Chapter I

Fundamentals of Information System

Aim
The aim of this chapter is to:
• introduce information system
• explain the components of information system
• discuss information system resources
Objectives
The objectives of this chapter are to:
• elucidate the hardware resources
• differentiate between data and information
• enlist network resources
Learning outcome
At the end of this chapter, you will be able to:
• understand the role of information system
•explain competitive advantages of information system
• enlist information system activities
Fundamentals of Information Systems

1.1 Introduction to Information System

 Information is data that has been processed into a form that
is meaningful to the user. An information system (IS) is an
organized combination of people, hardware, software,
communications network, and data resources that collect,
transform and disseminate information in an organization.
 Information systems and technologies have become vital
components of businesses and organizations.
 People rely on information systems to communicate with each
other using a variety of physical devices (hardware),
information processing instructions and procedures
(software), communication channels (networks) and stored
data (data resources).
 Information can be classified into facts, opinions, concepts,
procedures, processes, principles, primary information, and
secondary information.
Cont…..
 Apart from this, it can also be classified into several types
based on its nature, usage, creation, application,
structure,
 and form.
 In order to present the information in a proper manner to
the user, the data can be collected through two main •
methods:
o
Primary
o Secondary
 Fundamentals of Information Systems
 Primary data collection refers to collecting original data or
collecting data directly from the source.
 Secondary data collection refers to collecting data from
secondary sources such as books, journals, research
reports, online databases, Internet and so on.
 The user should check whether this data has been
updated before analyzing the data and drawing
conclusions.
 The transmission of information between one person and
another, takes place with the help of the communications
system.
 Summarization and message routing are the two methods that
increase the sending and receiving efficiency of the system.
 Individuals tend to exercise discretion over the content or
distribution of information by message delay, message
modification or filtering, inference or uncertainty
absorption, and presentation bias.
Cont….
The benefits of information in organizations include its
helps in management control, it helps in decision-
making, and it helps to build models, backgrounds, and
motivation.
Quality of information is also a vital issue.
The term ‘quality’ is subjective in nature and hence its
parameters should be clearly defined in order to judge the
quality of information.
The various parameters of quality are validity,
consistency, reliability, impartiality, and age.
Errors and bias occur as a result of giving too much
importance and preference to the quantity of information
•rather than the quality.
 Fundamentals of Information Systems

 An IS accepts data resources as input and processes it and delivers

information products as output. Information systems consist of people
resources (end users and IS specialists), hardware resources (machines
and media), software (programs and procedures), data (data and
knowledge bases) and networks (communications media and network
support) to perform input, processing, output, storage, and control
activities that convert data resources into information products.
 Some of the important activities performed by an IS are processing of
data into information, storage of data resources and control of system
performance.
 Information systems perform three vital roles in any type of
organization. They support business operations, support managerial
decision making and provide strategic competitive advantage to the
organization.
 Information systems are classified according to their use in a business.
 Fundamentals of Information Systems

1.2 Components of Information System

 An information system is a system that accepts data resources as
input and processes them into information products as output.
 An information system depends on the resources of people (end
users and IS specialists), hardware (machines and media), software
(programs and procedures), data (data and knowledge basis) and
networks (communications media and network support) to perform
input, processing, output, storage, and control activities that convert
data resources into information products.
 This information system model highlights the relationships among
the components and activities of information systems.
 It provides a framework that emphasizes four major concepts that
can be applied to all types of information systems:
 People, hardware, software, data and networks are the five basic
resources of information systems.
Cont….
 A people resource includes end users and IS specialists,
hardware resources consist of machines and media,
software resources include both programs and procedures,
data resources can include data and knowledge bases and
network resources include communications media and
networks.
 Data resources are transformed by information processing
activities into a variety of information products for end
users.
 Information processing consists of input, processing,
output, storage and control activities.
 Fundamentals of Information Systems

1.2.1 Information System Resources

 People resources
 People are required for the operation of all information systems. This
people resource includes end users and IS specialists.
 End users (also called users or clients) are people who use an
information system or the information it produces.
 They can be accountants, salespersons, engineers, clerks, customers or
managers. Most of us are information system end users.
 IS Specialists are people who develop and operate information
systems.
 They include systems analysts, programmers, computer operators, and
other managerial technical and clerical IS personnel.
 Briefly, systems analysts design information systems based on the
information requirements of end users, programmers prepare computer
programs based on the specifications of systems analysts, and
computer operators operate large computer systems .
Fundamentals of Information Systems

