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What is a system?
What exactly is a system? What makes up a system? What is data and
information? How is information used in decision making? What is an
information system? What are the different types of information systems used
today? How can we build information systems? Understand the benefits of
learning information systems. This chapter provides the answers.

hat is a system? A system can be described as a combination of parts

or components that are organised to achieve a goal or perform a task.
Considering this description, we can define many things to be systems.
Let us consider some examples.

A bicycle contains many parts such as wheels, chain, pedal, seat and handle. These parts
are combined together to create a bicycle. A bicycle is
used by people to travel (performs a task).
 Valuable information

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considered as a
Bicycle can be considered as
a system which contains
many parts and is used to by
persons to travel




A radio can be considered as a system. Radio has many parts such as antenna,
speakers, volume controller and tuner. A radio is used to listen to radio transmissions
(performs a task).

Radio as an
example of a
Radio is used to list to music
and news (i.e. performs a
task) and consist of many
part such as speakers,
antenna, etc.

Each part of the system carries out a part of the systems

task. For instance, the handle of the bicycle is used to
control the direction the bicycle is travelling; the antenna of
the radio is used to receive radio signals.
Certain systems are complex and contain many complex
parts or components. These parts/components are
sometimes referred to as subsystems. Each subsystem
itself can be considered as a system.

 Class Activity
Can you think of
other examples of
systems? Identify
their tasks and parts.
What function does
each part play in the
systems task?

We can even consider living beings as natural systems. A good example is a human.
Humans have a very complex system: the human body. The human body contains
many subsystems such as respiratory
subsystem, digestive subsystem, circulatory
subsystem, and others. The respiratory
Human body
subsystem contains many components
viewed as a
complex natural
such as nose, nasal passage, wind pipe and
lungs. These components function
together to provide oxygen to the
Human body is a complex
natural system that contains
many subsystems providing
subsystem contains the mouth, food
many functions.
passage, stomach, intestines and other
organs which together digest food to
produce energy for the body to


Organisations as Systems
Until now, our study of systems has been limited to tools such as bicycles and natural
systems such as the human body. We can even consider organisations as systems. Let
us consider a school which is an important organisation in our community.
A school has many
components, such as
principal, classrooms,
playground etc. All
these components
make up a school.
School also has a
goal - provide education to children.
 Class Activity
organizations that
you know of as
systems. Identify
their components
and goals.

School viewed as
School has many
components such as
students, teachers,
classrooms, playground and
provide education to
students (goal).

Similarly, we can consider other organisations as systems.

Complete your class exercise and it will help you
understand systems better!

Elements of a System

A system exists in and interacts with its surroundings

(also known as the environment). The boundary of a
system separates the system from its environment. A
systems boundary tells us what is inside and what is outside the system.
In our example of the school, we can consider community as the environment. The
components inside the school include students, teachers, classrooms, principal, and
playground. The environment of the school includes parents of students,
Department of Education, and other elements in the community which interact with
the school.
A system receives input from the environment, processes these input and produces
an output.
Input, Processing and
Output of a System





A system consumes inputs from its

environment, processes and produces

Considering the school example, a school receives input, which includes, funds to pay
teachers salaries, children who require education, materials (such as chalk and
blackboards) for classrooms and activities.
A school produces output which is students who have gained an education. Students
completing school education have gained knowledge and skills that help them live in
and contribute to society.
There is processing that occurs to produce the output. In the school example, there is
teaching by teachers and learning by students that occurs to produce its output and
achieve its goal.

School example
Identification of goals, input,
processing and output.

 Class Activity
organizations that
you know of.
Identify their goals,
inputs, processing
and outputs.







Education of students


Children, teachers, funds


Teaching and learning


Educated students

Viewing organizations as systems helps us better learn and

understand the organization. This can helps us to improve
the efficiency and effectiveness of the organisation.

Data, Information and Decision Making

You have learnt what data is in previous chapters. We will revisit these concepts in
this section and see how information assists in decision making.

Data are raw facts. Data is processed to produce information.

Let us consider an example. The Mathematics teacher evaluates the mathematics
scripts of students and produces the marks for each
student. The marks by
Example of
themselves can be
Year 9E
considered as data. The
Raw marks of
class teacher collects all

Name: A.P. Weerasinghe

students is an
example of data
marks for all subjects
Position: 1st
and creates the student
report. The student
Example of Information
information. That is,
Subject marks are processed to produce
information in the student report.



marks for each subject are processed to compute the grades and position of the student
in the class.
We can use a computer to process data to produce information (which is referred to
as computer-based information system) or process data manually (which is
referred to as manual information system). In our school example, the teacher
prepares the reports manually. In certain situations, using a computer-based
information system is advantageous as we will see later.
Why do we need information?

Do I need
Information helps
to make


Mathematics F

Information helps us make decisions!!! Let us consider the students report. The
students report contains the grades for each subject and position in the class. If a
student obtains a failure grade for Mathematics, then the student knows that his/her
performance is poor in Mathematics. This information is useful for the student to
make decisions. The student may decide to study harder and solve more problems in
Mathematics, refer additional books on Mathematics or attend tuition classes in
Mathematics to improve his/her performance on Mathematics. This is a decision
taken by the student based on the information in the student report.
Similarly, the Mathematics teacher might consider average marks across different
questions. This provides the teacher with information such as areas where students
are weak (for instance, geometry). This information may lead to the teacher to
decide to give extra homework exercises on geometry and also revise the geometry
lesson in class.
used by a
teacher in
decision making
Average marks for each area
in Mathematics paper assist
the teacher to make decisions

Average Marks Across Questions


Arithmetic Geometry



Similarly, the principal of the school may consider average marks across subjects
within a particular grade to identify strong and weak subjects. This information assists
the principal to make decisions.
Decision making in organisations

It is evident that information plays an important role in decision making.

Every person in an organisation makes decisions. Decision making is a part of the
role of every person in an organisation. Let us consider the school example.
Making in
a school






Timetable informs the student on the

subjects for each day. This information
helps the students to decide to prepare
and complete homework for the
appropriate subject.



Timetable information helps the teacher

to decide on subjects to prepare for
teaching the next day.


