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INFORMATION AND DATABASES

3 Information and Databases

a) What is a data-base?
b) Data modelling
c) Types of databases
d) The roles of a data-base management system
e) Data as a resource
f) Importance of models
g) Information systems categories
h) Office automation systems
i) Communication systems
j) Decision support systems
k) Enterprise systems
l) Limitations
m) Uses of information systems categories

Introduction to Management, Information, and System

The goal of Management Information System is to enable managers to make better decisions
by providing quality information. However, the proper understanding of Management
Information System requires clear explanation of Management, Information, and System,
which have been discussed in detail.

Management
According to Rosemary Stewart, ‘management is getting things done by others’. Therefore,
managers are supposed to manage things, so that people under them can carry out the
functions and operations effectively, efficiently, and economically. In order to understand
what information a manager needs, we need to review what management means. The word
‘management’ is used in three different but related meanings:

 People – the officers who run an organization.

 Tasks – the activities in which the officers are engaged.
 Process – which involves both people and the tasks.

Three fundamental conceptual frameworks that answer the question, ‘What does a manager
do?’ need to be understood to see how information system can help meet the information
needs of managers. Different writers gave different theories of management:

 Management Functions – Henry Fayol

 Management Roles – Henry Mintzberg
 Levels of Management – Robert Anthony

Functions of Management
Management is traditionally described as a process of leadership involving the management
functions of planning, organizing, staffing, directing, and controlling. Frenchman Henri Fayol,
a Pioneer of management theory, first explained these functions of management in the early
1900s. They give us a valuable way to think about what managers do. A manager should plan

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the activities of his or her organization, staff it with personnel, organize its personnel and their
activities, direct its operations, and control its direction by evaluating feedback and making
necessary adjustments.

a. Planning
It involves the development of long and short-range plans requiring the formulation of
goals, objectives, strategies, policies, procedures, and standards. Planning also involves
the perception and analysis of opportunities, problems, and alternative courses of action,
and the design of programs to achieve selected objectives.

b. Organizing
It involves the development of a structure that groups, assigns, and coordinates activities
by delegating authority, offering responsibility, and requiring accountability.

c. Staffing
This involves the selection and training of personnel and their assignment to specific
organizational activities.

d. Directing
This is the leadership of an organization through communication, inspiration, and
motivation of organizational personnel.

e. Controlling
This involves observing and measuring organizational performance and environmental
activities and modifying the plans and activities of the organization when necessary.

Roles of Management
Management scholar Henry Mintzberg in the early 1970s developed another useful
management model. This model views management as the performance of a variety of
management roles. A manager has the authority and status to play the following roles:

1. Interpersonal roles
A manager should be,
a. a leader of subordinates,
b. a liaison with the external environment, and
c. a figurehead when ceremonial duties arise.

2. Information roles
A manager should be,
d. a monitor of information on organizational performance,
e. a disseminator of information within the organization,
f. a spokesperson to the external environment.

3. Decision roles
A manager should be,
g. an entrepreneur in making innovative changes that affect the organizations,
h. a disturbance handler when unanticipated events occur,
i. a resources allocator in determining the distribution of financial and other resources
within the organization, and
j. a negotiator who resolves both internal and external disputes.

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Levels of Management
The information requirements of management depend heavily on the management level
involved. That the activities of management can be subdivided into three major levels:

 Strategic management
 Tactical management
 Operational management

These levels are related to the traditional management levels of top management, middle
management, and operating or supervisory management. This is the ‘managerial pyramid’
model of management by Robert N Anthony, in 1960s. It answers the question, ‘What does a
manager do?’ by emphasizing by the manager's specific levels in an organization. He says the
main job of a manager is planning and control, but this planning and control differs with his
level.

Planning

Control

a. Strategic planning and control

Top management develops overall organizational goals, strategies, policies, and
objectives, through long-range strategic planning. They also monitor the strategic
performance of the organization and its overall direction.

b. Tactical planning and control

Middle management develops short and medium-range plans and budgets and specifies
the policies, procedures, and objectives for sub-units of the organization. They also
acquire and allocate resources and monitor the performance of organizational sub-units,
such as departments, divisions and other work groups.

c. Operational planning and control

Supervisory management develops short-range planning devices such as production
schedules. They direct the use of resources and performance of tasks according to
established procedures and within budgets and schedules established for the work groups
of the organization.

Information requirements of different management levels

The type of information required by managers is directly related to the level of management
and the structure of decision situations they face. For example, the strategic management
levels require more summarized, ad hoc, unscheduled reports, forecasts, and external
intelligence to support its heavy planning and policymaking responsibilities. The operational
management level, on the other hand, may require more regular internal reports emphasizing
detailed current and historical data comparisons that support its control of day-to-day
operations.

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Strategic/Executive/Top Tactical/Management/ Operational/Junior/

level information Middle level information Supervisory level
requirements requirements information requirements
Planning related Planning and controlling Controlling
Future oriented Past, present, and future Historical
Whole organization Departmental Task specific
Primarily from external Primarily from internal Only from internal sources
sources sources
Not pre-scheduled Pre-scheduled Pre-scheduled and more
frequent
Summarized Summarized to lower level Detailed
Less accurate More accurate Most accurate
Used for unstructured Used for semi-structured Used for structured decision
decision making decision making making

Decision Making Process – Herbert A. Simon

System designing approaches/methodologies have been used for decision-making. The most
widely used example of this is a model of the decision making process by Herbert A. Simon, a
Nobel prize-winning economist and scholar of management decision making, his model is a
conceptual framework that divides the decision-making process into the following three
stages:

 Intelligence activities – search the environment and identify events and conditions
requiring decision.
 Design activities – develop and evaluate possible courses of action.
 Choice activities – select a particular course of action and monitor its implementation.

