System Analysis and Design

CHAPTER ONE

FUNDAMENTALS OF INFORMATION SYSTEM

Systems are created to solve problems. One can think of the systems approach as an
organized way of dealing with a problem. In this dynamic world, the subject System Analysis
and Design, mainly deals with the software development activities.

1.1 Data, Information, and Knowledge

According to Russell Ackoff, a systems theorist and professor of organizational change, the
content of the human mind can be classified into five categories:

1. Data: symbols

2. Information: data that are processed to be useful; provides answers to "who", "what",
"where", and "when" questions

3. Knowledge: application of data and information; answers "how" questions

4. Understanding: appreciation of "why"

5. Wisdom: evaluated understanding.

Ackoff indicates that the first four categories relate to the past; they deal with what has been or
what is known. Only the fifth category, wisdom, deals with the future because it incorporates
vision and design. With wisdom, people can create the future rather than just grasp the present
and past. But achieving wisdom isn't easy; people must move successively through the other
categories.

A further elaboration of Ackoff's definitions follows:

Data... data is raw. It simply exists and has no significance beyond its existence (in and of
itself). It can exist in any form, usable or not. It does not have meaning of itself. In computer
parlance, a spreadsheet generally starts out by holding data.

Information... information is data that has been given meaning by way of relational
connection. This "meaning" can be useful, but does not have to be. In computer parlance, a
relational database makes information from the data stored within it.

Knowledge... knowledge is the appropriate collection of information, such that it's intent is to
be useful. Knowledge is a deterministic process. When someone "memorizes" information (as
less-aspiring test-bound students often do), then they have amassed knowledge. This
knowledge has useful meaning to them, but it does not provide for, in and of itself, an
integration such as would infer further knowledge. For example, elementary school children
memorize, or amass knowledge of, the "times table". They can tell you that "2 x 2 = 4" because
they have amassed that knowledge (it being included in the times table). But when asked what
is "1267 x 300", they cannot respond correctly because that entry is not in their times table. To

Compiled by : K.N.V.Ratna Kumar, M.Tech, MCA, MBA

Lecturer, Computing Science Department,
Faculty of Engineering and Technology,
JIGJIGA UNIVERSITY
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System Analysis and Design

correctly answer such a question requires a true cognitive and analytical ability that is only
encompassed in the next level... understanding. In computer parlance, most of the applications
we use (modeling, simulation, etc.) exercise some type of stored knowledge.

Understanding... understanding is an interpolative and probabilistic process. It is cognitive

and analytical. It is the process by which I can take knowledge and synthesize new knowledge
from the previously held knowledge. The difference between understanding and knowledge is
the difference between "learning" and "memorizing". People who have understanding can
undertake useful actions because they can synthesize new knowledge, or in some cases, at least
new information, from what is previously known (and understood). That is, understanding can
build upon currently held information, knowledge and understanding itself. In computer
parlance, AI systems possess understanding in the sense that they are able to synthesize new
knowledge from previously stored information and knowledge.

Wisdom... wisdom is an extrapolative and non-deterministic, non-probabilistic process. It calls

upon all the previous levels of consciousness, and specifically upon special types of human
programming (moral, ethical codes, etc.). It beckons to give us understanding about which
there has previously been no understanding, and in doing so, goes far beyond understanding
itself. It is the essence of philosophical probing. Unlike the previous four levels, it asks
questions to which there is no (easily-achievable) answer, and in some cases, to which there
can be no humanly-known answer period. Wisdom is therefore, the process by which we also
discern, or judge, between right and wrong, good and bad. I personally believe that computers
do not have, and will never have the ability to posses wisdom. Wisdom is a uniquely human
state, or as I see it, wisdom requires one to have a soul, for it resides as much in the heart as in
the mind. And a soul is something machines will never possess (or perhaps I should reword
that to say, a soul is something that, in general, will never possess a machine).

The following diagram represents the transitions from data, to information, to knowledge, and
finally to wisdom, and it is understanding that support the transition from each stage to the
next. Understanding is not a separate level of its own.

