INFORMATION SYSTEM

Defining Information Systems

Almost all programs in business require students to take a course in something

called information systems. But what exactly does that term mean? Let’s take a
look at some of the more popular definitions of information systems:

Information system (IS) is the study of complementary networks of hardware

and software that people and organizations use to collect, filter, process, create,
and distribute data.”

Information systems are combinations of hardware, software, and

telecommunications networks that people build and use to collect, create, and
distribute useful data, typically in organizational settings.”

Information systems are interrelated components working together to collect,

process, store, and disseminate information to support decision making,
coordination, control, analysis, and visualization in an organization.”

The Components of Information Systems

They are made up of five components:

 Hardware
 Software
 Data
 people and
 Process.

The first three, fitting under the technology category, are generally what most
students think of when asked to define information systems. But the last two,
people and process, are really what separate the idea of information systems
from more technical fields, such as computer science. In order to fully
understand information systems, students must understand how all of these
components work together to bring value to an organization.

Hardware

Information systems hardware is the part of an information system you can

touch – the physical components of the technology. Computers, keyboards, disk
drives, iPads, and flash drives are all examples of information systems hardware.
Software

Software is a set of instructions that tells the hardware what to do. Software is
not tangible – it cannot be touched. When programmers create software
programs, what they are really doing is simply typing out lists of instructions that
tell the hardware what to do. There are several categories of software, with the
two main categories being operating-system software, which makes the
hardware usable, and application software, which does something useful.
Examples of operating systems include Microsoft Windows on a personal
computer and Google’s Android on a mobile phone. Examples of application
software are Microsoft Excel and Angry Birds.

Data

The third component is data. You can think of data as a collection of facts. For
example, your street address, the city you live in, and your phone number are all
pieces of data. Like software, data is also intangible. By themselves, pieces of
data are not really very useful. But aggregated, indexed, and organized together
into a database, data can become a powerful tool for businesses. In fact, all of
the definitions presented at the beginning of this chapter focused on how
information systems manage data. Organizations collect all kinds of data and use
it to make decisions. These decisions can then be analyzed as to their
effectiveness and the organization can be improved.

People

Steve Jobs and Bill Gates (099) When thinking about information systems, it is
easy to get focused on the technology components and forget that we must look
beyond these tools to fully understand how they integrate into an organization. A
focus on the people involved in information systems is the next step. From the
front-line help-desk workers, to systems analysts, to programmers, all the way
up to the chief information officer (CIO), the people involved with information
systems are an essential element that must not be overlooked.

Process

The last component of information systems is process. A process is a series of

steps undertaken to achieve a desired outcome or goal. Information systems are
becoming more and more integrated with organizational processes, bringing
more productivity and better control to those processes. But simply automating
activities using technology is not enough – businesses looking to effectively
utilize information systems do more. Using technology to manage and improve
processes, both within a company and externally with suppliers and customers, is
the ultimate goal. Technology buzzwords such as “business process
reengineering,” “business process management,” and “enterprise resource plans”
all have to do with the continued improvement of these business procedures and
the integration of technology with them. Businesses hoping to gain an advantage
over their competitors are highly focused on this component of information
systems.

Technology

Technology can be thought of as the application of scientific knowledge for

practical purposes. From the invention of the wheel to the harnessing of
electricity for artificial lighting, technology is a part of our lives in so many ways
that we tend to take it for granted. As discussed before, the first three
components of information systems – hardware, software, and data – all fall
under the category of technology. Each of these will get its own chapter and a
much lengthier discussion, but we will take a moment here to introduce them so
we can get a full understanding of what an information system is.

Networking Communication:

Besides the components of hardware, software, and data, which have long been
considered the core technology of information systems, it has been suggested
that one other component should be added: communication. An information
system can exist without the ability to communicate – the first personal
computers were stand-alone machines that did not access the Internet.
However, in today’s hyper-connected world, it is an extremely rare computer that
does not connect to another device or to a network. Technically, the networking
communication component is made up of hardware and software, but it is such a
core feature of today’s information systems that it has become its own category.

The Role of Information Systems

Now that we have explored the different components of information systems, we

need to turn our attention to the role that information systems play in an
organization. So far we have looked at what the components of an information
system are, but what do these components actually do for an organization? From
our definitions above, we see that these components collect, store, organize, and
distribute data throughout the organization. In fact, we might say that one of the
roles of information systems is

 To take data and turn it into information

 Transform information into organizational knowledge.

As technology keeps driving, this role has evolved into the backbone of the
organization.

Information System Classification:

Operational Management - Includes transaction processing system, office

automation system, and knowledge management system, handles structured
data, and used by workers and employees to streamline daily operations

Tactical Management - Used by business unit managers, handles semi-

structured data, and includes management information systems

Strategic Management - Used by executives, handles unstructured data, and

includes the decision support system and executive support system

Types of Information Systems

 Transaction Processing Systems

 Office Automation Systems
 Knowledge Management Systems
 Management Information Systems
 Decision Support Systems
 Executive Support System

Most businesses utilize six different information technology systems, each with
functionality that assists in managing a particular business unit or organizational
level.

