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Chapter-1
Information system**
“An information system can be any organized combination of people, hardware, software, communications
networks, data resources, and policies and procedures that collects, stores, retrieves, transforms, and disseminates
information in an organization. - Uma G. Gupta
People rely on modern information system to communicate with each other using a variety of-
• Physical devices (hardware)
• Information processing instructions and procedures (software)
• Communications channels (networks)
• Stored data (data management)
While today’s information systems are typically thought of as having something to do with computers, we have
been using information system since the dawn of civilization. Even today we make regular use of information
system that has nothing to do without a computer.
So, it can be defined technically- “As a set of interrelated components that collect, process, store, and distribute
information to support decision making and control in an organization.” C. Laudon and P. Laudon
Information systems contain information about significant people, places, and things within the organization or
in the environment surrounding it.
Management information system (MIS) ****
• Management: Management means planning, organizing, directing and controlling of physical and personnel
resources of an organization to reach its goals and objectives.
• Information: Information is the processed data that have been retrieved, processed or otherwise which helps
the management to take decisions.
• System: System means order, arrangement, purpose, set or things joined together to achieve a common
objective or goal.
• “MIS is an organized set of processes that provide information to managers to support the operation and
decision making within an organization.”- Kober and Watson
• “MIS is a system that creates, processes, stores, and generates information within and outside of an
organization.” - Uma G. Gupta
• So, MIS is that information system which is available to management, that provide information to support the
decision-making process, designed to help management in execution and control of plans on a regular basis
in an organization.
MIS Services.
MIS provides the organization with a wide range of services for all levels and for all functional areas. It provides
relevant information through the following reports:
1. Routine performance reports: These are the scheduled summaries such as periodic sales reports, production
reports, quality control reports, inventory control reports, etc.
2. Exception reports: These reports are produces only when actual performance deviates from pre-determined
standards.
3. On-Demand reports: These are the occasional specialized reports that are requested by management.
4. Predictive reports: These are used mostly in strategic analysis and planning activities.
What are the fields influence/ shape the field of MIS?
The field of management information systems is the study of information and its impact on the individual, the
organization, and society. Although computer is the heart of today’s information systems, a number of important
social, organizational, behavioral, and ethical issues also surround the study of information systems. Areas that
continue to influence the field of MIS include-
1. Computer science: theories and methods of computation, efficient data storage and access, and their impact
on information.
2. Political science: the political impact and uses of information, both within and outside the organization.
3. Psychology: cognitive models of human reasoning and behavior as they relate to information.
4. Operations research: scientific models that enhance decision making and make use of information to solve
complex problems.
5. Linguistics: languages and human communications and their influence on the creation and use of information.
6. Sociology: principles governing society as it relates to shaping information policies and principles.
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7. Organization theory and behavior: the nature and characteristics of organizations and their effect on the
way human beings use information to make decisions.
What do you mean by ethics in Information System (IS)? (PYQ)*

Information system & information technology.

Information system: A system that creates, processes, stores, and retrieves information. The input to such a
system is data, processed data becomes information.
Information Technology: Tools and techniques that support the design and development of information systems,
these include hardware, software, databases, telecommunications, and client-servers.
Why does information systems matter? (PYQ)*
Requisites of information system and information technology.
Information system and technologies are a vital component of successful businesses and organizations. That’s
why most business majors include a course in information system. Since you probably intend to be a manager,
entrepreneur, or business professional, it is just as important to have a basic understanding of information system
as it is to understand any other functional area in business. This is needed for a number of causes:
1. Improve the efficiency and effectiveness of business process
2. Managerial decision making
3. Workgroup collaboration
4. Strengthening competitive positions in a rapidly changing marketplace
5. Support product development teams
6. Customers support processes
7. E-commerce transaction
Moreover, we can discuss importance of information system by 2 perspectives:
An end user perspective: End Users (also called users or clients) are people who use an information system or
the information it produces. Most of us are information system end users. And most end users in business are
knowledge workers, that is, people who spend most of their time communicating and collaborating in terms of
workgroups and creating, using, and distributing information. A managerial end user is a manager, entrepreneur,
or managerial-level professional who personally uses information system.
An enterprise perspective: Information system plays a vital role in the business success of an enterprise.
Information technology can provide the information for-
1. Efficient operations
2. Effective management
3. Competitive advantage
Role of information system & information technology
Information technology is reshaping the basic of business. Customer’s service, operations, product and marketing
strategies, and distribution are heavily, or sometimes even entirely dependent on IT. Information system performs
3 vital roles in any type of organization:
1. Support of business operations
2. Support of managerial decision making
3. Support of strategic competitive advantage.

Distinguish between information system and information technology. (PYQ)*

Do you believe that Information Systems are more than computer? (PYQ)*

Discuss the relationship among ethical, social and political issues in an information
society (PYQ)*

What are the moral dimensions raised by information systems considering the
ethical, social and political issues? (PYQ)*
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Illustrate various levels of organisational activities with reference to information
required (PYQ)*
Discuss information system’s components (PYQ)*
Activities of an information system*
The activities in an information system produce the information that organization need for making decisions,
controlling operations, analyzing problems, and creating new products and services. Activities of an information
system are:
1. Input of data resources: Input involves capturing and assembling elements that enter the system to be
processed i.e., raw materials. In information system, input captures or collects raw data from within the
organization or from its external environment. Input: optical scanning of bar-coded tags on merchandise.
2. Processing of data into information: Processing involves transformation processes that convert input into
output i.e., manufacturing process. Processing converts this raw input into a more meaningful form.
Processing: calculating employee pay, taxes, and other payroll deductions.
3. Output of information products: Output involves transferring elements that have been produced by a
transformation process to their ultimate destination i.e., finished products. In information system output
transfers the processed information to the people or activities where it will be used. Output: producing reports
and displays about sales performance.
4. Storage of data resources: Storage is a basic system component of information system. Storage is the
information system activity in which data are retained in an organization manner for later use i.e., inventory
of finished products. Storage: maintaining records on customers, employees, and products.
5. Control of system performance: An information system should produce feedback about its input,
processing, output, and storage activities. This feedback must be monitored and evaluate to determine if the
system is meeting established performance standards. Control: generating audible signals to indicate proper
entry of sales data.
Information system resources
Information system consists of 5 major resources:
People Resources: People are the essential ingredient for the successful operation of all information system.
People are required for the operation of all information system. These people resource include-
1. End Users: who use an information.
2. IS Specialists: who develop and operate information system. They include-
3. System analysts: who design information system based on the information requirements of end users.
4. Programmers: who prepare computer program based on the specification of system analysts.
5. Computer operators: who operate computer system.
Hardware resources: Hardware resources include all physical devices and materials used in information
processing. It includes not only machines, but also all data media (on which data is recorded). Which consists of
central processing units (CPU) and variety of interconnected peripheral devices.
Software resources: The concept of software resources includes all sets of information processing instructions.
The instances are-
1. System software: Operating system programs which controls and supports the operations of a computer
system.
2. Application software: Which consists of programs that direct processing for a particular use of computers
by end users.
3. Procedures: Which are operating instructions for the people who will use an information system.
Data resources: Data constitute valuable organizational resources. Data can take many forms, including-
1. Alphanumeric data: data composed of numbers and alphabetical and other characters that describe
business transactions and other events and entities.
2. Text data: consisting of sentences and paragraphs used in written communication.
3. Image data: such as graphic shapes and figures.
4. Audio data: the human voice and other sounds are also important forms of data.
Network resources: Telecommunications technologies and networks like the Internet, intranets, and extranets
are essential to the successful electronic business and commerce operations of all types of organizations and their
computer-based information system. It consists of computers, communications processors, and other devices
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interconnected by communications media and controlled by communications software. Network resources
include:
1. Communications media: twisted-pair wire, coaxial and fiber-optic cables, and microwave, cellular, and
satellite wireless technologies.
2. Network infrastructure: modems and internet work processors, and communications control software
such as network operating system and internet browser package.
You should be able to recognize these five components at work in any type of information system , then you
encounter in the real world.
Computer literacy and information literacy.
Manufacturing and service organizations depend on information to keep business running smoothly. What kinds
of skills and knowledge do people need in this information-intensive setting? They need two kinds of knowledge:
computer literacy and information literacy.
Computer literacy: working knowledge of computers, their components, and their functions.
Information literacy: the ability to create and use information systems to achieve a competitive advantage. It
includes computer literacy, business acumen, and problem-solving skills.
Information literacy.
Information literacy has 4 characteristics. These are-
1. Business acumen
2. Understanding the organization’s mission
3. Knowledge of information technology
4. Problem solving skill
Information literacy refers to the ability to use information to achieve organizational goals.
Distinguish between computer literacy and information literacy (PYQ) *

In today's business world, computer literacy alone is not enough (PYQ) *

Which factors will you consider to design management system in your organization?
(PYQ) *

Discuss the features of management information system. (PYQ) *

Are there any differences among E-Business, E-Commerce, E-Government and M-

Commerce? (PYQ)***

What factors do you consider for assessing the growing impact of IT in business
firms? Discuss. (PYQ) *

