CHAPTER 2: INFORMATION SYSTEMS

Introduction
A system is an integrated set of regularly interacting or interdependent components
created to accomplish a defined objective, with defined and maintained relationships among its
components. Basically, there are three major units in every system namely input, processing and
output. The objective of a system demands that some output be produced as a result of
processing the suitable inputs.
An information system can therefore be seen as a set of interrelated components that collect
data, process the data to produce information.

1. Data and Information

Data are raw facts and figures that have no context or purposeful meaning. In computing,
data is simply any number, letter or symbol that can be entered into a computer system. When
data has been processed it gives information.
Information is data that has been processed. The processing gives it meaning and a context.
Information can also be defined as the useful knowledge derived from facts placed in the right
context with the purpose of reducing uncertainty.

𝐼𝑛𝑓𝑜𝑟𝑚𝑎𝑡𝑖𝑜𝑛 = 𝐷𝑎𝑡𝑎 + 𝐶𝑜𝑛𝑡𝑒𝑥𝑡

1.1. Sources of Data

a. Questionnaire

A questionnaire is a set of questions used for collecting data from people. A questionnaire may be in paper
format or online.
b. Interview

An interview is a meeting during which somebody is asked questions. Interviews allow you to collect a
greater depth of data and understanding from people than is possible by just using a questionnaire.
c. Observation

In observation, the data gatherer observes what is happening during a process or event and produces
some kind of data file as a result
d. Data logging

Data logging is an automated method of gathering data by using sensors.

e. Document review

Document review is getting relevant data from a document, an article or a book.

f. Data mining

Data mining is the exploration of databases to collect data.

1.2. Characteristics of Information

Good information is that which is used and which creates value. Experience and research show that good
information has numerous qualities.
a. Timeliness
Delay destroys the value of information. For effective decision making, information must reach the
decision-maker at the right time. Timeliness means that information must reach its recipients within the
prescribed timeframes.
b. Accuracy

Wrong information given to decision-makers would result in wrong decisions. Accuracy means that
information should be free from mistakes and errors.
c. Current

For the characteristic of timeliness to be effective, information should be current or up-to-date.

Information must be current as a fact of yesterday may not be a fact of today.
d. Completeness

Information should have every necessary part or everything that is wanted. If information is not complete,
it may lead to wrong decisions being made as only half of an entirety of the information is known.
e. Explicitness

Good information should not require further analysis for decision making. It should be clear and obvious,
leaving no doubts as to its intended meaning.

1.3. Data Collection

All computer systems need to have data input into them otherwise they have nothing to process.
Getting the data for the computer to process is known as data collection. Data collection can be manual or
automatic.

1.3.1. Manual Data Collection

Manual data collection uses forms and questionnaires. Data collected through this method has to
be entered into the computer by typing and clicking.
Many different errors can occur when entering data into a system. To try and reduce the amount of input
errors, a system designer can build in validation and verification checks into the software that the data is
entered into.
a. Data Verification

Verification means checking the input data to make sure it has been entered correctly. Verification tries to
ensure there have been no transcription errors. It is a check on accuracy. Two methods of data verification
are double entry and proofreading.
Double Entry

Double entry consists of entering the data twice. The two entries are then compared against each other
and a warning given if they do not match. For example, a new password is always entered twice.
Proof Reading

Proofreading consists of reading the data entered either on screen or printout, to be sure that it matches the
data source. It is also known as visual check

b. Data Validation
Validation is a check on input data to ensure that the data is sensible or reasonable. It compares the input
with a set of rules that the computer has been told the data must follow. If the data does not match up with
the rules then there must be an error. Validation only checks that the data is valid. The data may be valid
but not correct. Five types of validation checks are:
Type/Format check

A type check is used to ensure that data entered in a field fits the required data type. For example, a
person’s name will consist of letters of the alphabet and sometimes hyphens and apostrophe. Any name
that contains numbers will be rejected as invalid.
Length check

A length check ensures that an entered value is no longer than a certain number of characters. For
example, a phone number has 8 digits. Entering fewer or more digits makes a number invalid.
Range check

A range check is used to ensure that the data entered falls between a specified minimum and maximum values.
For example, a mark in an exam is between 0 and 20. Any mark below 0 or above 20 is rejected as invalid


Presence check
A presence check ensures that an entry has been made in a particular field. If it has not, the system will not
allow the record to be saved or any entries to be made in later fields. Such fields called mandatory fields
are indicated on some systems by the used of an asterisk

1.3.2. Automatic Data Collection

Automatic data collection is a form of data input in which there is no data entry. It uses sensors
and specialized input devices to collect data that is directly entered into the computer without any human
involvement. It is also called data capture. Different automatic data collection methods are:
a. Optical Mark Recognition (OMR)

