All Chapters 1 To 5 Mis

CHAPTER ONE
AN INTRODUCTION TO MIS
Robson Mekonnin/Asst.professor 1
Introduction
Information: - data that is processed and presented in a form
which assists decision makers.
System: - a set of interrelated parts which work together to

achieve a common objective.
Information systems: is an organized combination of people,

hardware, software, communications networks, data resources
that stores, retrieves, transforms, and disseminates information in
an organization.
Introduction Cont’d….
 Information systems may help managers and workers to analyze
problems, visualize complex subjects, and create new products in
addition to supporting decision makings.
MIS: an integrated set of hardware, software, procedures, users
and communication networks for collecting, processing, storing,
and communicating information that allows mangers to make
better decisions.
The goal of MIS is to deliver information and providing flexible

and speedy access of information to mangers.
Introduction Cont’d…
ha
Hardware Software
Software
Data
People
Information
Stored Procedures
data
Information System Model

Importance of MIS in Business:
Improves process
Improves products and services
Improves quality
Cuts costs
Improves management, problem solving and decision making.
Subsystems of MIS
 MIS can be viewed as a federation of information system.
Marketing: sales forecasting, sales planning, customer and sales

analysis
 Manufacturing: production planning and scheduling, cost control

analysis.
 Logistics: planning and control of purchasing, inventories,

distribution.
 Finance & accounting: financial analysis, cost analysis, capital

requirements planning income measurement.
 Personnel : planning personnel requirements, analyzing

Subsystems Cont’d…..
Activities of Subsystem
Transaction processing: processing of orders, shipments, and

receipts.
 Operational control: scheduling of activities and performance

reports.
 Management control: formulation of budgets and resource

allocation.
 Strategic planning: formulation of objectives and strategic

plans.
Information Requirements & sources of Information for
Managers
Information required at different levels of management are:
1. Operational information
 relates to the day-to-day operations
 repetitive in nature
 needed by the lower management
 derived from internal sources
 highly detailed, being the processing of raw data
 relates to the immediate term
Information Requirements Cont’d….
 task specific
 prepared constantly, or very frequently
 largely quantitative
2. Tactical Information
 helps middle level managers allocating resources
 derived from a more restricted range of external sources
 summarized at a lower level
 relevant to the short and medium terms
 prepared routinely and regularly
 based on quantitative
Robsonmeasures
Mekonnin/Asst.professor 9
Information Requirements Cont’d….
3. Strategic Information
 derived from both internal and external sources
 used by managers to define goals and priorities, initiate

new programs and develop policies
 summarized at a high level
 relevant to the long term
 deals with the whole organization
 often prepared on an 'ad hoc' basis
 both quantitative and qualitative

Contemporary Approaches to MIS
- The study of information systems is a multidisciplinary field.
- The field can be divided into Technical and Behavioral
approaches.
1. Technical Approaches : - emphasizes on

mathematically based models to the systems. The
disciplines that contribute to the technical approach are
i. Computer science: - concerned with establishing

theories of computability, methods of computation, and
methods of efficient data storage and access.
Contemporary Approaches to MIS
ii. Management science: - emphasizes the development of models
for decision-making and management practices
iii. Operations research: - focuses on mathematical techniques for

optimizing selected parameters of organizations.
II. Behavioral approaches: - arise in the development and long-

term maintenance of information systems.
i. Sociologists study information systems with an eye towards how

groups and organizations shape the development of systems.
Contemporary Approaches Cont’d….
ii. Psychologists study information systems with an interest
in how human decision makers perceive and use formal
information.
iii. Economists study information systems with an interest in

what impact systems have on control and cost structures
within the firm and within markets.
The Evolution of Information Age
The Evolution and Characteristics of the Information age
1. Agricultural age (up to1800s): -the majority of workers were

farmers whose lives revolved around agriculture
2. Industrial age (1800s to 1957): -when work processes were

simplified through mechanization and automation.
3. Information age (began in 1957): - in which the majority of

workers are involved in the creation, distribution, and application of
information
4. Knowledge workers: workers involved in the creation,
distribution, and application of information.

The Evolution of Information Age
The evolution of the information age
Agriculture age Industrial age Information
age
Time period Pre 1800s 1800s to 1957 1957 to
present
Majority of Farmers Factory Knowledge
workers workers workers
Partnership People and People and People and

land machines people
Principal tool Hand tools Machines Information

technology
Core Drivers of the Information Age
Core drivers of the information age
 Data: - raw facts that describe the characteristics of an

event or object
 Information: data converted into a meaningful and useful

context
 Business intelligence: - information collected from

multiple sources such as suppliers, customers, competitors,
partners, and industries that analyze patterns, trends and
relationships for strategic decision making.
Types of Information systems
IT will make a difference to you as a manager
 IT requires a capital management
 IT is a foundation of doing business
 IT is directly related with productivity
 IT brings strategic opportunity and advantage to firms
CHAPTER TWO
FOUNDATIONAL CONCEPTS
OF MIS
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What managerial end users need to know?
Foundation concepts
Need to have knowledge of the generic components and
properties of information systems,
which requires an understanding of some basic concepts in

general systems theory and information processing.
need to know about the behavioral, technical, business and

managerial concepts, components and roles of an
information systems.

Development
How should managerial end users or information specialists
develop information systems solutions to business problems?
should understand how methodologies such as the systems

approach, the systems development life cycle, and prototyping
can be used to construct information systems applications that
successfully meet end user and organizational needs.
 know how business professionals and information

specialists plan, develop, and implement information
systems.
What managerial end users need to
know?
Technology
should have an understanding of major concepts,
developments, and management issues in information
technology, i.e. Hardware, Software, Telecommunications and
Database management .

Applications
They should gain a basic understanding of information
systems concepts and applications in areas such as end user
computing, office automation, transaction processing,
information reporting, decision support, executive support and
artificial intelligence.
 uses of information systems for the operations,
management, and competitive advantage of a business.