Register &

Provides information that helps the

principal to decide whether to allocate a
replacement teacher for an absent


Report on number
of teachers,
students and
resources in school

This information helps the Department

of Education to decide on amount of
resources to allocate for the school (such
as funds for teachers salaries, budget for
school maintenance).

Similar to a school, in any organisation, information

is critical for decision making.
Complete your class activity to gain a better
understanding of how information is used by
organisations in decision-making.


 Class Activity
Consider organisations
that you know of. Think
of data collected and
information used by
these organisations. Who
uses this information?
What types of decisions
are made based on the

Qualities of Good Information

For information to be useful in our decision making process, this information should
contain certain properties as described below:

Accurate: Information must be accurate or correct. Incorrect information may

results in disastrous decisions to be made. This is one of the most important qualities
of information.
For instance, consider our school
example. If a student obtains an A
grade for Mathematics and however, by
mistake an F grade is printed on the
report, then this is an example of
information can result in invalid decisions
to be made.

Complete: Information must be

complete. Complete information contains
all the important facts. For example, if
some grades for subjects are missing in the
student report, then this is an example of
incomplete information.

Example of incomplete

Example of inaccurate
The student report contains incorrect information of
students grades by mistake. An example of inaccurate

Example of irrelevant information

The science marks are not relevant for decision making
for the mathematics teacher: An example of irrelevant

The student report is missing grades of certain

subjects: an example of incomplete information

Relevant: The information must be important to the decision maker for it to be

For instance, the mathematics marks obtained by students are important for the
Mathematics teacher and not the marks obtained for Science


Timely: Information is delivered

when it is needed is called timely.
For instance, if the students report in
Grade 6 is given to the student when
he/she is in Grade 10 is not timely.

Example of information provided in a

untimely manner
Students Grade 6 report is provided when he/she is in
Grade 10. This is a example of information which is not
provided in a timely manner.

Understandable: Information presented must

be understandable by the decision maker.
For instance, if the students report in
presented in a language not understood by the
student, then the information is not useful.

Example of information which is not

Information in the report is in binary format which is not
understandable by the user.

Accessible: Information must be

easily accessible by the authorised
For instance, in a bank customer
wants to see his/her bank balance. If
this information is not provided, then
the information is not accessible.

Example of manual data processing

The teacher processes the student marks and generates the reports
manually. This is an example of a manual information system.


It is evident that good quality

information is critical for valid or
Frequently, use of computer-based
information systems for information
processing within organisations can
enable us to obtain good quality

Manual vs. Computer based Information Systems

As discussed in previous section, data are processed to obtain information. We could
process the information manually or
using computers.
For instance, in our school example, if
the class teacher collects marks of all
subjects, computes the grades and
writes the report herself, then this is an
example of a manual information
If the different subject teachers enter
the marks of each subject to a
computer, which has a program that
automatically computes the grades, and
allows the class teacher to print the
reports, then this is an example of a
computer-based information system

Example of manual data processing

The teacher processes the student marks and generates the
reports manually. This is an example of a manual information

If computers are used for a major part of

information processing in an organisation,
then it is called a computer based
information system.
Computer-based information systems can
be effectively used to gain many benefits
as we will see in the next section.
Using a computer in an organisation does
not necessarily mean that the organisation is
Example of data processing using the
using a computer-based information system
effectively. For instance, if the teacher
The teacher enters students marks into the program which collects the marks from each subject teacher,
computes the grades for each subject and prints the student
compute the grades manually and then use a
report. In this instance, most of the data processing is
performed using computers. This is an example of a
computer to enter the grades and take a
computer-based information system.
printout of the report. This is not an
effective use of a computer-based information system. In this instance, the teacher is
doing most of the data processing manually and using a computer only for printing
purposes. In this instance, the use of a computer-based information system may be not
beneficial when compared to a manual information system. As we will learn in the
following sections, an information system must be designed and built to be effectively
used in an organisation.


Information Systems

From the previous discussions, it is evident that in any type of organisation, people
make decisions at all levels for their day-to-day activities. Data is collected and
processed to gain information which is used in decision making. The information
processing can be done manually or with the use of computers. The organisation of
people, processes, data for information processing and decision making in an
organisation to support their day-to-day activities is called an information system.
Capabilities of Computers

As is evident from the discussion in previous sections, computers can be used for
many data processing tasks in an organisation. Use of computers for data processing
can be advantageous over manual processing due to their capabilities.

Fast: Computers can perform programmed operations extremely fast when

compared to a human.
Speed: Computer Vs. Human
A computer can perform programmed
operations fast. For instance, a computer may
be programmed to complete add 100,000
numbers per minute on average. A human can
add 25 numbers per minutes on average

Accurate: Computers, if programmed correctly, are highly accurate in data

processing. Humans can make mistakes (known as human errors).
Store and retrieve large amounts of data:Computers can store and retrieve large
amounts of information. In a manual system, paper-based storage is used. Usually,
large amounts of files and filing cabinets are used which takes space and require time
to retrieve.
Manual Vs.










A computer can store

information of 3000
students in a single hard
disk and if organized
properly can retrieve a
single students grade in
less than a second. In a
manual system, we need
a large file of cabinets
and retrieving a student
grade takes 15 minutes
on average with a


Communicate efficiently over networks: Computers can send data efficiently over
long distances over a network to remote computers. In a manual system, data are
recorded in paper (such as files and books) and require sending them physically
which is inefficient.
Data transfer between
computers in a CBIS


Computers send data from Colombo

to Anuradhapura in less than 1 minute
over the network

Computer at

Computer at

Transfer of data in a
Manual Information
In a manual system, to send a file
of records from Colombo to
Anuradhapura takes 6 hours.



Work for long periods of time: Computers can work for a long period of time (as
long as the necessary environment exists such as
electricity and air conditioning etc.). Usually, humans
get tired and require a break.


Working Hours: Human vs. Computer

Human gets tired over a period of time and requires a rest. For
instance, a typical human works for 8 hours a day. On the other
hand, computers do not get tired and can work continuously for 24
hours a day.