Because the business environment has a wide range of data requirements,

business intelligence technology systems help each department manage and
organize all of their data in a manner that helps unit members meet key
objectives.

If the data collected by an IS is relevant and accurate, the organization can use
it to streamline tasks, pinpoint inefficiencies, and enhance customer service.
Successful companies typically employ six different systems to ensure that every
aspect of the organization's data is properly managed and used to improve
decision-making and problem-solving.

This allows a company to maintain a competitive edge, find growth

opportunities, and keep an accurate audit trail of financial and transactional data
for compliance purposes.

Here is an overview of the six types of information systems and how they work-

1. Transaction Processing Systems

A transaction encompasses all of the purchases and sales of products and

services, along with any daily business transactions or activities required to
operate a company.

Quantities and the types of transactions performed vary, depending on the

industry and size/scope of the company. Examples of typical transactions include
billing clients, bank deposits, new hire data, inventory counts, or a record of
client-customer relationship management data.

A transaction processing system ensures that all of the contractual, transactional,

and customer relationship data is stored in a safe location and accessible to
everyone who needs it. It also assists in the processing of sales order entries,
payroll, shipping, sales management, or other routine transactions needed to
maintain operations.

By utilizing a TPS, organizations can have a high level of reliability and accuracy
in their user/customer data while minimizing the potential for human error.

2. Office Automation Systems

An office automation system is a network of various tools, technologies, and

people required to conduct clerical and managerial tasks.

Typical examples of functions performed by an OAS include printing documents,

mailing paperwork, mailing, maintaining a company calendar, and producing
reports. Primarily, an office automation system assists in enhancing
communication among different departments so everyone can collaborate to
complete a task.
An OAS can integrate with e-mail or word processing applications to ensure all
communication data is easily accessible and in one centralized location. By
utilizing an office automation system, businesses can improve communication
between workers, streamline managerial activities, and optimize knowledge
management.

3. Knowledge Management Systems

A knowledge management system stores and extracts information to help users

enhance their knowledge and optimize collaboration efforts to complete tasks.
Examples of documents found in a knowledge management system include
employee training materials, company policies, and procedures, or answers to
customer questions.

A KMS is used by employees, customers, management, and other various

stakeholders involved with the organization. It ensures that technical abilities are
integrated throughout the company while providing visuals to help employees
make sense of the data they see.

This information system also provides intuitive access to external information

required by workers who need outside knowledge to complete their roles. For
example, a KMS may hold competitor data that helps a sales team member
optimize his/her strategy when pitching to a customer.

Because a KMS shares expertise and provides answers to essential questions,

using one can improve communication among team members and assist
everyone in meeting performance goals.

4. Management Information Systems

A management information system uses various transaction data from a TPS to

help middle management optimize planning and decision-making.

It retrieves TPS information, aggregates it, and generates reports to help those
at the management level know important details of a situation. Summaries and
comparisons are utilized to allow senior managers to optimize the decision
making process to achieve better results.

Most of the report formats encompass summaries of annual sales data,

performance data, or historical records. This provides a secure and systemized
way for managers to meet their targets and oversee business units.
5. Decision Support Systems

A decision support system processes data to assist in management decision-

making. It stores and gathers the information required for management to take
the proper actions at the correct time. For example, a bank manager can use a
DSS to assess the evolving loan trends to determine which yearly loan targets to
meet.

Decision models are programmed into the IS to analyze and summarize large
quantities of information and put it into a visual that makes it understandable.

Because a DSS is interactive, management can easily add or delete data and ask
important questions. This provides the evidence required for mid-management to
make the right choices that will ensure the company meets its targets.

6. Executive Support System

Executive support systems are similar to a DSS but are primarily used by
executive leaders and owners to optimize decision-making.

An expert system helps enterprise leaders find answers to non-routine questions

so they can make choices that improve the company's outlook and performance.
Unlike a DSS, an executive support system provides better telecommunication
functionality and a bigger computing functionality.

Graphics software is integrated within an ESS to display data about tax

regulations, new competitive startups, internal compliance issues, and other
relevant executive information. This allows leaders to track internal performance,
monitor the competition, and pinpoint growth opportunities.

Specific Use Cases for Information Systems:

Enterprise Resource Planning- Provides organization-wide integration of

important business activities, handles the allocation of resources to optimize
efficiency

Accounting Information System- Manages all of the accounting information

in an organization, including payroll to streamline human resource tasks

Sales Management System- An information system that manages and

monitors all of the sales and marketing data in an organization to streamline
each step of the sales process
Summary of critical terms

Transaction processing systems TPS handles all of the customer and

employee transaction data so an organization can streamline workflows and
easily retrieve the required information.

