software.

93 94

DSS Components Geographic Information Systems

• DSS uses geographic databases to construct and display maps and
other graphic displays
• Supports decisions affecting the geographic distribution of people
and other resources
• Often used with Global Positioning Systems (GPS) devices

• Data Visualization Systems:

• Represents complex data using interactive, three-dimensional
graphical forms (charts, graphs, maps)
• Helps users interactively sort, subdivide, combine, and organize
data while it is in its graphical form

95 96
 Using Decision Support Systems
Using Decision Support Systems
Examples
Activities and examples of the major types of analytical modelling.
• Using a decision support system involves an interactive analytical
modeling process
• Decision makers are not demanding pre-specified information
• They are exploring possible alternatives
• What-If Analysis
• Observing how changes to selected variables affect other
variables
• Sensitivity Analysis
• Observing how repeated changes to a single variable affect other
variables
• Goal-seeking Analysis
• Making repeated changes to selected variables until a chosen
variable reaches a target value
• Optimization Analysis
• Finding an optimum value for selected variables, given certain
constraints

97 98

Data Mining Analysis of Customer Demographics

• Provides decision support through knowledge discovery
• Analyzes vast stores of historical business data
• Looks for patterns, trends, and correlations
• Goal is to improve business performance
• Types of analysis
• Regression
• Decision tree
• Neural network
• Cluster detection
• Market basket analysis

99 100
 Market Basket Analysis Executive Information Systems
• Combines many features of MIS and DSS
• One of the most common uses for data mining
• Provide top executives with immediate and easy access to
• Determines what products customers purchase together information
with other products • Identify factors that are critical to accomplishing strategic
• Results affect how companies objectives (critical success factors)
• Market products • So popular that it has been expanded to managers, analysis, and
• Place merchandise in the store other knowledge workers
• Lay out catalogs and order forms • Features of an EIS:
• Information presented in forms tailored to the preferences of
• Determine what new products to offer
the executives using the system
• Customize solicitation phone calls • Customizable graphical user interfaces
• Exception reports
• Trend analysis
• Drill down capability

101 102

Enterprise Information Portals Dashboard Example

• An EIP is a Web-based interface and integration of MIS, DSS,
EIS, and other technologies
• Available to all intranet users and select extranet users
• Provides access to a variety of internal and external business
applications and services
• Typically tailored or personalized to the user or groups of
users
• Often has a digital dashboard
• Also called enterprise knowledge portals

103 104
 Enterprise Information Portal
Enterprise Knowledge Portal
Components

105 106

Case 2 Automated Decision Making Case 2 Automated Decision Making

• Automated decision making has been slow to materialize • AI is best suited for
• Early applications were just solutions looking • Decisions that must be made quickly and frequently, using
for problems, contributing little to improved organizational electronic data
performance • Highly structured decision criteria
• A new generation of AI applications • High-quality data
• Easier to create and manage • Common users of AI
• Decision making triggered without human intervention • Transportation industry
• Can translate decisions into action quickly, accurately, and • Hotels
efficiently
• Investment firms and lenders

107 108
 Enterprise Business Systems
• E-business means using the Internet, other networks, and IT to support
• Electronic commerce
• Enterprise communications and collaboration
Functional Management • Web-enabled business processes
Information Systems – Unit • E-commerce is the buying, selling, and marketing of products, services,
and information over the Internet and other networks
III • Cross – Functional Systems:
• Cross the boundaries of traditional business functions
• Used to reengineer and improve vital business processes all across
the enterprise

110

Functional MANAGEMENT
IT in Business
• INFORMATION
A variety of types of information systemsSystems
that support the business
functions of
• Accounting
• Finance
• Marketing
• Operations management
• Human resource management or Personnel
• Production
• Administration
• Functional Information System:
• A system that provides detailed information for a specific type of
operations activity or related group of activities.
• Supplies Information that is useful for another functional activity.
Ex: Quantity of products manufactured from the production unit to
the Marketing unit

111 112
 Functional MANAGEMENT Functional MANAGEMENT
INFORMATION Systems INFORMATION Systems
• The benefits of Functional Information Systems are:

• Reduced cost of Functional activities

• Increased accuracy of Information
• Increased Customer service
• Increased data for decision making.
• Runs faster and require less personnel.

113 114

Production Information Systems Production Information Systems

• Produces goods converted from raw materials • Includes all activities concerned with the planning and control of
the processes producing goods or services.
• Gaining momentum because of rapidly shifting consumer
• Information systems used for operations management and
tastes, increased global pressures
transaction processing support all firms that must plan, monitor,
• Resulting in shorter Product Design Cycle, Quality Control, and control inventories, purchases, and the flow of goods and
Just-in-Time Manufacturing services.
• Supports decision making for the allocation and planning of • Firms such as transportation companies, wholesalers, retailers,
production resources financial institutions, and service companies must use
• Assists in Product Design, Facility Design, Quality control and production/operations information systems to plan and control
Assurance etc their operations.
• Information systems use data from the Organisation’s
production, Inventory, Vendor and Marketing Databases as
well as many external sources.

115 116
 Production Information Systems Production Information Systems
• Input SubSystem of Production: The information required for
production decisions comes from various data sources as follows:
• Production Data: Using terminals on the shop floor, data on
production processes can be quickly gathered and processed.
• Inventory Data: Includes inventories of raw materials, goods in
progress, finished goods which leads to losses if inventory is
running out-of-stock.
• Vendor Data: Sources of raw materials maintained by purchase
department. Production personnel must be aware of the origins
of the materials including new items offered by the vendors.

117 118

Production Information Systems Production Information Systems

• Marketing Data: Marketing output is feedback information for • Output SubSystems of Production: The production information
the manufacturing department which specifies what is required system encompasses all of the applications of the computer in
• Industrial Engineering Data: The subsystem offers information the production area as a conceptual system.
related to productivity improvement aspects of production. • Product Design:
• External Data: Offers the knowledge of raw materials prices and • First step in production.
labour availability.
• The technical specifications of the product are finalised.
• Price rise of raw materials will force production manager to
stock up the materials before that happens. • Product design activities are getting more automated through
computer software like CAD(Computer Aided Design ) and
• The likelihood of labor problem in near future may force him to
CAD ( Computer Aided Engineering )
reschedule his production plans.
• Softwares are used to test it for features like safety,
reliability, ease of production and use etc.