Being an executive why are you interested to have a good MIS in your organization?
(PYQ) *

Recently under the collaborative and communication systems some vital

management tools have been included in the extended form of information system
(IS). Discuss those management tools. (PYQ) *

Chapter-2
Data & information*
Data: Data is the raw materials from which information is generated. Data are raw facts or observations typically
about physical phenomena or business transactions. It appears in the form of text, number, figures or any
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combination of these. More specifically data are objective measurements of the attributes (the features) of entities
(such as people, places, things and events).
“Streams of raw facts representing events occurring in organizations or the physical environment before they have
been organized and arranged into a form that people can understand and use.” - Laudon & Laudon
Information: when we process data and convert into a form that is useful and meaningful to the decision maker,
it becomes information.
“Information can be defined as data that has been converted into a meaningful and useful context for specific end
users.” - James O’Brien
Information is usually subjected to a “value-added” process where-
1. Its form is aggregated, manipulated and organized.
2. Its content is analyzed and evaluated, and
3. It is placed in a proper context for a human user
So, we should view information processed data in a context that gives it value for specific end users.
Distinction between Data & information*
Data Information
“Streams of raw facts representing events occurring in Information can be defined as data that has been
organizations or the physical environment before they converted into a meaningful and useful context for
have been organized and arranged into a form that specific end users.
people can understand and use.”
Data appears in the form of text, numbers, figures, After process data into a meaningful form then data
audio, video, images or any combination of these. becomes information.
Data may not be useful to the decision maker and data Decision makers use information to make decision.
must be processed to become useful.
All data may not become information, because not all All information must be based on factual data, but only
data or facts can be relevant at a given moment. data that are relevant to the situation are information.
There are many ways to collected data, i.e. surveys, Human beings apply facts, principle, knowledge,
interviews, the use of sensors, the reading of experience and situation to convert data in to
documents and even the monitoring of the brain information.
waves.
We can compare data as a raw material to produce We can compare information as finished goods.
information.
Data expresses in unorganized and inconsistent way. Information expresses as an organized and arranged
way.
Discuss Characteristics of Information (PYQ)*
Qualities of sound information or dimensions of information**
• What features make information meaningful and useful to managers?
• What qualities give it value for end users?
It is useful to think of information having the three dimensions of time, content, and form. Sound information has
3 dimensions of its features or attributes:
1. Time dimension
2. Content dimension
3. Form dimension
Time dimension.
1. Timeliness: Information should be provided when it is needed.
2. Concurrent: Information should be up-to-date when it is provided.
3. Frequency: Information should be provided as often as needed.
4. Time/period: Information can be provided about past, present and future time periods.
Content dimension
1. Accuracy: Information should be free from errors.
2. Relevance: Information should be related to the information needs of a specific recipient for a specific
situation.
3. Completeness: All the information that is needed should be provided.
4. Conciseness: Only the information that is needed should be provided.
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5. Scope: Information can have a broad or narrow scope, or an internal or external focus.
6. Performance: Information can reveal performance by measuring activities accomplished, progress made, or
resources accumulated.
Form dimension
1. Clarity: Information should be provided in a form that is easy to understand.
2. Detail: Information can be provided in detail or summary form.
3. Order: Information can be arranged in a predetermined sequence.
4. Presentation: Information can be presented in narrative, numeric, graphic, or other forms.
5. Media: Information can be provided in the form of printed-paper documents, video displays, or other media.
The process of converting data into information***
The process of converting data into information may include the following process:
1. Collection
2. Classification
3. Sorting, adding, merging, and so on
4. Summarizing
5. Storing
6. Retrieval
7. Dissemination

Chapter-3
Information system and organizational structure
Managerial decisions are made within the structure of an organization. So, we need to know about the structure
of organization. In fact, structure of the organization delegates the authority within the personnel of the firm.
Organizational structure related with information systems." - Explain the statement
(PYQ)*
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Organizational structure
Organizational structure: “Identifies the level of responsibility, authority, management, and scope of control of
employees in the organization.” - Uma G. Gupta
There are 2 types of organizational structure:
1. Pyramid or Hierarchical structure
2. Task-based structure.
Pyramid or hierarchical structure
 One of the most popular organizational structures is the traditional pyramid, or hierarchical, structure.
 “The pyramid structure is an organizational hierarchy with the chief executive officer (CEO) at the top of the
pyramid and non-managerial employees (staff) at the bottom. Middle managers are somewhere between top
management and non-managerial employees” -- Uma G. Gupta
 The pyramid structure divides management into 3 layers:
1. Top level or top management
2. Middle level or middle management
3. Lower level or lower management

Top management
 Top layer of the pyramid consists of top managers, who established the vision and long-term goals of the
organization and chart its overall course of action.
 “Top executive develops overall organizational goals, strategies, policies, and objectives through long-range
strategic planning. They also monitor the strategic performance of the organization and its overall direction.”
- James A. O’Brien
Unstructured decision*
The decisions of top managers tend to be unstructured- that is decisions that rely heavily on intuition, judgment,
and experience. Unstructured decisions include-
1. Assessing the way competitors react to a new marketing strategy.
2. Predicting the impact of changes in the global economy, and
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3. Developing global competitive strategies.
Middle management
 The next layer in the hierarchical organization comprises of middle managers who coordinate, control, and
monitor various activities in an organization and act as liaison between operational managers and top
managers.
 “Middle managers develop short and medium range plans and budgets and specify the policies, procedures,
and objectives for sub units of the organization. They also acquire and allocate resources and monitor the
performance of organizational sub units, such as departments, divisions, and other work-groups.”-James A.
O’Brien
Semi-structured decision*
The task perform by middle managers are partly structures and partly ambiguous, or unstructured, hence these
tasks are called semi structured. Semi structured task includes-
1. Assessing the impact of different marketing strategies on product sales.
2. Determining the impact of an increase in operational costs on company profits.
3. Appraising the impact of a new tax law on returns on investment.
Lower management
 Lower-level managers are responsible for the day-to-day operations, activities, and transactions of an
organization, which include inventory control, payroll, processing sales transactions, and keeping track of
employee hours.
 “Supervisory managers develop short-range planning devices such as production schedules. They direct the
use of resources and the performance of tasks according to established procedures and within budgets and
schedules established for the work groups of the organization.” -James A. O’Brien
 Lower-level managers are responsible for the short-term performance of the company and mostly performed
structured tasks, which are routine, are easily understood, and do not require intuition or judgment.
Information required for management
The type of information required by managers is directly related to the level of management and the number of
problems in the decision situations they face.
Top and middle level management: are more likely to be heavy users of external information- that is,
information generated outside the firm by entities such as government, laws, regulations, competitors, and
stockholders.
Lower-level management: need information to address short-term problems such as-
1. Number of units to be produced,
2. How to eliminate defective parts,
3. Number of transactions generated,
4. Number of hours worked by part-time employees.
Task-based structure
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Another type of organizational structure is called task-based organization.
“A structure in which a group of people required to accomplish a given task is brought together based on their
skills rather than on their places in the organizational hierarchy.” - Uma G. Gupta
Task-based organizations also work well for companies that operate in highly dynamic business environments.
The success of task-based teams depends a great deal on the ability of the team to share and disseminate
information, so computers and information system play a vital role in such organizations.
Chapter-4
Fundamentals of data representation*
How are data represented in a computer? All data- numbers, letters, symbols, graphs and images are represented
in a computer by strings of binary digits, or bits.
1. Bit: An electronic signal that denotes a zero or a one, the smallest unit of representation in a computer.
2. Byte: A byte is made up of eight bits. Each character requires a byte of memory to be represented in the
computer.
The 2 most important characteristics of hardware in a computer system are:
1. Speed: The rate at which the computer can process data and instructions.
2. Size: The amount of memory required to store the data and instructions.
The components of a computer
The modern computer system consists of five basic components. These are-
1. The central processor
2. Secondary storage
3. Input devices
4. Output devices
5. Communications devices
The central processor
CPU: Central Processing Unit referred to as a microprocessor, this is a critical computer component that directs
the flow of information among various input and output devices. The CPU is made up of-
1. ALU: the part of the CPU that performs fundamental arithmetic and logical operations.
2. Control Unit: the control unit is a part of the CPU that accesses data and instructions stored in the
computer memory and transfers them to the ALU.
The primary storage
The computer’s main memory is called primary storage and is part of the central processor. It is made up of
memory cells that are used to store data and instructions temporarily. There are four types of primary memory-
1. RAM: volatile
2. ROM: nonvolatile
3. Cache memory: volatile
4. Registers: volatile
Secondary storage
Nonvolatile memory that resides outside the CPU on devices such as magnetic disks and tapes. Data is stored on
secondary storage devices, retrieved, and put into primary memory, where it is processed, and then is transferred
back to secondary storage. There are two types of secondary storage:
1. Sequential storage: data that can be accessed and retrieved only in the order in which it was entered.
2. Direct access: also known as random access. A type of secondary storage in which any record can be
directly accessed, this type of storage is essential for online systems.
Secondary storage devices.
1. Magnetic disks 4. Magnetic tape 7. Pen drive/Flash drive
2. Floppy disks 5. CD-ROM
3. Hard disk 6. DVD-ROM
Input devices
1. Key board 4. Voice recognition 7. Light pen
2. Mouse 5. OCR 8. Pointer
3. Touch Screen 6. MICR
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Output devices
Output devices are used to output data and information generated by a computer.
1. Video display terminals: (CRT & LCD, LED, OLED)
2. Printers: (dot matrix, inkjet, and laser)
3. Sound boards
4. Other output devices: (micro fiche, microfilm)
Communication devices
We take a brief look at communication devices, which are covered in detail in telecommunication part.
Communication devices allow users separated by time and distance to communicate electronically and can
transmit text, images, graphics, voice, and video. Some basic communication devices are-
1. Terminals (to input and output data)
2. Communication channels (telephone lines and cables)
3. Communication processors (modems)
Types of computers
Computers can be classified into different types based on memory size and processing speed. In this section, we
describe the following types of computers:
1. Organization-wide system
a. Supercomputers
b. Mainframes
2. Work-group system
a. Midrange machines/minicomputers
b. Workstations
3. Personal information system
a. Microcomputers
b. Laptops
c. Notebook/net book
Program*
“A set of step-by-step instructions given to a computer to accomplish various tasks.”- Uma G. Gupta
Software development in an organization is a major challenge. The reasons are:*
1. The complexity and sophistication of software has increased manifold over the past decade.
2. Coding and testing software are time consuming and labor intensive.
3. It takes many years of extensive training to become an expert in software development.
4. Experienced software programmers are expensive to hire and are often in short supply.
5. A software application is never fully complete, because users function in a dynamic environment in which
their information needs are continuously changing.
Programing language**
A programming language is a computer language, with its own syntax and grammar, which is used to write
software. There are two types of programming language-
 Procedural language: language that explains in a step-by-step sequence how a given task should be
accomplished.
 Non-procedural language: language that focuses on what needs to be done, without specifying exactly
how it should be done.