Office automation system manages all of the clerical and managerial daily
tasks in a business to help optimize communication and improve collaboration
efforts.

Knowledge management system handles expertise on a variety of subjects

and assists in knowledge-sharing so users can become more informed and
enhance their job performance.

Information system MIS uses processing system TPS data to help middle
managers optimize decision-making and monitor performance.

Support system DSS processes information to help managers make the right
choices at the right time.

Executive system information system manages all of the required

information needed for enterprise leaders to monitor the competition, track
internal performance, and pinpoint growth opportunities.

Overview of Computer Information Systems

So, what is a computer information system? While a computer is an inherently

diverse tool, businesses generally use a group of networked computers to collect,
organize, store, and transmit information. This network is also known as a
computer information system. In the field of computer information systems,
professionals work to optimize the application of networked computers in
business environments.

To be effective in this effort, these professionals must learn how to improve

business processes by implementing a computer information system that can
accommodate the specific needs of their organization. For example, if an
organization is concerned with the productivity of its employees, IT professionals
could use the existing computer information system to track and measure
relevant metrics. The data from such a system could then be used to design
workplace policies that better promote optimal use of labor hours.
Definition: A computer information system is a system composed of people and
computers that processes or interprets information. The term is also sometimes
used to simply refer to a computer system with software installed.
Types of Computer Information Systems

 Transaction Processing Systems

 Office Automation (Enterprise Collaboration) Systems
 Management Information Systems
 Decision Support Systems
 Executive Information Systems.
 Expert Systems
 Finance and Accounting Systems
 Computer Network Architect.

Benefits of information system

Computer information systems have opened many doors in the public and
private sectors. By

 Allowing organizations to communicate more effectively

 Stimulating creative innovation

 Making collaboration easier than ever before.

 Serving as the foundation for cloud computing, which allows users to store
data and use software that is not installed on their own computers but
instead hosted on a remote server elsewhere, which in turn allows
businesses to immediately boost their efficiency without incurring massive
overhead costs.

 Giving businesses a unique ability to customize the way they use

technology, allowing them to adapt to market factors in real time.

Challenges of information system

The downside to computer information systems is that:

 They are subject to cyber threats, such as hackers, malware, and viruses.
  High cost of maintenance: Depending on the size of these systems,
maintaining them may also be costly on the macro level.

Still, the benefits of using a computer information system are likely to outweigh
the costs.

TRANSACTION PROCESSING SYSTEM (TPS)

Information:

Data:

Main Differences between Data and Information

The terms data and information can mean different things in different contexts,
but the main differences between them are:

 Data is a collection of facts. Information is how you understand those facts

in context.
 Data is unorganized, while information is structured or organized.
 Information is an uncountable noun, while data is a mass noun.
 The word information is used with a singular verb, while data is used with
a plural verb.
 Data is not typically useful on its own, but information is.
 Data generally includes the raw forms of numbers, statements, and
characters. Information doesn’t have to.
 Information depends on data.

Data vs. Information in Computers

In the world of computers, data is the input, or what you tell the computer to do
or save. Information is the output, or how the computer interprets your data and
shows you the requested action or directive.

Data vs. Information in Statistics

In the world of statistics, data is still defined as raw information, but the term
statistics is often used in place of information. The statistics interpret and
summarize the data.
Data vs. Information in Business and Healthcare

In the world of business, data are often raw numbers and information is a
collection of individual data points that you use to understand what you’ve
measured.

Data vs. Information Examples Chart

Seeing examples of data and information side-by-side in a chart can help you
better understand the differences between the two terms.

Data
each individual homework and test
grade of a student in one class
typing the words “cat videos” in your
computer search engine (input)
5551237798
100, 212, 0, 32
Information
the student’s average grade for each class
the list of search results that includes a
variety of cat videos on the internet (output)
a person’s phone number (555)123-7798
the freezing and boiling points of water in
Fahrenheit and Celsius

Note: Data typically comes before information, but it’s hard to say which is more
useful. For example, if the information was processed or organized in a biased
manner or incorrectly, it’s not useful, but the data still is. Continue exploring data
and information by learning the differences between a hypothesis and a
prediction or a hypothesis and a theory.

Data capture and input device

Data capture: is the process of collecting structured and unstructured information

electronically and converting it into data readable by a computer.