119 120
 Production Information Systems Production Information Systems
• Facility Design:
• MRP is also used to determine detailed capacity requirements
• Creation of facilities to manufacture the designed product in in terms of labour hours, machine hours and so on.
terms of plant, machinery building, layout etc.
• Design plant layout using mathematical models and • CAM ( Computer Aided Manufacturing ) can monitor the
simulators. production processes in continuous or discrete manufacturing
• Layout algorithms are generated which construct the layout as operations.
per the requirements. • Computer Numerical Controlled Machines (CNC ) are used to
• Production: Process of making new products from raw materials control the manufacturing process as per a defined sequence
as per design specifications. of operations.
• Measures the process in terms of time-tracking the work flow • Quality Control / Quality Assurance:
from one step to the next. • Relates to activities that ensure that the final product is of a
• Materials Requirement Planning( MRP )permits companies to required quality.
effectively use computers to establish a detailed requirements • Quality control (QC) is concerned with detecting existing
and priority plan for materials.
quality deficiencies and rectify them.

121 122

Production Information Systems Computer-Integrated Manufacturing

• Quality Assurance (QA) is concerned with the prevention of
future quality problems.
• Computer Integrated Manufacturing (CIM) integrates the
physical production system and CBIS (Computer Based
Information System)
• CAD provides the interface between two main systems types:
Production design specifications and IS controlling the product
quality.

123 124
 Production Information Systems Production Information System
• CIM(Computer-Integrated Manufacturing) Objectives: • Computers are used to help engineers to design better products:
• Simplify production processes, product designs, and factory computer-aided engineering (CAE) and computer-aided design (CAD)
organization systems, and better production processes with computer-aided process
planning.
• Automate production processes and the business functions that • Types of material needed in the production process, which is called
support them material requirements planning (MRP),
• Integrate: All production and support processes using • To integrate MRP with production scheduling and shop floor
• Networks operations, which is known as manufacturing resource planning.
• Cross-functional business software • Resource planning systems are included in the manufacturing module
• Other information technologies of enterprise resource planning (ERP) software
• Computer-aided manufacturing (CAM) automate the production
• CIM supports the concepts of flexible manufacturing systems, agile
process and Manufacturing Execution Systems (MES) performs
manufacturing, and total quality management. monitoring information systems for factory floor operations.
• Implementing such manufacturing concepts enables a company to • Process control : Control ongoing physical processes
respond to and fulfill customer requirements quickly with • Machine control : Controls the actions of machines
high-quality products and services.

125 126

Marketing Information Systems Marketing Information Systems

• Marketing systems are concerned with • The input subsystems of Marketing Information System are:
• Marketing system information consists of people, equipment • The subsystems offer the information to the database and the
and procedures to gather sort, analyze, evaluate and output information
distribute needed timely and accurate information to
marketing decision makers. • Internal Records System
• Role of MIS is to assess the managers information needs, • Marketing Intelligence System
develop the needed information and distribute that • Marketing Research System
information in a timely fashion. • Marketing Decision Support Analysis System
• Planning, promotion, and sale of existing products in existing • The subsystems offer the information to the database and the
markets output information System are:
• Development of new products and new markets • The subsystems offer the information to the database and the
• Better attracting and serving present and potential customers output information system consists of product plan, price plan,
place plan and promotion plan.

127 128
 Marketing Information Systems Marketing Information System
• Input SubSystems: The marketing information is developed
through the input sub systems which are as follows:
• Internal Records: Marketing Managers rely on internal reports
on orders, sales, prices, costs, inventory levels, receivables,
payables and so on.
• Marketing Intelligence Data:
• The Internal records system supplies results data, the
marketing intelligence system supplies happenings data.
• It is a set of procedures and sources used by managers to
obtain everyday information about development in the
marketing environment.

129 130

Marketing Information SystemS Marketing Information System

• Marketing Research Data: It is an activity responsible for the • Output Subsystems of Marketing Information System: The
systematic design, collection, analysis. products and services that are offered by the marketing function
• Reporting of consumer and market related data that can are referred to as Marketing Mix consists of components of
support marketing decisions. Product, Price, Place and Promotion.
• Data is gathered through Personal Interviews, Surveys, • Product Planning:
Questionaires etc. • A Complex task which determines the success or failure of a
• Statistical packages are applied to analyse marketing trends product by Quality, Price, Image Advertisement, Strength of
and generate various kinds of Output Information( Graphs). sales force etc.
• Marketing Decision Support Data: It is a coordinated collection • It also determines the demand of a product in the market from
of Data, System, Tools and techniques with supporting software the Market Research Data.
and hardware by which an organisation gathers and interprets
relevant information from business environment.

131 132
 Marketing Information System Marketing Information System
• Price Planning: The organisation may follow cost-based and • Place Planning:
demand –based pricing method. • Materials flow originates with the supplier and ends with the
consumer.
• The cost based pricing determined by adding a desired
markup to the cost of manufacturing the product. • Place system permits information to flow freely among many
firms provides an edge over competitive systems.
• Accounting Information system and historical database
• EDI (Electronic Data Interchange ) allows firms to establish
system provides accurate cost data for pricing a product. electronic links with other organisations.
• Place Planning: • Promotion Planning:
• This deals with how the product is distributed across • Promotion is concerned with increasing product awareness
geographical areas. among various consume segments.
• Organisation appoints and maintain a distribution channel to • Provides information about the firm’s advertising and
distribute its product. personnel selling activities.
• Place system consists of Supplier, Manufacturer, Wholesaler, • Personnel selling involves selling the products through the
Retailer and Consumer. company’s sales force.

133 134

Marketing Information System Marketing Information Systems

• Promotion Planning:
• Promotion is concerned with increasing product awareness among
various consume segments.
• Provides information about the firm’s advertising and personnel
selling activities.
• Personnel selling involves selling the products through the
company’s sales force.
• Sales personnel can query the database to answer questions
pertaining to Product availability, Price, Shipping status etc
• Sales personnel posts the sales order data in the order entry system
and submit call report
• Multimedia and Graphics help in Advertising and Mathematical
Models help in decision making.
• Database:
• Data is provided by the Output Subsystems Marketing Databases.