Management
This area requires understanding the major challenges and
methods involved in managing the resources, technologies, and
activities of information systems.
More specifically, they should understand concepts such as

information resource management and information systems
planning, implementation, and control.
 effectively and ethically managing information technology at

the end-user, enterprise, and global levels of a business.
Basic System Concepts
Inputs- data inputs are the facts that are gathered and captured
in the system.
Processing- is the way data is manipulated, developed or built

upon in some way that transforms it to create meaningful
information.
 Output- when raw facts are transformed by system processing,

output is produced that signals or communicates to the
stakeholders of the system.
Introduction Cont’d…..
 Feed back: - is data about the systems performance.
 Cohesion: - describes how well each sub-system within a system

is designed around an individual task or function of the system.
 Coupling: - refers to how independent each sub-system is in

relation to other sub-systems.
 Entropy: - is the tendency of systems to deteriorate over time.
 Boundary: - is the limits that identify the components, process

and interrelationship.
 Interface: is a common boundary shared by two or more systems

Business and Management Functions
1. Marketing Function: concerned with identifying the
customers needs and wants; and satisfying their needs.
2. Manufacturing and Production Function: is

responsible for actually producing the firm’s goods and
services.
3. Finance and Accounting Functions:
Finance function: responsible for managing the firm’s

financial assets, such as cash, stocks, bonds, and other
investments,
8/25/2021
to maximize the return.
Robson Mekonnin/Asst,professor 26
Business Functions Cont’d…
 Accounting function: responsible for maintaining and
managing the firm’s financial records such as receipts,

disbursements, depreciation, etc.
4. Human Resources Functions: responsible for

attracting, developing, and maintaining the firm’s
workforce.

Data, Information, Knowledge and Wisdom
1. Data: are raw facts and figures which have no meaning.
doesn't mean that data are useless.
 represented in the form of symbols, such as digits, alphabets,
pictures, graphs, etc.
2. Information
 data that have been retrieved, processed
 is knowledge that one derives from facts placed in the right
context.
 the most important corporate resources.

Data, Information Cont’d….
3. Knowledge - information becomes knowledge when
one is able to understand the patterns that exist within
information and their implication.
 Knowledge = Information + understanding of the

pattern
4. Wisdom - the ability to apply knowledge in order to

solve a problem.



Information Needs of Managers
Decision Structure Information
Unstructured Adhoc, unscheduled
infrequent
Semi-structured Pre-specified,
scheduled
Structured Detailed, internal,

historic

Information Needs Cont’d….
The Information Needs and Sources of Managers
The information requirements of management depend
heavily on the management level involved.
1.Strategic levels: - develop overall organizational goals,
strategies, policies and objectives through long –range
strategic planning,
Ad hoc Basis: - should be summarized, relevant, and
indicative towards to the point under consideration.
- are reports that managers need, usually quickly, that may
never be needed again.
 Unexpected Information: - focuses on prediction or forecasting which in
turn may result in an unexpected type of information for the managers.
 Summary Form: is usually not detailed but in summary form. Long-range

planners are not usually interested in detailed information.
 External Data: a large part of the data used as an input to the system may
be acquired from sources external to the organization.
Unstructured Format: the source of data is mainly external and there is

no prescribed format or structure of the data.
 Subjectivity: - uses personal judgments and experience than objective

information.

2. Tactical levels- develop short- range and medium – range plans
and budgets and specify the policies, procedures, and objectives
for subunits of the organization.
 Tactical information systems are characterized by: -
Summary Reports: - provides management with important

totals, averages, key data and abstracts on the activities of the
organization.
 Exception Reports: are report types that alert managers when

results from a particular operation have exceeded or not met

Comparative Nature: is usually comparative in nature
rather than merely descriptive.
 Both internal and external sources: the data used for

input to the system may not be confined to sources internal
to the organization.

3. Operational- level information systems often have the
following characteristics:
 Repetitiveness: is usually generated repetitively at periodic

intervals, such as daily, weekly or monthly.
Predictability: usually does not contain any surprises or

unexpected results for the manager or other users of the
system.
 Emphasis on the past: the information produced usually

describes past activities of the organization.

Detailed Nature: the information produced is very
detailed.
Internal Origin: the data or information at operational

systems is usually generated entirely from internal
source.
Structured Form: the form of the data used as input

and the form of the information produced by operational-
level systems are usually very structured.
Business Systems
1. e-Business: - the use of Internet technologies to work and
empower business processes.
 using internet and the web to perform business processes.
any online exchange of information, money, resources,

services, or any combination.
 using web technology to enhance your business practices.

Business Systems
Reasons to use e-business in your organization
Extend your customer base: e-business provides an easy,
low-cost mechanism to market and sell your products and
services to customers anywhere.
Respond to new customer and competitive demands:
shopping and communication convenience, wider product
selection (including customized products) and lower costs.
Enhance your productivity: reducing duplication,
improving communication and streamlining processes.
Business Systems Cont’d….
2. E-commerce: is the buying, selling, marketing, and servicing of
products, services, and information over a variety of computer
networks.
Types of e-commerce
There are 3 major e-commerce categories:

1.Business-to-consumer (B2C) : - involves retailing products and
services to individual shoppers.
2. Business-to-Business (B2B): - involves sales of goods and
services among businesses.
3. Consumer-to-Consumer (C2C) : - involves consumers selling
directly to consumers.
CHAPTER THREE
INFORMATION
TECHNOLOGY
Robson Mekonnin/Asst.Professor 42
Introduction
1. Computer hardware : the physical equipment used for

input, processing, and output activities in an information
system.
It includes:
 Input device
Output device
Processing unit
Storage devices
Physical media
2. Computer software : consists of the detailed,

preprogrammed instructions that control and coordinate the
computer hardware components of an information system.
It includes:
 Application software
System software
 Procedure
3. Communications technology: links the various pieces of

hardware and transfers data from one physical location to
another.
Computers and communications equipment can be

connected in networks for sharing voice, data, images, sound,
or even video.
Introduction Cont’d..
4. Storage technology: both the physical media for storing

data and the software governing the organization of data on
these physical media.
1. Computer Hardware
 An electronic system (interrelated combination of electronic
components) that provides end users with a powerful
information processing tool.
1. Input Devices: is a hardware used to enter data and

instructions.
convert data into electronic machine readable format.
 Input devices include:
Hardware Cont’d…
a. Keyboards - converts letters, numbers and other

characters into electrical signals that are machine
readable.
 contains the letters of the alphabet, numbers, and

frequently uses symbols($, #, &).
 There are two types of keyboard:
a. Special purpose keyboard - contains limited number of

keys and they are used for specific applications. E.g.
ATM
b. General purpose keyboard: connected to the personal

computer and looks like a typewriter keyboard to
which some additional keys are added.
ii. Touch Screens - used to enter limited amounts of data by

touching the surface of a sensitized video display monitor with
a finger or a pointer.
iii. Point-of-sale terminals: does not contain alphabet

letters but consist of a number of data pad and special
purpose function keys, such as for a sale, refund, or
void.
The number key board is used to enter details of the

purchase.
iv. Mouse - a small, handy pointing device containing

two buttons.
a device that controls movement of pointer
v. Touch pad - a flat, rectangular device used to enter data by

tapping the fingers on the surface of the pad.
vi. Light Pen - a light sensitive stylus or pen like

device, connected by a wire to the computer.
 there is a button in the light pen.
vii. Optical Scanners: can scan typed documents, picture

graphics, or even handwriting into a computer.
viii. Barcode scanners and wands
Bard code: is a computer-readable code consisting of

bars or lines of varying widths or lengths.
ix. Microphones - capture the voices or sounds.
x. Sensors: are devices that collect data directly from

the environment for input into a computer system.
2. Output devices - translate data in machine-

readable form into a form understandable to humans
or readable by other machines.
 is a peripheral device that allows a computer to

communicate information to humans or another
machine by accepting data from the computer and
transforming them into a usable form.
Human readable output can be categorized as:
Hard copy- is output such as paper that can be

read immediately or stored and read later.
Soft copy- is usually a screen- displayed output.
Output devices used to display and distribute

computer output includes:
i. Visual Displays (Monitors) - used to display any

information in the screen (soft copy output devices).
ii. Printers - are also called a hardcopy Output

device.
iii. Plotters: produce high quality color graphics output by

using pens for creating images.
 help to draw maps from stored data.
iv. Projector: device that takes image from computer screen

and projects it onto larger screen.
v. Speakers - used to generate sound output
3. Processor (CPU) – the center of action in a

computer.
 the ‘brain’ of the computer that processes from the

smallest instruction to complex functions.
 Carries out instructions that tell computer what to do
 found enclosed in the system unit
manipulates symbols, numbers, and letter, and controls the

other parts of the computer system
CPU consists of: Arithmetic Logic Unit and Control

Unit.
i. Arithmetic-logic unit (ALU): performs required

arithmetic and comparison operations.
 a computer can make logical changes from one

set of program instructions to another based on
the results of comparisons made in the ALU
during processing.
ii. Control unit: obtains instructions from those stored

in the primary storage unit and interprets them. Then, it
transmits directions to the other components of the
computer system, ordering them to perform required
operations.
3. Storage Devices
Classified as primary and secondary storage units.
i. Primary storage unit (or main memory): refers

to the internal storage of the computer, where
programs and their data are stored.
 Provides temporary storage during program

execution
Stores the operation systems programs that

manage the operation of the computer
 linked directly to the other components of the CPU,

access time to data is very fast.
Stores data and program:

 Before processing
Between processing steps
After processing has ended
All data and program instructions must first be

placed in the primary storage unit before they can be
used in processing.
 It consists of:
i. RAM (Random Access Memory) - used for short-

term storage of data and /or program instructions.
 located physically closer to the processor
 the contents of RAM can be read and changed when

required.
RAM is volatile- this means that if the computer's

electric supply is disrupted or the computer is turned
off, its contents will be lost.
 Data are read into and written out of the primary

storage area during the execution of a program.
ii. ROM- read only memory- is another kind of

memory found in a computer, which stores important
program instructions permanently.
 The contents of ROM can be read, data cannot be

written into it.
 contains information on how to start the computer
The actual contents of ROM are usually set by the

computer manufacturer; they are unchangeable and
permanent.
ROM is nonvolatile- because its contents cannot be

altered and they are not lost when the electric current
is turned off.
ii. Secondary storage devices
Because primary storage may not be large enough
to hold all the required instructions and data, and
because RAM is volatile and doesn't provide long-term
memory, supplemental storage is necessary.
store data and programs when they are not being

used in processing.
retain information when the computer system is

switched off or reset.
used for storing backups, or copies, of data and

programs so that they are not permanently lost if
primary storage power is interrupted.
Most of the information used by a computer

application are stored on secondary storage devices.
Secondary storage media can hold much more data

than primary storage, access to the data is slower.
There are two types of Secondary storage technologies:
a. Magnetic disk (Floppy disk, hard disk and

magnetic tape).
b. Optical disk (CD-ROM, DVD-ROM, CD-R, CD-RW)
a. Magnetic disk
the most common form of secondary storage

because it provides fast access and high storage
capacities at a reasonable cost
 Data are recorded on tracks in the form of tiny

magnetized spots to form the binary digits of
common computer codes.
i. Floppy disks: a small flexible Mylar disk coated

with iron oxide on which data are stored.
ii. Hard disk: is just that - hard and inflexible. It is

made from materials such as aluminum.
The I/O device used to transfer data to and from a

hard disk is called a hard-disk drive.
iii. Magnetic Tape: Store records or groups of related