Any process for converting information into a form that can be handled by a computer |
Meaning, pronunciation, translations and 

Effective Ways/methods to Data Capture

Depending upon the procedure of collecting information, the data capture process can be
divided into two segments:

1. Manual Data Capture: 

 In manual data capture process, the data is entered manually by an operator using
input devices like keyboard, touch screens, mouse etc.  for keying in data in the
form of figures or text into particular software such as Excel or any other data or
word processing program. This method of data collection is labor intensive, time
consuming and so businesses find it efficient to migrate to automated methods of
data capture. However, the manual method is not totally extinct and still finds
application in many business processes. Briefly, the methods of manual data
capture include using:

o Mouse
o Graphics tablet
o Keyboard
o Touch-screen – e.g. PDA
o Tracker ball 

2. Automated Data Capture: 

Automated data capture involves the use of computerized technology to capture

data. This method has  a high initial cost on account of the initial investment
required as for instance, the purchase of technology but  as the project proceeds, is
found to lower the operating costs significantly on account of low manpower
requirement.  Further, with the majority of data today existing in electronic forms,
the cost of using such automated technology has also reduced. Hence, there has
been proliferation of techniques and technology of automated methods of data
capturing, each suitable for a particular type data or source of data. Automated
data capture includes the use of different technologies such as OCR, ICR, OMR
and others, which are individually described here.

3. Optical Character Recognition (OCR):

OCR technology is used to convert different types of machine-printed documents

including image files, PDF files or scanned paper documents, into searchable and
editable data.

4. Intelligent Character Recognition (ICR):

ICR technology helps to recognize and capture handwritten printed characters

from image files. As handwritten text caries significantly, so ICR is less accurate
 and complicated as compared to other technologies. However, the technology
evolves continuously by itself and as the number of samples processed increases,
the accuracy increases. This self-learning process differentiates it from others and
gives it the name of ‘intelligent’.

5. Optical Mark Reading (OMR):

OMR technology is used to capture human marked data from documents such as
forms and surveys. The technology has the capacity to differentiate between
marked and unmarked boxes and so, is used for capturing data through boxes that
are checked manually on documents.

6. Magnetic Ink character Recognition (MICR):

It is a data capture technology capable of recognizing characters. It involves the

recognition of specially formatted characters that are printed in magnetic ink, by a
machine. The technology is mainly used by banking industry to speed up the
processing of cheques and other documents. The added advantage of this method
is that humans can also read the data as well.

7. Magnetic Stripe Cards:

Magnetic stripe cards store data using magnetic properties of certain materials.
They possess stripes of iron-based magnetic materials on the card. They are used
for electronically storing particular numbers related to credit cards, identity cards
and they enable automated data transfer when they reswiped in magnetic readers.

8. Smart-Cards:

Smart cards are pocket-sized cards with embedded integrated circuits. They can
function on contact or can be contactless. They contain more memory than
magnetic cards and can be used for data related to personal identification,
authentication, biometrics etc. Upon interaction with suitable reading devices they
enable automated information transfer and data access.

9. Web-Data Capture:

Data capture from web involves the capture of data from electronic forms through
internet or intranet.
It can equally be the method that involves collecting information from users, which
doesn’t exist already, it often makes sense to capture the data through a digital form
either on the web, via an intranet page or smart phone app. Digital forms can be designed
to structure the answers and data collected by avoiding too many open answers. They can
also dynamically adapt to responses and repopulate where information exists already. Ie.
Address look-up.

10. Voice- Recognition:

Voice recognition is the process of converting speech into text. The text can be simple
text or can be a set of commands.  It finds application in dictation systems, small
controlling systems and certain processes of data entry and word-processing
environment.

There are differences in the types of data and their sources. Accordingly, there are
different methods of capturing this data. Following this sub-topic would have certainly
provided you with information regarding various data sources and their methods of
processing data. However, the selection of appropriate methods for data capture involves
equally an understanding of form, source, depth and quantum of data.

Barcode/ QR recognition

Dependent upon the type of barcode that is used, the amount of metadata that can be
included or marked up can be high, as is the level of recognition. QR codes for example
can contain webpage links ultimately linking a webpage of almost anything and any
amount of information. Barcodes can be applied to documents, webpages or almost any
objects for a range of purposes including inventory management, location or task
tracking, webpage opening or authentication via authenticated app, production batch
tracking, delivery notes, digital form locating and more. Smartphone with barcode
applications have removed the need for dedicated barcode scanning tools making barcode
use even more affordable.

Template based intelligent capture

Templates are used to reduce variables and risks of failed data capture by optimizing the
capture process to certain document templates. This is combined with OCR & ICR to
identify machine produced and to a lesser degree handwritten characters that are
contained in particular area(s) of a document. This capability can be useful where the
number of different document types being received is relatively low (typically up to 30
different document types) but consistent. Common applications include census, inter-
bank transfers, logistics forms and application forms.

IDR (Intelligent Document Recognition)

Intelligent document recognition also interprets and indexes different documents based
on the document type, its meta data and elements of the document identified. For
example, invoices, letters, contracts, post codes, logos, key words, VAT registration
numbers. Data that has been identified through OCR can be validated and verified
through look-up tables and databases as well configure or “taught” rules associated with
such documents and data. and even databases to maximize accuracy.

