organisational information system

8/2/2019 Organisational Information System

1/15

1

1. Qns: Define system.A system is an organized set of components that interact in a regulated fashion to

achieve an objective or goal.

It is a set of interrelated parts that turns inputs into outputs through processing

The set of interrelated parts are arranged into an organized whole or orderly

structure and they continue to influence one another directly or indirectly tomaintain their activity and the existence of the system in order to achieve the

goal of the system

Ubiquity - System is ubiquity everywhere i.e. all around us.A system is defined as the inter-relation of parts (or components) working

together to achieve a goal.

1b. The types of systems1. Mechanistic / Deterministic system

- Simplest type & very mechanical- given known input can determine known output, interrelatedparts

- predictable- possible to predetermine the stages or states through which it

will pass

- goal seeking- possessing defined boundaries- some form of feedback & control- e.g. sales processing system, procurement system, purchasing

system, salaries, payroll, input stock controlling

2. Probability / Stochastic system- the output can only be reasonably determined with known

input

- due to wear and tear, a mechanistic system can become aprobability system

- subject to many varying internal & external factors- always some degree of error asso ciated with the predictions- e.g. gambling, examination, share market, weather forecast,

economic & business systems

3. Cybernetic / Organic / Adaptive / Self-organising system- Very complex- Given known input, output cannot be determined with

accuracy

- Unpredictable- React to a stimuli in a learning pattern- Used for decision making- They learn fr their mistake/ experience so that they do not

react to the same way to a particular input

- Most businesses are characterized this way so that they cangrow to meet the needs of a changing business environment


2/15

2

- E.g. Business system, Human system, Interconnections, Coupling& Decoupling

4. Homeostatic system- once developed a system remains in control despite the

changes that occurs within the environment or internally

- is one with controls that allows it to revert to its original statewhen affected by external events

- e.g. human body (when affected by a disease, it will fight back torevert back to its normal state)

2. talk about the 5 BENEFITS of the system1. GST General Systems Theory. GST defines the term

system in such a way that it meets a certain pre-determinedobjective

2. GST highlights the existence of sub-systems3. GST helps to identify the external environment that exerts

pressure on the organisations i.e P.E.S.T/ S.T.E.P. -> Political,

Economical, Social or Cultural, Technology

4. GST helps in the implementation of an Information System takinginto consideration of total system approach or Holistic approach

5. GST emphases that organization is dynamic and not static

3. Concept of GST & Open & Close Systema) The concept of GST

A system is a set of interrelated parts, arranged into anorganised whole or orderly structure. This is referred to as

holism

All systems can be decomposed or broken down intoconstituent parts. This is known as reductionism. They can

be reduced to sub-systems and reduced further until the

most basic constituents of the larger system.

Systems can have perspectives & boundaries that establishviewpoints & set perimeters around it.

The behaviour or activities of system & sub-system can bemodelled

The activities & actions of a system give rise to emergentproperties. Organisms usually share common underlying

characteristics but are very different in appearance

b) Open System Open Systems are connect to, and interact with

the outside world


3/15

3

Open System allows the interchange and theexchange of information, energy or material with

the external environment

Open information system is influenced & affectedby the external business environment

Most organization systems are open system e.g.Accounting System or Marketing System

c) Closed system

Is independent of its environment Is not influenced by & does not influence its

environment

Does not take in or give to it Does not exchange information, energy or

material with the environment

In reality there are very few closed systems In the business world, close system does not

exist at all

4. The characteristics of systemThe elements of a System: to be defined as a system, all these

characteristics must be present in the domain of the system

1. Input & output chap 2-4, MDIS texto All systems have input. It cannot be a static object likeand must

assume some form of activity.

o In information system, input is data & output is informationo The output of one system can form the input of another system

2. Processing Chap 2-6o In the case of information system, the fundamental activity is to

process data & information to provide knowledge for subsequent

decision-making

o3. Control Chap 2 pg 5

o All systems have a regulatory control that allow a system to maintainor pursue its objectives.

o To ensure objectives are met, control must be exercised withsystems processes & activities. It can only be achieved by accurate

& effective informatn tt is feedback to the system so as to allow

changes to be made, to maintain the direction of the system towards

the goal


4/15

4

4. Feedback Chap 2 pg 5o System feedback refers to the information that enables the system

processes to modify themselves and in turn meet the systems

ultimate goal

o 2 types of feedback, NEGATIVE FEEDBACK. The output of thesystem is fed back to achieve a specific or predetermined state.

Examples of natural systems are human temperature system, human

heart and kidney

o Positive feedback is the output of the control system that is fedback as an input for growth. Eg. Profits fr business org can be

reinvested back into the org for expansion or create economic growth

within a businesses.

