ITB Data and Information

8/14/2019 ITB Data and Information

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Data is unprocessed raw information.Data is normally stored in a databaseor a file. Information is the result of

processing, manipulating andorganizing data in a way that adds tothe knowledge of the person receiving

it.


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A system is a group of interrelatedcomponents, with clearly definedboundary, working together towards a

common goal by accepting inputs andproducing outputs in an organizedtransformation process.


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Input involves capturing andassembling elements that enter thesystem to be processed. For example

raw materials, energy, data, and labourmust be secured and organized forprocessing.

Processing involves transformationprocesses that convert input intooutput. Examples are manufacturingprocess, mathematical calculation etc.


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Output involves transferring elementsthat have been produced by atransformation process to their ultimate

destination. For example finishedproducts, management informationtransferred to the end users.


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A manufacturing system accepts rawmaterials as input produces finishedgoods as output. An information

system is a system that acceptsresources (data) as input and processesthem into products (information) as

output. A business organisation is alsoa system where economic resourcesare transformed various business

processes into goods and services.


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Our basic IS model shows that aninformation system consists of fivemajor resources:

2. People

3. Hardware

4.

Software5. Data and

6. Networks.


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End users (clients) are people who use aninformation system or the information itproduces. They can be customers, salesperson, engineers etc.

IS specialists are people who develop andoperate information systems. They includesystems analysts, software developers,system operators and other managerial,technical and clerical personnel.


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Hardware resources:

They include all physical devices andmaterials used in informationprocessing. It includes not onlymachines such as computers and theirperipherals but also data media such

as tangible objects on which data isrecorded, that is right from sheets ofpaper to magnetic or optical disks etc.


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Software resources:

The concept of software resourcesincludes all sets of informationprocessing instructions. It includes notonly the sets of operation instructionscalled programs, which direct and

control computer hardware, but alsothe sets of information processinginstructions called procedures that

people need.


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Data can take many forms, likealphanumeric data, composed ofnumbers and alphabetical and other

characters that describe businesstransactions and other events andentities. Text data, consisting ofsentences and paragraphs used in

written communications, image data,such as graphic shapes and figures,and photographic and video images,and audio data, the human voice andother sounds are also important forms


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The data resources of informationsystems are typically organized, storedand accessed by variety of data

resource management technologiesinto:

Databases that hold processed andorganized data

Knowledge bases that hold knowledgein a variety of forms such as facts, rulesand case examples about successful

business practices


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Network Resources:

Telecommunications technologies andnetworks like internet, intranets and

extranets are essential for the successof electronic business and commerce.

Telecommunications networks consistof computers, communicationprocessors and other devicesinterconnected by communicationsmedia and controlled by

communications software.


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Input of Data Resources:

Input typically takes the form of data entryactivities such as recording and editing. Onceentered, data may be transferred into amachine-readable medium such a magneticdisk until needed for processing.

Processing of Data into Information:

Data are subjected to processing activitiessuch as calculating, comparing, sorting,classifying and summarizing. These activitiesorganise, analyse, and manipulate data thusconverting them into information for end

users.


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Output of Information products:

Information in various forms istransmitted to end users and made

available to them in the output activity. Thegoal of information systems is theproduction of appropriate informationproducts for end users. Common

information products include messages,reports, forms, and graphic images, whichmay be provided by video displays, audioresponses, paper products and multimedia.

Storage of Data Resources:Storage is a basic system component ofinformation systems. Storage is theinformation system activity in which dataand information are retained in anorganised manner for later use.


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Control of system performance:

An important information system activityis the control of system performance. An

information system should producefeedback about its input, processing, andoutput and storage activities. Thisfeedback must be monitored and

evaluated to determine if the system ismeeting established performancestandards. Then appropriate systemactivities must be adjusted so that proper

information products are produced for end


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Transaction Processing System

Management Information System

Decision Support Systems


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A Transaction Processing System (TPS)is a type of information system thatcollects, stores, modifies and retrievesthe data transactions of an enterprise.A transaction is any event that passes

the ACID test in which data isgenerated or modified before storagein an information system


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Rapid Processing- TPS systems are designed to processtransactions virtually instantly to ensure that data isavailable to the processes that require it.Reliability- designed to incorporate comprehensivesafeguards and disaster recovery systems. These

measures keep the failure rate well within tolerancelevels.Standardization- Transactions must be processed in thesame way each time to maximise efficiency. To ensurethis, TPS interfaces are designed to acquire identical datafor each transaction, regardless of the customer.