135 136
 Interactive Marketing Marketing Information Systems
• Interactive Marketing
Marketing information systems provide information
• A customer-focused marketing process
technologies that support major components of the
• Uses the Internet, intranets, and extranets marketing function.
• Establishes two-way transactions between a business and its
customers or potential customers
• Goal
• Profitably use networks to attract and keep customers
• Get customers to help create, purchase, and improve
products and services

137 138

Marketing Information Systems Targeted Marketing

• Internet/ Intranet Web sites and services make an interactive marketing • An advertising and promotion management concept with five
process possible where customers can become partners in creating, targeting components
marketing, purchasing, and improving products and services.
• Sales force automation systems use mobile computing and Internet
technologies to automate many information processing activities for
sales support and management.
• Other marketing information systems assist marketing managers in
product planning, pricing, and other product management decisions;
advertising, sales promotion and targeted marketing strategies; and
market research and forecasting.
• Enterprisewide systems like customer relationship management link to
the portfolio of marketing information systems to provide and obtain
data essential to the marketing function.

139 140
 Targeted Marketing Components Accounting Information Systems
• Community: Customized ads to appeal to specific virtual • The oldest and most widely used information system in
communities business
• Content: Ads placed on a variety of selected websites, aimed at a • Financial Transaction based information system deals with
specific audience money
• Context: Ads placed on web pages that are relevant to a product • Process of identifying, measuring and communicating
or service economic information
• Demographic/Psychographic: Web marketing aimed at specific • Records and reports business transactions and other
types or classes of people economic events
• Online behavior: Promotions tailored to each visit to a site by an • Computer-based accounting systems Record and Report the
individual flow of funds
• Produces financial statements such as balance sheets and
income statements
• Forecasts future conditions
141 142

Accounting Information Systems Accounting Information Systems

• Operational accounting systems emphasize legal and historical
record-keeping and the production of accurate financial
statements.
• Systems include transaction processing systems such as
order processing , inventory control , accounts receivable,
accounts payable , payroll , and general ledger systems.
• Management Accounting Systems focus on the planning and
control of business operations.
• Emphasizes Cost Accounting Reports, Development of
financial budgets and projected financial statements and
analytical reports comparing actual to forecasted
performance.

143 144
 Accounting Information Systems Accounting Information Systems
• Characteristics of Accounting Information Systems:
• Deals with transactions which are financial in nature • Characteristics of Accounting Information Systems:
• Caters to the information needs of both external and internal • AIS are subject to greater degree of risk of security and are
users.
prone to computer crimes.
• External users – Customers, Vendors, Shareholders,
Investors, Statuatory Authorities, Stock Exchanges etc.
• Internal users – Managers at various levels of
organisation who makes use of Accounting information
both for planning and control.
• Principles and Procedures are defined by professional
bodies like Institute of Chartered Accountants of India.
• AIS uses historical data but also include data in the form
of budgets and forecasts.
• Source of data is mainly internal to the enterprise and
databases are well defined , integrated and controlled.

145 146

Accounting Information Systems Accounting Information Systems

• Components of Accounting Information Systems:
• Consists of four basic sub-systems namely Input, Process,
Output and Control.
• Input consists of transaction data which includes information
regarding Customers, Vendors, Employees, Assets etc.
• Processing of Accounting data are done in FOUR ways
namely: Classification, Comparison, Aggregation and
Calculation
• Output of AIS may consist of:
❖ Financial statements such as Income statements, Balance
sheet and statement of changes in financial position.
❖ Management reports such as debtors ageing report,
Financial ratios. Expense Analysis reports etc.
❖ Other output documents like Customer Invoice, Materials
Purchase order, Pay cheques etc.
147 148
 Accounting Information Systems Financial Information Systems
• Illustrates the interrelationships of several important accounting
• Computer-based financial management systems supports business
information systems commonly computerized by both large and
managers and professionals making decisions concerning
small businesses.
• The financing of a business
• Accounting software packages are available for these applications.
are being transformed by Internet technologies. • The allocation and control of financial resources within a
business
• Using the Internet and other networks changes how accounting
information systems monitor and track business activity. • Overall financial planning and the raising of capital
• The interactive nature of online accounting systems calls for new • Major financial management system categories include cash and
forms of transaction documents, procedures, and controls. investment management, capital budgeting, financial forecasting
and financial planning.
• This particularly applies to systems like order processing, inventory
control, accounts receivable, and accounts payable. • For example, the capital budgeting process involves evaluating the
profitability and financial impact of proposed capital expenditures.

149 150

Financial Information Systems Financial Information Systems

• Long-term expenditure proposals for facilities and equipment can
be analyzed using a variety of return on investment (ROI)
evaluation techniques.
• This application makes heavy use of spreadsheet models that
incorporate present value analysis of expected cash flows and
probability analysis of risk to determine the optimum mix of
capital projects for a business.
• Financial analysts also typically use electronic spreadsheets and
other financial planning software to evaluate the present and
projected financial performance of a business.
• They also help determine the financing needs of a business and
analyze alternative methods of financing.
• Financial analysts use financial forecasts concerning the economic
situation, business operations, types of financing
151 152
 Financial Information Systems Financial Information Systems
available, interest rates, and stock and bond prices to develop an
optimal financing plan for the business.
• Electronic spreadsheet packages, DSS software, and Web-based
groupware can be used to build and manipulate financial
models.
• Answers to what-if and goal seeking questions can be explored
as financial analysts and managers evaluate their financing and
investment alternatives.
• Sales Force Automation: Outfit sales force with notebook
computers, web browsers, and sales contact software connect
them to marketing websites and the company intranet
• Goals of Sales Force Automation:
• Increase personal productivity
• Speed up capture and analysis of sales data
• Gain strategic advantage
153 154