Adaptable and pre-programmed for different

tasks: CBISs are adaptable and easily programmed.
For instance, we can easily add and/or change a
report generated by a CBIS to reflect additional
information as required. However, changing a report in manual information system
may not always be easy.








Example of a
change in
Example of a
change in a report
required in an

For instance, in a school, let us assume that we maintain a record of files containing
student marks. If we need to obtain average marks obtained by students for A/L
Pure Mathematics paper for the last five years requires a manual procedure
consuming a long time to obtain this information. In a CBIS, if the data is stored in
an organised manner in the computer, generating this report could be easily
performed. Later, if we need to change this report to contain maximum and
minimum marks scored for Pure Mathematics paper for each year for the last five
years requires rescanning all student files manually. In a CBIS, the report can be easily
adapted to reflect this change.
Due to these capabilities of computers, they can be used effectively in organisations
for their information processing needs. In the next section, well learn elements of a
computer-based information system and see how it is effectively used in a banking

Elements and effective use of a Computer based

Information System
A computer-based information system (CBIS in abbreviated form) can be described
as a single set of hardware, software, databases, telecommunications, people
and procedures that are configured to collect, manipulate, store, and process data
into information. In Sri Lanka, we can see in many instances, banking organisations
using computer based information systems effectively.
Hardware consists of all computer equipment. A
banks computer based information system contains
a lot of equipment including monitors, keyboards,
ATM machines and others.
Software includes all the computer programs that
control and performs tasks Hardware used in
using the hardware. There are a bank
two main types of computer Examples of hardware
devices used in a bank



1. System software which controls the basic computer operations such displaying
words in the screen, starting-up the computer etc. These programs include the

Operating System.
2. Application software are programs
developed to perform certain tasks.
For example, Word Processing
software enables us to create
documents letters and books.

Example of
software used in a
Examples of software
packages used in a bank
devices used in a bank.


A bank uses many software packages including system software such as Operating
Systems that control the hardware devices and also application software which
includes banking packages to perform many different tasks bank account
management, loan processing and others.
A database is an organised collection of data and information.
A banks CBIS contains a large database of all account information, transaction
information, loan information and other relevant information for the bank. This
database is frequently accessed by many persons including customers and bank
employees for their day-to-day activities. By
using a computer-based information
system, all relevant persons can have
AccNo Balance Type
efficient, timely access to this
123240 12002.20 Savings
324214 4532.42

TID Date Amount Type

1002 12/03/06 12000.00 Debit
1003 12/03/06 2344.43

1232 K.R.Sampath 232312
1233 A.J. Fernando 455323

Database in a bank
A banks database contains an organised collection of data
and information including customer information,
transaction information and other related banking

Telecommunications include the computer networks that enable computers from

different locations to send/receive data. Networks connect computers and computer
equipment in different locations (i.e. places) and enable electronic communications.
In a bank, the banks CBIS connects the different branches of the bank which are
located in remote places. Now customers and bank employees can efficiently access
information from

Use of networks in
a bank

Transaction information is
accessed via the network
Customer deposits at
Colombo branch

Customer withdraws
at Kandy branch

Information of transactions
are accessed from different
branches in a bank via a

Computers from around the world are connected to the Internet (which is the
worlds largest computer network). Some banks allow access to the banks CBIS
from the Internet (popularly known as Internet Banking). This allows bank
customers to access his/her account information from anywhere in the world!


People include users of the system, persons who maintain, manage and program the
CBIS. In the banks CBIS, users include customers who access the CBIS, employees
of the bank who use the CBIS. There also exists a group of persons (sometimes
referred to as system administrator and system engineers)
who maintain the CBIS performing tasks such as backing
up, upgrading the system and program it.
Procedures include the strategies,
policies, methods, and rules for using
a computer-based information system.
Customers access the banks
Procedures may include methods such
CBISs services using an
as how to perform a task by
executing a particular program? or
policies such as who can have access to the database and what data?
Customer using
the banks ATM

For instance, in our bank example, a policy might be that the branch manager must
approve a withdrawal amounting to over Rs. 1 million. There is set of steps
(procedure) to be followed by the manager to provide the approval in the CBIS.
Use of computer-based information system effectively in a bank has results in
good quality information available for day-to-day activities:

Accuracy: The banks CBIS is programmed correctly and data entered is verified and
provides highly accurate information.

Complete: All data is stored in a database and the banks CBIS can be programmed
to obtained information in a complete manner.
For instance, at the end of each day, the branch manager may need a report of
consisting of all transactions performed during
the day and total amount withdrawn and
DATE: 06-02-06
deposited to the branch. The banks CBIS can
123 9:01 am 12000.00 Deposit
be programmed to produce this report to the
124 9:02 pm 2500.00 Withdrawal
manger at the end of each day.

Understandable: The banks CBIS can be

programmed to provide all necessary
information in an easy-to-understand manner.
At the head office of the bank, the senior
management needs a report on the days
performance by each branch in a graphical
manner. The banks CBIS can be programmed
to access the database and provide the days
performance in a graphical manner for the



Example of a report generated

by the banks CBIS
Example of a report needed by the branch
manager containing all transactions for the day.
The banks CBIS can be programmed to generate
reports needed by employees of the bank.

Example of a report
generated by the banks
CBIS in an easy-tounderstand manner

Total Deposits of Branch

Amount in Millions





20 Anuradhap

Example of a report generated by the banks

CBIS is an easy-to-understand manner for
the senior management.

Timely: The report which is


discussed above can be

provided to the senior
management is a timely
manner due to fact that this report can be generated from the banks CBIS at a click
of a button. Also, since the report is generate by accessing the database of the bank
which keeps accurate and up-to-date data, the generated report contains accurate,
complete and up-to-date information.