Controlled Access- TPS must be restricted to onlythose employees who require their use. Restricted accessto the system ensures that employees who lack the skillsand ability to control it cannot influence the transactionprocess


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Batch Processing

Real Time Processing


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Batch processing is a resource-savingtransaction type that stores data forprocessing at pre-defined times. Batch

processing is useful for enterprises thatneed to process large amounts of datausing limited resources.


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Credit card transactions, for which thetransactions are processed monthlyrather than in real time. Credit card

transactions need only be processedonce a month in order to produce astatement for the customer, so batch

processing saves IT resources fromhaving to process each transactionindividually.


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In many circumstances the primaryfactor is speed. For example, when abank customer withdraws a sum of

money from his or her account it is vitalthat the transaction be processed andthe account balance updated as soon

as possible, allowing both the bank andcustomer to keep track of funds.


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It is basically concerned withprocessing data into information, whichis then communicated to the various

Departments in an organization forappropriate decision-making.

Data Information CommunicationDecisions


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MIS plays a vital role in ensuring thatan appropriate data is collected from

various sources, processed and sentto the needy destinations, fulfills theinformation needs of an individual, a

group and the managementfunctionaries at all levels. MISsatisfys these needs through avariety of systems such as query,analysis, modeling and decisionsupport systems. The figure givenbelow explains the working of MIS


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A business transaction can be any


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A business transaction can be anybusiness event like a payment or receiptof purchase etc. When a transaction takes

place it is first processed through TPSwith the help of operational databases.An operational database is a databasecontaining up-to-date modifiable data.

From the TPS the transactions move toMIS, which draws inputs from internal andexternal sources and then stores theupdated transaction (output) inapplication databases to be used eitherfor internal distribution through intranetor for other systems like the Decision

Support systems, Executive support


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Drill down Reports

Scheduled reports

Key-indicator reportDemand report

Exception report

Drill down Reports:


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Drill down Reports:These are reports that move from summaryinformation to the detailed data thatcreated it. For example, adding totals from

all the orders for a year creates gross salesfor the year. Drilling down would identify thetypes of products that were most popularScheduled reports:Produced periodically, or on a schedule

(daily, weekly, monthly)Key-indicator report:It summarizes the previous days critical

activities. Typically available at the

beginning of each dayDemand report:Gives certain information at a managers

request

Exception report:


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A decision support system (DSS) is acomputer program application that analyzesbusiness data and presents it so that userscan make business decisions more easily.

Typical information that a decision support

application might gather and present wouldbe:

Comparative sales figures between oneweek and the next

Projected revenue figures based on newproduct sales assumptionsThe consequences of different decisionalternatives, given past experience in acontext that is described

A decision support system may present


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Also referred to as EIS that is ExecutiveInformation System. Executive SupportSystem (ESS) is a reporting tool

(software) that allows you to turn yourorganization's data into usefulsummarized reports. These reports aregenerally used by executive level

managers for quick access to reportscoming from all company levels anddepartments such as billing, costaccounting, staffing, scheduling, andmore.


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In addition to providing quick accessto organized data from departments,

some Executive Support Systemtools also provide analysis tools thatpredicts a series of performanceoutcomes over time using the inputdata. This type of ESS is useful toexecutives as it provides possibleoutcomes and quick reference to

statistics needed for decision-making.

Data Information

Knowledge Action


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It facilitates everyday informationprocessing tasks in offices and business

organizations. It provides effectiveways to process personal andorganizational business data, to

perform calculations and to createdocuments.


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Word processing

A spreadsheet

A presentation tool

A database

A schedule


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Considering that organizationsrequire increased communication,

today, office automation is no longerlimited to simply capturinghandwritten notes. In particular, it

also includes the following activities:Exchange of information

Management of administrative

documentsHandling of numerical data

Meeting planning and management

of work schedules


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INFORMATION SYSTEM LEVELS:

Top Mgmt Middle Mgmt

Lower Mgmt

Operational Mgmt


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At the operational level, known asfunctional level, routine production orclerical operations are performed.Operational systems provide littlefeedback directly to the employees. Fore.g., the materials clerk receives amaterial requisition, fills the requisitionand files a report of action taken. Therecords of transactions occurring at theoperational level constitute data that,when collected, organized and processed

becomes the basis for higher level


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Lower management performssupervisory functions. For e.g., thesupervisor cross checks the material

requisition form submitted by thematerial clerk at the operational leveland takes corrective actions.


