Lesson 6: System Background definitions and classification

LAIREN
Background
A system is a set of interdependent components – (sub-entities) that creates a whole
entity. The components are dynamically linked (i.e. each one affects and is affected by other
components). The concept of a system is a broad one encompasses every facet of our lives –
the solar system, educational systems, transportation systems, information systems,
organizations, society, the family and the body systems. The linkages between entities make
it a system. The way it is looked at, that is, the purpose/s one describe to it, sets a boundary
around the linked components that differentiates the system from its environment.
Every organization is composed of subsystems, one of which is the information system.
The subsystem interacts and contributes to the common purposes of the organizations. The
effectiveness of these subsystems considered separately. This is describing by Aristotle’s
statement – “the whole is greater than the sum of its parts”.
One of the attributes of modern organization is their increasing complexity and
specialization of their subsystems. Each organization unit has its own objectives and can thus
lose sight of how their activities and goals interrelate with those of the organizations as a
whole.
In a university for example, the Vice President for Academic Affairs wants to have a
large inventory or courses in order to satisfy large inventory of courses in order to satisfy
student’s preferences. The Vice President for Administration, on the other hand, wants to
schedule courses with large enrollments in order to minimize investments in classrooms and
academic personnel. It is a conflict of different system. In this situation, the systems
approach is to consider the manner in which administration of university should view the
interrelationships of various subsystems of the university system.

Common Types of Systems

There is much different type of systems that we come into contact with during our
day-to-day life. It’s either a system or a component of a system (sub-system) or both. The
following are the two general classifications of systems:

 Natural System
 - these system are not made by people; they exist in nature, and is
further divided into two basic sub categories:
1. Physical systems
- Prof. Yourdon gave these example under physical system
 Skellar System – galaxies, solar system and so on
 Geological System – rivers, mountain ranges and so on
 Molecular System – complex organization of atoms
2. Living System
- encompasses all of the natural animals and plants around us as well as our
human race. According to James Miller, “this category also includes hierarchies
of individual living organisms, for example, herbs, flocks, and tribes, social
groups, companies and motion.

 Man-made System
- these are system that are constructed, organized and maintained by humans.
These include things such as social systems, transportation systems, postal
system.
Man-made system (and Automated System) interacts with living
systems; for example computerized pacemakers interact with the human heart.
There are cases in which automated systems are being designed to replace
living systems; and in some cases researcher’s are considering living system as
components of automated systems. Living system and man made system are
often part and parcel of a larger meta-system. The more you understand about
them, the better MIS people you become.
Under this man made systems, only the automated systems will be given
a focus, since when someone speaks of information system nowadays it means
the use of the technologies available in the market. However, many companies
have not gone far because they are still using manual systems. It is believed
that they are just waiting for tomorrow’s creative users and MIS professionals
to identify their potential need for computerization. Moreover, these manual
systems are symbol of opportunities to improve the company’s productivity
through the application of MIS technologies.
ARYAN
Categories of Automated Systems

Decision Support System

- computer based designed to provide information to support specific
decision-making situations.
AI (expert systems)
- a set of computer programs that emulates the decision making
capability of expert based on facts provided to the system.
Online System
- transactions are stored in a temporary storage and evaluated later

Example:
Ms. Long Collantes proposed the computerization of the student Information System of
the Lagro School of Business in Quezon City. The school administration agreed to her
recommendation for Local Area Network (LAN). Terminals are placed in the different
departments. The server (main computer) is located at the school registrar. When a student
enrolls in a certain department an operator enters a data contained on the enrolment sheet
directly to the terminal and then stored to the department’s master file. And then, the
enrolment report are produced through the printer, which is an output device.
 Real time system
- the result of transaction should be communicated and recorded at the
time the transaction was made.
Example:
United Colors airline has created offices around Metro Manila and even in the
nearby provinces. Passenger or agencies buy their tickets from these officers. Reservations
can also be made at these off-site offices. Transactions are entered into a computer and will
be transmitted right away to the main office which houses the main computer.
Lesson 7: Information Systems: Challenges and Opportunities