Accessible: Due to the fact that the banks CBIS are connected through networks,
the information is easily accessible by bank employees and customers from any
Some other major advantages of using a CBIS are that most of the tasks can be
automated or handled by the computers. For instance, due to the fact that computers
do not need a break unlike humans, they can be kept switched on. This allows
customers to use the bank services even when the bank is closed! Customers connect
to the banks CBIS from Internet and banks services are made available to
customers 24 hours a day and 365 days a year via the Internet (Internet Banking).
However, a CBIS does not come without its disadvantages. There is a high initial cost
in setting up a CBIS in an organisation. . In a computer-based information system,
there is a high cost for hardware, software, and computer networks (also called
technology infrastructure) in addition to training people, revising and developing
procedures for effective use of a CBIS. In a manual system, the initial cost is lower
since this technology infrastructure is not required.
Also, sometimes, there is a fear among employees to change to a CBIS from a
manual information system as they fear that their jobs may be automated and make
them redundant. This culture barrier and resistance to change also may affect the
speed of adoption of a new CBIS to an organisation. When introducing a CBIS to an
organisation, these factors need to be considered. Appropriate training and proper
guidance and supervision allow for smooth transition to CBISs and provide higher
productive and gain to an organisation.
In todays competitive business environments, many organisations believe that
advantages of computer-based information systems far outweigh manual information
systems and are required for an organisations survival. With the cost of hardware


reducing with the advancement of technology,

computer-based information systems are affordable
to many organisations. Hence many organisations
try to leverage the advantages of using
computerised information systems in their daily
operations to gain a competitive advantage. Thus
learning computer-based information systems has
become a necessity and a fruitful endeavour for
students today. Hence, in the rest of this chapter,
we will focus on computer-based information
systems and we will use the term information
system to refer to computer-based information

 Class Activity
Consider an organisation
that you are aware of.
Describe how a computerbased information system
can be effectively used in
the organization. Describe
the elements of the CBIS.
Compare and illustrate
advantages/ disadvantages
of using CBIS vs. a manual
information system.

 Class Activity
Discuss with the
teacher the various
processes in the
school that qualify
for batch processing.

At a supermarket checkout counter you need to know the price of each item as the counter
person keys-in items. You do not want to know it a day or two later. On the other hand you
do not need to know how much it costs each time you switch on a bulb at home or each time
you open the water tap. You like to have such information at the end of a period (eg. every
house that has electricity needs to receive a bill at the end of a period).

Batch Processing
So, when we use computer systems to process large number of such events, and when
processing is simple and always the same we can process such events in defined intervals. We
refer this mode of processing as batch processing. A batch processing system is one where
computer programs and data are collected together in a batch before processing starts.


Batch processing usually follows below steps:

Accumulate transactions (e.g. electricity meter reading of each house) into

batches of suitable size, and keep a count of batches
The batches are then input to the computer system:
 Class Activity
Each piece of work for a batch processing system is
Make a list of
called a job. A job usually consists of a program and
processes that you
the data to be run.
find suitable for
batch mode
The stored batches are processed when computer
systems idle (usually in the night). Jobs are stored in
job queues until the computer is ready to process
To ensure all batches and all transactions in a batch are processed, various
totals (eg. number of batches, number of transactions in a batch) are used.
These totals are compared with computer generated totals to verify the
In this mode of processing, there is no interaction
 Class Activity
between the user and the computer while programs
Discuss with your
teacher other
Outputs of the process could be anything, such as;
examples given
 Updated file(s)

Online Real-Time Processing

As we saw, some events do not need critical time dependence. However, there are
other events that have critical time dependence. As opposed to Batch Processing, the
Online Real-Time processes events as and when it occurs. For example, airline
reservation, credit card payments, pre-paid mobile phone usage, playing a game on the
computer, and the like very much depend on time. Lets take a closer look on two of
the examples.
Airline reservations: imagine you book a seat in an airline at 9.00 am today. If the
computer system does not reserve that seat for you immediately, there is a possibility
that the same seat could be given to another person by the airline ticketing agent.
Playing a car race computer game: moment you see a bend on the screen, you
need to instruct computer to turn the car to that direction, if not the car will crash.


Compare online Systems Vs Batch Systems:



Immediate results
Information is available on demand

Outcome is not time dependent

Ideal for utility bill preparation and
employee payments
Can use idle computer time effectively
Economical when large amounts to be
processed that are similar

Can make quick decisions

Types of Information Systems

In Unit 1 you saw the difference between data & information, in
this section, you will learn about how information is used in
organizations. In doing so, the section will take you through
fundamental concepts that help to understand and answer
questions stated above.

 Class Activity
Find some
processes that
require online realtime processing, at
your school.

Information is every where. Do you agree with this sentence? Let us see the various sources
of information available to us in current day life. For example, today we have number of
newspapers, radio & TV channels compared with few years back. In addition to these, use
of many other technology tools such as home computers, mobile computers, mobile
phones, and access to Internet (World Wide Web of computer networks) are on the rise.
All these provide one common thing to all of us that is, Information.
This means we all have opportunities to access information in
various means and forms. And then, information is used by
us for various purposes such as add new knowledge, verify
and compare current understanding, make better choices, and share
it with others.
 Class Activity
Discuss with
your teacher the
importance of
online real time
processing, in
todays world.

 Class Activity
List the ways
you use
information at
home and in
your school?

As much as we use information in our personal lives, so do

organizations. Organizations not only use information, but they
create information by various means, and then store it for future
use too. To understand various roles played by information in
organizations, let us see how information is used by different
functions of an organization.


Office Automation System

In a typical office, people perform many tasks that support
the different functions of an organization. Let us see some
of these key tasks:

 Class Activity
Discuss with
your teacher
similar activities
in school.

Prepare and edit reports

Communicate with internal and external parties
Schedule and prioritize work
Assign work to staff
Maintain information about events of the organization
Answer telephone calls
Order and maintain an adequate inventory of supplies
Hire, train, supervise, and evaluate staff

Thus all organizations carry out many common activities, such as:
Writing letters, memos and receiving responses to them
Perform calculations, comparisons & analysis
Communicate ideas, outcomes and plans
Capture and record events
Create and implement plans, and many more
Since such tasks can be numerous, let us generalize (categorize) these tasks into
meaningful categories:
Document creation
Coordination, collaboration, scheduling
Maintain and store information


 Class Activity
Search Internet
to find a
definition to

The next question is how do organizations carry out these numerous tasks?
Organizations can use two types of information systems to perform different
Organized systems based on manual methods
Computer-based Automation Systems
They can perform these tasks in several ways:

One way is to do it just using people (human ability). Let us assume that a
supervisor in a garment production organization wants to do following:
Assign work to production workers such as writing down steps to perform
(work sheet), and communicate them to workers. (See Fig 4.3.1)
Monitor work progress (observe work)
Make a report at the end day (collect days work sheets and summarize it to
another sheet).