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Middle management functions areknown to be tactical in nature. Thislevel is responsible for planning,allocation and control of resourcesnecessary to accomplish the

organizational goals. Authority isdelegated to the supervisory leveland performance is measured. Top

management functions are strategicin nature. These includeestablishment of the goals, longrange planning, product


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INFORMATION GENERATORS:

Information systems are developed

in a company to meet not only itsinternal reporting needs but also theexternal reporting needs that arise

from its general businessenvironment. The internalinformation needs are represented

by the nine functional businesssystems. Externally generated needsare represented by nine agencies.


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BUSINESS INFORMATION SYSTEM:

Business Information System supportsthe functional areas of business

(marketing, production/operations,accounting, finance, and humanresource management) through a wide

variety of computer-based operationaland management information systems.


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Other wise called as Cross FunctionalInformation systems as they areintegrated combinations of business

information systems, thus sharinginformation resources across thefunctional units of an organization.

Lets now briefly study the applicationof MIS across the functional units of anorganisation.


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It is an Information System thatsupports planning, control, andtransaction processingrequired for theaccomplishment of marketingactivities, such as sales management,advertising and promotion


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A dynamic collaborative process ofcreating, purchasing, and improvingproducts and services that builds close

relationships between business and itscustomers, using variety of services onthe Internet, intranets and extranets.

The marketing materials can be put oncustomers or prospectus computerscreens using either Push or Pulltechnologies.


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Pull Marketing

It relies on the customer to access the

services of the internet using the Webbrowser. For e.g., A customer woulduse the browser to find and read ordownload multimedia marketing

material from a companys web site.Push Marketing

It relies primarily on software called

Web broadcasters or net broadcasters.For e.g., Softwares such as PointCast,Backweb, and Castanet automaticallytransmitsa variety of information fromthe web or other sources to the


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Step-1 Segment and identify potential customers(Initial market research done by reachingrelevant groups-WWW servers, newsgroups)

Step-2 Create promotional, advertising, and educationalmaterial(WWW page with multimedia effects-audio andvideo)

Step-3 Put the material on the customers computerscreensPush-based marketing-direct marketing usingWeb broadcasters, newsgroups and E-mailPull-based marketing- indirect marketing(static)-

www pages

Step-4 Interacting with customers


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Dialogue with the customer, interactivediscussion among customer about variousfeatures offering endorsements, testimonials,

questions/answers.

Step-5 Learning from customer

Incorporating feedback from customers inadvertising, marketing strategy identifying newmarkets, using experience in new productdevelopment

Step-6 Online customer serviceFast, friendly solutions to customer problems


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SFA were originally meant to improve salesforce productivityand encourage salespeopletodocument and communicate their fieldactivities. But today they are becomingincreasingly focused on cultivating customer

relationshipsand improving customersatisfaction. Sales Force Automation Systems(SFA), typically a part of a companys customerrelationship management system, is a systemthat automatically records all the stages in a

sales process. SFA includes a contactmanagement system which tracks all contactthat has been made with a given customer, thepurpose of the contact, and any follow up thatmight be required. This ensures that salesefforts are not duplicated, reducing the risk ofirritating customers.


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SFA also includes a sales leadtracking system, which lists potential

customers through paid phone lists,or customers of related products.Other elements of an SFA system can

include sales forecasting, ordermanagement and productknowledge. More developed SFAsystems have features where

customers can actually model theproduct to meet their required needsthrough online product building

systems


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Sales manager must plan, monitor, andsupport the performance of thesalespeople in their organizations. So inmost firms, computer based systemsproduce sales analysis reports thatanalyze sales by product, product line,customer, type of customer, salesperson,and sales territory. Such reports helpmarketing managers monitor salesperformance of products and salespeopleand help them develop sales support

programs to improve sales results.


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Market Research information systemsprovide marketing intelligence to helpmanagers make better marketing forecastsand develop more effective marketingstrategies. Marketing information systemhelp researchers to collect, analyze, andmaintain an enormous amount ofinformation on a wide variety of marketvariables that are subject to continual

change. This includes information oncustomers, prospects, consumers, andcompetitors. Data can be gathered frommany sources, including a companysdatabases, data marts and data warehouse,

www sites. Then a variety of statisticalsoftware tools can hel mana ers anal ze


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CRM is a combination of policies,processes, and strategies implementedby an organization to unify its customer

interactions and provide a means totrack customer information. It involvesthe use of technology in attracting new

and profitable customers, while formingtighter bonds with existing ones.


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Front office operations Direct interaction withcustomers, e.g. face to face meetings, phone calls, e-mail, online services etc.

Back office operations Operations that ultimatelyaffect the activities of the front office (e.g., billing,

maintenance, planning, marketing, advertising,finance, manufacturing, etc)

Business relationships Interaction with othercompanies and partners, such as suppliers/vendorsand retail outlets/distributors, industry networks(lobbying groups, trade associations) This externalnetwork supports front and back office activities.