Data represents a fact or statement of event without relation to other things.

Ex: It is raining.

Compiled by : K.N.V.Ratna Kumar, M.Tech, MCA, MBA

Lecturer, Computing Science Department,
Faculty of Engineering and Technology,
JIGJIGA UNIVERSITY
2
System Analysis and Design

Information embodies the understanding of a relationship of some sort, possibly cause and
effect.

Ex: The temperature dropped 15 degrees and then it started raining.

Knowledge represents a pattern that connects and generally provides a high level of
predictability as to what is described or what will happen next.

Ex: If the humidity is very high and the temperature drops substantially the atmospheres is
often unlikely to be able to hold the moisture so it rains.

Wisdom embodies more of an understanding of fundamental principles embodied within the

knowledge that are essentially the basis for the knowledge being what it is. Wisdom is
essentially systemic.

Ex: It rains because it rains. And this encompasses an understanding of all the interactions that
happen between raining, evaporation, air currents, temperature gradients, changes, and raining.

Meaning and Role of Information

Dictionary definition :

1. Knowledge derived from study, experience or instruction.

2. Knowledge of specific events or situations that has been gathered or received by
communication; intelligence of news.
3. A collection of facts or data.
4. The act of informing or the condition of being informed; communication of knowledge.
5. Computer Science. Processed, stored, or transmitted data.

Definition of System

The term system is derived from the Greek word systema, which means “an organized
relationship among functioning units”. A collection of components that work together to
realize some objective forms a system. The objectives of the system demand that some output
is produced as a result of processing the suitable inputs. Basically there are three major
components in every system, namely input, processing and output.

In a system the different components are connected with each other and they are
interdependent. For example, Human body represents a complete natural system. We are also

Compiled by : K.N.V.Ratna Kumar, M.Tech, MCA, MBA

Lecturer, Computing Science Department,
Faculty of Engineering and Technology,
JIGJIGA UNIVERSITY
3
System Analysis and Design

bound by many national systems such as political system, economic system, educational
system and so forth.

Characteristics of a System

[characteristic = attribute/feature/something it has that makes it a system]

These are 9 characteristics that a system has:

1. Components – one part or a number of parts grouped together – a subsystem.

2. Interrelated components – function of one component is related to the function of
another component – output from one is input for another – dependence of a part on
one or more other parts.
3. Boundary – separates the system from other systems; all components within the
boundary; establishes the limits of the system; components within the boundary can be
changed but components outside cannot be changed. Separates the system from other
systems in the organization.
4. Purpose – (or goal) – all components work together to achieve the overall purpose of
the system.
5. Environment – everything outside the Boundary that influences and/or interacts the
system.
6. Interfaces – the points at which the system meets the environment, or where
subsystems meet each other.
7. Input - system takes input from its environment.
8. Output – system returns output to its environment as a result of its functioning – to
achieve the purpose. Output from individual subsystems may be inputs to other
subsystems.
9. Constraints – there are limits to what the system can do (capacity, speed, capability);
some imposed within the system itself, some by the environment (e.g. available
resources, deadlines).

Fundamentals of Information System

What is Information System ?

Definition – I
An Information System is an arrangement of people, data, processes, interfaces, networks and
technology that interact for the purpose of supporting & improving both day-to-day operations
in a business (sometimes called data processing) as well as supporting the problem solving
and decision making needs of management (sometimes called information services).

Definition – II
An Information System (IS) is a system that accepts inputs in the form of raw data, processes
them, and provides output in the form of information. IS are designed in a manner to help the
managers to analyze data and make decisions.

Organizations use information systems for improved productiveness, profitability, gain

competitive advantage, improve quality of service to the customer, etc.

