Information Technology

By Md. Monowar Hossain, FCA,CISA,CPFA(UK)

md.monowar@gmail.com

Chartered Accountancy (CA)

Information Technology
Module-01: 01.Information Systems in Business
Information Systems (1) Foundation concepts: information systems in business
in Business (cont..) (2) Foundation concepts: the components of information systems

The Components of Information Systems

The components of information systems typically include:
1. Hardware: The physical devices used to process and store data, such as computers, servers, mobile devices, and
other electronic devices.
2. Software: The programs and applications that enable users to perform specific tasks, such as word processing,
data analysis, or inventory management.
3. Data: The raw facts and figures that are input into information systems for processing and analysis, such as
customer information, financial data, or inventory levels.
4. Procedures: The rules and guidelines that govern the use of information systems, such as security policies,
backup procedures, or data entry standards.
5. People: The individuals who design, develop, operate, and maintain information systems, as well as the users
who interact with them.
6. Communication networks: The infrastructure that connects hardware, software, and people across different
locations and enables data exchange and communication.
All of these components work together to enable the creation, storage, processing, and dissemination of information
within an organization. Effective management and integration of these components are critical to the success of
information systems and can help organizations gain a competitive advantage in the marketplace.
Regenerate response

01.2.01 System concepts underlie all business processes, as well as our understanding of
System information systems and technologies. That’s why we need to discuss how generic system
Concepts: concepts apply to business firms and the components and activities of information systems.
A Foundation
5Understanding system concepts will help us understand many other concepts in the
technology, applications, development, and management of information systems. For
example, system concepts help us understand:

Technology Applications Development Management

Computer networks E-business and Developing Managing
are systems of e-commerce ways to use information
information applications information technology
processing involve technology in emphasizes the
components that use interconnected business quality, strategic
a variety of hardware, business includes business value,
software, data information designing the and security of
management, and systems. basic an
telecommunications components of organization’s
network technologies. information information
systems. systems.
https://www.youtube.com/watch?v=3iAp9me4P1c

5
https://www.interviewbit.com/information-technology-mcq/

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 Information Technology
By Md. Monowar Hossain, FCA,CISA,CPFA(UK)
md.monowar@gmail.com

01.2.02
What is a
Syestem ?

Example.
✓ A manufacturing system accepts raw materials as input and produces finished
goods as output.
✓ An information system is a system that accepts resources (data) as input and
processes them into products (information) as output.

✓ A business organization is a system in which human and economic resources are

transformed by various business processes into goods and services.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA,CPFA(UK)
md.monowar@gmail.com

01.2.03 • A system does not exist in a vacuum; rather, it exists and functions in an environment
Other System containing other systems.
Characteristics • If a system is one of the components of a larger system, it is a subsystem, and the larger
system is its environment.
• Several systems may share the same environment.
• Some of these systems may be connected to one another by means of a shared
boundary, or interface.
• The concept of an open system, that is, a system that interacts with other systems in its
environment.
• The system exchanges inputs and outputs with its environment.
• The syestem is connected to its environment by input and output interfaces.
• A system that has the ability to change itself or its environment to survive is an adaptive
system .

01.2.04 • A business is an example of an organizational system in which economic resources

Organizational (input) are transformed by various business processes (processing) into goods and
Syestem services (output).
• Information systems provide information (feedback) about the operations of the system
to management for the direction and maintenance of the system (control) as it exchanges
inputs and outputs with its environment.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA,CPFA(UK)
md.monowar@gmail.com

✓ Organizations such as businesses and government agencies are good examples of the
systems in society, which is their environment. Society contains a multitude of such
systems, including individuals and their social, political, and economic institutions.
✓ Organizations themselves consist of many subsystems, such as departments, divisions,
process teams, and other workgroups.
✓ Organizations are examples of open systems because they interface and interact with
other systems in their environment.
✓ Organizations are examples of adaptive systems because they can modify themselves
to meet the demands of a changing environment.

✓ Information systems are made up of interrelated components:

• People, hardware, software, peripherals, and networks.
- They have clearly defined boundaries:
• Functions, modules, type of application, department, or end-user group.
- All the interrelated components work together to achieve a common goal by
accepting inputs and producing outputs in an organized transformation
process:
• Using raw materials, hiring new people, manufacturing products for sale, and
disseminating information to others.
✓ Information systems make extensive use of feedback and control to improve their
effectiveness:
• Error messages, dialog boxes, passwords, and user rights management.
✓ Many information systems are designed to change in relation to their environments
and are adaptive:
• Intelligent software agents, expert systems, and highly specialized decision support
systems.
Information systems are systems just like any other system. Their value to the modern
organization, however, is unlike any other system ever created.
01.2.05
Components of All information systems use people,
Information Systems hardware, software, data, and
network resources to perform input,
processing, output, storage, and
control activities that transform data
resources into information products.
An information system is a
system that accepts data
resources as input and
processes them into information
products as output.

How does an information system accomplish this task?

What system components and activities are involved?