This three-stage decision-making process includes the ability to cycle-back to a previous stage,
if the decision maker is dissatisfied with the intelligence gathered or the alternatives
developed. Also, note that each of these stages of decision-making has unique information
requirements.

Intelligence Activities

Design Activities

Choice Activities

However, given the time and resource constraints of the real world, most decision makers will
choose to satisfice rather than optimize when faced with a decision situation. That is, they will
rarely act as rational economic beings who insist that all relevant information be gathered,
that all rational alternatives be considered, and that only the optimum alternative be chosen.
Instead, they will act with what Simon calls ‘bounded rationality’. That is, they will be satisfied
to make a decision based on incomplete information and a limited number of alternatives, if
it meets some of these subjective preferences and produces an acceptable level of results.

Types of decision situations/decisions

There are different types of decision made in organizations, from simple to complex, short
term to long term, financial to non-financial and so on. All these decisions can be categorized
technically as:

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a. Structured or Programmable decision

These decisions involve situation where the procedures to follow can be specified in
advance. Therefore, the decision procedures or decision rules can be developed to
program such decision. A structured decision may involve deterministic or algorithmic
approach where a decision’s outcome can be determined with certainty if a specified
sequence of activities (an algorithm) is performed. Alternatively, it may involve a
probabilistic decision situation where enough probabilities about possible outcomes are
known that a decision can be statistically determined with an acceptable probability of
success.

For instance, the inventory reorder decision faced by most businesses are frequently
quantified and automated. Inventory control software includes decision algorithms that
outline the computation to perform and the steps to take when quantities and inventory
are running low.

b. Unstructured or Non-programmable decision

This involves decision situation where it is not possible or desirable to specify in advance
most of the decision procedures to follow. Many decision situations in the real world are
unstructured, because they are subjected to too many random or changeable events or
involve too many unknown factors or relationships.

For instance, decision involved in starting a new line of products in some foreign country
whose information is not freely available.

c. Semi-structured decision
This is a combination of structured and unstructured decisions and involves situations
where some decision procedures can be pre-specified, but not enough to lead to a definite
recommended decision.

For instance, decision involved in starting a new line of products or making major changes
to employee benefits would probably range from unstructured to semistructured. The
many unknown or changeable factors involved would require a less structured approach
leading to subjective judgments by managers.

Relationship of management level and decision situations

Different levels of management make different types of decision. It is based on the work of G.
Anthony Gorry and Michael Scott Morton in the early 1970s. Their work emphasize that many
of the changes in manager’s information needs can be attributed to the degree of decision
structure at each level of management. Decisions at the operational level tend to be more
structured, those at the tactical level more semi- structured, and those at the strategic level
more unstructured. Therefore, information systems must be designed to produce a variety of
information products to meet the changing decision needs of managers at different levels of
organization.

Decision level Structured Semi-structured Unstructured

Operational Credit control or stock Selection of new Hiring supervisor
control procedures supplier
Tactical Selection of products Allocation of budget Expanding into a
to discount new design
Strategic Major investment Entry to new market or Reorganization of
decisions new product line whole company

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Information

Data
Singular is datum, means fact. Data are raw facts, observations, or inference. It is raw material
for information. Data are represented by symbols, numbers, labels, and so on. They have little
meaning by themselves. They are not information except in a limited sense. Normally, data is
about a physical phenomenon or business transaction. Data are the objective measurements
of the attributes (characteristics) of entities (such as people, places, things, and events). These
measurements are usually represented by symbols, such as numbers and words or by codes
composed of a mixture of numerical, alphabetical, and other characters. Data commonly takes
a variety of forms including numeric data, text, voice, and image data. Data is not useful until
subjected to a ‘Value-added’ process, where:

 Its form is aggregated, manipulated and organized

 Its contents are analyzed and evaluated
 It is placed in a proper context for a human user

Every business transaction generates data. A transaction is a business activity or event. The
receipt of an order of the sale of a product constitutes a transaction. Normally unlimited
amounts of data are available from both internal and external sources to an organization.
Sheer data volume can be a burden to both the individual and the organization. This means
data should be processed with specific informational objectives in mind.

Information
Information is data that have been processed into an organized, usable form. Arranged in an
order and form that is useful to the people who receive it. Information is the relevant
knowledge, produced after the data processing operations. It is acquired by the people to
enhance understanding and achieve specific purpose. Put another way, information is data
placed in a context to give it value for specific end user.

Differences between Data and Information

Data
Raw facts, observations, measurements
Don’t show the whole picture
Input – raw material
Data + meaning
May not be answer of some question
Information
Processed/organized data
Clarifies the whole situation
Process Output – finished goods
Information
Always answer of some question

Examples:
a. Data: Pakistan Sri Lanka Honda 400
Info: Pakistan exported four hundred Honda cars to Sri Lanka

b. Data: Pakistan India Abu Dhabi 1-1

Info: Pakistan and India series in Abu Dhabi (UAE) drew 1-1

Points to remember:

 Data and information terminologies used interchangeably.

 Data at times may not require any processing to become information – example 2.
 Data for someone may be information for someone else – example 2.

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Information and Knowledge

Knowledge is information in people’s mind or use of information. This means until a person
uses his information, he cannot be considered as a knowledgeable person.