Emergence of the Global Economy

Globalization of the world’s industrial economies greatly enhances the value of

information to the firm and offers new opportunities to business. Today, information systems
provide the communication and analytic power that firms need for conducting trade and
managing business on the global scale. Controlling the far-plug global corporation –
communicating with distributors and suppliers, operating 24 hours a day in different national
environments, servicing local and international reporting needs – is a major business
challenge that requires powerful information system responses.
Globalization and information technology also brings new threat to domestic business
firms: because of global communication and management systems, customers now can shop in
a worldwide market place, obtaining price and quality information reliability, 24 hours a day.
This phenomenon heightens competition and forces firm to play in open, unprotected
worldwide markets, firms need powerful information and communication systems.

The New Role of Information Systems in Organization

Information system cannot be ignored by managers because they play such a critical
role in contemporary organization, Digital Technology is transforming business organizations.
The entire cash flow of most Fortune 500 companies is linked to information systems. Today’s
systems directly affect how managers decide, how senior managers plans, and in many cases
what products and services are produced (and how).
JERICK
The Widening Scope of Information Systems

There are growing interdependence between business, strategy, rules and procedures
on one hand, and information systems software, hardware, databases, and
telecommunication on the other. A change in any of these components often requires changes
in other components. This relationship becomes critical when management plans for the
future. What a business would like to do in five years is often dependent on what its system
will be able to do? Increasing market share, becoming the high quality or low cost producer,
developing new products, and increasing employee productivity depend more and more on
the kinds of quality information systems in the organization.
A second change in the relationship of information systems and organizations result
from the growing complexity and scope of systems projects and applications. Building systems
today involves a much larger part of the organization than it did in the past. Whereas early
systems bring about managerial changes (who has what information about whom, when, and
how, often) and institutional “core” changes (what product and services are produced under
what condition).
In the 1950’s, employees in the treasurer’s office, a few part-time programmers, a
single program, a single machine, and a few clerks might have used a computerized payroll
system. The change from a manual to a computerized system was largely technical – the
computer system simply automated a clerical procedure such as check processing. In contrast,
today’s integrated human resource system (which include payroll processing) may involve all
corporate division, the human resources department, dozen of full time programmers, a flock
of external consultants, multiple machines (or remote computers linked by communication
networks, and perhaps hundreds of end users in the organization who use payroll data to
make calculations about benefits and pensions and to answer a host of other questions. The
data, instead of being located in and controlled by the treasurer’s office, a re now available
to hundreds of employees via desktop computers each of which is as powerful as the large
computers of the mid 1980’s. The contemporary system embodies both managerial and
institutional changes.
The Network Revolution and Internet

One reason why system plays a larger role in organizations; and why they affect more
people, is the soaring power and declining cost of the computer technology that is at the
more of information systems. Computing power has been doubling every 18 months, so the
performance of the microprocessors has improved 25,000 times since their invention 26 years
ago.
The world’s largest and the most widely used network is the internet. The internet
is an international network of networks that are both commercially and publicly owned. The
internet connects hundreds of thousands of different networks from around the world.
Millions of people working in science, education, government, and business transactions with
other organizations use the internet around the globe.
The internet is extremely elastic. If networks are added or removal of failure occurs in
parts of the system, the rest of the internet continues to operate. Through special
communication and technology standards, any computer can communicate with virtually
private individuals linked using ordinary telephone lines. Companies and private individuals
can use the internet to exchange business transactions, text messages, graphic images, and
even video and sound, whether they are located next door or on the other side of the globe.
The internet is creating a new “universal” technology platform upon which to build all sorts
of new product, services, strategies, and organizations. Its potential for reshaping the way
information systems are used in business and daily life is vast and rich, and it is just beginning
to be trapped. By eliminating many technical, geographic and cost barriers obstructing the
global flow of information, the internet is accelerating the information revolution, inspiring
new uses of information systems and new business models.
CESS
What can you do with the Internet?
Function
Communicate and collaborate
Access information
Participate in discussions
Obtain information
Find entertainment
Exchange business transaction
Description
Send electronic mail messages, transmit documents and
data, participate in electronic conferences
Search for documents databases, and library card
catalogues, read electronic brochures, manuals, books and
advertisements.
Join interactive discussions groups; conduct primitive
voice transmission
Transfer computer files and text, computer program,
graphics, animation and videos.
Play interactive video games; view short video clips; read
illustrated and even animate magazines and books.
Advertise, sell, and purchase goods and services.