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 Information Technology
By Md. Monowar Hossain, FCA,CISA,CPFA(UK)
md.monowar@gmail.com

An information system model is expresses a fundamental conceptual framework

(as shown above) for the major components and activities of information systems.
This information system model highlights the relationships among the components
and activities of information systems.

An information system depends on the resources of

- people (end users and IS specialists),
- hardware (machines and media),
- software (programs and procedures),
- data (data and knowledge bases), and
- networks (communications media and network support)
to perform input, processing, output, storage, and control activities that transform data
resources into information products.

It also provides a framework that emphasizes four major concepts that can be applied
to all types of information systems:
• People, hardware, software, data, and networks are the five basic resources of
information systems.
• People resources include end users and IS specialists, hardware resources consist
of machines and media, software resources include both programs and
procedures, data resources include data and knowledge bases, and network
resources include communications media and networks.
• Data resources are transformed by information processing activities into a
variety of information products for end users.
• Information processing consists of the system activities of input, processing,
output, storage, and control.

01.2.06 An information system consists of five major resources: people, hardware, software, data,
Information System and networks. Let’s briefly discuss several basic concepts and examples of the roles these
Resources resources play as the fundamental components of information systems.
Information system resources are the assets used to support the development,
implementation, and maintenance of information systems. Effective management and
integration of these information system resources are critical to the success of information
systems and can help organizations achieve greater efficiency, productivity, and profitability.

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 Information Technology
By Md. Monowar Hossain, FCA,CISA,CPFA(UK)
md.monowar@gmail.com

Examples of information system resources and products.

01.2.07 Business examples of the basic activities of information systems.
Information System • Inpute of Data Resources
Activities6 • Processing of Data into Information
• Output of Information Products
• Storage of Data Resources
• Control of System Performance

6
MIS by James OBrien, George Marakas, 10th_Edition page -35
7
https://businessdocbox.com/Business_Software/84878824-Information-systems-control-and-audit.html

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 Information Technology
By Md. Monowar Hossain, FCA,CISA,CPFA(UK)
md.monowar@gmail.com

POS –Point of Sale

01.2.08 • As a business professional, you should be able to recognize the fundamental

Recognizing components of information systems you encounter in the real world.
Information • This demand means that you should be able to identify:
System ✓ The people, hardware, software, data, and network resources they use.
✓ The types of information products they produce.
✓ The way they perform input, processing, output, storage, and control
activities.
• This kind of understanding will help us be a better user, developer, and manager of
information systems.
• As a future Chartered Accountant, this is important to your future success as a finance
manager, entrepreneur, and business professional modern business fin-technologist.

We have to understand ….
01.2.09 The IS knowledge that a business manager or professional needs to know
Information System (1) foundation concepts: fundamental behavioral, technical, business, and
(IS) Framework for managerial concepts like system components and functions, or competitive
Business strategies;
Professionals (2) information technologies: concepts, developments, or management issues
regarding hardware, software, data management, networks, and other
technologies;

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 Information Technology
By Md. Monowar Hossain, FCA,CISA,CPFA(UK)
md.monowar@gmail.com

(3) business applications: major uses of IT for business processes, operations,

decision making, and strategic/ competitive advantage;
(4) development processes: how end users and IS specialists develop and
implement business/IT solutions to problems and opportunities arising in
business; and
(5) management challenges: how to manage the IS function and IT resources
effectively and ethically to achieve top performance and business value in
support of the business strategies of the enterprise.
01.2.10 • Information systems perform three vital roles in business firms.
Business Roles of (1) Business applications of IS support an organization’s business processes and
Information Systems operations,
(2) Business decision making, and
(3) Strategic competitive advantage.
• Major application categories of information systems include
operations support systems (OSS), such as
transaction processing systems (TPS),
process control systems (PCS), and
enterprise collaboration systems (ECS); and

management support systems (MSS), such as

management information systems (MIS),
decision support systems (DSS), and
executive information systems (EIS)
Other major categories are
- expert systems,
- knowledge management systems,
- strategic information systems, and
- functional business systems.
• In the real world, most application categories are combined into cross-functional
information systems that provide information and support for decision making
and also performing operational information processing activities.
01.2.11 • A system is a group of interrelated components, with a clearly defined boundary,
System Concepts working toward the attainment of a common goal by accepting inputs and
producing outputs in an organized transformation process.
• Feedback is data about the performance of a system.
• Control is the component that monitors and evaluates feedback and makes any
necessary adjustments to the input and processing components to ensure that
proper output is produced.
➔ Business organization as a System

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 Information Technology
By Md. Monowar Hossain, FCA,CISA,CPFA(UK)
md.monowar@gmail.com

01.2.12 • An information system uses the resources of people, hardware, software, data, and
Information System networks to perform input, processing, output, storage, and control activities that
Model convert data resources into information products.
• Data are first collected and converted to a form that is suitable for processing
(input). Then the data are manipulated and converted into information
(processing), stored for future use (storage), or communicated to their ultimate user
(output) according to correct processing procedures (control).
01.2.13 • Hardware resources include machines and media used in information processing.
Information System • Software resources include computerized instructions (programs) and instructions
(IS) Resources and for people (procedures).
Products • People resources include information systems specialists and users.
• Data resources include alphanumeric, text, image, video, audio, and other forms of
data.
• Network resources include communications media and network support.
Information products produced by an information system can take a variety of
forms, including
- paper reports,
- visual displays,
- multimedia documents,
- e-messages,
- graphics images, and
- audio responses.