1. Machine Language: Language written at the primitive level of binary arithmetic. It was the first generation
of computer language and was tedious and error-prone.
2. Assembly language: A language based on mnemonics, or meaningful abbreviations of commands, such as
add, load, and so on. It was the second generation of computer language.
3. Assembler: A program used to convert assembly language into machine language.
4. High-level languages (3GLs): Computer languages that improve over assembly language and machine
language because they are English like and require fewer instructions.
5. Compiler: A system software product that reads a program written in a high-level language and translates it
into machine language.
6. Very high-level language(4GLs): These are efficient, user-friendly, and English like languages.
P a g e | 11
Define software (PYQ)*

Types of software
Software can be classified into 2 broad categories:
1. System software: System software performs computer-related tasks, such as managing input and output
devices.
2. Application software: Application software performs people-related tasks, such as human resources and
marketing.
System software**
System software performs the basic functions necessary to start and operate a computer. It controls and monitors
the various activities and resources of a computer and makes it easier and more efficient to use the computer.
Various types of system software**
1. System control software: Programs that monitor, control, coordinate, and manage the resources and function
of a computer. The most important system control software is the operating system.
2. System support software: Programs that support the smooth execution of various programs and operations
of a computer. There are four major categories of systems support software:
a) Utility programs
b) Language translators
c) Database management systems and
d) Performance statistics software.
3. System development software: Software packages and programs that assist programmers and system analysts
in designing and developing information systems.
Application software*
Software designed to perform people-related tasks such as word processing, graphics, and so on.
 General purpose software: Software that is mass-produced for a broad range of common business
applications.
 Application dedicated software: Specialized or customized applications designed to meet the particular
information needs of an organization.
Types of application software
1. Word processing
2. Desktop publishing
3. Spreadsheets
4. Computer graphics
5. Accounting software
6. Imaging

Explain Software Quality Assurance activities in detail (PYQ)*

Discuss any one Software Life Cycle Models with reference to the application.
(PYQ)*

Briefly mention the contribution of information system in organization's decision

making. **

Contributions of information systems to Individuals, Group, and Organization-

Wide decision making
A primary reason for the sustained growth of information systems in organizations is that support and enhance
the making of individual, group, and enterprise-wide decisions. We refer to information systems that support
P a g e | 12
individual, group, and organization-wide decisions as personal information systems, work-group systems and
organization-wide systems, respectively.
Personal information system:
1. Systems that support the information needs of individual decision makers for solving structured, semi
structured, and unstructured problems. PCs are a good example of such systems.
2. Suppose a manager may use a PIS -
a. To calculate the total amount due on a set of invoices (structured decision).
b. To analyze market trends over the next 5 years (semi structured decision)
c. To evaluate the impact of a competitor’s marketing strategy (unstructured)
Work-group information system:
1. Many important decisions in an organization are made by a group of individuals. Work-group information
system designed to support group decision making. Such systems promote the free flow of information
among group members.
2. For example, launching a new product requires team effort and free sharing of information among group
members, the WIS is designed primarily to support such activities.
Organization-wide information system:
1. Systems that provide overall, comprehensive, long-term information about the entire organization. These
systems integrate information from multiple sources to present a complete view of the organization.
2. A good example of such a system is one that responds to customer queries. If a customer wants to know
the status of his or her order, an employee will need information-
3. On product availability (manufacturing)
4. Product discounts (marketing)
5. Payment policies (finance)
6. Quality issues (damaged items)
7. This employee will need the ability to integrate information from different departments, the OIS provides
the tools necessary to achieve this integrated view.
Comparison of Individuals, Group, and Organization-Wide information system
Systems Number of users Tasks Size of computer
Personal information systems Single Individual-based Small
Work-group systems Group Group-based Medium
Organization-wide systems Larger groups Organization-wide Medium /large
P a g e | 13
Chapter-5
Concept of database*
Databases are vital to many firms. Without them, some companies simply cannot function. Poorly managed and
maintained data can threaten the very existence of an organization; while well-managed data system can provide
a significant edge in the marketplace.
Data are driving force behind good decisions, and therefore the ability to gather, store, process, and retrieve date
in timely manner is vital to the health of an organization. Data that are well managed can -
• Save an organization time and money
• Increase market share
• Capture new markets
• Improve customer service
• Increase productivity, and
• Enhance decision making

Explain the role of primary key in database (PYQ)*

Data Hierarchy/elements of data hierarchy in ascending order *

• Data and information are stored in a computer file for procession, retrieval, and dissemination.
• The date in a computer system is organized in a hierarchy, referred to as the data hierarchy chain.
The hierarchy, in ascending order, includes:
• Bits: A bit represents the smallest unit of data.
• Byte: A group of bits, called a byte represents a single character.
• Field: A meaningful grouping of characters of bytes or a group of words or a complete number is referred
to as a field.
• Record: A group of interrelated fields is called a record
• File: A collection of records of the same type that are grouped together.
• Database: A collection of interrelated files is a database. Database (A collection of interrelated files)
• Personal Data file
• Credit History File
• Transaction Data File
Methods of Organizing Data in Files*
Computer system store files on secondary storage devices. There are a number of methods to organize data in
files. The choice of method depends on factors such as storage media, access methods, processing techniques,
and so on and the arrangement determine the manner in which individual records can be accessed or retrieved.
There are basically 3 ways to organize files.
1. Sequential file Organization: A method of storing data records in which the records must be retrieved in the
same physical sequence in which they are stored Laudon and Laudon
2. Direct or Random file Organization:
a. Record 199 to be Located
b. Unique Key
c. "Method of storing data records in a file so that they can access in any sequence without regard to their
actual physical order on the storage medial"
3. Indexed sequential file Organization: "A file in which data are stored in a sequence (similar to the sequential
method), but in addition an index is created that shows the memory address of each piece of data.
Database Management System (DBMS)*
DBMS are a set of programs that act as an interface between application programs and the data in the database.
DBMS are Support programs that work with the operating system to create, process and manage data.
That means database management systems Define, create and organize a database, Input data, Process data,
Maintain data integrity and security, and ensures the Query of database.
Components of DBMS*
A DBMS has three main components. They are- DDL, DML & Data Dictionary.
P a g e | 14
1. Data Definition Language (DDL): The contents of a database are created using the data definition language
(DDL). It is a language that is used to create and describe the data and define the schema in a DBMS. It
defines the relationship between different data elements and serves as an interface for application programs
that use the data. For example- if a payroll program needs the social security number of an employee, the
DDL defines the logical relationship between the social security number and the other data in the database
and acts as an interface between the payroll program and the files that contain the social security number.
2. Data Manipulation Language (DML): Data manipulation language is the language that processes and
manipulates the data in the database. It allows the user to query the database. The DML is usually integrated
with other programming languages, many of which are 3GLs and 4GLs, in order to implement sophisticated
database functions. For example- Structured Query Language (SQL): Structured query language (SQL) is
a nonprocedural language that deals exclusively with data: data integrity, data manipulation, data access, data
retrieval, data query and data security. SQL is a database language that allows users to query a database and
receive ad hoc reports and planned reports.
3. Data dictionary: The third component of a DBMS is the data dictionary, which is an electronic document
that contains data definitions and data use for every piece of data in an organization. Every organization,
whether small or large, needs a tool to describe, identify, locate, control and mange each piece of data in the
organization and to ensure consistency and standardization in the use of the data throughout the organization.
It is a component of DBMS that describe the data and its characteristics, such as location, size, and type of
data.
Database Model.
A database model is a way of organizing data and its interrelationships. It represents the logical relationships
among data elements in the database.