Data and Content

According to IBM, in organizations, 85% is content and data is only 15%. Systematic data is
called data and unsystematic data is called content. Today content includes; typed
documents, handwritten documents, chits, receipts, acknowledgements, faxes, SMSs, MMSs,
VVSs, emails, vmails, and pictures made through computer, hands, and camera.

Information sources
In gathering, processing and producing reports through data is very costly and includes human
and other resources. It is important to become aware of all the potential sources of
information available. Decision making efforts can be hampered if you do not know where to
get the information you need or fail to realize that certain information exists. Information can
be acquired from two basic sources:

a. Internal sources
Internal sources of information are within organization. Common internal sources are
internally generated documents, observations, and internal surveys. Internal documents
found in most businesses include a balance sheet, an income statement, employee files,
scheduled and unscheduled reports, and other files and reports. Such documents can
supply a great deal of information about how a business operates and what its financial
condition is.

b. External sources
External sources of information are outside an organization. Common external sources
used by business people include external surveys annual reports from other organizations,
as well as statistics from government agencies, trade publication, and research reports.
External surveys are similar to internal surveys except that the individuals surveyed are
outside the organization that is conducting the survey.

Publication of commercial, trade, government, or professional business natures are

available through subscription, libraries, or special purchase. Information can also be
purchased from outside sources, such as research houses, and public opinion
organization, like Gallup Pakistan. An organization can buy information from existing
research or can commission specific research and polls to gather needed information.

Information types
Information can be of two general types: Quantitative information and Qualitative
Information.

a. Quantitative information
This type of information tells how much or how many. For example, there are 10 roses in
the vase, 20 books are on the shelf. Quantitative information is used heavily throughout
the business; such as how many units were sold? or how many rupees are being spent on
employees’ salaries. Quantitative information appears in one of two forms:
 Numerical representation – the description is given in the form of numbers. A balance
sheet or income statement contains numerical information is the best example.
 Graphical representation – is the pictorial description. Common graphical
representations of quantitative business information include charts and graphs.

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b. Qualitative information
It describes something using non-quantitative characteristic. For example, the roses in the
vase are red; the books on the shelf are related to accounting. This description does not
tell how much or how many roses or books; it simply states the quality. Qualitative
characteristics can also be used to describe job categories or positions such as manager,
systems analyst, and programmer.

In real life situations, the information that we receive/use is a mix of these two types. For
instance, 15 competent workers are serving this organization.

These two types are interconvertible as well, qualitative can be converted into quantitative or
quantitative into qualitative. For example, intelligence (quality) converted in IQ (quantity) and
marks secured (quantity) converted in to grades (quality).

Information levels
Information can also divided into levels, based on level of the receiver or may the number of
people receiving it. Levels can be discussed in three different ways:

a. General
No organizational concerns, this categorization is based on the number of people
receiving or can receive. Cateroies are:

 Universal – for people of all planets!

 International – for everybody in the world.
 Continental – for people of a continent.
 Regional – for people in a region, e.g SAARC or GCC.
 National – for people of a country.
 Provincial – for people of a province.
 Local – for people of a city.
 Personal – may be confidential information relating to one’s self.

b. Organization
Based on the vertical division in terms of organizational units. How and who is receiving
and using this information. Cateroies are:

 Organizational/Corporate – for everybody in the organization.

 Divisional/Unit – for the employees working in a division.
 Departmental – for that department employees.
 Section/Workgroup/Team – for a team members.
 Personal – for an individual concerning him only.

c. Management
This type is based on management levels in organizational settings.

 Strategic/top level – the senior management level people.

 Tactical/middle level – for the people working at middle level.
 Operational/supervisory level – for the people working at the operational level.

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Attributes of Information quality

Managers want information of high quality that is information whose characteristics,
attributes, or qualities help make it valuable to them. What characteristics make information
meaningful and useful to managers? What qualities give it value for managerial end users?
One way to answer these important questions is to examine the characteristics or attributes
of information quality. These qualities have been grouped into four dimensions of: time,
content, form, and cost.

1. Time dimension
This dimension includes the characteristics, which are related to the time aspect of the
information, as information is very time sensitive. Attributes included are:

a. Timeliness – Information should be provided when it is needed.

b. Currency – Information should be up-to-date when it is provided.
c. Frequency or consistency – Information should be provided as often as needed.
d. Time period – Information can be provided about past, present, and future time
periods.

2. Content dimension
Content dimension includes the characteristics that are related to contents of
information.

a. Accuracy – Information should be free from errors.

b. Relevance – Information should be related to the information needs of a specific
recipient for a specific situation.
c. Completeness – All the information that is needed should be provided.
d. Conciseness – Only the information that is needed should be provided.
e. Performance – Information can reveal performance by measuring activities
accomplished, progress made, or resources accumulated.
f. Scope – Information can have a broad or narrow scope, or an internal or external
focus.

3. Form dimension
Form dimension includes characteristics emphasizing that information must be attractive
and easy to understand and use.

a. Clarity – Information should be provided in a form that is easy to understand.

b. Details – Information can be provided in detail or summary form.
c. Order – Information can be arranged in a predetermined sequence.
d. Presentation – Information can be presented in narrative, numeric, graphic, or other
forms.
e. Media – Information can be provided in the form of printed-paper documents, video
displays, or other media.

