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0 Introduction to Information Systems

Lesson Introduction
A system can be defined as a relationship between different components which are linked or
working together to achieve a common goal. Today, we live in a world of systems. Our world
is a system of natural and human-made parts operating mutually to sustain life. System
analysis is the method of identifying problems and organizing the facts and details of a
system. System analysis can also be defined as the accurate categorization of a system into
its components. It is essential to know what works with what, what makes something to fail,
and what can work autonomously.

Learning Outcomes:
After successful completion of this lesson, the students will be able to describe the role
and the influence of information technology to facilitate ever-changing business
requirements.

Lesson Outline:
• Define information system and its components
• Various types of information systems
• Roles and responsibilities of a systems analyst
1.1 Overview of Systems Analysis and Design
Information is considered one of the most critical assets in any organization in the modern
world. Organizations utilize information as a tool to enhance productivity, maintain
customer faith, and make reasonable decisions. Therefore, Information technology can be a
significant factor in defining the difference between the success and failure in current
business.

Systems analysis and design is a step-by-step process for developing high-quality

information systems. An information system combines information technology, people, and
data to support business requirements. For example, information systems handle daily
business transactions, improve company productivity, and help managers make sound
decisions.

1.2 Components of the Information Systems

An information system has five main components: hardware, software, data, processes, and
people.

Figure: Five Components of Information Systems (Source: Shelly Cashman)

1.2.1 Hardware
Hardware is the portion of an information system that can be touched. Servers, workstations,
keyboards, disk drives, iPods, and flash drives are all examples of information systems
hardware.

1.2.2 Software
Software is a set of instructions that directs the hardware to accomplish specific goals. When
developers write software programs, they are typing out lists of instructions that tell the
hardware what to do. There are numerous categories of software, with the two main
categories being system software, which makes the hardware usable, and application
software, which does useful things to the users.
1.2.3 Data
Data can be considered as a collection of facts. For example, the index numbers of students,
phone numbers, and marks are all pieces of data. Companies collect all kinds of data and use
it to make decisions. These judgments can then be analyzed as to their effectiveness and the
organization can be improved.

1.2.4 People
Individuals who have an enthusiasm for an information system are called stakeholders.
Stakeholders incorporate the administrators, the clients inside and outside the organization
who will connect with the information system, and IT staff individuals. IT staff may include
software developers, analysts, database administrators, etc.

1.2.5 Process
A process is a sequence of actions engaged to achieve a desired result or goal. Information
systems are shifting more and more integrated with organizational rules, producing more
control to those processes. However, merely automating activities using technology is not
enough – businesses looking to utilize information systems effectively do more. Companies
expecting to obtain an advantage over their contestants are profoundly focused on this
component of information systems.

1.3 Business Advantage with Information Systems

It has always been the opinion that the introduction of information systems will bring a
competitive business advantage. In the event that putting one PC to control stock can make
an organization more proficient, won't introducing a few PCs to deal with significantly a
greater amount of the business keeps on improving it.

In 2003, Nicholas Carr composed an article in the Harvard Business Review that examined
this suspicion. The article, entitled "IT Doesn't Matter," raised information technology has
turned out to be a commodity. Rather than viewing technology as an investment, it ought to
be viewed as something like electricity: It ought to be figured out how to decrease costs,
guarantee that itis continually running, and be as hazard-free.

1.3.1 Innovation with Information Technology

Innovation is a considerable factor in business success, where Information technology
encourages innovation. On the other hand, business has massively benefited from the digital
revolution over the last couple of decades. Now the equation for the success of the business
is simple: encourage changes with the help of information technology. Therefore, it is clear
that without a backbone of information technology, a business is not going to sustain in the
long run.
For example, agriculture field uses computers to maintain production records, financial
planning, and procurement purposes.

For instance, a store owner was using a cash register similar to the one invented by James
Ritty in 1879 to block his employees from stealing his saloon profits in Dayton, Ohio.
However, everything changed on 1991with World Wide Web (WWW) going live to the world.

As stated previously, Information technology encourages businesses to run more efficiently,

while enhancing quality. In that way, the productivity can go high.
IT-related innovation has made some drastic changes in business:
· Online shopping is more efficient than shopping in a store.
· Digital marketing is more efficient than high-cost newspaper, television, and radio
advertising.
· Social networking is more efficient than going to clubs.
· VOIP communication is more efficient than legacy telephony.
· Cloud computing is more efficient than a private computer network.
Businesses that have embraced the innovation paradigm tend to have the following
characteristics:
· They have more accurate business planning

Innovation is a considerable factor in business success, where Information technology

encourages innovation. On the other hand, business has massively benefited from the digital
revolution over the last couple of decades. Now the equation for the success of the business
is simple: encourage changes with the help of information technology. Therefore, it is clear
that without a backbone of information technology, a business is not going to sustain in the
long run.

For example, agriculture field uses computers to maintain production records, financial
planning, and procurement purposes.

For instance, a store owner was using a cash register similar to the one invented by James
Ritty in 1879 to block his employees from stealing his saloon profits in Dayton, Ohio.
However, everything changed on 1991with World Wide Web (WWW) going live to the world.

As stated previously, Information technology encourages businesses to run more efficiently,

while enhancing quality. In that way, the productivity can go high.