Analysis Key CRM data can be analyzed in order toplan target-marketing campaigns, conceive business

strategies, and judge the success of CRM activitiese. . market share number and t es of customers


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Product Managers need information toplan and control the performance ofspecific products, product lines, and

brands. Computer-based models maybe used to evaluate the performancesof current products and the prospects

for success of proposed products.


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They support production/operationsfunction of an organization. Informationsystems used for operations

management and transactionprocessing, support firms in planning,monitoring, & controlling inventories,

purchases & the flow of goods andservices.


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Combines material requirementplanning with other manufacturing-related activities to plan the

manufacturing process such as:Shop activity control and purchasing

Source of demand

Customer order entry and forecastingSupport functions such as financialmanagement, sales analysis, and datacollection


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Engineering System:

Engineering information systems aidengineers in designing new products

and simulate operations with the helpof Computer aided designs, Computeraided engineering etc


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Human Resource Information Systems support,Planning to meet the personnel needs of thebusinessDevelopment of employees to their full potential

Control of personal policies and programsRecruitmentJob placementPerformance appraisals

Employee benefits analysisTraining and developmentHealth, safety, & security

HRM and the Internet


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Allows companies to process mostcommon HRM applications over theirintranets

Allows companies to provide around-the-clock services to their employees

Allows companies to disseminate

valuable information fasterAllows employees to perform HRMtasks online

A ti I f ti S t


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Accounting Information System:

An accounting information system (AIS) isthe system of records a business keeps tomaintain its accounting system. Thisincludes the purchase, sales, and otherfinancial processes of the business. Thepurpose of AIS is to accumulate data and

provide decision makers (investors,creditors, and managers) with information.

While this was previously a paper-basedprocess, most businesses now use

accounting software. In an electronicfinancial accounting system, the steps inthe accounting cycle are dependent uponthe system itself. For example, some

systems allow direct journal posting to the


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Order processing:Captures & processes customer orders

and produces data needed for salesanalysis and inventory control

Inventory Control:Helps provide high-quality service while

minimizing investment in inventory &inventory carrying costs

Accounts Receivable:Keeps records of amounts owed by

customers from data generated bycustomer purchases and payments


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It involves the following steps,


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g pEstimate the monthly cash outflowsboth operating and capital expenditures

Estimate the monthly cash inflows

Compare inflows and outflows. Ifsurplus funds exist, then find ways touse them productively. If there isshortage, then find ways to reduceoutflows and increase inflows.

Identify and compare outside fundingsources

Establish a system for tracking flow offunds and measurin the return rate on


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The system approach to problem solving uses asystems orientation to define problems andopportunities and develop solutions. Studying aproblem and formulating a solution involve thefollowing interrelated activities.

Recognize and define a problem or opportunityusing systems thinking.Develop and evaluate alternative system

solutionsSelect the system solution that best meets your

requirementsDesign the selected system solution to meet your

requirements.Implement and evaluate the success of the

designed system.


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Symptom Sales of a companys products are

Example:


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Symptom Sales of a company s products aredeclining.

Problem Sales person are losing ordersthey cannot get currentinformation on product prices andavailability.

Opportunity

We could increase salessignificantly if salespersons couldreceive instant responses to

requests for prices quotations andproduct availability.

Developing Alternative Solutions:


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Developing Alternative Solutions:

There are usually several different ways

to solve any problem or pursue anyopportunity. Where do alternativesolutions come from?

Experience is a good source

Past historyAdvice from others

Recommendations of consultants

Suggestions of expertDecision support software can be usedto development alternative solution

Evaluating Alternative Solutions:


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Evaluating Alternative Solutions:

These alternative solutions must be

evaluated so that the best solutioncan be identified. Then evaluationcriteria need to be developed inorder to determine how well eachalternative solution meets thesecriteria. Criteria may be ranked orweighted, based on their importance

in meeting our requirements.

Criteria RelativeW i ht

Alternative

A

Relative

S

Alternative

B

Relative

S

Example:


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Weights A Score B Score

Sales Data Entry by Sales

Reps Using Laptop Linked to

Company Intranet Web Site

Sales Data Entry by

Optical Scanning of Forms

Mailed to the Data Centerby Sales Reps

Start-up costs Operating costs Ease of use

Accuracy Reliability

Overall score

20

30

2020

10

100100

$1 million

$100,000/year

GoodExcellent

Excellent

12

25

1620

10

8383

$100,000

$200,000/year

FairFair

Excellent

18

20

126

10

6666

Advantages Low operating costs, easy to use, accurate, andreliable

Low start-up cost and reliable

Disadvantages High start-up cost High operating costs, difficult to use, and not veryaccurate

l i h l i


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Selecting the Best Solution:Once all alternative solutions have been

evaluated, you can begin the process ofselecting the best solution. Alternativesolutions can be compared to eachother because they have beenevaluated using the same criteria.