data, sequentially, i.e. one after another. To get to
the data you're looking for, every record preceding
them must be read.
 can store large quantities of data inexpensively and

so are often used as backup storage media.
 are re-erasable, reusable, and durable
is not well suited for data files that are revised or
updated often.
b. Optical disks
An optical disk is a disk on which data are recorded

and read by laser beams rather than magnetic
means.
can store data at densities much greater than

magnetic disks.
CD-ROM - provides a low-cost way to read data files

and load software onto your computer.
it is a form of read-only storage in that data can

only be read from it, not written to it.
CD-RW - allows you to easily create your own custom

data CDs for data backup or data transfer purposes.
allow you to store and share video files, large data

files, digital photos, and other large files with other
people.
2. Computer Software
Software: refers to the detailed instructions that

control the operation of a computer hardware.
without the instructions provided by software,

computer hardware is unable to perform any of the
tasks we associate with computers.
A software program is a series of statements or

instructions to the computer.
Software Cont’d…
 tells the processor what to do and how to do it
 helps end users use computer hard ware to

transform data into information products.
In order to execute, a program must be stored in

the computer's primary storage along with the
required data.
Computer software is generally classified in to:
1. System Software
2. Application Software
1. System Software
 allows the hardware to run properly, which manage

and supports the resources of the computer system.
 control the operations of the computer and its

devices Robson Mekonnin/Asst.Professor 79
serves as the interface between the user, the
application software, and the computer’s hardware.
consists of programs that manage computer

resources such as the CPU, printers, terminals, etc.
 System software is divided in to two:
i. System management software
ii. System development software
i. System management software: programs that
manage the hardware, software, and data resources of
the computer system during its execution
 Major system management programs are operating

systems, Network Management Programs, database
management systems, and System Utilities
Performance.
Operating systems programs are the most important.
Operating Systems program:
 manages the operations of the CPU
controls the input/output and storage
manages files on computer hard drives and
 controls computer peripherals.
 helps application programs perform common operations
What are the functions of an
operating System?
start the provide a user manage
OS computer interface programs
Administer
security
manage
memory
control a
network
provide file monitor establish an schedule jobs

management performan Internet and configure
and other ce connection devices
utilities
ii. System development programs
help users develop information system programs

and procedures and prepare user programs for
computer processing. E.g. Programming tools
2. Application software
consists of programs designed for applying the

computer to solve a specific problem.
 allows users to actually do something
direct computers to perform specific information

processing activities for end users.
helps the user and the system software work

together.
Application software divided in to two:

i. General- purpose programs: programs that perform
common information processing jobs for end users. E.g. Word
processing, spreadsheets, Power Point, etc.
ii. Application- specific programs: applied in specific

areas e.g. Business application programs, Scientific application
programs, education entertainment, music, art law, medicine
and so on.
3. Communications
Networks
Communication Network
Communications Networks
 What are Communications Networks?
 Process in which two or more computers or devices transfer
data, instructions, and information via wires or wirelessly.
notebook Web-enabled
computers servers PDAs
GPS
receivers
desktop
computers
mainframe
computers
set-top boxes
Tablet PCs
Telecommunications Network
Telecommunication: is communication of
information by electronic means over some distance.
 Communications Networks: the process in which

two or more computers or devices transfer data,
instructions, and information via wires or wirelessly.
 The reasons to network are to share hardware

devices, software programs, data, information and
time and money.
Network Cont’d
Types of Signals: Analog and Digital
 Information travels through channel in the form of

electromagnetic signals.
 Signals are classified as an analog and digital

signals
i. Analog signal : is represented by a continuous

waveform that passes through a communications
medium(telephone line).
Network Cont’d
ii. Digital signal: 1-bits and 0-bits, which are
represented on-off electrical pulses.
Modem: is a device that transfers digital signals

into analog signals.
Components of Communication Network
Computers
Terminals Communications 4
Processors/Devices
1
2 3 2 5
Communications
Software
Communications
Channels and Media
Communication Network
Digital pulses from computers Digital pulses to computers
1 1 1
1 1 1
0 0 0 0 0
0 0 0 0 0
Modem: Modem:
modulation Analog signals over
demodulation
communications
channels
Communications Channel
Data are transmitted and received over channels.
Communication channels: - means by which data

are transmitted from one device in a network to
another.
are transmission media on which data travels in

communications system.
Channel Cont’d..
Types of Channels
1.Twisted-Pair Wire
2. Coaxial cables
3. Fiber optic cables
4. Microwaves
5. Communication satellites
Channel Cont’d…..
1. Twisted-Pair Wire: -ordinary telephone wire,
consisting of copper wire twisted into pairs (twisted-
pair wire).
 the most widely used medium for

telecommunications.
 wrapped or shielded in a variety of forms
used for telephone systems and network cabling.
Channel Cont’d…..
Twisted-Pair Wire
Channel Cont’d….
2. Coaxial Cable: - consists of a powerful copper or

aluminum wire wrapped with spacers to insulate
and protect it.
little interference and distortion of the signals

involved.
 often used for cable television wiring.
Coaxial Cable

3. Fiber-optic cable: uses cables consisting of one or
more hair-thin filaments of glass fiber wrapped in a
protective jacket.
 carries significantly more data at faster speeds
than wire cables
 Less susceptible to interference (noise) and more
secure
 Smaller size (thinner and lighter)
Channel Cont’d…
Fiber-optic cable

4. Wireless Telecommunications Technologies
relies on radio waves, microwave, infrared, and

visible light pulses to transport digital information
without wires.
 Wireless technologies includes:
 Terrestrial microwave
Communications satellites
Cellular and PCS telephone and pager systems
Mobile data radio
Wireless LANs Robson Mekonnin/Asst.Professor 103
i. Terrestrial microwave : earth-based reflective
dish used for microwave communications.