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4. Cost dimension
Cost dimension includes characteristics related to the worth of information to be collected
and filed. There should be cost-benefit analysis done. Information, which has more cost
of acquiring or processing than the benefit we are going to get from it, is not useful
information.

a. Eliminating losses – Information should be provided to eliminate losses.

b. Reduce cost – Information should lead to the reduction in the cost of operation.
c. Better utilization of resources – Information can be provided to make better
utilization of resources.
d. Prevention of fraud – Information should prevent occurrence of fraud.
e. Consequences – Information should tell manager about the consequences of action.

System Concepts

General system theory

To understand the system concepts, we will be using General System Theory (GST) which is
applicable on every system in this world. The knowledge of system concepts is vital to proper
understanding of the development, technology, applications, and management of
information system. What is system? A system can be simply defined as a group of
interrelated or interacting elements forming a unified whole. Many examples of system can
be found in the physical and biological sciences, in modern technology, and in human society.
Thus, we can talk of physical system of the sun and its planets, the biological system of the
human body, the technological system of an oil refinery, and the socioeconomic system of a
business organization. The following generic concept of a system is widely used in the
information system discipline:

A system is group of interrelated components working together towards a common goal by

accepting inputs and producing outputs in an organized transformation process. Systems do
not exist in vacuum; rather, it exists and functions in an environment that contains other
system as well. If a system is one of the components of larger system, it is called subsystem,
and the larger system is its environment. In addition, a system is separated from its
environment and other systems by its system boundary.

Several systems may share the same environment. Some of these systems may be connected
to one another by means of a shared boundary, or interface. An open system is a system that
interacts with other systems in its environment.

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Environment

Boundary
Control

FB CS FB CS

FB CS
Input Process Output

Other Systems

FB = Feedback CS = Control Signal

In the diagram, the system exchanges inputs and outputs with its environment. Thus, we could
say that it is connected to its environment by input and output interfaces. Finally, if a system
has the ability to change itself or its environment to survive, it is known as adaptive system.

Organizations such as businesses and government agencies are subsystem‚ of society, which
is their environment. Society contains a multitude of such systems, including individuals and
their social, political, and economic institutions. Organizations themselves consist of many
subsystems, such as; departments, divisions, and other work groups. Organizations are open
systems, since they interface and interact with other systems in their environment. In
addition, organizations are adaptive systems, since they possess the ability to modify
themselves to meet the demands of a changing environment.

A business is an open, adaptive organizational system‚ operating in a business environment,

consisting of the following interrelated system component:

1. Input
It involves capturing and assembling elements that enter the system to be processed. For
example, economic resources such as; people, money, material, machines, land, facilities,
energy, and information are acquired by a business from its environment and used in its
system activities.

2. Processing
This involves transformation processes that convert input into output. Examples are
organizational processes such as; marketing, manufacturing, and finance transform input
into output. Other organizational processes are engineering, research and development,
legal services, and so on.

3. Output
Output involves transferring elements that have been produced by the transformation
process to their ultimate destination. For example, products and services, payments to
employees and suppliers, dividends, contributions, taxes, and information are all outputs
produced by a business and exchanged with or transferred to its environment.

4. Feedback
A primary role of information systems is serving as the feedback component of an
organization system. They provide information to management concerning the
performance to the organization.

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Feedback is the metadata (data about data) or data about performance of the system.
Feedback is frequently included as part of the concept of the control function because of
the essential role feedback plays in the control. The feedback and control functions
perform an important supportive role. They assure that other system components
properly transform input into outputs so the system can achieve its goal.

There are two types of feedback; positive and negative. A system performing properly
generates positive feedback, which signals the control function to maintain the system's
current course toward its goal. A system whose performance is deteriorating – deviating
from the attainment of its goal – generates negative feedback. In the real world, the
performance of most system tends to deteriorate overtime; this characteristic is called
entropy – the tendency of a system to lose its homeostasis, that is, a relatively stable state
of equilibrium.

Like feedback, we have feedforward which is forecast or the prediction about the system
performance. It can also be positive or negative.

5. Control
Control is a major system function that monitors and evaluates feedback to determine
whether the system is moving toward the achievement of its goal. It then makes any
necessary adjustments to the input and processing component of the system to ensure
that proper output is produced. Management is the control component of an
organizational system. Managers control the operations a business so that its
performance meets organizational goals such as profitability, market share, and social
responsibility. Feedback about organizational performance is compared to standards of
performance established by management, managers than make decisions to adjust
performance to meet organization goals.

The control function strives to reverse the entropy and maintain the equilibrium of a
system through a variety of corrective actions. It monitors feedback and attempts to
reduce deviations by the system from previously established standards of acceptable
performance. Control is accomplished by:

a. Detecting feedback with sensors of some kind

b. Measuring the size, quantity, direction, or intensity of the feedback
c. Comparing the results to the established standards of proper performance
d. Transmitting control signals that initiate corrective actions to adjust the activities of
other system components
e. Bringing system performance ‘under control’, that is, back within an acceptable range
of performance that leads to the attainment of system goals.

6. Environment
A business is an open, adaptive system that shares inputs and outputs with other systems
and its environment. A business must maintain appropriate relationships with other
economic, political, and social systems in its environment. This group includes its
stakeholders, such as; customers, suppliers, competitors, stockholders, labor unions,
financial institution, governmental agencies, and their community, all of which have a
stake in the proper and successful operation of the business. Information systems can
help a business shape its relationships with each of these stakeholders.