Financial Information Systems Financial Information Systems

❖ It helps to understand the nation’s economy and helps to
• Input Subsystem: analysing the trends that may affect the company
• Transactional Data: Includes the transactions of revenues and economy.
expenses incurred from each functional area. ■ Strategic Plans: Important indicator and measurement scale for
• Forecasting data: A Company needs forecasting data from each any kind of financial information as it charts the future of the
functional area which can be used to compare the actual company.
transactions with the anticipated as per the forecast. • Output Subsystem:
• Strategic Plans: Important indicator and measurement scale for ■ Forecasting:
any kind of financial information as it charts the future of the ❖ Prepares the projections of activity of the firm in the
company. future.
• Financial Intelligence Data: Gathers data from the financial ❖ Forecasts submitted by each functional area and external
community like Banks, Government, Stock Markets, National or data
International environment through online databases available
❖ Shows the estimated sources and amounts of cash
through various vendors or directly through internet services. flowing into or out of the firm.
155 156
 Financial Information Systems Human Resource Information Systems
• Funds Management: • Human Resource Management (HRM):
❖ Determines the flow of money into and out of the firm. • Function involves the Recruitment, Placement, Evaluation,
❖ Finance areas decides how to raise the needed funds Compensation and development of the employees of an
e.g. getting a loan, Issuing bonds / Equity organization.
❖ Master schedule that combines the financial forecast • Goal of HRM is the effective and efficient use of the human
with income and disbursements related to external resources of a company.
systems. • Human Resource Information Systems (HRIS) designed to
❖ Plan can be prepared using some tools like Monte Carlo support
Simulation • Planning to meet personnel needs
• Auditing and Control: Auditing is an inspection that • Development of employees to their full potential
determines whether Organisational Guidelines, worker’s • Control of all personnel policies and programs
Claim and verifies the accuracy of the company’s financial
accounting records.

157 158

Human Resource Information Systems Human Resource Information Systems

• Traditional Human Resource Management functions used
computer-based information systems to
• Produce paychecks and payroll reports
• Maintain personnel records
• Analyze the use of personnel in business operations.
• Human Resource Information Systems (HRIS) supports
• Recruitment, Selection, and Hiring
• Job Placement
• Performance Appraisals
• Employee benefits analysis
• Training and Development
• Health, Safety, and Security.

159 160
Human Resource Information Systems Human Resource Information Systems
• HRM and the Internet: Recruiting employees uses the • HRM and Corporate Intranets :Corporate intranet uses
corporate website, commercial recruiting services, Posting • Process common HRM transactions
messages in selected Internet newsgroups and • Allow around-the-clock HRM services
Communicating with job applicants via e-mail. • Disseminate information faster than through previous
• For example, Online HRM systems may involve recruiting for company channels
employees through recruitment sections of corporate Web • Collect information from employees online
sites. • Allow HRM tasks to be performed with little HRM
• The Internet has a wealth of information and contacts for department intervention
both employers and job hunters. For eg. [Link] , • Training
[Link] , and [Link] . • Intranet technologies allow companies to process most
common HRM applications over their corporate intranets.
• Intranets allow the HRM department to provide
around-the-clock services to their customers: the employees.

161 162

Human Resource Information Systems Human Resource Information Systems

• HRM and Corporate Intranets : • HRM and Corporate Intranets :
• They can also disseminate valuable information faster than • Employees can use their Web browsers to look up individual
through previous company channels. payroll and benefits information online, right from their desktop
• Intranets can collect information online from employees for PCs, mobile computers, or intranet kiosks located around a work
input to their HRM files, and they can enable managers and site.
other employees to perform HRM tasks with little • It serves as a superior training tool. Employees can easily
intervention by the HRM department. download instructions and processes to get the information or
• For example, Employee Self-Service (ESS) intranet applications education they need.
allow employees to view benefits, enter travel and expense • Employees using new technology can view training videos over
reports, verify employment and salary information, access the intranet on demand.
and update their personal information, and enter
time-sensitive data.

163 164
Human Resource Information Systems Human Resource Information Systems
• HRM and Corporate Intranets :
• Intranet eliminates the need to loan out and track training
videos.
• Employees can also use their corporate intranets to produce
automated pay sheets, the online alternative to time cards.
• These electronic forms have made viewing, entering, and
adjusting payroll information easy for both employees and
HRM professionals.

165 166

Human Resource Information Systems Human Resource Information Systems

• Input Data of HRIS: • Output Subsystem of HRIS:
• Transactional Data: Transaction processing data like • Organisational Resource Planning: Provides proper
employee selection, enrollment and daily performance acquisition and allocation of the resources of manpower to
details are the transactions that must be available. the required areas of work.
• Functional Plans: Plans for each functional area are • Organisational Management: Provides means to evaluate
intimated to personnel department, No further planning for and control the human resource performance.
recruitment or task allocation can be done. • Suitable training and other needs must be fulfilled in time to
• External Data: Must be aware of the needs of the ensure the quality of performance.
employees, competition, Market pay pattern, government • Payroll and Administration: One of the basic requirements
and labor laws etc. of any employee.
• Proper handling of this function is provided by personnel
information system.

167 168
 Interrelationship of Functional Interrelationship of Functional
Information Systems Information Systems
• Interrelationship: Each functional information systems depend
one another and in co-ordinated way to achieve the corporate
objectives.
• Enterprise Resource Planning (ERP): Interrelationship among
the various functions can be automated and integration is
achieved.
• ERP is a software package which has evolved as the integrated
and seamless information system to support the functional
units of an enterprise.
• Companies use ERP Systems to identify and plan enterprise
wide requirements for fulfilling customers orders and to
automate business processes.
• Ex: SAP, BaaN, People Soft, JD Edwards, Oracle, BOI, Maars,
QAD, Ramco Systems
169 170

The Systems Approach

• IS Development: When the systems approach is applied to the
development of an information systems solution to business problems,
it is called information systems development or application
development.
• A problem solving technique that uses a systems orientation to define
UNIT-IV: Systems Analysis and problems and opportunities and develop appropriate and feasible
solutions
Design • Analyzing a problem and formulating a solution involves these
interrelated activities:
• Recognize and define a problem or opportunity using systems
thinking
• Develop and evaluate alternative system solutions
• Select the solution that best meets your requirements
• Design the selected system solution
• Implement and evaluate the success of the system

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 What is Systems Thinking ? What is System Analysis and Design?
• Seeing the forest and the trees in any situation • SAD refers to the process of examining a business situation with the
• Seeing interrelationships among systems rather than linear intent of improving it through better procedure and methods.
cause-and-effect chains • Systems Development has TWO major components:
• Seeing processes of change among systems rather than discrete • Systems Analysis and Systems Design
snapshots of change
• Systems Analysis:
• See the system in any situation
• Is the process of gathering and interpreting facts, diagnosing
• Find the input, processing, output, feedback and control components
problems and using the information to recommend
improvements in the system.
• Analysis specifies “what” the system should do. It sets the
objective.
• Systems Design: is the process of planning a new business system
or complement an existing system.
• Design states ”how” to accomplish the objective.

