Chapter - 1

Information Systems
 Data V/s Information
Data –

Raw facts or observations, typically about physical or business

transactions.

Group of non-random / unstructured symbols in the form of text,

numbers, images or voice representing quantities, actions or objects.

Information –
Conversion (organization) of raw data into useful / meaningful
form.

Proper arrangement / organization of raw facts into useful

messages.
Types of Information –

1. Strategic Information –
Needed for long term planning / taking decisions.

It contains specific, precise & straightforward information.

For Ex – Diversification of Business, Opening Overseas branches,

2. Tactical Information –
Needed for short term planning / taking decisions.

Used for Control the functioning of the organization.

For Ex – Developing policies, HR Planning, Changing the credit

limit of customers / Stock Limit, Forecasting, etc.,
3. Operational Information –
Needed for day to day operations of organization.

It is well structured & more voluminous.

For Ex – Employee Attendance Maintenance, Re-order of goods,

Receiving Orders from customers, Rules & Regulations, etc.

4. Statutory Information –
Information which are required by a law / Regulators / Govt.
authorities.

For Ex – Filing annual Tax, P/L statements, Compliance Reports to

Regulators, Pollution Compliance Report, Labour compliance
reports, Affiliation reports, etc.,
 Strategic Role of Information

1. Within the Organization :

Need to all the functional departments for a variety of needs.

Used in all the management functions like strategic planning,

organizing, management control, operational control, .

 Strategic Role of Information

2. Outside the organization :

Government, Regulators, Auditors, Share holders etc.

Government need various information to monitor & control

activities like frauds, irregularities, etc,

Regulators – SEBI / RBI / IRDA / TRAI.

Used to market the products / services.

To build partnerships with other companies.

Qualities of Effective Information –

1. Accurate

2. Complete

3. Trans worthy / Credible

4. Timely

5. Up to date

6. Relevant

7. Brief – Without repeating the same contents

8. Significance Understandable
 Information System
An Information System is an organized combination / assemblage of
people, hardware, software, communication networks and the data
resources that collects, transforms, Process and disseminates
information in organization.
Need of an Computer based IS
Repeated processing of same data.

Processing of large volume of data.

Fast processing is needed for timely information.

Increase in the complexity of business.

Operations scattered in different geographical locations.

Reducing the cycle time & delighting the customer.

Cost cutting.
 IT Vs IS Payroll
System

INFORMATION
TECHNOLOGY
Invento
Hardware ry
System
Software are used to build
INFORMATION
SYSTEMS
Databases
Marketing
Networks System

Other related
components

Custome
r Service
System
Organization as an IS
 Classification of IS
Information
Systems

Operations
Management
Support System
Support System

Transaction Office Manageme Decision Executive

Process
processing automation nt support information
control systems
systems informatio systems systems
systems
n systems
Transaction Processing System (TPS)
A TPS is scrutinized for conformance to the rules, policy or

guidelines.

A system that handles a business’s routine and recurring

information transaction and records complete fundamental

business exchanges.

Used at Operational level of the organization.

Transaction Processing System (TPS)
Handle routine, yet critical tasks.

Perform simple calculations.

It helps an organization to add value to its products &

services.
Goals of TPS are –
To automate repetitive information processing activities.
Increase speed.
Increase accuracy.
Greater efficiency.
Transaction Processing System (TPS)

Examples - POS system, on-line cash registers, ATM,

Purchasing system, Accounting systems, Payroll, CRM..,
 Management Information System
The process of effective and efficient planning, organizing,
leading, implementing, controlling and adjusting a set of
people, procedures, and resources that collects, transforms and
disseminates information in a organization.

Providing right information to the right people in the right format at

right time.

Helps middle managers for monitoring, controlling, decision -making,

and administrative activities.
 It summarizes and reports on the basic operations.

Characteristics of MIS –

Routine information for routine decisions.

Operational efficiency.

Use transaction data (TPS) as main input.

Databases integrate MIS in different functional areas.

