Objectives:
An information system uses the resources of people, hardware, software, data, and
networks to perform input, processing, output, storage, and control activities that
convert data resources into information products. Data are first collected (input)
and converted to a form that is suitable for processing. Then the data are
manipulated and converted into information (processing), stored for future use
(storage), or communicated to their ultimate user (output) according to correct
processing procedures (control).
1.1 Data:
It is a set of facts and figures – which are random, unorganized, are not classified,
ordered or sorted. They do not convey much meaning. They are raw facts or
observations, typically about physical phenomena or business transactions. More
specifically, data are objective measurements of the attributes (characteristics) of
entities, such as people, places, things, and events.
1.2 Data Resources:
Data constitutes a valuable organizational resource. Thus, data resources must be
managed effectively to benefit all end users in an organization. The data resources
of information systems may be typically organized into Databases which are a
collection of logically related records or files. A database consolidates many
records previously stored in separate files so that a common pool of data records
serves many applications.
1.3 Process:
They may be any set of tabulations, sorting, comparisons, calculations done on the
data to make it more meaningful. They may be procedures or work flows for
conversion of data into meaningful information.
Thus data is subjected to a “value-added” process (data processing or information
processing) where:
• Its form is aggregated, manipulated, and organized.
• Its content is analyzed and evaluated
• It is placed in a proper context for a human user
1.4 Information:
This is data which has been tabulated, sorted, classified etc. It conveys meaning
and gives a picture of the object/event under consideration to specific end users.
Thus Information is processed data, which has been placed in a meaningful and
useful context for an end user.
Fig 1.3 A
Attributes of Information:
1. Timely
1. Accurate
2. Relevant
3. Complete, integrity, consistency, validity, etc.
Fig 1.4 A
Summary:
Fig 2.1 A
Each organization has a structure which facilitates its chain of command. The
management of an organization can broadly be divided into three overlapping
layers. Usually the organization is viewed as a triangle depicting the hierarchy and
diminishing number of employees with the increasing levels of management.
The top level of management is focused on chalking out long term tactics and
strategies for the organization. They are largely involved in futuristic perspectives.
They try to work out plans for the organization which can help them achieve their
vision and mission. They also have to counter the intense competition of the
markets.
Middle management carries out the programs and plans of senior management.
The most important activity of the next stratum of management is control. The top
management sets the targets and strategies of the operations with a long term
perspective.
The long term plans are then converted into short term and measurable targets. A
path to achievement of the vision is clearly laid out. This path then helps the actual
operations of the organization to monitor their progress and achievements.
Deviations within permissible limits may be allowed but any major shortfalls are
immediately addressed and lead to precautionary and remedial measures being
taken to put the process back in control.
The bottom most layers may be considered to consist mainly of lower levels of
management – usually in charge of the daily routine operations of the business
organization. These routine day to day transactions generate large quantities of
detailed data. Any transaction or operations of the lower strata of the organization
usually involves procedures which are highly structured in nature. They usually
follow a non deviating routine; these procedures then can hence be easily
converted into computer programmes of the intended software.
Summary:
Thus the three levels of management deal with data and its progressively
processed forms. The lower levels of management deal with extremely detailed
data. This is voluminous and some parts of it may be irrelevant. Every transaction
or unit activity taking place in the organization generates a trail of data. This data
is then processed, and starts giving a comprehensive picture for the middle
management to accomplish their tasks of ensuring the systems are in control. This
is the further analyzed and studied for trends and patterns to become the
knowledge capital for the top levels of management. This knowledge management
then becomes a tool for corporate warfare.
3.1 Business Process: The procedure or the work flow of doing any task is called
a business process. It may also be defined as the manner in which work is
organized and coordinated to produce the required product and service. The data
generated due to a transaction in an organization is converted into information in
the work flow of a business process. The analysis of this resultant information is
then used for control of the operations of an organization by comparing results to
established company goals and helping to identify problem areas and opportunities
for improvement. This data and information forms an important input for short
term or long term planning.
Fig. 3.1 A
3.2 System:
Input:
It involves capturing and assembling elements that enter the system to be
processed. This may be data which is requiring transformation.
Process:
It involves transformation processes that convert input into output. This may be an
activity or a combination of activities which may be classification, sorting,
tabulation, calculation etc which may be aimed at converting of data into
information for the end-user.
Output:
Output involves transferring elements that have been produced by a transformation
process to their ultimate destination. This is the result of the process and this may
be used for analysis, working out of trends, future projections and predictive
decision making.
.
Feedback:
A fourth dimension can be added to the above, that of feedback. Feedback is a
very important process for any managerial action. An understanding of the
problems faced by the end users may go a long way in the improvement of the
process. Feedback provides data about the performance of the system.
Hence the systematic conversion of data into information, to aid and enhance the
process of decision making is an important managerial activity.
There is a need for each organization to analyze its operational data as each and
every company is facing global competition. No longer is the competition
restricted to geographical domains. The competition is with multi national
companies or even with e-commerce where the consumer has diverse avenues to
not only to make his final choice but also in terms of initial enquiries and FAQ s
of the product in question. Even the after sales service/suggestions and complaints
have been re-routed to an IT enabled medium. CRM thus acquires a new
dimension with immediate feedback and complaint redress.