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System Analysis and Design The Work of a System Analyst

• SAD is the overall process by which IS are designed and • Work of a System Analyst :
implemented • The system analyst is a person who is thoroughly aware of the
• Includes identification of business problems system and guides the system development project by giving proper
directions.
• Two most common approaches
• He is an expert having technical and interpersonal skills to carry out
• Object-oriented analysis and design development tasks required at each phase.
• Life cycle • He pursues to match the objectives of information system with the
• Systems Development Process: organization goal.
• Systems Investigation
• The first step in the systems development process
• May involve consideration of proposals generated by a
business/IT planning process
• Also includes the preliminary feasibility study of proposed
information system solutions

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 Roles of System Analysts Duties of System Analysts
• Estimate personnel requirements – Cost and time for systems projects
• Review and approve proposed systems solutions
• Perform resource planning and scheduling for systems personnel
• Develop, implement and enforce procedural standards for performing
tasks of system analysis and design
• Evaluate performance of systems personnel and report on personnel
activity to management
• Plan and direct acquisition training and development of systems
personnel.
• Assist in programs to educate management users in data processing
and system capabilities and requirements
• Define requirements for analytical studies
• Document current systems operations

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Duties of System Analysts The Work of a System Analyst

• Perform interviews and other data gathering • Main Roles:
• Apply current technology to solution of problems
• Defining and understanding the requirement of user through
• Prepare specifications for systems improvements.
various Fact finding techniques.
• Define systems security and control procedures
• Develop systems testing and conversion plans • Prioritizing the requirements by obtaining user consensus.
• Fulfill administrative reporting requirements • the facts or information and acquires the opinions of users.
• Supervise other project personnel as required • Maintains analysis and evaluation to arrive at appropriate system
• Develop file structures which is more user friendly.
• Design forms and reports • Suggests many flexible alternative solutions, pick the best solution,
• Design data collection, processing and control procedures and quantify cost and benefits.
• Guide programmers and procedure writers
• Evaluate results of program and procedure writers • Draw certain specifications which are easily understood by users
• Document results of design and testing and programmer in precise and detailed form.
• Assist in systems testing and implementation • Implemented the logical design of system which must be modular.
• Fulfill administrative reporting requirements • Plan the periodicity for evaluation after it has been used for some
time, and modify the system as needed.
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 Attributes of a System Analyst Attributes of a System Analyst
• Interpersonal Skills:
• Interface with users and programmer.
• Facilitate groups and lead smaller teams.
• Managing expectations.
• Good understanding, communication, selling and teaching
abilities.
• Motivator having the confidence to solve queries.
• Analytical Skills:
• System study and organizational knowledge
• Problem identification, problem analysis, and problem solving
• Sound commonsense
• Ability to access trade-off
• Curiosity to learn about new organization

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Attributes of a System Analyst Skills of a System Analyst

• Management Skills: • To be effective, a system analyst must have several skills
• Understand users jargon and practices. described below:
• Resource & project management. • An Analytical Mind
• Change & risk management. • Computer Systems and software skills
• Understand the management functions thoroughly. • Knowledge of Organisations
• Good Interpersonal relations
• Technical Skills: • Good Communication skills
• Knowledge of computers and software. • Problem solving skills
• Keep abreast of modern development. • Creative Mind
• Know of system design tools.
• Breadth knowledge about new technologies.

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 Prototyping
Life Cycle
Systems
Development
Lifecycle (SDLC)

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System Design System Design

• It is a process of planning a new business system or replacing an
existing system by defining its components or modules to satisfy the
specific requirements.
• System design is the phase that bridges the gap between problem
domain and the existing system in a manageable way.
• This phase focuses on the solution domain, i.e. “how to
implement?” and how to accomplish the objective of the system.
• In this phase, the complex activity of system development is divided
into several smaller sub-activities, which coordinate with each other
to achieve the main objective of system development.
• System Analysis and Design (SAD) mainly focuses on:
• Systems
• Processes
• Technology
• User interface methods and products
• Database structures
• Processing procedures
• Control procedures
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 System Design System Design
• Inputs to System Design:
• System design takes the following inputs − • What is to be Designed? An ideal new system should include
• Statement of work the content requirements of the following system components:
• Requirement determination plan • Input: It defines the quality of data being entered in the
• Current situation analysis machine. Ex: Forms, Screens
• Proposed system requirements including a conceptual data
model, modified DFDs, and Metadata (data about data). • Output: It is in the form of reports, on-line displays.
• Outputs for System Design: • Procedures: It is structures of procedures to collect,
• System design gives the following outputs − transform and output data.
• Infrastructure and organizational changes for the proposed
system. • Database Interactions: It is concerned with identifying
• A data schema, often a relational schema. requirements of data storage and management.
• Metadata to define the tables/files and columns/data-items. • Controls: The requirements for Data Integrity, Security and
• A function hierarchy diagram or web page map that graphically procedures for recovery.
describes the program structure.
• Actual or pseudocode for each module in the program.
• A prototype for the proposed system.
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System Design System Design

