Module 1: Introduction to Information Systems
1. Concept of Data and Information
Data:
Data refers to raw facts and figures that have no specific meaning or context on their own. It
represents unprocessed information that can be numerical, textual, or in other forms. Examples
of data include:
A list of customer names.
The number of items in stock.
Transaction dates.
Information:
Information is the result of processing, organizing, or structuring data so that it becomes
meaningful and useful. For example:
Data: 10, 20, 30, 40.
Information: These numbers could represent the sales figures for the past four weeks.
In essence, information is derived from data after it is processed to provide insight or
knowledge. For example, customer purchase data can be processed to provide information
about buying patterns.
Example:
A retail store collects data on its sales: each transaction records the date, item sold, quantity,
and price. When this data is processed, it provides information such as:
Total sales for the day.
Most popular items.
Peak sales times.
2. Meaning and Role of Information Systems
Definition of Information Systems (IS):
An Information System (IS) is an integrated set of components designed to collect, process,
store, and distribute data to support decision-making, coordination, and control in an
organization.
Role of Information Systems:
Information Systems play a crucial role in modern organizations. They help:
• Enhance decision-making by providing timely and accurate information.
• Improve productivity by automating routine tasks.
• Support business processes through transaction processing and data management.
• Foster innovation by enabling new ways to conduct business, such as e-commerce.
Example:
Amazon uses an information system to manage its logistics and inventory, processing millions
of transactions daily. It tracks product availability, customer orders, and shipping data,
providing real-time information for operational decisions.
3. Elements of a System
A system is a set of interrelated components working together to achieve a specific goal. The
key elements of a system include:
1. Inputs: The resources (data, materials, energy, etc.) that are put into the system.
2. Processes: The actions taken on the inputs to convert them into outputs.
3. Outputs: The final product or result produced by the system.
4. Feedback: Information about the output used to make adjustments or improvements.
5. Control Mechanisms: Rules or guidelines that govern the operation of the system.
6. Environment: The external factors that influence the system.
Example:
In a payroll system:
Inputs: Employee work hours and wage rates.
Process: Calculation of pay, taxes, and deductions.
Outputs: Paychecks and payroll reports.
Feedback: Review of payroll accuracy to ensure correct payments.
4. Types of Systems
1. Open System: Interacts with its environment and adapts to changes (e.g., an organization
that adapts its strategy based on market trends).
2. Closed System: Operates independently of external influences (e.g., a thermostat that
maintains a set temperature regardless of outside weather).
3. Subsystems: A part of a larger system that performs a specific function (e.g., the HR
department within an organization).
5. Conversion/Installation Modes of Information System
When a new information system is installed in an organization, the transition can be done using
different modes:
1. Direct Cutover: The old system is completely replaced with the new one. It's risky because
there's no backup system in place.
Example: A company switching its entire customer database to a new CRM system
overnight.
2. Parallel Conversion: Both old and new systems run simultaneously for a period to ensure
the new system works correctly before fully switching over.
Example: A hospital implementing a new electronic medical records system while still using
the old paper-based system for a few weeks.
3. Phased Conversion: The new system is implemented in stages, with different parts or
departments adopting it over time.
Example: An e-commerce company launching a new payment system first for international
transactions, then for domestic ones.
4. Pilot Conversion: The new system is tested in one part of the organization before being
rolled out across the entire organization.
Example: A company first implements a new inventory system in one regional office to
check its performance.
6. Strategic Information Systems
Strategic Information Systems (SIS):
A Strategic Information System is developed to support or shape an organization’s competitive
strategy. SIS helps in gaining a competitive edge by providing information that leads to better
decision-making, improved customer service, and innovation in products or services.
Example:
Walmart’s strategic use of its Supply Chain Management (SCM) system helped the company
reduce inventory costs and provide better service, giving it a competitive advantage in the retail
industry.
7. Classification of Information Systems
1. Management Information System (MIS):
An MIS provides middle managers with reports and summaries of the organization’s
performance based on transaction data. It is designed to meet the needs of decision-making and
management control.
Example: A report showing monthly sales figures for a retail store.
2. Transaction Processing System (TPS):
A TPS handles the collection, modification, and retrieval of all transaction data. It’s used for
day-to-day operations such as billing, order processing, and payroll.
Example: The point-of-sale (POS) system at a retail store.
3. Decision Support System (DSS):
A DSS helps managers make decisions by providing interactive tools and analytical models.
Example: A DSS helps a company decide where to open new stores by analysing
demographic data and consumer behavior.
4. Knowledge Management System (KMS):
A KMS helps capture, store, and share knowledge within an organization to improve decision-
making and collaboration.
Example: A corporate intranet that allows employees to access best practices, reports, and
training materials.
5. Operations Support System (OSS):
OSS focuses on supporting daily business operations by ensuring the smooth running of
processes like production and logistics.
Example: A manufacturing company using an OSS to track production line efficiency.
6. Management Support System (MSS):
MSS helps top management with strategic decision-making by providing information and
simulations.
Example: A dashboard displaying key performance indicators (KPIs) for the CEO.
7. Process Control System (PCS):
PCS is used in industries to control physical processes, such as in manufacturing where
automation and robotics play a role.
Example: A chemical plant using a PCS to monitor and control production equipment.
8. Enterprise Collaboration System (ECS):
An ECS helps employees collaborate by providing tools for communication, project
management, and document sharing.
Example: Microsoft Teams or Slack for internal communication and collaboration.
9. Artificial Intelligence (AI):
AI refers to systems that simulate human intelligence through learning, reasoning, and
problem-solving.
Example: A chatbot that provides customer support by answering common questions.
8. Applications of Artificial Intelligence (AI)
1. Neural Networks:
Neural networks are AI models that mimic the human brain to recognize patterns, make
decisions, and learn from data.
Example: Facial recognition software used by smartphones to unlock the device.
2. Fuzzy Logic Control Systems:
Fuzzy logic systems make decisions based on "degrees of truth" rather than the binary "true or
false" used in traditional systems.
Example: An air conditioner that adjusts cooling intensity based on the current room
temperature and humidity levels.
3. Virtual Reality (VR):
VR immerses users in a simulated environment for entertainment, training, or education.
Example: Virtual reality used in real estate to give potential buyers a virtual tour of a house.
4. Expert Systems (ES):
Expert systems use knowledge from experts to make decisions in specialized areas, often
replicating human decisionmaking.
Example: A medical expert system used to diagnose diseases based on symptoms entered by
a healthcare professional.
5. Executive Information Systems (EIS):
An EIS provides senior executives with easy access to internal and external information
relevant to strategic decisions.
Example: A dashboard that gives the CEO real-time data on the company’s financial
performance.
