The Nature of Systems

Overview

Define AIS Define System Examine parts of Living Systems Examine reasons NOT to automate Examine Different System Types Examine General Systems Theory

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But First.....

Why are we here? What changes do you foresee in

Accounting in the near-future? Have you heard about Twitter? Have you heard about Twitter

Annotations it's a system for almost any metadata to be

connected to any Twitter message when it's published. Inside every Tweet is now a space where you could put or find anything, including links out to further instructions or larger bodies of information.

Twitter and DJIA

“can societies experience mood states that affect their collective decision making? By extension is the public mood correlated or even predictive of economic indicators? Here we investigate whether measurements of collective mood states derived from large-scale Twitter feeds are correlated to the value of the Dow Jones Industrial Average (DJIA) over time.”

“Our results indicate that the accuracy of DJIA predictions can be significantly improved by the inclusion of specific public mood dimensions but not others. We find an accuracy of 87.6% in predicting the daily up and down changes in the closing values of the DJIA and a reduction of the Mean Average Percentage Error by more than 6%.”

Indiana University's research team Johan Bollen, Huina Mao, and Xiao-Jun Zeng's

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WHAT IS AN AIS?

An AIS is a system that collects, records, stores, and processes data to produce information for decision makers.

It can: Use advanced technology; or Be a simple paper-and-pencil system; or Be something in between.

Technology is simply a tool to create, maintain, or improve a system.

WHAT IS AN AIS?

The functions of an AIS is to: Collect and store data about events,

resources, and agents. Transform that data into information that

management and external users can use to make decisions about events, resources, and agents.

Provide adequate controls to ensure that the entity’s resources (including data) are: Available when needed Accurate and reliable

So then What is a System?

A system is: A set of interrelated components That interact To achieve a goal

The AIS goal is?

These are all Systems

LivingManual Automated

Machine-Human

ERP

Living System Sub-systems

James Miller’s Living Systems (1978) describes 19 sub-systems all “living” systems have Living = biological (people) and groups

of biological (organizations)

The reproducer;The boundary;The ingestor;The distributor;The converter;The producer;The matter-energy storage subsystem;The extruder,The motor;The supporter;The input transducer;The internal transducer,The channel and net;The decoder;The associator;The memory;The decider,The encoder;The output transducer

Miller’s Sub-Systems

Reproducer Create replicas of itself

Boundary Holds system together Keeps environment out Entrance/Exit for

Matter-Energy Information

Ingestor Brings matter-energy

into system from environment

Distributor Moves external inputs or

internal outputs around system

Converter Changes inputs based on

needs of sub-system Producer Takes inputs and creates

new forms to be used by system

To grow, repair, replace or provide energy to system

Matter-Energy Storage

Miller’s Sub-Systems

Extruder Outputs from the

system Products Waste

Motor Movement

Supporter Maintains relationships

among sub-systems

Input Transducer Brings Information input

into the system Changes information to

form suitable for transmission

Internal Transducer Collects

information/Changes form from internal sub-systems

Channel and Net Route(s) which information

take in the system

Miller’s Sub-Systems

Decoder Translates information

to a private form used by internal sub-systems

Associator 1st Stage of Learning

Creates relationships between information

Memory 2nd Stage of Learning

Stores information to be used later

Decider Receiver of information Transmitter of information Used to Control System Encoder Takes private information

from sub-systems and translates into public information for use by external systems

Output Transducer Takes public information

and transmits it to external systems

Should All Systems be Automated? No

Cost it may be cheaper to

continue carrying out the system functions and storing the system’s information manually.

Security if the information

system is maintaining sensitive, confidential data, the user may not feel that an automated system is sufficiently secure.

The user may want the ability to keep the information physically protected and locked up.

Timely disappearance: Metal nanoparticles that clump together and change color under ultraviolet light are used as an ink to create images. In visible light, the clumps break apart and the image fades away in nine hours. Credit: Rafal Klajn

Types of Systems

On-line Real-time Decision Support

Expert Systems Knowledge Based Systems

Automated Manual System

Four Sub-processes Business Event Occurs

Recorded on Source Document

Record Business Event Batch Processed and Input by data-entry clerk

Event Data Store (Sales, Purchases, etc.) Data Store = Table

Update Master Data Generate Output

Automated Equivalent to a Manual System

Online Transaction Entry (OLTE) Entering business events at time and

place the business event occurs Computer input device used to enter data

at source at time of business event Merging Step 1 & 2 of Automated Manual System

Input/Source document is eliminated Price data is retrieved from the system Source documents are printed by the

system Event information in accumulated on tape

or disk

Online Transaction Entry (Batch)

Online Real-time (OLRT)

Three Sub-processes Business event occurs and is recorded

Transactions saved Update Master data

Immediate mode Generate Reports and Support Queries

Reports periodically or on an as needed basis

Support queries to generate unique reports for key decisions on demand

Online real-time processing

Real Time System

Not the same as Online Real-Time Controls an environment by receiving

data, processing them, and returning the results sufficiently quickly to affect the environment at that time

Require concurrent processing of multiple inputs.

Interacts with both people and an environment that is generally autonomous and often hostile.

IBM InfoSphere (Stream Computing)

InfoSphere Streams... ingest, filter, analyze, and correlate potentially massive volumes of continuous data streams.

InfoSphere Streams supports high volume, structured & unstructured streaming data sources images, audio, voice, VoIP, video, TV,

financial news, radio, police scanners, web traffic, email, chat, GPS data, financial transaction data, satellite data, sensors, badge swipes, etc.

XBRLXBRL-GL?

InfoSphere Example

What is Stream Computing?

IBM Video

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Stream Computing

Stream computing is a new paradigm. In “traditional” processing, one can think of

running queries against relatively static data for instance - List all personnel residing within 50

miles of New Orleans With stream computing, one can execute a

process similar to a “continuous query” get continuous, updated results as location

information from GPS data is refreshed over time. In the first case, questions are asked of

static data, in the second case, data is continuously evaluated by static questions.

Stream Computing

Decision Support Systems

Computer system that Supports

business and organizational decision-making activities (Wikipedia)

Key Features Provides decision alternatives

Based on model Human makes final choice

Expert Systems

Attempts to mimic the decision making steps of an Expert If-Then-Else Rules Output is Decision Ability to Explain Choice Ability to Explain non-chosen Options

Knowledge Based Systems

Two Basic Types Threaded Discussion Boards Database of Information/Knowledge Database of SME’s

Purpose Don’t re-invent the Wheel Ease the process of finding an expert

Hierarchical view of Systems

Operational/Transactions Decision Support Strategic Planning

General Systems Theory The more specialized a system is, the less able it is to adapt

to different circumstances. The larger a system is, the more of its resources that must be

devoted to its everyday maintenance. Systems are always part of larger systems, and they can

always be partitioned into smaller systems. Systems grow (5-10%/year)

what might this mean for XBRL elements including extensions to it by individual corporate filers. Currently ~14,000 standard element names

The interactions between components of a system are often complex and subtle. a change in system component A can cause a change in B, which

can “ripple” into component C. he change in C can cause a “feedback” effect on the original

component A XBRL may eliminate the negative aspects of this ripple effect

Why Study Systems?

We will work with systems We will design systems We will Model systems