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Classifications of System
Systems can classified in different types based on their component and working.

a. Open system – is the one that exchanges inputs and outputs with other systems of the
environment. Every business organization is an open system.
b. Closed system – is that which does not exchange inputs and outputs with outside. This
type of system does not exist in real life.
c. Closed loop/cybernetic system – has five components; input, process, output, feedback,
and control. Cybernetic system is self-monitoring and self-regulating system. A familiar
example of a self-monitoring, self-regulating system is the thermostat-controlled heating
system, which automatically monitors and regulates itself to maintain a desired
temperature. Another example is the human body that automatically monitors and
adjusts many of its functions such as; temperature, heartbeat, and breathing.

Heirarcy/levels of system
a. Corporate level system – deals with planning and forecasting for the whole organization.
b. Divisional level system – deals with divisional performance, planning, and control.
c. Departmental level system – deals with departmental planning and control.
d. Transaction processing system – for processing transactions in the front office.

Information System and its Classes

Information Systems
Information system is system that handles/deals with information. Another definition is, a set
of people, procedures, and resources that collects, transforms, and disseminates
information in an organization. It accepts data resources as input and processes them into
information products as output. Information systems have been there since day one, when
humans started trading, in those days, these were manual information systems, but with
advancement of technology, these have become computerized. The journey started from
manual to mechanical to electromechanical to computerized systems today. Most simple
examples include Accounting and HR systems of an organization.

How does an information system convert data into information? What system components
and activities are involved? Let us see the details.

Information System resources

An information system uses the resources of hardware (machine and media), software
(programs and procedures), people (specialist and end-users), and data to perform input,
processing, output, storage, and control activities that convert data resources into
information products. An information system includes four major resources:

a. Hardware resources
b. Software resources
c. Network resource
d. Data resources
e. Human resources

All these have been covered in earlier chapters, see a little connecting material here:

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a. Hardware resources
The concept of hardware resources includes all physical devices and materials used in
information processing. Specifically, it includes not only machines, such as computers and
calculators, but also all data media that is, all tangible objects on which data is recorded;
sheets of paper to magnetic disks.

Examples of hardware in computer-based information systems are: computers systems,

workstations, which use a keyboard for input of data, a video screen or printer for output
of information, and magnetic or optical disks for storage. Telecommunications networks,
which consist of computers, workstations, communications processors, and other devices
interconnected by a variety of telecommunication media to provide computing power
through an organization.

b. Software resources
The concept of software resources includes all sets of information processing instructions.
The generic concept of software includes not only the sets of operating instruction called
programs, which direct and control computer hardware, but also the sets of information
processing instructions needed by people, which are called procedures. The following are
examples of software:

 System software – operating system that manages and supports the operations of a
computer system.
 Application software – programs that direct processing for a particular use of
computers by end users. Examples are an inventory program, a payroll program, and
a word processing program.
 Procedures – operating instructions for the people who will use an information
system. Examples are instruction for filling out a paper form or using a software
package.

c. Network resources
Network resources are infrastructure resources that are capable of transferring data.
Network resources include; servers, routers, switches, load balancers and other network
equipment, IP address pools, etc.

d. Data resources
Data is more than the raw material for information systems. Managers and information
systems professionals have broadened the concept of data resources. They realize that
data and information constitute a valuable organizational resource.

Data can take many forms, including traditional alphanumeric data composed of numbers
and alphabetical and special characters that describe business transactions and other
events and entities. Text data, consisting of sentences and paragraphs used in written
communications, and image data, such as graphic shapes and figures are also important
forms of data. However, data frequently takes the form of video data, data presented for
viewing by a variety of video display devices; audio data, the human voice, and other
sounds; tactical data, generated by touch-sensitive materials; and sensor data, provided
by a variety of sensors used in the control of physical processes.

Data resources are typically recorded and stored on several types of media, including;
paper, magnetic, optical, film, and electronic media. Examples are paper documents,
magnetic disks, magnetic tape, optical disks, microfilm, and electronic circuit chips. Thus,

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data and information stored in databases, model bases, and knowledge bases are now
considered part of the data resources or information resources of an organization. Data
resources are kept in different forms, like:

 Databases – collection of data.

 Model bases – collection of models (model represent others), different types are:
o Oral model – explanation of an object, e.g. a bungalow description orally.
o Written model – if the explanation is in written form, it is written model.
o Graphic model – if you draw the explanation graphically.
o Physical model – the bungalow itself.
o Mathematical model – equations, a model holds mathematical and conceptual
relationships.
 Knowledge bases – collection of knowledge (facts and rules).

e. Human resources
People are required for the operation of all information systems. These people resources
include end users and specialists.

 End users (or users) are people who use an information system or the information as
system products. They can be accountants, salespersons, engineers, clerks,
customers, or managers. Most of us are information system end users. These users
can be further categorized as direct (operate and use) and indirect (using the output).
 Specialists are people who develop and maintain information systems. They include
systems analysts, programmers, computer operators, and other managerial,
technical, and clerical personnel.

Information System activities

Data resources are transformed into a variety of information products by the information
processing activities of information systems. Information processing consists of the basic
system activities of input, processing output, storage, and control. Take a closer look at each
of the basic information processing activities that occur in information systems.

a. Input of data resources

Business transactions and other events must be captured, prepared, entered, and edited
for processing purposes. Input of data resources includes activities like:

 Collection of data – end users typically record data about transaction on some type of
physical medium such as paper form, or enter it directly into a computer system. For
example, Power utility employees collect data at subscribers’ premises.
 Preparation – data is converted into a form, which allows data entry easily, for
example, data in the electricity meter-reading book put on few pages for quick data
entry.
 Entry – keyboarding or scanning the data to convert it into digital format
 Editing – includes a variety of editing activities to assure data accuracy.

