System Concepts: A Foundation: Chapter 1 Foundations of Information Systems in Business 1

System Concepts: A Foundation
• System concepts help us understand…

– Technology: hardware, software, data
management, telecommunications networks
– Applications: to support inter-connected
information systems
– Development: developing ways to use information
technology includes designing the basic
components of information systems
– Management: emphasizes the quality, strategic
business value, and security of an organization’s
information systems
Chapter 1 Foundations of
Information Systems in 1
Business
What is a System?
• A system is…
– A set of interrelated components
– With a clearly defined boundary
– Working together
– To achieve a common set of objectives
– By accepting inputs and producing outputs
– In an organized transformation process
Business
Basic Functions of a System
• Input
– Capturing and assembling elements that enter the
system to be processed
• Processing
– Transformation process that converts input into
output
• Output
– Transferring transformed elements to their
ultimate destination
Business
A Business as a System
Business
Other System Characteristics
• If a system is one of the components of a larger
system, it is a subsystem
– The larger system is an environment
• Several systems may share the same environment
– Some may be connected via a shared boundary, or
interface
• Types of systems…
– Open
– Adaptive
Business
Components of an IS
Business
Information System Resources
• People Resources
– Specialists
– End users
• Hardware Resources
– Machines
– Media
• Software Resources
– Programs
– Procedures
• Data Resources
– Product descriptions, customer records, employee files, inventory
databases
• Network Resources
– Communications media, communications processors, network access
and control software
• Information Resources
– Management reports and business documents using text and graphics
displays, audio responses, and paper forms
Business
IS Activities
• Input of data resources
– Data entry activities
• Processing of data into information
– Calculations, comparisons, sorting, and so on
• Output of information products
– Messages, reports, forms, graphic images
• Storage of data resources
– Data elements and databases
• Control of system performance
– Monitoring and evaluating feedback
Business
Recognizing IS
• Business professionals should be able to look at an
information system and identify…
– The people, hardware, software, data, and
network resources they use
– The type of information products they produce
– The way they perform input, processing, output,
storage, and control activities
Business
Systems
Development
Lifecycle
(SDLC)
Chapter 12 Developing Business/IT Solutions 10

