Loading ...
Global Do...
News & Politics
5
0
Try Now
Log In
Pricing
Information System (CS507) VU © Copyright Virtual University of Pakistan i Table of Contents Chapter No.1 Defining Needs 10 1.1 Need for information 10 1.2 Sources of Information 10 1.3 Primary Sources 11 1.4 Secondary Sources 11 1.5 Tertiary Sources 12 1.6 Changing Needs 12 Chapter No.2 Areas Covered 14 2.1 Need for Organization 14 2.2 Data vs. Information 14 2.3 Information Quality Checklist 15 2.4 Organization & Information Requirements 15 Chapter No.3 Organization & Information Requirements 17 3.1 Size of the Organization and Information Requirements 17 3.1.1 Small Organizations 17 3.1.2 Medium Sized Organizations 17 3.1.3 Large Organizations 18 3.2 Nature of Business & Information Requirements 19 Chapter No.4 Unique Attributes of Organization 20 4.1 Organizational Structure Pyramid/Tall/Hierarchical 20 4.1.1 Hierarchical organization 20 4.1.2 Organizational Structure 20 4.1.3 Culture of the Organization 21 4.2 Management Styles 21 4.2.1 Authoritative 21 4.2.2 Participative 22 4.2.3 Mixed 22 4.3 Decision Making Approach 22 4.4 Sources of information in Organizations 22 4.5 Direction of Information Flow 23 Chapter No.5 Effect of Changes in Environment 24 5.1 Elements of Environment 24 5.1.1 Legal 24 5.1.2 Economic 24 5.1.3 Social 25 5.1.4 Technological 25 5.1.5 Corporate social responsibility 26 5.1.6 Ethics 27 Information System (CS507) VU © Copyright Virtual University of Pakistan ii Chapter No.6 Systems vs. Procedures 28 6.1 Purpose of Systems & Procedures 28 6.2 Data & Information 28 6.3 Data & Information 28 6.4 Manual Vs Computerised Information Systems 28 6.5 What is Computer based Information System (CBIS)? 28 6.6 Why Information Systems? 29 6.7 Emerging Global Economies 29 6.8 Transforming Industrial Economies 29 6.9 Transformed Business Enterprise 29 6.10 Emerging Digital Firms 29 Chapter No.7 Types of Systems 30 7.1 What are Systems? 30 7.2 Components of a system 30 7.3 Types of Systems 30 7.3.1 Open-Loop System 30 7.3.2 Closed Loop System 30 7.3.3 Open Systems 31 7.3.4 Closed Systems 31 7.4 Level of Planning 31 7.5 Strategic Planning for Information Resources (SPIR) 32 Chapter No.8 What are Systems? 33 8.1 Components of a system 33 8.2 Types of Systems 33 8.3 Open Loop System 34 8.4 Closed Loop System 35 8.5 Attributes of an IS/CBIS 36 Chapter No.9 Infrastructure 39 9.1 Architecture 39 9.1.1 Information Architecture 39 9.2 Components/Sub-Systems of CBIS 40 9.3 Transaction Processing System 40 9.4 Management Information System 42 Chapter No.10 Support Systems 43 10.1 Support systems can be classified into two categories 43 10.1.1 Office Automation Systems 43 10.1.2 Decision Support Systems 43 10.2 Functionalities of MIS and DSS 44 10.3 Types of DSS 44 10.3.1 Model Driven DSS 44 10.3.2 Data Driven DSS 45 Information System (CS507) VU © Copyright Virtual University of Pakistan iii Chapter No.11 Data Mart 47 11.1 Online Analytical Processing (OLAP) 47 11.2 Data Mining 48 11.3 Types of Models Used in DSS 48 11.3.1 Physical Models 48 11.3.2 Narrative Models 48 11.3.3 Graphic Models 48 11.3.4 Mathematical Models 48 11.4 Knowledge / Intelligent Systems 49 11.5 Knowledge Support Systems (KSS) / Intelligent Systems 49 11.6 Components of an Expert System 50 Chapter No.12 CBIS from Functional View Point 52 12.1 Organizational Information Systems (OIS) 52 12.2 Marketing Information Systems (MKIS) 53 12.3 Benefits of Marketing IS 53 12.4 Management Levels in MKIS 53 12.5 New Dimensions in MKIS 53 12.6 Key CRM Tasks 56 12.7 CRM Issues 56 12.8 Call Center 56 Chapter No.13 Organizational Structure 57 13.1 Financial Sector 57 13.2 Air Line Industry 57 13.3 Manufacturing Information System 58 13.4 Inventory Sub System 59 13.5 Production Sub System 59 13.6 Maintenance & Scheduling Sub System 60 13.7 Quality Sub system 60 13.8 Total Quality Management (TQM) 61 13.9 Planning Productions/Operations52 62 13.10 Materials Requirement Planning (MRP) 62 13.11 Manufacturing Resource Planning (MRP II) 62 13.12 Computer Aided Design (CAD) 63 13.13 Computer Aided Manufacturing (CAM) 63 13.14 Computer Integrated Manufacturing (CIM) 63 13.15 Computer Integrated Manufacturing (CIM) Goals 64 Chapter No.14 Marketing 65 14.1 Accounting & Financial Information Systems 66 14.2 Human Resource Information Systems 66 14.3 IT Department 67 14.3.1 Evolution of the IT Department 67 Information System (CS507) VU © Copyright Virtual University of Pakistan iv Chapter No.15 Decision Making 69 15.1 Types of Problems 69 15.2 Type of Decisions 70 15.3 Decision-making process 71 Chapter No.16 Phases of decision-making 73 16.1 Phases of decision-making process 73 16.2 The Intelligence Phase 73 16.3 The Design Phase 73 16.4 The Choice Phase 74 16.5 The Implementation Phase 75 16.6 Rational Individual Models of Decision Making 75 16.7 Organizational Models in Decision Making 75 Chapter No.17 Planning for System Development 77 17.1 Phases of IT planning 77 17.2 Models Used for System Development 78 17.3 Systems Development Life Cycle 78 17.4 Types of System Development Life-Cycle 78 Chapter No.18 Systems Development Life Cycle 81 18.1 Project lifecycle vs. SDLC 81 18.2 Types of System Development Life-Cycle Model 81 18.3 Costs of Proposed System 83 18.4 Benefits from the proposed system 84 18.5 Classic lifecycle Model / Waterfall Model 84 18.6 Analysis of Existing system 85 18.7 Elicitation of Detailed Requirements 87 Chapter No.19 System Design 88 19.1 Entity Relationship Diagram (ERD) 88 19.2 Design of the information flow 90 19.3 Design of data base 90 19.4 Design of the User Interface 91 19.5 Physical Design 91 19.6 Program Development 91 19.7 Procedures Development 92 19.8 Testing 92 19.9 Operations & Maintenance 92 19.10 Evaluating Waterfall 92 Chapter No.20 Incremental Model 95 20.1 Characteristics of the Incremental Mode l 95 20.2 Incremental Model-Evaluation 95 20.3 Iterative Models – Evaluation 96 20.4 Incremental vs. Iterative 97 Information System (CS507) VU © Copyright Virtual University of Pakistan v Chapter No.21 Spiral Model 98 21.1 Determine Objectives, Alternatives and Constraints. 98 21.2 Prototyping 99 21.3 Advantages of Prototype 100 21.4 Risks of Prototyping 101 Chapter No.22 System Analysis 102 22.1 Computerized vs. Manual environment 102 22.2 Systems Analyst 103 22.3 System Design 103 22.4 Designing user interface 104 Chapter No.23 Benefits of Good System Design 107 23.1 System Analysis & Design Methods 107 23.2 Structured Analysis and Design 107 23.3 Flow Chart 107 Chapter No.24 Symbols used for flow charts 110 24.1 Symbols 110 24.2 Good Practices 114 24.3 Data Flow Diagram 115 Chapter No.25 Rules for DFD’s 118 25.1 Entity Relationship Diagram 120 25.2 Entity 123 25.3 Value Sets 124 25.4 Relationships 124 Chapter No.26 Symbols 126 26.1 Why need Object-Orientation? 127 26.2 Object Oriented Analysis 128 Chapter No.27 Object Oriented Analysis and Design 131 27.1 Object 131 27.2 Classes 131 27.3 Inheritance 131 27.4 Encapsulation 132 27.5 Polymorphism 132 27.6 What is Business Process Reengineering? 133 Chapter No.28 Critical Success Factors (CSF) 135 28.1 Sources of Critical Success Factors 135 Information System (CS507) VU © Copyright Virtual University of Pakistan vi 28.2 CSF vs. Key Performance Indicator 135 28.3 Centralized vs. Distributed Processing 136 28.4 Web based Environment 137 28.5 Internet 138 Chapter No.29 Security of Information System 139 29.1 Security Issues 139 29.2 Security Objective 139 29.3 Scope of Security 140 29.4 Security Policy 140 29.5 Security Program 141 29.6 Identification of Assets 141 Chapter No.30 Threat Identification 143 30.1 Types of Threats 143 30.2 Control Analysis 143 30.3 Impact analysis 144 30.4 Risk Determination/Exposure Analysis 144 30.5 Occurrence of threat 145 30.6 Computing Expected Loss 146 Chapter No.31 Control Adjustment 147 31.1 Security to be cost effective 147 31.2 Roles & Responsibility 147 31.3 Report Preparation 148 31.4 Types of Threat 148 Chapter No.32 Unauthorized intrusion 149 32.1 Physical Access vs. Logical access 149 32.2 Viruses 149 32.3 Sources of Transmissions 150 32.4 Types of Viruses 150 32.5 Management procedural controls 151 32.6 Technical controls 151 Chapter No.33 Antivirus software 153 33.1 Scanners 152 33.2 Active monitors 152 33.3 Behavior blockers 152 33.4 Logical intrusion 152 33.5 Best Password practices 153 33.6 Firewall 154 Information System (CS507) VU © Copyright Virtual University of Pakistan vii Chapter No.34 Types of Controls 156 34.1 Access Controls 156 34.2 Cryptography 156 34.3 Biometrics 157 Chapter No.35 Audit trails and logs 159 35.1 Documentation 159 35.2 Audit trails and types of errors 160 35.3 Definition of Audit 160 35.4 IS audit 160 35.5 Parameters of IS audit 161 35.6 Risk Based Audit Approach 161 Chapter No.36 Risk Management 162 36.1 Phases of Risk Management 162 36.2 What is focal Point? 162 36.3 System Characterization 162 36.4 Steps in threat identification 163 36.5 Vulnerability Assessment 163 Chapter No.37 Control Analysis 166 37.1 Likelihood Determination 166 37.2 Impact Analysis 166 37.3 Risk Determination 167 37.4 Results Documentation 168 37.5 Implementation 168 37.6 Monitoring and evaluation 168 Chapter No.38 Risk Management 169 38.1 Corporate Culture and Risk Management 169 38.2 Constituents of Risk Management 169 38.3 Risk management 169 38.4 Business Continuity Planning 169 38.5 Components of BCP 170 38.6 Phases of BCP 170 38.7 Incident Management: 171 38.8 Business Impact Analysis (BIA) 171 38.9 Recovery Strategies 171 38.10 Development of Business Continuity and Disaster Recovery Plans 172 38.11 Monitoring 173 Information System (CS507) VU © Copyright Virtual University of Pakistan viii Chapter No.39 Web Security 174 39.1 Web Security Threats 174 39.2 Passive attacks 174 9.3 Active Attacks 174 39.4 Types of Active attacks 174 39.5 Threat Impact 175 39.6 Methods to avoid internet attacks: 175 Chapter No.40 Factors Encouraging Internet Attacks 177 40.1 Internet Security Controls 177 40.2 Firewall Security Systems 177 40.3 Intrusion Detection Systems (IDS) 178 40.4 Components of IDS 179 0.5 Web Server Logs 180 40.6 Web Security audits 180 40.7 Digital Certificates 181 Chapter No.41 E-Commerce 182 41.1 Why E-Commerce? 