What types of approaches are used in database management system? (PYQ)**

What types of concepts are used in database system? Explain. (PYQ)*

There are 3 types of relationships in database. They are-

1. 1-1(One-to-one): A one-to-one relationship indicates a unique relationship between two entities. For
example- The relationship between name and social security number is one to one relationship because each
person has only one social security number and vice versa.
2. 1-M(One-to-many): One-to-many is a relationship in which each node can have only one parent, but can
have multiple children. In a one-to-many relationship, an entity can have multiple relationships with other
entities in the database. For example- In a given course, a teacher has many students, but each student has
only one teacher for that course.
3. M-M(Many-to-many): Many-to-many is a relationship in which a record can have multiple parents and
multiple children. In a many-many relationships, every entity can be related to a number of entities. For
example- Each airport has many airlines that use its facilities and each airline has access to many airports.
Based on the 3 types of relationship, there are 3 types of models in database model.
1. Hierarchical data model: A hierarchical model is a model in which the logical relationship among data
elements is represented as a hierarchy similar to an organizational chart by using 1-M relationship. Each “box”
in the hierarchical model is a record, sometimes referred to as a node; the top most nodes is referred to as the root
node. The relationship between different nodes is sometimes referred to as a parent-child relationship; in a
hierarchical model, each node (except the root node) has exactly one parent. In other words, the data elements in
a hierarchical model are well suited for a one-to-many relationship with other data elements in the database,
because each parent can represent relationships other than the 1-M relationship, although this is not recommended.
P a g e | 15

The above figure shows a hierarchical data model of a university registration system, as example. The root node
is the university, which is made up a number of schools (business, arts engineering and so on). A school is on the
first level in the hierarchy. Each school, in turn, has a number of departments. For example, the business school
has MIS, marketing, accounting, finance and Banking departments. The departments are the second level in this
hierarchy. Each department offers different courses—for example, the MKT department offers MKT 101, MKT
305, and so on—so courses are the third level; finally on the fourth level are the students registered in each course.
2. Network Model: Network model is a model in which the relationships among the data elements are represented
by M-M relationships. It is a variation of the hierarchical model. In a network model, each record in a database
can have multiple parents—that is, the relationships among data elements can be many-to-many (M-M
relationship). For example- each airline in a country can use many airports and each airports have many airlines
that use their facilities, so that there is a M-M relationship between airports and airlines. The network model is a
variation of the hierarchical model; databases can be translated from hierarchical form to network form and vice
versa. Like those in hierarchical data models, data elements in a network model are also linked through pointers.
The main difference between the network model and the hierarchical model is that in a network model a child can
have a number of parents, whereas in a hierarchical model a child can have only one parent.

The above figure shows the M-M relationships among airports and airlines, as example. Here, each airline in a
country can use many airports and each airports has many airlines that use their facilities
3. Relation model: The third types of data model is the relational model, in which data is represented using two-
dimensional tables, called relations or flat files, which are made up of columns and rows. Each column represents
a field, also referred to as an attribute; each row represents a record, also referred to as tuple. Today, the most
popular type of DBMS is the relational model over others of its many advantages. The biggest advantage of the
relational model over others is that it can relate data in a table to data in any other table as long as the two tables
(or files) share at least one common attribute. This is simple yet powerful idea, on that has made relational model
P a g e | 16
almost a database standard. Today, there are many popular microcomputer relational databases, such as dBase IV
and Paradox (from Borland International), and Oracle (from Oracle corporation).

Which factors will you consider to design database management system in your
organization? (PYQ)*

Discuss the methods that are used to organize database management system in the
business firm. (PYQ)*

Chapter-6
Business Problem

Different types of business problem.

1. Independent problems: problems whose solutions are independent of other problems, so the goal is simply
to find the most effective solution to the problem at hand. Truly independent problems are rare in the business
world. Problems whose solutions are independent of other problems.
2. Interrelated or Dependent problems: Problems whose solutions are interrelated. Interrelated problems
influence, and influenced by each other. Such a problem often requires a team of experts from different areas
within an organization to work together to solve the problem. For example, Suppose Pepsi’s goal is to increase
sales by 5% this November. Problems whose solutions are interrelated. Interrelated problems influence, and
influenced by each other. For example, suppose Pepsi’s goal is to increase sales of Pepsi by 5% this year.
3. Organizational problems: Problems that span a number of departments and units in an organization and
affect the entire organization. Such problems require team effort. For example, an organizational problem is
introducing a new product into the market. Problems that span a number of departments and units in an
organization and affect the entire organization. Such problems require team effort. For example. New product
launching.
Steps in Problem solving
Recall that managers make three types of decisions: structured, semi structured, and unstructured. Steps in
problem solving are-
1. Feedback
2. Define Problem
3. Gather Data
4. Build Model
5. Generate Alternatives
6. Select “best” Alternative
7. Implement Alternative
8. Feedback

In case of business organization how information system supports corporate

strategy and improves team collaboration? Give instance for each. (PYQ)*

Why organizations need information system

Today, few medium or large-sized companies can survive without computers and information system. Here are
some reasons why organizations need information system.
1. Meeting global challenges:
2. Capturing opportunities in the marketplace:
3. Supporting corporate strategy:
 They stay ahead of the competition by providing goods services at the lower price than their competitors.
 They produce high specialized or unique goods and services that allow them to stand apart from their
competitors.
P a g e | 17
 They find a market niche and focus on meeting the needs of this special group.
 Companies use information system to cut costs, improve productivity, create unique and innovative
products and services, and better serve customers.
4. Linking departments whose functions are different:
5. Enhancing worker productivity:
6. Enhance decision making
7. Improve team collaboration
8. Create business partnership and alliances
9. Enable global reach
10. Increasing the quality of goods and services
Potential risk of information system**
Although, organizations derive many benefits from information system and technologies, sometimes the same
system and technologies can have negative effects on people and organizations. Therefore, organizations should
take all possible precautions to make sure that information system will not hinder their growth and progress.
Followings are some problems that can arise from information system:
1. Deskilling of workers
2. Information overload
3. Employee mistrust
4. Increased competitive pressure
5. Disenchantment with information system
6. Challenges in developing information systems
7. Security breaches
Chaplet-7
Telecommunication/Telecommunication system*****
 Telecommunications can be defined as a communication of information by electronic means, usually over
some distance. Technology has made the world a small place. Human ingenuity and the development of
computer technology have made telecommunications one of the most powerful technologies of our times.
 According to Uma G. Gupta, “Telecommunications refers to transmitting different forms of data (i.e. text,
images, voice, graphics, etc) over different media from one set of electronic devices that are geographically
separated.”
 According to James A O’Brien, “Telecommunications is the sending of information in any form (e.g. voice,
data, text and images) from one place to another using electronic media.”
 According to Laudon and Laudon, “A telecommunications system is a collection of compatible hardware and
software arranged to communicate information from one location to another.”
P a g e | 18
Components of telecommunication.

Components of telecommunications network**

A communication network is any arrangement where a sender transmits a message to a receiver over a channel
consisting of some type of medium. The essential components of a telecommunications system are:
1. Computers: To process information.
2. Terminals: Any input/output devices that sends and receives data.
3. Communication channels: the links by which data or voice are transmitted between sending and
receiving devices in a network.
4. Communication processors: Such as modems, multiplexer, controller, and front-end processor which
provide support functions for data transmissions and receptions.
P a g e | 19
5. Communication software: Which control input and output activities and manages other functions of the
communication networks.
Functions of telecommunications system**
In order to send and receive information from one place to another, a telecommunications system must perform
a number of separate functions. These functions are largely invisible to the people using the system. The functions
of telecommunications are:
1. A telecommunication system transmits information.
2. Establishes the interface between the sender and the receiver.
3. Route messages the most efficient path.
4. Performs elementary processing of the information to ensure that the right message gets to the right
receiver.
5. Performs editorial tasks on the data (such as checking for errors and rearranging the format)
6. Converts messages from one speed (say, the speed of a computer) into the speed of a communications line
or from one format to another.
7. The telecommunications system controls the flow of information.