Channel Cont’d…
ii. Communications satellite: space station that
receives microwave signals from earth-based station,
amplifies signals, and broadcasts signals back to any
number of earth-based stations
 use microwave radio as their telecommunications
medium.
Placed in stationary geosynchronous orbits
approximately 22,000 miles above the equator.
 are powered by Robson
solar panels
Mekonnin/Asst.Professor 105
Channel Cont’d…
Communications satellite

Database
Management

Data Hierarchy
Bit A binary digit: 0 or 1.
Byte or character A group of 8 bits representing a character
A collection of characters describing one

Data element or field attribute an entity
Record A collection of related data elements describing

an entity
A collection of records about
File
similar entities
Database A collection of related files
Figure 1. Building blocks of a computer based electronic database.

The Hierarchy of Data
What is a hierarchy?
 Database contains files, file contains records, record
contains fields, field contains characters

Data and Information
 How are data and information related?
Data:are raw facts

Step 2. The computer
Information: data that is organized
extracts the member data from
and meaningful. disk.
Computers process receipt
data into information
processing
Step 1. The member data,
including a photograph, is
entered and stored on the hard data stored on disk
disk. Step 3. The receipt is
created and printed.

 What is a database?
Collection of data
Database software
organized so
Database software also called database
you can access,
allows you to management system
retrieve, and
(DBMS)
use it
Create
Create forms
database and
Add, Sort reports
change, and
and delete retrieve
data data

 What is data integrity?
Degree to which data is
correct.
Garbage in
Garbage in, garbage out
(GIGO)—computer phrase
that means you cannot create Garbage out
correct information from

incorrect data
Data integrity
is lost

What are the qualities of valuable information?
Accurate
Verifiable
Timely
Organized
Accessible
Useful
Cost-effective

File Processing Versus Databases
 What is a file processing system?
Each Records in
department or one file may
area within May have
not relate to
organization weaknesses
records in
has own set of any other file
files
Data Isolated
redundancy— data—data
same fields stored in
stored in separate files
multiple files so it is
difficult to
access

 What is the database approach?
Many programs and users can share data in database

Secures data so only authorized users can access certain
data.

 What are the strengths of the database approach?
Reduced
data
redundancy Improved
data
integrity
Shared
data
Easier
access
Reduced
developmen
t time

File Processing Example
How do a
database
application and a
file processing Database Example
application differ in
the way they store
data?

Database processing consists of three basic activities:
i. Updating and maintaining : making changes to an

organization’s records
ii. Providing information
iii. Providing an inquiry: users can easily interrogate

databases, generate reports, and receive quick responses.
Database management system: -the set of computer

programs that control the creation, maintenance and use of the
databases of an organization and its end users.

Types of Databases
i. Operational databases: store detailed data needed to

support the operations of the entire organization.
ii. Management databases: store data and information

extracted from selected operational and external
databases.
iii. Information warehouse databases: stores data

from current and previous years that has been extracted
from the various operational and management databases.
iv. Distributed databases: are databases of local work

groups and departments at regional offices, branch offices,
manufacturing plants.
v. End user databases: consist of a variety of data files

developed by end users at their workstations.
vi. External databases: external, privately owned online

databases or data banks is available for a fee to end users
and organizations from commercial services.

Database Management Systems
What are popular database management systems (DBMSs)?
Database Manufacturer Computer Type
Access Microsoft Corporation Personal computer, server, PDA

DB2 IBM Corporation Personal computer, midrange server,
mainframe
Informix IBM Corporation Personal computer, midrange server,
mainframe
Ingres Computer Associates Personal computer, midrange server,
International, Inc. mainframe
Oracle Oracle Corporation Personal computer, midrange server,
mainframe, PDA
SQL Server Microsoft Corporation Server
Sybase Sybase Inc. Personal computer, midrange server, PDA
CHAPTER FOUR
COMMON BUSINESS
APPLICATIONS OF
INFORMATION TECHNOLOGY

Internet, Extranet, Intranet and
Collaboration Systems
1. Internet: is worldwide collection of networks that

connects millions of computers.

Cont’d…..
Why do users access the Internet?
1. Communication
2. Information
3. Shopping
4. Banking and Investing
5. Classes
6. Entertainment

Cont’d….
The most popular Internet applications are:
e-mail
Instant messaging
Browsing the sites on the World Wide Web
Participating in newsgroups and chat rooms.

2. Intranet - is a network inside an organization
that uses Internet technologies.

Cont’d….
an Internet-like environment within the enterprise
for information sharing, communications,
collaboration, and the support of business processes.
 protected by passwords, encryption, and firewalls,

and thus can be accessed by authorized users.

Cont’d….
3. Extranet: uses internet technologies to
interconnect the intranet of a business with the
intranets of its customers, suppliers, or other business
partners.
4. Enterprise Collaboration Systems
uses a variety of information technologies to help

people work together.

Cont’d….
help us collaborate-to communicate ideas, share
resources, and coordinate our cooperative work
efforts.
 the goal is to use information technology to enhance

the productivity and creativity of teams and
workgroups.
 creates virtual teams of people from several

departments and locations within a company.
Classification of Information
system
Information systems can be classified as:
1. Operations information systems
2.Management information systems
1. Operations Information Systems
i. Transaction Processing System (TPS)
 Transaction - a record of an event, which the

business must respond.
Operations Information
Systems
E.g. sales order entry, hotel reservation systems,
payroll, employee record keeping, etc.
process data resulting from the occurrence

of business transactions.
serve the operational level of the organization.
 a computerized system that performs and records

the daily routine transactions.
Operations Information Systems
Cont’d…
The goal is to improve the speed of transaction processing,

using fewer people, improving efficiency and accuracy.
Transaction Processing System:
automates the handling and capture of data about

transactions.
 Capture the data, verify that it is valid transaction

and accept or reject it.

Cont’d…
accepted transactions are stored in database
 Reporting summaries of transactions.

ii. Process control system
 controls physical operational processes
E.g. Automatic inventory reorder decisions and

production control decisions.