182 41.2 Commerce vs. E-Business 182 41.3 Business to Consumer (B2C) 183 41.4 Electronic Data Interchange (EDI): 184 41.5 E-Government 185 41.6 Other Forms of E-Commerce 186 41.7 M-Commerce 186 41.8 E-Business Opportunities 187 41.9 E-Business IT Risks 188 Chapter No.42 Supply Chain Management 191 42.1 Integrating systems 192 42.2 Methods of integration 192 42.3 Using SCM Software 193 42.4 Components of Supply Chain 193 42.5 Types of Supply Chains 194 Chapter No.43 Enterprise Resource Planning 195 43.1 Business Objectives and IT 195 43.2 Using ERP Software 195 43.3 ERP Compared to integrated Software 196 43.4 Evolution of ERP 197 43.5 ERP & Customer relationship management 199 Chapter No.44 ERP & E-commerce 200 Information System (CS507) VU © Copyright Virtual University of Pakistan ix 44.1 ERP & CRM 200 44.2 Change management 201 44.3 Phases of Change Management 202 44.4 Change agent: 204 44.5 ERP– Ownership and sponsor ship: 204 Chapter No.45 Importance of ethics in IS 205 45.1 Meaning of Ethics 205 45.2 Ethical Challenges 205 45.3 Privacy and Ethics 206 45.4 Threats to Privacy 207 45.5 Electronic Surveillance 207 45.6 Data Profiling 208 45.7 Online Privacy and E-Commerce 208 45.8 Workplace Monitoring 208 45.9 TRIPS 210 45.10 Privacy Codes and Policies 210 Information System (CS507) VU © Copyright Virtual University of Pakistan 1 LESSON 1 Defining Needs Decisions are required to be taken in day to day life. No single task in our life can be done without decision making. For every assignment we undertake, there has to be a process of making choices. Whenever we are faced with choices, there is an inevitable need of selecting one particular course of action. Any task can be done in various ways, but doing it simultaneously through all possible alternatives is virtually impossible. This necessitates making a reasonable choice from all the options available. An example can be taken for a person who wants to go to Islamabad. He can look at following options. • Use any of the local bus service available • Go by train • Travel by air As you can see, the decision to be made in this situation is faced with the availability of a set of combination of alternatives. • Every decision we take in daily life requires some sort of information about the alternatives available. For instance, in the above example certain factors need to be considered before taking a decision. • How urgent it is to reach to Islamabad • How much time is available to accommodate travelling, since each mode of travelling will take different time to reach at the same destination? • Whether bookings are available for the desired day and time. • Is there any possibility of cancellation of booking or flight or bus service. • Which bus service or airline to chose from, since various airlines and bus services are having travelling facilities to Islamabad. • Without the availability of relevant information, we may take a decision which is wrong or not to our benefit. For instance if the person does not have complete knowledge of facts he might not be able to take the right decision. • Similar is the case with business. Businesses are run by organizations which are in-fact a group of people. As individuals have choices to choose from, organizations also face various alternatives in day to day operations, Decisions are made by individuals from the management. 1.1 Need for information Information is required in day to day decision making. Without the availability of right quantity of information at the right time, the process of decision making is highly affected. For this reason various sources of information are used to extract information. Some of these are: o Newspapers o Internet o Marketing Brochures o Friends & Relatives 1.2 Sources of Information Sources of information are generally categorized as primary, secondary or tertiary depending on their originality and their proximity to the source or origin. For example, initially, findings might be communicated informally by email and then presented at meetings before being formally published as a Information System (CS507) VU © Copyright Virtual University of Pakistan 2 primary source. Once published, they will then be indexed in a bibliographic database, and repackaged and commented upon by others in secondary sources. The designations of primary, secondary and tertiary differ between disciplines or subjects, particularly between what can generally be defined as the sciences and the humanities. For example, • The historian’s primary sources are the poems, stories, and films of the era under study. • The research scientist's primary sources are the results of laboratory tests and the medical records of patients treated with the drug. Written information can be divided into several types. • Primary Sources • Secondary Sources • Tertiary Sources 1.3 Primary Sources Some definitions of primary sources: 1. Primary sources are original materials on which other research is based 2. They are usually the first formal appearance of results in the print or electronic literature (for example, the first publication of the results of scientific investigations is a primary source.) 3. They present information in its original form, neither interpreted nor condensed nor evaluated by other writers. 4. They are from the time period (for example, something written close to when the event actually occurred. 5. Primary sources present original thinking and report on discoveries or share new information. Some examples of primary sources: 1. Scientific journal articles reporting experimental research results 2. Proceedings of Meetings, Conferences. 3. Technical reports 4. Dissertations or theses (may also be secondary) 5. Patents 6. Sets of data, such as census statistics 7. Works of literature (such as poems and fiction) 8. Diaries 9. Autobiographies 10. Interviews, surveys and fieldwork 11. Letters and correspondence 12. Speeches 13. Newspaper articles (may also be secondary) 14. Government documents 15. Photographs and works of art 16. Original documents (such as birth certificate or trial transcripts) 17. Internet communications on email, and newsgroups 1.4 Secondary Sources Secondary sources are less easily defined than primary sources. What some define as a secondary source, others define as a tertiary source. Nor is it always easy to distinguish primary from secondary sources. For example, • A newspaper article is a primary source if it reports events, but a secondary source if it analyses and comments on those events. Information System (CS507) VU © Copyright Virtual University of Pakistan 3 • In science, secondary sources are those which simplify the process of finding and evaluating the primary literature. They tend to be works which repackage, reorganize, reinterpret, summarize, index or otherwise "add value" to the new information reported in the primary literature. Some Definitions of Secondary Sources: 1. Describe, interpret, analyze and evaluate the primary sources 2. Comment on and discuss the evidence provided by primary sources 3. Are works which are written after the fact with the benefit of hindsight? Some examples of secondary sources: 1. bibliographies (may also be tertiary) 2. biographical works 3. commentaries 4. dictionaries and encyclopedias (may also be tertiary) 5. dissertations or theses (more usually primary) 6. handbooks and data compilations (may also be tertiary) 7. history 8. indexing and abstracting tools used to locate primary & secondary sources (may also be tertiary) 9. journal articles, particularly in disciplines other than science (may also be primary) 10. newspaper and popular magazine articles (may also be primary) 11. review articles and literature reviews 12. textbooks (may also be tertiary) 1.5 Tertiary Sources This is the most problematic category of all. Some Definitions of Tertiary Sources: 1. Works which list primary and secondary resources in a specific subject area 2. Materials in which the information from secondary sources has been "digested" - reformatted and condensed, to put it into a convenient, easy-to-read form. 3. Sources which are once removed in time from secondary sources Some examples of tertiary sources: 1. Almanacs and fact books 2. Bibliographies (may also be secondary) 3. Chronologies 4. Dictionaries and encyclopedias (may also be secondary) 5. Directories 6. Guidebooks, manuals etc 7. Handbooks and data compilations (may also be secondary) 8. Indexing and abstracting tools used to locate primary & secondary sources (may also be secondary) 9. Textbooks (may also be secondary) 1.6 Changing Needs When needs change, requirements for information change. Information needs of users are changing as a result of changes in the availability of information content in electronic form. Changing needs of the users determine the nature of the physical form in which information content is currently being made available for users’ access and use in electronic information environments. Information needs: Information System (CS507) VU © Copyright Virtual University of Pakistan 4 • Each user has a different type of information need depending on what he's trying to find and why he's trying to find it. If we can determine the most common information needs a site's users have, we can select the few best architectural components to address those information needs. • For example, if a user is designing a staff directory, we can assume that most users are searching for items they already have information about. The user already knows exactly what he's looking for, he has the terms necessary to articulate that need, and he knows that the staff directory exists and that it's the right place to look. This type of information need would be best served by employing a search system. So resources should be invested in developing and maintaining a comprehensive search system. • Another example: the site's users are often new or infrequent visitors. And perhaps the site's content scope is changing frequently. So the information architecture probably should be very good at supporting orientation. If that's the case, invest in a table of contents or some other IA component that's effective at orienting users and communicating what content is contained in the site. Information System (CS507) VU © Copyright Virtual University of Pakistan 5 LESSON 2 Areas Covered • Introduction to Organization and • Role of Information in Organization, Management & Strategy What is Organization? Basically, an