Lecturer Notes of Management Information System Department of BCA

Unit:1

INFORMATION SYSTEM CONCEPT

1.1. Data and Information:
A) Introduction to Data:
• Data is a collection of raw facts and figures.
• Raw material that can be processed by any computing machine.
• A collection of facts from which conclusions may be drawn.
• Data can exist in a variety of forms -- as numbers or text on pieces of paper,
as bits and bytes stored in electronic memory, or as facts stored in a person's
mind

B) Information:
• Information is defined as systematic and meaningful form of data.
• A collection of facts organized in such a way that they have additional value
beyond the value of the facts themselves
• Example: a random number like 0001-021A is a data after using processing
machine it can be result into ID no, House no, Bill no which is more
meaningful and called as information.
• "Information is a data that has been processed into a form that is meaningful
to recipient and is of real or perceived value in the current or the prospective
action or decision of recipient."

Information can be classified in a number of ways and the most important

ways to classify information.

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Lecturer Notes of Management Information System Department of BCA
a) Classification by Characteristic:
Based on Anthony's classification of Management, information used in business for
decision-making is generally categorized into three types:
• Strategic Information: Strategic information is concerned with long term policy
decisions that defines the objectives of a business and checks how well these objectives
are met. For example, acquiring a new plant, a new product, diversification of business
etc., comes under strategic information.

• Tactical Information: Tactical information is concerned with the information needed

for exercising control over business resources, like budgeting, quality control, service
level, inventory level, productivity level etc.

• Operational Information: Operational information is concerned with plant/business

level information and is used to ensure proper conduction of specific operational tasks as
planned/intended. Various operator specific, machine specific and shift specific jobs for
quality control checks comes under this category.

b) Classification by Application:
In terms of applications, information can be categorized as:
• Planning Information: These are the information needed for establishing standard
norms and specifications in an organization. This information is used in strategic,
tactical, and operation planning of any activity. Examples of such information are time
standards, design standards.
• Control Information: This information is needed for establishing control over all
business activities through feedback mechanism. This information is used for
controlling attainment, nature and utilization of important processes in a system.
When such information reflects a deviation from the established standards, the
system should induce a decision or an action leading to control.
• Knowledge Information: Knowledge is defined as "information about information".
Knowledge information is acquired through experience and learning, and collected
from archival data and research studies.

• Organizational Information: Organizational information deals with an

organization's environment, culture in the light of its objectives. This information is
used by everybody in the organization; examples of such information are employee
and payroll information.

• Functional/Operational Information: This is operation specific information. For

example, daily schedules in a manufacturing plant that refers to the detailed
assignment of jobs to machines or machines to operators. In a service-oriented
business, it would be the duty roster of various personnel. This information is mostly
internal to the organization.

• Database Information: Database information construes large quantities of

information that has multiple usage and application. Such information is stored,
retrieved and managed to create databases. For example, material specification or
supplier information is stored for multiple users.

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Lecturer Notes of Management Information System Department of BCA
C) Differences Between Data and Information:
Parameters Data Information

Data is a collection of raw

Information is defined as systematic and meaningful
Definition facts and figures.
form of data
It can be structured, tabular Language, ideas, and thoughts based on the given
Represented in
data, graph, data tree, etc. data.
Data does not have any It carries meaning that has been assigned by
Meaning
specific purpose. interpreting data.
Data is a single unit and is
Information is the product and group of data which
Feature raw. It alone doesn't have any
jointly carry a logical meaning.
meaning.
It never depends on
Dependence It depended on Data.
Information
Measured in meaningful units like time, quantity,
Measuring unit Measured in bits and bytes.
etc.
Support for It can't be used for decision
It is widely used for decision making.
Decision making making
Contains Unprocessed raw factors Processed in a meaningful way
Knowledge level It is low-level knowledge. It is the second level of knowledge.

Example Ticket sales on a band on tour. Sales report by region and venue.
Data alone has no
Significance Information is significant by itself.
significance.