Cont’d…
 Controls an ongoing physical process e.g.
Processes in petroleum refineries
Processes in cement plants
Processes in steel mills
Processes in electric power plants

Cont’d…
iii. Enterprise collaboration system
 uses a variety of information technologies to help

people work together.
 help us collaborate-to communicate ideas, share

resources, and coordinate our cooperative work
efforts.

Cont’d…
 the goal is to use information technology to enhance

the productivity and creativity of teams and
workgroups.
 create virtual teams of people from several

departments and locations within a company.

Managerial Decision Support
Systems
2. Managerial Decision Support Systems
 focus on providing information and support for

effective decision making by managers.
i. Management information systems (MIS)
serves the management level of the organization
 Produces information that support day-

to-day decision-making needs of management.

Systems Cont’d…
 requires information from TPS
provides for management-oriented reporting.
Provides information products to managers:
On demand
Periodically
Whenever exceptional conditions occur
 Used for structured types of decision situations.

Systems Cont’d…
Attributes of MIS
Inputs: high volume data
Processing: simple models
 Outputs: summary reports
 Users: middle managers
 Structured decisions

Systems Cont’d…
ii. Decision Support System (DSS)
are computer- based information systems that

provide interactive information support to
managers during the decision making process.
provide interactive information support in smi-

structured and unstructured decision-making
processes.

Systems Cont’d…
used to make decisions that are unique, rapidly

changing, and not easily specified in advance.
 use internal information from TPS and MIS.

Systems Cont’d…
DSS uses:
Analytical models (model-base)
Specialized database
A decision maker’s own insights and judgments
 Interactive modeling process
Managers make inquiries and responses using input

and output medias.
Systems Cont’d…
 has more analytical power than other systems
 uses a variety of models to analyze data
designed to support unstructured decisions
Unstructured decisions
involve decision situations where it is not possible

or desirable to specify in advance most of the
decision procedures to follow.

Systems Cont’d…
DSS has 3 parts:
database
Mathematical or graphical models of business

processes.
 A user interface (or dialogue module)

Systems Cont’d…
iii. Expert system
captures and reproduces the knowledge and

expertise of an expert.
simulates the thinking and actions of an expert.
duplicate the knowledge and expertise of

experienced problem solver.
imitates the logic and reasoning of the expert.

Systems Cont’d…
iv. Executive Information System (EIS)
designed to support executive support systems.
 serves the strategic level of the organization
 address non routine decisions requiring judgment,

evaluation, and insight.
 draw summarized information from internal MIS

and DSS.

Systems Cont’d…
 provides top management 'With immediate and

easy access to selective information.
 provides information about the current status and

projected trends.
 address non routine decisions requiring judgment,

evaluation, and insight.

Functional Information
Systems
1. Accounting information systems
 record, report, and analyze business transactions

and events for the management of the business
enterprise.
i. Operational accounting systems: computer-

based information systems record and report the flow
of funds through an organization on a historical basis
and produce important financial statements such as
balance sheets income statements.
Functional Information Cont’d…
ii. Management accounting systems - produce

forecasts of future conditions such as projected
financial statements, and financial budgets.
It emphasizes:
cost accounting reports
the development of financial budgets and projected

financial statements.
analytical reports comparing actual to forecasted

2. Financial Information systems
Computer-based financial information systems

support managers in decisions concerning
 the financing of a business, and
 the allocation and control of financial resources

within a business

i. Capital Budgeting
involves evaluating the profitability and financial
impact of proposed capital expenditures.
long-term expenditure proposals for plant and
equipment can be analyzed using a variety of
techniques:
present value analysis of expected cash flows
probability analysis of risk

ii. Financial Forecasting

A variety of statistical forecasting packages provide
techniques that result in financial forecasts of
national and local economic conditions, wage levels,
price levels, and interest rates.
iii. Financial Planning
uses planning models to evaluate the present and
projected financial performance of a business.

3. Marketing Information Systems
 computer based information systems that support

the marketing function in the following areas:
i. Sales management
plan and monitor sales performance of products and
sales people.
produces sales analysis reports which analyze sales
by product, product line, customer, sales person, and
sales territory.
ii. Product management

plan and control the performance of specific
products.
provide price, revenue, cost, and growth

information for existing products and new product.
iii. Customer Relationship Management (CRM)
 used to better serve customers and learn of their
changing needs.
helps to track past purchases and payments, update

online answers to frequently asked questions (FAQs)
about products and services.
iv. Sales Force Automation
 the sales force is being outfitted with notebook

computers, Web browsers, and sales contact
management software that connect them to
marketing Web sites on the Internet, extranets,
and their company intranets.
dramatically speeds up the capture and analysis of

sales data from the field to marketing managers at
company headquarters.
 allows marketing and sales management to improve

the delivery of information and support they provide to
their salespeople.

Classification Cont’d…
4. Manufacturing and Production Information

Systems
 support the production or operations function,

which includes all activities concerned with the
planning and control of the processes that produce
goods or services.

Computer Integrated Manufacturing (CIM): an

overall concept which stresses that the goals of
computer use in factory automation must be to:
Simplify production processes, product design, and
factory organization.
Automate production processes, and business
functions that support them with computers and
robots.
Integrate all production, and support processes
using computers and Tele networks.

Computer Aided Manufacturing (CAM): used to

manufacture products. This can be accomplished by:
Monitoring and controlling the production process in

a factory - Shop floor control.
Directly controlling a physical process - Process

control.
 Directly controlling a machine tool - Machine

control.
Directly controlling a machine with some human like

capabilities- Robotics.
Computer-Aided Design (CAD) -creates designs

for products and manufacturing processes.
Quality Control -tests incoming materials and

outgoing products, tests of process in progress, quality
assurance.

5. Human Resource Information Systems
 involves the recruitment, placement, evaluation,

compensation, and development of the employees.
 Designed to support:
planning to meet the personnel needs of the
business.
 development of employees to their full potential.
 control of all personnel policies and programs.

