College of Accountancy and Business Administration

Second Semester, A.Y. 2020-2021

APC3 Managing Information and Technology

INTRODUCTION

Information Systems

• “Information systems (IS) is the study of complementary networks of hardware and

software that people and organizations use to collect, filter, process, create, and
distribute data.”
• “Information systems are combinations of hardware, software, and telecommunications
networks that people build and use to collect, create, and distribute useful data,
typically in organizational settings.”
• “Information systems are interrelated components working together to collect, process,
store, and disseminate information to support decision making, coordination, control,
analysis, and visualization in an organization.”

The Components of Information Systems

Five components:
1. hardware,
2. software,
3. data, 4. people, and
5. process.

Technology

Technology can be thought of as the application of scientific knowledge for practical

purposes. From the invention of the wheel to the harnessing of electricity for artificial lighting,
technology is a part of our lives in so many ways that we tend to take it for granted.

Hardware

Information systems hardware is the part of an information system you can touch – the
physical components of the technology. Computers, keyboards, disk drives, iPads, and flash
drives are all examples of information systems hardware.

Software

Software is a set of instructions that tells the hardware what to do. Software is not tangible –
it cannot be touched. When programmers create software programs, what they are really
doing is simply typing out lists of instructions that tell the hardware what to do. There are
several categories of software, with the two main categories being operating-system
software, which makes the hardware usable, and application software, which does something
useful.
 Examples of operating systems include Microsoft Windows on a personal computer
and Google’s Android on a mobile phone. Examples of application software are Microsoft
Excel and Angry Birds.

Data

Data is a collection of facts.

For example, your street address, the city you live in, and your phone number are all
pieces of data. Like software, data is also intangible. By themselves, pieces of data are
not really very useful. But aggregated, indexed, and organized together into a database,
data can become a powerful tool for businesses.

Organizations collect all kinds of data and use it to make decisions. These decisions can then
be analyzed as to their effectiveness and the organization can be improved.

Networking Communication

Besides the components of hardware, software, and data, which have long been considered
the core technology of information systems, it has been suggested that one other component
should be added: communication. An information system can exist without the ability to
communicate – the first personal computers were stand-alone machines that did not access
the Internet. However, in today’s hyper-connected world, it is an extremely rare computer
that does not connect to another device or to a network. Technically, the networking
communication component is made up of hardware and software, but it is such a core feature
of today’s information systems that it has become its own category.

People

Users focus on the people involved in information systems. From the front-line help-desk
workers, to systems analysts, to programmers, all the way up to the chief information officer
(CIO), the people involved with information systems are an essential element that must not
be overlooked.

Process

A process is a series of steps undertaken to achieve a desired outcome or goal. Information

systems are becoming more and more integrated with organizational processes, bringing
more productivity and better control to those processes. But simply automating activities
using technology is not enough – businesses looking to effectively utilize information systems
do more. Using technology to manage and improve processes, both within a company and
externally with suppliers and customers, is the ultimate goal. Technology buzzwords such as
“business process reengineering,” “business process management,” and “enterprise resource
planning” all have to do with the continued improvement of these business procedures and
the integration of technology with them. Businesses hoping to gain an advantage over their
competitors are highly focused on this component of information systems.
The Role of Information Systems

The components if Information Systems collect, store, organize, and distribute data
throughout the organization

Take data and turn it into information, and then transform that into organizational knowledge.
As technology has developed, this role has evolved into the backbone of the organization.

To get a full appreciation of the role information systems play.

The Mainframe Era

From the late 1950s through the 1960s, computers were seen as a way to more efficiently do
calculations. These first business computers were room-sized monsters, with several
refrigeratorsized machines linked together. The primary work of these devices was to
organize and store large volumes of information that were tedious to manage by hand. Only
large businesses, universities, and government agencies could afford them, and they took a
crew of specialized personnel and specialized facilities to maintain. These devices served
dozens to hundreds of users at a time through a process called time-sharing. Typical functions
included scientific calculations and accounting, under the broader umbrella of “data
processing.”

In the late 1960s, the Manufacturing Resources Planning (MRP) systems were introduced. This
software, running on a mainframe computer, gave companies the ability to manage the
manufacturing process, making it more efficient. From tracking inventory to creating bills of
materials to scheduling production, the MRP systems (and later the MRP II systems) gave
more businesses a reason to want to integrate computing into their processes.

