Information Management

System
Pertemuan II
Magister Teknik Elektro
Universitas Udayana

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• Organizations, Managers, &
Information
– To understand how information flows in an
organization, we need to understand how
organizations work.
– Information flows horizontally between the
five departments of an organization:
research and development, production,
marketing, accounting and finance, and
human resources.
– It also flows vertically between the layers of
managements.
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• There are three levels of management
corresponding to three kinds of decisions, as
reflected in the organization chart, a schematic
drawing showing the hierarchy of formal
relationships among an organizations'
employees.
– (1) Top managers are concerned with long-range, or
strategic, planning and decisions.
– (2) Middle-level managers, make tactical decisions
to implement the strategic goals of the organization.
– (3) Supervisory managers make operational
decisions, predictable decisions that can be made by
following a well-defined set of routine procedures.

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– Organization chart
• Schematic drawing showing the hierarchy of
relationships among an organization's employees.
• Why it's important: Organization charts show levels
of management and formal lines of authority.
• Related Industry: SmartDraw.com claims to "draw
anything easily," including organizational charts.
Visit the SmartDraw.com Webpage that shows
various examples of organizational charts.

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– Top managers
• One of the three types of managers; also called
strategic managers, they are concerned with long-
range planning and strategic decisions.
• Why it's important: Top managers need
information that is unstructured—that is,
summarized, less current, future-oriented, covering
a broad range of facts, and concerned with events
outside as well as inside the organization.
• Web Exercise: Select a well-known IT company
which you admire. Use the WWW to learn the
name of the company's current CEO (Chief
Executive Officer). Then research that person's
career using the WWW. Write up your findings in a
one-page autobiographical sketch.

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• Middle-level managers
– One of the three types of managers; they implement
the goals of the organization. Their job is to oversee
the supervisors and to make tactical decisions.
– Why it's important: Middle managers require
information that is both structured and unstructured.
– Career Corner: How much would you guess a middle
manager at an IT company is compensated? To find
out how close your guess is, visit ComputerWorld's
Website to look at the latest Annual Salary Survey.
The 2001 survey is at
http://www.computerworld.com/cwi/story/0,1199,NAV
64_STO63423,00.html.

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• Supervisory managers
– Also called low-level managers; the lowest level in the
hierarchy of the three types of managers. Their job is
to make operational decisions, monitoring day-to-day
events, and, if necessary, taking corrective action.
– Why it's important: Lower managers need information
that is structured—that is, detailed, current, and past-
oriented, covering a narrow range of facts and events
inside the organization.
– For More Info: Yet another commonly-used term for
a supervisory manager is a first-line manager.

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• Information has three distinct properties: level of
summarization, degree of accuracy, and timeliness.
• To make the appropriate decisions strategic, tactical,
operation the different levels of managers need the right
kind of information: structured, semi-structured, and
unstructured.
• Structured information is detailed, current, concerned
with past events, records a narrow range of facts, and
covers an organization's internal activities.
• Unstructured information is summarized, less current,
concerned with future events, records a broad range of
facts, and covers activities outside as well as inside an
organization.
• Semi-structured information includes some structured
information and some unstructured information.

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• Computer-Based Information Systems.
– Six types of computer-based information systems
provide managers with appropriate information for
making decisions:
• (1) A transaction processing system (TPS) is used by
supervisory managers to keep track of transactions
recorded events having to do with routine business
activities-needed to conduct business. A TPS produces
detail reports, which contain specific information about
routine activities.
• (2) A management information system (MIS) is used by
middle managers. An MIS uses data from a TPS to
produce routine reports—summary reports to show totals
and trends, exception reports to show out-of-the-ordinary
data, periodic reports produced on a regular schedule, and
demand reports to produce information in response to an
unscheduled demand.
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• (3) A decision support system (DSS) is also used by
middle managers.
– A DSS provides models mathematical representations of real
systems—that gives managers a tool for analysis and helps
them focus on the future.
• (4) An executive support system (ESS) is used by top
managers to support strategic decision making.
• (5) An office automation system (OAS) is used by all
levels of managers as well as nonmanagers. An OAS
combines various technologies, such as word
processing, scheduling software, e-mail, and the like, on
a network to reduce the manual labor required in
operating an efficient office.
• (6) An expert system helps users solve problems that
would otherwise require the assistance of a human
expert.
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• Transaction processing system (TPS)
– Computer-based information system that keeps track of the
transactions needed to conduct business.
– Inputs are transaction data (for example, bills, orders, inventory
levels, production output).
– Outputs are processed transactions (for example, bills,
paychecks).
– Each functional area of an organization—Research and
Development, Production, Marketing, and Accounting and
Finance—usually has its own TPS.
– Why it's important: The TPS helps supervisory managers in
making operational decisions. The database of transactions
stored in a TPS is used to support a management information
system and a decision support system.
– Related Industry: Transaction Processing Systems are often
measured using benchmarks (performance tests) produced by
the nonprofit Transaction Processing Performance Council
(http://www.tpc.org/ )