Thus there is an urgent need for the companies to work with their maximum
efficiency & effectiveness to be able to withstand the onslaught of the intense
competition.
There is another very subtle advantage – that of increased transparency and the
resultant accountability of processes and organizations. Each activity that is
mapped electronically leaves an auditable trail.
In these days of global proximities, IT can become the cause and driver of
organization renewal and innovation which can give immense gains as an agile
competitor. It has become simply “infrastructural costs”
Objective Type Questions
Introduction:
E-business is all about going much beyond just the use of the Net, It is about the
combination with other technologies and forms of electronic communication, to
enable any type of business activity
This chapter introduces the fast-changing world of business applications of
information technology, which increasingly consists of what is popularly called e-
business applications. E-business is the use of the Internet and other networks and
information technologies to support electronic commerce, enterprise
communications and collaboration, and Web-enabled business processes, both
within a networked enterprise and with its customers and business partners.
Objectives:
• Accounting
• Finance
• Marketing
• Productions/operations management
• Human resource management
There is a strong emphasis in many organizations to develop such composite or
cross-functional information systems that cross the boundaries of traditional
business functions in order to reengineer and improve vital business processes.
These organizations view cross-functional information systems as a strategic way
to share information resources and improve the efficiency and effectiveness of a
business, thus helping it attain its strategic objectives.
Examples:
Marketing Systems:
Marketing information systems integrate the information flow required by many
marketing activities. Marketing information systems provide information for:
• Internet/intranet websites and services make an interactive marketing
process possible where customers can become partners in creating,
marketing, purchasing, and improving products and services.
• Sales Force Automation Systems use mobile computing and Internet
technologies to automate many information processing activities for sales
support and management. Increasingly, computers and networks are
providing the basis for sales force automation. In many companies, the
sales force is being outfitted with notebook computers that connect them to
web browsers, and sales contact management software that connect them to
marketing websites on the Internet, extranets, and their company intranets.
• Characteristics of sales force automation include:
o Increases the personal productivity of salespeople.
o Dramatically speeds up the capture and analysis of sales data from
the field to marketing managers at company headquarters.
o Allows marketing and sales management to improve the delivery of
information and the support they provide to their salespeople.
o Many companies view sales force automation as a way to gain a
strategic advantage in sales productivity and marketing responsiveness.
• Interactive marketing: Customers are not passive participants, but are
actively engaged in a network-enabled proactive and interactive process. It
encourages customers to become involved in product development,
delivery, and service issues. This is enabled by various Internet
technologies, including chat and discussion groups, Web forms and
questionnaires, and e-mail correspondence.
• Targeted Marketing: Companies can customize their web advertising
messages and promotion methods to appeal to people in specific
communities. These can be communities of interest, such as virtual
communities of online sporting enthusiasts or arts and crafts hobbyists, or
geographic communities formed by the websites of a city or other local
organizations.
o Content – advertising such as electronic billboards or banners can be
placed on various website pages, in addition to a company’s home
page. These messages reach the targeted audience.
o Context – advertising appears only in Web pages that are relevant to
the content of a product or service. So advertising is targeted only at
people who are already looking for information about a subject
matter that is related to a company’s products.
o Demographic/Psychographic – marketing efforts can be aimed only
at specific types or classes of people: unmarried, twenty-something,
middle income, male college graduates.
o Online Behavior – advertising and promotion efforts can be tailored
to each visit to a site by an individual. This strategy is based on
“web cookie” files recorded on the visitor’s disk drive from previous
visits. Cookie files enable a company to track a person’s online
behavior at a website so marketing efforts can be instantly developed
and targeted to that individual at each visit to their website.
Summary:
Many firms have gone beyond these traditional personnel management functions
and have developed human resource information systems (HRIS) that also
support:
• Recruitment, selection and hiring
• Job placement
• Performance appraisals
• Employee benefit analysis
• Training and development
• Health, safety, and security
Summary:
After studying the role of data and information in various information systems
such as Manufacturing Systems, Accounting Systems and Human Resource
Management Systems one can comprehend how the level of efficiency increases
in various business processes once the computer based information systems are in
place.
Transaction – Any unit event happening in the organization is called a
transaction. A transaction generates data. This data may then form part of the
information generating process which is the basis of all managerial decision
making.
Fig 8.2 A
• The first step is the entry of the details of any business process and
hence the resultant database maintenance which is updating of the
corporate databases of an organization to reflect changes resulting from
day-to-day business transactions.
Summary:
TPS are the basic and initial processing systems of a business organization. The
data generated at this preliminary level is used at all ascending levels of
management for control and analysis purposes.
Reports
Some of the types of report generated at lower levels of management may be:
Summary Reports – These are those reports which are prepared to give a
comprehensive and holistic picture of the organization. They may be used to
review the systems and ensure that the systems are in control and in consonance
with the targets and standards specified.
Non Periodic Reports – They are generated as a function of activity and not time.
They may follow some other methodology of generation such as:
Summary:
Q3 Transaction processing systems process data in two basic ways. One way is
real-time processing, where transaction data are processed __________ after a
transaction occurs.