5. Environment The environment is where the system within an organisation operates.

It distinguishes the internal & external environment. The system

environment determines how the system functions.

6. Boundaries Chap 2-2 It is defined as whatever lies within the scope of the system &

interacts with the system

The emphasis to establishing boundaries is to determine the specificimpact of the environmental considerations on the system or sub-

system. Anything that resides outside the system boundaries & does

not impact/affect the system in any way, then this would be outside

the systems Immediate boundaries.

The shape & constituent parts are not determined by the physicalboundary, but by the pre-established Logical boundary

5. The competitive forces acting against an organization. PLEASE READ MDIStxt Chap 1 The Global Information Age

1) The threats of new entrants to the competitive marketi. Today, internet increasing increases the threats of new

entrants

ii. Internet reduces the traditional barrier of entryiii.New entry only need to set up a website and become a

competitor

iv. Internet is global and it breaks down geographical barrier


5/15

5

2) The bargaining power of suppliersi. The internet can also impact the suppliers as it is with the

new entrants

ii. Buyers/ Customers can find alternative suppliersiii.Buyer can reduce suppliers bargaining poweriv.Suppliers on the other hand have power or dominant over

the price especially monopoly.

v. It does not apply in a perfect competition.vi. In prefect competition, all suppliers have no power to

dictate price; market dictates price

3) The bargaining power of the customers (buyers)i. The internet provides buyers access to a vast amount

of information on products and suppliers

ii. Buyers can easily buy products or services from thecheapest suppliers

iii.As suppliers, the prices quoted to the buyers must becompetitive

4) The threats of substitute products and servicesi. In a perfect competition, there are many buyers and

many sellers and also many homogenous products

being offered

ii. Especially so in the internet, when customer s(buyers)can easily compare prices of substitute products

5) The competition and rivalry between business organizationi. There is no secrecy when the internet is so visibleii. One way to reduce cost is to distinguish competitors in

terms of cost

iii.Cost can be easily reduced with the implementation oftechnology

6. The strategies to counter against the forcesOnce an org recognizes the competitive forces, they can developstrategies to counteract these forces that is affecting the competition.


6/15

6

There are 5 main strategies that can be used to deal with the

competitive forces:

1. Cost leadershipproducing products & services that are of lower price than itscompetitors2. Growth strategy: economy of scale. Expanding company capacity, diversify

into new product, merger or integrating3. Product differentiation: creating new or different product to distinguish itself

from its competitors4. Innovation strategy/ Niche marketing: focusing products & services to a

specific market, segment, customers so that better products & services can be

delivered than its competitors5. Alliance Strategy. Customer & Supplier linkage: synergy, join forces

with your competitors, tapping on your competitors talentlocking-in suppliers to a price & delivery structure or locking-in a customer to the orgs products or

services. Both of this can be achieved by linkages of a business system of the customers, orgs orsuppliers inherent in the structure of a competing org.

- ICT can be used to lock suppliers or cms to a biz system org. In doing so, it wldcreate cm loyalty and make it inconvenient or costly for them to switch

allegiance to a competitor. By having unique products & services.

- The supplier becomes technologically linked through its dependence &connectivity with the systems infrstructure f the purchasing org.

- That is aside from provision of better services & products, with value-added.7. Knowledge ManagementIs a range of practices used in an organization to identify, create, represent,

distribute & enable adoption of insights & experience. Such insight & experience

comprises of knowledge embodied in an individual or embedded in an

organizational process.

It caters to the critical issues of organizational adaption, survival & competence

in the face of increasingly discontinuous environmental change.

The knowledge base of an organization is normally composed of 2 components.

Formal structured knowledge (EXPLICIT knowledge)

e.g process, procedure, manuals, company policy documents

Informal unstructured knowledge (TACIT knowledge)

- Needs, habits, abilities- Experience and understanding of an organization that resides in

employees mind

- Ways of doing things- In the mind of the employee1. Info systems play an important role in enabling an org to structure

information flows & capture the inherent knowledge base of an org.


7/15

7

2. It can be released by encouraging group collaboration among employees& establishing system that enable knowledge to be shared and integrated

into the way the organization operates

3. Information enables business organization to undertake the activity ofdecision- making. Knowledge represents the interpretation &

conceptualization of information by human beings4. In the information age, knowledge management is aimed at enabling a

business organization to encourage innovation & stimulate business

ideas.

5. KM tries to encourage employee to share knowledge & understanding ofthe businesses environments.

8. Competitive Advantage

is defined as the ability of an org to compete w other org. OR the advantage of

one organization over the other in the efficient & effective use of using ICT &

information systems to deal with competitive forces.