• Properties or Objectives of a Good Design: The major objectives of • Portable: Portability is closely related to independence of Hardware and
Software platforms.
system design are:
• Maintainability: The Design should be so simple that it can be easily
• Functional: The design must be functional i.e. it must meet and maintainable by other designers.
support the user requirements.
Detailed System Design:
• Efficient:A System must be able to meet the functional
requirements within a specified time and it is measured in terms
of
• Throughput – Ability to handle a specified number of
documents per unit of time.
• Response Time – Ability to respond to a request for
information within a given time limit.
• Run Time – Ability to undertake a whole processing task
within a given time limit.
• Flexible: The Design should be flexible as the organisational
processes are dynamic and affected by internal as well as
external factors. It also allows users to adapt requirements to
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meet new needs.
 Requirement Analysis or Systems Requirement Analysis or Systems
Analysis or Structured Analysis Analysis or Structured Analysis
• Requirements Investigation is studying the current system
• A requirement is a vital feature of a new system which may and documenting its features for further analysis.
include processing or capturing of data, controlling the
• It is at the heart of system analysis where analyst
activities of business, producing information and supporting
documenting and describing system features using
the management.
fact-finding techniques, prototyping, and computer assisted
• Requirements determination involves studying the existing tools.
system and gathering details to find out what are the
• Requirements Specifications includes the analysis of data
requirements, how it works, and where improvements should
which determine the requirement specification, description of
be made.
features for new system, and specifying what information
• Requirements Anticipation predicts the characteristics of requirements will be provided.
system based on previous experience which include certain
problems or features and requirements for a new system.

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Tools of Requirement Analysis Tools of Requirement Analysis

• Tools For Structured Analysis: Data Flow Diagrams, Data • Data Storage - There are two variants of data storage - it can either
Dictionary and Process Descriptions are the main tools for be represented as a rectangle with absence of both smaller sides or
structured analysis. as an open-sided rectangle with only one side missing.
• Data flow diagram is graphical representation of flow of data in • Data Flow - Movement of data is shown by pointed arrows. Data
an information system. It is capable of depicting incoming data movement is shown from the base of arrow as its source towards
flow, outgoing data flow and stored data. DFDs depict flow of head of the arrow as destination.
data in the system at various levels.
• Data flow Components represent Source, destination, storage
and flow of data using the following set of components
• Entities - Entities are source and destination of information data.
Entities are represented by a rectangles with their respective
names.
• Process - Activities and action taken on the data are represented
by Circle or Round-edged rectangles.

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Data Flow Diagram for a Generic Order Requirement Analysis or Systems
Processing system Analysis or Structured Analysis
• Data Dictionary is the centralized collection of information about data.
• It stores meaning and origin of data, its relationship with other data,
data format for usage etc.
• Data dictionary is often referenced as meta-data (data about data)
repository. It is created along with DFD.
• Requirement of Data Dictionary:
• The data is referenced via data dictionary while designing and
implementing software.
• Data dictionary removes any chances of ambiguity.
• It helps keeping work of programmers and designers synchronized
while using same object reference everywhere in the program.
• Data dictionary provides a way of documentation for the complete
database system in one place.
• Validation of DFD is carried out using data dictionary.
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Requirement Analysis or Systems Requirement Analysis or Systems

Analysis or Structured Analysis Analysis or Structured Analysis
• Data dictionary should contain information about the following:
• Data Flow: When the data flows from One end to another and is
described by means of DFDs
• Data Structure: It is a set of elements that are related to one
another and collectively describe a component in the system Ex:
Employee Register
• Data Element: consist of Name and descriptions of Data and
Control Items, Internal or External data stores . It is the basic
reference work for finding the names and attributes of data • Data Processing : There are two types of Data Processing:
elements. Ex: Employee Name, DOJ, DOB etc • Logical: As user sees it
• Data Stores: It stores the information from where the data • Physical: As software sees it.
enters into the system and exists out of the system The Data
Store may include Files and Tables.

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 Requirement Analysis or Systems Requirement Analysis or Systems
Analysis or Structured Analysis Analysis or Structured Analysis
• Process Description: Another Major tool of structured analysis that • Decision Tree:
describes the sequence of different processes in the system. • A decision tree is a decision support tool that uses
• Commonly used Process Descriptions are:
a tree-like model of decisions and their possible consequences,
including chance event outcomes, resource costs, and utility. It is
• Structured English
one way to display an algorithm that only contains conditional
• Decision Tree control statements.
• Decision Table • Decision trees are commonly used in operations research,
■ Structured English: Analysts and designers of the software come up specifically in decision analysis, to help identify a strategy most
with tools such as Structured English. likely to reach a goal.
■ It is nothing but the description of what is required to code and how
to code it.
■ Structured English helps the programmer to write error-free code It
uses plain English words in structured programming paradigm.
■ Ex: Customer Authentication in the online shopping environment.
■ Enter Customer_Name
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Requirement Analysis or Systems Relationship Diagram

Analysis or Structured Analysis • Entity-Relationship model :
• Decision Table:
• A Decision table represents conditions and the respective actions • Entity-Relationship model is a type of database model based on the
to be taken to address them, in a structured tabular format. notion of real world entities and relationship among them.
• It is a powerful tool to debug and prevent errors. • ER Model creates a set of entities with their attributes, a set of
• To create the decision table, the developer must follow basic four constraints and relation among them.
steps:
• Identify all possible conditions to be addressed • ER Model is best used for the conceptual design of database. ER Model
• Determine actions for all identified conditions can be represented as follows
• Create Maximum possible rules
• Define action for each rule
• Decision Tables should be verified by end-users and can lately be
simplified by eliminating duplicate rules and actions.
• Example : Let us take a simple example of day-to-day problem with
our Internet connectivity. We begin by identifying all problems that
can arise while starting the internet and their respective possible
solutions.

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 Relationship Diagram Implementation
• ENTITY − It specifies distinct real world items in an application. For
example: vendor, item, student, course, teachers, etc.
• RELATIONSHIP − They are the meaningful dependencies between
entities. For example, vendor supplies items, teacher teaches courses,
then supplies and course are relationship.
• ATTRIBUTES − It specifies the properties of relationships. For example,
vendor code, student name. Symbols used in E-R model and their
respective meanings −
▪ The implementation of New systems involves
▪ Hardware and software acquisition
Symbol Meaning
▪ Software development
Entity
▪ Testing of programs and procedures
▪ Conversion of data resources
Relationship
▪ Conversion alternatives
▪ Education / Training of End users and specialists who will
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operate the new system 206

Implementation Implementation
• The keys to successful implementation of a new business • Data Conversion includes
system • Converting data elements from the old database to the new
• System Testing database
• Data conversion • Correcting data errors
• Documentation • Filtering out unwanted data
• Training • Consolidating data from several databases
• System testing may involve • Organizing data into new data subsets
• Testing and debugging software • Improperly organized and formatted data is a major cause of
• Testing website performance implementation failures
• Testing new hardware
• Review of prototypes