It has been observed that IT-related innovation has made some drastic changes in business:
· Online shopping is more efficient than shopping in a store.
· Digital marketing is more efficient than a high-cost newspaper, television, and radio
advertising.
· Social networking is more efficient than going to clubs.
· VOIP communication is more efficient than legacy telephony.
· Cloud computing is more efficient than a private computer network.
1.3.2 Underline Reasons for the Business Growth

The revolution of technology has been a major factor for the improved businesses in this
century. Some of the main reasons for such growth are:

a) IT facilitates the business with sophisticated tools and applications to solve complex
problems.

Updated hardware such as faster processors and sharper displays together with smarter
applications such as Google calendar and Kanban boards have made it simpler to solve their
major problems.

b) Information technology allows businesses to make better decisions.

Solid market research is the foundation for good business decisions. IT facilitates this with
video conferences, analyzing public sentiment on social media, and managing online surveys
to obtain customer feedback. Furthermore, IT provides tools like Microsoft CRM Dynamics
and Google Analytics.

c) Information technology has improved marketing.

Internet marketing methods such as SEO and Facebook Ads are far more reliable ways than
traditional marketing to find the target audiences, identifying their needs, and creating a
marketing campaign. Besides, customer relationship management (CRM) systems assist
businesses to understand the behavior of customers.

d) Information technology has improved customer support.

Customers can be benefited from various ways of telephone, emails, or social media
platforms.

e) Information technology has improved resource management.

The concept of "Cloud computing" enables employees to access their software systems by
using any device anywhere in the world.

1.4 Different types of Information Systems

In the ancient days of computing, the information systems were 'tailor-made' - built as a one-
off solution for a particular problem. However, it soon became apparent that many of the
problems information systems set out to solve shared certain characteristics. Consequently,
people attempted to try to build a single system that would solve a whole range of similar
problems. However, they soon realized that in order to do this, it was first necessary to be
able to define how and where the information system would be used and why it was needed.
It was then that the search for a way to classify information systems accurately began.
A process of classification can recognize the various types of information systems. The
classification of information systems into various types is a useful technique for designing
systems and discussing their application. However, it is important to remember that
different kinds of systems found in organizations exist to deal with the particular problems
and tasks that are found in organizations.

For instance, Figure 1 represents a three-level pyramid model based on the type of decisions
taken at different levels in companies.

Figure 1: Three-level pyramid model

However, as presented in Figure 2, the four-level pyramid model can be used to compare
how the various information systems contrast from each other.

Figure 2: Four-level pyramid model

1.4.1 Transaction Processing Systems

Tansaction Processing Systems can be considered as operational-level systems at the base

of the pyramid. They are normally operated directly by shop floor workers or frontline staff,
which provide the critical data needed to strengthen the management of services. This data
is collected by tracking of low-level actions and essential transactions. Transaction
processing systems eventually little more than mere data processing systems

Some examples of TPS include reservation systems, payroll systems, and stock control
systems.

The role of TPS

o Produce information for other systems

o Cross boundaries (internal and external)
o Used by operational personnel + supervisory levels
o Efficiency oriented

1.4.2 Management Information Systems

Many of the diverse types of Information Systems discovered in commercial organizations

designated as "Management Information Systems." Nevertheless, within the pyramid model,
MIS are management-level systems that are used by middle managers to help guarantee the
steady running of the business. The profoundly structured information given by MIS enables
managers to assess an organization's performance by analyzing the current outputs with the
previous outputs. Typically, MIS are built on the data provided by the TPS.

Some examples of MIS include budgeting systems, inventory control systems and sales
management systems.

The role of MIS

o Based on internal information flows

o Support relatively structured decisions
o Inflexible and have little analytical capacity
o Used by lower and middle managerial levels
o Deals with the past and present rather than the future
1.4.3 Decision Support Systems

Decision Support Systems are considered as a knowledge-based system, employed by senior

managers. DSS promotes the production of knowledge and allow its integration into the
organization. Such systems are utilized to look at the organized data and enable senior
managers to extend the potential impacts of their choices into the future. DSS offer access to
databases and various analytical tools. DSS build upon the information from an MIS or TPS
to produce useful insights about the business.

Some examples of DSS include financial planning system, group decision support systems
and logistic systems.

The role of DSS

o Support ill- structured or semi-structured decisions

o Have analytical and/or modelling capacity
o Used by more senior managerial levels
o Are concerned with predicting the future
o Are effectiveness oriented?

1.4.4 Executive Information Systems

EIS are strategic-level information systems that are found at the top of the Pyramid. They
encourage officials, and senior managers investigate nature in which the association works,
to distinguish long haul drifts, and to design proper plans. The data in EIS is frequently
pitifully organized and originates from both inward and outside sources. EIS are intended to
be worked straightforwardly by administrators without the requirement for delegates. EIS
organizes and presents data and information from both external data sources and internal
MIS or TPS in order to support and extend the inherent capabilities of senior executives.

The role of EIS

o Are concerned with ease of use

o Are concerned with predicting the future
o Are effectiveness oriented
o Are highly flexible
o Support unstructured decisions

1.5 Roles and Responsibilities of a Systems Analyst

A systems analyst's role is to investigate, design, implement and maintain a company's
information systems. Systems analyst needs to continually communicate with users and
managers within and outside the company. It is not a mandatory requirement to assign
systems analysts only to the IT department; they also can allocate to sales or accounting
departments depending on the requirements of the organization.

A successful systems analyst should possess strong written and oral communication skills
together with solid technical knowledge. However, the required educational qualifications
may vary based on different companies.