The data collected by the

Information is useful and valuable as it is readily
Usefulness researcher, may or may not be
available to the researcher for use.
useful.

Information is always specific to the requirements

Data is never designed to the and expectations because all the irrelevant facts and
Dependency
specific need of the user. figures are removed, during the transformation
process.

D) Component/Dimension of Information:
The personal and organizational dimensions of information include
1. Personal Dimension: since knowledge worker works with and produce information,
while working with it they can consider it three points of view or dimensions:
Time
1. Personal- Access to information when you need it and information that
describes the time period you’re considering.

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Lecturer Notes of Management Information System Department of BCA
Location2. Time- Access the information no matter where you are.
3. Form- Information in a form that is most usable and understandable (audio,
text, video, animation, graphical and others) and information that is free of
errors.

Fig: Personal dimension of information

2. Organizational Dimension: To run the business smoothly and efficiently, we have to

consider various organizational dimensions of information. These include:

1. Information flows: Up, down, horizontal and outward with respect to an

organization.
2. Granularity: The extent of detail within information.
3. What information describes:
▪ Internal- Specific organizational aspects of the organization,
▪ External- The environment surrounding the organization,
▪ Objective- Quantifiably describing something that is known and
▪ Subjective- Attempting to describes something that is unknown

E) Quality, Cost and Value of Information:

❖ Quality of Information:
• Reliability − It should be verifiable and dependable.
• Timely − It must be current and it must reach the users well in time, so that important
decisions can be made in time.
• Relevant − It should be current and valid information and it should reduce uncertainties.
• Accurate − It should be free of errors and mistakes, true, and not deceptive.
• Sufficient − It should be adequate in quantity, so that decisions can be made on its basis.
• Unambiguous − It should be expressed in clear terms. In other words, in should be
comprehensive.
• Complete − It should meet all the needs in the current context.

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Lecturer Notes of Management Information System Department of BCA
❖ Cost of Information:
Information cost are expenditure of time and money that are required to obtain
information.
The following are common types of information costs.
• Purchase:
The purchase price of information such as the cost of a book or a research
report
• Search:
The cost of locating information, for example, the time required to
comparison shop on multiple e commerce websites.
• Communications:
The time required to communicate or stay up to date on communicated
messages. For example, an investor is comparing passive investing versus
actively investing in a basket of stocks. They consider the cost of due
diligence such as reading company press releases and listening to earning
calls.
• Analysis:
The time and expertise required to analyze information. For example, the
time required to use company data and information to reach a reasonable
valuation estimate for a stock.
• Automation:
The cost of tools that automate data processing and analysis. For example,
the cost of a tool that automatically calculates risk estimates for an
investment.
• Development:
The cost of developing new information using techniques such as research
and experiments. For example, the cost involved in interviewing a firm’s
customers to look for risks to their revenue.
• Travel:
The cost of physical travel that may be required to obtain certain types of
information. For example, A salesperson who considers the cost of
attending an industry event to gain information about competitors and
customers

❖ Value of Information:
The value of information is a very complicated concept as information per system
does not have any universal value. Its value is related to the person who uses it,
when he/she uses it and for what he/she uses it.

Two types of value of information:

• Normative Value of Information:
Decision theory has developed this concept further and the basic
assumption is that we always have some preliminary information about the
occurrence of events that are related to our decisions. This approach is
however, only good for theoretical discussions as its practical applicability
is poor.

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Lecturer Notes of Management Information System Department of BCA
• Subjective Value of Information:
It is the subject view of the information available. It is the subjective
perception or impression of the information. This subjective value
approach varies widely with individuals. In the subjective valuation of
information, no probabilities are calculated. Subjective value of
information is the person's (receiver's) comprehensive impression about
the information content.

F) Organization Dimension of Information (Information Flow and Granularity):

We need to consider the following organization dimension of information
a) Information Flows:
Information in any organization flows in four directions: up, down, horizontal and
inward/outward. Most people view a traditional organization as a pyramid with four
levels and many sides as we can see in below figure:
From top to bottom, the levels are:
• Strategic management, which provides an organization with overall
direction and guidance.
• Tactical Management, which develops the goals and strategies outlined
by strategic management.
• Operational Management, which manages and directs the day to day
operations
• Non-management employees, which actually performs daily activities,
such as order processing, developing and producing goods and services
and serving customers.

