B301- Ict in business

Chapter I: INFORMATION SYSTEM

Defining Information Systems

• “Information systems (IS) is the study of complementary networks of hardware and software that people and
organizations use to collect, filter, process, create, and distribute data.”1
• “Information systems are combinations of hardware, software, and telecommunications networks that people build
and use to collect, create, and distribute useful data, typically in organizational settings.”2
• “Information systems are interrelated components working together to collect, process, store, and disseminate
information to support decision making, coordination, control, analysis, and visualization in an organization.”3
1. Wikipedia entry on "Information Systems," as displayed on August 19, 2012. Wikipedia: The Free Encyclopedia. San Francisco:
Wikimedia Foundation. http://en.wikipedia.org/wiki/Information_systems_(discipline).
2. Excerpted from Information Systems Today - Managing in the Digital World, fourth edition. Prentice-Hall, 2010.
3. Excerpted from Management Information Systems, twelfth edition, Prentice-Hall, 2012.

Components of Information System

1. Hardware - part of an information system that you can

touch – the physical components of the technology.
Computers, keyboards, disk drives, iPads, and flash
drives are all examples of information systems
hardware.

Hardware Tour

Digital Devices
A digital device processes electronic signals that
represent either a one (“on”) or a zero (“off”). The on
state is represented by the presence of an electronic
signal; the off state is represented by the absence of an
electronic signal. Each one or zero is referred to as a bit
(a contraction of binary digit); a group of eight bits is a byte.

Understanding Binary
Computers use the base-two numbering system, also known as binary. As the capacities of digital devices
grew, new terms were developed to identify the capacities of processors, memory, and disk storage space.
Prefixes were applied to the word byte to represent different orders of magnitude.

Processing Data: The CPU

• “brains” of the computer.
• primary manufacturers – Intel & Advanced Micro Devices (AMD).
• The speed (“clock time”) is measured in hertz. A hertz is defined as one cycle per second.
• kilohertz (abbreviated kHz) is one thousand cycles per second
• a megahertz (mHz) is one million cycles per second,
• gigahertz (gHz) is one billion cycles per second.
• multiple processors - dual-core (two processors) or quad-core (four processors)
Motherboard
• main circuit board where the CPU, memory, and storage components are connected together
• provides much of the bus of the computer (the term bus refers to the electrical connection between
different computer components).
• The bus is an important determiner of the computer’s speed: the combination of how fast the bus can
transfer data and the number of data bits that can be moved at one time determine the speed.

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Random-Access Memory
• When a computer starts up, it begins to load information from the hard disk into its working memory.
This working memory, called random-access memory (RAM),
• Any program that you are running on the computer is loaded into RAM for processing.
• Another characteristic of RAM is that it is “volatile”. This means that it can store data as long as it is
receiving power; when the computer is turned off, any data stored in RAM is lost.
Hard Disk
• for long-term data storage. A hard disk is where data is stored when the computer is turned off and
where it is retrieved from when the computer is turned on.
• A hard disk consists of a stack of disks inside a hard metal case.
Solid-State Drives
• A relatively new component becoming more common in some personal computers is the solid-state
drive (SSD). The SSD performs the same function as a hard disk: long-term storage.
• Instead of spinning disks, the SSD uses flash memory, which is much faster.
• Solid-state drives are currently quite a bit more expensive than hard disks. However, the use of flash
memory instead of disks makes them much lighter and faster than hard disks.
• SSDs are primarily utilized in portable computers, making them lighter and more efficient.

Basic Computer Hardware Components

a. Input devices 
Floppy disk
 Keyboard 
Memory card
 Image scanner 
USB flash drive
 Microphone d. Computer case
 Pointing device  Central processing unit (CPU)
o Graphics tablet, Joystick, Light pen,  Hard disk / Solid-state drive
Mouse, Pointing stick, Touchpad,  Motherboard
Touchscreen, Trackball  Network interface controller
 Webcam  Power supply
o Softcam  Random-access memory (RAM)
b. Output devices  Sound card
 Monitor  Video card
 Printer e. Data ports
 Speakers  Ethernet
 Plotter  FireWire (IEEE 1394)
c. Removable data storage  Parallel port
 Optical disc drive  Serial port
o CD-RW  Thunderbolt
o DVD+RW  Universal Serial Bus (USB)
 Disk pack

2. Software - set of instructions that tells the hardware what to do. Software is
not tangible – it cannot be touched. When programmers create software
programs, what they are really doing is simply typing out lists of instructions
that tell the hardware what to do. The two main categories are operating-
system software, which makes the hardware usable, and application software,
which does something useful. Examples of operating systems include
Microsoft Windows on a personal computer and Google’s Android on a mobile
phone. Examples of application software are Microsoft Excel and Angry Birds.