Hardware resources
The concept of hardware resources includes all physical devices
and materials used in information processing. Specially, it
includes not only machines, such as computers and other
equipments, but also all data media, that is, all tangible objects
on which data is recorded, from sheets of paper to magnetic
disks.
Examples of hardware in computer-based information systems
are:
 - Computer systems, which consist of central processing units
containing microprocessors, and variety of interconnected
peripheral devices.
 - Computer peripherals, which are devices such as a keyboard
or electronic mouse for input of data and commands, a video
screen or printer for output of information, and magnetic or
optical disks for storage of data resources.
Cont…
Software resources
 The concept of software resources includes all sets of
information processing instructions
 This generic concept of software includes not only the sets of
operating instructions called programs, which direct and
control computer hardware, but also the sets of information
processing instructions needed by people, called procedures.
 It is important to understand that even information systems that don’t use
computers have a software resource component.
 This is true even for the information systems of ancient times, or the
manual and machine-supported information systems still used in the
world today.
 They all require software resources in the form of information processing
instructions and procedures in order to properly capture, process, and
disseminate information to their users.
Following are the examples of software resources
Cont….
 System software, such as an operating system program, which
can control and support the operations of a computer system.
 Application software, which are the programs that directs
processing for a particular use of computers by end users. For
example, a sales analysis program, a payroll program, or a work
processing program.
 Procedures, which are operating instructions for the people who will
use an information system. For example, instructions for filling out a
paper form or using a software package.
Data resources
 Data is more than the raw material of information systems.
 The concept of data resources has been broadened by managers
and information systems professionals.
 They realize that data constitutes a valuable organization
resource. Thus, you should view data as data resource that must
be managed effectively to benefit all end users in an
organization.
Cont…
 Data can take many forms, including traditional alphanumeric data,
composed of numbers and alphabetical and other characters that
describe business transactions and other events and entities.
 Text data, consisting of sentences and paragraphs used in written
communications; image data, such as graphic shapes and figures; and
audio data, the human voice and other sounds, are also important
forms of data.
 The data resources of information systems are typically organized into
following factors.
 Database that holds processed and organized data.
 Knowledge bases that hold knowledge in variety of forms such as
facts, rules, and case examples about successful business practices.
 For example, data about sales transactions may be accumulated and
stored in a sales database for subsequent processing that yields daily,
weekly, and monthly sales analysis reports for management.
 Knowledge bases are used by knowledge management systems and
expert systems to share knowledge and give expert advice on specific
subjects.
Fundamentals of Information Systems

1.2.2 Data vs. Information

 The word data is the plural of datum, though data commonly
represents both, singular and plural forms.
 Data are raw facts or observations, typically about physical
phenomena or business transactions. For example, a spacecraft
launch or the sale of an automobile would generate a lot of data
describing those events.
 More specifically, data are objective measurements of the
attributes (the characteristics) of entities (such as people, places,
things, and events).
Example 1:
 A spacecraft launch generates vast amounts of data.
 Electronic transmissions of data (telemetry) from thousands of
sensors are converted to numeric and text data by computers.
 Voice and image data are also captured through video and radio
monitoring of the launch by mission controllers.
Fundamentals of Information Systems

1.2.3 Network Resources

 Telecommunications networks like the Internet, intranets, and
extranets have become essential to the successful operations of
all types of organizations and their computer-based information
systems.
 Telecommunications networks consist of computers,
communications processors, and other devices interconnected
by communications media and controlled by communications
software.
 The concept of Network resources emphasizes that
communications networks are a fundamental resource
component of all information systems.
Network resources include the following:
Communication media
 Examples include twisted pair wire, coaxial cable, fiber-optic
cable, microwave systems, and communication satellite systems.
Cont…

Network support
 This generic category includes all of the people, hardware, software, and
data resources that directly support the operation and use of a
communications network. Examples include communications control
software such as network operating systems and Internet packages.
1.3 Roles of Information System
 Information technology (IT) refers to the management and use
of information using computer-based tools.
 It includes acquiring, processing, storing, and distributing
information.
 Most commonly, it is a term used to refer to business
applications of computer technology, rather than scientific
applications.
 The term is used broadly in business to refer to anything that
ties into the use of computers.
 Mostly, businesses today create data that can be stored and
processed on computers.
 Cont….

 In some cases, the data must be input to computers using devices such as
keyboards and scanners.
 In other cases, the data might be created electronically and automatically
stored in computers.
 Small businesses generally need to purchase software packages, and may
need to contract with IT businesses that provide services such as hosting,
marketing web sites and maintaining networks. However, larger
companies can consider having their own IT staffs to develop software,
and otherwise handle IT needs in-house.
 Effective implementation of information technology would decrease
liability by reducing the cost of expected failures and increase flexibility
by reducing the cost of adjustment.
 The businesses reaction to the environment remains to be the vital
determinant for its effectiveness.
 The capabilities and flexibilities of computer-communication systems
make them gradually more appropriate to businesses by being able to
respond to any specific information or communication requirement.
 Information technology is having impact on all trade industries and
businesses, in service as well as in •manufacturing.
 Cont….