Fig: Organization Dimension of information

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Lecturer Notes of Management Information System Department of BCA
The information that flows upward describes the current state of the organization based on its
daily transaction.
The downward flow of information consists of the strategies, goals and directives that originate
at one level and are passed to lower levels.
The information that flows horizontally, or the horizontal flows of information, is between
functional business units and work teams.
Finally, the outward and inward flows of information consist of information that is
communicated to customers, suppliers, distributers, and other partners for the purpose of doing
business.

b) Information Granularity:
The above figure also illustrates the information granularity. It refers to the extent of
detail within the information.
The one end of the granularity is a coarse granularity that is highly summarized
information.
At other end is fine granularity that is the information is in high detail.

The top-level people deal with the coarse granularity of the information as they required
to know the exact point.
The people with the lowest level of an organization requires the fine granularity of the
information as they need complete information.

1.2. System:
A) Introduction to system concept:
• The word system is taken from Greek word "Systema" which means an
"organized collection".
• Hence a system is a collection of elements or components that are organized
for a common purpose.

Fig: A complete System

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Lecturer Notes of Management Information System Department of BCA

B) Elements of a system:
Above figure illustrates a typical system having input, processor, output, feedback, environments
as its elements i.e. a system consists of following basic elements:

a) Input
Input may be defined as the start-up component on which the system operates.

b) Process
The process is the transformation activity that converts the inputs into the output.

c) Output
Output is defined as the result of an operation. It is the end result of a system, and it
represents the objective of a system.

d) Feedback control
Feedback control is defined as the system function that compares output with a model or
standard i.e. it is the function that provides information on the deviation between output and
the prescribed standards and delivers this information as input the process form which output
is obtained.

C) Types of System:
Followings are the types or kinds of systems available:
• Abstract and physical systems:

Systems can be categorized as abstract and physical systems.

Abstract system is orderly arrangement of interdependent ideas or construct, which may or may
not have any counterpart (matching point) in the real world. It is also known as conceptual
system. For example, a system of theology is an example of abstract system, which is an orderly
arrangement of ideas about God and the relationship of humans to God.

Physical systems are generally concrete operational systems made up of people, materials,
machines, energy and other physical things. Physical systems are more than abstract; they
display some activity or behavior. The elements in such a system interact with each other’s to
achieve a common objective. For example: transportation system, computer system, educational
system, etc.

• Deterministic and probabilistic systems:

A deterministic system is the system in which the occurrence of all events is

known with certainty. In such system, given description of the system state at a particular point
of time, the next state can be perfectly predicted. Example: computer system; computer program
performs exactly according to a set of instructions.

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Lecturer Notes of Management Information System Department of BCA
A probabilistic system is the system is one in which the occurrences of events cannot be
perfectly predicted but the behavior of such system can be described in terms of probability,
where certain degree of error is always attached to the prediction of the behavior of the system.
Example: a set of instructions given to a person who may not follow the instructions exactly as
given. In our daily life we usually have to deal with such probabilistic systems.

• Open and closed systems:

An open system is one that interacts with its environment and thus exchanges
information, material etc. with the environment. All living systems are open systems. An
organization which is sensitive to changes in customer’s tastes, preferences, likings, disliking,
demands, etc. they can’t work in isolation.

A closed system is one which doesn’t interact with its environment. Such systems in business
world are rare, but relatively closed systems are common. Thus, the systems that is relatively
isolated from the environment but not completely closed are known as closed system. For
example: a computer system is relatively closed system, because it accepts and processes
previously defined inputs and provides outputs to a previously defined way.