Therefore in the previous example,Alternative with a low accuracy

evaluation should be rejected.

Therefore, alternative B for sales dataentry is rejected, and alternative A,the use of laptop computers by salesrepresentatives, is selected.

Designing and Implementing a Solution:


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Once a solution has been selected, it mustbe designed and implemented. Animplementation plan specifies theresources, activities, and timing needed forproper implementation. Using the aboveexample, the following items might beincluded in the design specifications and

implementation plan for a computer-basedsales support system:

Types and sources of computer hardware,and software to be acquired for the salesrepresentatives

Operating procedures for the new salessupport system

Training of sales reps and other personnel

Conversion procedures and timetables for

final implementation


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Using the systems approach to developinformation system solution involves amultistep process called the

Information systems development cycle(ISDC) also known as the SystemDevelopment Life Cycle (SDLC).


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1. System Investigation- FeasibilityStudies:

A feasibility study is apreliminarystudywhich investigates theinformation needs of prospective users

and determines the resourcerequirements, costs, benefits andfeasibility of a proposed project.

These are the questions that have to be


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These are the questions that have to beanswered in the systems investigation

stage.Do we have a business problem (or

opportunity)?

What is causing the problem?Would a new or improved information

system help solve the problem?

What would be a feasible informationsystem solution to our problem?

The feasibility study of proposed

s stem can be evaluated in terms of

Organizational feasibility: It investigateshow well the proposed information system


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how well the proposed information systemsupports the strategic objectives of theorganization.

Economical feasibility: It is concerned withwhether expected cost savings, increasedrevenue, increased profits, reduction inrequired investment, and other types ofbenefits will exceed the cost of developing andoperating a proposed system.

Technical feasibility: It is concerned with theacquisition or development of reliable

hardware and software capable of meeting theneeds of a proposed system for the business inthe required time.

Operational feasibility: It is concerned with

the willingness and ability of the management,

2 S t A l i F ti l


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2. System Analysis - FunctionalRequirements:

System analysis describes what asystem should do to meet theinformation needs of users. Functional

Requirements are end user informationrequirements that are not tied to thehardware, software, network, data and

people resources that end userspresently use or might use in the newsystem. It includes,

User interface requirements: The


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qinput/output needs of end users that must besupported by the information system,

including sources, formats, content, volumeand frequency of each type of input and outputProcessing requirements: Activitiesrequired to convert input into output. Includescalculations, decision rules, and other

processing operations, and capacity,throughput, turnaround time, and responsetime needed for processing activitiesStorage requirements: Organization,content, and size of databases, types andfrequency of updating and inquiries, and thelength and rationale for record retentionControl requirements: Accuracy, validity,safety, security, and adaptability requirements

for system input, processing, and output and


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3. System Design Systemspecifications:

System Design specifies how the

system will accomplish the objective.System Design

can be viewed as the design of user

interfaces, data, and processes

System Design


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It involves process design of,i


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User services:Front-end software that communicates

with users through a graphical userinterface.Application services:

Software modules that can - enforce

business rule, process information andmanage transactions. Application servicesmay reside on the client and server.Data services:

Data is made available to the applicationservices software for processing. This istypically accomplished through adatabase management system.

It also involves Prototyping :

The rapid development and testing of


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The rapid development and testing ofworking models, or prototypes, of new

information system applications in aninteractive, iterative process involving bothsystems analysts and end users. Prototypingmakes the development process faster andeasier for system analysts, especially forprojects where end user requirements arehard to define.

Prototyping Process: A typical prototyping-based systems development process inbusiness comprises of: Team, Schematic

design, Prototype, Presentation, Feed back, Team A few end users and IS developers from a team to

develop a business application


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Schematic The initial prototype schematic design is developed

Prototype The schematic is converted into a simple point-and

click prototype using prototyping tools.Presentation A few screens and routine linkages are presented

to users.Feedback After the team gets feedback from users, the

prototype is reiterated

Reiteration Further presentations and reiterations are madeConsultation Consultations are held with central IT

developers/consultants to identify potentialimprovements and conformance to existingstandards of the organization

Completion The prototype is converted into finished application

Acceptance Users review and sign off on their acceptance ofthe new systems

Installation The new application software is installed

on network servers


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ITB Data and Information