Example:

IBM became the dominant mainframe company in the 1960s. Nicknamed “Big
Blue,” the company became synonymous with business computing. Continued
improvement in software and the availability of cheaper hardware eventually brought
mainframe computers (and their little sibling, the minicomputer) into most large
businesses

The PC Revolution

In 1975, the first microcomputer was announced on the cover of Popular Mechanics: the Altair
8800. Its immediate popularity sparked the imagination of entrepreneurs everywhere, and
there were quickly dozens of companies making these “personal computers.” Though at first
just a niche product for computer hobbyists, improvements in usability and the availability of
practical software led to growing sales. The most prominent of these early personal computer
makers was a little company known as Apple Computer, headed by Steve Jobs and Steve
Wozniak, with the hugely successful “Apple II.” Not wanting to be left out of the revolution, in
1981 IBM (teaming with a little company called Microsoft for their operating system software)
hurriedly released their own version of the personal computer, simply called the “PC.”
Businesses, who had used IBM mainframes for years to run their businesses, finally had the
permission they needed to bring personal computers into their companies, and the IBM PC
took off. The IBM PC was named Time magazine’s “Man of the Year” for 1982.
Because of the IBM PC’s open architecture, it was easy for other companies to copy, or
“clone” it. During the 1980s, many new computer companies sprang up, offering less
expensive versions of the PC. This drove prices down and spurred innovation. Microsoft
developed its Windows operating system and made the PC even easier to use. Common uses
for the PC during this period included word processing, spreadsheets, and databases. These
early PCs were not connected to any sort of network; for the most part they stood alone as
islands of innovation within the larger organization.

Client-Server

In the mid-1980s, businesses began to see the need to connect their computers together as a
way to collaborate and share resources. This networking architecture was referred to as
“client-server” because users would log in to the local area network (LAN) from their PC (the
“client”) by connecting to a powerful computer called a “server,” which would then grant
them rights to different resources on the network (such as shared file areas and a printer).
Software companies began developing applications that allowed multiple users to access the
same data at the same time. This evolved into software applications for communicating, with
the first real popular use of electronic mail appearing at this time.

This networking and data sharing all stayed within the confines of each business, for the most
part. While there was sharing of electronic data between companies, this was a very
specialized function. Computers were now seen as tools to collaborate internally, within an
organization. In fact, these networks of computers were becoming so powerful that they were
replacing many of the functions previously performed by the larger mainframe computers at a
fraction of the cost. It was during this era that the first Enterprise Resource Planning (ERP)
systems were developed and run on the client-server architecture. An ERP system is a
software application with a centralized database that can be used to run a company’s entire
business. With separate modules for accounting, finance, inventory, human resources, and
many, many more, ERP systems, with Germany’s SAP leading the way, represented the state
of the art in information systems integration.
 DATA

Data, Information, and Knowledge

Data are the raw bits and pieces of information with no context. Data can be quantitative
or qualitative.

Quantitative data is numeric, the result of a measurement, count, or some other

mathematical calculation.

Qualitative data is descriptive.

Example:

“Ruby Red,” the color of a 2013 Ford Focus data.

A number can be qualitative too: if I tell you my favorite number is 5 - it is
descriptive, not the result of a measurement or mathematical calculation.

Adding the context converts data into information. Knowledge can be used to make
decisions, set policies, and even spark innovation. The final step up the information ladder
is the step from knowledge (knowing a lot about a topic) to wisdom.

Examples of Data MP3 music

file, a video file, a
spreadsheet, a web page,
and an e-book.

Databases
A database is an organized collection of related information. All information in a database
should be related as well; separate databases should be created to manage unrelated
information.

Example:

A database that contains information about students should not also hold information
about company stock prices.
Relational Databases

Databases can be organized in many different ways, and thus take many forms. The most
popular form of database today is the relational database.

Example:

Microsoft Access,
MySQL, and
Oracle.

A relational database is one in which data is organized into one or more tables. Each table
has a set of fields, which define the nature of the data stored in the table. A record is one
instance of a

set of fields in a table.

Example:

Records - rows of the table and

Fields - columns of the table

Normalization

To normalize a database means to design it in a way

that: 1) reduces duplication of data between tables
and 2) gives the table as much flexibility as
possible.

Data Types

Most modern databases allow for several different data types to be stored. Some of the
more common data types are listed here:

• Text: for storing non-numeric data that is brief, generally under 256 characters. The
database designer can identify the maximum length of the text.
• Number: for storing numbers. There are usually a few different number types that can
be selected, depending on how large the largest number will be.
• Yes/No: a special form of the number data type that is (usually) one byte long, with a 0
for “No” or “False” and a 1 for “Yes” or “True”.
• Date/Time: a special form of the number data type that can be interpreted as a
number or a time.
• Currency: a special form of the number data type that formats all values with a
currency indicator and two decimal places.
• Paragraph Text: this data type allows for text longer than 256 characters.
• Object: this data type allows for the storage of data that cannot be entered via
keyboard, such as an image or a music file.

There are two important reasons that we must properly define the data type of a field:

1. Data type tells the database what functions can be performed with the data.
Example:
A field storing birth year, we can subtract the number stored in that field from the
current year to get age.
2. Proper amount of storage space is allocated for our data.
Example:

If the First Name field is defined as a text (50) data type, this means fifty
characters are allocated for each first name we want to store.

A table ends up holding 50,000 names, we are allocating 50 * 50,000 = 2,500,000

bytes for storage of these values.