• User-Machine System:

Most of the physical systems are user-machine systems. It is difficult to think a

system composed only of people who do not utilize equipment of some kind to achieve their
goals. Such system has two major elements: human and user. In user-machine systems, both:
human and machine perform some activities in the accomplishment of a goal. The machine
elements are relatively closed and deterministic; whereas the human elements of the systems are
purely open and deterministic.

• Adaptive and non-adaptive System:

A system is said to be adaptive if it modifies itself with the changes in its environment. Example
A democratic system of government. It adapts changes in environment.

A non-adaptive system does not react to changes in its environment. Example an autocratic
system of governance. It does not change or adapt to changes in the environment.

• Simplex and Complex System:

A system which is made up of few components and its behavior is easily understandable and
predictable is known as Simplex system. Example the ball falling under the action of gravity
through air. Here, the system consists of only three things, air, ball and gravitational force.

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Lecturer Notes of Management Information System Department of BCA
A system which is made up of many components and its behavior are difficult to understand and
predict. Example a computer system, it is made up of many tiny elements and it is hard to
understand and predict its behavior.

D) Subsystem:
Any system that is part of a larger system or component system. Example transportation
(commercial airlines), communications (Internet), construction (home-building), etc.

E) Feedback Control:
All organizations exist as part of a larger system. Information systems are used to assist
management by providing feedback on the firm's performance. Feedback refers to the
outputs of a system that are transformed back into inputs in order to control the system's
operation. Information systems are used to compare the data on the actual performance
with the standards developed earlier. Based on the information about the discrepancies,
managers can formulate corrective actions, which are then fed back into the firm's
operations.

F) System Approach to Organization:

A systems approach to organizational learning is a key to evolving the capacity of
employees because it supports their understanding how they are a part of the current
unfolding story and how they can leverage a change.

G) Application of System Concepts

• A system modeling is generally a basic principle in engineering and in social
sciences.
• The system is the representation of the entities under concern.
• Hence inclusion to or exclusion from system context is dependent of the intention
of the modeler.
• No model of a system will include all features of the real system of concern, and
no model of a system must include all entities belonging to a real system of
concern.

The application of system concepts can be explained below:

1. Systems in information and computer science:
In computer science and information science, system is a software system which has components
as its structure and observable inter-process communications as its behavior. System can also be
used referring to a framework, be it software or hardware, designed to allow software programs
to run.

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Lecturer Notes of Management Information System Department of BCA
2. Systems in engineering and physics:
In engineering and physics, a physical system is the portion of the universe that is being
studied (of which a thermodynamic system is one major example). Engineering also has the
concept of a system that refers to all of the parts and interactions between parts of a complex
project. Systems engineering refers to the branch of engineering that studies how this type of
system should be planned, designed, implemented, built, and maintained.

3. Systems in social & cognitive sciences and management research:

Social and cognitive sciences recognize systems in human person models and in human
societies. They include human brain functions and human mental processes as well as
normative ethics systems and social/cultural behavioral patterns.
In management science, operations research and organizational development (OD), human
organizations are viewed as systems (conceptual systems) of interacting components such as
subsystems or system aggregates, which are carriers of numerous complex business
processes and organizational structures.

4. Pure logical systems:

There is also such a thing as a logical system. The most obvious example is the calculus
developed simultaneously by Leibniz and Isaac Newton. Logic has been applied to
categories such as Taxonomy, Ontology, Assessment and Hierarchies.

5. Systems applied to strategic thinking:

In 1988, military strategist, John A. Warden III introduced his Five Ring System model. The
Air Campaign contending that any complex system could be broken down into five
concentric rings. Each ring: Leadership, Processes, Infrastructure, Population and Action
Units could be used to isolate key elements of any system that needed change.

1.3. Information System:

A) Introduction:
• Information system is on organized combination of people, hardware, software,
communication networks and data resources that collects, stores, and process data as well
as delivers information, knowledge in an organization.
• An information system is any organized system for the collection, organization, storage
and communication of information.

B) Components /Resources of Information system:

An IS depends on following five essential components.

a) People resources b) software resources c) hardware resources

d) Network resources e) Database and warehouse resources

a) People resources: -
The success or failure of a system usually depends on whether users are satisfied with the
system’s output and operations. They are the users who uses the system normally, these are
two types of users available to use the system according to they have.