Specialized applications exist for departmental projects such as invoice processing. IDR
applications can hold information about suppliers generated from other line-of-business
systems and match invoices to that information, using recognized text such as VAT
number, telephone number, post code etc. The application then looks for keyword
identifiers on the invoice and extrapolates the value nearby. Validation rules are then
applied, for example the NET amount plus the VAT amount must equal the gross
amount, minimizing the chance for errors.

Artificial Intelligence and Data Capture

Artificial Intelligence is ultimately an umbrella terms for different artificial intelligence

techniques. AI is best viewed in context of the use case and application. All of the
methods described here can be augmented to some degree or another by Artificial
intelligence such as

 Computer vision, Image or pattern recognition to improve the recognition of any

type image.
 Neural Networks & Machine learning to assist with accurate recognition training
based on large data sets and assisted learning.
 Natural Language Processing for interpreting sentences and their meaning.

Hybrid Intelligent Automated Data Capture

Despite advances in data capture and artificial intelligence, exceptions can happen when
an automated approach is unable to confidentially automate a task such as the extraction
of text (based on a set of rules or a recognition profile). When this happens an exception
can be thrown and the task is passed to service desk for verification. Service desks can
also assist machine learning to improve or train automated processes such as data capture
or decision making. Our hybrid automation platform combines artificial intelligence with
Human intelligence to offer the highest level of automated data capture of unstructured
documents as service. An application of this approach is the Process Flows Intelligence
AP automation service.

Digital Signatures

A valid digital signature associated with an email or document allows a user’s identity or
the authenticity of digital messages or documents to be captured. Digital signatures are
often used for digital approval workflows involving parties from different companies or
entities.

Web scraping or monitoring

Since there is now a huge amount of data on the web, web scraping tools, called web bots
or crawlers (ie. Google spiders) are used to crawl through web pages and code to collect,
analyze and index specific data. Web scraping is used to capture and monitoring many
types of web data such as news, updates, prices, contacts, policies, share data, currencies,
connected devices, comments and reviews – basically anything accessible via the web.

Screen Scraping

Screen scraping is used by Robot Process Automation and other tools to navigate interact
and capture raw data that appears on a display digital display, application or website.
Once the data is captured, it is then analyzed to extract elements such as text and images
etc and then a workflow executed to process the data as defined by the configured
workflow rules.

Legacy System Integration or Data Import & Migration

If data can’t be accessed in a legacy system due to missing features or proprietary APIs,
products such as Alchemy Data grabber Module, Formate and OnBase allow
organizations with legacy systems (mainframe systems) to ingest data for improved
search and archival applications.

Examples include cheque requisition reports, property tax reports, invoice and credit note
runs. The reports would be parsed by the application and broken down into individual
records or pages. At the same time, index information is extracted from each record or
page and associated with that record or page.
The full text content of the document is also made available for searching. To improve
the presentation of the document to the end user, an overlay can be added. The Overlay
can be a representation of the form or paper that the original report would have been
printed on. Therefore, in the case of an invoice, the record resembles the original printed
invoice. Data-grabber can also be used to import images, or files, along with indexing
information extracted from a legacy system or from a manually created file. It can also be
used to create the required structure of a database within Alchemy.

OMR (Optical Mark Reading)

This approach is used to capture human marked data on scanned forms, surveys and
exams. A natural question to ask would be why a digital form won’t suffice before using
this approach.

MICR (Magnetic Ink Character Recognition)

This is a data capture technology capable of recognizing characters machine printed in a

magnetic ink. It is mainly used in the bank industry for cheque processing.

Intelligent Voice Capture

The boom in smart devices has also seen the rise of voice controlled virtual assistants
from the likes of Apple (Siri), Google (Google Assistant), Amazon (Alexa) and Microsoft
(Cortana). These are the best examples of voice capture being used mainstream in our
everyday lives. There are now many applications of Voice data capture in businesses. For
example, applications such as CX-E (CallXpress) and virtual assistants provide the ability
to capture voice commands and initiate business processes, transcribe voice mails and
other functions unifying verbal communications data with other channels. Contact centres
are a good example of where the unification and integration of voice data alongside
voice, instant messaging, email, fax and forms deliver enhanced customer experiences
and business processes.

Intelligent image & video capture

Intelligent image and video data capture involves real-time analysis of images and
moving image data for objects or “triggers” before executing a certain process. There are
a wide range for applications for automated image and video data capture and analytics
including: health & Safety or QA monitoring, crowd and footfall analysis, sentiment
analysis, facial recognition, ANPR (Automatic Number Plate Recognition), Fire detection
or elevated temperatures in humans, animals or machinery (Thermal imaging), site
protection, People counting, queue monitoring, patient activity, object counting,
behavioural detection, prevention of vandalism and theft. Examples include: Konica
Minolta Intelligent Video Solutions.