organization is group of people organized to accomplish an overall goal. Organizations can range in size from two people to hundreds of thousands -- some people might argue that organizations are even larger. Organizations have an overall goal (or mission) which is usually subdivided into various other goals (often called strategic goals) that, in total, will achieve the overall goal of the organization. A structure through which individuals cooperate systematically to conduct business. It is a collection of people working under predefined rules and regulations to obtain a set of objectives. It is a stable formal social structure. It takes resources from the environment and processes them to produce outputs. "Organization" is understood as planned, coordinated and purposeful action of human beings in order to construct or compile a common tangible or intangible product or service. This action is usually framed by formal membership and form (institutional rules). Organization is a permanent arrangement of elements. These elements and their actions are determined by rules so that a certain task can be fulfilled through a system of coordinated division of labour. An organization is defined by the elements that are part of it (who belongs to the organization and who does not?), its communication (which elements communicate and how do they communicate?), and its rules of action compared to outside events (what causes an organization to act as a collective actor?). By coordinated and planned cooperation of the elements, the organization is able to solve tasks that lie beyond the abilities of the single elements. The price paid by the elements is the limitation of the degrees of freedom of the elements. 2.1 Need for Organization As the volume of business expands, the need for disciplined approach to managing operations is required. This results in formulation of organizational structures. The organizational structures are formulated in order to efficiently manage the business operations. This makes the structures a relative term to explain and define. Organizations have the freedom to chose / evolve the structures which best fits the management needs. An organization’s primary aim is to achieve the objective that it lays down for itself and in pursuance of which various actions are undertaken. Such objective could be to generate profits or specific socio- economic cultural objectives. What ever the objectives are, these activities interrelate and their occurrence generate a series of events which helps organization achieve its goal. The regular and timely recording of information is critical to the proper management of business operations. 2.2 Data vs. Information Data represents facts of any kind. In the process of recording important particulars of any event, it is the discretion of the management, what should be recorded and how it should be presented. However when this data is processed or reformatted, it becomes information. Information is a subset of data which adds to the knowledge. Information System (CS507) VU © Copyright Virtual University of Pakistan 6 Information should be relevant so that it is valuable for the recipient. Although the processed form of information is more valuable than the raw form of data, still all information is not of value for every one. Distributing common information to every one may result in waste of time and confusion. Irrelevant information has no value. 2.3 Information Quality Checklist The information can also be ranked in accordance with the qualities it has in it. The experts have devised certain criteria to evaluate the quality of information. These are stated below: 1. Is it clear who has written the information? 2. Who is the author? Is it an organization or an individual person? Is there a way to contact them? 3. Are the aims of the information clear? 4. What are the aims of the information? What is it for? Who is it for? Does the information achieve its aims? 5. Does the information do what it says it will? Is the information relevant to me? List five things to find out from the information. o ....................................................................................... o ....................................................................................... o ....................................................................................... o ....................................................................................... o ....................................................................................... 1. Can the information be checked? Is the author qualified to write the information? Has anyone else said the same things anywhere else? Is there any way of checking this out? If the information is new, is there any proof? 2. When was the information produced? Is it up to date? Can you check to see if the information is up to date? 3. Is the information biased in any way? Has the information got a particular reason for wanting you to think in a particular way? Is it a balanced view or does it only give one opinion? 4. Does the information tell you about choices open to you? Does the information give you advice? Does it tell you about other ideas? 2.4 Organization & Information Requirements Organizations have various attributes which distinguish them from each other. No two organizations are similar in all respects. There have to have certain distinctive lines keeping them unique from each other. Information requirements keep varying in accordance with • Size of organization • Its structure • The Culture it follows • Decision Making Structures • Interested parties both internal and external An organization should consider the above mentioned requirements while devising a system which tailors for specific information needs. Information System (CS507) VU © Copyright Virtual University of Pakistan 7 LESSON 3 Organization & Information Requirements Organizations have various attributes which distinguish them from each other. No two organizations are similar in all respects. There have to have certain distinctive lines keeping them unique from each other. Information requirements keep varying in accordance with • Size of organization • Its structure • The Culture it follows • Decision Making Structures • Interested parties both internal and external An organization should consider the above mentioned requirements while devising a system which tailors for specific information needs. 3.1 Size of the Organization and Information Requirements 3.1.1 Small Organizations Small organizations usually have simple management structure. The need invariably grows from the limited scope and operations of management. Since tasks to be handled are usually limited and manageable, hence need for introducing more levels is not required. Since operations can be managed at the top level by one or two members of the senior management, officers from the lower level of management are not usually involved in decision making. Hence the final decisions are centrally taken. Information flows and formats are easy to define and change. Since information requirements are not extensive, number of documents prepared and generated will also be few in number. Mostly the interested party itself is running the business, hence the management is centralised to few people. Examples of Information requirements of Small Organizations • Day to day transactions • Daily Sale • Cash management • Receivables and Payables 3.1.2 Medium Sized Organizations Medium Sized organizations are normally a family ownership run by brothers, father-son. There are many organizations existing these days which are being run by the family members. The prime concern may be the trust already fostered among the blood relations but this might give rise to informal relationship among them. Since all critical managerial positions are usually controlled by the family members, information is structured only to the extent of external reporting. The level of reporting that could meet the information needs of the clients is best suited for such an organization. Medium sized organizations are run under direct supervision of the family members which rarely extends to segregation of duties and delegation of authority. • Centralized decision making • Above mentioned structure rarely changes with complexity and dynamism of environments. Information System (CS507) VU © Copyright Virtual University of Pakistan 8 Information Requirements of Medium Sized Organizations As size of the organization increases, the importance of planning for information also increases. The planning on long-term basis also helps in monitoring of information against planning 3.1.3 Large Organizations Usually such organizations are characterized by large scale of operations. Various criteria can be used for this purpose. • Number of employees • Amount of turnover • Number of branches • Profit size • Value of assets • Number of businesses the organization is working in With such large size of organizations, management structure needs to be multi- tiered for efficient and strong control. This leads to formulation of many departments, management levels, designations, promotional opportunities and salary increments. Example Public companies Information Requirements of Large Organizations With such a large structure, it is inevitable that the detailed planning should be made for proper management control, for both short term and long term. Performance measurement against plans / targets Nature of the Business and Information Requirements • Manufacturing Sector • Service Sector • Trading Sector 1. Manufacturing Sector Manufacturing process involves more than one sub-processes, detailed information is required before transferring materials for warehousing, manufacturing and sale to final consumer. Information Requirements of Manufacturing Sector Management is concerned with the day to day costs, production targets, quality of the product, delivery schedules, etc. 2. Service Sector Final product is intangible, so information is critical at various steps, e.g. preparation, delivery and customer Information System (CS507) VU © Copyright Virtual University of Pakistan 9 satisfaction. Quality maintenance is an issue which requires structured reporting. Information requirements of Service Sector • Quality of service provided. • Mode