Telecommunication signals

Types of Telecommunication signals

Data travels through a telecommunication system in the form of electromagnetic signals. Signals are represented
in two ways:
1. Analog signals: An analog signal is represented by a continuous waveform that passes through a
communication medium. Analog signals are used to handle voice communications and to reflect variations in
pitch.
2. Digital signals: A digital signal is a discrete rather than a continuous waveform. It transmits data coded into
two discrete states: 1-bits and 0-bits, which are represented as on-off electrical pulse. A digital signal must be
translated into analog signals before they can be transmitted in an analog system. The device that performs
this translation is called a modem (Modulator-Demodulator).
Telecommunication media/channel and types:
Telecommunications media are the links over which data are transmitted or the means by which data are
transmitted. There are two types of media:
P a g e | 20
Bounded Media: In a bounded medium, the signals are confined to the medium, they never leave it. The three
most popular types of bounded medium are-
1. Twisted pairs: A twisted pair consists of two insulated strands of copper wire, twisted together. When a
number of twisted pairs are grouped together and enclosed in a protective sheath, they form a cable.
Twisted-pair cable, one of the most popular telecommunication media is used for phone lines and
computer networks.
2. Coaxial cable: Coaxial cable consists of a central conducting copper core. Surrounded first by a layer of
insulating material and then by a second conducting layer of braided wire mesh. This can transmit a larger
volume of data than twisted wire can. They allow high-speed data transmission (200MBPS) and are used
instead of twisted–pair wire lines in high-service metropolitan areas, for cable TV system.
3. Fiber-optic cable: Consists of thousands of hairs –thin strands of glass or plastic, bound together inside
a glass cylinder that is covered by a protective sheath. Data are transmitted into pulse of light, which are
sent through the fiber optic cable by a laser device at a rate from 500 kbps to several billion bits per second.
This is about 60 times greater than coaxial cable and 3000 times better than twisted pair lines.
Unbounded Media: In an unbounded, or wireless, medium, the signals are not confined to the medium. Wireless
medial propagate signals through the atmosphere, the ocean, and outer space. Wireless transmission sends signal
through air or space without being tied to a physical line. Today, common uses of wireless data transmission
include-
1. Terrestrial microwave
2. Microwave radios
3. Communication satellites
4. Cellular phones
5. High-frequency radio.
Characteristics of communication channel/media:
Telecommunication channel: A channel is the part of the telecommunications system that constitutes the link
between message source and message destination. A channel is any conduit along which data can be transmitted.
Features: Telecommunications channels are identified according to transmission rate, transmission mode, and
transmission direction.
1. Transmission rate: Data transmission rates are typically measured in bits per second (BPS). The capacity of
a communication channel, measured as the difference between the highest and lowest frequencies carried by
the channel. The greater the bandwidth, the greater the amount of information that can be simultaneously
transmitted over the channel.
2. Transmission Mode: Transmission mode is the mode in which data are transmitted over the network. There
are two modes:
a. Synchronous: Transmits a group of characters at a time. (More than 2400BPS)
b. Asynchronous: Transmits one character at a time. (Less than 2400BPS).
3. Transmission direction: Transmission direction is the direction in which data is transmitted. Transmission
direction is categorized in three ways:
a. Simplex mode: Term for a data communication device that can either send or receive data, but cannot
do both. So, transmission occurs in one direction only. Example: TV broadcasting.
b. Half duplex mode: A data exchange device in which two parties alternate sending data. In half-duplex
mode, when one party has completed a transmission, control of the channel switches to the other party,
allowing it to transmit data. Example: walkie-talkie.
c. Full-duplex mode: A data exchange device in which both parties can send and receive information at
the same time. Example: telephone.
Types of telecommunication network
How do common carriers and special-purpose carriers provide communication services? Some methods for
providing communication services are-
1. Private Branch Exchange (PBX)
2. Local Area Networks (LAN)
3. Wide Area Networks (WAN)
4. Value Added Networks (VAN)
P a g e | 21
Private Branch Exchange (PBX)
 A private branch exchange is an electronic switching device (or a special computer); located within the
company that automatically switches calls between the company’s telephone lines and those of a local
telephone company. It is a small telephone exchange that is owned by the organization, as opposed to the
large public telephone exchange owned by telephone companies.
 A PBX performs a number of functions, such as call routine, call forwarding, redialing, storing, tracing the
origin of calls for statistical purpose, and automatically determines the least expensive route for a long-
distance call. Today PBX can carry both voice and data to create local networks. The primary disadvantage
of a PBX is that it can cover only a small geographical area, unless it is connected to other PBX or to value-
added networks. Also, since PBX use only telephone lines, they cannot handle large volume of data.
Local Area Networks (LAN)
 Local Area Networks (LANs) connect computers and other information processing devices within a limited
physical area, such as an office, a building, manufacturing plant, or other work site so that knowledge workers
can share data, information, messages, software, and even peripherals, such as printer.
 LAN generally have higher transmission capabilities than PBXs, a very fast PBX can have a maximum
transmission capacity of over 2 megabits per second, LAN transmit at a rate of 100 megabits per second.
Advantage of LAN
 The power and versatility of LANs have made commonplace in both large and small organizations.
 LANs allow users to access, process, and share large volume of data and resources.
 LANs reduce computing costs by allowing users to share resources.
 LANs facilitate organizational communications through the rapid dissemination of files, programs, and
messages.
 LANs have been instrumental in cutting costs, improving productivity, and enhancing customer service.
Wide Area Networks (WAN)
 Telecommunications networks covering a large geographical area are called remote network, long-distance
networks, or more popularly, Wide Area Networks. Network that covers a large city or metropolitan area can
also be included in this category. Such large networks have become a necessity for carrying out the day-to-
day activities of many business and government organizations and their end users.
 Thus, WANs are used by manufacturing firms, banks, retailers, distributors companies, and government
agencies to transmit and receive information among their employees, customers, suppliers, and other
organizations across cities, regions, countries, or the world.
 The primary difference between a LAN and a WAN covers greater geographical distance than a LAN.
Value Added Networks (VAN)
 VANs are public data networks that add value to the basic communication services, such as access to
commercial databases and software, correction of transmission errors, establishing compatibility between
previously incompatible computers and terminals, E-mail, and videoconferencing.
 A subscriber to a VAN service pays a monthly fee depending on its level of use; VANs present an attractive
alternative for companies that want to receive the benefits of telecommunications without investing large
amounts of capital in hardware.
Business value of telecommunication*****
A manager, entrepreneur, or business professional may need to know what business value is created by the
business applications of telecommunications? Information technology, especially in telecommunications-based
business applications, helps a company overcome geographic, time, cost, and structural barriers to business
success. Figures outlines examples of the business value of these four strategic capabilities of telecommunications
and other information technologies. This figure emphasizes how several applications of electronic commerce can
help a firm capture cost, as well as supporting its strategic organizational objectives.
P a g e | 22

The Differences Between Intranet, Internet, and Extranet***

Depending on the needs of an organization, a network may span a geographical divide or allow for interconnection
between persons and devices within the same building.
INTERNET
 The Internet is a global system of interconnected computer networks. It is not controlled by a central entity
and therefore relies on network devices and accepted conventions and protocols to relay the data traffic until
it gets to its destinations. Some countries have imposed rules to censor or otherwise control what kind of
content is accessible by its citizen (i.e. China).
 The Internet is now global and in theory can be accessed by anyone who can get access from an Internet
service provider.
Intranet
 An intranet is a private network that is setup and controlled by an organization to encourage interaction among
its members, to improve efficiency and to share information, among other things. Information and resources
that are shared on an intranet might include: organizational policies and procedures, announcements,
information about new products, and confidential data of strategic value.
 The difference between an intranet and the Internet is defined in terms of accessibility, size and control. Unless
content filters are being used or the government is censoring content, all the Internet’s content is accessible
to everyone. On the other hand, an intranet is owned and controlled by a single organization that decides
which members are allowed access to certain parts of the intranet. In general, an intranet is usually very small
and is restricted to the premises of a single organization.
Extranet
 An extranet is an extended intranet. In addition to allowing access to members of an organization, an extranet
uses firewalls, access profiles, and privacy protocols to allow access to users from outside the organization.
In essence, an extranet is a private network that uses Internet protocols and public networks to securely share
resources with customers, suppliers, vendors, partners, or other businesses.
 Both intranets and extranets are owned, operated and controlled by one organization.
P a g e | 23
P a g e | 24
 The difference between intranets and extranets is defined in terms of who has access to the private network
and the geographical reach of that network.
 Intranets allow only members of the organization to access the network, while an extranet allows persons
from outside the organization (i.e. business partners and customers) to access the network.
 Usually, network access is managed through the administration of usernames and passwords, which are also
used to determine which parts of the extranet a particular user can access.
Chapter-8
Business information system (BIS)
 Business Information System is the term to describe a variety of types of information system that supports a
business function such as accounting, finance, marketing, human resource management.
 Information system that supports the whole business process to make a good plan, administer, make sure free
flow of information, measuring the productivity of information systems.
 Business Information System is also knowing as Electronic Business System.

