A system exists because it is designed to achieve one or more objectives

We come into daily contact with:-

 the transportation system,
 the telephone system,
 the accounting system,
 the production system, and,
 the computer system
Similarly, we talk of the business system and of the organization as a system consisting of interrelated
departments (subsystems) such as
 production,
 sales,
 personnel, and
 an information system.
None of these subsystems is of much use as a single, independent unit. When they are properly
coordinated, however, the firm can function effectively and profitably.
System analysis and design focus on systems, processes and technology. In business, System
 Analysis and Design refers to the process of examining a business situation with the intent of
improving it through better procedures and methods.
 System analysis and design relates to shaping organizations, improving performance and
achieving objectives for profitability and growth.
Systems development can generally be thought of as having two major components:
 Systems analysis and
 Systems design.

System analysis
 is the process of gathering and interpreting facts, diagnosing problems.
 It is a method of describing and understanding complex interactions among large numbers of
processes or components in a generalized way.
 The focus is on identifying the fundamental units of a system and defining how they interact.
 Systems analysis is the study of sets of interacting entities, including computer systems
analysis.
System design
 is the process of planning a new business system to replace or complement an existing system.
 However, before this planning can be done, we must thoroughly understand the old system
and determine how computers can be used to make its operation more effective.
Definition:
The term system is derived from the Greek word systema, which means an organized relationship
among functioning units or components.
A System is an integrated set of interoperable components, each with explicitly specified and
bounded capabilities, working synergistically to perform value-added processing to enable a user to
satisfy mission-oriented operational needs in a prescribed operating environment with a specified
outcome and probability of success.

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The word component may refer:
 to physical parts (engines, wings of aircraft, car),
 managerial steps (planning, organizing and controlling), or a system in a multi level structure.
The component may be
 simple or complex,
 basic or advanced.
In either case, each component is part of the total system and has to do its share of work for the
system to achieve the intended goal.

The study of systems concepts, then, has three basic implications:

1. A system must be designed to achieve a predetermined objective.
2. Interrelationships and interdependence must exist among the components.
3. The objectives of the organization as a whole have a higher priority than the objectives of its
subsystems.
System and its components
A collection of elements that work together to realize some objective forms a system.
There are three major components in every system. Namely

 input,
 process and
 output.

In a system, the different components are connected with each other and they are interdependent. For
example, Human body represents a complete natural system.

We are also bound by many other systems such as

 political system,
 economic system,
 educational system and so forth.

The objective of the system demands that some output is produced because of processing the suitable
inputs.

E.g.
 an information system takes data as an input, performs sorting, calculating or summarizing as
processing and produces information as an output.
 Manufacturing systems take raw materials as input, transformation processes and finished
products as an output

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Business System Concepts
The word system is widely used.
People speak of
 exercise system,  information system,
 investment system,  education system,
 delivery system,  computer system etc.
 System may be referred to any set of components, which function in interrelated manner for a
common objective.
 The systems approach should be used because problems of society have become very large and
complex.

 It is exceedingly difficult to deal with such problems by intuition or hunches.

 Systems analysts need to know the following important systems concepts:
 Decomposition
 Modularity
 Coupling
 Cohesion
Decomposition- is the process of breaking down a system into its smaller components.
 These components may themselves be systems (subsystems) and can be broken down into
their components as well.
 It results in smaller and less complex pieces that are easier to understand than larger,
complicated pieces.
 Decomposing a system also allows us to focus on one particular part of a system, making it
easier to think of how to modify that one part independently of the entire system.
Decomposition is a technique that allows the systems analyst to:
� Break a system into small, manageable, and understandable subsystems
� Focus attention on one area (subsystem) at a time, without interference from other areas
� Concentrate on the part of the system pertinent to a particular group of users, without
confusing users with unnecessary details
� Build different parts of the system at independent times and have the help of different
analysts
Modularity- is a direct result of decomposition.
 It refers to dividing a system into chunks or modules of a relatively uniform size.
 Modules can represent a system simply, making it easier to understand and easier to
redesign and rebuild.
Coupling- means that subsystems are dependent on each other.
 Subsystems should be as independent as possible.
 If one subsystem fails and other subsystems are highly dependent on it, the others will either
fail themselves or have problems functioning.
 We would say the components of a portable MP3 player are tightly coupled
Cohesion- is the extent to which a subsystem performs a single function. In the MP3 player example,
supplying power is a single function.

