meaning, types, impotrance, merits and demerits of Info System

1. INFORMATION SYSTEM &
BUSINESS
BY-S Bhardwaj
by:S.Bhardwaj

2. What Is an Information System?
• Many organizations work with large amounts
of data. Data are basic values or facts and are
organized in a database. Many people think of
data as synonymous with information; however,
information actually consists of data that has been
organized to help answers questions and to solve
problems. An information system is defined as
the software that helps organize and analyze data.
So, the purpose of an information system is to
turn raw data into useful information that can be
used for decision making in an organization.
by:S.Bhardwaj

3. General Purpose vs. Specialized
Information Systems
• There are some general types of information systems. For example, a database
management system (DBMS) is a combination of software and data that
makes it possible to organize and analyze data. DBMS software is typically not
designed to work with a specific organization or a specific type of analysis.
Rather, it is a general-purpose information system. Another example is
an electronic spreadsheet. This is a tool for basic data analysis based on
formulas that define relationships among the data. For example, you can use a
spreadsheet to calculate averages for a set of values or to plot the trend of a
value over time.
• In contrast, there are a number of specialized information systems that have
been specifically designed to support a particular process within an
organization or to carry out very specific analysis tasks. For
example,enterprise resource planning (ERP) is an information system used
to integrate the management of all internal and external information across an
entire organization. Another example is a geographic information system
(GIS), which is used to manage and analyze all types of geographical
data. Expert systems are another example of information systems. An experts
system is designed to solve complex problems by following the reasoning of an
expert.
by:S.Bhardwaj

4. Components of Information Systems
While information systems may differ in how they are used within an
organization, they typically contain the following components:
1. Hardware: Computer-based information systems use computer
hardware, such as processors, monitors, keyboard and printers.
2. Software: These are the programs used to organize, process and
analyze data.
3. Databases: Information systems work with data, organized into
tables and files.
4. Network: different elements need to be connected to each other,
especially if many different people in an organization use the same
information system.
5. Procedures: These describe how specific data are processed and
analyzed in order to get the answers for which the information
system is designed.
by:S.Bhardwaj

5. Types of Information Systems in a
Business Organization
by:S.Bhardwaj

6. 1. Transaction Processing System:
A small business processes transactions that result
from day-to-day business operations, such as the
creation of paychecks and purchase orders, using a
transaction processing system, or TPS. The TPS,
unlike a batch system, requires that users interact
with the system in real time to direct the system to
collect, store, retrieve and modify data. A user enters
transaction data by means of a terminal, and the
system immediately stores the data in a database
and produces any required output. For example, a
small-business owner may direct a bank system to
debit a savings account for $500 and credit the
company's checking account for $500. Because of
constant system updates, a user can access current
TPS data, such as an account balance, at any point.
by:S.Bhardwaj

7. 2. 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. For
example, an MIS report may be a pie chart that illustrates
product sales volume by territory or a graph that illustrates the
percentage increase or decrease in a product's sales over time.
Small-business managers and owners also rely on the MIS to
conduct “what-if” ad hoc analyses. For example, a manager
might use the system to determine the potential effect on
shipping schedules if monthly sales doubled.
by:S.Bhardwaj

8. 3. Decision Support System
• 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 answers to queries
may take the form of a data summary report, such as a
product revenue by quarter sales report. To conduct an
analysis, business owners and managers use an interface -- a
dashboard -- to select a particular graphic representation of
a key performance indicator that measures the progress
toward meeting a specific goal. For example, a
manufacturing dashboard might display a graphic
representing the number of products manufactured on a
particular line.
by:S.Bhardwaj

9. 4. Executive Support System
• The executive support system, or ESS, contains predefined
reports that help small-business owners and managers
identify long-term trends in support of strategic planning
and nonroutine decision making. System users click on any
icon displayed on the ESS screen and enter report criteria to
view individual predefined reports and graphs, which are
based on companywide and functional department data,
such as sales, scheduling and cost accounting. The ESS
reports brief the business manager or owner on an issue,
such as market trends and buyer preferences.The ESS
system also offers analysis tools used to predict outcomes,
assess performance and calculate statistics based on existing
data.
by:S.Bhardwaj

10. Although the pyramid model remains useful, since it
was first formulated a number of new technologies have
been developed and new categories of information
systems have emerged, some of which no longer fit easily
into the original pyramid model. Some examples of such
systems are:
• data warehouses
• enterprise resource planning
• enterprise systems
• expert systems
• search engines
• geographic information system
• global information system
• office automation.
by:S.Bhardwaj

11. Data warehouse
In computing, a data warehouse (DW or DWH), also known as an
enterprise data warehouse (EDW), is a system used for
reporting and data analysis, and is considered a core component
of business intelligence. DWs are central repositories of
integrated data from one or more disparate sources. They store
current and historical data in one single place and are used for
creating analytical reports for knowledge workers throughout
the enterprise. Examples of reports could range from annual and
quarterly comparisons and trends to detailed daily sales analysis.
The data stored in the warehouse is uploaded from the
operational systems (such as marketing or sales). The data may
pass through an operational data store and may require data
cleansing for additional operations to ensure data quality before
it is used in the DW for reporting.
by:S.Bhardwaj