Overview of MIS
Goals of the MIS –

1. Enhances communication among employees.

2. Support the organization’s strategic goals and directions.

Uses of the MIS –

1. Effective Planning.
2. Improving the quality of decision.
3. Improving the efficiency of operations and generating accurate
results.
4. Minimizing the duplication of efforts.
5. Controlling activities.
6. Possible clerical cost reduction.
7. Intangible benefits.
8. Improved work environment & job satisfaction.
Applications of MIS –

Generating various kinds of reports like Scheduled reports, Demand

reports, Exception reports, Drill Down report, etc.,

Short term Forecasting - Sales forecasting, Capital forecasting,

Manufacturing planning and scheduling, Inventory management and

planning, Advertising and product pricing.

Decision Support Systems (DSS)
System used to support specific decision making & Problem solving.

Interactive support for non-routine decisions or problems.

Decision makers insight & judgment are needed to control the

decision process.

It strive to make effective decisions on unstructured or semi -

structured problems via., analyzing part of the problem.

Decision Support Systems (DSS)
It can also be used for future forecasting.

It enables Collection of data, analytical models and user friendly software

to support a decision making.

Use internal & external data.

Advanced Graphical capabilities & GUI for analysis purpose.

It is usually on-line & related to real time.

Helping to automate managerial processes.

 Structure of Decision Support System

Model
Management
System
Dialog Supporting
Management Tools
Data
User
Management

...
Internal and External
Databases
Functions of DSS –

1. Model Building – Identifying most appropriate model

(Financial, Statistical, Graphical, Project Management Model).

2. What if Analysis – Assessing the impact of changes, value &

the inter-relationships of model variables.

3. Goal Seeking – Determining the input required to achieve a

certain goal.
4. Risk Analysis – It allows decision makers to determine risk

associated with various alternatives.

5. Graphical Analysis – It helps managers to understand large

volumes of data & identify the impacts of various courses of

action.
Applications of DSS -

Product pricing, sales / service profitability[future forecast],

Capital forecasting, other financial forecasting, risk
calculations, etc.,

For Ex -

Selection of Vendor

Comparative sales figures between one week and the next.

Projected revenue figures based on new product sales assumptions.

Executive Support Systems (ESS) / EIS
Specialized decision support system used at the middle & top level
management of an organization.

Helps top executives for tracking critical success factors that are
important for achieving a firm’s strategic objectives.

This systems filter, compress and track critical data.

It employs advanced graphics software to provide highly visual and

easy-to-use representations of complex information and current
trends.
Executive Support Systems (ESS) / EIS
These systems are not designed to solve specific problems, but to

tackle a changing array of problems.

ESS provides a generalized computing and telecommunications

capacity that can be applied to a changing array of problems.

ESS enables the executive to ‘drill down’ quickly to lower levels, in

areas of particular interest to them.

Features / Properties of an ESS –

1. Easy To Use.

2. Access To Data.

3. Data Analysis.

4. Quality Presentation.

5. Tailored to Individual Executives.

6. Support the Need for External Data.

7. Have a Future Orientation.

ESS Supports for –

Strategic planning

Strategic organizing and staffing

Strategic control

Crisis management
Advantages of ESS –

Access a broader range of information faster in a more focused way.

Condensed information reduces the amount of data to be reviewed.

A clear link to business objectives.

The best use of technology.

Recognize the existence of problems and managing the solution of those

problems.

Having the capacity to integrate with other systems.

Types of Information used in ESS –
Predictions, speculations, forecasts, estimates (78.1%)

Explanations, justifications, assessments, interpretations (65.6%)

News reports, industry trends, external survey data (62.5%)

Schedules, formal plans (50.0%)

Opinions, feelings, ideas (15.6%)

Rumors, gossip (9.4%)

Major Commercial ESS Software Vendors -

– Comshare Inc. (www.comshare.com)

– Pilot Software Inc. (www.pilotsw.com)

Relationship b/w different ISs

Figure 2-9
 Office Automation System
(OAS)
To automate office procedures & make them more efficient &
productive.

OAS refers to the use of computer and software to digitally create,

collect, store, manipulate, and transfer office information needed for
accomplishing basic tasks and goals.