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To reconstruct a system, the following key elements or characteristics must be considered:
1. Outputs and inputs. 6. Boundaries and interface.
2. Process 7. Constraints
3. Control. 8. Integration
4. Feedback. 9. Central objective
5. Environment.
1. Outputs and Inputs
 A major objective of a system is to produce an output that has value to its user. Whatever the
nature of the output (goods, services, or information), it must be in line with the expectations
of the intended user.
 Inputs are the elements (material, human resources, and information) that enter the system for
processing.
 Output is the outcome of processing.
2. Process
 The process is the element of a system that involves the actual transformation of input into
output. It is the operational component of a system. Process may modify the input totally or
partially, depending on the specifications of the output. This means that as the output
specifications change so does the processing. In some cases, input is also modified to enable
the process to handle the transformation.
3. Control
 The control element guides the system. It involves managing the pattern of activities
governing input, processing, and output. In an organizational context, management as a
decision – making body controls the inflow, handling and outflow of activities that affect the
welfare of the business. In a computer system, the operating system and accompanying
software influence the behavior of the system.
4. Feedback
 Control in a dynamic system is achieved by feedback.
 Feedback measures output against a standard in some form of cybernetic procedure that
includes communication and control.
 Output information is fed back to the input and / or to management (Controller) for
deliberation. After the output is compared against performance standards, changes can result
in the input or processing and consequently, the output
 Feedback may be positive or negative, Positive feedback reinforces the performance of the
system. Negative feedback generally provides the controller with information for action.
5. Environment
 A system exists within an environment—everything outside the system’s boundary that
influences the system. Usually the system interacts with its environment. An information
system interacts with its environment by receiving data (raw facts) and information (data
processed in a useful format). For example, the organization’s environment, consisting of
vendors, competitors, and others, may provide constraints and, consequently, influence the
actual performance of the business.

6. Boundaries and interface

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  A system should be defined by its boundaries – the limits that identify its components,
processes and interrelationship when it interfaces with another system.
 Each system has boundaries that determine its sphere of influence and control. This means
that in systems analysis, knowledge of the boundaries of a given system is crucial in
determining the nature of its interface with other systems for successful design.
 The points at which the system meets its environment are called interfaces; an interface also
occurs between subsystems.

7. Constraints
 Constraints refer to the limits (in terms of capacity, speed, or capabilities) to what it can do and
how it can achieve its purpose within its environment. Some of these constraints are imposed
inside the system (e.g., a limited number of staff available), and others are imposed by the
environment (e.g., due dates or regulations).
8. Integration
 Integration refers to the holism of systems. Integration is concerned with how a system is tied
together. It is more than sharing a physical part or location. It means that parts of the system
work together within the system even though each part performs a unique function. Successful
integration will typically produce a synergistic effect and greater total impact than if each
component works separately.
9. Central objective
 Every system has a predefined goal or objective towards which it works. A system cannot exist
without a defined objective. For example, an organization would have an objective of earning
maximum possible revenues, for which each department and each individual has to work in
coordination.

Types of systems
The frame of reference within which one views a system is related to the use of the systems approach
for analysis.
Systems have been classified in different ways.
1. Physical or abstract systems
 Physical systems are tangible entities that may be static or dynamic in operation.
 For example, the physical parts of the computer center are the officers, desks, and chairs that
facilitate operation of the computer.
 They can be seen and counted; they are static. In contrast, a programmed computer is a
dynamic system.
 Data, programs, output, and applications change as the user’s demands or the priority of the
information requested changes. Abstract systems are conceptual or non-physical entities.
 They may be as straightforward as formulas of relationships among sets of variables or models
– the abstract conceptualization of physical situations.