12. Enterprise resource planning
Enterprise resource planning (ERP) is the integrated management of
core business processes, often in real-time and mediated by software
and technology. These business activities can include:
Product planning, purchase, production planning, manufacturing
or service delivery, marketing and sales, materials management,
inventory management, shipping and payment, & finance
ERP is usually referred to as category of business-management
software—typically a suite of integrated applications—that an
organization can use to collect, store, manage and interpret data from
these many business activities.
ERP provides an integrated and continuously updated view of core
business processes using common databases maintained by a database
management system. ERP systems track business resources—cash, raw
materials, production capacity—and the status of business
commitments: orders, purchase orders, and payroll.
by:S.Bhardwaj

13. The applications that make up the system share data
across various departments (manufacturing, purchasing, sales,
accounting, etc.) that provide the data. ERP facilitates
information flow between all business functions and manages
connections to outside stakeholders.
Enterprise system software is a multibillion-dollar
industry that produces components supporting a variety of
business functions. IT investments have become the largest
category of capital expenditure in United States-based
businesses over the past[which?]decade. Though early ERP
systems focused on large enterprises, smaller enterprises
increasingly use ERP systems.. The ERP system integrates varied
organizational systems and facilitates error-free transactions and
production, thereby enhancing the organization's efficiency.
However, developing an ERP system differs from traditional
system development. ERP systems run on a variety of computer
hardware and network configurations, typically using a database
as an information repository.
by:S.Bhardwaj

14. Enterprise system
Enterprise systems (ES) are large-scale application software packages that
support business processes, information flows, reporting, and data analytics in
complex organizations. While ES are generally packaged enterprise application
software (PEAS) systems they can also be bespoke, custom developed systems
created to support a specific organization's needs.
Types of enterprise systems include:
• enterprise resources planning (ERP) systems,
• enterprise planning systems, and
• customer relationship management software.
Although data warehousing or business intelligence systems are enterprise-wide
packaged application software often sold by ES vendors, since they do not directly
support execution of business processes, they are often excluded from the term.
Enterprise systems are built on software platforms, such as SAP’s NetWeaver and
Oracle's Fusion, and databases. From a hardware perspective, enterprise systems
are the servers, storage and associated software that large businesses use as the
foundation for their IT infrastructure. These systems are designed to manage large
volumes of critical data. These systems are typically designed to provide high
levels of transaction performance and data security.
by:S.Bhardwaj

15. Expert system
• In artificial intelligence, an expert system is a computer system
that emulates the decision-making ability of a human expert.
Expert systems are designed to solve complex problems by
reasoning about knowledge, represented mainly as if–then rules
rather than through conventional procedural code. The first expert
systems were created in the 1970s and then proliferated in the
1980s. Expert systems were among the first truly successful forms
of artificial intelligence (AI) software.
• An expert system is divided into two subsystems: the inference
engine and the knowledge base. The knowledge base represents
facts and rules. The inference engine applies the rules to the
known facts to deduce new facts. Inference engines can also
include explanation and debugging abilities.
by:S.Bhardwaj

16. Web search engine
• A web search engine is a software system that is
designed to search for information on the World Wide
Web. The search results are generally presented in a
line of results often referred to as search engine results
pages (SERPs). The information may be a mix of web
pages, images, and other types of files. Some search
engines also mine data available in databases or open
directories. Unlike web directories, which are
maintained only by human editors, search engines also
maintain real-time information by running an
algorithm on a web crawler.
by:S.Bhardwaj

17. Geographic information system
• A geographic information system (or GIS) is a system designed to capture,
store, manipulate, analyze, manage, and present spatial or geographic data. The
term GIS is sometimes used for geographic information science (GIScience) to
refer to the academic discipline that studies geographic information systems
and is a large domain within the broader academic discipline of geoinformatics.
What goes beyond a GIS is a spatial data infrastructure, a concept that has no
such restrictive boundaries.
• In general, the term describes any information system that integrates, stores,
edits, analyzes, shares, and displays geographic information. GIS
applications are tools that allow users to create interactive queries (user-created
searches), analyze spatial information, edit data in maps, and present the results
of all these operations. Geographic information science is the science
underlying geographic concepts, applications, and systems.
by:S.Bhardwaj

18. Global information system
There are a variety of definitions and understandings of a global information
system (GIS, GLIS), such as
A global information system (GIS) is an information system
which is developed and / or used in a global context.
A global information system (GIS) is any information system
which attempts to deliver the totality of measurable data worldwide
within a defined context.
Common to this class of information systems is that the context is a
global setting, either for its use or development process. This means that it
highly relates to distributed systems / distributed computing where the
distribution is global. The term also incorporates aspects of global software
development and there outsourcing (when the outsourcing locations are
globally distributed) and offshoring aspects. A specific aspect of global
information systems is the case (domain) of global software development. A
main research aspect in this field concerns the coordination of and
collaboration between virtual teams.[3][4] Further important aspects are the
internationalization and language localization of system components.
by:S.Bhardwaj