of delivery • Customer Satisfaction • Time Scheduling • Resource Management Trading Sector Monitoring requires information for each product, e.g. • Customer profiles • Customer Comments • Volume of sales • Profitability • Stock movements Manufacturing/Procurement Cycle • Market needs 3.2 Nature of Business & Information Requirements As the size of organization and scale of operations change, information requirements need to be adjusted for better monitoring to keeping things in control. Information System (CS507) VU © Copyright Virtual University of Pakistan 10 LESSON 4 Unique Attributes of Organization Organizations can be distinguished on the basis of various criteria. These are as follows. • Organizational structure • Culture of the Organizations • Management Style • Decision Making Style 4.1 Organizational Structure Pyramid/Tall/Hierarchical 4.1.1 Hierarchical organization A hierarchical organization is organization structured in a way such that every entity in the organization, except one, is subordinate to a single other entity. This is the dominant mode of organization among large organizations; most corporations and governments are hierarchical organizations • Low number of subordinates per supervisor • Long chain of command • Greater number of levels 4.1.2 Organizational Structure Flat Flat organization refers to an organizational structure with few or no levels of intervening management between staff and managers. The idea is that well-trained workers will be more productive when they are more directly involved in the decision making process, rather than closely supervised by many layers of management. This structure is generally possible only in smaller organizations or individual units within larger organizations. When they reach a critical size, organizations can retain a streamlined structure but cannot keep a completely flat manager-to-staff relationship without impacting productivity. Certain financial responsibilities may also require a more traditional structure. Some theorize that flat organizations become more traditionally hierarchical when they begin to be geared towards productivity. Information System (CS507) VU © Copyright Virtual University of Pakistan 11 Following are the characteristics of a flat organization. • High number of subordinates per supervisor • Short of chain of command • Less number of levels • Eliminates middle level managers • Decentralizes authority to low level managers 4.1.3 Culture of the Organization Organizational culture is the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. Organizational values are beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behavior organizational members should use to achieve these goals. From organizational values develop organizational norms, guidelines or expectations that prescribe appropriate kinds of behavior by employees in particular situations and control the behavior of organizational members towards one another. Culture is set of Fundamental Assumptions that exist and grow with the organization. It’s not publicly announced but spoken about within the organization. It is a combination of implicit values that keep the organization together. It is essential that the employees understand the culture-What drives the organization. 4.2 Management Styles • Authoritative • Participative • Mixed 4.2.1 Authoritative • An Autocratic or authoritarian manager makes all the decisions, keeping the information and decision making among the senior management. Objectives and tasks are set and the workforce is expected to do exactly as required. The communication involved with this method is mainly downward, from the leader to the sub-ordinate critics such as Elton Mayo have argued that this method can lead to a decrease in motivation from the employee's point of view. The main advantage of this style is that the direction of the business will remain constant, and the decisions will all be similar, this in turn can project an image of a confident, well managed business. On the Information System (CS507) VU © Copyright Virtual University of Pakistan 12 other hand, subordinates may become highly dependent upon the leaders and supervision may be needed. Decisions are taken centrally by the senior management themselves and are enforced at all levels. 4.2.2 Participative In a Democratic style, the manager allows the employees to take part in decision-making: therefore everything is agreed by the majority. The communication is extensive in both directions (from subordinates to leaders and vice-versa). This style can be particularly useful when complex decisions need to be made that require a range of specialist skills: for example, when a new computerized system needs to be put in place and the upper management of the business is computer-illiterate. From the overall business's point of view, job satisfaction and quality of work will improve. However, the decision-making process is severely slowed down, and the need of a consensus may avoid taking the 'best' decision for the business. 4.2.3 Mixed The approach is a combination of both authoritative and participative style. Input from employees is taken and respected, final decision is taken by the senior management keeping in view the views given by the employees. 4.3 Decision Making Approach • Structured Procedures are predefined for solving routine repetitive problems • Non-structured When problems require individual judgment, evaluation and insight varying on case-to-case basis 4.4 Sources of information in Organizations There can be sources of information both internal and external to the organization. Following is a list of important sources. Internal External • Staff meetings • Formal reporting systems • Project proposals • Research results • Employee Surveys • Persuasive interviews • Loan applications • Purchasing agreements • Advertisement • Distribution Contracts Table 4.1 4.5 Direction of Information Flow Information System (CS507) VU © Copyright Virtual University of Pakistan 13 Ideal Information Network in an Organization • Periodically updated / continuously updated – the information should be updated so that whenever accessed, the user should be fully informed. • Efficient Processing – data should not be kept unprocessed for long. Timely processing helps in effective decision making. • Value driven – the information kept in a computerised system should add value to the user’s knowledge. • Audience Centred – every one should receive that part of information that is relevant to the user. Conclusion • Availability of timely and accurate information helps in proper decision making and meeting the organizational goals. • Information should be tailored in accordance with the organization’s culture and structure. Information System (CS507) VU © Copyright Virtual University of Pakistan 14 LESSON 5 Effect of Changes in Environment Business Environment is defined as “all elements that exist outside the boundary of the business (Organization) and have the potential to affect all or part of the organization 5.1 Elements of Environment It is a collective reference made to the following factors • Legal • Ethics • Economic • Social • Technological 5.1.1 Legal Rules and Policies and Legal Laws established by government effect the Business Environment Change in tariff rate may increase or decrease operation of the business. Laws imposed to regulate business o Companies Ordinance 1984: It is the Law under which a company performs its business activities. o Import Export regulations: Government announces Import & Export Policy at the time of annual budget. Goods which are manufactured in the country is encouraged by levying high duties on imported goods and encouraged export. o International trade agreements e.g. o European Union (EU): A number of regional agreements have been signed by the EC and Pakistan such as: o World Trade Organization (WTO): The World Trade Organization (WTO) is an international, multilateral organization, which was created as a result of the Uruguay round of discussion in 1994 to harmonic world trade. Various agreements between member countries has resulted in lowering import tariffs, bringing down protective trade barriers setting up anti dumping procedures and settlement methods. However it has failed to achieve any headway in getting member countries to eliminate subsidies provided t other agriculture sector by nearly all member states. As a result the WTO is currently faced with the threat of failure. The WTO trade and services arrangements effectively replaced the general Agreement on Trade Tariffs (GATT). o South Asia Free Trade Agreement (SAFTA): The South Asia Free Trade Agreement (SAFTA) was agreed to among the seven South Asia countries that form the South Asian Association for Regional Cooperation (SAARC): Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. SAFTA came into effect on 1 January 2006, with the aim of reducing tariffs for intraregional trade among the seven SAARC members. Pakistan and India are to complete implementation by 2012, Sri Lanka by 2013 and Bangladesh, Bhutan, Maldives and Nepal by 2015. 