ITAB LEC 2 types of system (Closed and

Open)
UNIT 1
Closed vs Open System
Information Systems
Closed-System that stand alone that
-People and orgs seek info specifically for
has no external connection, no inflow
making soynd decision making and problem
and no outflow to other systems
solving
(isolated)
Data vs Information
Open- interfaces and interacts with
-Data is the raw material in the production for oother systems
info
Benefits of Human-Computer
-Information is the output Synergy

5 Characteristics of useful information • The combination of strengths of

machine with human creates synergy.
RCACE
• Human-computer combinations
Relevant-information must pertain to the allows results of human thoughts to
problem at hand be translated into efficient processing
Complete-Partial information worse than no of large amounts of data.
info Information technology
Accurate-basta accurate pag hinde • A term that refers to all technologies
disastrous decisions daw that collectively facilitate
Current-latest info available construction and maintenance of
information system.
Economical-cost of obtaining said info
6 Components of Information System
What is a system?
DHSTPP
BIS (Business info system)
Data- Input to produce information
-System is an array of components that work
together to achieve a common or multiple Hardware- A computer and its
goals. peripheral equipment

Systems and subsystems Software- Set of instructions on how

to take in, process, display and how to store
• A system consists of subsystems – data and information.
components of a larger system – with
sub goals, all contributing to meeting Telecommunication- hardware and
the main goal. software that facilitates transmission in the
form of electronic data
• Subsystems can receive input from,
and transfer output to, other systems People- Information system
or subsystems. professionals and users
 Procedures- Rules to achieve optimal Management Information Systems-
and secure operations in data processing Information system for planning,
control, decision-making, and
4 stages of processing
problem solving.
Input-process-output-storage
On-Demand Output-

Reports or the output part of

Input and Transaction Recording Managerial Information System

• 1st step in producing information is Group Decision Support Systems

collecting and introducing data into (GDSS/DSS)- It takes the optimal
the IS, known as input. course of actions, gather detailed
data and information to help
• Most data an organization uses as middle/senior managers make
input are generated and collected decisions.
within the organization
Executive Information
Processing Systems/Executive Support System
• The computer’s speed and accuracy (EIS/ESS)- To help high ranking
let organizations process millions of officers/executives direct an
pieces of data in several seconds; in organization to focus on long range
the past, such quantities of data strategic plan.
could not have been processed
quickly enough to be meaningful.
Executive Information
Output Systems/Executive Support System
• Output is the information an (EIS/ESS)- To help high ranking
Information system produces and officers/executives direct an
displays in the format most useful to organization to focus on long range
an organization. strategic plan.

Storage Expert Systems-Incorporation of

human expertise to a computer
• One of the greatest benefits of using system that emulates our decision
computers is their ability to store a making. - AI
vast amounts of data and information.
(Internal and External) Geographic Information System-A
database that contains data about
Different types of Information System (IS) part of a city, a country, a state, orb
• Transaction processing system- even the entire world. (Google Maps,
predominant function is to record Waze, and other uses especially for
data collected at the boundaries of agriculture)
organizations, in other words, at the
point where the organization
transacts business with other parties.
(ATM, POS, etc..)
Information Systems in Functional Human Resources
Business Areas

Accounting-
Human resource management systems help
In accounting, information systems help mainly in record keeping and employee
record business transactions, produce evaluation.
periodic financial statements, and create
Every organization must maintain accurate
reports required by law, such as balance
employee records. Human resource
sheets and profit-and-loss statements. They
management
also help create reports that may not be
required by law but help managers systems maintain such records, including
understand changes in an organization’s employees’ pictures, employee status and tax
finances. Accounting ISs contain controls to
ascertain adherence to standards, such as information, and other data that other
systems such as payroll may use.
double entry.

