study unit 11 revised

Flashcard maker : Lily Taylor
A Business Information Systems (BIS) is
Any combination of hardware, software, data, people, and procedures employed to pursue an organizational objective.
The first generation of business information systems served
the finance and accounting functions, since computing lends itself so readily to quantitative tasks.
“Stakeholder” in business information systems refers to
Anyone in the organization who has a role in creating or using the documents and data stored on The computers or networks. Or those who affect, or are, affected by, the output of information system.
The four major tasks that any system must perform are
Input, transformation, output and storage.
The system must acquire or capture data from within or outside of the entity.
Raw materials or data are converted into knowledge useful for decision making.
The ultimate purpose of the system is communication of results to internal or external users.
Before, during, and after processing, data must be temporarily or permanently stored, for example, in files or databases.
Use of social networking site is
to disseminate information and gather customer feedback.
A wiki type of website allows
members of user a user community to share information about a particular knowledge area.
RSS, which stands for rich site summary or really simple syndication, allows
– The content of a website that changes often to be pulled and fed automatically to a user’s computer.
– This saves the user the need to constantly revisit the site to get the latest information.
Two broad categories of business information systems are
1) Systems that support routine processes
2) Systems that support decision making.
Systems that support routine processes are
1) Office Automation Systems (OASs)
2) Transaction Processing System (TPS)
3) Management Information System (MIS)
a) Accounting Information System
4) Enterprise Resource Planning
Office Automation Systems includes
– Word processing
– Spreadsheet
– Digital document storage
– Desktop publishing applications
A transaction is
A single, discrete event that can be captured by an information system.
A Transaction Processing System, captures
the fundamental data that reflect the economic life of an organization.
Introduction to management Information System
– A MIS typically receives input from a TPS, aggregate it, then reports it in a format useful by middle management in running the business.
– For this reason MIS is often classified by function or activity
Difference between a management information system and transaction processing system
A management information system provides managers with the information they need for analysis, planning, control, and decision making. A transaction processing system supports the ongoing routine operations of an organization.
An Accounting Information System is a subsystem of
A management information system.
An Accounting Information System processes
– Routine, highly structured financial and transactional data relevant to managerial as well as financial accounting.
An Accounting Information System is concerned with
– Transactions with external parties reflected in financial statements prepared in conformity with GAAP, and – The internal activities recorded in the cost accounting system and the preparation of related reports and analyses
An Accounting Information System is best suited to solve problems when
reporting requirements are well defined
An Accounting Information System does not specifically use records based on
Predictive systems, which would be a feature of a decision support system.
Accounting Information system
Subsystem of MIS, Processes transactional data relevant to managerial ; financial accounting, Supports operations by collecting historical data , Concerned with external parties ; internal activities, Best suited with well defined reporting system
Accounting Information system
Subsystem of MIS, Processes transactional data relevant to managerial ; financial accounting, Supports operations by collecting historical data , Concerned with external parties ; internal activities, Best suited with well defined reporting system
Enterprise Resource Planning
– It is the latest phase in development of computerized systems for managing organizational resources. It is intended to integrate enterprise – wide information systems by creating one database linked to all of an organization’s applications.
An advantage Enterprise Resource Planning is
The business process re-engineering needed for its implementation.
In traditional Enterprise Resource Planning system
Subsystems share data and coordinate thier activities.
Traditional Enterprise Resource Planning system is also called back-office functions
– The subsystems in a traditional ERP system are internal to the organization, hence they are often called back-office functions. – The information produced is principally intended for internal use.
A principal advantage of an ERP system is
Centralization of data.
An ERP system eliminates
Data redundancy.
An ERP system is characterized by
One-time data updating for all organizational functions
The disadvantage of ERP are
Its extent and complexity, which make implementation difficult and costly.
Comprehensive Enterprise Resource Planning system subsumes
– Traditional Management Information systems, including materials requirement planning, manufacturing resource planning, supply chain management, and customer relationship management.