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• TPC
– The essence of a transaction program is that it manages data
that must be left in a consistent state.
– E.g. if an electronic payment is made, the amount must be either
both withdrawn from one account and added to the other, or
none at all. In case of a failure preventing transaction
completion, the partially executed transaction must be 'rolled
back' by the TPS.
– While this type of integrity must be provided also for batch
transaction processing, it is particularly important for online
processing: if e.g. an airline seat reservation system is accessed
by multiple operators, after an empty seat inquiry, the seat
reservation data must be locked until the reservation is made,
otherwise another user may get the impression a seat is still free
while it is actually being booked at the time. Without proper
transaction monitoring, double bookings may occur.
– Other transaction monitor functions include deadlock detection
and resolution (deadlocks may be inevitable in certain cases of
cross-dependence on data), and transaction logging (in
'journals') for 'forward recovery' in case of massive failures.

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• Transaction
– Recorded event having to do with routine
business activities (for example, materials
purchased, employees hired, or taxes paid).
– Why it's important: Today in most
organizations the bulk of transactions are
recorded in a computer-based information
system.
– Related Industry: IBM is one of many
companies that provide products to help
businesses manage their transactions. For an
overview of IBM's Transaction Systems, view
their Website.

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• Management information system (MIS)
– Computer-based information system that
derives data from all an organization's
departments and produces summary,
exception, periodic, and on-demand reports of
the organization's performance.
– Why it's important: A MIS principally assists
middle managers, helping them make tactical
decisions—spotting trends and getting an
overview of current business activities.

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• Decision support system (DSS)
– Computer-based information system that helps managers with
non-routine decision-making tasks.
– Inputs consist of some summarized reports, some processed
transaction data, and other internal data. They also include data
from sources outside the organization —for example, data may
be produced by trade associations, marketing research firms,
and government agencies.
– The outputs are flexible, on-demand reports from which a top
manager can make decisions about unstructured problems.
– Why it's important: A DSS is installed to help top managers and
middle managers make strategic decisions—decisions about
unstructured problems, those involving events and trends
outside the organization (for example, rising interest rates). The
key attribute of a DSS is that it uses models. The DSS database,
which draws on the TPS and MIS files, as well as outside data,
is accessed through DSS software.

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• Executive support system (ESS)
– Also called an executive information system (EIS);
DSS made especially for top managers that
specifically supports strategic decision making.
– It draws on data both from inside and outside the
organization (for example, news services, market-
research databases).
– Why it's important: The EIS includes capabilities for
analyzing data and doing "what if" scenarios.
– For More Info: Read "Implementing an EIS" on the
ceoreview.com Website. What are the three purposes
of an EIS according to author Floyd Kelly?

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• Office automation system (OAS)
– Computer information system that combines
various technologies to reduce the manual
labor needed to operate an office efficiently;
used at all levels of an organization.
– Why it's important: An OAS uses a network to
integrate such technologies as fax, voice mail,
e-mail, scheduling software, word processing,
and desktop publishing and make them
available throughout the organization.

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• Expert system
– Set of computer programs that perform a task at the
level of a human expert.
– Why it's important: Expert systems are used by
management and non-management personnel to
solve sophisticated problems.
– Related Industry: CLIPS is a tool for developing
expert systems. Developed in 1984 at the Nasa's
Johnson Space Center, CLIPS is now widely used
throughout government, industry, and academia.
CLIPS is now maintained separate from Nasa, as
public-domain software, meaning that it is free to
everyone. Read more about CLIPS and expert
systems on the CLIPS home page.