Systems Development Process
• Systems Investigation
– The first step in the systems development
process
– May involve consideration of proposals
generated by a business/IT planning process
– Also includes the preliminary feasibility study
of proposed information system solutions
Chapter 12 Developing
11
Business/IT Solutions
Systems Development Process
• Feasibility Studies: a preliminary study to
determine the
– Information needs of prospective users
– Resource requirements
– Costs
– Benefits
– Feasibility
• In some cases, a feasibility study is
unnecessary
12
Operational Feasibility
• How well the proposed system will
– Support the business priorities of the
organization
– Solve the identified problem
– Fit with the existing organizational structure
13
Economic Feasibility
• An assessment of
– Cost savings
– Increased revenue
– Decreased investment requirements
– Increased profits
– Cost/benefit analysis
14
Technical Feasibility
• Determine the following can meet the needs
of a proposed system and can be acquired or
developed in the required time
– Hardware
– Software
– Network
15
Human Factors Feasibility
• Assess the acceptance level of
– Employees
– Customers
– Suppliers
– Management support
• Determine the right people for the various
new or revised roles
16
Legal/Political Feasibility
• Assess
– Possible patent or copyright violations
– Software licensing for developer side only
– Governmental restrictions
– Changes to existing reporting structure
17
Systems Analysis
• An in-depth study of end user information
needs
– It produces the functional requirements used as the
basis for the design of an IS
• It typically involves a detailed study of the
– Information needs of a company and end users
– Activities, resources, and products of one or more
of the information systems currently being used
– Information system capabilities required to meet
the information needs of business stakeholders
18
Organizational Analysis
• Study of the organization, including…
– Management structure
– People
– Business activities
– Environmental systems
– Current information systems
• Input, processing, output, storage, and control
19
Analysis of the Present System
• Before designing a new system, it is important
to study the system to be improved or
replaced
– Hardware and software
– Network
– People resources used to convert data
resources into information products
– System activities of input, processing,
output, storage, and control
20
Logical Analysis
• A logical model is a blueprint of the current
system
– It displays what the current system does,
without regard to how it does it
– It allows an analyst to understand the processes,
functions, and data associated with a system
without getting bogged down with hardware and
software
21
Functional Requirements
• This step of systems analysis is one of the
most difficult
– Determine what type of information each
business activity requires
– Try to determine the information processing
capabilities required for each system activity
– The goal is to identify what should be done,
not how to do it
22
Examples of Functional Requirements
• User Interface: automatic entry of product
data and easy-to-use data entry screens for
Web customers
• Processing: fast, automatic calculation of sales
totals and shipping costs
• Storage: fast retrieval and update of data from
product, pricing, and customer databases
• Control: signals for data entry errors and quick
e-mail confirmation for customers
23
Prototyping
• Prototyping is the rapid development and
testing of working models
– An interactive, iterative process used during
the design phase
– Makes development faster and easier, especially
when end user requirements are hard to define
– Has enlarged the role of business stakeholders
24
Prototyping
Life Cycle
25
Systems Design
• Systems design focuses on three areas
26
User Interface Design
• Focuses on supporting the interactions
between end users and their computer-based
applications
– Designers concentrate on the design of attractive
and efficient forms of user input and output
– Frequently a prototyping process
– Produces detailed design specifications for
information products, such as display screens
27
System Specifications
• Formalizing the design of
– User interface methods and products
– Database structures
– Processing procedures
– Control procedures
28
Examples of System Specifications
User interface Use personalized screens that welcome repeat Web
specifications customers and that make product recommendations
Database Develop databases that use object/relational database
specifications management software to organize access to all
customer and inventory data and to multimedia product
information
Software Acquire an e-commerce software engine to process all
specifications e-commerce transactions with fast responses, i.e.,
retrieve necessary product data and compute all sales
amounts in less than one second
Hardware Install redundant networked Web servers and sufficient
and network high-bandwidth telecommunications lines to host the
specifications company e-commerce website
Personnel Hire an e-commerce manager and specialists and a
specifications webmaster and Web designer to plan, develop, and
manage e-commerce operations
29
Focus of End User Development
30
Input Design
In an information system, input is the raw data that is processed to

produce output.
During the input design, the developers must consider the input
devices such as PC, MICR, OMR, etc.
Well designed input forms and screens have following properties −
It should serve specific purpose effectively such as storing, recording,

and retrieving the information.
It ensures proper completion with accuracy.
It should be easy to fill and straightforward.
It should focus on user’s attention, consistency, and simplicity.
All these objectives are obtained using the knowledge of basic design
principles regarding −
What are the inputs needed for the system?
How end users respond to different elements of forms and screens.
Output Design
The design of output is the most important task of any system. During
output design, developers identify the type of outputs needed, and consider the
necessary output controls and prototype report layouts.
Objectives of Output Design

The objectives of input design are −
To develop output design that serves the intended purpose and eliminates
the production of unwanted output.
To develop the output design that meets the end users requirements.
To deliver the appropriate quantity of output.
To form the output in appropriate format and direct it to the right person.
There are three types of reports produced by management information −
Detailed Reports − They contain present information which has almost

no filtering or restriction generated to assist management planning and
control.
Summary Reports − They contain trends and potential problems which

are categorized and summarized that are generated for managers who do
not want details.
Exception Reports − They contain exceptions, filtered data to some

condition or standard before presenting it to the manager, as information.
Computer Program Development
Define the functions of the program.
Plan the logic of the program.
Code the program.
Test and Debug the program.
Complete the documentation.

