Ch2 Information technology

and systems

Study guide
Types of information technology and
information systems
Attributes of good quality information
How type of information and purposes differ
at different levels of an organisation
Sources of internal and external information
Features of information systems
* Choose suitable systems to meet a specific
business information requirement.

1 Information systems

Information is processed data that is

meaningful to the its user.
Organisation require different types of
information system to provide different
levels of information in different functional
areas.
Information is needed for the purpose of :

Planning
Controlling
Recording transactions
Performance measurement
Decision-making

Qualities of good information

ACCURATE:

Accurate: correct, assumptions stated

Complete: includes everything needed
Cost-beneficial
User-targeted: needs of user considered
Relevant: to the decision
Authoritative: from a reliable source
Timely: available when needed
Easy to use: clearly presented, not excessively
long, sent in appropriate way

Information in the organisation

Organisation require different types of

information system to provide different
levels of information in different functional
areas.
strategic
Tactical/management

Management
levels

knowledge

operational
Marketing Production

Finance Accounting

Functional area

HR

Information systems

Strategic information system

Tactical information system

Help middle managers in monitoring and

controlling

Knowledge information system

Help senior managers in long-term planning and

strategic decision-making

Help knowledge and data workers to perform

tasks and org. to integrate new knowledge

Operational information system

Help operational managers in tracking the dayto-day operational activities.

Information systems
Strategic:
more summarised,
more external information
Management
levels
Operational:
more detailed
Less external inf.
Functional areas

strategic

Time
horizon

Level of
detail

Degree of
certainty

frequency

long-term

summarised mainly uncertain

external

infrequent

tactical

source

.
.
.
.

operational immediate highly

detailed

internal certain

frequent

Types of information used at each level

Strategic

Tactical

Expected gov. policy; overall/divisional

profitability; competitor analysis; future market
prospects; cost of capital; total cash needs;
capital equipment requirement
Productivity measurement; budgetary control
report; variance analysis; stock turnover; labor
turnover

Operational

Employee hours worked; raw material input to

a production process; hours spent on each job;
stock level
*+p101 1.3.1 finance subsystem

Types of information system

Executive support systems(ESS) Strategic level

Management information systems(MIS) tactical
level
Decision-support systems(DSS)
Expert systems(ES)
Knowledge work systems(KWS)
knowledge
Office automation systems(OAS) level
Transaction processing systems(TPS) operational
level

Types of information system

Executive support system (ESS)

Pools data from internal and external sources

Provides information to senior managers
In an easy-to-use form

Features of ESS (EIS)

Flexibility
Quick response time
Sophisticated data analysis and modeling tools

*a system for total business modelling, monitors

internal and external envioronment.

MIS & DSS

Management information system(MIS)

Mainly internal information

Enable managers to report on existing operations and
make timely and effective decisions for planning and
controlling
Support structured decisions
Little analytical capability
Relatively inflexible

Decision support system (DSS)

Enable managers to solve highly uncertain problems

Support unstructured or semi-structured problems
More analytical power (basic statistics, models and tools)
Flexible and user-friendly

Expert system and KWS

Expert system (ES)

Computer program that captures human

expertise, allows users to benefit form expert
knowledge and may provide information to any
management level
E.g. process loan application; legal advice;
forecast of economic developments or of the
market and customer behaviour

Knowledge work system (KWS)

Facilitate the creation and integration of new

knowledge into an organisation.
E.g. CAD/CAM

OAS & TPS

Office automation system (OAS)

Support the major activities performed in a

typical office
E.g. word processing, E-mail

Transaction processing system (TPS)

Performs and records routine transactions

Used mainly by operational management
E.g. purchase ledger, sales ledger, payroll
system
Batch processing: at regular time interval; suitable
for internal, regular task
On-line processing: process immediately

System dependencies and integration

The ease of which data flows from one

system to another depends on the extent of
integration between systems.
ESS
MIS

OAS

DSS

TPS

Intranet, extranet and internet

Organisations are increasingly using intranet

and extranet to disseminate information

Intranet
Extranet

Internet can be used in :

Dissemination of information
Product/service development
Transaction processing
Relationship enhancement
Recruitment
entertainment

2 Sources of information

Internal information

Accounting records
Other internal sources

Payroll system; production department; staff

External information

Formal information

Gathered by tax specialists; legal experts; company

secretary; R&D department; marketing

Informal information

From newspapers, TV, trade press

Environment scanning

Process of gathering external information:

Government
Information bureaux
Consultants
Newspapers and magazines
Reference works
Libraries
Each others systems
Electronic sources

Data collection methods

Document reading methods

Magnetic ink character recognition
Optical mark reading
Scanners and optical character recognition
Bar coding and electronic point of sale
Electronic funds transfer at the point of sale
Magnetic stripe cards
Smart cards
Touch screens
Voice recognition

3 database systems

Database is a collection of structured data

which can be used by a wide variety of users
Database management system (DBMS) is
the software that builds, manages and
provides access to a database.
Features of a database
Should be shared
Should meet needs of different users
Should be able to evolve to meet future needs
* Database system is any system that utilises a
central pool of data.

Use of database

Create database structure

Enter and maintain data

Retrieval and manipulate data

Compatibility
Easy access
Support existing reporting
secure
Specify the required parameters
Sorted
Calculations

Produce reports: ease of reporting

Adv. and disadv. of database system

Advantages

Avoid unnecessary duplication of data

Serve the organisation as a whole
Encourage management to analyze data
Consistency
Greater flexibility
Easier to develop new application programs

Disadvantages

Data security and data privacy

Only one set of data
System failure will be widespread
High initial development costs
Training required

4 Information systems security

Protection of data from unauthorised

modification, disclosure or destruction
Protection of information systems from
degradation or failure
Ensure information is entered, kept and
processed reliably and accurately.
Measures to protect information and IS:

Security controls
Integrity controls
Contingency controls

P101 1.3.1
P104 table(1.10)
P105 table(1.12)
P 107 question
P114 quiz #5
Question bank: p561 #5,6
Pilot paper: p38 #21