19. Office automation
Office automation 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. Office automation helps in optimizing or automating existing
office procedures.
The backbone of office automation is a LAN, which allows
users to transfer data, mail and even voice across the network. All
office functions, including dictation, typing, filing, copying, fax, Telex,
microfilm and records management, telephone and telephone
switchboard operations, fall into this category. Office automation was a
popular term in the 1970s and 1980s as the desktop computer exploded
onto the scene.
by:S.Bhardwaj

20. Importance of information
systems in business
• Information systems are important as they help
ensure :
– regulatory compliance
– support better management decision making
– assimilate new records management technologies and
– minimize litigation risks.
• For any business to remain relevant in a
competitive market, it must embrace the use of
modern information systems as they provide a
cheap and clear way to stay in touch with clients
and partners.
by:S.Bhardwaj

21. More reasons why a business
should invest in information system
• Safeguard information: strong information systems
are able to help in the preservation of vital business
information. Poorly stored records or data may easily
be stolen, lost to natural disasters or corrupted, and that
is why good information systems should be used.
• Foster professionalism: a business that does not neatly
organize its files or records is likely to lose more
clients. In order to avoid such things, the use of
information systems should be considered. Clients are
likely to be attracted to a business entity simply
because of its professional presentation.
by:S.Bhardwaj

22. • Improve efficiency and productivity: good
information systems are able to automate certain
activities such as transactions and security
surveillance. This ultimately results in efficiency and
more productivity for a business.
• Save costs: effective information systems eliminate
the need for more manpower and this ultimately cuts
down on certain costs that may have otherwise been
incurred. It also helps to achieve better time
management and accurate record keeping.
by:S.Bhardwaj

23. Business firms invest heavily in information systems to
achieve six strategic business objectives:
1. Operational excellence: Efficiency, productivity,
and improved changes in business practices and
management behavior differentiates excellent
companies from rubbish companies.
2. New products, services, and business
models: A business model describes how a
company produces, delivers, and sells a product or
service to create wealth. Information systems and
technologies create opportunities for products,
services, and new ways to engage in business.
by:S.Bhardwaj

24. 3. Customer and supplier intimacy: Improved
communication with and service to customers
raises revenues, and improved communication
with suppliers lowers costs.
4. Improved decision making: Without accurate
and timely information, business managers must
make decisions based on forecasts, best guesses,
and luck, a process that results in over and
under-production of goods, raising costs, and the
loss of customers.
by:S.Bhardwaj

25. 5. Competitive advantage: Implementing effective
and efficient information systems can allow a
company to charge less for superior products,
adding up to higher sales and profits than their
competitors e.g safari.com
6. Survival: Information systems can also be a
necessity of doing business. A necessity may be
driven by industry-level changes, as in the
implementation of ATMs in the retail banking
industry. A necessity may also be driven by
governmental regulations, such as federal or state
statutes requiring a business to retain data and report
specific information.
by:S.Bhardwaj

26. Limitation of information system
by:S.Bhardwaj

27. Unemployment and lack of job
security
implementing the information systems can save a great deal
of time during the completion of tasks and some labor
mechanic works. Most paperwork’s can be processed
immediately, financial transactions are automatically
calculated, etc. As technology improves, tasks that were
formerly performed by human employees are now carried out
by computer systems. For example, automated telephone
answering systems have replaced live receptionists in many
organizations or online and personal assistants can be good
example also. Industry experts believe that the internet has
made job security a big issue as since technology keeps on
changing with each day. This means that one has to be in a
constant learning mode, if he or she wishes for their job to be
secure.
by:S.Bhardwaj

28. Dominant culture
while information technology may have made the world
a global village, it has also contributed to one culture
dominating another weaker one. For example it is now
argued that US influences how most young teenagers all
over the world now act, dress and behave. Languages
too have become overshadowed, with English becoming
the primary mode of communication for business and
everything else.
by:S.Bhardwaj

29. Security issues
thieves and hackers get access to identities and
corporate saboteurs target sensitive company data.
Such data can include vendor information, bank
records, intellectual property and personal data on
company management. The hackers distribute the
information over the Internet, sell it to rival
companies or use it to damage the company’s
image. For example, several retail chains were
targeted recently by hackers who stole customer
information from their information systems and
distributed Social Security numbers and credit card
data over the Internet.
by:S.Bhardwaj

30. Implementation expenses
to integrate the information system it require pretty good amount
of cost in a case of software, hardware and people. Software,
hardware and some other services should be rented, bought and
supported. Employees need to be trained with unfamiliar
information technology and software. Information systems
contribute to the efficient running of organizations. Information
systems are showing the exponential growth in each decades.
Today’s information technology has tremendously improved
quality of life. Modern medicine has benefited the most with
better information system using the latest information
technology. By understanding and learning what advantages and
disadvantages it can bring, we have to try, believe and put an
effort with our best to make that existing advantage much better
and navigate the disadvantages to have a less impact on
organizations and society.
by:S.Bhardwaj

31. by:S.Bhardwaj