Other Information Systems in Different

Finance
Business Sectors
While accounting systems focus on recording
and reporting financial changes and states, • Manufacturing
the purpose of financial systems is to • Service
facilitate financial planning and business • New Business
transactions. In finance, information systems • Government
help organize budgets, manage cash flow,
E-Commerce
analyze investments, and make decisions
that could reduce interest payments and The intersection of IT and business is
increase revenues from financial electronic commerce.
transactions.
In the early years, e-commerce is restricted
Marketing only to business-to-business activities
because of the large distances operation and
Marketing’s purpose is to pinpoint the people
causes a lot of money in using private/third
what they’re most likely to purchase of what party networks.
the organization sells and to promote the
appropriate products and services to those The Internet spawned huge surge in business-
people. The system identify trends in the to-business and business-to-customer
demand for the company’s products and electronic trade, now every individual and
services small businesses can afford to use a network
for business.

The Internet is a vast network of computers

connected across the globe that can share

both information and processing. The Web is

capable of displaying text but also
graphics, sounds, and moving images. The Initiative #1: Reduce Cost
Web has enticed thousands of businesses to
• Reduce costs to lower price
become involved in commercial, social, and
• Using of Web to automate customer
education initiatives.
service

Unit 2
Initiative #2: Raise Barriers to Entrants
Strategy – Strategic Advantage
• Less competition is better
• Plan to gain advantage over enemy.
• Obtain copyrights and patents on
• Business strategy is a plan to invention, techniques and services
outperform competitors.
Initiative #3: Establish High Switching
• By creating new opportunities. Costs

• Using strategy to maximize its • Explicit – Charge customer for

strengths, resulting in a competitive switching (early termination of
advantage. contract)

Why Strategic IT • Implicit – Indirect costs over period of

time, such as implementation of new
• Technology is no longer an
product that does the same job as the
afterthought in forming business
old.
strategy, but the actual cause and
driver. Initiative #4: Create New Products and
Services
• IT can change the way businesses
compete. • Having unique product or services

Strategic View of IS • First mover – organization that is first

to offer a new product or service
• Information systems are vital
competitive network. Initiative #4: Create new Products and
Services- Self explanatory
• Information systems are a means of
organization renewal. Initiative #5: Differentiate Products and
Services
• IS are necessary investment in
technologies that help a • Persuading customers that your
company adopt strategies and product is better than competitors’.
business processes that can
• Advertising
reinvent itself in order to
survive and succeed in today’s • Develop new IT features to
dynamic business differentiate product/service
environment.
Initiative #6: Enhance Products or Services
Achieving Competitive Advantage
 • Enhance existing products or services
to increase value to customer.

Initiative #7: Establish Alliances

• Two or more organization combining

services

Initiative #8: Lock in Suppliers

Steps involved in SIS planning
or Buyers

• Organizations can achieve ACTIVITY

competitive advantage if they are
STEPS
powerful enough to lock either
suppliers into their mode of operation
or buyers to their product 1 Presents potential
strategic moves
• Accomplished by bargaining power

Competitive Weapon 2 Brainstorm different

strategic moves
• The intention is to improve mundane
operations using IT yielded a system 3 Select the most
with strategic qualities. attractive one
• SIS embodies two types of ideas
4 Brainstorm ways to
• Potentially-winning business
support the selected
move move with IT
• How to harness IT to
implement that move 5 Evaluate the
feasibility of an SIS to
• SIS conditions
support the move
• Must be serving an
organizational goal 6 List the general
functions the SIS will
• The unit must be working with
fulfill
the managers of the other
functional units
7 List the major feature
Creating an SIS of the SIS

• Top management must be involved

from initial consideration through
development and implementation Reengineering and Organizational Change

• SIS must be a part of the overall • To implement an SIS and achieve a

organizational strategic plan competitive advantage, organization
 must rethink the entire way in which it • No experience from which to
operates. learn

• Goal of re-engineering is to achieve • No guarantee technology will

efficiency leaps of 100 percent or work or customers and
even higher. employees will welcome it