5.1.2 Economic To make a profit without raising prices, the company turned to making simpler furniture designs and increasing its technological efficiency.Developments within the economy which may affect the business environment o Inflation rates: Information System (CS507) VU © Copyright Virtual University of Pakistan 15 Inflation rate is an indicator of economic growth of a country. Inflation rate in Pakistan is 6.1 percent. o Bank Interest Rate: o Availability of capital in the capital, in the capital/money markets Capital/ Money market is access able for an Entrepreneur who starts business with his savings and with equity from capital/ money markets on favourable interest rate. o Foreign Exchange rates between two currencies specifies how much one currency is worth in terms of the other. For example an exchange rate of 120 Japanese Yen to the Dollar means that ¥120 is worth the same as $1. An exchange rate is also known as a foreign exchange rate, or FX rate. o Consumer spending: Patterns of spending give a good picture of consumer behavior, showing various social, economic and marketplace trends at the household level. Consumer behavior is also revealed by decisions not to spend. For example, if enough people are involved, boycotting a company or a product (or even the threat of it) can be an effective way for consumers to make their opinions felt. Boycotting has brought about a number of changes in companies' social and business behavior, such as the development of certain voluntary codes. In fact, any consumer decision to stop buying a product can ultimately and substantially influence corporate strategies. New trends in the fast food industry's offerings are one example of the marketplace's responsiveness to consumers' willingness to walk away. o Employment opportunities: Information Technology offers a variety of jobs. In the present era information technology is used in every field like, Banking, Medicine, Laboratories, Textiles, Scientific research etc. 5.1.3 Social Changing demographic and social needs are impacting the business world. Corporations must address the issues pertaining to the changing needs and requirements to retain and enhance market positions. The internationalization of business brings greater pressure as variety of cultures, customs and practices need to be taken into account whilst conducting business. The employees are today more aware of their social needs whether these related to the work environment, behaviour, children education health, compensation or work hours. National interests and culture have to be considered while offering a particular product or service or exploiting the natural resources of a particular country. This includes o Demographic changes leading to changes in needs: o Age Composition: o Gender: o Occupations o Social norms o Changing attitudes and perceptions o Lifestyle o Prosperity o Availability of foreign brands/products 5.1.4 Technological The most overwhelming change in the technology sector is rapid expansion of the internet as a place for doing business. The World Wide Web and other advances in information technology have changed the whole face of business. Information System (CS507) VU © Copyright Virtual University of Pakistan 16 o To produce desired products, It is necessary for a business to stay in market to produce the goods according to the desire of the consumers. Due to the change in technology day by day innovations has been taken place. Competitors by using the technology reducing the cost and improving the quality. o To solve a problem,: There are varieties of problems facing a business in the contemporary world. Information technology is being used to overcome the business issues like, Marketing, Brand of the product, Quality of the product, Cost control, Organizational internal and external issues etc. o To fulfill a need: Information system must fulfill the needs of the business. An organization needs information of its customers, product, market trend, employee information, payroll, manufacturing cost etc. In time information helps the organization launch its product in time to maximize profit. o The way products are developed and offered to the customers keeps changing thus affecting the business environment in which the organization works Pressures/Challenges The changes in business environment pose challenges on the organizations which need to be responded to. Following are the pressures • Competition for cheaper factors of production Cheaper factor of production is a challenge for the survival of a company in competitive market. Factors of production are basic elements of reducing manufacturing cost. Cheap and skilled labour Availability of raw material, infrastructure. • Changing workforces Lack of availability of skilled and experience force in market is a challenge for an organization. Continue change in work force is harmful for an organization. • Enhanced customer quality For the enhancement customer quality consistently provide innovative products, with outstanding customer service and help their customers achieve operational excellence. An Organization ability to provide outstanding product quality, service support, and their ability to enhance product quality, achieve shorter delivery times, reduce scrap, rework and reduced life cycle costs • Technological Obsolescence Technological obsolescence is the result of the evolution of technology: as newer technologies appear, older ones cease to be used. For example, new media for storing digital information rapidly replace older media and reading devices for these older media become no longer available. Newer versions of software constantly render older versions obsolete and the hardware required by this software also changes over time. Consequently, information which relies on obsolete technologies becomes inaccessible. Currently, it seems that the lifetime of digital storage media generally exceeds the life of the technology that supports it. • Information overload In recent decades, technology has so enhanced our ability to gather data that the sheer volume of data now outstrips our capacity to deal with it. Informatics is taking this seemingly unmanageable flood of data and transforming it into information that helps solve key problems in fields like medicine, genetics, chemistry, Internet security and engineering Information System (CS507) VU © Copyright Virtual University of Pakistan 17 5.1.5 Corporate social responsibility Corporate social responsibility (CSR) is an expression used to describe what some see as a company’s obligation to be sensitive to the needs of not only all of the stakeholders in its business operations but more importantly the community at large. It has been defined as: “The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society as large.” Businesses are now seen as partners of the communities in which they may be located rather than simply as a profit making set up serving the needs of their stake holders. Corporate social responsibility incorporates the principle of sustainable development along with “triple bottom line reporting” reflecting not only financial results but also social and environmental impact of the business. The CSR may be looked after by an independent department reporting directly to the board or may be a part of the business development or human resource department. 5.1.6 Ethics Corporate or business ethics have attained vital importance in today’s world. The issue not only addresses matters such as how those charged with governance and managing businesses take decisions but importantly the employee conduct and behaviour the corporations responsibility in terms of its image, product, branding, trade, business practices and compliance with not only national and regional but also international laws. The huge number of financial and corporate scandals has moved the regulators to take suitable action. In Pakistan all listed companies particularly are required to follow the code of corporate governance. Information System (CS507) VU © Copyright Virtual University of Pakistan 18 LESSON 6 Systems vs. Procedures Procedure is a defined set of instructions aimed at describing how to proceed in achieving a pre-defined milestone/target. Systems have collection of predefined procedures related to each other in a sequenced logical manner in order to collectively achieve the desired results. The system & procedures in all kinds of environment are subject to internal controls and checks that are necessary to ensure the effectiveness of the same. 6.1 Purpose of Systems & Procedures The basic purpose behind setting up systems and procedures is to make available information when required. But when procedures are organized in a logical manner to form systems, the value of information as an output of a system enhances. When technology is added to the system, scope of a system changes to include hardware, software and designs linked together in accordance with the procedures contained in that system to give a purposeful architecture. 6.2 Data & Information Before defining what information systems are? I would like to once again differentiate between data and information. Data represents facts of any kind. Information is the processed form of data being verified and substantiated from various sources. Example 100,000 is a figure which by itself does not add to the knowledge But When we say 100,000 sales orders, it does add to our knowledge, hence is information. 6.3 Data & Information Generation of relevant information is the objective of every information system. Now we would move fwd with the definition & necessity of information systems. What are Information Systems? Interrelated components working together to collect, process, store and disseminate information to support decision making, coordination control, analysis and visualization in an organization. 6.4 Manual Vs Computerised Information Systems As advancement was made in every field of life, manual information systems were converted to computerized systems. In manual environment, the concept of transformation was difficult to apply, since input of data into records was by itself the output which also included simple computations. Concept of control mechanism grew stronger as computerized information systems emerged. Now the concept of Information system exists with the usage and benefits of Computers as an inevitable part. 6.5 What is Computer based Information System (CBIS)? CBIS is an Information System that uses computer & telecommunications technology to perform its intended tasks. In CBIS, Information technology (IT) becomes a subset of the Information system. Information System (CS507) VU © Copyright Virtual University of Pakistan 19 The terms Information System (IS) and Computer Based Information System (CBIS) with the extensive use of computers in almost every field renders it inevitable to think of an IS as CBIS. 6.6 Why Information Systems? In modern age, there has been felt a growing need for the use of information systems. Let’s take a look at what factors increased the importance of efficient information systems. 6.7 Emerging Global Economies High level of foreign trade has resulted in imports and exports which require inter linkage for smooth coordination. Core business functions (manufacturing, finance and customer support) have been distributed in different countries. Coordination 6.8 Transforming Industrial Economies Industrial economies have started merging as knowledge-and-information-based economies. Manufacturing activities being shifted to low wage countries. More opportunities are available in education, health care, banks, insurance firms and law firms. More knowledge and information intense products are being created. Higher commitment expected from customer e.g. overnight package delivery, world wide reservation systems. 