MANAGING INFORMATION SYSTEM

LESSON 2: SYSTEM FRAMEWORK

systems are very much coupled that is brought together very close, the degree of independence for each subsystem is dramatically reduced and flexibility is affected. When two subsystems are de-coupled, adequate independence and flexibility can be acquired, however the coordination is made difficult and complex. Coupling and de-coupling of subsystems have their own advantages and limitations. Business organizations-have to make decisions about coupling and decoupling considering the advantages and disadvantages at time after making trade-offs. Considerable interaction and information interchange takes place between the systems and subsystems within an enterprise wide business system. These interfaces are not only complex but also involve duplication. Information flows within the organization between several systems and subsystems over numerous information paths. Proper management of such interfaces has a direct bearing on effectiveness and efficiency of the enterprise wide business system. The task or synchronization and coordination between different subsystems of the business system do not remain simple in the complex business organization that operates in ever changing market environment. There are constant changes in the environment to which the business system is expected to react. The business organization is spread over in different geographic locations and involves personnel who come from different backgrounds, education and experience, value standards and aspirations. Now you must have realized that why the business system is so complex in nature. Lets recall the points covered in complexity of business system before proceeding further
One subsystem is a part of more than one system Several systems have to operate in synchronization and

Objective
The objectives of this lesson is to give you an Insight into:
The meaning of information and the types of information The need of Information System The various types of Information Systems Available.

Introduction
Before beginning with Information System, directly lets pick up two systems namely: Business and Computers and talk about the details of the components of systems and their subsystems they possess. With that I will try to discuss with you the various issues involved in these systems. In other words, lets apply the knowledge we have gained in the previous chapter to evaluate these system first. These cases will help us to better understand the Information System, which is our further topic of discussion in this chapter.

Case 1 Business Organization A System

It wouldnt be wrong to say that a Business organization can be considered as a system. Since a system is a collective entity consisting of a group of elements that are interdependent, interrelated and interacting. The business system consists of different subsystems such as marketing, materials, manufacturing, finance, personnel and so on. Each of these subsystems can be considered as systems themselves. These systems in turn have their own subsystems. What makes the business system so complex or why we should we study business as a study? This is a billion dollar question! The reason is that in business systems, it is not essential that a subsystem is a component of one system only. There are certain subsystems, which are components of more than one system. For example, Accounts receivable is a subsystem of finance system. At the same time Accounts receivables is also a subsystem of sales system, which in turn is a subsystem of marketing system. Production planning is another example of a subsystem that forms part of more than one system. Production planning is subsystem of Production System as well as Material System. The manufacturing resource planning system has subsystems drawn from several other systems such as marketing, materials, manufacturing, accounting etc. Let me explain you this with a pictorial representation. Further, in order to be effective, several systems have to operate in synchronization and coordination. Many systems and subsystems need to be coupled in order to ensure that coordination is maintained. Loss of coordination can result in total mess up and would put the system in a state of confusion, thereby increasing the pressure in working. When two sub-

maintaining this synchronization and coordination makes business system complex

The coupling and de-coupling both have advantage and

disadvantage
The interaction and information interchange sometimes

involve duplication of information

Business organizations are spread over in different

geographic locations To conclude it finally we can state that if the business system is broken down into logical subsystems, it helps in better understanding of the business system. This exercise of breaking down a system into subsystem could be continued in different levels until each of the subsystem or module is easy to understand.

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MANAGING

Case 2 - Computer system A system

In modern business organizations it is common to find a blend of systems that are operated manually and those which are computer based systems. The degree and extent of computer usage depends on a variety of factors including economics of operations, cost of data processing, organization culture, and complexity of technological aspects of manufacturing, critical success factors of the organization, the sales turnover, market forces and competitive market. To accomplish the goal, a computer based system makes use of a variety of system elements.
Software Hardware People Database Documentation Procedures

Information System Framework

A framework implements the basics which glue our information system. The benefit is that the time to design and develop and deploying a complex application is less than of implementing everything our self. Frameworks are actually the complete information required to start building any information system. This information has to be collected from different sources. Thus the information system framework provides a platform from which an organization gets all the information required by it for its functioning. At this stage it might be useful to list the usage of information in an organization,
Planning and decision making Controlling Recording transactions Performance measurement.