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• Systems Development
• The Six Phases of Systems Analysis &
Design. A powerful tool for helping
organizations keep up with new information
needs is systems analysis and design.
• In general, a system is a collection of related
components that interact to perform a task in
order to accomplish a goal.
• Participants in an information-system project
should be users, managers, and technical
staff, including systems analysts, information
specialists who perform systems analysis,
design, and implementation.

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• System
– Collection of related components that interact to perform a task
in order to accomplish a goal.
– Why it's important: Understanding a set of activities as a system
allows one to look for better ways to reach the goal.
– Knowledge in Action: You probably participate in one or more
systems without ever having thought about it. For example,
perhaps you do volunteer work, in which case you help the
beneficiary organization with tasks needed to accomplish an
established goal. Or perhaps your family has a system for
managing household finances in which everyone participates,
i.e., one person may pay the bills, another may take deposits to
the bank, yet another may balance the checkbook on a monthly
basis, etc. Write up a couple of paragraphs describing a system
in which you participate. Be sure to describe all of the
components, the tasks accomplished, and the overall goal of the
system.

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• Systems analyst
– Information specialist who performs systems analysis,
design, and implementation.
– Why it’s important: The systems analyst studies the
information and communications needs of an
organization to determine how to deliver information
that is more accurate, timely, and useful. The systems
analyst achieves this goal through the problem-
solving method of systems analysis and design.
– Career Corner: Read the U. S. Department of
Labor’s Occupational Outlook Handbook entry for
Systems analysts. Does this sound like a job you
would like to have? Why or why not?

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• Systems analysis and design is a six-phase
problem-solving procedure for examining an
information system and improving it.
• The six phases make up the systems
development life cycle (SDLC), the step-by-
step process that organizations follow during
systems analysis and design.
• The six steps are preliminary investigation
followed by systems analysis, design,
development, implementation, and maintenance.

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• Systems development life cycle (SDLC)
– Six-phase process that many organizations follow during
systems analysis and design:
– (1) preliminary investigation;
– (2) systems analysis;
– (3) systems design;
– (4) systems development;
– (5) systems implementation;
– (6) systems maintenance.
– Phases often overlap, and a new one may start before the old
one is finished. After the first four phases, management must
decide whether to proceed to the next phase. User input and
review is a critical part of each phase.
– Why it's important: The SDLC is a comprehensive tool for solving
organizational problems, particularly those relating to the flow of
computer-based information.
• Web Exercise: The Systems Development Life Cycle
model is sometimes called the waterfall model. Use the
WWW to find out the rationale for this alternative term.
(Answer)
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• (1) The objective of preliminary investigation
is to conduct a preliminary analysis, propose
alternative solutions, describe costs and
benefits, and submit a preliminary plan with
recommendations.
• (2) The objective of systems analysis is to
gather data, analyze the data, and write a report.
Several tools are used to analyze the data.
– Modeling tools enable an analyst to present graphic
representations of a system.
– Data flow diagrams, for example, graphically show
the flow of data through a system.

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• Preliminary investigation
– Phase 1 of the SDLC; the purpose is to
conduct a preliminary analysis (determine the
organization's objectives, determine the
nature and scope of the problem), propose
alternative solutions (leave the system as is,
improve the efficiency of the system, or
develop a new system), describe costs and
benefits, and submit a preliminary plan with
recommendations.
– Why it's important: The preliminary
investigation lays the groundwork for the other
phases of the SDLC.

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• Systems analysis
– Phase 2 of the SDLC; the purpose is to gather data
(using written documents, interviews, questionnaires,
observation, and sampling), analyze the data, and
write a report.
– Why it's important: The results of systems analysis
will determine whether the system should be
redesigned.
– Web Exercise: Focus groups are another popular
method of gathering data during the systems analysis
phase of the SDLC. Look up the term focus group in
an online dictionary such as Merriam-webster.com.
How long has this term been around?

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• Modeling tools
– Analytical tools like charts, tables, and diagrams used
by systems analysts. Examples are data flow
diagrams, decision tables, systems flowcharts, and
object-oriented analysis.
– Why it's important: Modeling tools enable a systems
analyst to present graphic, or pictorial,
representations of a system.
– For More Info: Read more on modeling tools in an
online book entitled Just Enough Structured Analysis
by Edward Yourdon, a member of the Computer Hall
of Fame. Pay particular attention to the five points that
any model should possess, according to Yourdon.

