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INFORMATION

RESOURCE
MANAGEMENT
INFORMATION SYSTEM
People require information for many and
varied reasons. For instance, you probably
seek information for entertainment and
enlightenment by watching television, seeing
movies, browsing the Internet, listening to the
radio, and reading newspaper and book. In
business, however, people and organization
seek and use information specifically for the
purposes of sound decision making and
problem solving.
INFORMATION SYSTEM
What is a problem? A problem is any
undesirable situation. When you are stuck in
the middle of nowhere with a flat tire, you
have a problem. If you know that some
customers do not pay their debts on time, but
you don’t know who or how much they owe,
you have a problem. You can solve both
problems with the aid of information.
INFORMATION SYSTEM
An organization or individual that finds
more than one way to solve problems
must make decisions. As a manager for
example you may face a problem of
promoting new car? There are many
potential ways to promote new car—
television advertising, radio advertising,
newspaper advertising, Web advertising,
auto shows, direct mail, or any
combination of these methods. This case
calls for decision making.
DATA, INFORMATION,
AND SYSTEMS
Data vs. Information
The term data and information do not mean
the same thing. Data is the plural of the
Latin datum, literally given fact, which may
take the form of a number, a statement, or a
picture. Data are the raw materials in the
production of information. Information,
on the other hand, is data that have meaning
within a context.
Generating Information
A process is any manipulation of data,
usually with the goal of producing
information. Some processes, however,
produce yet another set of interim data.
Hence while data are raw materials,
information is output. Just as raw materials
are processed in manufacturing to create
final useful products, so raw data is
processed in information systems to create
final useful information.
Information in Context
 Information is an extremely important resource for
both individuals and organizations, but not all
information is useful. Consider the following story.
Two people who took a tour in a hot-air balloon
encountered unexpected wind that soon blew then
off course. When they managed to lower their
balloon, they shouted to a farmer on the ground,
“Where are we?” “You are right above a corn field!”
he answered. The balloonist looked at each other,
and one groaned, “Some information! Highly
accurate and totally useless!” To be useful,
information must be relevant, complete, accurate,
and current.
Information in Context
1. Relevant
Information must pertain to the problem at
hand. For example, the total number of
years of education may not be relevant to a
person’s qualification for a new job.
Relevant information might be that the
person has so many years of education in
mechanical engineering and many years of
experience.
Information in Context
2. Complete
Partial information is often worse than no
information. For example, marketing data
about household incomes may lead to bad
decisions if not accompanied by vital
information on the consumption habits of
targeted population.
Information in Context
3. Accurate
Erroneous information may lead to
disastrous decisions. For example, an
inaccurate record of a patient’s reaction to
penicillin may lead a doctor to harm the
patient while believing that she is helping
him.
Information in Context
4. Current
Decision are often based upon the latest
information available, but what was a fact
yesterday may no longer be one today. For
example, a short-term investment decision
to purchase a stock today based on
yesterday’s stock prices may be a costly
mistake if the stock price has risen on the
interim.
Information in Context
5. Economical
In business settings, the cost of
obtaining information must be considered
as one element involved in any decision.
For example, demand for a new product
must be researched to reduce risk of
marketing failure, but if market research
is too expensive, the cost of obtaining the
information may diminish profit from sales.
What is a System?
Simply put, a system is an array of
components that work together to achieve a
common goal, or multiple goals, by
accepting input, processing it, and
producing output in an organized manner.
A sound system consists of many electronic
and mechanical parts, such as laser head,
amplifier, an equalizer, and so on. This
system , uses input in the form of electrical
power and sound recorded on tape or CD,
and processes the input to reproduce music
and other sounds. The components work
together to achieve this goal.
What is a System?
Simply put, a system is an array of
components that work together to achieve a
common goal, or multiple goals, by
accepting input, processing it, and
producing output in an organized manner.
A sound system consists of many electronic
and mechanical parts, such as laser head,
amplifier, an equalizer, and so on. This
system , uses input in the form of electrical
power and sound recorded on tape or CD,
and processes the input to reproduce music
and other sounds. The components work
together to achieve this goal.
Systems and Subsystems
Often, a system consists of several
subsystems—components of a larger
system—with sub goals all contributing to
meeting the main goal. Subsystem can
receive input from, and transfer output to,
other systems or subsystems.
Systems and Subsystems
Consider the different departments of a
manufacturing business. The marketing
department tries to promote sales of the
organization’s products; the engineering
department tries to design new products and
improve existing ones; the finance
department tries to plan a clear budget and
earn interest on every unused penny at the
end of the day. Each department is a
subsystem with its own goal, which is a
subgoal of a larger system (the company),
whose goal is to maximize profit.
Closed vs. Open Systems
Systems are closed or open, depending upon the nature
of information that flows within an organization. A closed
system stands alone, with no connection to another
system: nothing flows in from another system, nothing
flows out to another system. An open system interface
and interacts with other systems For example, an
accounting system that records account receivable,
accounts payable, and cash flow is open if it receives its
payroll figures from the payroll system. Subsystems, by
definition, are always open, because as components of a
bigger system, they must receive information from, and
give information to, other susbsystems.
Information and Systems
With an understanding of the words
information and system is almost intuitive: an
information system (IS) is all components that
work together to process data and produce
information.
Information and Managers
Thinking of an organization in terms of its sub
organizations or subsystems—called system
thinking—is a powerful management
approach because it creates a framework
for both excellent problem solving and
excellent decision making. To solve
problems, managers need to isolate them,
which they do by recognizing the subsystems
in which the problems occur and solving the
problems within those subsystems’
constraints and strengths.
Information and Managers
System thinking served well by information
technology (IT), a term that refers to all
technologies that collectively facilitate
construction and maintenance of information
system.
The Benefits of Human-
Computer Synergy
It is important to remember that computers
can only carry out instructions that humans
give. Computers can process data
accurately at far greater speeds than people
can, yet they are limited in many respects—
most importantly they lack common sense.
However, combining the strengths of these
machines with human strengths creates
synergy.
The Benefits of Human-
Computer Synergy
Some people call synergy 2+2=5 rule. Synergy (from the
Greek “work together”) occurs when combined resources
produce output that exceeds the sum of the outputs of the
same resources employed separately. A computer works
quickly and accurately; humans work relatively slowly and
make mistakes. A computer cannot make independent
decisions, however, or formulate steps for solving problems.
Thus, a human-computer combination allows the results of
human thought to be translated into efficient processing of
large amount of data.
Qualities of Humans and Computers that
Contribute to Synergy
Humans Computer
Think Calculate and perform programmed logical
operations extremely rapidly