 It is affecting workers at all levels of organizations, from the executives to

middle management and clerks.
 Information technology is increasingly becoming a basic factor of all types
of technologies such as craft, •engineering, routine, and non-routine.
 It enables the business to respond to the new and urgent competitive forces
by providing effective management of interdependence.
 In the near future businesses would be facing a lack and a
redundancy of information called information glut.
 To solve the information-glut companies will need to introduce
methods for selective thinning out of information.
 Improvements in telecommunications will make it easier to
control business units dispersed over different parts of the
world.
 Fundamentals of Information Systems

1.4 Competitive Advantages of Information System

 Following are the advantages of information system.
 Technology has taken the business environment by storm.
 Processes that used to be manual are now automated, and methods for
communication have been transformed.
 The arrival of technology has completely transformed today’s business practices.
 Information systems (IS) have been around for a while, but as they evolve, they
are continually “new” and offer many possibilities.
 An IS isn’t just a collection of hardware and software, it’s much more than that,
it’s a tool. This tool can be used in a number of ways, and the value of it really
depends on how your business opts to utilize it.
 Many businesses today are still realizing the power their technology possesses,
but once strategic knowledge is realized, the potential is endless.
 Installing automation simply for the sake of having it guarantees it’ll be a just an
ordinary (and expensive!) •business possession, but grasping an understanding of
the ways it can be used is the real value.
 Strategic planning in utilizing information systems is the key to gaining a
competitive advantage.
 Ways you can maximize your information systems are as follows:
 Fundamentals of Information Systems

Differentiation
 IS allows you to strategically define your organization in a way that makes your
business stand out from the competition.
 You can integrate IS in such a way where you can offer your customers
something no one else does.
 With a unique design that makes your business appealing to do business with,
you can easily increase your customer base.
 Coordination of supply and distribution
 IS provides a terrific way to monitor and track inventory.
 Typically, managers will use information system to track goods and to manage
their entire supply/chain management process.
 If there’s a problem, you can easily pinpoint and enact a solution before
becoming a costly issue.
Customers
 Integrating IS with the web is a great way to maximize your technology.
 You can generate efficiency, effectiveness and enhancement all at the same time.
 Employee burden is relieved and you can augment your customer’s shopping
experience at the same time
 Fundamentals of Information Systems

Decision making
 Information systems allow the vital element of providing “real-time” information.
 In today’s competitive environment, a manager needs to make rapid decisions and
to do this effectively; you’ll need the most up to date information available.
Properly designing your IS to custom fit your needs will enable you to accomplish
this.
Communication
 Your systems possesses ways to effectively and efficiently share information.
 Automated communication is a time and resource saver and can add tremendous
value to your business.
 When implementing IS, technology standards are important, but inter-connectivity
is essential.
 Providing a way to network within your own organization and with partners and
customers is a vital component.
 If your company has the latest and greatest technology, even better than
competitors and suppliers, it doesn’t you much good in seclusion because you’re
left isolated from the others.
 Ultimately, this ends up becoming less cost-effective and more time consuming
which decreases the value of your IS.
 Cont….

 Great benefits come with utilizing management information

systems.
 The business values in this investment are less redundancy
(which saves on man-hours worked), efficiency, better data
integrity, streamlining of processes the possibilities are
endless.
 With proper planning, your company can maximize profit
while decreasing overhead costs.
 When exploring the value of IS from both, a technical
perspective and a competitive advantage perspective,
Information Systems are a definitive and effective means to
expand your business.
 1.5 Applications of Information Systems
There are several application areas which have to be considered in
information systems. Those are as follows:
Information system activities
Information processing (or data processing) activities that occur in
information system include the following:
 Input of data resources
 Processing of data into information
 Output of information products
 Storage of data resources
 Control of system performance
Input of data resources
 Data about business transactions and other events must be captured and
prepared for processing by the input activity.
 Input typically takes the form of data entry activities such as recording
and editing.
 Once entered, data may be transferred onto a machine-readable medium
such as magnetic disk or type, until needed for processing.
Processing of data into information
 Data is typically subjected to processing activities such as calculating,
comparing, sorting, classifying, and summarizing.
 These activities organize, analyze and manipulate data, thus converting
them into information for end users.
 A continual process of correcting and updating activities must maintain
quality of data stored in an information system.
Output of information products
 Information in various forms is transmitted to end-users and made
available to them in the output activity. The goal of information systems is
the production of appropriate information products for end users.
Storage of data resources
 Storage is a basic system component of information systems.•
 Storage is the information system activity in which data and information
are retained in an organized manner for later use.
 Cont…

