BUSINESS FUNCTIONS & INFORMATION

SYSTEM

What is a System?

• System is simply a set of components that interact to accomplish some purpose.

• Business is also a system. Its components are marketing, manufacturing, sales, research, accounting, and personnel- all work together to create a profit that benefits the employees and stockholders of the firm.

Characteristics of System

• Systems that interact with their environments (receive input and produce output) ,are open systems.

• Systems that do not interact with their surroundings are closed systems.

• All ongoing systems are open.

• The element of control is related to

whether systems are open or closed. Systems work best -are ‘in control’ – when they operate within tolerable performance levels.

• All systems have acceptable levels of performance, called standards, against which actual performances are compared.

• The information supplied by comparing results with standards and informing the

the control elements of the differences is termed feedback.

• Systems that can adjust their activities to acceptable levels continue to function. Those that can not eventually stop.

• Systems may be made up of levels of systems, or subsystems.

What is Information System?

• Every business system depends on a more abstract entity called an information system.

• This system is the means by which dataflow from one person or dept. to another and can encompass everything from interoffice mail and telephone links to a computer system that generates periodic reports for various users.

• An IS is a set of interrelated elements or components that collect (i/p), manipulate (process) , and disseminate (output) data and information and provide a feedback mechanism to meet an objective.

• INPUT- the activity of gathering and capturing raw data.

• PROCESSING- converting or transforming data into useful o/ps.

• OUTPUT- producing of useful information,

usually in the form of documents and reports.

• FEEDBACK- o/p that is used to make changes to i/p or processing activities.

• FORCASTING- predicting future events to avoid problems.

Characteristics of IF

• Accurate

• Complete

• Economical

• Flexible

• Reliable

• Relevant

• Simple

• Timely

• Verifiable

• Accessible

• Secure

Business IS

• The purposes of IS are to process i/p, maintain files of data about the organization, and produce information, reports, and other o/p.

• IS consists of subsystems , including hardware, software, and data storage for files and databases.

Computer Based Information System

• Computer Based information System (CBIS) consists of hardware, software, databases, telecommunications, people, and procedures that are configured to collect, manipulate, store, and process data into information.

• The technology infrastructure is a set of shared information system resources that form the foundation of each individual computer based information system.

• Hardware:- It consists of computer equipment used to perform input, processing, and output activities.

• One company for e.g. uses computer hardware in its stores to allow customers to order items that are not on store shelves.

• The hardware helps the company “save the sale” and increase the revenues.

• Software:- It consists of computer programs that govern the operation of the computer.

• There are two basic types of software: system software such as Windows XP, which controls basic computer operations such as start-up and

printing and second type is application software such as Office XP, which allows specific tasks to be accomplished, such as word processing.

• Database:-it is an organized collection of facts and information.

• Facts and information on customers, employees, sales information etc..

• Telecommunication:- the electronic transmission of signals for communications; enables organizations to carry out their processes and task through effective computer networks.

• Networks:- It is used to connect computers and computer equipment in a building, around the country, or around the world to enable electronic communications.

• Internet:- it is the world’s largest computer network , actually consisting of thousands of interconnected networks, all freely exchanging information.

• Intranet:- an internal network based on web technologies that allows people within an organization to exchange information and work on projects.

• Extranet:- it is a network based on web technologies that allows selected outsiders, such as business partners and customers, to access authorized resources of the internet of a company.

• People:- it is most important element in computer based information system. It include all the people who manage, run, program, and maintain the system.

• Users are any people who use information system to get results.

• Procedures:- it include the strategies, policies, methods, and rules for using a CBIS.

Categories Of Information System

System analysts develop several different types of information systems to meet a variety of business needs.

1)Transaction Processing SystemsTransaction processing systems(TPS) are aimed at improving the routine business activities on which all organization depend.

A transaction is any event or activity that affects the organization. Common transactions include placing orders, billing customers, hiring employees, and depositing checks. These occur at operational level in any organization.

• Transaction processing procedures are often called Standard Operating Procedures.

• Transaction processing system provide speed and accuracy, and can be programmed to follow routines without any variance.

• Its main characteristics: substitutes computer-based processing for manual procedures. Deals

well-structured routine process. Includes recordkeeping applications.

2)Management Information System:-• Transaction system are operation-oriented. In

contrast, management information systems assist managers in decision making and problem solving.

• Main characteristics:- provides input to be used in the managerial decision process. Deals with supporting well-structured decisions situation. Typical information requirements can be anticipated.

3) Decision support system:-• Not all decisions are of a recurring nature.

Some occur only once or recur infrequently. Decision support assist managers who must make decisions that are not highly structured, often called unstructured or semi-structured decisions.

• A decision is considered unstructured if there are no clear procedures for making the decision and if not all the factors to be considered in the decision can be readily identified in advance.

• A key factor in the use of decision support systems is determining what information is

needed.• In well-structured situations it is possible to

identify information needs in advance, but in unstructured environment, it is difficulty to do so.

• Main characteristics:- provides information to managers who must make judgments about particular situations. Support decision makers in situations that are not well-structured.

System Development Strategies

• 3 distinct approaches1. System development life cycle method.• System development, a process consisting of

the two major steps of systems analysis and design, starts when management or sometimes systems development personnel realize that a particular business system needs improvement.

• The system development life cycle method is

is classically thought of as the set of activities that analysts, designers, and users carry out to develop and implement an information system.

• The system development life cycle method consists of the following activities:

1.Preliminary investigation.2.Determination of system requirement.3.Design of system.4.Development of software.5.Systems testing.6.Implementation and evaluation.

2. Structured analysis development method• The structured analysis development method is

aimed at overcoming that difficulty through 1. Partitioning the system into components.2. Constructing a model of the system.• It consist of elements of both analysis and

design.• Structured Analysis:- it focuses on specifying

what the system or application is required to do.

• Elements of structured analysis:-

1. Graphic Description.2. Data flow diagrams.3. Data dictionary.• Structured Design:- it is another element of

structured analysis that utilizes graphic description, focuses on the development of software specifications.

• The goal is to create programs consisting of functionally independent modules that perform relatively independently of one another.

3) Systems prototype method:-• It involves the user more directly in the analysis

and design experience than does the systems development life cycle or structured analysis method.

• Prototype:-it is a working system-not just idea on paper-that is developed to test ideas and assumptions about the new system.

• Underlying principle of prototype:-user can point to features they like or dislike so indicate short-comings in an existing and working system more easily than they can

describe them in a theoretical and proposed system. Experience and use produce more meaningful comment than analysis of charts and narrative proposals.

Tools For Systems Development

• A tool is any devise that, when used properly, improves the performance of task, such as development of computer information system.

1.Analysis tools.• Data collection tools• Charting tools• Dictionary tools

2. Design tools• Specification tools• Layout tools3. Development tools• Software engineering tools• Code generators• Testing tools

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