Features or advantages of current generation of Enterprise Resource Planning system are
1) Addition of front- office functions
2) Provision of smooth interaction with the business processes of external parties
3) Integration with the firm’s back – office functions
Front office function of current generation of Enterprise Resource Planning system includes
Connecting the organization with customers, suppliers, owners, creditors, and strategic allies for an example, the members of a trading community or other business association.
Systems that support decision making
1) Data warehouse
2) Decision support system (DSS)
3) Expert system (ES)
4) Artificial intelligence (AI)
5) Business Intelligence (BI)
A Data warehouse is
– A cetral database for transactional- level data from more than one of the organization’s transaction processing systems.
– They are very large and require that the transaction records be converted to a standard format.
Data warehouse is powerful tool for ad hoc queries
The ability of data warehouse to relate data from multiple systems makes it a very powerful tool for ad-hoc queries.
Online Analytical Processing (OLAP) is
A technique where data warehouse can be accessed using analytical and graphics tools.
Drill – down analysis
It is an important component of Online analytical processing.
In Drill – down analysis
the user is first presented with the data at an aggregate level and then can display successive levels of details for a given date, region, product, etc. until finally reaching the original transaction.
Difference between data warehouse and transaction processing system
– a data warehouse is not used to carry on the enterprise’s routine operations, however, it gets it input from the various TPSs in the organization.
– a date warehouse is optimized for data retrieval and reporting. A TPS is optimized for data entry.
A Data warehouse is strictly
A Query-and-reporting system
A data warehouse is optimized for
Data retrieval and reporting
A TPS is optimized for
Data Entry
A data mart is a subset of
A data warehouse
A data warehouse is generally meant to address
The needs of the entire enterprise.
A data warehouse enables data mining, i.e.
– the search for unexpected relationship among data
– Special software and large amount of processing power are needed for effective data mining.
Data mart and Data warehouse
– A data mart is designed primarily to address a specific function or department’s needs.
– Whereas a data warehouse is generally meant to address the needs of the entire enterprise.
Data mining allows a user to discover
hidden relationshios, such as associations, sequences of events, classifications (descriptions of the groups to which the item belongs), or clusters (new groupings previously not known).
Typical appliactiona of data mining are
identification of potential customers and purchasing power.
A Decision Support System (DSS) is
An interactive system that is useful in solving semistructured and unstructured problems, that is, those requiring a top management or middle management decision maker to exrcise judgement and to control the process.
DSS assists middle- and upper level managers in
– Long term,
– Non routine, and
– often unstructured decision making.
Characteristics best describes DSS are
– Analytic models
– Specialized databases
– Interactive computer- based modeling processes, and
– The decision maker’s own insights and judgments.
A DSS has three basic components:
– Database – consisting raw data, relevant to decision
– Model – set of equations,comparisons,graphs, assumption,etc.,into which data will be fed.
– Dialog – user interface that allows user to specify appropriate model ; set of data.
DSS and decision making
– DSS is an aid to decision making, not the automation of a decision process. – DSS doesn’t automate decision. – It examines the relevant data and presents a manager with choices between alternative courses of actions.
An Expert System is
An interactive system that attempts to imitate the reasoning of a human expert in a given field.
Important use of an Expert System
Useful for addressing unstructured problems when there is a local shortage of human experts.
An Expert System has three components
1) the Knowledge base
2) the Inference engine
3) the Dialog
The Knowledge base is
Base which consists of facts & the relationship among those facts.
The Inference engine
It is often a series of if / then decisions
The Dialog
It allows the user to input data relevant to the current problem, which are then filtered through the inference engine and used to query the knowledge database. A suggested optimal solution is returned to the user.
The processing in Expert System is characterized by
Heuristics (self educating)
Artificial Intelligence
– More sophisticated than expert system
– Computer software designed to perceive, reason and understand.