It will going to alter the nature of office work altogether.

It helps in reducing the office/clerical personnel.

Basic functions of OAS –

1. Data Storage And Manipulation – Word processing, Spread sheet

application, Image handling, Desktop publishing.
2. Data Exchange
3. Data Management

Advantages –
Office automation can get many tasks accomplished faster.

It eliminates larger staff.

Efficient memory management.

Multiple user can use simultaneously.

Dis – advantages –

1. Workplace resistance

2. Initially takes time to adjust to new system.

3. Training of personnel to effectively use an office automation.

4. It requires huge amount of money to implementation and

maintenance.

5. It can leads to some health problems.

 Networking
Group of computers and other devices connected in some ways so

as to be able to exchange data.

It primarily fulfills the requirement of communication.

Each of the devices on the network can be thought of as a node.

Each device can be geographically located anywhere.

Features of networking –

1. It allows sharing of hardware resources like printer, scanner, disk

drives, modems.

2. It allows the information to share across the company.

3. It enables the electronic transfer of mail, document or data.

4. It enables interaction b/w different computers for the purpose of

processing, sharing & communicating.

5. It enables endless integration of the business functions &

operating divisions.
Advantages of Networking –

1. A user can logon to a computer anywhere on the network and access

their work files from the file server.

2. Resource Sharing

Hardware (computing resources, disks, printers)

Software (application software)

3. Communication – Email, Message broadcast.

4. It saves money and time.

5. It is easy and convenient to monitor users.

 Types of Networks
1. LAN (Local Area Network) - Network in small geographical
Area (Room, Building or a Campus)
Example – Within Office, cyber cafe, office intercom.

2. MAN (Metropolitan Area Network) - Network in a City /

region.
Example – MTNL, A chain of community colleges.

3. WAN (Wide Area Network) - Network spread geographically

(across Country or across Globe).
Example – Internet, Intranet, Extranet.
 Network Topology
The network topology defines the way in which computers, printers,
and other devices are connected.

A network topology describes the layout of the wire and devices as

well as the paths used by data transmissions.

Three commonly used network topologies are –

1. Bus topology

2. Ring topology

3. Star topology

4. Tree topology
1. Bus Topology –

All computers and devices connected to central cable or bus.

Allows information to be directed from one computer to the other.

Consists of a main run of cable with a terminator at each end.

2. Ring Topology –

Cable forms closed ring or loop, with all computers and devices arranged

along ring.

Data travels from device to device around entire ring, in one direction.

Uses a Packet / frame / token to pass information from one computer to

the other.
A frame travels around the ring, stopping at each node. If a

node wants to transmit data, it adds the data as well as the

destination address to the frame.

The frame then continues around the ring until it finds the

destination node, which takes the data out of the frame.

3. Star Topology –

All devices connect to a central device, called hub. All data transferred

from one computer to another passes through hub.

4. Tree Topology –

A tree topology connects multiple star networks to other star

networks.
Telecommunication Network

Telecommunication is communication of information by

electronic means (signals) over some distance.

It is a collection of compatible h/w & s/w arranged to

communicate.

It can transmit text, graphic images, voice or video files.

 Telecommunication Network
Essential components of a telecommunication system –

1. Computer to process
2. I/p or O/p devices for sending & receiving & terminals.
3. Communication channels such as phone lines, co-axial cable,
fibre-optic cable & wireless transmission.
4. Processors such as modem, multiplexers, controllers.
5. Software such as protocols.
 Channels of Telecommunication
Means by which signals (data) are sent from one computer to another
(either by cable or wireless means).
1. Twisted Pair Cable -
2. Co – Axial Cable -
3. Fibre Optic Cable –
Wireless Communication
 Channels of Wireless Systems

Wireless LANs

Satellite Systems

Paging Systems

Bluetooth
Applications of Telecommunication Network –

E-mail
Searchable Data (Web Sites)
E-Commerce
Internet Telephony (VoIP)
Video Conferencing
Chat Groups
Internet Radio