Designing Structured Programs
Structured programming is aimed at improving the clarity, quality, and
development time of a computer program by making extensive use of
subroutines, block structures, for and while loops.
Control structures
"Sequence"; ordered statements or subroutines executed in sequence.
"Selection"; one or a number of statements is executed depending on the state

of the program. This is usually expressed as if ...then..else…endif.
"Iteration“; a statement or block is executed until the program reaches a certain

state, or operations have been applied to every element of a collection. This is
usually expressed with keywords such as while, repeat, for or do..until.
"Recursion"; a statement is executed by repeatedly calling itself until

termination conditions are met.
Implementing New Systems
• The systems implementation stage involves
– Hardware and software acquisition
– Software development
– Testing of programs and procedures
– Conversion of data resources
– Conversion alternatives
– Education/training of end users and
specialists who will operate the new system
38
Implementation Process
39
Sample Implementation Process
40
Other Implementation Activities
• The keys to successful implementation of
a new business system
– Testing
– Data conversion
– Documentation
– Training
41
System Testing
• System testing may involve
– Testing and debugging software
– Testing website performance
– Testing new hardware
– Review of prototypes
42
Data Conversion
• Data conversion includes
– Converting data elements from the old database
to the new database
– Correcting data errors
– Filtering out unwanted data
– Consolidating data from several databases
– Organizing data into new data subsets
• Improperly organized and formatted data is a
major cause of implementation failures
43
Documentation
• User Documentation
– Sample data entry screens, forms, reports
– System operating instructions
• Systems Documentation
– Method of communication among those
developing, implementing, and maintaining
a computer-based system
– Detailed record of the system design
– Extremely important when diagnosing
problems and making system changes
44
Training
• End users must be trained to operate a new
business system or its implementation will fail
– May involve only activities, such as data entry,
or all aspects of system use
– Managers and end users must understand how
the new technology impacts business operations
• System training should be supplemented with
training related to
– Hardware devices
– Software packages
45
Major System Conversion Strategies
46
Direct Conversion
• Direct conversion
– The simplest conversion strategy
– The most disruptive to the organization
– Sometimes referred to as the slam dunk or
cold-turkey strategy
– May be the only viable solution in cases of emergency
implementation or if the old and
new system cannot coexist
– Has the highest risk of failure
– Involves turning off the old system and turning on the
new one
47
Parallel Conversion
• Old and new systems are run simultaneously
until everyone is satisfied that
– The new system functions correctly
– The old system is no longer needed
• Conversion to new system can be single
cutover or phased cutover
• Has the lowest risk, but the highest cost
– Can cost 4 times more than using the old system
• Best choice where an automated system is
replacing a manual one
48
Pilot Conversion
• Scenarios best suited to a pilot conversion
– Multiple business locations
– Geographically diverse locations
• Advantages of single location conversion
– Can select a location that best represents
the conditions across the organization
– Less risky in terms of loss of time or delays
in processing
– Can be evaluated and changed before further
installations
49
Phased Conversion
• A phased or gradual conversion
– Takes advantage of both the direct and parallel
approaches
– Minimizes the risks involved
– Allows the new system to be brought online
as logically ordered functional components
• Disadvantages
– Takes the most time
– Created the most disruption to the organization over
time
50
Post-Implementation Activities
• The single most costly activity
– Correcting errors or faults in the system
– Improving system performance
– Adapting the system to changes in the operating
or business environment
– Requires more programmers than does
application development
– May exist for years
51
Systems Maintenance
• There are four basic categories of system
maintenance
– Corrective: fix bugs and logical errors
– Adaptive: add new functionality
– Perfective: improve performance
– Preventive: reduce chances of failure
52
Post-Implementation Review
• Ensures that the newly implemented system
meets the established business objectives
– Errors must be corrected by the maintenance
process
– Includes a periodic review/audit of the system
as well as continuous monitoring
53
Fundamental Data Concepts
• Character
– A single alphabetic, numeric, or other symbol
• Field or data item
– Represents an attribute (characteristic or quality)
of some entity (object, person, place, event)
• Example: salary, job title
• Record
– Grouping of all the fields used to describe the attributes of an entity
• Example: payroll record with name, SSN, pay rate
• File or table
– A group of related records
• Database
– An integrated collection of logically related
data elements
Chapter 5 Data Resource