Competitive Advantage as Moving Unit 3

Target
Effectiveness and Efficiency of IS
• SISs developed as strategic
EFFECTIVENESS
advantages quickly become standard
business. defines the degree to which a goal is
achieved. Thus, a system is more or less
• Banking industry (ATMs and
effective depending upon:
banking by phone)
(1) how much of its goal it achieves and;
• Companies must continuously
contemplate new ways of utilizing (2) the degree to which it achieves better
information technology to their outcomes than other systems do.
advantage.
EFFICIENCY
• Airlines’ reservation system
• is determined by the relationship
Success and Failure on the Web between resources expended and the
benefits gained in achieving a goal.
• Just being first on the Web is not
enough to be successful; business Information Technology
ideas must be sound.
AFEMicMas
• An organization must carefully
define what buyers want. Accounting- track every financial
transaction within a company, from dollar
• Establishing a recognizable to multimillion dollar purchases, from
brand name is important but salaries to benefits, to sales of every item.
does not guarantee success;
satisfying needs is more Finance-
important. 1. collecting payables as soon as
The Bleeding Edge possible
2. making payments at the latest time
• Business owners must develop new allowed by contract or law
features to keep the system on the 3. ensuring that sufficient funds are
leading edge. available for day-to-day operations
• Adopting a new technology involves
great risk.
 4. taking advantage of opportunities to
accrue the highest yield on funds not
used for current activities
• Cash Management-
A Systems that deal specifically with
cash are often called cash
management systems (CMSs).

One common use for a CMS is to execute

cash transactions in which financial
institutions transfer huge amounts of money
using electronic funds transfer (EFT). EFT is
the electronic transfer of cash from an
account in one bank to an account in another
bank

• Investment Analysis

Every investors goal is to buy an asset and

later sell it for more than it cost. When Marketing and Sales
investing in securities, such as stocks and
bonds, it is important to know the prices of -Market Research system help to
securities in real time, that is, “right now”. find the population and regions that
are most likely to purchase a new
product or service. They also help
Engineering- IT’s greatest contribution to analyze how a new product fares in its
engineering is in the area of computer aided first several months on the market.
design (CAD) and rapid prototyping (creating -The principle of targeted marketing
one of a kind products to test design in three is to define the prospective customer
dimensions). as accurately as possible and then to
direct promotional content only to
those people most likely to purchase
Manufacturing and Inventory Control your product.

Computer telephony integration (CTI)

is a technique allowing computer to
use the digital signal coming through
a telephone line as input in a
computer system. It has been used
often in marketing, sales, and
customer service.
 Sales Force Automation can more accurate name is enterprise
increase sales productivity applications, but ERP is their more
significantly, making sales popular name.
presentations more efficient.
Groupware and Collaborative Work
To better serve customer and learn of
When people work together, either to provide
their changing needs, companies use
a service or create a product, they often do so
customer relationship management
in sequence: one person provides his or her
(CRM).
input to the project, then passes it along to
Human Resources other person, who does the same, and so on
along the chain. A series of such repeated
• HR Management has become more
activities is called work cycle , or simply
complex due to the fast growth in
cycle.
specialized occupations, the need to
train and promote highly skilled Work cycles may take a long time to
employees, and the growing variety of complete.
benefits programs.
Document Control
• HR management can be classified
Quality Manager document control
into five activities:
module allows companies to automate and
1. Employee Record manage internal and external document.
Management
Collaborative Projects
2. Promotion and Recruitment
• Managing a project– especially a large
3. Training one involving many organizational
units– and keeping on track requires
4. Evaluation
enormous effort.
5. Compensation and Benefits
Brainstorming
Management
In business, brainstorming refers to the
Enterprise Resource Planning
process of a group of colleagues meeting and
• Many corporations have opted to working collaboratively to generate creative
replace their disparate ISs with a solution and new ideas.
single integrated systems. Rather
than using an IS, or several ISs, in
each business function, all business UNIT IV
functions are served by one system
Digital data can be stored in variety of ways
that supports different activities for
on different
different departments. Such systems
are often called enterprise resource types of media. They can be stored in what we
planning (ERP) systems. Although call the traditional file format, in which the
these systems do help in planning, different pieces of information are not labeled
their main focus is to help run the and categorized but are stored as continuous
different functions, therefore, their string of bytes.
By contrast, the database format, in which A DBMS, however, does much of this work
each piece of data is labeled or categorized, and a lot of other work for you.
provides a much more powerful information
Queries Data are accessed in a database by
management tool. Data in this format can be
sending message called queries, which
easily accessed and manipulated in almost
request data from specific fields and direct
any way desired to create useful information
the computer to display the results on the
and optimize productivity.
monitor. Queries are entered to manipulate
We can roughly distinguish between different data.
approaches to maintaining data: traditional
Security the use of database raises security
file approach—which has no mechanism for
and privacy issues. Restricting access is
tagging, retrieving, and manipulating data—
easily dealt with by customizing menus for
and the database approach, which does have
different users and requiring users to enter
that mechanism.
codes that limit access to certain fields or
Traditional file approach: low data integrity. records.