6.9 Transformed Business Enterprise The structure of business enterprise have also changed, initially the organizations used to be Hierarchical, Centralized, Structured following a Fixed Set of SOP’s. However, now the organizations are moving towards more Flatter, Decentralized and Flexible structures. Information Technology makes it convenient and efficient to promote this new culture. 6.10 Emerging Digital Firms Firms where all significant business process and relationships with customers and suppliers and employees are digitally enabled and key corporate assets are managed through digital firms. This results in rapid response with more flexibility to survive and getting more global. Information System (CS507) VU © Copyright Virtual University of Pakistan 20 LESSON 7 Types of Systems 7.1 What are Systems? A system is a group of elements that are integrated with the common purpose of achieving an objective. Example Purchase & Sales System 7.2 Components of a system Following are the important components of the system. • Input elements Raw Data input to the computer system • Process Computation, analysis, application of any model • Output elements Results of computation or analysis • Control mechanism Comparison of actual with expected • Feedback system Corrective action • Objectives Expected/Ideal output 7.3 Types of Systems 7.3.1 Open-Loop System The determinant factor is in an open loop system is that the information from the system not used for control purpose. This is done by using the output to generate feed back for control purposes. • The output is not coupled to the input for measurement. • Hence the components of open loop system do not include control and feedback mechanism due to non-existence of internally defined objectives. That is, o Input o Process o Output Example An information system that automatically generates report on regular basis and are not used to monitor input or activities. 7.3.2 Closed Loop System • Is a system where part of the output is fed back to the system to initiate control to change Either the activities of the system or input of the system • Has the ability to control the output due to existence of Information System (CS507) VU © Copyright Virtual University of Pakistan 21 • Control Mechanism • Feedback System • Objectives Example Budgetary control system in a company by which o The results are communicated through feedback system o Results are compared with the objectives/budget through controls mechanism 7.3.3 Open Systems • A system that is connected to its environment by means of resource flows is called an open system. • The environment exerts influence on the system and the system also influences the environment. Example • Business is a system where management decisions are influenced by or have an influence on suppliers, customers, society as a whole. • Computerized system of a manufacturing entity, that takes influence from the society. 7.3.4 Closed Systems • A system that is not connected with its environment • Neither environment exerts any influence on the system nor does system influence the environment. Examples • An information system designed to control data in a research laboratory is a closed system. • An information system designed to record highly sensitive information is a closed system so as • To accept no input for amendment • To give no output for disclosure Objective of Having Systems • To subject a predefined amount of input (tangible, intangible) to predefined set of instructions in order to achieve an expected quality and amount of output. • Effective and efficient utilization of resources 7.4 Level of Planning There are three levels • Strategic • Tactical / Functional • Operational Information System (CS507) VU © Copyright Virtual University of Pakistan 22 Strategic Planning Is the formulation, evaluation and selection of strategies for the purpose of preparing a long-term plan of action to attain objectives. Tactical/Functional Planning Is the process by which managers assure the resources are obtained and used effectively and efficiently in the accomplishment of the organization’s objectives? Operational Planning It is the process of assuring that the specific tasks are being carried out efficiently and effectively. • Functional Strategic Planning Commitment by Firm’s executives requires strategic planning for the following functional areas. o Manufacturing resources o Financial resources o Human resources o Marketing Resources o Information Resources 7.5 Strategic Planning for Information Resources (SPIR) When a firm embraces SPIR the strategic plans for information services and the firm are developed concurrently. Business strategy and IT related strategy should go hand in hand. The IT related strategy should be driven by business strategy and the former should support the achievement what’s being mentioned in the latter. Any inconsistencies or deviations between the two should be removed and avoided. The investment in IT is costly and inflexible. Such investment is also monitored and controlled by the IT strategy. Hence any investment not supporting the business strategy would be futile. Example Business strategy Modify inventory system to fulfill orders quickly through relocating system to warehouse and efficient shelf picking. IS strategy To identify information resources needed for the successful implementation of business strategy. Information Value Chain Raw information is transformed at various points and value is added before passing onwards. Every step of processing should make the information stored more valuable. Example When customer order received, data punched into computerized system, which updates order list, customer records and store room records. When order has been served, customer orders are filed into records. Information System (CS507) VU © Copyright Virtual University of Pakistan 23 LESSON 8 What are Systems? A system is a group of elements that are integrated with the common purpose of achieving an objective. Organization having common goal for the achievement are functionally interactive units. All systems have inputs, outputs, and feedback, and maintain a basic level of equilibrium. For example, in the human body the heart functions to support the circulatory system, which is vital to the survival of the entire body. Example Purchase System A simple example can be given of a purchase and sales system. In a typical purchase system information related to purchase of materials is kept, for instance, ¾ Orders for the purchase of various materials ¾ Status of deliveries received against specific orders ¾ Changes in the order quantity, time, day or other information ¾ Quality inspection reports and whether they need to be communicated to the supplier ¾ Updated status report of stock ¾ Issues made out of the stock All and more of information is required to be linked and provided in an organized way. 8.1 Components of a system Every system comprises of basic components which in a coordination formulate a system. These are as follows. • Input elements The information entered into a system. For instance raw data input to the computer system. • Process Any specific treatment defined in the system to be performed on the data entered into the system, for instance, computation, analysis, application of any model. • Output elements The results given by the system after the process has been performed on the data being input to the system. • Control mechanism Every system is expected to generate some sort of standardized output. Hence actual output needs to be compared with what it is supposed to generate. This comparison of actual with expected output is done with the help of control mechanism. • Feedback system Once the control mechanism has been devised, it needs to a reporting mechanism, which should respond with a corrective action, if required. • Objectives We just mentioned that a control mechanism should compare actual output with expected/Ideal output. But before this is being done, there needs to be a list of specific objectives which define expected output. 8.2 Types of Systems • Open System Information System (CS507) VU © Copyright Virtual University of Pakistan 24 • Closed System • Open loop System • Closed loop system Systems Every system that is constructed is expected to generate some sort of output based upon the information fed into it. The output is expected to be used to evaluate system performance – whether the output complies with stated objectives of the system and generate instruction to change input to improve/change output. In this manner the system helps in establishing/re-defining: • Objectives-What needs to be achieved • Control Mechanism – Output Vs. Expected • Feed back – Corrective Action Types of System The first issue therefore is to define the environment where the systems are required to be operated and the second issue is to describe the system itself. Let us look at some examples. • Book Store Open system – any and everyone is allowed to view and purchase the books available. • School Library Closed system – entry to the library is restricted to the students only. Thus in an open system we refer to the connection it has to its environment by means of inflows and outflows of resources between the environment and organization. When we refer to a closed system we talk of a system that is dependant on internal resources and data for decision making rather than external environment. • Example: THE BOOK STORE may have: • An Open loop – if customer feedback is not taken for the purchase of books for the store OR • A Closed loop – if Customer feedback/interest is taken into account when selecting the books to be purchased and displayed in the store. The SCHOOL LIBRARY may have: • An Open loop – if students’ feedback is not taken for the kind of books to be stocked in the library. • A Closed loop – if students’ interest is the determinant criteria for the kind of books that are to be carried out in the library. For many years the computer profession and business have formed a partnership which operated under what can be termed as open-loop architecture. Advances in data warehouse technology and the Internet have enabled what can be termed as closed-loop architecture for the comprehensive usage in business of computers. 