For example, data about sales transaction can be recorded on source documents such as
paper sales order forms. (A source document is the original formal record of a
transaction). Alternately, sales data could be captured by sales salespersons using the
keyboards or optical scanning devices who are visually prompted to enter data correctly
by video displays. This provides them with a more convenient and efficient user interface
that is method of end user input and output with the computer system. Methods such as

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optical scanning and displays of menus, prompts, and fill-in-the-blanks formats make it
easier for end users to enter data correctly into an information system.

b. Processing of data into information

Data manipulation includes calculating, comparing, sorting, classifying, and summarizing.
These activities organize, analyze, and manipulate data, thus converting it into
information for end users. A continual process of correcting and updating activities must
also maintain the quality of any data stored in an information system. For example, data
received about a purchase can be: added to a running total of sales results, compared to
a standard to determine eligibility for a sales discount, stored in numerical order based on
product identification numbers, classified into product categories (such as food and
nonfood items), summarized to provide a sales manager with information about various
product categories, and, finally, used to update sales records.

Therefore, when we say, computer is busy in processing, then it may be performing one,
many, or all of the below mentioned operations.

 Verification – comparison with the source document to verify the data entered.
 Validation – comparison with the allowed, possible, or acceptable limits of data to
ensure correct entry.
 Arithmetic – simple addition, multiplication, subtraction, and/or division.
 Comparison – with some defined standard to give discount or commission.
 Classifying – separating data into groups.
 Sorting/Indexing – arranging data in a sequence.
 Summarizing – producing summaries of huge data.
 Updating – updating the files to show changes made in data.

c. Output of information products

Information in various forms is transmitted to end-users and made available to them in
the output activity. The goal of information systems is the production of appropriate
information products for end users. Common information products are video displays,
paper documents, and audio responses that provide us with messages, forms, improve
our personal and professional performances as we work in organization and live in society.

d. Storage of Data, Model, and Knowledge resources

Storage is a basic system component of information systems. Storage is the information
system activity in which data and information are retained in an organized manner for
later use. For example, just as text is organized into words, sentences, paragraphs, and
documents stored data is commonly organized into fields, records, files, and databases.
This facilitates its later use in processing or its retrieval as output when needed by users
of a system. Data and information are vital organizational resources that can be stored in
information systems in the following forms:

 Databases, which hold processed and organized data.

 Model bases, which hold conceptual, mathematical, and logical models that express
business relationships, computational routines, or analytical techniques.
 Knowledge bases, which hold knowledge in a variety of forms such as facts and rules
of inference about various subjects.

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For example, sales data is accumulated and stored in a sales database for subsequent
processing, which yields daily, weekly, and monthly sales analysis reports for
management. Decision support systems, on the other hand, rely on model bases for
decision rules and analytic techniques that help mangers make decisions, while expert
systems use knowledge bases to develop interfaces about specific subjects and give end
users expert advice. Decision Support Systems and Expert Systems will be discussed later.

e. Control of system performance

An information system should produce feedback about its input, processing, output, and
storage activities. This feedback must be monitored and evaluated, determine if the
system is meeting established performance standards. Then appropriate system activities
must be adjusted so that proper information products are produced for end users. For
example, a manger may discover that subtotals of sales amounts in sales report do not
add up to total sales, then input or processing procedures will have to be changed to
accumulate correctly all sales transactions captured and processed by the sales
information system.

General attributes of a good quality information system include:

 Meets the users’ needs / desired objectives.

 Has a structure that stays intact over a reasonable period and does not require
modifications.
 User friendly.
 Efficient (minimum response time).
 Its operational cost is less than its benefits.
 Built in security features.
 Flexible and provides many options for handling data and evaluating information.
 Capable of supporting a variety of styles, skills, and knowledge.
 Multiple analytical and intuitive models for the evaluation of data and the ability to keep
track of many alternatives and consequences.
 Environment friendly.

Classes of Information System

There is no single system to control all aspects of computing in an organization. Organizations
have many information systems serving different organizational levels and functions. These
systems can have a variety of relationships with each other. Information systems perform
operational, managerial, and strategic support roles in business and other organizations.

All systems should have data security and must maintain confidentiality

Transaction processing systems

 Processes and records routine transactions
 Examples – online booking, store’s sale/purchase, ATM

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Top level Planning

EIS Strategic matters Unstructured
decision
Middle level
DSS Tactical matters Semi-structured
decision
Supervisory level
MIS Operational matters Structured
decision Control
Frontline staff
TPS For transaction

Management information systems

Takes input from TPS and produces reports

Characteristics:
 Internal focus
 Existing operations
 Current and historical information
 Structured decisions
 Little analytical capability
 Inflexible
 Regular reports
 Online access

Decision support systems

 Analyses data
 Produces different scenarios to help decision-making
 Types: Specialized and Generalized

Characteristics:
 What-if – intelligent guesses
 Mathematical modelling
 Real-time
 Queries
 Natural language
 User interface with data management and modelling software
 Semi-structured decisions

Executive information systems

A DSS for top level management with graphical interface

Characteristics:
 Data source – internal and external
 Summaries
 Dashboard reporting
 Unstructured decisions
 Real-time
 Drill down
 Expensive

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Expert systems
 Simulate human judgement using knowledgebase
 Examples – loan processing, chess game, legal diagnostics, medical diagnostics

