CIBMBUSINESSINFORMATIONSYSTEMSINTRODUCTION TO INFORMATIONSYSTEMS Ch01
SystemA system is a set of interrelated parts that worktogether to accomplish a purpose. To accomplishits purpose, a system performs three basicfunctions: input, processing, and output.A system has two additional functions: feedbackand control. Every system has a boundary thatdefines its limits; anything outside the system’sboundary is part of the system’s environment. Asystem can be a part, or a subsystem, of a largersystem.
ExampleA manufacturing system accepts raw materials as input and produces finishedgoods as output. An Information System accepts resources (data) as input andprocesses them into products (information) as output. A business is a systemwhere economic resources are transformed by various system processes intogoods and services.PeoplePeople are required for the operation of all information system. As a group,these people are referred to as information system users or end users. Theycan be accountants, salesperson, clerks, engineers, or customers.The structure and design of an information system is defined by anothergroup of people—the system designers.Another group of people in the organisation; managers decides howmoney, time, and other resources should be allocated to design,implement, and maintain the organisation’s information systems.
TasksTasks can be categorised into four areas: tasks related to communicationamong people in the organisation, tasks related to making decisionswithin the organisation, tasks related to the operations of theorganisation, and tasks related to strategic management of theorganisation.InformationAs a commodity, information refers to facts, statistics, or other data thatare valuable or useful to a person for accomplishing a task. Thesevaluable pieces of information are organised and represented in somephysical or digital form.OrganisationA business or other organisation can be defined by its purpose, the tasksor activities that it performs, and its structure.EnvironmentThe global, competitive business environment presents problems andopportunities that a business organisation must cope with to thrive.
Benefits of Information SystemsA firm can reap the following benefits:High-quality information.Access to information.Utilisation of information.Perform organisational work efficiently.Better communication and decision-making.Better products and services for customers.
INFORMATION SYSTEMS FOR BUSINESSTRANSACTIONSA transaction is an event that occurs in any of the primaryactivities of the company. A transaction processing system (TPS)is a firm’s basic accounting and record-keeping system that keepstrack of routine daily transactions necessary to conduct business.Transaction processing systems typically involve large amounts ofdatastored in large databases; they require high processing speeds tomanipulate large volumes of data. A transaction processing systemmust ensure a high level of accuracy and security of the data.
The Transaction Processing CycleTransaction processing is a cyclical process withfive steps:Entering the data. This involves online data entry ortranscribing paper source documents. Data entry canalso use electronic data interchange (EDI) toelectronically exchange business transactions.Processing the data. Data can be processed in twoways: batch processing or real-time processing.
Storing and updating the data. This step involves storing thetransaction data in database files. Many large organisations usedata warehousing software to create and maintain very largedatabases containing data on all aspects of the company.• Document and report preparation. A transaction processingsystem produces several types of action documents and reports. Anaction document initiates an action by the recipient or verifies forthe recipient that a transaction has occurred.User inquiry. Managers and other workers can use a database querylanguage to ask questions and retrieve information about anytransaction activity.
ExamplePayroll System to handle employee savings plan deductionsAn employee provides input by completing a deduction form. Ahuman resources representative submits the completed form tothe payroll department, which enters the deduction. The systemperforms processing and produces output, including a paycheckdeduction, a report to the employee on check stub, and a creditto the employee’s account.
Enterprise Resource PlanningTransaction processing systems exist in all functionalareas of a business. Each subsystem is itself a transactionprocessing system. The subsystems exchange information;the output of one subsystem is the input to anothersubsystem. Many managers in organisations look for waysto create cross-functional information systems byreengineering, or combining and integrating, two or moretransaction processing systems. This approach of creatinginformation systems to support an organisation’soperational business processes is referred to as enterpriseresource planning (ERP).
Computer-Aided Design (CAD)Product designers and engineers use computer-aideddesign (CAD) with computer workstations and softwareto draw product or process designs on the screen. CAD isused in a wide variety of industries, but a prime exampleof the importance of CAD is its use in the design of theBoeing 777, the first commercial aeroplane to bedesigned entirely with CAD software.
Computer-Aided Manufacturing (CAM)Computers and other information technology are usedto automate the manufacturing process withcomputer-aided manufacturing (CAM). Thesoftware in a CAM system retrieves the designspecifications of the product from the CAD database;controls specific tools, machines, and robots on thefactory floor to manufacture the product; and monitorsthe overall physical process of manufacturing theproduct.Manufacturing (CIM)Computer-integrated manufacturing (CIM) is aconcept, or management philosophy, emphasising theco-ordination of CAD and CAM systems along withother information systems in the company.
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