OMR uses a device called an optical mark reader to read marks made with prescribed pens, pencils or
special writing material on OMR forms, and convert them into information in the computer. This system is
good for multiple choice examination questions.
b. Optical Character Recognition (OCR)

This method uses a device called an optical character reader to read characters from printed or
handwritten text and transmit them to the computer as if they were typed from the keyboard. This
method is suitable for capturing data from airline tickets; reading postal codes; capturing data from
telephone and electric bills.
c. Magnetic Ink Character Recognition (MICR)

The device used is a magnetic ink character reader that reads characters written in magnetic ink, using
magnetic stripe readers or card swipe machines that capture the information on the magnetic card. These
are seen on the back of credit cards and bank cards.
d. Barcode Reading

An optical device called barcode reader is used to read the barcode on products and convert them into a form
that can be processed by the computer. A bar code is a sequence of vertical lines and numbers that identify a
product. They are used in libraries, supermarkets and retail shops

e. Voice Recognition
This method converts speech into text or a sequence of computer commands. It is most common for data
entry and word processing environments.

2. Information System Components

 There are five basic components in an information system: hardware, software, procedures, data
and people.
Hardware

Hardware refers to the physical devices that make up the system. They are the whole set of equipment
used for input, processing, storage and communication of data.
Software

Software is the collection of computer programs used in the system. They provide the instructions that tell
the computer what to do.
Data

Data are raw, unorganized, potentially useful facts and figures that are processed to produce information.
People

People are the main actors of the system. They are the users of the information system. They input data
into the computer, give some direction to the computer to perform tasks and review information on the
computer for output.
Procedures

Procedures are the series of documented actions taken to achieve a particular goal. A procedure is more than a
single simple task. It can be complex and involved, such as reinstalling software, performing a backup etc.

3. Organizational Information Systems

There are three levels at which information can be used in an organisation: strategic, tactical and operational
levels. This can be represented using the pyramid below.

At the strategic level, information is needed by senior managers (executives) to help them with their
business plans. Information at this level is used for making long term decisions.

At the tactical level, information is needed by middle managers to help them monitor and control
business activities. Tactical planning and decision-making takes place within the guidelines set by the
strategic plan.

At the operation level, employees with operational roles need information to help them carry out their
duties. Results of operational work are passed upwards to let the tactical planners evaluate their plans.
In order to meet with the information needs of the organization, different types of information systems
exist which can be grouped into two: operations support systems and management support systems.

3.1. Operations Support Systems

 Operation support systems process data generated by business operations. They act at the
operational level of the organization. Major categories of OSS are transaction processing systems, office
automation systems and process control systems.

3.1.1. Transaction Processing Systems

A transaction is any event of interest to an organization. It may be a business activity such as a payment, a
deposit, a customer’s order, a reservation or a student’s registration. Transaction processing systems
capture and process data generated during an organization’s day-to-day transactions and maintain
records about the transactions. They are vital for any organization or business as they gather all the input
necessary for other types of systems. TPS are also called Data Processing Systems.
There are two types of TPS: batch processing and online processing systems.
a. Batch Processing

With batch processing, transaction data is collected over a period of time and all processing is done as a
group. Batch processing is ideal in situations where large amounts of data requiring similar processing are
to be processed. Examples are:
Payroll systems for calculating employee salaries
Billing systems for calculating consumer bills.

b. Online Transaction Processing

With online transaction processing (OLTP) the computer processes transactions as they are entered. Such
systems are ideal for situations where the master file needs to be updated each time a transaction is made.
Examples are:
Stock control systems which reduce automatically the number of items in stock once an item has been
bought
Reservation systems which reduce automatically the number of seats available on a flight or bus once
a seat has been booked.

3.1.2. Office Automation Systems

Office automation systems automate office procedures and enhance office communication and productivity.
They support a wide range of office activities such as creating and distributing documents, sending messages
and scheduling. The software an OAS uses to support these activities include word processing, spreadsheets,
databases, presentation, graphics, e-mail, Web browsers, personal information management, and groupware.
They use communication technologies such as voice mail, facsimile (fax), videoconferencing, and electronic
data interchange (EDI) for the electronic exchange of text, graphics, audio, and video. OAS are also called Office
Information Systems (OIS).

3.2. Management Support Systems

Management support systems provide information and support needed for effective decision
making by managers. They act at the tactical and strategic levels of the organization. Major categories of
MSS are management information systems, decision support systems and executive information systems.