…
Functional information Systems
Cont’d…
Training and Development: computer-based

training programs and appraisals of employee job
performance are available to help this area of HRM.
Compensation Analysis: can help analyze the

range and distribution of employee compensation
wages and salaries incentive payments fringe benefits
with in a company, and make comparison with
compensation paid by similar firms.
Cross-Functional Business
information Systems
i. Enterprise Resource Planning (ERP)
 a system that all business functions are served by

one system that supports different activities for
different departments.
 used to create a single integrated system and

automates many internal business processes.
 is the technological backbone of e-business

Cross-Functional Business…
ii. Supply Chain Management (SCM): the linkage

and coordination of activities involved in buying,
making, and moving a product.
 integrates supplier, manufacturer, distributor,

and logistics processes to reduce time, redundant
effort, and inventory costs.

Cross-Functional Business…
helps companies to coordinate, schedule, and

control procurement, production, inventory
management, and delivery of products and services.

IT for Competitive Advantage
involves using information technology to develop

products, services, and capabilities that give a
company major advantages.
 the collection of strategic information system

supports or shapes the competitive position of firms.
 Strategic information system can be any kind of

information system (i.e. TPS, MIS, and DSS).

Knowledge Management
Introduction
Knowledge: facts about the real world entities and

the relationship between them.
can be gained through experience and answering the

“how” question.
 Knowledge Management: the process of creating,

acquiring, organizing, sharing and making available
important knowledge for end users.
Knowledge Management Cont’d…
Knowledge Management (KM): the process of
gathering, managing and sharing employees'
knowledge capital throughout the organization.
 Knowledge sharing:
enhances existing business processes
introduces more efficient and effective business

processes and
removes redundant processes

Knowledge management systems (KMS) - used

to manage organizational learning and business know-
how.
 The goal of KMS to help knowledge workers create,

organize, and make available important business
knowledge.

Knowledge Management involves: the acquisition,
storage, retrieval, application, generation, and review
of the knowledge assets of an organization in
controlled way.
 Knowledge Management efforts typically focus on

organizational objectives such as:
 improved performance
competitive advantage
innovation
the sharing of lesson learned
integration and continuous improvement of the

organization.
Role of Knowledge management for business
Increase people skills and expertise through sharing
Facilitates collaboration in the innovation process

Assist in converting tacit knowledge to explicit

knowledge.
 help companies to turn human capital into

intellectual capital by creating value.
 Provides necessary elements to solve critical

problems.

Types of Knowledge Management
1. Explicit knowledge (already represented): is the

data, documents, and things written down or stored
on computers.
has been codified (documented) in a form that can

be distributed to others or transformed into a
process.
contained in documents or other forms of storage

other than the human brain.
2.Tacit knowledge: is the knowledge, which resides
in workers.
stored in human brain usually in the domain of

subjective, cognitive, and experiential learning.
 highly personal and difficult to formalize.

 knowledge embedded in the human mind through
experience and jobs.
 developed through the process of interaction with
other people.
Knowledge Management Lifecycle
Knowledge Management: the process of creating,

acquiring, organizing, sharing and making available
important knowledge for end users.
1. Knowledge Creation: Knowledge is created as

people determine new ways of doing things or develop
know-how.
Knowledge is created either as explicit or tacit

knowledge.
KM Lifecycle Cont’d...
2. Knowledge acquisition: - finding existing or new

knowledge, understanding requirements, searching
among multiple sources and representing in a
reasonable.
3. Knowledge Storage: Knowledge is stored &

organized in a repository so that others in the
organization can access it.

KM Lifecycle Cont’d...
4. Knowledge Sharing: is the exchange of ideas,

solutions, experiences to individuals via knowledge
transfer automated or manual systems.
5. Knowledge Utilization: - KM does not have any

value if knowledge created is not applied, used &
reused to its potential.

Knowledge Support Systems
(KSS)
1. Artificial Intelligence
 the ability of a machine to replicate the human

thought processes.
2. Expert System
 represent the knowledge of human experts.

The Knowledge
Spiral/Interaction
successful KM effort needs to convert internalized

tacit knowledge into explicit knowledge in order to
share it.
 Ikujiro Nonaka proposed a model (SECI)

Socialization, Externalization, Combination,
Internalization which considers a spiraling knowledge
process interaction between explicit knowledge and
tacit knowledge.
The Knowledge
Spiral/Interaction Cont’d…
1. Socialization: exchange of tacit
knowledge among members that create

common mental models and abilities.
transfers tacit knowledge most frequently

though the medium of shared experience.

The Knowledge
2. Externalization: the process of articulating

tacit knowledge and transforming in to models,
concepts, analogies, stories and metaphors
that can be communicated by language.
E.g. Writing about knowledge.

The Knowledge
3. Combination: the process of combining bodies of

existing explicit knowledge in order to generate
new explicit knowledge, by addition.
 obtained by the exchange of explicit knowledge

among members.

The Knowledge
4. Internalization: the process of adding to explicit

knowledge (principles, procedures, methodologies)
tacit new knowledge (in the form of sensations,
memories, images) through.

KM Methodologies and
Technologies
Knowledge management methodologies and

technologies must enable effective ways to:
create knowledge
acquire knowledge
 represent knowledge
 organize knowledge
share/Disseminate knowledge
technologies Cont’d…
use and reuse knowledge
update this knowledge
Benefits of Knowledge Management
 to capture the tacit knowledge required by the

business process
 to encourage knowledge workers to share and

communicate knowledge with peers

technologies Cont’d…
Knowledge Engineering (KE) : - is the process of

building a knowledge base through extracting the
knowledge from the human expert.

CHAPTER FIVE
ETHICAL AND
SECURITY ISSUES

Security, Ethical, and Societal
Challenges of IT
The use of information technologies in business has

had major impacts on society, and thus raises ethical
issues in the areas of crime, privacy, individuality,
employment, health, and working conditions.
Principles of Technology Ethics
Proportionality: the good achieved by the

technology must outweigh the harm or risk.