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 Implementation Implementation
• Documentation: • Training:
• User Documentation • End users must be trained to operate a new business system or
• Sample data entry screens, forms, reports its implementation will fail
• System operating instructions • May involve only activities, such as data entry, or all aspects
• Systems Documentation of system use
• Method of communication among those developing, • Managers and end users must understand how the new
implementing, and maintaining a computer-based system technology impacts business operations
• Detailed record of the system design • System training should be supplemented with training related to
• Extremely important when diagnosing problems and • Hardware devices
making system changes • Software packages

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Implementation - System Conversion Implementation

Strategies • Direct conversion:
■ The simplest conversion strategy and involves turning off the old
system and turning on the new one.
■ Advantages:
• May be the only viable solution in cases of emergency
implementation or if the old and new system cannot coexist
• Forces users to make the new system work.
• There are immediate benefits from new methods and controls.
■ Disadvantages:
• The most disruptive to the organization
• Sometimes referred to as the slam dunk or cold-turkey strategy
• Has the highest risk of failure
• Requires more careful planning
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 Implementation Implementation
• Parallel Conversion: ■ Pilot Conversion: Select a location that best represents the
• Advantages: conditions across the organization where the working version of the
• Old and new systems are run simultaneously until everyone is system is implemented. For Ex: A Department
satisfied that until the new system functions correctly and the • Scenarios best suited to do pilot conversion are Multiple business
old system is no longer needed. locations and Geographically diverse locations
• Offers greatest Security as there is a backup in the old system • Advantages:
• Conversion to new system can be single cutover or phased • Provides experience to the users and operators.
cutover • Less risky in terms of loss of time or delays in processing.
• Best choice where an automated system is replacing a manual • Provides Live Test Data before implementation
one • Can be evaluated and changed before further installations
• Disadvantages: • Disadvantages:
• Has the lowest risk, but the highest cost • In case, if Implementation is not handled properly, then users may
• Can cost 4 times more than using the old system develop the impression that the system is not error free and may
• Burdens Employees involved with Double workload think it is unreliable.

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Implementation Post-Implementation Activities

• Phased Conversion: • The single most important and costly activity for the success of a
• Takes advantage of both the direct and parallel approaches system
• Minimizes the risks involved • Correcting errors or faults in the system
• Allows the new system to be brought online as logically ordered • Improving system performance
functional components • Adapting the system to changes in the operating or business
• Only one phase of the system is implemented one at a time. For environment
example, File Conversions, Training of Personnel or Arrival of Equipment • Requires more programmers than does application
• Advantages: development
• Allows some users to take advantage of the system early. • May exist for years
• Allows training and installation without unnecessary use of resources. • System Maintenance: Four basic categories of system
• Disadvantages: maintenance are
• Force the staging of Implementation over a period of time which could • Corrective: Fix bugs and logical errors
be Weeks or Months.
• Adaptive: Add new functionality
• Created the most disruption to the organization over time.
• Perfective: Improve performance
• A long Phase-In causes, user, problems whether the project is under
progress or not. • Preventive: Reduce chances of failure
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 Post-Implementation Review Evaluation and Maintenance
• Evaluation: Periodic monitoring of the efficiency and effectiveness of
• Most important activity for the success of a system:
the new information system against the set objectives and standards.
• Different people with different styles of decision making and
• Concerned with the monitoring of the performance of the
problem solving will have different responses to the same
information system.
system.
• Performed by the Manager in the systems department who
• Formal set of measures identified are High levels of System use,
supervises and controls processing activities from scheduling through
User satisfaction, Favourable Attitude, Achieved Objectives and
output distribution.
Financial Payroll.
• Factors such as Availability, Flexibility, Reliability, Timeliness,
• Refers to the proper, periodic feedback system of the users to
Repairability and Quantity of operations, Questions regarding the
measure the success
performance of the system will be raised.
• Ensures that the newly implemented system meets the established
• Performance factors can be measured by monitors that collect
business objectives
quantitative data. For example, hardware monitors are used to know
• Errors must be corrected by the maintenance process. the utilisation of CPU, peripherals to identify bottlenecks, downtime,
• Includes a periodic review/audit of the system as well as saturation conditions of storage devices, Auditing programs on
continuous monitoring. software Monitoring and collect information on how system
resources have been used by whom and for what applications.
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Evaluation and Maintenance Evaluation and Maintenance

• Another approach to data collection is ti solicit the views of • Hardware evaluation factors are:
people who interact with the information system through • Performance
Surveys, Interviews, Observations, Complaints Records, Study
• Cost
of Documentation etc. are the other ways of assessing system
performance. • Reliability
• System evaluation takes place periodically for example every • Compatibility
six months and it may also takes place when problem arise or • Technology
when End-users express dissatisfaction with output. • Ergonomics
• Performance is compared to the systems requirements and • Connectivity
checked to see that departmental standards for information • Scalability
processing.
• Software
• Operations will continue if the system is satisfactory or
• Support
systems evaluation should identify problems that needed to be
corrected
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 Evaluation and Maintenance Evaluation and Maintenance
• Software Evaluation Factors are: • Examples of IS services
• Hardware evaluation factors apply to software, as do these • Developing a company website
• Quality • Installation or conversion of hardware/software
• Efficiency • Employee training
• Flexibility
• Hardware maintenance
• Security
• System design and/or integration
• Connectivity
• Maintenance
• Contract programming
• Documentation • Consulting services
• Hardware

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Evaluation and Maintenance Evaluation and Maintenance

