Business Organisation as IS
Sandip Das (MLIB 07)
Samhati Soor (MLIB 08)
Tanmay Mondal (MLIB 10)
Date : 15th May, 2014.
A system is a set of interrelated elements that operate
collectively to accomplish some common purpose or
An information system is an arrangement of people,
data, processes, interfaces and geography that are
integrated for the purpose of supporting and
improving the day-to-day operations (in a business),
as well as fulfilling the problem-solving and
decision-making information needs (of business
General Model of a System
A general model of a physical system is input, process and output. This
is very simplified because a system may have several inputs and
INPUT PROCESSING OUTPUT
• Boundary: The features that define and delineate a system form
• Sybsystem: A subsystem is a part of a larger system.
• Interfaces: The inter connections & interactions between the
subsystem are termed interfaces.
Characteristics of Sub-systems
Decomposition : The process of dividing a system into sub-systems is
Simplification : No sub system can work in isolation to each other in
order to achieve objective of the system, therefore we need to
establish interconnection between them. As such the no. of interfaces
between subsystems of a system can be calculated n (n – 1) / 2 , where
n is the number of subsystems.
Decoupling : It is the strength with which subsystems are connected with
each other. If two different subsystems are connected very tightly,
very close coordination between them is required.
Moto: System deals with information.
“Information is data that has been processed into a form that is
meaningful to the recipient and is of real or perceived value in
current and progressive decision.” -according to Davis and Olson
Attributes of Information :
1. Cost Benefit Analysis
2. Accuracy and Quality
3. Relevance and Purpose
4. Mode and Format
Type of Information :
Sub-systems of IS
Six sub-systems of IS:
Transaction processing system (TPS) / Data processing system (DPS)
Management Information System(MIS)
Decision Support System (DSS) / Executive Information System (EIS)
Expert System (ES)
Office Information System (OIS)
Personal and Work Group Information System (PWGIS)
Business: A person's regular occupation, profession, or trade/ commercial
Organisation: An organized group of people with a particular purpose, such as
a business or government department.
Business Organisation: A business organization is businesse
controlled in common by a group of people.
An organization may have one or more businesses. A business may
not have more than one organization.
The contractual relationships that bind them differ significantly from
the employer-employee relationship that exists within the
Business and organization are inseparable. They are simply two
aspects of the one thing.
Is Business Organisation integrataion of
six sub-systems of IS?
To prove it, we discuss
Six sub-syatems of IS one-by-one in the aspect of business
Interconnection between the sub-systems and Integration
• All business activity such as Sales, Purchase, Production, Transportation,
Payment, Receipt etc. involves transaction and these transactions are to be
organized and manipulated to generate information.
• DPS/TPS is fully automated system which is aimed at improving routine
transaction processing activities. Reports generated by TPS are used by
bottom level of management.
• TPS involves the following activities :
1. Capturing data to organize in files or databases.
2. Processing of files / database using application software.
3. Generating information in the form of reports.
4. Processing of queries from various functional areas of organization.
Features of DPS/TPS
• Large volume of data
• Automation of basic operations
• Benefits are easily measurable
• Source of input for other systems
Traditionally Only 5 resources were needed by managers to run a business organization
and they are 5M's : Men, Money, Machine, Material, Method.
But today due to volatile and complex business environment and intense
competition, Information is regarded as an important resource by managersto
MIS is an organization's functional area that provides this information to managers.
It is obligatory for any organization to provide right information, in right quantity,
to right person, at right time.
MIS deals with the critical information that effects the success of any business
MIS is a tool for better management and scientific decision making.
Features of an effective MIS
MIS supports structured decisions.
MIS are generally reporting and control oriented.
MIS generally aids in decision making using past and present data.
MIS gives an overall picture of the company.
Management as a group of people
Determining goals and objectives
Develop plans to achieve them
Identification and acquisition of resources exercising Control
Co-ordinating group efforts
Management as activities
DSS is a system that provides tools to managers to assist them in solving
semi-structured and unstructured problem in their own way.
DSS is not intended to make decisions for managers, but rather to provide
managers with a set of capabilities that enable them to generate the
informations required by them.
Such systems are particularly useful to higher level managers whose
requirement for information are some what unpredictable.
Unlike MIS, which provide fixed, pre-formatted information in a
standardized way, DSS is more flexible and adaptable to changing
decision making requirement.
In other words, a DSS supports the human decision making process, rather
than providing a means to replace it.
Components of A DSS
A DSS has four basic components :
DSS characteristics and capabilities
Support managers at all levels
Support individuals and groups
Human control of the process
Adaptable and flexible
To store all the necessary decision-making data, DSS or EIS often
uses extremely large databases, called data warehouses.
A data warehouse stores and manages the data required to analyze
historical and current business circumstances
Examples of DSS
i. Cost Accounting system
ii. Capital Budgeting system
iii. Budget Variance analysis
iv. General DSS
ES is a number of software imitate the reasoning processes of human
experts and provide decision makers with the type advice they would
normally receive from such experts.
It preserves the knowledge of an expert.
It puts information into an active-form(readily accessible).
It assists novice in solving the problem they professionals do.
It does not get stressed out.
ES can be effectively used as strategic tool.
Features of ES
Availability : ES is always available to solve a problem which experts
need to discuss.
Complexity : Problems for which ES will be used are complex task
which would not be easily handled by conventional information
Domain : The subject area of the problem is relatively small in ES.
Expertise : ES aim to solve the problem that require the efforts of
Structure : ES handle problems with un-structured, un-certain
Components of ES
Knowledge Acquisition Sub-system (KAS)
Application of ES
Some of the business applications of expert system are :
Accounting and Finance
It is the application of computers to handle the office activities:
• Document Capture
• Document Creation
• Receipts and Distribution
• Filling, Search, Retrieval and Follow up
• Recording Utilisation of Resources
Word processing System
Electronic Document Management Systems
Electronic message communication systems
Tele-conferencing or Video-conferencing systems
Personal and Work Group Information Systems typically are
built using personal computer technology and software.
Personal information systems are those designed to meet the
needs of a single user. They are designed to boost an individual’s
Work group information systems are those designed to meet the
needs of a work group. They are designed to boost the group’s
Features of PWGIS
The user can classify the entire organizational structure by defining the company
into different levels by defining various units, departments, categories and
Maintaining and updating records of existing and left employees and categorize
them on the basis of their unit, departments, designations etc.
Various details of the employees like the personal details containing their name, age,
marital status, qualification details, professional details, work experience,
their salary details, etc. are managed through this module.
The information relating to the employees joining and leaving the organization can
also be maintained that would help the organization to create the required
number of vacancies to fill-in the vacant posts.
Inputs and Outputs of PWGIS
Inputs to the Package
Year Leave Detail
Remarks Of Any Kind on the
Employees/ Work Groups
Outputs from the Package
Employee Detail/ Work Group
Till Date Leave Detail
Service Record of an employee
and within groups
In this way, we can say that
Business Organisation is an integration of six
sub-systems( DPS/TPS, MIS, DSS/EIS, ES,
OIS and PWGIS)
Information System Building Blocks : Kevin C. Dittman
Discovering Information Systems : Jean-Paul Van belle, Mike Eccles and Jane Nash