Data Dependency- sequential file storage

Data Redundancy- It is the existence of the

same data in more than one place in a
database.

In the database approach, we maintain and

manipulate data about entities.

An entity is any object about which an

organization chooses to collect data.

The smallest piece of data is a character (a

letter in a first or last name or address).
A database model is the general logical
A field is one piece of information about an
structure in which records are stored
entity, such as last name or first name of
student. Several fields related to the same within a database. There are three different
entity make up a record. A collection of database model.
related records is called a file.
They differ in the manner in which records are
While a database itself is a collection of linked to each other. These differences , in
several related files, the program used to turn, dictate the manner in which a user can
build databases, populate them with data, navigate the database and retrieve desired
and manipulate the records.

data is called a database management

systems (DBMS). The files themselves are the
database, but DBMSs do all the work—
structing files, storing data, and linking
records.
 THE OBJECT-ORIENTED STRUCTURE

In object-oriented- technology, an object

consists of both data and the procedures that
manipulate the data. The ability in object-
oriented structures to automatically creates a
new object by replicating all or some of the
characteristics of a previously developed
object (called the parent object) is called
inheritance.

Hierarchical Model follows the pattern of an ENTITY-RELATIONSHIP DIAGRAMS (ERD)

upside-down tree and is sometimes referred
An ER diagram is a graphical representation
to as the tree model. (1:1)
of all entity relationship, and they are often
Network Model has the ability to store a consulted to determine a problem with a
record only once in the entire database. query or to implement changes.
Network model would allow the same record
to be linked to more than one parent. (M:M)

Relational Model has all the advantages of a

network database without the complications.
The relational model consist of tables.
Retrieving a desired records is easy.

KEYS COMPONENTS OF DATABASE MANAGEMENT

SYSTEMS

While DBMSs have different interfaces, they

A key is a fields whose values identify records
share similar components.
either for display or for pprocessing. U may
use any field as a key. Schema When building a new database,
users must first build a schema
Primary key the only way to be sure you are
retrieving the desired record is to use a (from the Greek word “plan”). The schema
unique key. A unique key is called primary key. describes the structure of database being
designed:
Linking to link records from one table with
records of another table must have one field Types of Data fields can hold different types
in common. We say that this repeated field is of data: numeric, alphanumeric, graphic or
a primary in one table, and a foreign key field time related.
in the other table.
Building a Database Once the schema is
complete, users may start entering values in
the tables.

Data Dictionary contains the notation of who

is responsible for updating
each part of the database and descriptions or RELATIONAL OPERATIONS
names of the people who are authorized to
access the different parts of database
Data Manipulation Relational operations
Data dictionaries are often referred to as
allow the user to manipulate data. There are
“metadata”, meaning “data about the data”.
several types of data manipulation.
They are useful when trying to understand a
database designed by someone else.

Data Definition Language (DDL) – This Select is the selection of records that meet
language has various commands and certain conditions.
protocols the database designer uses to
define and name the files, records, and fields
in a database before beginning to populate Project is the selection of certain columns
them. from a table, such as the salaries of all the
employees.