INFORMATION SYSTEM

The elements combine in a variety of ways to transform information. For example a marketing dept transforms raw sales data into a profile of the typical purchaser of a product; a robot transforms a command file containing specific instructions into a set of control signals that cause some specific physical action. Creating an information system to assist the marketing department and control software to support the robot both require system engineering.

However since information system framework is an important activity there must exist certain parameters which may affect the value of information in an organization. These parameters are,
Completeness Accuracy Timeliness Consistency Validity unbiased, representative and verifiable Appropriateness Uniqueness Relevance.

Information System
Information is collection of facts from which conclusion may be drawn. In computer terminology we can call it as ,
Processed Stored, and Transmitted data.

Need for Information Systems

Information is said to be the life blood of an organization owing to its importance. By information we also mean data that has been shaped into a form that is meaningful and useful to human beings. Data, in contrasts are streams of raw facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use.

Definition
Information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store and distribute information to support decision making and control in an organization. An information system helps users to collect the data, process that data to maintain information and distribute this information. Such information can be used for decision making and also for controlling the organization in a proper manner. In addition to supporting decision-making, coordination and control, information system also helps managers and workers analyze problems, visualize complex subjects and create new products.

Until 1980s, managers generally did not need to know much about how information was collected processed and distributed in their organizations and the technology involved was also minimal. Information itself was not considered an important asset for the firm. But today few can afford to ignore how information was handled by their organization. The reasons for this change can be summed up as below,
Globalization Management and control in a global market place. Competition in world markets Global work groups Global delivery systems Transformation of industrial economies

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MANAGING INFORMATION SYSTEM

Knowledge and information based economies Productivity New products and services Leadership Time-based competition Shorter product life Turbulent environment Limited employee knowledge base

MIS answers the questions that are well known in advance and based on which reports were produced. These systems are not very flexible and have analytical capability. MIS are generally report oriented and are designed to report on existing operations. So they help to provide day-day control of operations.
Decision Support Systems

Transformation of the enterprise

Flattening Decentralization Flexibility Location independence Low transaction and coordination cost Empowerment Collaborative and team work.

Managers often need to select one course of action from many alternatives. Because managers have neither the time nor the resources to study and absorb long, detailed reports of date and information organizations started to build information systems specifically designed to help managers make decisions. These systems are called decision support systems (DSSs). DSS uses TPS and MIS to get the internal information to make any decision. Even it can bring information from external sources like stock exchange, specific websites etc. DSS use sophisticated analysis and modeling tool. DSS provides support for decisions and problems that cannot be specified in advance.
Executive Information System

Types of Information systems There are different types of information systems for different types of organizations, for different functions within organization for different business needs and at different management levels of organization. Information systems may be basically grouped into 5 types serving different levels of organization. These are,
Transaction processing system Management information systems Decision support system Executive information system Expert

Executive information systems are specific types of DSSs, serving the highest level of decision making that is the executives. Executive Information System serves the strategic level of organization that is the most knowledge intensive decision-making processes. It main feature is the user interface it provides. EIS employ the most advanced graphics software. It can even let executives to view data in terms of graphs and pictures for taking proper decision.
Expert Systems

systems

Better if we take it one by one.

Transaction Processing Systems

The earliest, electronic information system in business consisted of computers and programs used to record and report, transactions. Called transaction processing systems, or TPSs, they are the oldest widely used information systems. TPSs predominant function is to record data collected at the boundaries of Organization, in other words, at the point where the organization transacts business with other parties. They are the basic business system that serves the operational level of the organization. It is a computerized system that performs and records the daily routine transactions necessary to the conduct of the business. For example sales order entry, hotel reservation, payroll, employee record keeping etc.
Management Information System

Powerful decision-making tools, DSSs and EIS only include quantitative formulae, or models, that process data. Often however, managers or other workers may need expertise to make certain decisions, not just formulae. In the past, only human experts in a specific line of work could provide advice to decision makers. Now, ISs can be developed such that they incorporate human expertise. These systems are called expert systems.

MIS serves the management level of the organization. It provides managers with reports, organizations data, performance and historical details. MIS summarizes and reports on the basic operations done by the company. The basic transactions are mainly given by TPS. MIS is basically for the managers involved in weekly, monthly or yearly activities of the organization rather than the daily activities.

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