Compiled by : K.N.V.Ratna Kumar, M.Tech, MCA, MBA

Lecturer, Computing Science Department,
Faculty of Engineering and Technology,
JIGJIGA UNIVERSITY
4
System Analysis and Design

Types of Information System

A variety of Information Systems are available to cater to the varying needs of the
organizations. Some of them are as follows :

• Transaction Processing Systems

• Management Information Systems (such as Inventory and Planning systems)
• Decision Support Systems
• Expert Systems
• Customer Relationship Management Systems
• Electronic Commerce Systems
• Enterprise Resource Planning Systems
• Office Automation and Enterprise Collaboration Systems

Transaction Processing Systems (TPS)

• Automate the handling & capture of data about transactions or business activities.
• For each transaction, the system must capture the data, verify that it is a valid
transaction and accept or reject it.
• Accepted transactions are stored in the system database.
• Reporting provides summaries of transactions (e.g. daily, weekly).
• A transaction may be passed from one process to another to reflect all steps in the
business process e.g. take a credit card order over the phone, authorise with the credit
card company, then place the order with the inventory system.

Management Information Systems (MIS)

• Take the raw data from a system such as a TPS, and convert into a more meaningful
form, where the data is aggregated (combined).
• Provide reports of this information to Managers.

Decision Support Systems (DSS)

• Help decision-makers with decisions, by allowing them to analyze data.
• Interactive environment to allow data to be manipulated (viewed in different ways) and
to change different factors.
• Data extracted from a TPS or MIS, and combined with models of business processes.
• Help user to find problems or decide a course of action in the business.
• Requires a user interface to allow decision-maker to input criteria, answer questions
etc.

Expert Systems (ES)

• Replicate the decision-making process, by applying rules to information in the way that
an expert would.

Compiled by : K.N.V.Ratna Kumar, M.Tech, MCA, MBA

Lecturer, Computing Science Department,
Faculty of Engineering and Technology,
JIGJIGA UNIVERSITY
5
System Analysis and Design

• An ES is developed for a particular domain/area of knowledge & problems e.g.

medical.
• The knowledge of a human expert and how they apply that knowledge to make
decisions needs to be written into the system.
• More recently, expert systems include data warehousing and data mining:
o Data warehousing is the storage of large volumes of data for organizational use
o Data mining is the process of looking for patterns in the data stored in
databases, in order to uncover undiscovered information

Types of System

Systems are of two types – Open and Closed.

Open System

• It is a collection of interacting software, hardware and human components designed to

satisfy the stated needs
• They adapt quickly to the environment in which they live by possessing preamble
boundaries through which the new and viable ideas are incorporated, by which they
serve their parent environment
• Ex : Network File System by Sun Microsystems, Netscape Navigator
• Advantages
o Less reliance on proprietary products
o More competition leading to lower cost
o Decreased probability of schedule delay
o Tested products
o Portable applications
o Interoperability
o Faster technology insertion
o Foundation for system evaluation

Closed System

• It is a system which resists the inclusion and integration of new ideas.

• They do not adapt to the new and feasible ideas and may be considered waste and
unnecessary to the parent environment.
• Ex : Internet Explorer Browser for proprietary Windows Operating System

Some important Systems Concepts

[concepts = ideas/theories/thoughts]

These are some important concepts about systems that a Systems Analyst needs to understand.

• Decomposition – breaking down into smaller components – to make smaller, less

complex parts

Compiled by : K.N.V.Ratna Kumar, M.Tech, MCA, MBA

Lecturer, Computing Science Department,
Faculty of Engineering and Technology,
JIGJIGA UNIVERSITY
6
System Analysis and Design

• Modularity – as a result of Decomposition, the system is divided into ‘chunks’ or

modules that are roughly the same size; this makes it easier to understand the system.
• Coupling – coupled subsystems depend on each other – messages are passed between
subsystems; a good system will have very independent subsystems with minimal flows
of data between them. This makes the system more simple and also makes it easier to
change just one part of the system without affecting the other parts.
• Cohesion – the extent (how much) to which a subsystem performs a single function.
Generally, a module should be cohesive – so that it performs only one function.

The view of a system in figure below shows 3 subsystems within the system – they are
coupled because they pass messages between each other.

A theoretical view of systems

Compiled by : K.N.V.Ratna Kumar, M.Tech, MCA, MBA

Lecturer, Computing Science Department,
Faculty of Engineering and Technology,
JIGJIGA UNIVERSITY
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