Define Electronic Business System and illustrate how information system can be
categorized into business function of an organization? (PYQ)*

Business information system (BIS) & organizational productivity

BIS helps to achieve operational excellence at minimum cost as well as it facilitates Re-engineering, total quality
management, deliver high quality goods at the best possible price, quickly and efficiently to the customers
Functional Information system.
Information system that is pervasive, versatile and instrumental in helping organizations to achieve their strategic,
tactical, and operational goals. There are 5 Business functional areas that are
1. Marketing
2. Manufacturing
3. Accounting and finance
4. Quality control
5. Human Resources
P a g e | 25
Functional Areas of Business Information system.

Financial & Human

Marketing Manufacturing Quality Control
Accounting Resource

General Ledger
Advertising and Promotion Computer Aided Engineering Compensation Analysis
Response
Asset Management

Marketing management Computer-aided Manufacturing Order Entry

Employee Skills Inventory
Flexibility
Accounts Receivable
Market Research Machine Control
Accounts Payable Personnel Record Keeping

Product Management Material Requirements Planning Inventory Control Customer Service

Personnel Requirements
Payroll Forecasting
Sales Forecasting Process Control
Cash Management
Training
Training and Development
Capital Management Analysis
Sales Force Automation Purchasing and Receiving

Long-range Forecasting
Competitor Analysis Governmental Report
Sales Management Robotics
Business Intelligence

Briefly discuss about marketing information system and show its effectiveness in the
organizational profitability. (PYQ)*

Marketing information system (MkIS)

 MkIS is a system that meets the information needs of an organization in sales, distribution, advertising, market
analysis, market intelligence, product research, service management and other marketing functions.
 The system that supports to gain instant access to global market information, from internal and external
sources and with the primary goal of retaining existing customers and potential customers.
P a g e | 26

Manufacturing Information system.

 Manufacturing Information System is a system that supports the manufacturing functions of purchasing,
receiving, quality control, inventory management, material requirement planning, capacity planning,
production scheduling, plant design.
 The term Manufacturing Information System actually applies to both manufacturing and service
environments.
P a g e | 27

Financial And Accounting information system (FAIS)

 Financial and Accounting Information System provides information related to the accounting and financial
activity of an organization.
 FAIS includes a number of systems such as cash and assets management, budgeting, capital budgeting,
portfolio analysis, general ledger, accounts receivable and payroll system.
P a g e | 28

Quality information system

 Quality information system stand-alone or embedded system that help an organization to achieve its quality
goals. The quality plan is drive form the strategy information.
 The IS department plays a major role in ensuring the success of TQM efforts in organization. An IS can
promote quality and provide tools and techniques to help the company its quality goals.
P a g e | 29

Human resource information system

P a g e | 30
 HRIS a system that supports the planning, control, coordination, administration, and management of the
human resource assets in an organization.
 HRIS provides managers with information, policies and procedures concerning recruiting, layoffs, employee
evaluation, promotion, termination, transfer, salary equity monitoring, job description, responsibilities,
training and employment opportunities.

Chapter-9
Strategic Information system. (SIS)
 Strategic Information System (SIS) is a system that deliver information, products and services that play a
direct and prominent role in helping the firm achieve its strategic goal.
 SIS deals with long term strategic advantages to an organization by competing successfully in the market
place.
 An SIS also supplies an organization with business intelligence or competitive information. (Business
intelligence consists of internal and external data used to assess and analyze opportunities and threats in the
business environment).
 Example: A company can store different sorts of information about its product and product line in their server.
From the server consumer can get their necessary information on the basis of their requirement which helps
the company to reach its strategic goal.
Information support system (ISS)
 Information Support Systems are computer-based Information Systems that supports business or
organizational information processing and information dissemination activities.
 ISS serve the management, operations, and planning levels of an organization and provide information
accessibility to a wide range of users distributed over a large geographical area.
 ISS serves as the computer technology/network support system for varied users. ISS manages and provides
technical support and service for centrally administered services such as software and hardware support. ISS
P a g e | 31
is responsible for the upgrade and maintenance of both hardware and software for different shades of users of
an organization/enterprise.
Strategic Information system vs Information support system
Subject matter Information Support System (ISS) Strategic Information System
1. Definition ISS is computer-based Information Systems that SIS deals with long term strategic
supports business or organizational information advantages to an organization by
processing and information dissemination competing successfully in the market
activities. place.
2. Objectives It supports to make a decision. To deliver information for achieving
the strategic goal.
3. Benefits Improved efficiency and effectiveness. Competitive advantages.
4. Impact Cost Improvement, high quality decisions. Increase market share and profit.
5. Cost Administrative /overhead Administrative/overhead
Direct business expenses.

Classification of Strategic Information system (SIS)

Strategic Information System (SIS) is a system that deliver information, products and services that play a direct
and prominent role in helping the firm achieve its strategic goal. Strategic Information System can be can be
classified into following ways-
Internal Strategic Information Systems: that are used by employees within an organization and designed
primarily to enhance internal productivity that have not any value-added components. Example: Sales and
production statistics books, reports,
External Strategic Information Systems: that are used primarily by external entities in the business
environment such as customer, supplier and distributor and have a value-added component.
Some of the benefits of external strategic system that add value –
❖ Benefits to the Customer:
➢ Increase customer satisfactions.
➢ Increase customer control.
➢ Reduction in transaction cost (shipping and handling cost)
❖ Benefits to the organization:
➢ Increased market share.
➢ Reduction of processing cost.
➢ Increase in profit margin.
➢ Ability to charge higher price because of value added components.
Fundamentals of strategic advantages
 Strategic Information system can be any kind of information system (TPS, MIS, DSS etc.) that helps an
organization gain a competitive advantage, reduce competitive disadvantages.
 Information system is more important than a set of technology that support end user commuting and
collaboration, efficient business operation or effective managerial decision making.
 Information system strategically act as competitive network, as a means of organizational renewal, and as a
vital investment in technologies that help an enterprise achieve its strategic objectives.
 The strategic role of information system involves using information technology to develop products, services,
and capabilities that give a company strategic advantage over the competitive forces.
 It also supports or shape the competitive position and strategies of an enterprise.
Competitive strategy concepts
STRATEGY: A plan of action or policy designed to achieve a major or overall aim. A strategy is all about
integrating organizational activities and utilizing and allocating the scarce resources. Within the organizational
environment so as to meet the present objectives.
COMPETITIVE STRATEGY: A plan for how a firm will compete, formulated after evaluating how its
strengths and weaknesses compare to those of its competitors. For example- a small chocolate producing firm try
to enter into a special segmented market but the firm fail to capture the market due to the pricing of the competitors
so here the has to make below decisions to penetrate the market:
 How to cope with present situation?
 What will be the pricing strategy?
P a g e | 32
 How to find out the weak points of the competitors?
Etc. to develop a competitive strategy to face the competition.
How information system helps to develop competitive strategy*
One of the major roles of information system is to provide effective support of a company’s strategies for gaining
competitive advantage. This strategic role of information system involves using information technology to
develop products, services, and capabilities that give a company major advantage over the competitive forces.
Now information system can help us in below ways:
1. Data base management: provide huge information to develop the competitive strategy.
2. Statistical analysis: help to compare past and present data.
3. Online: huge source of vertical information.
e) Office automation system (OAS): Increase productivity by the replacement of human being with the
machine.
Competitive strategies & competitive forces.