Control of system performance

 An important information system activity is the control of its
performance.
 An information system should produce feedback about its input,
processing, output, and storage activities.
 Feedback must be monitored and evaluated to determine if the
system is meeting established performance standards.
 Feedback is used to make adjustments to system activities to correct
deficiencies
1.6 Trends of Information System
Management information systems (MIS) are complex decision
support systems used by companies to enhance and improve their
business operations. Historically, an MIS was a management tool to
help company management make informed decisions for their
business based on information gathered from all business
departments. Technology has greatly improved the effectiveness of
the MIS.
 Cont….
Enterprise Resource Planning
 Enterprise resource planning (ERP) software is a form of MIS that is
installed in all departments and locations of businesses to enhance the
availability of company information.
 ERPs fill this void by allowing companies to use one computer system to
effectively record all company information.
Networking
 Another trend in MIS is the ability for companies to network with other
companies for business purposes.
 Manufacturing firms can shorten their supply chain using electronic data
interchange (EDI) to transfer the necessary information for ordering more
products.
 Networking also allows companies to transfer money through several bank
accounts, creating a quicker process for paying bills and purchasing
materials.
 Cont….

Data mining
 An important trend in MIS is the ability for companies to use data
mining tools to collect information regarding consumer purchases and
other economic trends. This allows management to translate this
information into goals and directions for future business operations.
 Most MIS software also has trending or forecasting models that allow
companies to project emerging consumer markets for profitable
operations.
Education
 As MIS software becomes more prevalent in businesses, many colleges
and universities have developed educational programs to train students
on these programs.
Careers
 Computerized MIS programs have led to a new career in database
management and consulting.
 1.7. Future of Information System

Metadata
 Metadata is data about data.
 Metadata can describe a data source, a particular collection of data (a file
or a database or a table in a relational database
 Metadata can describe data models.
 Metadata can also be used to describe processes and software.
 It can describe an overall processing system environment, a processing
system, a process, a component of a process.
 It can describe a suite of software, a program, a subroutine or program
fragment, a specification.
 It can describe an event system, an individual event, a constraint system
and an individual constraint.
 It can describe a process and /or event model.
 Metadata can describe people and their roles in an IT system.
 It can describe an organization, a department, individuals or individuals
in a certain role.
 A classification of metadata
 Metadata is used for several purposes, they are mentioned as follows:
 Describing data for the purposes of data exchange
 Describing data for the purposes of global access from query (including
update) to optimize recall and relevance
 Describing data for the purposes of query optimization;
 Describing data for the purposes of answer integration and explanation;
 Describing data for the purposes of correct analytical processing or
interpretation, representation or visualization.
 All of these purposes require that the data be described:
 Such that the resource is constrained formally to ensure integrity.
 Such that the resource is reachable by automated means.
 Such that there is sufficient description for the purposes to utilize the
resource
 Cont…
Schema Metadata
 Schema metadata constrains the associated data.
 It defines the intension whereas instances of data are the extension.
 From the intension a theoretical universal extension can be created,
constrained only by the intension.
 Conversely, any observed instance should be a subset of the theoretical
extension and should obey the constraints defined in the intension
(schema).
 One problem with existing schema metadata (For example, schemas for
relational DBMS) is that they lack certain intentional information that is
required.
 Cont….
Navigational metadata
 Navigational metadata provides the pathway or routing to the data
described by the schema metadata or associative metadata.
 In the RDF(Resource Description Framework) model it is a URL
(universal resource locator), or more accurately, a URI (Universal
Resource Identifier).
 With increasing use of databases to store resources, the most common
navigational metadata now is a URL with associated query parameters
embedded in the string to be used by CGI (Common Gateway Interface)
software or proprietary software for a particular DBMS product or DBMS-
Web server software pairing.
 The navigational metadata describes only the physical access path.
Naturally, associated with a particular URI are other properties such as:
 security and privacy (For example, a password required to access the target
of the URI);
 access rights and charges (For example, does one have to pay to access the
resource at the URI target);
Associative metadata
 In the data and information domain, associative metadata can describe:
 A set of data (For example, a database, a relation (table) or a
collection of documents or a retrieved subset). ..An example would
be a description of a dataset collected as part of a scientific mission;
 An individual instance (record, tuple, document). An example would
be a library catalogue record describing ..a book ;
 An attribute (column in a table, field in a set of records, named
element in a set of documents).
 A record / field intersection unique value (i.e., value of one attribute
in one instance)
 In the relationship domain, associative metadata can describe
relationships between sets of data, For example, hyperlinks.
 Cont….
 Taking an orthogonal view over these different kinds of information
system objects to be described, associative metadata may be classified as
follows:
 Descriptive: provides additional information about the object to assist in
understanding and using it;
 Restrictive: provides additional information about the object to restrict
access to authorized users and is related to security, privacy, access rights,
copyright and IPR (Intellectual Property Rights);
 Supportive: a separate and general information resource that can be cross-
linked to an individual object to provide additional information, for
example, translation to a different language.
Cont….

The end of Chapter One

Thank you::