Sewing instruction
card, 1958
Maidenform Co.,
NewYork, New York.
Printed ink on paper.

Now, think of an organization that has ten thousand production workers

producing one hundred different types of garments that can change frequently.
Even if the organization employs many supervisors, it would be humanly
impossible for them to perform all required tasks by only using manual work

Another way to perform these activities is to use computer based office

automation systems (OAS) that assist the supervisor. Lets see how each of these
tasks can be supported by computer based systems.


Assign work to production workers

Supervisor can record (key-in) all worksheets into the computer. This can be done
by using Word Processing software or Spread Sheet software. Supervisor
needs to record this information in the computer only once. Thereafter,
supervisor can change, re-produce and print them at any time.

Assign work to production

A supervisor can use word processes,
spreadsheet software to record worksheets
into computer.

Monitor work progress

Similar to above, the supervisor can collect each production workers daily work
output and record them into the computer. To do this supervisor can use either
Word Processing software, Spread Sheet software or simple Database software.
Monitor work progress
Word processing spreadsheet or
simple database software can be used
to monitor.

Make a report at the end of the day

As you learned in earlier units, if you record data inside the computer using an
information system, you can view or further processes such recorded data later.
This helps produce a report that contains various information that you like to
 Class Activity
What are the
advantages and
among manual
systems vs OAS




Interface of an
An ATM can be used to
perform a variety of
banking operations.

Press your choice!

Balance Inquiry

Mini Statement


Fund Transfer



Transaction Processing Systems

Organizations are of many types, ie. Government, NGOs, Commercial
Enterprises, Educational Institutions etc,. All organizations have one thing
common, meaning they all create events. These events are very important for any
organization to carry out its operations. For example these events could be:
Super market check-out counter scans (enters) items in your basket or trolley,
into a small computer
Bank accepts deposits and allows you to withdraw money
Educational institution accepts student application
Pay for your electricity, water & telephone bills

 Class Activity
Identify 3
and list 3
transactions for
each of these

Did you notice below, in these events?

They happen routinely
They are repetitive in nature
Without them an organization cannot operate
In other words without these events no organization can
survive. Let us call these events as transactions. As you
already know computers are very good in handling routine
and repetitive tasks. If these events are so important, we
can use computers to carry them out. So, how do
computers do that? Fortunately there are number of
software systems that specialize in processing transactions
in organizations, for example:
- Small computer at the check-out counter in a supermarket
- Bank ATM (Automatic Teller Machine)


 Class Activity
Discuss with
your teacher the
processes in
your school that
can be done by
methods &
using OAS.

 Class Activity
- Payment acceptance system when making
payments for electricity, water & telephone bills
- Salary/wages processing system

Discuss with your

teacher various
transactions that
routinely take
place in your

When a computer-based information system handles all these transactions, we call

that information system, a Transaction Processing System (TPS). The key
function of a TPS is to keep track of goods & services provided by organizations.
Therefore, all the TPSs have below components:
Collect business transactions (Input sub-system)
Process business transactions (Process sub-system)
 Perform calculations
 Modify already stored data
Check validity of transactions (Validation sub-system)
Display transaction (Output sub-system)
Store data about transactions (Storage sub-system)

A typical TPS has
input, process,
output, storage and
validate sub


Management Information System

Introduction to Management

In many organizations people play different roles. One such role is management,
and people who carry out management function are called managers. So, what
functions managers do in an organization? Essentially managers are responsible to
use organizational resources (money, plant and machinery, people, land and
buildings) to achieve organizations goals.
The next thing we should know is how do managers do that? Well, there are
several ways. However, the most commonly used approach has five steps to
 Class Activity

List 3 key decisions you

made in your life?
Identify one major
decision your school
made/will make during
this year.
Write down steps
you followed to
make that decision

In this unit, we will see one common task for all of above steps performed by
managers that is making decisions. We all make decisions, whether in an
organization or in our personal lives. Simply, a decision is what you choose from
various alternatives.
Decision Making Process

In our daily lives we face different situations. For example some situations are
problems, some are choices and some others are opportunities. So when we
face a problem we naturally want to solve it, and based on our solution we make
 Class Activity
We make decisions at home, at school, at play, or perhaps at
When did you
the grocery store. Common examples include shopping, make a decision
deciding what to eat, and deciding whom or what to vote for last? What was the
in an election or referendum.
problem or
Interestingly, some of these problems and decisions are very
challenging, and some may even change our lives
dramatically. So, making decision may need lot of thought,



emotion, and research. As you may have noticed, either you followed your heart
or perhaps a set of formal steps to make the decision.
Lets see a simple guideline that can help you make decisions:
Step 1: See whether you can define the problem, in terms of what you
know about the problem situation, how it affects you, why you identify the
situation as a problem
Step 2: All problems have solutions, but which one is right? To find an
answer for this question you need to generate several options or alternative
courses of action.
Step 3: Think about how does each solution affect
the situation? What are my feelings, fears about each
Step 4: Check whether your decision affects others
feelings, emotions, or values.
Step 5: After weighing all above, choose the best

Write down
steps you
followed to
make above

Step 6: Create a plan of action to implement the chosen decision.