8.3 Open Loop System In open-loop architecture, business decisions made by management have an impact in the marketplace, Information System (CS507) VU © Copyright Virtual University of Pakistan 25 and the impact of that decision is measured only indirectly by the company's computer systems. For example, if a bank decides to raise interest rates, the results of the decision impact the lenders, the present and future borrowers. The results are measured indirectly as loan applications increase or decrease. Another example can be given of an insurance company which decides to offer a new kind of insurance. The market expresses its approval or disapproval by buying or not buying the new insurance offering. By measuring the response within the open-loop architecture, the marketplace response is quantified. In every case of an open-loop business / computer architecture, the impact of the corporate decision is felt indirectly through the reactions of the marketplace and is measured indirectly by the computer systems that are used by the company. Such interactions between the decision process and the measurement of the effectiveness of the decisions made can be called an open-loop decision environment. In an open- loop decision environment, there is no direct relationship between a corporate decision and a consequence, although there certainly is an indirect relationship. A big challenge in an open-loop business/computer architecture is that of measuring the consequences of the decisions made by the company. This is due to the fact is that there is a time lag between the time the corporate decision has been made and the time when the marketplace gives its verdict on the decision. Another difficulty is that in an open-loop environment, there may be factors other than the decision made by corporate management affecting the results achieved in the marketplace. Trying to measure precisely the effect of management's decisions is an imprecise science at best. Trying to quantify the impact of management's decisions in an open-loop environment is difficult in every case. For Example take the case of a soft-drinks company. It has no idea of the identity of its ultimate consumer. They deal through distributors who for them is the final customer and not the man on the street who actually buys the soft drink from the retailer. The feedback on the product, pricing or any other matter related to the product would be provided by the distributor and not the final consumer. Open-loop decision making is for mass marketing companies. Companies that really don't know who their customers are employ open-loop decision making. 8.4 Closed Loop System Feedback is an integral part of the closed loop system. The corrective action as a response to the output requires two other components o Control Mechanism – Variance Analysis o Objectives – Predefined expected output from the system Closed loop system is a system where part of the output is fed back to the system to initiate control to change either the activities of the system or input of the system. In a closed-loop decision environment, the impact of decisions can be measured very precisely. In a closed-loop decision environment, management makes a decision, the computer system singles out exactly to whom the decision applies and a direct action is taken as a result of the decision. The response to the action can then be measured on a case-by-case basis. The results of the management decision can be measured quickly and directly. As an example of a closed- loop decision environment, suppose a department store can use its data warehouse to determine who has made purchases of more than Rs. 15000 in the past year. Once that information is collected, those customers can be offered a personalized credit card. In such a manner, management can measure the effect of the decision quickly and very accurately. Another example can be given where management selects all customers who have shown an interest in James Bond movies. The data about such an interest, is stored in a database. If those customers are offered a new James Bond t-shirt at a discount price, the results of the promotion can be accurately and quickly calculated. Information System (CS507) VU © Copyright Virtual University of Pakistan 26 With a closed-loop decision environment, there is the possibility of having very quick and very accurate feedback on the decision process. The ability to make this assessment is very valuable. Let us illustrate the usage of the systems through an every day example. Take any international sports event: Olympics, soccer, cricket, tennis, every event is commercialised. To catch the interest of every individual, highly integrated information systems are used. For instance o To sell tickets o To advertise o Sports accessories o To set up a system for commentators to extract information for instant analysis for viewers o Comparative Scores o Projected Scores o Team Performances o Match Performances All of the above requirements are not possible without the availability of an information system which serves the information requirements of all the interested in a timely fashion. The system has to be intelligent system capable of performing necessary tasks and providing the requisite output. 8.5 Attributes of an IS/CBIS The attributes an Information System should have, to be worthy of being used by an organization for meeting its information requirements. Although information requirements may vary from organization to organization, however common premise is quite the same for many. • Efficient Processing, including query time • Large Storage Capacity • Reduced information Load • Cross-functional boundaries • Competitive Tool • Electronic Document Management/Paper Free environment Let’s consider each of these one by one. Efficient Processing Every transaction affects our records in a number of ways. CBIS helps in updating every change being triggered in less time and with less effort. Large Storage Capacity & Instant Access Efficient and effective decision making requires two aspects – Availability of processed corporate data – occurrence of every event relating to a company affects policy making and implementation, thus recording and processing of every data results in huge amount of information – Instant access to right chunk of information presented in comprehensible format – both the above requirements are easy to handle when a well structured information system is in place. Reduced Information Load With such huge amounts of information available, managers can feel overloaded, hence taking more time in Information System (CS507) VU © Copyright Virtual University of Pakistan 27 decision making. CBIS/IS help to tailor loads of information w.r.t. every manager’s requirements. The way information is presented can also save time for decision making. Hence, report formats can be tailored in accordance with the nature of problem being faced. Cross-Functional Coordination There are various functions in an organization that need to be managed. o Manufacturing o Purchasing o Warehousing o Marketing o Accounts o Finance o Human Resource In every transaction, every department has its own share of responsibility. Thus uncoordinated effort by every department won’t help in achieving the successful completion of transaction and meeting commitments. CBIS help in keeping an updated record for easy access by every department in an organization. Example A customer order is received by Sales/Marketing department. Record for customer profitability and recovery pattern are also kept by sales dept. • Manufacturing requires • Customer order in quantitative terms • Raw material availability for production • Time available for delivery • Procurement schedule • Accounts require an intimation the delivery is made along with the sales invoice • Customer wants the status of its/his/her order Competitive Tool Businesses invest to earn profits or for other non-profit based objectives. There seems no point in pouring in Co.’s hard earned money on IS if they don’t add to the quality and value of information. Hence CBIS/IS can and should work to enhance the competitive advantage for the organization. Paper Free Environment • Information overload enhances paper work. • Maintenance of records in hard form has always proven to be a cumbersome task. • An IS/CBIS should be efficient enough to properly manage of documents electronically. • Customer orders met through Virtual Private Networks and intranets (to be discussed later). • Payments made through Electronic payment system. • Report generation and record analysis gets convenient and easy. Information System (CS507) VU © Copyright Virtual University of Pakistan 28 Conclusion Hence an Information System / Computer Based information system should help an organization in achieving the above mentioned goals. If put differently, an organization should not proceed with the implementation of an IS unless it helps in achieving the above goals. Information System (CS507) VU © Copyright Virtual University of Pakistan 29 Lesson 9 Infrastructure Infrastructure, generally, is the set of interconnected structural elements that provide the framework for supporting the entire structure. It usually applies only to structures that are artificial. The term is used differently in a variety of fields; perhaps the single most well-known usage is in economics, where it refers to physical infrastructure such as buildings and roads. The notion that a structure has an internal framework is popular especially in business organizations where a dependency on interconnected information technology systems has become as prevalent as a city's dependency on interconnected conveyance systems for power, people and things. Information infrastructure consists of the physical facilities services and management that support all computing resources in an organization. There are five major components of infrastructure • Computer hardware • General purpose software • Networks & communication facilities • Databases • Information management personnel • Each of these components is designed in such manner to collectively meet the needs and objectives of the organization. The infrastructure will include • The detailed configuration of the hardware • Design of the operating system, • Documentation of the operational and application software, and • Documentation on how to technically manage and operate the entire system • Infrastructure also includes the integration, operation, documentation, maintenance and management the components as defined in infrastructure. • It is guideline to how specific computing resources are arranged, operated and managed. 