Artificial Intelligence attempts to imitate human decision making, which hinges on the combination of
Knowledge and intuitions
The advantage of AI in a business environment is that, relative to human experts, they
1) can work 24 hours a day
2) will not become ill, die, or be hired away
3) are extremely fast processors of data, especially if numerous rules must be evaluated
Fuzzy logic systems are
A form of artificial intelligence that deal with imprecise data and problems that may have many solutions
Features of Fuzzy logic systems are
– It is a departure from classical two-valued sets and logic
– It uses soft linguistic system variables and a continuous range of truth values rather than strict binary decisions and assignments.
Fuzzy rule based systems apply these methods to solve many types of real world problems, especially when
– A system is difficult to model,
– when it is controlled by human operator or expert, or
– when ambiguity or vagueness is common
Fuzzy set theory allows objects
to belong partly to multiple sets.
Fuzzy logic is particularly useful for
– designing of internal controls
– data retrieval,
– systems in which user is not intimately familiar with all data
– when absolute accuracy is costly, or
– judgments of value must be synthesized from multiple inputs
Fuzzy logic has emerged as profitable tool for
– the controlling of subway systems and complex industrial processes,
– for household and entertainment electronics, diagnostic systems, and other expert systems
The key benefits of fuzzy design are
– a simplified and reduced development cycle,
– ease of implementation, and
– more user friendly and efficient performance
Neural networks are
a collection of processing elements, working together to process information much like the human brain, including learning from previous situations and generalizing concepts.
Case-based reasoning systems
It uses a process similar to that used by humans to learn, from previous, similar experiences.
Rule-based expert systems
It function on the basis of set rules to arrive at an answer. Theses cannot be changed by the system itself. They must be changed by an outside source i.e. computer programmer.
Intelligent agents
they are programs that apply a built in or learned knowledge base to execute a specific, repetitive, and predictable task, for example showing a computer user how to perform a task or searching websites for particular financial information.
Business Intelligence serves
The needs of top management for managerial control and strategic planning.
Business Intelligence is
not a program for providing top management with advice and answers from a knowledge-based / expert system.
Business Intelligence tools display information about the organization as
bar graphs, pie charts, columnar reports, or any other format considered appropriate to upper management’s decision making.
digital dashboard
Business Intelligence display tools are sometimes grouped by a particular executive’s needs what is termed as a digital dashboard.
Business Intelligence tools and data used
Business Intelligence tools use data both from within and outside the organization.
Transaction processing modes refers to
The way in which a system is updated with new data.
Two modes of tansaction processing
1) Batch Processing
2) Online Processing
In batch processing mode
Transactions are accumulated and submitted to the computer as a single “batch”.
In online processing mode
The computer processes each transaction individually as the user enters it.The user is in direct communication with the computer and gets immediate feedback on whether the transaction was accepted or not.
Online processing mode is also called
Interactive processing.
Batch processing is
The accumulation & grouping of transactions for processing on delayed basis.User cannot influence process once job has begun.she/he must wait until job is finished running to see if any transactions in batch were rejected and failed to post.
The batch approach is suitable for
Applications that can be processed against the master file at intervals and involve large volumes of similar items, such as payroll, sales, inventory, and billing.
Online processing is also called
Real- time processing or interactive processing.
Real- time processing involves
Processing an input record and receiving the output soon enough to affect a current decision making process.
The advantage of Real- time processing over Batch processing is
Timeliness of information.
Batch and online processing modes
Can be used in combination in a single application.
In an interactive (inquiry) system
Users employ interactive terminals to converse directly with the system.
An interactive system is characterized by
– online entry and processing
– Direct access, and
– Time sharing
Batch processing requires a lesser degree of control
than online real- time processing.
During the early days of computer processing, computers were very large and expensive and only organization such as large banks and governmental agencies could afford them.
Advantages of Centralization are
– Stronger information security
– Data integrity
– Economies of scale
– Stronger control
As the data processing industry evolved, computers became smaller, and branch offices of large organization could have their own data processing and transmission.
Client – server network
The key to client – server model of distributed processing is that it runs processes on the platform most appropriate to that process while attempting to minimize traffic over the network.
server is
– It is a device, centrally located and devoted to the functions that are needed by all network users.
– whether a device is classified as a server is not determined by its hardware configuration, but rather by the function it performs.