2. Open or Closed Systems

 Another classification of systems is based on their degree of independence.
 An open system has many interfaces with its environment.
 It permits interaction across its boundary; it receives inputs from and delivers outputs to the
outside.

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  An information system falls into this category, since it must adapt to the changing demands of
the user.
 In contrast, a closed system is isolated from environmental influences.
 In reality, a completely closed system is rare.
 In systems analysis, organizations, applications and computers are invariably open, dynamic
systems influenced by their environment.

Important characteristics of open systems

1. Input from outside:

 Open systems are self – adjusting and self-regulating. When functioning properly, an open
system accepts inputs from external environment.
2. Entropy:
 All dynamic systems tend to run down over time, resulting in entropy or loss of energy.
Open systems resist entropy by seeking new inputs or modifying the processes to return to
a steady state
3. Process, output and cycles:
 Open systems produce useful output and operate in cycles, following a continuous flow
path.
4. Differentiation:
 Open systems have a tendency toward an increasing specialization of functions and a
greater differentiation of their components. In business, the roles of people and machines
tend toward greater specialization and greater interaction. This characteristic offers a
compelling reason for the increasing value of the concept of systems in the systems
analyst’s thinking.
5. Equifinality (More than one way to accomplish the same result)
 Equifinality means that the same or similar results can be achieved by using a variety of
different processes.
 For example, management can achieve the same results by using different inputs or by
using different processes with the same inputs.
 Equifinality suggests that there is no one right way to accomplish important results in an
organization. In contrast, closed systems have one right way to do things.

Natural or Man – Made Systems

All man- made systems are embedded by natural world and important interfaces often exist between
them.
 Natural systems- are those that came in to being by natural processes. In natural system there is
multiple or infinite direction of feedback. Example, water cycle, digestive system, immune
system.etc
 Man-Made (fabricated, synthetic) systems - are those in which human being intervened through
component, attributes, or relationships. There is one directional feedback in man-made system.
Example, educational system, computer system
 Adaptive and non-adaptive systems: Adaptive systems change itself to cope up with the
turbulent environment while non adaptive system do not adapt.

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Fundamentals of information System
 An Information System is an arrangement of people, data, processes, interfaces, networks and
technology that interact for the purpose of supporting and improving both day-to-day operations
in a business (data processing) as well as supporting the problem solving and decision making
needs of management (information services).

The Information System includes the following

 Hardware – Computers, servers and printers

 Software - System soft ware and application software
 Documentation and training materials – The materials created by Systems Analyst to help
users to use the software
 Specific job roles – The roles associated with the overall system, such as the people who run the
computers and the software operating.
 Controls- which are the parts of the software written to prevent fraud and theft
 People- Who uses the software in order to do their job.
.
Types of Information Systems
 The main types of IS are transaction processing systems, management information systems,
decision support systems and expert systems.

Transaction Processing Systems (TPS)

TPS automates the handling and capture of data about transactions or business
activities/transactions/.
 TPS is Process orientation.
 The goal of TPS development is to improve transaction processing by speeding it up, using
fewer people, improving efficiency and accuracy, integrating it with other organizational
information systems, or providing information not previously available.
Management Information System (MIS)¨

MIS takes the raw data available through a TPS and converts them into a meaningful form.Itprovides
reports of this information to managers. Developing MIS calls for good understanding of what kind
of information mangers require and how managers use information in their jobs.
 Thus, the System Analyst must develop a good understanding of the business and the
transaction processing systems that provide data for an MIS
 MIS is data orientation
Decision support System (DSS)

 Helps the manager to take decisions by analyzing the data. It provides an interactive
environment in which decision maker can quickly manipulate data and models of business
operations.
 DSS has three parts; the first part is composed of a database, extracted from a TPS or MIS.
The second part consists of mathematical or graphical models of business processes. The
third part is made up of a user interface that provides a way for the decision maker to
communicate with the DSS.

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  System Analyst is to concentrate on the three main components database, model base and user
dialogue.