9.1 Architecture Architecture more specifically is related to defining the information needs and how these will be obtained through the various application software modules. Architecture is the “Blueprint” that provides the conceptual foundation for building information infrastructure and specific applications. It is a way of mapping information requirements and resources. Architecture covers following components: • The business needs of the information • Existing planned information infrastructure and applications in the organizations. Information System (CS507) VU © Copyright Virtual University of Pakistan 30 9.1.1 Information Architecture In context of web design Information (Or design for related media Information). Architecture is defined by the Information Architecture Institute as 1. The structural design of shared information environments. 2. The art and science of organizing and labeling web sites, intranets, online communities and software to support usability. 3. An emerging community of practice focused on bringing principles of design and architecture to the digital landscape. An alternate definition of Information Architecture exists within the context of information system design, in which information architecture refers to data modeling and the analysis and design of the information in the system, concentrating on entities and their interdependencies. Data modeling depends on abstraction; the relationship between the pieces of data is of more interest than the particulars of individual records, though cataloging possible values is a common technique. The usability of human- facing systems, and standards compliance of internal ones, is paramount. The term information architecture describes a specialized skill set which relates to the management of information and employment of informational tools. It has a significant degree of association with the library sciences. Many library schools now teach information architecture. 9.2 Components/Sub-Systems of CBIS Following are the components / subsystems of CBIS • Transaction Processing System • Management Information System • Support Systems • Office Automation System • Decision Support System • Knowledge System • Executive Support System Let’s consider them one by one. 9.3 Transaction Processing System This system is used to record transactions of routine and repetitive nature. For Instance • Defining eh transaction recording structure • Placing customer orders • Billing customers • Other basic business transactions Information System (CS507) VU © Copyright Virtual University of Pakistan 31 Features • It is a repetitive number crunching system. • Today the transaction processing systems are more sophisticated and complex but spirit is same, that is to record routine business transactions, irrespective of their complexity, so as to help in analysis and report generation at a higher level. • Help to cater needs for operational level management. • Rapid Response Fast performance with a rapid response time is critical. Businesses cannot afford to have customers waiting for a TPS to respond, the turnaround time from the input of the transaction to the production for the output must be a few seconds or less. Reliability • Many organizations rely heavily on their TPS; a breakdown will disrupt operations or even stop the business. For a TPS to be effective its failure rate must be very low. If a TPS does fail, then quick and accurate recovery must be possible. This makes well–designed backup and recovery procedures essential. • Inflexibility • A TPS wants every transaction to be processed in the same way regardless of the user, the customer or the time for day. If a TPS were flexible, there would be too many opportunities for non-standard operations, for example, a commercial airline needs to consistently accept airline reservations from a range of travel agents, accepting different transactions data from different travel agents would be a problem. Controlled processing • The processing in a TPS must support an organization's operations. For example if an organisation allocates roles and responsibilities to particular employees, then the TPS should enforce and maintain this requirement. Data Processing Tasks • Major data processing tasks which a TPS is expected to per form are • Data identification and Gathering – keying in the data or obtaining it directly from machines by providing suitable interface • Data manipulation/Analysis – refers to transformation of data into information • Classifying • Sorting • Calculating • Summarizing • Data storage – data is kept somewhere in a sequenced manner until when needed. • Document Preparation – output for managers as reports or as input to other systems. • Goals a TPS is supposed to achieve are predefined and highly structured, for instance Information System (CS507) VU © Copyright Virtual University of Pakistan 32 • Checking a customer’s credit limit every time an order is received • Checking inventory level before accepting an order • Payroll generation on monthly basis 9.4 Management Information System MIRS makes information available to relevant users by producing pre-determined and pre-designed reports required by the management. Management information system helps middle level management planning, controlling and decision making. The data stored can be used or manipulated to produce differently defined reports from pre-defined reports. It can be presented graphically or pictorially. The reports generated by the MIS are used for analytical decision making by the management. The application software can construct projections, build scenarios, do what if analysis to enable better decision making. For Example MIS will use the TPS data to generate monthly and weekly summaries as per requirement (product, customer and salesperson. Major purpose is report generation. We would discuss major types of reports. • Periodic reports – daily, weekly, monthly, annually, format is predefined and structured for convenience. • Special – Management by Exception reports only when a special event occurs which needs to be monitored. For instance • Report sequence to highlight- fast moving & slow moving • Group the exceptions together – Aged accounts receivable • Show variance from the norm – Sales analysis report Information System (CS507) VU © Copyright Virtual University of Pakistan 33 LESSON 10 Support Systems Seeing the benefits of MIS for middle level managers, Computerised systems have been devised for other employees in the organization to help them complete their work efficiently and effectively. 10.1 Support systems can be classified into two categories • Office automation systems • Decision support systems 10.1.1 Office Automation Systems Office automation system includes formal and informal electronic systems primarily concerned with the communication of information to and from persons both inside and outside the firm. It supports data workers in an organization. For Instance • Word processing • Desktop publishing • Imaging & Web publishing • Electronic calendars – manager’s appt. calendars • Email • Audio & video conferencing – establishing communication between geographically dispersed persons. 10.1.2 Decision Support Systems Before moving forward with the concept of decision support system, we would take a look at the definition of MIS “An integrated man-machine system for providing information to support the operations, management and decision making functions in an organization.” (Prof. Gordon Davis University of Minnesota) Four Criteria for designing models and systems to support management decisions making were laid down by J.D.C. Little. These were • Robustness • Ease of Control • Simplicity • Completeness of relevant detail Decision Support Systems was defined by Bill Inmon, father of data warehouse, as “a system used to support managerial decisions. Usually DSS involves the analysis of many units of data in a heuristic fashion. As a rule, DSS processing does not involve the update of data” Heuristic simply means a particular technique of directing one’s attention in learning, discovery or problem solving. It assists in non-routine decision making process due to powerful analytical abilities. Information System (CS507) VU © Copyright Virtual University of Pakistan 34 For Instance For any scenario all the related factors with their ranges of variability are entered into DSS, which helps guide managers for any new scenario that emerges. DSS can stimulate innovation in decision making by helping managers to existing decision making procedures. An example of Decision Support System An outfit store maintains ready made garments and stitched clothes for various classes of society. Due to fluctuating changes in fashion trends, pre-seasonal planning becomes critical. • A Planning and forecasting software can be used by management to • Measure customer reactions to re-pricing • When to initiate clearance sales for old stock • Deciding about discount percentages • When to order new stock for the season 10.2 Functionalities of MIS and DSS Sr. No. MIS DSS 1 Provides information on monitoring and controlling the business. Helps in non routine decision making. 2 Fixed and regular reports are generated from data kept in TPS. Users are not linked with the structured information flows. 3 Report formats are predefined. Greater emphasis on models, display graphics & ad hoc queries. 4 User is part of the system DSS is a small part of users’ actions. 5 Controlled by IT Dept. Directly used by middle level managers Table 10.1 10.3 Types of DSS DSS, may either be • Model Driven DSS • Data Driven DSS 10.3.1 Model Driven DSS Model driven DSS uses following techniques • What-If analysis Attempt to check the impact of a change in the assumptions (input data) on the