Of special interest to organization and managers in the internet capability know as the
World Wide Web, because it offers so many few possibilities for doing business. The World
Wide Web is a system with universally accepted standards for storing, retrieving, formatting,
and displaying information in a networked environment. Information is stored and displayed
as electronic pages that can contain text, graphics, animations, sounds, and video. These
Web pages can be linked electronically to other web pages, regardless of where they are
collected, and viewed by any type of computer. By clicking on highlighted words or buttons or
web page, one can link to relate pages to find additional information, software programs, or
still more links to other points on the web. The web can serve as the foundation for new kinds
of information.
The web pages created by an organization or individual are called Web site. Business
are creating web site with stylish typography, colorful graphics, push-button interactivity,
and often sound and video to widely disseminate product information, to broadcast
advertising and messages to customers, to collect electronic orders and customer data, and
increasingly to coordinate far plug sales forces and organizations on a global scale.
New Options for Organizational Design
Information systems can become powerful instruments for making organization more
competitive and efficient. Information Technology can be used to redesign and reshape
organizations, transforming their structure, scope of operations, reporting and control
mechanisms, work practices, work flows, products and services. We now describe some major
organizational design options that information technology has made available.

 Flattening Organizations
Today, the large, bureaucratic organizations that developed before the expensive
growth of information technology are often inefficient slow to change and uncompetitive.
Some of these organizations have downsized, reducing the number of employees and the
number of levels in their organizational hierarchies.
Flatter organizations have fewer levels of management, with lower-level employees
being given greater decision making authority. These employees are empowered to make
more decision than in the past, they no longer work standard 9 to 5 hours, and they no longer
necessarily work in an office. Moreover, such employees may be scattered geographically,
sometimes working half a world away from managers.
Modern information systems have made such changes possible. They can make more
information available to line workers so they can make decisions that previous had been made
by managers. Networks of computers have made it possible for employees to work together as
a team, another feature of flatter organizations. With emergence of global networks such as
the internet, team members can collaborate closely even from distant locations.

 Separating Work from Location

It is now possible to organize globally while locally; information technology such as e-
mail, the internet, and video conferencing to the desktop permit tight coordination of
geographically dispersed workers across time zones and cultures. Entire part or organizations
can disappear. Inventory (and warehouse to store it) can be eliminated as suppliers tie into
firm’s computer systems and deliver just in needed and just in time.
Modern communications technology has eliminated distance as a factor for many types
of work in many situations. Sales person can spend more time in the fields – with customers –
and yet have more up-to-date information with them while carrying much less paper. Many
employees can work remotely from their homes or cars, and companies can reserve at a much
smaller central office for meeting clients or other employees.
Companies are not limited to physical locations or their own organizational boundaries
for providing products and services. Networked information systems are allowing companies
to coordinate their geographical capabilities and even coordinate with other organizations as
virtual corporation (or virtual organizations) sometimes called networked organizations).
Virtual organizations use networks to link people, assets and ideas, allying with suppliers and
customers (and sometimes even competitors) to create and distribute new products and
services without being eliminated by traditional organizational boundaries or physical
location. One company can take advantage of the capabilities of another company, without
actually physically linking to that company.

