CHAPTER 1 SYSTEM THEORY & SYSTEM ENVIRONMENT

Major Topics Covered

 Information Technology
 Information Systems
 Types of Information Systems
 Systems Development Life Cycle
 Information Systems Personnel

IT

Computer Telecommunications
Technology Technology

S/W H/W

Information Technology (IT) is the combinations of hardware, software and

telecommunication system that support business operation, improve productivity and help
managers make decisions.

IS

IT People Process Data

System
Information System (IS) is the effective use of hardware, software, data, process and people to
support the company’s business objectives.
Advantages of IS:
 Support operations
 Improve productivity
 Help to make decision

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IS Components
IS
Components

Hardware Software Data People Process

Software
System Software

Application Software
 In-house Application VS Software Package
 Horizontal System VS Vertical System

Hardware
- refers to the physical layer of the information system. Hardware includes computers, network,
communication equipment and other technology based infrastructure.

Software
- consist of system software and application software.
- System software controls the computer and includes the operating system, device drivers and
utilities functions e.g. virus protection, backup, etc. Examples Windows XP, Windows7,
Linux, Unix, MacOS.
- Application software consists of programs that support the users and companies to carry out
their business functions. There are various types of application software:-
i) In-house application.
- the company IT department develops its own information system
ii) Software package
- purchasing the software package from an outside vendor
iii) Horizontal system
- is a basic system such as inventory or payroll program that can be adapted for use in
many company
iv) Vertical system
- is designed to meet the unique requirements of a specific business or industry such as
Web based retailer or a video rental chain

Data
- An information system transforms data into useful information

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People
The primary purpose of an information system is to provide valuable information to managers
and users within and outside the company. Users sometimes called end users include employees,
customers, vendors and others who interact with the information system.
Users consist of 2 types:-
i) Internal users
- include managers, technician, sales rep and corporate officers

ii) External users

- include customers who track their orders, suppliers, etc.

Processes (Procedure)
- describe the tasks that users, mangers and IT staff perform.

Characteristic of Information System

Characteristics
IS

Electronic System Specification Size

Data Boundary System Of
Interchange Company

An analyst learns about information system by asking questions about the system.
1) Does the system interact with other system?
EDI involves the computer-to-computer transfer of data between companies. EDI has
expanded rapidly to foster closer working relationship with their suppliers and customers.

2) What are the system boundaries?

System boundaries indicate where one system ends and another begins. The boundary
between 2 systems is not always clear cut.

3) Will the system handle specialized business needs?

Many firms require specialized system for information management that is unique to their
company and industry needs.

4) What size is the company and what growth is forecast?

Large and small companies in the same industry have different information system
requirements. (e.g. differences in volume of transactions)

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Organizational Structure

Strategic Planning COE, President, Vice

Top
President
Mgt

Tactical Planning
Middle Mgt Director, Manager

Operation Plans
Supervisor, Team Leader,
Low Management
Coordinator

Sales Representative, retail

Day to Day Operation associate, product workers, Team
Operational Management Members, admin assistant, tech
support representative, account
clerks, account analyst

Mapping of Organization Structure with the types of Information System

ESS
GDSS Top
CSCW Mgt

ES
DSS
Middle Mgt
MIS

KWS
OAS Low Mgt

TPS Operational Mgt

Top management
This senior management uses external business information to come up with strategic plan
for the organization. The information solicited and used are economic forecast, technology
trends, competitive threats, government issues and shareholders’ concern

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Middle management
This management uses detailed information to make tactical plans. For example, review a
weekly sales summary for a different geographic location so that a new business tactic may
be employed to boost sales.

Lower management
This management coordinates operational tasks, makes necessary decisions and ensures right
tool, materials and training are made available to operational staff.

Operational management
This management involves operational staff / employees that perform the day-to-day work.
They operate on the daily business processes.