01.2.14
Generic System
Concepts
A generic system is one which is representative of all systems, be they physical, sentient or more abstract. You can
define a boundary anywhere, the system it defines will acknowledge the same laws.
A mode of description,
which explains an aspect of an
object in terms of a set of interacting
elements.
The object can, in principle, be
anything:
-a physical object,
-a body of work,
-an idea, or
-an enterprise.

01.2.15
Generic System Development Process

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 Information Technology
By Md. Monowar Hossain, FCA,CISA,CPFA(UK)
md.monowar@gmail.com

The definition of generic is something without a brand name. An example of generic is the type of soap with a store's
label that says "soap," but without a brand name.
8Information technology is made by combining the two words “Information” and “Technology”.

• Computer systems: Characteristics of a computer, components of a computer system – CPU, Memory,

storage devices, and I/O devices.
• Memory: Primary memory (RAM and ROM) and Secondary memory.
• Storage devices: Hard disk, CD ROM, DVD, memory stick
• Types of software: System software (operation system, device drivers)
• Computer networking: LAN, MAN, WAN, Wi-fi, Bluetooth, cloud computers.
• Multimedia: Images, audio, video, animal

Memory: Processing Device: Elements or Components ALU:

• Three devices are used • CPU (Central Processing of a computer system: • ALU stands for
to store data/ Unit) is a processing There are many five major Arithmetic and Logic
information. device. components of a Unit
• Memory is a storage • CPU is the brain on the computer system: • ALU is a part of a
device of a computer heart of a computer it is • Memory unit computer processor
system. also known as the • storage unit
• The manufacturer's processor and consists • control unit
developed advanced of a total of three units: • hardware and
memory devices that o the control unit • software
can execute data (CU)
speedily and can store o main memory unit
large size data. o arithmetic logic
unit (ALU)
Control Unit:
• The Control Unit controls all the devices connected to the computer system
• It also programs execution along with device communication
• It communicates between processor and memory and computer peripherals.

Watch the following videos:

• What are systems? https://www.youtube.com/watch?v=e7VZmLUBSQ8
• Open systems, closed systems, and isolated systems https://www.youtube.com/watch?v=ASzTtp6QZ6Y
• Five Components of Information System https://www.youtube.com/watch?v=L0xF8KqjKVU
• Role of Information Systems in Business Today https://www.youtube.com/watch?v=XVvEZXjKZMM

Chartered Accountancy (CA)

Information Technology (MCQ for exam preparation)
Foundation concepts: the components of information systems

11 Hardware, Software, Data, Procedures, People, 12 Input, processiong, output, subsystem, feedback,
Communication networks, etc. are the control, etc. are the functions of __________.
components of ______ _______ .
(a) information technology.
(a) information systems.
(b) system.
(b) information technology.
(c) business process.
(c) information communication.
(d) process automation.
(d) business automation.
Ans.(a) Ans.(b)

8
https://www.interviewbit.com/information-technology-mcq/

09(2023) Page # 36
 Information Technology
By Md. Monowar Hossain, FCA,CISA,CPFA(UK)
md.monowar@gmail.com

Chartered Accountancy (CA)

Information Technology (MCQ for exam preparation)
13 Understanding system concepts will help us 14 __________ is a system that is a component of a
understand many other concepts in the large system.
technology, applications, development, and
management of information systems. (a) Technology (b) Process
(a) True (b) False (c) Networking (d) Subsystem
Ans.(a) Ans.(d)

15 Which of the following information systems are 16 A system that has the ability to change itself or its
used in the daily running of the business? environment to survive is an ?

(a) transaction processing systems (TPS). (a) open system.

(b) operational planning systems (OPS). (b) adaptive system.
(c) office automation systems (OAS). (c) subsystem.
(d) management information systems (MIS). (d) closed system.
Ans.(a) Ans.(b)

17 If a system is one of the components of a ______ 18 A system does not exist in a vacuum; rather, it
system, it is a __________, and the larger system exists and functions in _ _______________ containing
is its environment. other systems.

(a) smal, system (a) a databased

(b) big, subsystem (b) an organization
(c) larger, subsystem (c) a subsystem
(d) larger, system (d) an environment
Ans.(c) Ans.(d)

19 Pepole Resources, Hardware Resources, 20 Inpute of Data Resources, Processing of Data into
Software resources, Data Resources, Network Information, Output of Information Products,
Resources, etc, are the ? Storage of Data Resources, Control of System
Performance, etc. are what?
(a) Information System Resources.
(a) Information Technology.
(b) Technological Resources.
(b) Information System Activities.
(c) Business Process Resources.
(c) Business Activities.
(d) None of the above.
(d) eBusiness.
Ans.(a) Ans.(b)

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