Software Categories
• System Software- programs that generally perform the background tasks in a computer. These
programs, many times, talk directly to the hardware
o Operating System (OS) - control the overall operation of the computer. OS do the ff.
 Manage processor resources to handle simultaneous input, output, and processing task

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 Manage memory by allocating space for all programs and data that are in use during a
computing session.
 Keep track of storage resources so that files and programs can be found and
manipulated.
 Ensure that input and output proceed in an orderly manner by communicating with
peripheral devices
 Establish basic elements of the user interface such as the appearance of the desktop,
menus and toolbars.
o Device drivers - software that helps a peripheral device establish communication with a
computer.
o Utilities - perform system management & maintenance
o Language Translator - used to develop or maintain other program

• Application/ Production Software

o Set of computer programs that helps a person carry out a task. Examples: Word Processing
Software, Video editing software

3. Data - You can think of data as a collection of facts. For example, your street address, the city you live in,
and your phone number are all pieces of data. Like software, data is also intangible. By themselves, pieces
of data are not really very useful. But aggregated, indexed, and organized together into a database, data
can become a powerful tool for businesses. Organizations collect all kinds of data and use it to make
decisions. These decisions can then be analyzed as to their effectiveness and the organization can be
improved.
Data versus Information
The term’s data and information are often used interchangeably. However, you should make the following
distinction:
Data:
- Are raw facts or observations, typically about physical phenomena or business transactions. More
specifically, data are objective measurements of the attributes (characteristics) of entities, such as
people, places, things, and events.
Information:
- Is processed data, which has been placed in a meaningful and useful context for an end user. Data
is subjected to a “value-added” process (data processing) where:
• Its form is aggregated, manipulated, and organized.
• Its content is analyzed and evaluated
• It is placed in a proper context for a human user

4. Networking Communication - An information system can exist without the ability to communicate – the
first personal computers were stand-alone machines that did not access the Internet. However, in today’s
hyper-connected world, it is an extremely rare computer that does not connect to another device or to a
network. Technically, the networking communication component is made up of hardware and software,
but it is such a core feature of today’s information systems that it has become its own category.

Transmission media

A. Physical transmission media

 Twisted Pair - most prevalent form of communications wiring; used for
almost all business telephone wiring.
o Unshielded twisted pair (UTP) - containing no shielding, it is less
expensive but more susceptible to signal noise.
o Shielded twisted pair (STP) - wire pairs are coated with a foil shield,
which reduces signal noise that might interfere with data
transmission.

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 Coaxial Cable - commonly known as “coax”, is a high-capacity communications cable consisting of

copper wire conductor. Although it has excellent bandwidth and can carry much more data, it is less
durable, more expensive and more difficult to work with than twisted-pair cable

 Fiber – Optic Cable - bundle of extremely thin tubes of glass, each tube
is called optical fiber, is much thinner than human hair. It is
technologically advanced as compared to the twisted-pair wire and
coaxial cable. It can carry a greater volume of data, it is also immune
from electromagnetic interference

B. Wireless transmission media - generally slower than cables and susceptible to signal interference,
eavesdropping and jamming.
 Radio Waves – provide wireless transmission for mobile communications, such as cellular
telephones, and for stationary communications where it is difficult or impossible to install cabling,
such as remote, geographically rugged regions.
 Infrared Transmission - use frequency range just below the visible light spectrum to transport
data.
 Broadband Radio - it distribute radio signals through the air over long distances such as
between cities, regions, and countries and short distances such as within an office or home.
 Cellular Radio - form of broadcast radio that is used widely for mobile communications,
specifically wireless modems and cellular telephones.
 Microwave - an electromagnetic wave with a frequency of at least 1 gigahertz. Microwave
transmission sends a high-frequency signal from a transmitting station to a receiving station.
Distance must not be 25 to 30 miles apart because at farther distances, the curve of the earth blocks
the line-of-sight transmission path.
 Satellites - must receive and transmit via line-of-sight but high altitudes overcomes the limitations
of microwave data relay stations.
o Three types of orbits
 Geostationary earth orbit (GEO) - satellites orbit 22,300 miles directly above the equator
and maintain a fixed position above the earth’s surface. Excellent in sending television
programs. Transmission take a quarter of seconds to send and return.
 Medium earth orbit – satellites are located about 6,000 miles above the earth’s surface.
 Low earth orbit (LEO) - satellites are located 400 to 1,000 miles above the earth’s surface.
Closer to the earth, reducing or eliminating apparent propagation delay.