Step 7: Continuously assess your decision.
Decision Making Process in Organizations

Making decisions as an individual and as a community is different, and even so for

an organization. So, how do organizations make decisions?
Organizations can use a formal approach to make decisions.
Understand the situation (collect and analyze data)
Gather information
Identify solutions
Select most suitable solution
Implement the solution


Step 1: Understand the Situation

State the situation in broad terms since the exact situation may not be
obvious. To do this you need lot of information or else you can confuse
symptoms of a problem with underlying causes. Information gathering
occurs in all steps -from recognition of the situation to implementation of
its solution. New information may force you to redefine a problem in the
Step 2: Gather Information
In this step organization collect information from its stakeholders
(individuals, groups that are affected by the problem or its solution). You
may also seek facts & data from research, results from experimentation,
studies, interviews of experts, and observed events, past or present data.
Step 3: Identify Solutions
In this step organizations see the problem in different ways, in a new
perspective that you have not thought of before. Once you have listed or
mapped alternatives, be open to their possibilities, such as;

Need more information

Can be combined or eliminated
Will meet opposition
Seem promising or exciting

Step 4: Select most suitable solution

After listing possible alternatives, evaluate them without prejudice, no
matter how appealing or distasteful they are. Consider all criteria; while a
suitable solution may solve the problem, it may not work if resources are
not available, if people won't accept it, or if it causes new problems.
Step 5: Implement the solution
Until the solution is acted on, a decision is only a good intention. So, you
need to develop a plan for implementation. This would follow a step-bystep process as follows;

A way to communicate all affected stakeholders

Resource identification/allocation
Timeline for implementation


As much as implementing the solution, it is equally important to monitor

it, the effects of it on resources and stakeholders, your timeline, and your
progress. As you monitor your progress, if results are not what you expect,
review your options and alternatives. Whether or not you achieved your
goals, it is important to consider what you have learned from your
Now, let us see how Computer Systems can help in decision making
process. In fact, Computer Systems play a key role in organizational
decision making process. As you saw, managers use large amount of data
to make decisions. In other words they need lots of information to make
decisions. One such example of a computer system that helps organization
make decisions is Management Information System.
Management Information System

Information does not come automatically, whether it is from a manual

systems or a computer based system. In a computer based environment,
you can derive management information from Transaction Processing Systems.
So, how do we do that?
Management Information Systems usually
generate information that helps managers
monitor, coordinate, direct, and obtain summary
Discuss with
of organizations events. For example, in a superyour teacher the
market if a manager gets list of sales for entire
process your
week that would not be much useful. However, if
school uses to
the same information is summarized into per
make decisions.
item, per check-out counter, per each hour of a
day would provide
 Class Activity
useful information that
helps a manager to carry out his or her duties Identify 3 MISs in
effectively. But as you saw there are different your school or in a
known organization
levels of managers in organizations.
 Class Activity

Therefore, we have special types of systems to

generate MIS, such as;

to you, and show

how they differ
from TPSs.

MISs that support all managers (eg. systems that help to carry out
basic management functions)
MISs that support functional managers (eg. sales and marketing
MIS, management accounting MIS, production planning MIS)


MISs that support different levels of managers (operational

management, middle level, top management)
 Class Activity

Process Control System

A process is generally a defined way of doing an activity.
For example, to make a cake you would follow the steps
given in a recipe. But, in large scale operations there can
be many thousands of people carrying out many tasks to
full-fill a particular task.

Discuss Discuss
how different
levels of staff at
your school make
use of

Many thousands
of people
carrying out
many tasks
These people work
according to a well defined
Set of activities (processes)

Let us take the process of making hoppers that you probably may have seen at
home. At times you may think the manual process is very cumbersome, and
subject to many issues leading to poor quality hopper.
However, if we use a process control systems, such as shown in below diagram,
the process becomes easy and possibly improve the quality of hoppers.

The figure
shows the
whole process
which consists
of sub
processes such
as recipe


The above figure shows that the whole process should consist of several subprocesses, such as;

Recipe entry function

Process start/stop function
Indication function with graphic screen on equipment
Failure monitoring function

In addition, by automating this manual process, we can reap several other

 Class Activity

Can feed multiple types of raw materials (flour, rice,

Find 3 areas
known to you
that use

Seasoning can be done with a recipe screen.

processes control

Accommodate taste variations that can change

traditional taste.

Create new products.

As you can think, if we apply such automated systems on other processes (eg.
from making a nail to making a car), it would bring many advantages. For
example, we can make things faster, accurately, and economically. However, there
can be disadvantageous too. For example, loss of jobs, health hazards, and
environment pollution are some of the major disadvantages.

Intelligent Information System

Whats really an intelligent system? Essentially intelligent systems make computers
behave like humans. Intelligent systems use some kind of intelligence, and we call
it artificial intelligence. Hence, all intelligent systems need artificial intelligence
Think how you come to school today. Did you follow a routine process?
Wash yourself
Change Clothes

Have Breakfast


Travel (Bus, Train, Car, Van)

How do you feel, preparing your breakfast by an intelligent computer system,
ironing your clothes by an intelligent computer (robot)?
So we can say an intelligent system is also a system. It should learn during its
existence based on situations it faces.

Structure of the
Functioning Of an
Intelligent System
An intelligent system is a type
of response system. It should
learn during its existence based
on situations it faces.

As you can see from the figure, the intelligent system is fundamentally a
type of response system. It takes inputs through the senses. The brain extracts
information from this and represents it as a situation. Next, the intelligent
system selects a response rule, appropriate to the situation, and performs the
response part of this rule. Performing the response permits the system to
get nearer to the situation that is its objective. The intelligent system makes its
selection of response rules from those that it finds stored in its memory. In
this memory, the intelligent system has accumulated response rules that it
has generated from earlier experiences and from generalizations based on
previously used response rules.
To do all these intelligent systems use two distinct processes.

Human thought process

Represent those thought processes in machines

Studying these processes beyond the scope of this book, and you would
one day learn more about it.


Today the world uses many computer based intelligent systems, such as;

Garry Kasparov
vs. Deep Blue

Play games such as chess and checkers

Medical clinics use artificial intelligence systems help doctors diagnose
diseases based on symptoms, to organize bed schedules, make a staff
rotation, and to provide medical information.
Understand natural human languages. You could simply walk up to a
computer and talk to it.
Simulate intelligence by attempting to reproduce the types of physical
connections that occur in animal brains.
Financial institutions have long used such systems to detect charges or
claims outside of the norm, flagging these for human investigation.
Robots are given jobs that are considered dangerous to humans. Robots
have also proven effective in jobs that are very repetitive which may lead
to mistakes or accidents due to a lapse in concentration, and other jobs
which humans may find degrading.
 Class Activity

Robots are given jobs

that are considered
dangerous to humans

Are there any

systems in your
school that are
suitable for
intelligent systems?
Give reasons for
your answer.