Augmented Reality

Augmented reality is closely linked to video analysis and involves the real time
processing of camera footage looking for programmed “trigger” objects. If a trigger
object is identified, a process is executed to for example display an overlay graphic, video
or other web data. AR applications are increasing in popularity as the digital and physical
worlds get closer ie Google Streetview, Skyview, Pokemon. Our Airelens AR solutions is
used to assist Remote Services operations in the field.

With advances in cloud computing, AI and mobile technology, data capture has come
such as long way recent years and is required in some form in almost every digital
process. The digital world can overlay and co-exist with the physical world and business
operations to create new value and possibilities in our personal lives as well as our
working lives.

Controls in data processing

Data control is the process of governing and managing data. It is a common type of
internal control designed to achieve data governance and data management objectives.

Data processing is the conversion of data into usable and desired form. This conversion
or “processing” is carried out using a predefined sequence of operations either manually
or automatically. Most of the processing is done by using computers and other data
processing devices, and thus done automatically. The output or “processed” data can be
obtained in various forms. Example of these forms include image, graph, table, vector
file, audio, charts or any other desired format. The form obtained depends on the software
or method used. When done itself it is referred to as automatic data processing. Data
centers are the key component as it enables processing, storage, access, sharing and
analysis of data

More and more information can be sorted in this manner. This help in getting a clearer
view of matter and have a better understanding of it. This can lead to better productivity
and more profits for the various business fields. The advancement in areas such as data
security, machine leaning, data science, network security etc requires a focused approach
for reliable, accurate & cost effective processing. All the businesses, especially those
which require real time processing need reliable & efficient data center. These centres
house the critical infrastructure and provide robust processing required keeping services
running.

Type of data to be processed

Data in any form and of any type requires processing most of the time. It can be
categorized as personal information, financial transactions, tax credits, banking details,
computational, imagery and simply almost anything you can think of. The quantum of
processing required will depend on the specialized processing which the data requires.
Subsequently it will depend on the output that you require. With the increase in demand
and the requirement for such services, a competitive market for data services has
emerged.

There are various data processing services available which performs audit, processing
operations for a company or organization collecting data. These services or businesses
help other business to comply with the applicable law, follow standard contractual
clauses, make data processing agreement, create security documentation, and prevent
personal data breach and even act as supervisory authority for government.

Applications of Data Processing

Areas data processing is applied includes:

 Commercial Data Processing: Commercial data processing involves a large

volume of input data, relatively few computational operations, and a large
volume of output. For example, an insurance company needs to keep records on
tens or hundreds of thousands of policies, print and mail bills, and receive and
post payments.
 Data Analysis: In a science or engineering field, the terms data processing and
information systems are considered too broad, and the more specialized term
data analysis is typically used. Data analysis makes use of specialized and highly
accurate algorithms and statistical calculations that are less often observed in the
typical general business environment.
 Real World Applications: With the implementation of proper security algorithms
and protocols, it can be ensured that the inputs and the processed information is
safe and stored securely without unauthorized access or changes. With properly
processed data, researchers can write scholarly materials and use them for
educational purposes. The same can be applied for evaluation of economic and
such areas and factors. Healthcare industry retrieves information quickly of
 information and even save lives. Apart from that, illness details and records of
treatment techniques can make it less time-consuming for finding solutions and
help in reducing the suffering of the patients.
 Almost all fields: It is impossible to think of any area which is untouched by data
processing or its use. Let it be agriculture, manufacturing or service industry,
meteorological department, urban planning, transportation systems, banking and
educational institutions. It is required at all places with varied level of complexity.

Reasons for data processing popularity

Processing of data is becoming a popular topic because of the various new laws and uses
associated with the data. Big companies and MNCs are collecting data by various means
which comprises of personal information, customer data, health information, contact
information, location data etc. Due to collection of this data, there is an increasing
concern over how it is collected and how it will be used. Collecting, storing and
processing the sensitive information such as income, medical records, spatial information
etc is becoming a concern worldwide. New laws are being framed to regulate what data is
collected and how it is processed and keeping in mind the user privacy.

Stages and process of Data Processing

Processing of data is required by any activity which requires its collection. This data
collected needs to be stored, sorted, processed, analyze and presented. This complete
process can be divided into 6 simple primary stages which are:

1. Collection
2. Storage
3. Sorting
4. Processing
5. Analysis
6. presentation and conclusions

The steps involved in this forms a cycle which resembles data processing cycle and
information processing cycle. These cycles might provide instant results or take time
depending upon the complexity.

Video explaining Data Processing and Data Processing Cycle

Understanding how data is processed and reading about data processing cycle can often
be confusion. This short video on data processing and data processing cycle will help you
gain more clarity on the topic. It explains briefly about the data processing followed by
data processing cycle.