Client is
It is any object i.e. a piece of hardware or a software program that uses the resources of another object.
Some organization farm out all part of their IT function to an outside provider.There are two common motivation for this practice:
1) To earn economies of scale
2) Management decides that IT is not core competency of the organization
Data Capture
It is a process of entering data into an information system.
Methods of data capture are
1) Batch entry
2) online entry
3) Optical scanner
Batch entry involves
loading a group of records at one time.
Online entry involves
entering single records, usually in an interactive environment where the user gets immediate feedback.
Optical Scanner or Point of sale transactions are capable of
Updating of accounts/inventory, Identify trends, Make sales forecasts, Determine product demand, Improve customer service, Target products/ promotions to customers with different demographic traits, and evaluate effect of promotions
A master file is
Permanent information that is updated for the effects of transactions
Volatility means
– Permanent information that is updated for the effects of transactions
– It is the relative frequency with which the records in a file are added, deleted, or changed during a period.
Transaction file contains
the data that reflect ongoing business activity, such as individual purchases from vendors or journal entries.
Periodic Routine Reports
– Reports required at regular intervals
– E.g. monthly trial balances and ledger summaries to assist in closing the books.
On- demand Reports
Reports that can be generated by users at times they specify.
Ad- hoc reports or quick-and-dirty reports
reports that can be designed to the user’s own specifications without the involvement of IT personnel.
Example Database queries
Exception reports
Reports of transactions or activities that lie outside predefined boundaries.
Electronic distribution of reports or push reporting
Distribution of reports as email attachments
Audit Trail
Reports in form of logs, required for monitoring
Database administartors (DBAs) are
Responsible for developing and maintaining the organization’s databases and establishing controls to protect thier integrity.
Network technicians
– Maintain the bridges, hubs, routers, switches, cabling, and other devices that interconnect the organization’s computers.
– They are also responsible for maintaining organization’s connection with other networks, such as internet.
is responsible for the content of the organozation’s website.
Computer (console) operators
are responsible for the moment-to-moment running of the organization’s medium and large scale computers, i.e., servers and mainframes.
Maintain control over and accountability for documentation, programs, and data storage media.
Systems programmers
Maintain and fine- tune the operating systems on the organization’s medium and large scale computers.
Applications programmers
Design, wirte, test, and document computer programs according to specifications provided by the end users.
Systems analyst
Uses his/her detailed knowledge of the organization’s databases and applications programs to determine how an application should be designed to best serve the user’s needs.
Help desk personnel
Log problems reported by users, resolve minor difficulties, and forward more difficult problems to the appropriate person, such as a databasr administrator or the webmaster.
The IT function is merely
The custodian of the data
User department should be able to access and alter
only the data pertaining to thier job duties.
IT security officer is responsible for
– formulating ; enforcing formal information security policy for all employees ; outside parties
– Ensuring that persons both inside + outside organization can gain access only to those programs ; data that are appropriate for their job duties.
System analysts and applications programmers are responsible for
designing, building, and maintaining the the organization’s applications.
Analyst and Programmers should never have access to
– programs that are used in ” live” production.
– live production data
Console operators’s responsibility and access
– are responsible only for smooth running of organization’s computers i.e. scheduling of jobs & production of output
– should have no access to make changes to applications programs.
Responsibility of librarians
– “checking out” application programs to analyst and programmers for modification and testing
– ensure that properly tested version gets “checked in” to production.
Database Administrators or Data Analyst
– determine how the organization’s data should be stored and
– what relationships among the data best achieve the organization’s business objectives.
– they keep the organization’s database running efficiently
Every database is a unique combination of
1) the relationship among the data i.e.the schema,
2) the database management system i.e. the software, and
3) the equipment on which the database is stored i.e. the hardware
In an organizational sense, the “owners” of data are
The end user department
The sequence of events followed by the computer center in updating its master file should be
1) Batching records of transactions
2) Converting to machine readable form
3) validating input
4) updating the master
Responsibility assigned to a system programmer in a computer system environment
– operating systems and compilers
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