5. People - from the front-line help-desk workers, to systems analysts, to programmers, all the way up to the
chief information officer (CIO), the people involved with information systems are an essential element that
must not be overlooked.

6. Process - series of steps undertaken to achieve a desired outcome or goal. Using technology to manage
and improve processes, both within a company and externally with suppliers and customers, is the ultimate
goal. Technology buzzwords such as “business process reengineering,” “business process management,”
and “enterprise resource planning” all have to do with the continued improvement of these business
procedures and the integration of technology with them. Businesses hoping to gain an advantage over
their competitors are highly focused on this component of information systems.

Information System Activities

Information processing (or data processing) activities that occur in information system include the following:
1. Input of Data Resources
- Data about business transactions and other events must be captured and prepared for processing
by the input activity.
- Input typically takes the form of data entry activities such as recording and editing.
- Once entered, data may be transferred onto a machine-readable medium such as magnetic disk or
type, until needed for processing.

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2. Processing of Data into Information:

- Data is typically subjected to processing activities such as calculating, comparing, sorting, classifying,
and summarizing. These activities organize, analyze, and manipulate data, thus converting them
into information for end users.
- A continual process of correcting and updating activities must maintain quality of data stored in an
information system.

3. Output of Information Products:

- Information in various forms is transmitted to end-users and made available to them in the
output activity. The goal of information systems is the production of appropriate information
products for end users.

4. Storage of Data Resources:

- Storage is a basic system component of information systems.
- Storage is the information system activity in which data and information are retained in an
organized manner for later use.

5. Control of System Performance:

- An important information system activity is the control of its performance.
- An information system should produce feedback about its input, processing, output, and storage
activities.
- Feedback must be monitored and evaluated to determine if the system is meeting established
performance standards.
- Feedback is used to make adjustments to system activities to correct deficiencies.

Collaboration Tools & Communication Media

1. BULLETIN BOARDS – allows users to leave messages or read public messages that provide information or
announce upcoming events. Organizations often add bulletin board capabilities to their Web site to
attract a community of users and increase site traffic. Often Bulletin board is used to keep visitors
informed about current events and developments associated with the organization.

2. BLOG – is a web site in which contributors (“bloggers”) provide ongoing commentary on a particular subject. It is
often used as a personal online diary or to address current issues and local news. Organizations are using corporate
blogs externally for branding, marketing, or public relations purposes. Often, executives or public relations people
write the posts with the goal of improving a firm’s public image, its products, and its services.

3. CALENDARING – software allows people to capture and record scheduled meetings and events. It enables
you to check the electronic calendar of team members for open time slots and notify or remind meeting
and event participants by e-mail. Calendaring products include Google Calendar, IBM Lotus Notes,
Microsoft Exchange.

4. DESKTOP SHARING – includes number of technologies and products that allow remote access and remote
collaboration on a person’s computer. Remote log-in and real-time collaboration are the most common forms of
desktop sharing. Remote log-in – allows users to connect to their office computer while they are away from the
office. (technicians too for repairs)
5. INSTANT MESSAGING – offers real-time, informal communications based on the often rapid exchange of typed
messages. IM is less formal than e-mail and is used primarily in a synchronous communication mode, with all parties
sending and receiving messages in real time. ex. Messengers
6. PODCAST – is a digital media file distributed over the Internet using syndication feeds for playback on portable
media players and personal computers. Users simply download a podcast to their computer and then transfer it to
and Ipod or other player device for listening at their convenience.
7. SHARED WORKSPACE – is an area hosted by a Web server in which project members and colleagues can share
documents, models, photos, and other forms of information to keep each other current on the status of projects
or topics of common interest. Example: Center for Scientific Review (CSR) review of applicants.

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8. WEB CONFERENCING – a way to conduct live meetings or presentations over the Internet. In a Web conferencing,
each participants sits at his or her own computer, and is connected to other participants via the Internet. Ex.
Softwares like GoToMeeting, Live Meeting, Netviewer, SkypePro, WebEx, and Yugma.
Web conferencing often is sold as a service that is hosted on a Web server and controlled by the vendor. The service
may be offered on a per-minute usage basis or for fixed monthly fee. Some vendors make their conferencing
software available as a licensed product, allowing organizations that make heavy use of conferencing to install the
software on their own servers. Ex. Adobe Acrobat Connect, Genesys Conferencing, GoToMeeting, Lotus Sametime,
Microsoft Office Live Meeting, Unyte, and WebEx

a. Webcast – a presentation of information in one direction only, like watching a video on the
Internet.
b. Webinar – a type of Web conference in which the direction of the presentation is primarily one
way from the presenter to the audience; however, it can also be interactive between the
presenter and audience.