Types of output files obtained as “processed” data

 Plain text file – These constitute the simplest form of processed data. Most of
these files are user readable and easy to comprehend. Very negligible or no
further processing is required in these types of files. These are exported as
notepad or WordPad files.
 Table/ spreadsheet – This file format is most suitable for numeric data. Having
digits in rows and columns allows the user to perform various operations. For ex,
filtering & sorting in ascending/descending order to make it easy to understand
and use. Various mathematical operations can be applied when using this file
output.
 Charts & Graphs – Option to get the output in the form of charts and graphs is
handy and now forms standard features in most of the software. This option is
beneficial when dealing with numerical values reflecting trends and
growth/decline. There are ample charts and graphs are available to match
diverse requirements. At times there exists situation when there is a need to
have a user-defined option. In case no inbuilt chart or graph is available then the
option to create own charts, i.e., custom charts/graphs come handy.
 Maps/Vector or image file – When dealing with spatial data the option to export
the processed data into maps, vector and image files is of great use. Having the
information on maps is of particular use for urban planners who work on
different types of maps. Image files are obtained when dealing with graphics and
do not constitute any human readable input.
 Other formats/ raw files – These are the software specific file formats which can
be used and processed by specialized software. These output files may not be a
complete product and require further processing. Thus there will need to
perform steps multiple times.

Methods of Data Processing

There are number of methods and types of data processing. Based on the data processing
system and the requirement of the project, suitable data processing methods can be used.
Generally, Organizations employ computer systems to carry out a series of operations on
the data to present, interpret, or to obtain information. The process includes activities like
data entry, summary, calculation, storage, etc. A useful and informative output is
presented in various appropriate forms such as diagrams, reports, graphics, etc. Data
processing is mainly important in business and scientific operations. Business data is
repeatedly processed, and usually needs large volumes of output. Scientific data requires
numerous computations and usually needs fast-generating outputs. Three methods of data
processing have been presented below:

Manual Data Processing

Data is processed manually without using any machine or tool to get the required results.
In manual data processing, all the calculations and logical operations are performed
manually on the data. Similarly, data is transferred manually from one place to another.
This method of data processing is very slow, and errors may also occur in the output.
Mostly, Data is processed manually in many small business firms as well as government
offices & institutions. In an educational institute, for example, marks sheets, fee receipts,
and other financial calculations (or transactions) are performed by hand.

This method is avoided as far as possible because of the very high probability of error,
labour intensive and very time-consuming. This type of data processing forms the very
primitive stage when technology was not available, or it was not affordable. With the
advancement of technology, the dependency on manual methods has drastically
decreased. This also makes processing expensive and requires large manpower depending
on the data required to be processed. Example includes selling of commodity on shop.

Mechanical Data Processing

In this method, data is processed by using different devices like typewriters, mechanical
printers or other mechanical devices. This method of data processing is faster and more
accurate than manual data processing. These are faster than the manual mode but still
form the early stages of data processing. With invention and evolution of more complex
machines with better computing power this type of processing also started fading away.
Examination boards and printing press use mechanical data processing devices
frequently. Any device which facilitates data processing can be considered under this
category. The output from this method is still very limited.
Electronic Data Processing

Electronic data processing is also known as EDP, a frequently used term for automatic
information processing. It uses the computers to collect, manipulate, record, classification
and to summarize data. If someone asks what is electronic data processing, then EPD
meaning can be described as the processing of data using electronic means such as
computers, calculators, servers and other similar electronic data processing equipment. A
computer is the best example of an EDP system. Use of a data processing system ensures
accurate and rapid data processing.

Types of Data Processing

There are number of methods and techniques which can be adopted for processing of data
depending upon the requirements, time availability, software and hardware capability of
the technology being used for data processing. There are number of types of data
processing methods.

Batch Processing

This is one of the widely used type of data processing which is also known as
Serial/Sequential, Tacked/Queued offline processing. The fundamental of this type of
processing is that different jobs of different users are processed in the order received.
Once the stacking of jobs is complete they are provided/sent for processing while
maintaining the same order. This processing of a large volume of data helps in reducing
the processing cost thus making it data processing economical. Batch Processing is a
method where the information to be organized is sorted into groups to allow for efficient
and sequential processing.

Online Processing is a method that utilizes Internet connections and equipment directly
attached to a computer. It is used mainly for information recording and research. Real-
Time Processing is a technique that can respond almost immediately to various signals
to acquire and process information. Distributed Processing is commonly utilized by
remote workstations connected to one big central workstation or server. ATMs are good
examples of this data processing method. Examples include: Examination, payroll and
billing system.

Real time processing

As the name suggests this method is used for carrying out real-time processing. This is
required where the results are displayed immediately or in lowest time possible. The data
fed to the software is used almost instantaneously for processing purpose. The nature of
processing of this type of data processing requires use of internet connection and data is
stored/used online. No lag is expected/acceptable in this type and receiving and
processing of transaction is carried out simultaneously. This method is costly than batch
processing as the hardware and software capabilities are better. Example includes
banking system, tickets booking for flights, trains, movie tickets, rental agencies etc. This
technique can respond almost immediately to various signals to acquire and process
information. These involve high maintenance and upfront cost attributed to very
advanced technology and computing power. Time saved is maximum in this case as the
output is seen in real time. For example in banking transactions.