54
ManagementChapter 5
Electric Utility Database

55
ManagementChapter 5
Database Structures
• Common database structures…
– Hierarchical
– Network
– Relational
– Object-oriented
– Multi-dimensional

56
ManagementChapter 5
Hierarchical Structure
• Early DBMS structure

• Records arranged in
tree-like structure
• Relationships are one-
to-many

57
ManagementChapter 5
Network Structure
• Used in some mainframe DBMS packages

– Many-to-many relationships

58
ManagementChapter 5
Relational Structure
• Most widely used structure

– Data elements are stored in tables
– Row represents a record; column is a field
– Can relate data in one file with data in another,
if both files share a common data element
59
ManagementChapter 5
Relational Operations
• Select
– Create a subset of records that meet a stated
criterion
• Example: employees earning more than $30,000
• Join
– Combine two or more tables temporarily
– Looks like one big table
• Project
– Create a subset of columns in a table

60
ManagementChapter 5
Multidimensional Structure
• Variation of relational model
– Uses multidimensional structures to
organize data
– Data elements are viewed as being in cubes
– Popular for analytical databases that support
Online Analytical Processing (OLAP)

61
ManagementChapter 5
Multidimensional Model

62
ManagementChapter 5
Object-Oriented Structure
• An object consists of
– Data values describing the attributes of an entity
– Operations that can be performed on the data
• Encapsulation
– Combine data and operations
• Inheritance
– New objects can be created by replicating some or
all of the characteristics of parent objects

63
ManagementChapter 5
Source: Adapted from Ivar Jacobsen, Maria Ericsson, and Ageneta Jacobsen, The Object Advantage:
Business Process Reengineering with Object Technology (New York: ACM Press, 1995), p. 65.
Copyright @ 1995, Association for Computing Machinery. By permission.

64
ManagementChapter 5
• Used in object-oriented database management
systems (OODBMS)
• Supports complex data types more efficiently than
relational databases
– Example: graphic images, video clips,
web pages

65
ManagementChapter 5
Evaluation of Database Structures
• Hierarchical
– Works for structured, routine transactions
– Can’t handle many-to-many relationship
• Network
– More flexible than hierarchical
– Unable to handle ad hoc requests
• Relational
– Easily responds to ad hoc requests
– Easier to work with and maintain
– Not as efficient/quick as hierarchical or network
66
ManagementChapter 5
Database Development
• Database Administrator (DBA)
– In charge of enterprise database development
– Improves the integrity and security of
organizational databases
– Uses Data Definition Language (DDL) to develop
and specify data contents, relationships, and
structure
– Stores these specifications in a data dictionary or
a metadata repository

67
ManagementChapter 5
Data Dictionary
• A data dictionary
– Contains data about data (metadata)
– Relies on specialized software component to manage
a database of data definitions
• It contains information on..
– The names and descriptions of all types of data
records and their interrelationships
– Requirements for end users’ access and use of
application programs
– Database maintenance
– Security
68
ManagementChapter 5
Database Development

69
ManagementChapter 5
Data Planning Process
• Database development is a top-down process
– Develop an enterprise model that defines the
basic business process of the enterprise
– Define the information needs of end users in
a business process
– Identify the key data elements that are needed to
perform specific business activities
(entity relationship diagrams)

70
ManagementChapter 5
Entity Relationship Diagram

71
ManagementChapter 5
Database Design Process
• Data relationships are represented in a data model that
supports a business process
• This model is the schema or subschema on which to
base…
– The physical design of the database
– The development of application programs to support
business processes
• Logical Design
– Schema - overall logical view of relationships
– Subschema - logical view for specific end users
– Data models for DBMS
• Physical Design
– How data are to be physically stored and
accessed on storage devices
72
ManagementChapter 5
Logical and Physical Database Views

