BIS

SYSTEM
• The word system is widely used.
• It has become fashionable to attach the word
system to add a contemporary flair when
referring to things or processes.
• People speak of exercise system, investment
system, delivery system, information system,
education system, computer system etc.
• System may be referred to any set of
components, which function in interrelated
manner for a common cause or objective.
• The term system is derived form the Greek
word systema, which means an
organized relationship among functioning
units or components.
• A system exists because it is designed to
achieve one or more objectives.
• We come into daily contact with the
transportation system, the telephone system,
the accounting system, the production
system, and, for over two decades, the
computer system.
• Similarly, we talk of the business system and
of the organization as a system consisting of
interrelated departments (subsystems) such as
production, sales, personnel, and an
information system.
• None of these subsystems is of much use as a
single, independent unit.
 Definition of a system
• There are more than a hundred definitions of
the word system, but most seem to
have a common thread that suggests that a
system is an orderly grouping of
interdependent components linked together
according to a plan to achieve a specific
objective.
• The word component may refer to physical
parts (engines, wings of aircraft,
car), managerial steps (planning, organizing
and controlling), or a system in a multi level
structure.
• The component may be simple or complex,
basic or advanced.
• They may be single computer with a keyboard,
memory, and printer or a series of intelligent
terminals linked to a mainframe.
• In either case, each component is part of the
total system and has to do its share of work for
the system to achieve the intended goal.
The study of systems concepts, has three basic implications:

1. A system must be designed to achieve a

predetermined objective.
2. Interrelationships and interdependence must
exist among the components.
3. The objectives of the organization as a whole
have a higher priority than the
objectives of its subsystems.
• For example, computerizing personnel
applications must conform to the
organization’s policy on privacy,
confidentiality and security, as well as making
selected data (e.g. payroll) available to the
accounting division on request.
 Characteristics of a system
• Our definition of a system suggests some
characteristics that are present in all
systems:
• organization (order), interaction,
interdependence and a central
objectives
 Organization
• Organization implies structure and order. It is
the arrangement of components that
helps to achieve objectives.
• In the design of a business system, for example,
the hierarchical relationships starting with the
president on top and leading downward to the
blue – collar workers represents the
organization structure.
• Like – wise, a computer system is designed
around an input device, a central processing
unit, an output device and one or more storage
units.
• When linked together they work as a whole
system for producing information.
 Interaction
• Interaction refers to the manner in which each
component functions with other components
of the system.
• In an organization, for example, purchasing
must interact with production, advertising with
sales and payroll with personnel.
• In a computer system, the central processing
unit must interact with the input device to
solve a problem.
• In turn, the main memory holds programs and
data that the arithmetic unit uses for
computation.
• The interrelationship between these
components enables the computer to perform.
 Interdependence
• Interdependence means that parts of the organization or
computer system depend
on one another.
• They are coordinated and linked together according to a
plan.
• One subsystem depends on the input of another
subsystem for proper functioning: that is, the
output of one subsystem is the required input for another
subsystem.
• This interdependence is crucial in systems work.
• In summary, no subsystem can function in
isolation because it is dependent on the
data (inputs) it receives from other subsystems
to perform its required tasks.
 Central objective
• The last characteristic of a system is its central
objective.
• Objectives may be real or stated.
• Although a stated objective may be the real
objective, it is not uncommon for
an organization to state one objective and
operate to achieve another.
•
• The important point is that users must know
the central objective of a computer application
early in the analysis for a successful design
and conversion.
 ELEMENTS OF A SYSTEM
• In most cases, systems analysts operate in a
dynamic environment where change
is a way of life.
• The environment may be a business firm, a
business application, or a computer system.
• To construct the system the following are the
key elements of the system:
1. Inputs and outputs
2. Processor
3. Control
4. Feedback
5. Environment
6. Boundaries and interface
 Inputs and outputs