Japan is the leader in using robots in the world. In 1995, 700,000 robots were in
use worldwide; over 500,000 of which were from Japan.


Developing an Information System

How to develop an Information System? There are many ways that can be
adopted to build an information system, but they are all based on the steps
discussed below.
To learn about building an information system, lets take your school for an
example. Assume that your school does not have any automatic information
system built, and all the activities are done manually.
When a new student registers to your school, the registrar office opens a new file
for the student and stores all his details for example, personal details and birth
certificate in that file. Once he promotes from grade to grade all the details
relevant to the student is updated on his file. If any one wants to refer to students
past data, they take his file and get the details.

Step 1: Requirements analysis (What

to build?)

Can you come up with
requirements for
developing an
information system for a
sports club in your

The first step in developing an information system is to

decide on what to build. This involves analyzing the
requirement and the necessity to build an information system.
This is a very important part in the development of an Information System and
involves looking at an organization or system (such as a school) and finding out
how information is being handled at the moment.

For the example of your school discussed above, if we analyze the requirements
we can clearly see a necessity of developing an information system for the school
to manage student data. The reasons for justifying the development of the
information system are
Difficulty in updating data manually
In the manual system of recording student data, it is very difficult to update the
data if any change occurs.


This is a

Difficulty in updating data

For example, if the address of a student
is changed, it has to be updated in several
books manually and some times the
changed data might not be reflected in
some books

Probability of loss of data

What will happen if the student detail file gets misplaced, stolen or damaged? All
the details regarding the student are lost!! There is no way of recovering the data
unless you have a backup file in a safe location with all the data updated.
Difficulty in retrieving data
With the manual system searching for the required data is also difficult.
Oh..! My god.
This manual process is a

Difficulty in retrieving data

If the class teacher wants to refer an early record of one of
his students, He might have to go through several files,
contacting many people, searching from cupboard to
cupboard and still might not find the exact data what he
wants!! The manual student recording system needs more
time and more resources to retrieve the required data.

No central location
Another disadvantage of the manual system is that there is no central repository to
keep the data. There might be many files, many drawers, and many cupboards in
many buildings. If any one wants to access all students data, he will surely have to
spend more than one day to collect the data!!
There are many more drawbacks and disadvantages in the manual student data
recording system which are not listed here and through developing an information
system we can overcome most if not all of the drawbacks mentioned above.
Data updating
With a computer based information system, updating the student data will take
only a few minutes and the data updated will be reflected in all the records for that


Loss of data
Loss of data can be completely overcome by taking backups periodically and
storing them in a separate place or sending them to the relevant authorities.
Retrieving data
Data retrieval might need only a mouse click. You can get details about the one
student, class of students or even the data of all the students in the school.
Central location
An information system gives you the advantage of centrally located data.
Central location
For example, all the data about all the students
are located in one place, may be on a database
or a file system or any other storage, but the
users can access, search and retrieve from a
single location

All these reasons and many more justify the development of an information
system to store student details for your school.

Step 2: Feasibility Study (Can we build it?)

A feasibility study is a preliminary study undertaken before the real work of a
project starts to ascertain the likelihood of the project's success. It is an analysis of
possible solutions to a problem and a recommendation on the best solution to
use. At the end of the feasibility study a decision is taken whether to proceed or
not with the development of the system.

Feasibility Study
An analysis of possible solutions to a problem
and a recommendation on the best solution to


Lets take the same example discussed above. Through the feasibility study we
have to find answers to similar questions given below.
Do we have enough funds for the project?
Here we have to do a rough cost estimate covering the
costs for hardware, software and other tools to develop
the information system. Then we check whether we have
sufficient funds in school to cover the above estimated

 Class Activity
Do a feasibility study for the
information system for the
sports club in your school.
Come up with a cost
estimate and required
technical expertise.

If not, are there any ways to find funds?

If the school does not have enough money to cover the cost, can we find ways to
find funds, such as from parents, through dramas/exhibitions, from education
ministry or from other donors.
Do we have the expertise?
To build the information system, you need to have a team of software engineers,
system administrators and others. First you check within the school whether you
have the experts to build such a team, if not you can think of giving a contract to a
software company to build the student details management information system.
Here you have to go to the related companies, give them your requirements and
ask them to come up with a plan. If you can find a company which can undertake
the building of the system according to your requirements at the cost you
estimated you can handover the development of the system to that company.
If you have answered YES to the questions above and similar questions related
to building the information system, you can decide to proceed with the

Step 3: Design (How to build it?)

In this step, we analyze how to build an information system
which performs according to the requirements we identified
in step 1. The real time requirements of the system will be
transformed to modules in this step and these modules will
be implemented in order to build the information system.

 Class Activity
Design one module of the
information system for the
sports club. Identify the
inputs, outputs, storage
structure and other data
necessary for the design.

For the student details management information system, to

store and manage student details, first the requirements will be break down into
modules. For example, the requirement to store student details will be one module
and to design this module we will be considering the following details.


Some of the inputs for this module will be student registration number,
registration year, name, address, birth date, telephone number and birth certificate
When deciding on inputs, think about what
information you are going to store in the
For example, for the student detail
management system, we have to store the data
about the student, but you have to decide
whether the data you are going to store is a
required data for the system. Only required
data should be taken as inputs.
For example, the data about students
neighbors is not required for the school, so
that data is not an input to the system.

One of the outputs of this module will be the details of a student when you search
for a given registration number.
Reg. Number

Alwis K.D.

32, Kahantota Road,

Phone Number

File structure
To store the details of the students, we should decide on
the data structure. The data structure can be a file system
or a database having tables of data. If the amount of data
is less and if there wont be any major expansion, then we
can go for a file system, otherwise to store a large amount
of data we can design tables in a database.

Birth date

Design one module of
the information system
for the sports club.
Identify the inputs,
outputs, storage structure
and other data necessary
for the design.

Depending on the above and other details we design the modules of the student
details management information system. These designs should be reviewed by all
the parties involved with the development of the system and should take the feed
back of the users of the system.