73
ManagementChapter 5
Data Resource Management
• Data resource management is a managerial activity
– Uses data management, data warehousing,
and other IS technologies
– Manages data resources to meet the information needs of
business stakeholders
• Data stewards
– Dedicated to establishing and maintaining the quality of
data
– Need business, technology, and diplomatic skills
– Focus on data content
• Judgment is a big part of the job

74
ManagementChapter 5
Types of Databases

75
ManagementChapter 5
Operational Databases
• Stores detailed data needed to support business
processes and operations
– Also called subject area databases (SADB),
transaction databases, and production databases
– Database examples: customer, human resource,
inventory

76
ManagementChapter 5
Distributed Databases
• Distributed databases are copies or parts of databases stored on servers at
multiple locations
– Improves database performance at worksites
• Advantages
– Protection of valuable data
– Data can be distributed into smaller databases
– Each location has control of its local data
– All locations can access any data, any where
• Disadvantages
– Maintaining data accuracy
• Replication
– Look at each distributed database and find changes
– Apply changes to each distributed database
– Very complex
• Duplication
– One database is master
– Duplicate the master after hours, in all locations
– Easier to accomplish
77
ManagementChapter 5
External Databases
• Databases available for a fee from commercial online
services, or free from the Web
– Example: hypermedia databases, statistical
databases, bibliographic and full text databases
– Search engines like Google or Yahoo are
external databases

78
ManagementChapter 5
Hypermedia Databases
• A hypermedia database contains
– Hyperlinked pages of multimedia
– Interrelated hypermedia page elements,
rather than interrelated data records

79
ManagementChapter 5
Components of Web-Based System

80
ManagementChapter 5
Data Warehouses
• Stores static data that has been extracted from other
databases in an organization
– Central source of data that has been cleaned,
transformed, and cataloged
– Data is used for data mining, analytical processing,
analysis, research, decision support
• Data warehouses may be divided into data marts
– Subsets of data that focus on specific aspects
of a company (department or business process)

81
ManagementChapter 5
Data Warehouse Components

82
ManagementChapter 5
Applications and Data Marts

83
ManagementChapter 5
Data Mining
• Data in data warehouses are analyzed to reveal
hidden patterns and trends
– Market-basket analysis to identify new
product bundles
– Find root cause of qualify or manufacturing
problems
– Prevent customer attrition
– Acquire new customers
– Cross-sell to existing customers
– Profile customers with more accuracy
84
ManagementChapter 5
Functional Business Systems
• A variety of types of information systems
that support the business functions of
– Accounting
– Finance
– Marketing
– Operations management
– Human resource management
Chapter 7 Electronic Business

85
Systems
IT in Business

86
Systems
Marketing Systems
• Marketing systems are concerned with
– Planning, promotion, and sale of existing products
in existing markets
– Development of new products and new markets
– Better attracting and serving present and
potential customers

87
Systems
Marketing Information Systems

88
Systems
Interactive Marketing
• Interactive Marketing
– A customer-focused marketing process
– Uses the Internet, intranets, and extranets
– Establishes two-way transactions between a
business and its customers or potential customers
• Goal
– Profitably use networks to attract and keep
customers
– Get customers to help create, purchase, and
improve products and services
89
Systems
Targeted Marketing
• An advertising and promotion management
concept with five targeting components

90
Systems
Targeted Marketing Components
• Community: customized ads to appeal to specific
virtual communities
• Content: ads placed on a variety of selected
websites, aimed at a specific audience
• Context: ads placed on web pages that are
relevant to a product or service
• Demographic/Psychographic: web marketing
aimed at specific types or classes of people
• Online behavior: promotions tailored to each
visit to a site by an individual