 Increasing Flexibility of Organization

Modern communications technology has enabled many organizations in more flexible
ways, increasing the ability of those to respond to changes in the marketplace and to take
advantage of new opportunities. Information systems can give both large and small
organizations additional flexibility to overcome some of the limitations posed by their size.
CARL
How Information Technology Increases Organizational Flexibility?

1. Small Companies
Desktop machines, inexpensive computer-aided design (CAD) software, and
computer-controlled machine tools provide the precision, speed and quality of giant
manufacturers.
Information immediately accessed by the telephone and communication links
eliminates the need for research staff and business libraries.
Managers can more easily obtain the information they need to manage larger
numbers of employees in widely scattered locations.

2. Large Companies
Custom manufacturing systems allow large factories to offer customized
products in small quantities.
Massive database of customers purchasing records can be analyzed so that large
companies can know their customers need and preferences as easily as local merchants.
Information can be easily distributed down the ranks of the organizations to
empower lower-level employees and work group to solve problems.

 Redefining Organizational Boundaries and Electronic Commerce

Networked information system can enable transactions such as payments and
purchase orders to be exchanged electronically among different companies, thereby reducing
the cost of obtaining products and services form outside the firm. Organizations can also
share business data, catalogues, or mail message through such systems. These networked
information system can create new efficiency and new relationship between an organization,
its customers and suppliers thus redefining their organizational boundaries and the way they
conduct business.
System linking in a company to its customers, distributors, or suppliers are termed
inter-organizational systems because they automate the flow of information across
organizational boundaries. Such systems follow information or processing capabilities of the
organization to improve the performance of another to improve relationship among
organization.
 Inter-organizational Systems that provide services to multiple organizations by
linking many buyers and sellers create an Electronic Market. Through computer and
telecommunications, these systems function like electronic middlemen with lowered cost for
typical market place transactions such as selecting supplies, establishing prices, ordering
goods, paying bills. Buyers and sellers can compete purchase and sale transactions digitally
regardless of their locations.
The internet is creating a global electronic market place where vast array of goods
and services are being advertised bought, and exchange world wide. Companies are furiously
creating eye-catching electronic brochures, advertisements, product manuals and order from
the World Wide Web. All kinds of products and services are available on the web, including
fresh flowers, books, real estate, musical recording, electronic streaks and automobiles.

 Reorganizing Work Flows

Since the first uses of information technology in business, information systems have
been progressively replacing manuals work procedures with automated work procedures, work
flows and processes. Electronic work flows have reduced the cost of operations in many
companies by displacing paper and manual routines that the companies that accompany it.
Improve work flow management customer services has enable many corporations not only to
cost cut significantly but also to improve customer services at the same time. Redesigned
work flows can have a profound impact on organizational efficiency and can lead to new
organizational structure, products and services.

 The Changing Management Process

Information Technology is recasting the process of management. Providing powerful
new capabilities to help managers strategize and plan, organize, lead and control. For
instance, it is now possible for managers to obtain information on organizational performance
down to the level of specific transactions from just about anywhere in the organization
anytime. This new intensity of information makes possible far more precise planning,
forecasting and monitoring. Information technology has also opened new possibilities for
leading. By distributing information through electronic networks, the new managers can
effectively communicate frequently with thousands of employees and even manage far-plug
forces and teams – task which would be impossible in face-to-face traditional organizations.

 New People Requirement

 Managers must deal with people issues because the changes brought about by
information technology definitely require a new kind of employee. Employees need to be
highly trained in the past as work shifts from production goods to production services and
more tasks become automated. High on this skill set the ability to work in an electronic
environment; the ability to digest new information and knowledge, and act upon that
information; and the ability and willingness to learn new software and business procedures.
The new global worker, whether in factories or offices, is a multitalented college graduate
who is exceptionally productive because of an ever-changing set of skills and competencies.