Online Processing

This processing method is a part of automatic processing method. This method at times
known as direct or random access processing. Under this method the job received by the
system is processed at same time of receiving. This can be considered and often mixed
with real-time processing. This system features random and rapid input of transaction and
user defined/ demanded direct access to databases/content when needed. This is a method
that utilizes Internet connections and equipment directly attached to a computer. This
allows the data to be stored in one place and being used at an altogether different place.
Cloud computing can be considered as an example which uses this type of processing. It
is used mainly for information recording and research.

Distributed Processing

This method is commonly utilized by remote workstations connected to one big central
workstation or server. ATMs are good examples of this data processing method. All the
end machines run on a fixed software located at a particular place and make use of
exactly same information and sets of instruction.

Multiprocessing

This type of processing perhaps the most widely used types of data processing. It is used
almost everywhere and forms the basis of all computing devices relying on processors.
Multi processing makes use of CPUs (more than one CPU). The task or sets of operations
are divided between CPUs available simultaneously thus increasing efficiency and
throughput. The breakdown of jobs which needs be performed is sent to different CPUs
working parallel within the mainframe. The result and benefit of this type of processing is
the reduction in time required and increasing the output. Moreover CPUs work
independently as they are not dependent on other CPU; failure of one CPU does not
result in halting the complete process as the other CPUs continue to work. Examples
include processing of data and instructions in computer, laptops, mobile phones etc.

Time sharing

Time based used of CPU is the core of this data processing type. The single CPU is used
by multiple users. All users share same CPU but the time allocated to all users might
differ. The processing takes place at different intervals for different users as per allocated
time. Since multiple users can uses this type it is also referred as multi access system.
This is done by providing a terminal for their link to main CPU and the time available is
calculated by dividing the CPU time between all the available users as scheduled.

Laws related to data processing & storage

The increasing concern about user privacy and the collection of sensitive information has
resulted in new laws and guidelines which must be followed. This law differs from
country to country and governs how the data is processed, shared and used by a company.

Data protection laws are rapidly improving and changing so as to meet the evolving
requirements. Security breach, unauthorized disclosure and data theft are other concerns
which require strict rules and standards to be followed by companies dealing with
consumer information. Data processing agreements are formulated and followed by the
companies so as to keep them compliant with the data processing and data protection law.
There are a lot of different data protection laws in the world today and it can be confusing
to keep up with them.  Data protection law is a set of laws that govern how and when
personal data can be collected, used or shared. In the UK, it’s a legal obligation for
organizations to make sure their customers are aware of how they will use their data. The
EU has enacted the General Data Protection Regulation (GDPR) which came into effect
in May 2018. There are a number of data protection laws that you’ll need to comply with
when you’re taking your business online.

When it comes to data protection, you need to make sure that the data on your site is
secure. There are some very good encryption technologies available today that will
protect your data and allow you to safely store it on your site. “The Data Protection Act
1998 is an Act of the Parliament of the United Kingdom that regulates how organizations
can protect and control the processing of personal data. GDPR rules were brought in with
the intention of giving people more control over what their data is used for.
Management Information System

A Management Information System (MIS): is a systematic organization and

presentation of information that is generally required by the management of an
organization for taking better decisions for the organization.

A Management Information System (MIS) is a systematic organization and

presentation of information that is generally required by the management of an
organization for taking better decisions for the organization. The MIS data may
be derived from various units of the organization or from other sources. However
it is very difficult to say the exact structure of MIS as the structure and goals of
different types of organizations are different. Hence both the data and structure
of MIS is dependent on the type of organization and often customized to the
specific requirement of the management.

The structure of decision making in organizations

The traditional organizational structure is top-down. Decisions are made at the top and
permeate down through layers of management. Decision making involves a complex set
of skills: being able to synthesize information, assess risk, and incorporate divergent
feedback.

Decision making refers to making choices among alternative courses of action—which may also include
inaction. While it can be argued that management is decision making, half of the decisions made by
managers within organizations ultimately fail (Ireland & Miller, 2004; Nutt, 2002; Nutt, 1999). Therefore,
increasing effectiveness in decision making is an important part of maximizing your effectiveness at
work.

Types of decision making

There are different types of decisions ranging from

 Automatic
 programmed decisions to
 More intensive nonprogrammer decisions.
 Structured decision-making processes

Types of Structured decision-making processes

They include

 Rational
 bounded rationality,
 intuitive
  Creative decision making.

Each of these can be useful, depending on the circumstances and the problem that needs to be solved.