Have common sense Store and retrieve data and information


extremely rapidly

Can make decisions Perform complex logical and arithmetical


functions accurately

Can instruct the computer what to do Execute long, tedious operations

Can learn new methods and techniques Perform routine tasks less expensively than
humans
Can accumulate expertise
Are adaptable (can be programmed and
reprogrammed)
What are Information System?
In an organization, an information system consist of
data, hardware, software, telecommunications,
people, and procedures. Generally defined, the term
information system does not have to include electronic
equipment. However “information system”, has
become synonymous with “computer-based
information system”, a system with a computer at its
center to which peripheral equipment is connected. In
a computer-based information system, computers
collect, store, and process data into information,
according to instructions people provide via computer
programs.
Components of an Information
System
Data Input that the system takes to produce information.
Hardware A computer and its peripheral equipment: input, output and storage device.
Hardware also includes data communication equipment.
Software Sets of instructions that tell the computer how to take data in, how to process
it, how to display information, and how to store data and information.

Telecommunica Hardware and software that facilitate fast transmission and reception of text,
tions pictures, sound, and animation in the form of electronic data.
People Information system professionals and users who analyze organizational
information needs, design and construct information systems, write computer
programs, operate the hardware, and maintain software.
Procedures Rules for achieving optimal and secure operations in data processing.
Procedures includes priorities in dispensing software applications and security
measures.
Several trends have made the use
of ISs very important in business:
Computers’ power have grown tremendously while their
prices have dropped.
Computer programs’ variety and ingenuity have increased.
Quick and reliable communication lines and access to the
Internet and World Wide Web have become widely
available and affordable.
The fast growth of the Internet has opened opportunities
and encouraged competition in the global markets.
An increasing ration of workforce is computer literate.
Remember that in a broad sense an information system
consists of physical and nonphysical components
working together. A computer alone is not an
information system. A computer combined with software
may constitute an information system, but only if the
program is designed to produce information that helps an
organization or person achieve a specific goal.
The Four Stages of Processing
All information systems operate in the same basic fashion
whether they include a computer or not. However, the
computer provides a convenient means to execute the
four main operations of an information system:
Entering data into the IS (input)
Changing and manipulating the data in the IS (data
processing)
Getting information out of the IS (output)
Storing data and information (storage)
Computer Equipment for Information
System
Input devices introduce data into the IS
The computer processes data through IS
Output devices display information
Storage devices store data and information
In addition to communication that takes place between
computer components, communication occurs between
computers over great distances (called
telecommunications). Communication technology lets
users not only access multiple input, output and storage
devices with a single computer but access data and
resources of more than one computer as well.
In addition to communication that takes place between
computer components, communication occurs between
computers over great distances (called
telecommunications). Communication technology lets
users not only access multiple input, output and storage
devices with a single computer but access data and
resources of more than one computer as well.