9. WIKI – a collaborative Web site that allows users to create and edit Web page content freely using any
Web browser. It has supports hyperlinks and has a simple text syntax for creating new pages ad cross-
links between internal pages. Wikis can be constructed from all types of corporate data, such as
spreadsheets, Microsoft Word documents, PowerPoint slides, PDFs and anything else that can be
displayed in a browser. Ex. Wikipedia – largest free content encyclopedia on the Internet.

Types of Information System

Information Systems perform important operational and managerial support roles in businesses and
other organizations. Therefore, several types of information systems can be classified conceptually as either:
• Operations Support Systems
• Management Support Systems

1. Operations Support Systems

- Information systems are needed to process data generated by and used in business operations.
Such operations support systems (OSS) produce a variety of information products for internal and
external use. However, they do not emphasize producing the specific information products that
can best be used by managers. Further processing by management information systems is usually
required. The role of a business firm’s operations support systems is to:
• Effectively process business transactions
• Control industrial processes
• Support enterprise communications and collaboration
• Update corporate databases

a. Transaction Processing Systems (TPS)

- Focus on processing the data generated by business transactions and operations.
- Transaction processing systems record and process data resulting from business transactions
(sales, purchases, inventory changes).
- TPS also produce a variety of information products for internal or external use (customer
statements, employee paychecks, sales receipts etc.).

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- TPS process transactions in two basic ways:

• Batch Processing
- transactions data is accumulated over a period of time and processed periodically.
• Real-time (or online) processing
- data is processed immediately after a transaction occurs.

b. Process Control Systems (PCS)

- Process control systems are systems, which make use of computers to control ongoing physical
processes. These computers are designed to automatically make decisions, which adjust
the physical production process. Examples include petroleum refineries and the assembly lines of
automated factories.

c. Enterprise Collaboration Systems

- Enterprise collaboration systems are information systems that use a variety of information
technologies to help people work together. Enterprise collaboration systems help us:

• Collaborate
- to communicate ideas
• Share resources
- Co-ordinate our cooperative work efforts as members of the many formal and informal process
and project teams. The goal of enterprise collaboration systems is to use information technology
to enhance the productivity and creativity of teams and workgroups in the modern business
enterprise.

2. Management Support Systems (MSS)

- Management support systems focus on providing information and support for effective decision
making by managers. They support the decision-making needs of strategic (top) management,
tactical (middle) management, and operating (supervisory) management. Conceptually, several
major types of information systems support a variety of decision-making responsibilities:
• Management Information Systems (MIS)
• Decision Support Systems (DSS)
• Executive Information Systems (EIS)

a. Management information systems

- are the most common form of management support systems. They provide managerial end users
with information products that support much of their day-to-day decision-making needs. MIS
provide a variety of pre specified information (reports) and displays to management that can be
used to help them make more effective, structured types of day-to-day decisions. Information
products provided to managers include displays and reports that can be furnished:
• On demand
• Periodically, according to a predetermined schedule
• Whenever exceptional conditions occur

b. Decision support systems

- provide managerial end users with information in an interactive session on an ad hoc (as needed)
basis. Managers generate the information they need for more unstructured types of decisions in
an interactive, computer-based information system that uses decision models and specialized
databases to assist the decision-making processes of managerial end users.

c. Executive information systems

- provide top and middle management with immediate and easy access to selective information
about key factors that are critical to accomplishing a firm’s strategic objectives. EIS are easy to
operate and understand.

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Other Classifications of Information Systems:

Several other categories of information systems that support either operations or management
applications include:
• Expert Systems
◦ is an artificial intelligence
◦ emulates the decision-making ability of a human expert.
◦ designed to solve complex problems by reasoning about knowledge, represented mainly as if–
then rules rather than through conventional procedural code.
• Knowledge Management Systems
◦ Supports the capturing, organization, and dissemination of knowledge throughout an organization
◦ It is up to the organization to determine what information qualifies as knowledge.

• Functional Business Information Systems

◦ System that provides detailed information for a specific type of activity or related group of
activities, as well as summarized information for management control of such activities.
◦ Ex. IS for Marketing, for HR management, for finance management
• Strategic Information Systems
◦ A system used by organization to examine market and competitor information to help them plan
how to make their business more successful
◦ It shapes the strategy of an organization.
• Cross-functional Information Systems
◦ is the third era of information systems, after calculations systems and functional systems designed to
integrate the activities of the entire business process, and are called so because they 'cross' departmental
boundaries.

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