• IT specialist: system analyst, programmer and IT managers.

• End user: -

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Lecturer Notes of Management Information System Department of BCA
i) Internal users: - employee, customers, vendors, and others who interacts with IS.
ii) External user: - customer who track their orders or the company’s website, supplies
that use a customer system to plan their manufacturing schedules, Employees who log
on the company’s intranet from home to check their e-mail messages.

b) Hardware resources:
It is simply physical equipment that helps to process and store the required information of any
type of system. Examples of hardware in computer-based information system are:
• Computer system which consists of central processing units containing microprocessors
and a variety of interconnected peripheral devices. Example: handheld, laptop, midrange
computer systems and large mainframe computer systems.

• Computer peripherals which are devices such as a keyboard or electronic mouse for
input of data and commands a video screen or printer for output of information and
magnetic or optical disks for storage of data resources.

c) Network / Telecommunication resources:

It is the path through which signals from one device to another. Normally it consists of
communications media, communication processors, and network access and control software.
Telecommunications are used to connect, or network, computer systems and transmit
information. Network resources include:

• Communications media is including twisted pairs wire, coaxial and fiber optic
cables and microwave, cellular and satellite wireless technologies.
• Network infrastructure this generic category emphasizes that many hardware,
software and data technologies are needed to support the operation and use of a
communication network.

d) Data / Database:
Data are raw facts that are used by programs to produce useful information. Databases are
organized collections of interrelated data used by applications software. Databases are
managed by systems software known as database management systems (DBMS) and shared
by multiple applications.

• Database that hold processed and organized data.

• Knowledge bases the hold knowledge in variety of forms such as facts, rules, and
case.

e) Software resources:
It includes all set of information processing instructions. It includes not only the set of
operating instructions called programs.

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Lecturer Notes of Management Information System Department of BCA
Examples are

• System software such as an operating system program which controls and supports the
operations of computer system.
• Application software which are programs that direct processing for a particular use of
computers by end users. Example sales analysis program, a payroll program and a word
processing system.

A) Classification /Types of Information System:

The different types of IS are described Below:

1) Transaction Processing System (TPS):

• It is a system that is used to record day to day business transaction of
an organization is known as TPS. They are used by user at the
operational management level. The decision made by operation
manager are routine and highly structured.
• Example of TPS are Point of Sale System-Record daily sales
• Airline booking system-flights booking management

2) Office Automation System (OAS)/office IS:

• It refers to the varied computer machinery and software used to digitally create,
collect, store, manipulate, and relay office information needed for accomplishing
basic tasks.
• Raw data storage, electronic transfer, and the management of electronic business
information comprise the basic activities of an office automation system.
• This system gives the information about the office, enterprise, corporate and firm.
• It is always responsible for the providing the information to the known and
unknown user and employee.

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Lecturer Notes of Management Information System Department of BCA
3) Management Information System:
Small-business managers and owners rely on an industry-specific management
information system, or MIS, to get current and historical operational performance data,
such as sales and inventories data. Periodically, the MIS can create prescheduled reports,
which company management can use in strategic, tactical and operational planning and
operations. Example: Budget system, Sales Management system

4) Decision Support System (DSS):

• A decision-support system, or DSS, allows small-business managers and owners
to use predefined or ad hoc reports to support operations planning and problem-
resolution decisions. With DSS, users find answers to specific questions as a
means to evaluate the possible impact of a decision before it is implemented.
• The main objective of DSS is to provide solution to the problems that are unique
and changed frequently.

5) Integrated IS:
• It is a collection of information system that can be also called as package which is
the combination of the information system.
• It is responsible for the organization to help the integrated information for the
decision making and analysis.

Important Questions for Exam:

1) Define IS and Explain the different types of IS?
2) Differentiate between IS and IT? Discuss the role of IT in business
3) Information is key resource for business growth? Explain.

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