3.2.1. Management Information systems

Management information systems generate accurate, timely and organized information needed by
middle managers to take decisions, solve problems, supervise activities, and track progress. They provide
routine information for routine tasks. The source of data for an MIS usually comes from numerous
databases. These databases are usually the data storage for Transaction Processing Systems. MIS take
information from TPS and summarize them into a series of management reports. As such, MIS are
sometimes called Management Reporting Systems (MRS).
MIS generate three basic types of information or reports: detailed, summary and exception.
Detailed reports confirm transaction processing activities. A detailed order report is an example of a
detail report.

Summary reports consolidate data into a format that an individual can review quickly and easily. To
help synopsize information, a summary report typically contains totals, tables, or graphs. An inventory
summary report is an example of a summary report.

Exception reports report information that is outside of a normal condition. These conditions called the
exception criteria, define the range of what is considered normal activity or status. An example of an
exception report is an inventory exception report that notifies the purchasing department of items it
needs to reorder. Exception reports help managers save time because they do not have to search through
a detailed report for exceptions. Instead, an exception report brings exceptions to the manager’s attention
in an easily identifiable form. Exception reports thus help them focus on situations that require immediate
decisions or actions.

Examples of MIS are:

Sales management systems
Inventory control systems
Budgeting systems
Management reporting systems

3.2.2. Decision Support Systems

Decision support systems are designed to help tactical and strategic decision-making in situations
where there is uncertainty about the possible outcomes of those decisions. They provide interactive
support for non-routine decisions or problems.
TPS and MIS provide information on a regular basis. However, managers need information not provided in
their reports to help them make decisions. Decision support systems therefore use data from internal
(TPS and MIS) and external sources.
o Internal sources of data might include sales, manufacturing, inventory, or financial data from an
organization’s database.
o Data from external sources could include interest rates, population trends, and costs of new housing
construction or raw material pricing.

Examples of DSS are:

Logistics Systems
Financial Planning Systems
Spreadsheet Models

3.2.3. Executive Information Systems

Executive information systems (EIS) are designed to support the information needs of executive
management. Their purpose is to analyse, compare and identify trends to help the strategic direction of
the organisation. Information in an EIS is presented in charts and tables that show trends, ratios, and
other managerial statistics. Because executives usually focus on strategic issues, EISs rely on external data
sources that can provide current information on interest rates, commodity prices, and other leading
economic indicators.
To store all the necessary decision-making data, DSSs or EISs often use extremely large databases, called
data warehouses.

4. Other Information Systems

4.1. Expert Systems
An expert system is a computer program that tries to emulate the decision making of a human
expert. It does this by combining the knowledge of human experts and then, following a set of rules, it
draws inferences. An expert system is made up of three parts: a knowledge base, an inference engine and
a user interface.
The knowledge base stores all of the facts, rules and information needed to represent the knowledge
of the expert.
The inference engine is the part of the system that interprets the rules and facts using backward and
forward chaining to find solutions to user queries.
The user interface allows the user to enter new knowledge and query the system.

Expert systems are one part of an exciting branch of computer science called artificial intelligence (AI). AI is the
science and engineering of making intelligent machines which are able to simulate human behavior. AI
technology can sense your actions and, based on logical assumptions and prior experience, will take the
appropriate action to complete the task. AI has a variety of capabilities, including speech recognition, logical
reasoning, and creative responses.

Example 1:
A medical diagnosis expert system could be used in a doctor's waiting room. Patients would use a touch
screen to answer questions on symptoms etc. created by the system. Based on the patient responses, the
system could use its database of diseases and symptoms, along with its programmed rules, to prepare a
list of possible diagnosis for the doctor to investigate further.
Advantages
o The doctor saves time because they do not have to ask the patient to describe their symptoms in
person.
o The doctor is given a suggested list of possible diagnosis to investigate further.
o The computer can store far more information than the doctor and can search it far faster and more
efficiently.
o The database can easily be updated or extended.

Disadvantages
o It can be difficult to describe symptoms to a computer system.
o It relies on a basic level of skills from the user.
o It lacks the 'human touch' of a doctor actually talking to a patient.

4.2. Geographic Information System

A geographic information system (GIS) is a computer system for capturing, storing, checking, and
displaying data related to positions on the earth’s surface. GIS stores information about the world as a
collection of layers that can be linked together by a common locational component such as latitude and
longitude, a postal zip code, census tract name, or road name.
Data in many different forms can be entered into GIS. Data that are already in map form can be included in
GIS. This includes such information as the location of rivers and roads, hills and valleys. Digital or
computerized data can also be entered into GIS. An example of this kind of information is data collected by
satellites that show land use - the location of farms, towns, or forests. GIS can also include data in table
form, such as population information. GIS technology allows all these different types of information, no
matter their source or original format, to be overlaid on top of one another on a single map.