Expert Systems (ES)

 An Es is different from other information systems, it replicates the decision making process
by applying rules to information in the way that an expert would.
 An ES is developed for a particular area of knowledge or domain. Example, medical
diagnosis, weather forecasting, etc.
 The ES asks questions, and the end user supplies the answers, rules applied on the answers
and the ES provides a recommendation.

More recently, expert systems include data warehousing and data mining:
o Data warehousing is the storage of large volumes of data for organizational use
o Data mining is the process of looking for patterns in the data stored in databases, in order to
uncover undiscovered information

System and system analyst

 A system analyst is a person who is responsible for development of software. A system
analyst is a computer professional charged with analyzing, designing and implementing
computer- based information systems.
 He is a computer specialist who translates business problems and requirements into
information systems and acts as link between information systems department and rest of the
organization.
 The Systems Analyst bridges the communications gap between those who need the computer
system and those who understand the technology.

The system analyst performs the following roles:-

1. Change agent
– The analyst may be viewed as an agent of change. The systems analyst may select various
styles to introduce change to the user organization when he feels there is a need of change in
the current system depending on the problems in the system.
2. Problem investigator
– The analyst studies the problems and needs of the organization. He visits various
departments of the organization and interviews the users and analysis the problems of the
current system and collects their new requirements.
3. Problem solver
– The analyst solves the problems of the current system faced by the users. He determines
how people, method and technology can improve the current system.
4. System designer
– The analyst creates a detailed physical and logical design of the system. So as to find out the
requirements of the new system.
5. Motivator

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 – The analyst motivates users to participate in development and implementation of the
proposed system. This helps to understand user’s needs. He appeals management and users for
getting the support in development and implementation of the proposed system.
6. Project manager
– The analyst monitors the development and implementation of software in relation to
quality, cost and time. He works with the project leader for managing the project properly.

A system analyst is required to have all of the following skills:

 Analytical and problem solving skill- understand the problem, suggest solutions to the
problem, suggest ways of implementing the solution
 Managerial skill:- Resource management, project management, risk management, change
management
 Interpersonal skill
 Technical skill
 Effective writing and oral communication
Why do systems fail?
System failure can be the result of any one of the following:
 Lack of user involvement
 Lack of clear statement of requirements
 No clear vision
 Poor planning and overambitious plans
 Lack of management support

The Four Stages of Data Processing

 Input: Data is collected and entered into computer.

 Data processing: Data is manipulated into information using mathematical,

statistical, and other tools.

 Output: Information is displayed or presented.

 Storage: Data and information are maintained for later use.

Why is MIS Important?

• The role of the MIS in an organization can be compared to the role of heart in the
body. The information is the blood and MIS is the heart. In the body the heart plays
the role of supplying pure blood to all the elements of the body including the brain.

• The heart works faster and supplies more blood when needed. It regulates and controls
the incoming impure blood, processes it and sends it to the destination in the quantity needed.
It fulfills the needs of blood supply to human body in normal course and also in crisis.

• MIS affects almost all areas of business. Such as;

• Manufacturing • Accounting & Finance

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 • Human resources • Performance
evaluations—
• Marketing expectations
• Top management

In each of the business functions, effective decision making is required based upon: Quality analysis,
Cost & budget analysis, Risk analysis ,Market analysis, Inventory analysis, SWOT analysis,
Stakeholder analysis, Feedback analysis, Behavior analysis ,Report & Dashboard preparation.

Tasks of MIS

Following are activities performed during information system processing:

1. Handling of voluminous data

2. Confirmation of the validity of data & transaction

3. Complex processing of data & multidimensional analysis

4. Quick search & retrieval

5. Mass storage

6. Communication of information system to the user on time

7. Fulfilling the changing needs of information

 Formal system should exist to handle all above mentioned things. Hence, MIS uses computer
technology to deal with information. In addition to supporting decision making, coordination, and
control, information systems may also help managers and workers analyze problems, visualize
complex subjects, and create new products.

Therefore, business firms invest heavily in information systems to achieve six strategic business
objectives:

 Operational excellence
 New products, services, and business models
 Customer and supplier intimacy
 Improved decision making
 Competitive advantage
 Survival

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