How can competitive strategies be applied to the use of information system in

business? (PYQ)*

COMPETITIVE FORCES AND STRATEGIES

Here remains two questions:
 How should a business professional think about competitive strategies?
 How can competitive strategies be applies to the use of information system by business?
A company can survive and succeed in the long run only if it successfully develops strategies to confront five
competitive forces that shape the structure of competition in its industry. Now the five competitive forces are
given in below:
1. The rivalry of competition: Competition is a positive characteristic in business and competitors share a
natural and often healthy, rivalry among them. This rivalry encourages and sometimes requires a constant
effort to gain competitive advantage in the marketplace. This ever-present competitive force requires
significant resources on the part of a firm.
P a g e | 33
2. Threat of new entrants: The threat of new entrants also expends significant organizational resources. Not
only do firms needs to compete with the other firms in the marketplace, but also work to create significant
barriers to the entry of new competition. This competitive force has always been difficult to manage, but id
even more so today. For example: The internet has created many ways for a new entrant to enter the
marketplace quickly and with relatively low cost of entry. In the internet world a firm’s biggest potential
competitors may be one that is not yet in the
3. The Threat of substitutes: The threat of substitutes is another competitive force confronting a business. The
effect of this force is seen almost daily in a wide variety of industries. It is often at its stronger during periods
of raising costs or inflation. For example: When airlines prices get too high. People substitute’s car travel on
their vacations. Most products or services have some sort of substitutes available to the consumer. Such as
pumoil is the substitute of soyabean.
4. The bargaining power of buyers: The bargaining power of buyers or customers when gets too high then can
drive prices to unmanageably low levels or simply refuse to buy the product or services.
5. The bargaining power of suppliers: The bargaining power of suppliers when gets too strong it can force the
price of goods and services to unmanageably high levels or can simply starve a business by controlling the
flow of parts or raw materials essential to the manufacture of a product.
COMPETITIVE STRATEGIES
1. Cost leadership strategy: Becoming a low-cost producer of products and services in the industry, or finding
way to help its suppliers or customers reduce their cost or increase the costs of their competitors. For
example: to cover the huge market of India, Tata introduce the TATANANO car within the purchasing power
of Indian people.
2. Differentiation strategy: Developing ways to differentiate a firm’s products and services from its
competitors’ or to reduce the differentiation advantages of competitors. This may allow a firm to focus its
products or services to give it an advantage in particular segments or niches of a market. For example: Such
as General Motors producing specific quality cars for their special segmented group of customers with their
best quality control method.
3. Innovation strategy: Finding new ways of doing business. This may involve the development of unique
products and services, to entry into unique markets or market niches. It may also involve radical changes to
the business processes for producing or distributing products and services that are so different from a business
has been conducted that they alter the fundamental structure of an industry. For example: Such as i-phone
every time changing their mobiles to cope with the changing technological condition. Here most of their
customers are innovative and always searching for the updated technical devices.
4. Growth strategy: Significantly expanding a company’s capacity to produce goods and services, expanding
into global markets, diversifying into new products and services, or integrating into related products and
services. For example: WALMART try to enter into the Indian market to increase their market shares in
global market after a huge success in their domestic market.
5. Alliance strategy: Establishing new business linkages and alliances with customers, suppliers, competitors,
consultants, and other companies. These linkages may include mergers, acquisition, joint ventures, forming
of virtual companies or other marketing, manufacturing, or distribution agreements between a business and
its trading partners. For example: At first Japanese company Honda produces bike for the Indian market but
after sometimes they realize that to be more competent in this huge market, they need strong support from the
local company and they go for a joint venture with the Indian company Hero to satisfy the need of local
customers. Now they are producing their bike from the Hero Honda joint venture.
Comparison of the competitive strategies.
Topics Cost Differentiation Innovation Growth Alliance
leadership
Focus cost quality Changing Expansion Integration
technology
Customer Cost sensitive Quality sensitive Innovative Market Co-
segmentation group share operation
P a g e | 34
Competitive Cost Unique quality Something Stimulate Integrating
advantages advantages addition with the latent the
the existing demand expertise
one
Finally, it may conclude that, one additional point concerning the above strategies is that they are not mutually
exclusive. This means that an organization may make use of one, some, or all of the strategies in varying degrees
to manage the forces of competition. Because of this, a given activity could fall into one or more of the categories
of competitive strategy.
For example, implementing a system that allows customers to track their order or shipment online could be
considered a form of differentiation if the other competitors in the marketplace do not offer the service. If they do
not offer the service, however, then online order tracking would not serve to differentiate one organization from
another.
Strategic Roles of information system.
1. Improving Business Operations: Investment in information system can help make a firm’s operations
substantially more effective. Improvement of business process can enable a firm to cut its cost dramatically
and improve the quality and delivery of its product and service, which contribute to Cost leadership and
Differentiation strategy.
2. Promoting Business Innovations: Investment in information system can result in the unique products and
services. It can create new business opportunities, new market or a new segment in the existing market. It
directly helps to implement the Innovation strategy.
3. Locking in Customers and Suppliers: Investment in information system can allow a business to lock in
customers and suppliers by building a valuable relationship with them. It can deter both customers and
suppliers from abandoning a firm for its competitors. It helps a firm to undertake competitive strategies.
4. Creating Switching Costs: A major emphasis in strategic information system is to build switching costs into
the relationship between a firm and its customers or suppliers. It makes customers and suppliers more
dependent on the firm which make them reluctant to pay the switching cost.
5. Raising Barriers to Entry: By investing in information system to improve operations or to promote
innovations, a firm can build barriers to entry, that would discourage or delay other companies from entering
into the market.
6. Building a Strategic IT Platform: Investing in information system enables a firm to build a strategic IT
platform that allows it to take advantages of strategic opportunities. Typically, it means acquiring hardware
& software, developing telecommunication network, hiring IS specialist and training end users.
7. Developing a Strategic Information Base: Establishing information system including information about
firm’s operations, customers, suppliers, competitors as well as economy & demography are viewed as
strategic resources that support strategic planning, marketing and other strategic initiatives.
Strategic Application and used in information technology.
By using Information Technology, a firm can be benefited in the following fields-
1. Breaking Time Barriers: Computer and telecommunication can break the time barriers. Telecommunication
is faster than most of other forms of communications. Ex. Online sales transaction processing network.
2. Breaking Geographic Barriers: Telecommunication networks enable firms to communicate with people
almost anywhere in the world. Ex. Links between regional sales office and travelling sales people.
3. Breaking Cost Barriers
4. Breaking Structural Barriers
Extra from PPT
What types of information systems are generally used at different levels of
organization? Discuss those major types of information systems. (PYQ)**
Classification of information systems:
The types of information systems used by an organization depend on its information needs. There are four
types of information systems. These are-
1. Transaction processing systems (TPS)
2. Management information systems (MIS)
3. Intelligent support systems (ISS)
P a g e | 35
➢ Decision support system (DSS)
➢ Executive information systems (EIS)
➢ Expert systems (ES)
5. Office automation systems (OAS)

How does operation support system, transaction processing system and

management support system works? (PYQ)*

Transaction processing system

• Transaction processing systems were among the earliest computerized system.
• Information systems that record internal and external transactions.
• A TPS meets the needs of operational managers; the output of the TPS becomes the input to an
MIS.
Steps in processing a transaction (TPS)*
The six steps in processing a transaction are:
1. Data entry
2. Data validation: It ensures the accuracy and reliability of data by comparing actual data with
predetermined standards or known results. There are two steps in validation: a) Error detection
and b) Error correction
3. Processing and revalidation: a) Online transaction processing and b) Batch processing
4. Storage
5. Output generation: The output can be communicated to decision makers in two ways- a) Documents
and reports b) Forms: screens or panels
6. Query support
Characteristics of TPS:
• A TPS records internal and external transactions for a company. It is a repository of data that is
frequently accessed by other systems.
• A TPS performs routine, repetitive tasks. It is mostly used by lower-level managers to make
operational decisions.
• Transactions can be recorded in batch mode or online. In batch mode, the files are updated
periodically; in online mode, each transaction is recorded as it occurs.
• There are six steps in processing a transaction. They are data entry, data validation, data processing
and revalidation, storage, output generation, and query support.
MIS
• Well-integrated systems that meet the tactical information needs of middle managers. These systems
generate summary and exception reports.
• Summary Report: A report that summarizes data from several transactions. This is one of the
outputs of an MIS.
• Exception Report: A report that identifies data that appear to be exception is the difference between
actual performance and expected performance.
How are Transaction Processing Systems and Management Information Systems
linked together? (PYQ)*
P a g e | 36
TPS and MIS:

Intelligent support systems (ISS)*

Intelligent support systems (ISS) are systems that facilitate decisions requiring the use of knowledge,
intuition, experience, and expertise.
• Systems that fall into this category are-
• Decision support systems (DSS)
• Executive information systems (EIS)
• Artificial intelligence (AI)
• Expert systems (ES)
DSS (decision support systems):
Computerized systems that provide managers with internal and external data and decision-making
models that facilitate semi-structured decision making.
EIS (executive information systems)*
User-friendly and interactive computer-based systems, designed to meet the information needs of top
managers.
Discuss the features of DSS and compare with Management Information Systems.
(PYQ)*

Characteristics of DSS & EIS**

1. DSS and EIS are intelligent support systems designed to provide middle and top managers with
information necessary to make decisions that require intuition and judgment.
2. Both DSS and EIS are intuitive, interactive, user-friendly systems that augment the decision-making
capabilities of a manager.
3. Both systems use internal and external data to solve problems. Managers at this level tend to rely
more on external data than on internal data.
4. 4. A DSS also uses various decision-making models to provide managers with alternative solutions
to a given problem.
5. 5. Both systems are equipped with decision-making tools such as ‘what-if” analysis and goal seeking.
P a g e | 37
6. 6. A DSS can support both individual decision making and group decision making. Decision support
systems that support group decision making are referred to as group decision support systems
(GDSS)
Functions of DSS:
A DSS has five main functions, which facilitate managerial decision making. They are-
• Model building,
• “What-if” analysis,
• Goal-seeking,
• Risk analysis, and
• Graphical analysis.
Five functions of dss:
Function Description
Model building Allow decision makers to identify the most appropriate models for showing the
problem at hand. Takes into account input variables, interrelationships among
the variables, problem assumptions and constraints.
“What-if” analysis Allow decision makers to access the impacts of changes – to model variables,
variable values, and variable interrelationships on the problem solution.
Goal seeking Allow decision makers to determine the input values necessary to achieve a
certain goal.
Risk analysis Allow decision makers to asses the risks and uncertainties associated with
different alternatives. User’s statistics ad probabilistic measures to evaluate and
access risk factors.
Graphical analysis Allow decision makers to view data and information in different format such as
graphs, charts, and figures.