Parts:
 Expert System Shell
 Inference Engine
 Knowledgebase
 Knowledge Acquisition Program (KAP)

Preconditions:
 Problem reasonably well-defined
 Defined rules
 Releasing expert for difficult problems
 Cost-benefit

Advantages:
 Non experts – expert decisions
 Fast, accurate, consistent
 Alternative solutions
 Reduced staff costs
 Relieves experts for complex issues
 Competitive advantage
 Always available
 Multi-access

Disadvantages:
 High capital expenditure
 Technical support
 Non expert – wrong advice
 Requires updation
 Down time
 Reliance
 Resistance

Integrated IT systems
Modules are linked to function separately and collectively in coordinated fashion

Advantages:
 Input to one system is input to many
 Output of a system is input to the other system
 Complete view
 Informed decisions
 Efficient operations
 Customer satisfaction
 Profitability

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Disadvantages:
 One module failure affects whole system
 Complex
 Prone to error
 Expensive
 Bespoke

Enterprise resource planning (ERP)

Cross-functional system having integrated suite of modules providing real-time view

Business resources:
 Cash
 Raw materials
 Personnel
 Production capacity

Commitments:
 Customer orders
 Purchase orders
 Employee costs

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Data Storage Approaches

Data storage, retrieval, and manipulation are important aspects of information system design.
Data storage/retrieval approach can greatly affect the performance of system. There are three
approaches to handle the data storage/retrieval:

1. Non-integrated approach
2. Integrated approach
3. Database approach

Go through the details here:

1. Non-integrated approach
In Non-integrated systems/approach, the systems are developed in piece-meal fashion
without any considerations/provisions for others departments/systems. Each application
operates on a separate file. The applications were based on File Management System
(FMS).

File Management System allows access to single file/table at a time and accommodates
flat files that are not related to other files.

Sales Application Inventory Application Purchase Application

Sales Data File Inventory Data File Purchase Data File

This approach led to a number of problems like:

 Data redundancy (duplication).

 Wastage of time, efforts, and disk space.
 Updating problems.
 Interdepartmental disagreement.
 No single comprehensive view of data.

2. Integrated approach
A number of systems/applications are linked up to operate in an integrated as well as
autonomous fashion. Input to one system is input to many systems or output of one is
input of other system. The main feature was use of common files. Several files were
combined into one master file, several master files were merged into fewer master files,
and these files were kept in one computer system. The system was based on FMS.

Sales Application Inventory Application Purchase Application

Sales Data File Purchase Data File

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The advantages were:

 Less redundancy.
 Reduced likelihood of interdepartmental disagreements.
 Improvements in productivity.
 Up-to-date information availability.
 Improvements in quality of management decisions.

The disadvantages included:

 Difficult to create links.
 One set of data, so accuracy and safety are very important.

3. Database approach
Maximum data is collected and organized to be used by many applications. The
applications are centered on a database not files. DB is an example of general-purpose
system, which uses Database Management System (DBMS) for creating and linking files in
a database container. Examples include; any organization’s database and the national
database (NADRA).

Databases

Meaning
The terminology database can be used in any of following senses:
 Loose meaning – collection of data files integrated and organized to provide a single
comprehensive view.
 General meaning – collection of records/data.
 Strict meaning – collection of structured data independent of any particular application(s).

Data independence
Data could be used from different records and files without disturbing the physical location.
Data independence includes:

 Independence of logical data from physical storage – data can be stored anywhere on the
storage and it is accessed without any problems.
 Independence of data items from programs which access them – many changes in
program will not affect the data and vice versa is also true.

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Access and sharing

Only authorized people are allowed to access data as per their authorities and data is shared
as users can see records and files at the same time. Two principles to control access:

 Record locking – allows many users to access records, but only one user can modify the
record. After modification, the lock will be released and record may be edited by others.
 File locking – access to whole file is prevented, generally applied in two cases:
o Data Base Administrator (DBA) is making some structural changes – adding,
amending, and/or deleting some fields.
o A user processing the file – e.g. producing some report based on a data file.

Database administration
It is done by the DBA and it includes:

a. Creation – making a DB.

b. Maintenance – performance tuning and fixing accessing problems.
c. Safety – protection from malware.
d. Security – setting logon ids, passwords, and privileges.
e. Integrity of databases / rule enforcement – validation checks to ensure reliable data in
fields.
f. Maintaining user manuals – to help user in case of any problems.

Database management
It is done by users and it includes:

a. Insertion of records – adding new records.

b. Updating of records – changes in existing records.
c. Deletion of records – deleting existing records, when not required.
d. Indexing of records – sorting/arranging records in a database.
e. Querying – questioning database using single or multiple criteria.

Operating a database
There are four major/common operations in using a database:

a. Creating the database structure to hold data.

b. Entering and amending the data for further use.
c. Retrieval and manipulation of data to deal with day-to-day operations:
 Select operation – select desired record(s) from the database to answer queries.
 Join operation – joins tables temporarily (on screen only) to answer queries.
 Project operation – joins tables permanently and produces another table combining
all or selected fields of all the tables involved.
d. Report production to help decision making.

Data Base Management Systems (DBMS)

A DBMS is software that allows database administration, management, and development of
systematic applications for data storage and retrieval. Examples include; FoxPro, MS-Access,
Oracle, and SQL. A DBMS has two parts:

a. Database engine – also called ‘backend’, it is used for DBA and DBM.
b. Developer – also called ‘front-end’, it is used for writing programs (form and report
generations).