• IS evaluation factors include • Systems Maintenance:
• Maintenance is one of the systems support activities of taking
• Performance corrective action to prevent systems crash.
• Systems development • Errors will be caused by so many factors such as Design Flaws,
• Maintenance Unanticipated situations like changes in the Business
environment in appropriate systems, Program Errors, New
• Conversion business policies, Acquiring of new Hardware and Unanticipated
• Training misuse of the programs
• Backup facilities and services • Fundamental Objectives of system maintenance are:
• To make predictable changes to existing programs to correct
• Accessibility to sales and support
errors that were made during system design and implementation.
• Business position and financial strength • Better the system design the easier it will be to maintain and the
• Hardware selection and compatibility maintenance cost will be low.
• Software packages offered • To improve the existing software rather than to respond to a
crisis or system failure.
• To update software
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 Database System Database System
• Overview of Database: • Relation-based tables − DBMS allows entities and relations
• Database is a collection of related data and data is a collection of among them to form tables. A user can understand the
facts and figures that can be processed to produce information. architecture of a database just by looking at the table names.
• Data aids in producing information, which is based on facts. For • Less redundancy − DBMS follows the rules of normalization,
example, data about marks obtained by all students, to calculate which splits a relation when any of its attributes is having
toppers and average marks. redundancy in values.
• A database management system stores data in such a way that it
• Consistency − Consistency is a state where every relation in a
becomes easier to retrieve, manipulate, and produce information.
database remains consistent.
• Characteristics: A modern DBMS has the following characteristics :
• Query Language − DBMS is equipped with query language,
• Real-world entity − DBMS is more realistic and uses real-world
which makes it more efficient to retrieve and manipulate data.
entities to design its architecture. It uses the behaviour and
attributes too. For example, a school database may use students • Multiuser and Concurrent Access − DBMS supports multi-user
as an entity and their age as an attribute. environment and allows them to access and manipulate data
in parallel.

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DataBase System DataBase System

• Multiple views − DBMS offers multiple views for different • Designers − Designers are the group of people who actually work
users. A user who is in the Sales department will have a on the designing part of the database. They identify and design
different view of database than a person working in the the whole set of entities, relations, constraints, and views.
Production department. • End Users − End users are those who actually reap the benefits
• Security − Features like multiple views offer security to some of having a DBMS.
extent where users are unable to access data of other users
and departments. For example, a user in the Sales
department cannot see the data that belongs to the Purchase
department.
• Users:
• DBMS has users with different rights and permissions and the
users of a DBMS can be broadly categorized as follows −
• Administrators − Administrators maintain the DBMS and are
responsible for administrating the database. They create
access profiles for users and apply limitations to maintain
isolation and force security.
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 DataBase System Database System
• Components of a DataBase System: • Components of a Database System:
• Data Dictionary:
• Data dictionary is the centralized collection of information about
• Data Dictionary data.
• Data Languages • It stores meaning and origin of data, its relationship with other
• Teleprocessing Monitors data, data format for usage etc.
• Application Development Tools • Data dictionary is often referenced as meta-data (data about
• Security Software data) repository. It is created along with DFD (Data Flow Diagram)
model of software program.
• Report Generator
• Data Languages:
• Query Languages
• Database Languages are used to create and maintain database
• Multiple Platform Databases on computer. Database languages like Oracle, MYSQL, MS Access
• Web Server Software are some examples. Database Languages can be categorized as
data definition language (DDL), data control language (DCL) and
data manipulation language (DML).

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DataBase System DataBase System

• Data Definition Language (DDL): • Components of a DataBase System:
• It is a language that allows the users to define data and their ■ Teleprocessing Monitors:
relationship to other types of data. It is mainly used to create • A teleprocessing monitor (also, Transaction
files, databases, data dictionary and tables within databases. Processing Monitor or TP Monitor) is a communications
• Data Manipulation Language (DML): software package that manages communications between the
• It is a language that provides a set of operations to support database and remote terminals.
the basic data manipulation operations on the data held in • Control program that monitors the transfer of data between
the databases. It allows users to insert, update, delete and
multiple local and remote terminals to ensure that the
retrieve data from the database.
transaction processes completely or, if an error occurs, to take
• Data Control Language (DCL): appropriate actions.
• DCL statements control access to data and the database using
• It handle the order entry systems that have terminals located at
statements such as GRANT, SELECT, ALTER, DELETE, EXECUTE,
remote sales locations.
INSERT, INDEX and REVOKE.

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 DataBase System DataBase System
• Components of a DataBase System: Application Development • Components of a DataBase System:
Tools: • Security Software:
• A security software package provides a variety of tools to shield the
• These are the programs designed to help programmers to database from unauthorised access and from unwanted viruses.
develop application programs that use the database. Example: • Report Generator:
CASE Tools • A report generator is a computer program whose purpose is to take data
from a source such as a database, XML stream or a spreadsheet, and use it
• CASE tools can serve many functions in database design, to produce a document in a format which satisfies a particular human
including: readership.
• A Report Generator or writer allows programmers, Managers and other
• Collecting and analyzing data. users to design output reports such as Job Reports, Documents such as
• Designing a data model. Invoices and special reports.
• Feasibility analysis.
• Requirements definition.
• Implementing the database.
• Prototyping.
• Data conversion.
• Generating application code.
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DataBase System DataBase System

• Components of a DataBase System:
■ Query Languages: • Components of a DataBase System:
• A Query language is a set of commands used primarily for accessing ■ Web Server Software:
data from a database. • A Web server is a program that uses HTTP (Hypertext Transfer
• It allows to ask ad-hoc questions of the database interactively Protocol) to serve the files that form Web pages to users, in
without the aid of programmers. response to their requests, which are forwarded by their
• Three tools used to query a database are Structured Query Language computers' HTTP clients.
(SQL), Natural Language Queries and Query By Example (QBE) • Most databases recently have integrated WWW (World Wide
■ Multiple Platform Databases: Web) server software in them to enable users for web
• These are versions of softwares in database that work on many connectivity.
different computer hardware and operating system platforms • All computers that host Web sites must have Web
• The versions often simplify downloading data from one system to server programs.
another for local processing (Example: Oracle DBMS)

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 DataBase System DataBase System
• Advantages of DataBase System: • Disadvantages of DataBase System:
• Reduced data redundancy • Database systems are complex, difficult, and time-consuming to
• Reduced updating errors and increased consistency design
• Greater data integrity and independence from applications • Substantial hardware and software start-up costs
programs • Damage to database affects virtually all applications programs
• Improved data access to users through use of host and query • Extensive conversion costs in moving form a file-based system to
languages a database system
• Improved data security • Initial training required for all programmers and users
• Reduced data entry, storage, and retrieval costs
• Facilitated development of new applications program

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