91
Systems
Sales Force Automation
• Outfit sales force with notebook computers,
web browsers, and sales contact software
– Connect them to marketing websites and the
company intranet
• Goals
– Increase personal productivity
– Speed up capture and analysis of sales data
– Gain strategic advantage

92
Systems
Manufacturing Information Systems
• Supports the production/operations functions

– Includes all activities concerned with planning and
control of the processes producing goods
or services

93
Systems
Computer-Integrated Manufacturing

94
Systems
CIM Objectives
• Simplify production processes, product designs,
and factory organization
• Automate production processes and the
business functions that support them
• Integrate all production and support
processes using
– Networks
– Cross-functional business software
– Other information technologies

95
Systems
CIM Systems
• Computer-aided manufacturing (CAM)
– Automate the production process
• Manufacturing execution systems (MES)
– Performance monitoring information systems
for factory floor operations
• Process control
– Control ongoing physical processes
• Machine control
– Controls the actions of machines
96
Systems
Human Resource Management (HRM)
• Information systems designed to support

– Planning to meet personnel needs
– Development of employees to their full potential
– Control of all personnel policies and programs

97
Systems
HRM Systems

98
Systems
HRM and the Internet
• Recruiting employees using the corporate
website and commercial recruiting services
• Posting messages in selected Internet
newsgroups
• Communicating with job applicants via e-mail

99
Systems
HRM and Corporate Intranets
• Corporate intranet uses
– Process common HRM transactions
– Allow around-the-clock HRM services
– Disseminate information faster than through
previous company channels
– Collect information from employees online
– Allow HRM tasks to be performed with little HRM
department intervention
– Training

100
Systems
Employee Self-Service
• Intranet applications can allow employees to
– View benefits
– Enter travel and expense reports
– Verify employment and salary information
– Access and update personal information
– Enter time-sensitive data

101
Systems
Accounting Information Systems
• The oldest and most widely used information system in business
– Records and reports business transactions and economic events
– Produces financial statements
– Forecasts future conditions
• Typically consists of
– Order processing
– Inventory control
– Accounts receivable
– Accounts payable
– Payroll
– General ledger systems

102
Systems
Accounting Information Systems

103
Systems
Financial Management Systems
• Supports business managers and professionals
making decisions concerning
– The financing of a business
– The allocation and control of financial
resources within a business

104
Systems
Financial Management System
Example

105
Systems

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System Concepts: A Foundation

• System concepts help us understand…

Chapter 12 Developing Business/IT Solutions 10

In an information system, input is the raw data that is processed to

Well designed input forms and screens have following properties −

It should serve specific purpose effectively such as storing, recording,

Objectives of Output Design

To deliver the appropriate quantity of output.

Detailed Reports − They contain present information which has almost

Summary Reports − They contain trends and potential problems which

Exception Reports − They contain exceptions, filtered data to some

Define the functions of the program.

Plan the logic of the program.

Code the program.

Test and Debug the program.

Complete the documentation.

"Sequence"; ordered statements or subroutines executed in sequence.

"Selection"; one or a number of statements is executed depending on the state

"Iteration“; a statement or block is executed until the program reaches a certain

"Recursion"; a statement is executed by repeatedly calling itself until

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

• Early DBMS structure

Chapter 5 Data Resource

• Used in some mainframe DBMS packages

Chapter 5 Data Resource

• Most widely used structure

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 5 Data Resource

Chapter 7 Electronic Business

Chapter 7 Electronic Business

Chapter 7 Electronic Business

Chapter 7 Electronic Business

Chapter 7 Electronic Business

Chapter 7 Electronic Business

Chapter 7 Electronic Business

• Supports the production/operations functions

Chapter 7 Electronic Business

Chapter 7 Electronic Business

Chapter 7 Electronic Business

• Information systems designed to support

Chapter 7 Electronic Business

Chapter 7 Electronic Business

Chapter 7 Electronic Business