• A major objective of a system is to produce an

output that has value to its user.
• Whatever the nature of the output (goods,
services, or information), it must be in line
with the expectations of the intended user.
• Inputs are the elements (material, human
resources, and information) that enter the
system for processing.
• Output is the outcome of processing.
• A system feeds on input to produce output in
much the same way that a business brings in
human, financial, and material resources to
produce goods and services.
 Processor
• The processor is the element of a system that
involves the actual transformation of
input into output.
• It is the operational component of a system.
• Processors may modify the input totally or
partially, depending on the specifications of
the output.
 Control
• The control element guides the system.
• It is the decision – making subsystem that
controls the pattern of activities governing
input, processing, and output.
• In an organizational context, management as a
decision – making body controls the inflow,
handling and outflow of activities that affect
the welfare of the business.
• In a computer system, the operating system
and accompanying software influence the
behaviour of the system.
• Output specifications determine what and how
much input is needed to keep the
system in balance.
 feedback
• Control in a dynamic system is achieved by
feedback.
• Feedback measures output
against a standard in some form of cybernetic
procedure that includes communication and
control.
• Output information is fed back to the input and
/ or to management (Controller)
for deliberation.
• After the output is compared against
performance standards, changes can
result in the input or processing and
consequently, the output.
• Feedback may be positive or negative, routing
or informational.
• Positive feedback reinforces the performance
of the system. It is routine in nature.
• Negative feedback generally provides the
controller with information for action.
 Environment
• The environment is the “suprasystem” within
which an organization operates.
• It is the source of external elements that
impinge on the system. In fact, it often
determines how a system must function
• For example, the organization’s environment,
consisting of vendors, competitors, and others,
may provide constraints and, consequently,
influence the actual performance of the
business.
 Boundaries and interfaces
• A system should be defined by its boundaries
– the limits that identify its
components, processes and interrelationship
when it interfaces with another system.
• For example, a teller system in a commercial bank
is restricted to the deposits, withdrawals
and related activities of customers checking and
savings accounts.
• It may exclude mortgage foreclosures, trust
activities, and the like.
• Each system has boundaries that determine its
sphere of influence and control.
 TYPES OF SYSTEMS
• The frame of reference within which one
views a system is related to the use of
the systems approach for analysis. Systems
have been classified in different ways.
• Common classifications are: (1) physical or
abstract, (2) open or closed, and (3) “man –
made” information systems.
 Physical or abstract systems
• Physical systems are tangible entities that may
be static or dynamic in operation.
• Abstract systems are conceptual or non-
physical entities which may be as
straightforward as formulas of relationships
among sets of variables or models – the
abstract conceptualization of physical
situations.
 Open and close system
• Another classification of systems is based on
their degree of independence.
• An open system has many interfaces with its
environment.
• It permits interaction across its boundary; it
receives inputs from and delivers outputs to
the outside.
• An information system falls into this category,
since it must adapt to the changing demands of
the user.
• In contrast, a closed system is isolated from
environmental influences.
• In reality, a completely closed system is rare.
 Characteristics of open system
• Input from outside: Open systems are self –
adjusting and self-regulating.
• Entropy: All dynamic systems tend to run down
over time, resulting in
entropy or loss of energy. Open systems resist
entropy by seeking new inputs or
modifying the processes to return to a steady state.
• Process, output and cycles: Open systems
produce useful output and operate in
cycles, following a continuous flow path.
• Equifinality: The term implies that goals are
achieved through differing courses
of action and a variety of paths. In most
systems, there is more of a consensus on
goals than on paths to reach the goals.
 Man made information system

• It is generally believed that information reduces

uncertainty about a state or event.
• For example, information that the wind is calm
reduces the uncertainty that a trip by boat will be
enjoyable.
• An information system is the basis for interaction
between the user and the analyst. It determines
the nature of relationship among decision makers.
• In fact, it may be viewed as a decision centre for
personnel at all levels.
• From this basis, an information system may be
defined as a set of devices, procedures and
operating systems designed around user-based
criteria to produce information and communicate it
to the user for planning, control and performance.
• Many practitioners fail to recognise that a business
has several information systems; each is designed
for a specific purpose.