These interfaces are intuitive and allow a

database to be created by someone who may Join the joining of data from multiple tables.
have relatively little development experience. The join operation is a powerful manipulation
In other DBMSs, the user must know the that can create very useful reports for
commands used in the DDL to construct the
schema. Structured Query Language (SQL) – has
become the DDL and DML choice for many
Data Manipulation Language (DML) – is the developers of relational DBMSs. SQL is an
software that serves the users who is international standard and is provided with
querying the database. Some DBMSs hide the the most relational database management
DML from the user. Instead of statements, the programs.
user express a query by example

(QBE).

Database architecture Refers to both the

physical and logical layouts of databases in
organization.
Distributed Database Clients list and Profiles. Usually, individual
users have access to these databases
Many organization operate through
geographically remote sites. The only for the purpose of inserting or updating
their own records.
organization can use a centrally located
database and let the other sites use it WEB DATABASE

through communications lines. Points to Consider

There are two distributed database models: When linking a database to the Internet, IT
professionals must consider several Points
Replicated-each computer holds a copy of
the entire database • Which application to use
• How to ensure that online access by
Fragmented-each computer holds only one
Web surfers does not interfere with
the part of the database that is most
• database updates
frequently accessed by the local users.
• How to maintain security
Shared Resource and Client/Server Systems
The increasing power of microcomputers and
the great progress and declining cost of data
communications are driving organizations to
move to what we called client/server
architecture.

WEB DATABASE While a data warehouse combines data from

database across an entire organization,
Database on the web is used in several ways:
organization also use data marts, smaller
Catalog allow browsers to search items by collections of data that focus on a particular
keywords or combination of keywords. subject or department.
Libraries of books, articles, CDs, and movie
clips. Most of these database are not owned
by the school but are operate by organizations If business maintains a data warehouse that
that specialize in library consist of several data marts, they are called
department data marts.
Database. Directories which can include
names, address, telephone numbers, and
email-address.
From Database to Data Warehouse Phases in Building a Data Warehouse

Unlike data warehouse, transactional

database are usually no suitable for business
Several phases are involved in building a data
analysis because they contain current, not
warehouse from transactional data:
historical, data. The same data are often
stored differently and under other names. chiefly, the extraction, cleansing, and loading
phases.

Extraction phase, the builders creates the

They are often incompatible with computer-
files from transactional database and save
based decision aids such as decision support
them on the server that will hold the data
systems and executive support systems.
warehouse.
When management decides to build a data
warehouse, the IT staff must carefully
consider the hardware, software, and data
involved in the effort. Cleansing phase, the builders modify the
data into a form that allows insertion into the
Hardware data warehouse.
The larger the data warehouse, the larger the
storage capacity, the greater the
Loading phase, the builders transfer the
memory, and the greater processing power of cleansed files to the database that will serve
the computer is needed. as the data warehouse.
The computer memory must be large enough Data mining is the process of selecting,
to allow processing of huge amounts of data exploring, and modeling large amounts of
at once. data to discover previously unknown
relationships.
Data and Software

To analyze the data in data warehouses,

Data warehouse designers create metadata,
organizations can use Online analytical
that is, data about data, including:
processing (OLAP) applications.

• The source of data, including contact

Data mining is an especially powerful tool in
information.
an environment in which business are shifting
• Tables that are related to the data.
from mass-marketing a product to targeting
• Field and index information, such as
the individual consumer with a variety of
the size and type of the field.
products that are likely to satisfy him or her.
• Programs and processes that use the Some observers call this approach
data. “marketing to one.”
• Population rules: what is inserted, or
updated, and how often.
Knowledge Management is the combination
of activities involved in gathering, organizing,
sharing, analyzing, and disseminating
knowledge to improve an organizations
performance.

Knowledge is usually perceived as “know-

how”, which is usually accumulated through
experience combined with accumulating
certain information or, at least, knowing
where the information can be found.