Step 4: Development (Building the system)

Once the design is reviewed and agreed upon by the parties involved, the next
step will be the development based on the design. In this step we decide on the
software and hardware for the implementation of the modules designed in step 3.
There are many ways an information system can be built. Stand alone applications
which are installed on separate computers and web based systems which can be
accessed from any computer are two popular ways of building information
For the student detail management system discussed above, we can develop it as a
stand along application, assuming that the system will be installed at the school
premises and only the school staff and students who are authorized will be using
the information system. The system can be developed using VB.NET.

This is an example of a form developed
through VB.NET.

Assuming that your school has more than 2000 students and will be expanded in
the future, we can store data in a SQL data base called MySchool. This database
will have many tables including the student table and the grade table.


Student Table
The student table will
store the personal
details of the student.
This figure shows the
data as columns in the
table Student.

How would you develop
the information system
for the sports club? What
are the software you are
going to use? Will you
use any databases? Justify
your answer.

Step 5: Testing (Is it working correctly)

Any new system needs to be thoroughly tested before being introduced to the
users. Testing is done through out the development life cycle in various phases.
Unit testing
Unit testing is the testing of different units or modules of a system in isolation.
For example, once the store student details module is completed, which is
described in step 3, it should be tested and if the testing ensures that the modules
are working as required. The user inputs the required values - student registration
number, registration year, name, address, birth date, telephone number and birth
certificate number through the developed module and then checks whether these
values are updated in the student table of the MySchool database.


Integration testing
After all the modules of a system have been coded and unit tested, integration of
modules starts. The full product takes shape only after all the modules have been
integrated. The integration testing consists of a number of steps. During each
integration step, some modules are added to the previously partially integrated
system and the system is tested again.
In the student details management system, there can be several modules in which
several teams work in. Some of them are store student details, search student
details, update student details and delete student details modules. As these
modules are developed by separate teams, they have to be integrated and tested.
The integration is done step wise; first the store student details and search
student details modules are integrated and then tested to see if these two
modules are performing as required. Once the two modules are tested, update
student details module is added and all the three modules are tested again. In this
manner, the modules will be integrated one by one and the system is tested in
order to ensure that there are no errors during the integration.

The figure shows the testing
pyramid. Stating from the lowest
level, the modules are separately
tested (unit testing) then modules are
tested together (integration testing)
and lastly the whole system is tested
on the requirements.

System testing
Once all the modules have been integrated and tested, system testing can start.
During system testing the fully integrated system is tested against the requirements
of the system as recorded in requirements analysis in step 1.
System testing will ensure that the student details
management system works according to the requirements we
identified in our requirements analysis. For example, if there
was a requirement that only the staff members are allowed to
view student performance rating, in system testing, when a


Come up with a
detailed test plan to
test the modules in
the information
system for the sports

user logs in as a student he should not be able to view his performance ratings.
In order to carry out proper testing of the system, a test plan should be designed
before testing commences. Part of a test plan for the student details management
system is as follows.
Part of system
store student Add new
Remove a
Members File

Expected result

Actual result

A student is added to the

current student list.
Member not on membership

New student appears in

the student list.
Member deleted from list

Part of a test plan

Step 6: Deployment (Using the Information System)

After implementing and testing of an information system, its ready to be
introduced for the users. The introduction or the deployment of the system
involves many tasks such as installing the application in computers, configuring
the application and training the users.
Training users is first done offshore, meaning that the users are trained not with
the real system, but a sample system installed at some other location. The users are
given a user guide which covers how to run the system, how to enter data, how to
modify data and how to save and print reports. In addition, the guide should
include a list of error messages and advice on what to do if something goes wrong.
Implementing or introducing a new system can be done in two ways:
Direct Implementation
With this method of implementation the users stop using the manual system and
start using the computer system from a given date.
The advantage of this method is that it is less costly in effort and time than any
other method of implementation. The disadvantage of this method is that if
problems occur the users do not have any alternative apart from returning to a
manual system which may prove difficult if it has been discontinued.
Parallel Running

 Class Activity

With parallel running, the new system is introduced

alongside the existing system. With parallel running
both systems (manual and computer, or old computer
and new computer system) will be in operation at the

How would you deploy your

information system for the
sports club? If you are going to
link your sports club
application to the student
details management
application, what are the things
you should consider?


same time. This has the advantage that the results from the new system can be
compared with those of the old system.
However, it has the major disadvantage that each job is done twice and therefore
it means a lot of extra work for the users.
The deployment of your system can be in one computer or
several computers. In case of several computers, the computers
can be networked where the deployment can be done in one
computer but can be accessed from the other connected

The method of deployment will depend on the users requirements. For the
student details management system we have been discussing so far, direct
implementation will be easier to be used, as in school holidays, we can stop the
manual system and then deploy the new system. Before deploying the system, the
potential users (teachers, clerks and students) of the system will be given training
and after deployment they can use the system at school.

Step 7: Maintenance (Any update needed?)

It is impossible to produce systems of any size, which do not need to be changed.
Over the lifetime of a system, its original requirements will be modified to reflect
changing user and customer needs. The system's environment will change as new
hardware is introduced. Errors, undiscovered during system validation, may emerge
and require repair.
The process of changing a system after it has been delivered and is in use is called
software maintenance. The changes may involve simple changes to correct coding
errors, more extensive changes to correct design errors or significant
enhancements to correct specification errors or accommodate new requirements.
Maintenance therefore, in this context, really means evolution. It is the process of
changing a system to maintain its ability to survive.
The maintenance process is triggered by a set of change requests from system
users, management or customers. The cost and impact of these changes are
assessed. If the proposed changes are accepted, a new release of the system is
planned. This release will usual1y involve elements of adaptive, corrective and
perfective maintenance. The changes are implemented and validated and a new
version of the system is released. The process then iterates with a new set of
changes proposed for the new release.
Suppose after installing the student details management system, education ministry
sets a rule that all the student registration numbers should follow a standard


format. The format of the registration number will be <year>_<birth

date>_<birth certification number>. For example a student who was born on
02/02/1991 with birth certificate number of 468 registers with your school in year
2000, will have a registration number of 2000_02021991_468. As this was not the
format of the registration number you have used in your system, the system has to
be updated to reflect the changes. The developers who build the system will
update your system with a new version which updates the system with the new