Security, Ethical Cont’d…
 Informed Consent: those affected by the

technology should understand and accept the risk.
 Justice: the benefits and burdens of the technology

should be distributed fairly.
Minimized Risk: the technology must be

implemented so as to avoid all unnecessary risk.

Computer Crimes
the unauthorized use, access, modification, and

destruction of hardware, software, data , or network
resources.
the unauthorized release of information
the unauthorized copying of software
denying an end user access to his or her own

hardware, software, data, or network resources.
using or conspiring to use computer or network

resources to illegally obtain information or tangible
property.
Privacy Issues
 Accessing individual private e-mail conversations

and computer records, and collecting and sharing
information about individual(violation of privacy).

Health Issues
Heavy use of computers is reportedly causing health
problems:
 job stress
damaged arm and neck muscles
eye strain
radiation exposure
death by cause of computer –related job stress

Always knowing where a person is , especially as
mobile and paging services become more closely
associated with people rather that places(Computer
monitoring).
Using customer information gained from, many
sources to market additional business services
(Computer Matching)
Collecting telephone numbers, e-mail addresses,
credit card numbers, and other personal information
to build information to build individual customer
profiles (Unauthorized personal files).
IS Security Risks
What is an IS security risk?
Action that causes loss of or damage to information
system.

Computer Viruses, Worms, and
Trojan Horses
What are viruses, worms, and Trojan horses?
Virus is a Worm copies Trojan horse hides Payload

potentially itself repeatedly, within (destructive
damaging using up or looks like event) that is
computer resources legitimate delivered when
and possibly
program shutting down program until you open file, run
computer or triggered infected program,
network or boot computer
Does not with infected disk
Can spread in disk drive
replicate
and
itself on
damage
other
files
computers

Tools of Security Management
Effective security management can minimize error,

frauds, and losses in the information systems.
Internet worked security defenses

1. Encryption – the process of converting plaintext
(readable data) into cipher text (unreadable
characters).
Encryption key (formula) often uses more than one
method.
to read the data, the recipient must decrypt, or
decipher, the data.
Tools of Security Cont’d…
safeguards against information theft on computer

networks resources especially on, internet, intranet,
and extranet.

What does an encrypted file looks
like?

2. Firewall
Security system consisting of hardware and/or software
that prevents unauthorized network access.

Firewall can be a router, or dedicated server, along

with firewall software.
 serves as goalkeeper system that protect a

company intranets and other computer networks.

3. Virus Defenses (Antivirus program)

POPULAR ANTIVIRUS PROGRAMS
Identifies and removes
computer viruses
Most also protect against
worms and Trojan horses

4.Other Security Measures
Security Codes: Passwords are unique

identification code or users ID that end user’s logs on
to the computer system.
 Backup Files: Involves storing copies of file from

previous period.

What is a user name?
User name: is a unique combination of characters
that identifies user.
Password: is private
combination of
characters associated
with the user name
that allows access
to computer
resources.
Security Monitors: are specialized system software

packages that provide security of a network which
protect computer system & network from
unauthorized use, fraud, and destruction.
 Biometric Security: includes Voice verification,

retina scanning, finger prints; hand geometry.
Biometric control devices use special purpose

sensors.

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CHAPTER ONE

System: - a set of interrelated parts which work together to

Information systems: is an organized combination of people,

The goal of MIS is to deliver information and providing flexible

Information System Model

Improves products and services

Improves management, problem solving and decision making.

Marketing: sales forecasting, sales planning, customer and sales

 Manufacturing: production planning and scheduling, cost control

 Logistics: planning and control of purchasing, inventories,

 Finance & accounting: financial analysis, cost analysis, capital

 Personnel : planning personnel requirements, analyzing

Transaction processing: processing of orders, shipments, and

 Operational control: scheduling of activities and performance

 Management control: formulation of budgets and resource

 Strategic planning: formulation of objectives and strategic

 prepared constantly, or very frequently

 summarized at a lower level

 relevant to the short and medium terms

 prepared routinely and regularly

 derived from both internal and external sources

 used by managers to define goals and priorities, initiate

 summarized at a high level

 relevant to the long term

 deals with the whole organization

 often prepared on an 'ad hoc' basis

 both quantitative and qualitative

1. Technical Approaches : - emphasizes on

i. Computer science: - concerned with establishing

iii. Operations research: - focuses on mathematical techniques for

II. Behavioral approaches: - arise in the development and long-

i. Sociologists study information systems with an eye towards how

iii. Economists study information systems with an interest in

1. Agricultural age (up to1800s): -the majority of workers were

2. Industrial age (1800s to 1957): -when work processes were

3. Information age (began in 1957): - in which the majority of

4. Knowledge workers: workers involved in the creation,

distribution, and application of information.

Partnership People and People and People and

Principal tool Hand tools Machines Information

 Data: - raw facts that describe the characteristics of an

 Information: data converted into a meaningful and useful

 Business intelligence: - information collected from

 IT is a foundation of doing business

 IT is directly related with productivity

 IT brings strategic opportunity and advantage to firms

8/25/2021 Robson Mekonnin/Asst,professor 18

which requires an understanding of some basic concepts in

need to know about the behavioral, technical, business and

8/25/2021 Robson Mekonnin/Asst,professor 19

should understand how methodologies such as the systems

 know how business professionals and information

8/25/2021 Robson Mekonnin/Asst,professor 21

systems concepts and applications in areas such as end user

computing, office automation, transaction processing,

information reporting, decision support, executive support and

 uses of information systems for the operations,

management, and competitive advantage of a business.

More specifically, they should understand concepts such as

 effectively and ethically managing information technology at

Processing- is the way data is manipulated, developed or built

 Output- when raw facts are transformed by system processing,