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It is not necessary to have DB Engine and Developer from the same vendor. Different vendors’
engines and developer work together without any problems.

Data modelling
A data model is a set of data specifications and related diagrams that reflect data
requirements and designs.

 A physical data model represents the actual structure of a database – tables and columns,
or the messages sent between computer processes. Here the entity types usually
represent tables, and the relationship type lines represent the foreign keys between
tables.
 A logical data model is a fully attributed data model that is fully normalized. Fully
attributed means that the entity types have all the attributes and relationship types for
all the data that is required by the application(s) it serves. It may include:
o Restrictions on the data that can be held
o Rules and derived data that are relevant to the processes of the application(s) the
logical data model serves.

Designing systems (database and application)

Designing a system (databases and applications) requires involvement of three people:

 System Analyst – performs the data analysis and draws up the logical design of records
and files.
 Database Administrator – focuses on issues like; media and physical location of records,
mapping of logical and physical data and the mechanics of handling the database (Data
Base Administration).
 Programmer – writes the application and focuses on the logical relationship of database
with the program.

Database structures
Data/records can be structured in databases in different ways each having its own pros and
cons. There are three models:

a. Hierarchical structures
b. Network structure
c. Relational structure

Relationship (data associations) among the entities – four relationships; one to one, one to
many, many to one, and many to many.

a. Hierarchical structure
The records are stored using one to many relationships or parent-child structures. It has
lot of redundancy, low operational efficiency, and difficult database management. The
examples of HDBMS are; Adabas, GT.M, IMS, Cache, Multidimensional hierarchical toolkit,
and Mumps compiler.

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Parts Sales System

Customer 1: ABC Customer 2: XYZ

Order 1 Order 3 Order 2 Order 4

P1 P2 P1 P1 P3 P2

b. Network structure
In network data base model data are stored using many to many relationships. It offers
lesser redundancy, better operational efficiency, and easier database management. The
NDBMS examples are; IDMS and Total.

Parts Sales System

Customer 1: ABC Customer 2: XYZ

Order 1 Order 3 Order 2 Order 4

P1 P2 P3

c. Relational structure
Relational model stores data in tabular format using one to many relationships. It offers
minimum redundancy, high operational efficiency, and easy database management. The
software is called RDBMS and examples are; FoxPro, Access, Oracle, Informix, and many
more.

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Customer Table Product Table Order Table

Cust Id CN Prod Id Prod Name Ord No. Cust Id Prod Id
C1 ABC P1 Pin O1 C1 P1
C2 XYZ P2 Shaft O1 C1 P2
P3 Handle O2 C2 P1
O2 C2 P3
O3 C1 P1
O4 C2 P2

Keys and their use

Tables or files are collection of fields, all of these fields contain data which user access. Some
fields have special uses and recognized with other names as well.

 Primary key / Key field – it is a field, which is unique in every record, used for indexing the
records and searching is mostly done through it. At times, it may be a compound key,
means made up of more than one fields, e.g. name and date of birth.
 Foreign key – it is primary key of table used in other table(s) for linking up the tables.

These keys help user to link tables temporarily or permanently.

Database trends
Recent database trends include the growth of distributed databases and the emergence of
object-oriented and hypermedia databases.

a. Distributed databases – usually found in very large corporations that require multiple sites
to have immediate and fast access to data.
b. Object-Oriented databases – many companies are steering away from strictly text-based
database systems. Data as objects can be pictures, groups of text, voice, audio, etc.
Object-oriented databases bring the various objects from many different sources and get
them all working together.
c. Hypermedia databases – database allows the user to access texts, video and audio
recordings and photographs. Hypermedia, an extension of the term hypertext, is a
nonlinear medium of information which includes graphics, audio, video, plain text and
hyperlinks.

Advantages of databases/database approach/DBMS

a. Ease of setting up – databases can be set up very easily using engines and developers.
DBMS support the process of prototyping.
b. Lower maintenance cost – engine and developers make maintenance easier so the cost is
lowered.
c. Structured Query Language (SQL) features allows performing queries very comfortably.
d. Standardized interface for data import/export helps to exchange data with other
applications.
e. Standardized security mechanisms, that includes:
i. Access security – Logon ids, passwords, and privileges are assign to every user as per
job requirements.
ii. Backup and disaster recovery to ensure survival during any disaster.
iii. Transaction Tracking System (TTS) – this will ensure tracking of all transactions done,
so that there is no mixing up of transaction during any system failure, e.g. cell phone
will record miss call data even battery was low and cell shuts down.

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iv. High level of data integrity – as data in DB container, so any deletion of record will be
done after thorough checking of all tables.
f. No/less redundancy – no duplication.
g. Multiple uses – data in databases can be used for multiple purposes. For example, NADRA
is using data for many purposes other than computerize national identity card (CNIC) and
machine readable passport (MRP).
h. Data for the organization as a whole so relationships are easier to define among data
elements.
i. Easier to update – update once to update all the tables.
j. Independent of the user program – data and programs can be change independent of each
other.
k. Off-the-shelf available – wonderful DBMS are available in market, buy one and use it.

Disadvantages of database/database approach

a. Data security and privacy – a big administrative hassle in setting up accounts and assigning
privileges and if mismanaged more security and privacy problems hit the organization.
b. One set of data so it has to be accurate, any inaccuracy will affect the whole organization.
c. One set of data if it fails the whole organization suffers and work comes to stand still.
d. Problems in geographical area accessing – every user accesses the same database, so there
is more load on the database and it responds slowly.

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