Application of DSS:
1. DSS help managers to solve interrelated and inter-organizational problems: A DSS is an ideal
candidate for interrelated and inter-organizational problems. For example, in a manufacturing
environment, production managers make semi-structured and unstructured decisions, such as the
number of machines to be operated, the amount of materials required to fill a new order, production
scheduling, and labor scheduling. A DSS can help a production manager answer such complex and
data-intensive questions.
2. Coordinate and manage the task of allocating limited resources: DSS helps better coordinate and
manage the task of allocating limited resources. Resources allocation is a critical task that confronts
managers regularly; a DSS is and ideal tool for such problems. It can address questions such as
these: “What quantities of manpower, money, machines, and materials should be allocated to this
project successfully complete it in time?” “What quantities of extra resources do we require to
complete this project in 5 fewer days than planned?”
3. Forecasting demand management and supplier evaluation: A DSS can consolidate data from different
sources to forecast demand, determine the appropriate quantity and mix of resources necessary to
meet the demand, and balance supply and demand for a wide variety of products. It can also present
managers with comprehensive data about different company projects, programs, and products so
that they can make sound decisions.
4. Enhance organizational decision making by information resources.
5. Determine the best location for store.
Critical success factor of DSS & EIS*
• Although DSS/EIS technology has existed for almost three decades, not all organizations have been
successful in adapting DSS/EIS technology. Critical success factors for DSS/EIS are those that
significantly increase the chances of successfully using and implementing these technologies.
• Commitment from top management
• Availability of accurate and reliable data
• Careful problem selection
• Integration of DSS and EIS with existing technologies
P a g e | 38
• Meaningful analysis of costs versus benefits.
Office automation system**
Office automation systems (OAS), also referred to as office information systems, are systems whose
primary goal is to facilitate communications. Such a system is as set of tools that gather, process, store,
retrieve, and disseminate information between individual workers, team of workers, and business entities,
both inside and outside the organization.
Discuss different useful services that are included in an Office Automation System.
Discuss various functional services that are included in an Office Automation
System. (PYQ)**
What includes OAS:
Systems that are designed to increase the productivity of clerical workers and knowledge workers and
enhance communication in the workplace. Office automation systems include-
• Word processing: letters, memos, term papers on the computer.
• Desktop publishing: using software to create documents.
• E-mail:
• Voice mail:
• Videoconferencing:
• Image retrieval and storage: conversion of paper documents into electronic files and images for easy
retrieval and processing.
• Facsimile transmission, or fax: the transfer of written or pictorial information over phone lines to
users anywhere in the world.
• Electronic meeting systems:
Types of OAS:
1. Electronic Publishing and Processing Systems
a) Word processing
b) Desktop publishing
c) Document management system:
d) Multimedia
e) Imaging
f) Communication systems:
g) E-mail
h) Fax
i) Voice Mail
2. Electronic Meeting Systems
a) Audio Conferencing
b) Videoconferencing
c) Groupware
What are the purposes to use electronic publishing and processing systems, and
electronic meeting systems? (PYQ)*

Discuss the role of office automation system in the organization (PYQ)*

Difference between TPS, MIS, DSS & EIS*

The different types of system, including TPS, MIS, DSS, and EIS can together help an organization to
meet its information needs. Although there are similarities and differences among this system, it is
important to recognize that no one system is superior to another and that each system is designed to serve
a specific purpose.
The differences among TPS, MIS, DSS, and EIS are shown in the following table:
TPS MIS DSS EIS
Targeted Operational Operational Middle Management Top
Audience Management Management Management
P a g e | 39
Primary Capture Generate summary Facilitate decision making Generate clear,
Purpose transaction and exception concise,
data enterprise-wide
information
Nature of Tasks Highly Highly structured Semi-or-unstructured Semi-or-
structured unstructured
Kind of Data Internal Internal Internal and external Internal and
external

Computer Security
Computer security is a set of policies, procedures, tools, and techniques, to protect computer assets from
accidental, intentional, and natural disasters, including accidental input or output errors, theft, breakings,
physical damage or manipulation.
It covers all computing environments including:
• Hardware
• Software
• Network
• Physical facilities
• Data and information and
• Personnel
Reasons for vulnerability of computer systems
There are a number of reasons why computer systems are vulnerable to security breaches:
• Intentional breaches by employees:
A primary source of security breaches is the intentional or unintentional actions of dissatisfied and greedy
employees.
• Increased system complexity:
Technological advances cause complexity to managers. And this complexity leads computer system to
vulnerability.

• Choices of system components:

Huge number of hardware, Software and network security concentration is different.
• Network vulnerability:
Networks have become increasingly complex and difficult to manage. That’s why network is vulnerable.
• Sophisticated Hackers:
Hackers and crackers both are a potential threat to computer security.
• Complacent Management:
Due to financial consideration or lack of knowledge or just indifference managers do not take computer
security seriously.
Types of common Security Breaches**
Computer security breaches are of mainly three types.
They are:
Accidental or Unintentional errors: Accidents in the workplace can cause security breaches. It is more
threatening than any other type of errors. Accidental errors are as follows:
• Hardware Component Fail: Failure of Memory, Keyboard, Server, Network Cable etc.
• Destruction During Maintenance: Cables can be accidentally cut or destroyed during building
repairs and maintenance.
• Others: Poor quality and commitment of employees.
Intentional errors: Intentional damage to systems is also common phenomena. It is widely believed that
Information System personnel are the greatest threat to system security, because they have intimate
knowledge of the workings and the critical elements of a system. Some types of intentional security
violations are as follows:
• Cracking Passwords: Is one of the most common security violations, since hackers and crackers
can easily guess passwords or capture them as they travel over the network.
P a g e | 40
• Breaking Into Hardware: Breakings into hardware components like Modem, Fax machine,
Cellular phone etc. can cause intentional security violence.
• Software Virus: A program that causes systems to behave in unexpected and undesirable ways.
When the virus program is executed, it makes copies of itself and spreads from one system or
application to another, either through networks or through discs.
Natural Disasters: Even computer security breaches are caused to a great extent by natural disasters. These
can be so devastating that companies and even entire cities, take a long time to recover from them. Various
Natural Disasters are mainly as follows:
• Power cut: Common cause of computer downtime and lost productivity.
• Telephone outage: Causes major havocs and destroy the reputation of a company.
• Lightning: Causes great loss to computer system.
• Hurricanes, Earthquakes, Tornadoes and Floods.
Computer security
Computer security includes the policies, procedures, tools and techniques designed to protect a company’s
Assets from accidental, intentional, or natural disaster including accidental input or output errors, theft, breaking,
physical damage, and illegal access or manipulation.
Computer security controls**
Policies, procedures, tools, and techniques designed to reduce security breaches and system distribution, to
prevent errors in data, software, and systems, to protect systems from accidental, international, and natural
disasters, and to continually enhance system security.
Controls may be manual or automated.
Types of security Controls**
1. Application Controls
2. Development Controls
3. Physical Facilities Controls
4. Personnel Controls
Application Controls
Application controls are policies and procedure that ensure that the security and quality of system applications in
the organization.
Example: (such as payroll and inventory management).
It covers 4 primary areas of data processing:
1. Inputs Controls
2. Process Controls
3. Output Controls
4. Storage Controls
Development Controls
Development controls are controls built into the development cycle to ensure the security of information system.
These controls are set up so that security is not just an afterthought but is built into the system itself.
We can define 4 types of development controls
1. Documentation
2. Data security
3. Authorization Requirements
4. Separation of duties

Physical Facilities Control

Primary goal of physical facilities control is to protect the physical facilities that house the computer and other
related assets from theft, unauthorized access, natural disasters, and vandalism, through measures such as posting
security personnel, installing fire alarms, security alarms, and hidden cameras, and requiring users to wear badges
or use smart cards to gain access to the building.
• Security personnel
• Fire alarms
• Hidden cameras
• Badges
P a g e | 41
Personnel Controls
Many security breaches are caused by employees within the company, either because they lack knowledge about
system security or because they have illicit intentions. Controls are only as effective as the people who implement
them. Training system users and communicating security policies are two types of personal control.
• Training
• Effective communication

Disaster recovery plan

Disaster recovery plan specifies how a company will maintain its information systems and services if a disaster
strikes. Specifies the situation that warrant the declaration of a disaster and identifies the courses of action
employees must take when a disaster strikes.

What is a backup? (PYQ) **

Why are backups vital to computer system security? (PYQ) **

What do you mean by GIGO? (PYQ) *

What is data warehouse? Why it is important for the organization? (PYQ) *

How does Broadband network service and technology works? Explain. (PYQ) *

What do you mean by Internet addressing and architecture? (PYQ) *

P a g e | 42
Discuss the types of digital networking technology that are used in business. (PYQ)
**

The role of hospital has changed from medical assistance to healthcare. What
important information system is required to be considered while implementing
front-end application development for hospital management? (PYQ) *

What do you mean by business information value chain? (PYQ) *

If you are asked to computerize your department, enumerate the application areas
you would computerize (PYQ) *