Types of Information System

1. Operational Systems / Transaction Processing System (TPS)

 Automates daily routine monotonous tasks
 Not a very “intelligent” system
 Easiest to develop

2. Office Automation System

 Assist in running the daily operations in an organization
 Famous example: Microsoft Windows Office Applications

3. Knowledge Worker System (KWS)

 KWS enhances knowledge worker productivity by delivering task-specific
information as needed, and by associating all automated tools, software agents and
multimedia document references that a knowledge worker needs to complete a
specific task.
 knowledge workers -- professionals who use information as their primary input and
whose major products are distillations of that information

4. Management Support Systems / Management Information System (MIS)

 Collects information from the Operational systems and presents information in the
most useful format for decision-makers
 More “intelligent” than the operational systems
 Have somehow become the de facto standard in most of today’s computerized
information systems

5. Decision Support System (DSS)

 Helps decision makers arrive at appropriate decisions based on various what-if
scenarios
 Final decision is still being made by the decision maker

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6. Expert System (ES) /Artificial Intelligence System

 Able to come out with decisions for decision makers
 Consist of knowledge base and inference rules
 Decision makers can decide whether to carry out decisions proposed by the system or
to come out with other solutions

7. Computer supported cooperative work (CSCW)

 CSCW [is] a generic term, which combines the understanding of the way people work
in groups with the enabling technologies of computer networking, and associated
hardware, software, services and techniques.

8. Group Decision Support System

 Used to link personnel who are disparately located together via the existence of
various software and hardware
 Emergency meetings could be called with minimal hassle

9. Executive Information System/ Executive Support System

 It helps the executive to organize the interaction with the external environment by
providing graphics and drilling facilities.
 It helps the users to address unstructured decision problem by creating an
environment that is conductive to thinking the strategic problem.

Systems Development Life Cycle (SDLC)

Traditionally, SDLC is called as a waterfall model. It consist of 5 phases

Phase 1: Systems Planning

 Begins with system request
 Preliminary investigation or feasibility study
 Identify the problem
 Project scope
 Determine time, costs and benefits
 Recommendation based on economic, technical, and operational factors

Phase 2: Systems Analysis

 Using fact-finding techniques (interview, surveys, observation, sampling, document review,
and research) to understand business requirements.
 Build a logical model (data modeling, process modeling, and object modeling)
 System requirements document describes management and user requirements, alternative
plans and costs, recommendation

Phase 3: Systems Design

 Create a new system whether is develop in-house or purchased as a packages
 Identify input, output, process and user interface
 Prepare system design specification for review and approval

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Phase 4: System Implementation

 Developed in-House (program are written, tested and documented, and system is installed) or
purchased as a package (modifications and configurations)
 User training
 Converting data and actual transition to the new system
 System evaluation

Phase 5: Systems Operation & Support

 Maintenance changes correct errors and adapt to changes in the environment
 Enhancements provide new features and benefits

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IT Department

Application Development
- Composed of system analysts and programmers who handled information system, design,
development and implementation.

System Support
- Provides hardware and software support for enterprise computing system, networks,
transaction processing system and corporate IT infrastructure.
- Also provide technical support to other group in the IT department.

User Support
- called as help desk or information center
- Primary focus is to support users IT problems in supporting their day to day duties.

Database Administrator
- Database design, management, security, backup and user access.

Network Administrator
- Includes controlling network access, install, configure monitor and maintain network
application.

Web Support
- Web Support Specialist often called a web master support a company’s internet and
intranet operations.
- Web support is critical in company engaged in e-commerce.

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System Analyst Position

- Investigate analyses, design, develop, install, evaluates and maintain a company’s
information system.
- Translate business requirements into practical IT projects that meet the company needs.
- Keep managers and users informed through meetings, presentations, reports, memos and
other documentations.

- Skills Required by System Analyst.

 Analytical Ability
 Logical Thinking
 Technical Knowledge
 Interpersonal and Communication Skills
 Understand Business Operations and Process
 Leadership Skills

Certification Issues
Certification is a skills and knowledge assessment process organized by computer industry
vendor. In area of high demand, certification can translate into salary offers that are 10 to 15
percent higher than normal.

However, certification process emphasizes a form of learning that is both narrow and deep.
People who have narrow training may not be able to adjust to the rapidly changing technologies.
That is why it is important to have a basic computing degree so that with a solid theoretical
foundation, you can learn new skills throughout your career

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