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• Data flow diagrams
– Modeling tool that graphically shows the flow
of data through a system.
– Why it's important: A DFD diagrams the
processes that change data into information.
DFDs have only four symbols—for source or
destination of data, data flow, data
processing, and data storage—which makes
them easy to use.
– For More Info: Read more on DFDs in an
online book entitled Just Enough Structured
Analysis by Edward Yourdon, a member of
the Computer Hall of Fame.

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• (3) The objective of systems design is to do a
preliminary design, which describes the general
functional capabilities of a proposed information system;
then do a detail design, which describes how the system
will deliver the capabilities described in the preliminary
design; and then to write a report.
– Tools used in the preliminary design are CASE tools and project
management software. CASE (computer-aided software
engineering) tools are programs that automate the various
activities of the SDLC in several phases.
– Prototyping refers to using workstations, CASE tools, and other
software applications to build working models of system
components that can be quickly tested.
– A prototype is just such a limited working system developed to
test out design concepts.
– Project management software consists of programs used to plan,
schedule, and control the people, costs, and resources required
to complete a project.
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• Systems design
– Phase 3 of the SDLC; the purpose is to do a
preliminary design and then a detail design,
and write a report.
– Why it’s important: Systems design is one of
the most crucial phases of the SDLC.

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• CASE tools
– (Computer-Aided Software Engineering) tools.
Software that provides computer-automated means of
designing and changing systems.
– Why it's important: CASE tools may be used in almost
any phase of the SDLC, not just design. So-called
front-end CASE tools are used during the first three
phases—preliminary analysis, systems analysis,
systems design—to help with the early analysis and
design. So-called back-end CASE tools are used
during two later phases—systems development and
implementation—to help in coding and testing, for
instance.
– Related Industry: Rational Software Corporation
makes a very popular CASE tool called RUP
(Rational Unified Process). Visit the RUP Web page
to learn more about this computer-aided software
engineering tool.
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• Prototyping
– Involves building a model or experimental version of
all or part of a system so that it can be quickly tested
and evaluated; uses workstations, CASE tools, and
other applications software.
– Why it's important: Prototyping is part of the
preliminary design stage of Phase 3 of the SDLC.
– For More Info: A plethora of prototyping tools exist,
many of them with specific targets in mind, i.e.,
graphical user interfaces (GUIs), 3-dimensional
applications, gaming applications, etc. However, one
designer has proposed that yellow stickies are the
best prototyping tool of all! Read this amusing and
informative article at http://www.sum-
it.nl/en200148.html .

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• (4) The objective of systems
development is to develop or acquire the
software, acquire the hardware, and then
test the system.
– In considering what software to acquire, the
systems analyst must make a make-or-buy
decision decide whether to create a program
or buy existing software.

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• Systems development
– Phase 4 of the SDLC; hardware and software for the
new system are acquired and tested.
– The fourth phase begins once management has
accepted the report containing the design and has
approved the way to development.
– Why it's important: This phase may involve the
organization in investing substantial time and money.
– Career Corner: Software engineers are likely to be
involved with the systems development phase of the
SDLC, assuming that the business has decided to go
with the "make" in their "make-or-buy decision." The
U. S. Department of Labor's "Occupational Outlook
Handbook" predicts that software engineering will be
the fastest-growing occupation in the years 2000-
2010.
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• Make-or-buy decision
– Decision made in Phase 4 (programming) of the SDLC
concerning whether the organization has to make a program—
have it custom-written—or buy it, meaning simply purchase an
existing software package.
– Why it's important: The decision taken affects the costs and time
required to develop the system.
– For More Info: The term make-or-buy decision is applicable to
more than just the SDLC. IT companies have to decide whether
to make or buy training classes for their employees, and whether
to make or buy technical support services for their customers.
– Manufacturing companies have to decide whether to make or
buy various components needed for their products.
– Another common term for the "buy" in make-or-buy is
outsourcing. Originally, this term referred to U. S. companies
moving their manufacturing plants overseas where labor was
cheaper. But outsourcing has come to mean the "buy" in any
make-or-buy decision made by a business.

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• (5) Systems implementation consists of
converting the hardware, software, and
files to the new system and training the
users.
– Conversion to the next system may be by
direct implementation (stop the old, start the
new), parallel implementation (operate both
old and new concurrently for a while), phased
implementation (phase in new system in
stages), or pilot implementation (try out new
system by some users).

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• (6) Systems maintenance adjusts and
improves the system by having system
audits and periodic evaluations and by
making changes based on new conditions.

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