For example, marketing information system can be developed to enhance the

information available from sales & marketing systems. This info can be used to

identify niche marketing and/ or determine strategies to target products &

services to cms

Also to create more attractive products & services. ATMs & INB for banks, mobile

banking. This is possible due to ICT & its application to business

competitiveness. Banks are constantly looking to review internal & external

business systems productivity to gain C.A.

In the past, economic winners are those that come up with new products but in

the 21stcentury, sustainable competitive advantage will come out more for new

process technologies compared to product technologies.

Business organizations are realizing that in a dynamic business environment, thecompetitiveness is established not just by the services or products but by the

ICT-based information that delivers those product & services to customers.

Business competition usually takes on a global scale. The globalization of trade

means larger market, stiffer competition & greater economic uncertainty. For

example, globalization has lead to greater uncertainty within the information

environment due to different national laws, trading practices, competition

policies & cultural attitudes to technology and its use

However, the rewards of globalization can also be greater in terms of increased

revenue & profits.


8/15

8

Therefore information system needs to be focused in tackling this global

challenges so as to enable organisations to compete in increasingly competitively

global environments.

A significant challenge in business information systems is the need to attain

competitive advantage both nationally & internationally.

Competitive biz org recognize that ICT can be used to transform org

infrastructures.

ICT can be used to define the manner in whc an org conducts biz

activity in relation to its cms & suppliers

9. Fundamental Resources of an organization(socio-technical pillars1. The success of a business depends on how well (effectively & efficiently)

you manage & control the 3 fundamental resources in a systematic way.

2. A system is a set of interrelated & integrated components.3. Business systems not only interact with one another but also with other

systems in the world at large. For example, government agencies,

education, transportation & social systems.

4. The overaching purpose of commercial business system activity is tomake a profit.

An information system within the business results from structured &

successful integration of the 3 main resources of P.E.T. Therefore, abusiness info system is a set of interrelated parts to handle, store &

process data that is in turn disseminated to users to provide info &

knowledge for decision making & control within the business domain.

People

Organisation (structure)

Technology

people organisation technologycareer Bureaucracy software

education Culture Hardware

ergonomics Competition telecommunication

Employee attitude Environment informatics

Employee

participation

Management

Employee monitoring Mission

statutory regulation Policy


9/15

9

training Strategy

5. These components constitute the elements to consider when dealing withthe integration of people organization & technology.

6. These 3 pillars are also known as the socio-technical pillars of a businessorganization7. The socio-technical view of an organization gives the most paramount

importance to people as the major and significant asset in a business

within this information systems domain.

8. Most businesses aim to be efficient and effective in maximizing theutilization of the 3 resources in order to generate a business profit.

1. Interrelated-holism-systematic-methodical2. Decomposed-sub systems-give eg3. Perspectives & boundaries-perimeters-define perspectives & boundaries4. Behaviour can be observed &modeled-defines the activity & r/s-abstract rep-activities simple,

structured, complex & unstructured

5. Emergent activities-what emerges fr b buildg block-determined by structure,r/s, connectivitydetermine nature & appearance-imp to take a holistic view than.

6. Have input, outputs & feedback mechanism7. Goals or objectives8. Feedback & cont9. Interrelated parts10. Interdependence11. Homeostasis12. Display properties that are unique13. Subsystems14. integration

The characteristics of systemThe characteristics of a system are:

a) They have inputs, outputs & feedback mechanisms. Organisation implies structure & orderb) Goals or objectives: for e.g one of the main purposes or goals of ICT-based business info systems is to make

human activity of info processing more efficient & effective within an org. The outputs from the processes of asystem are directly related to the systems goal, set of goals or objectives. Every system has a predefined

objective. Objective define the goal & the aim of a system c) Have boundaries that are usually defined by the system observer. It is defined as whatever lies within the

system and interacts w tt system. Boundaries are imp so that we can focus attention more effectively on issuesthat affect the system. The shape & constituent parts of a particular system are determined by the pre-established logical boundary

d) Feedback & control. Feedback refers to info tt enables the system processes to modify themselves & thus meetthe systems ultimate goals. Negative vs positive. Negative is fed back an as input to achieve a specified orpredetermined state. Positive feedback is fed back as an input for growth

e) Interrelated parts, each component function interacts with other component of the system. Theinterrelationship btw these components & integration enables the computer to perform smooth functions.

f) Interdependence- output of one system can be input of another system. Systems depend on one another for properfunctionality.coordinated & linked together according to a plan

g) Maintain a homeostasis (steady-state) despite a changing external environmenth) They display properties that are unique to the whole but are not possessed by the individual elementsi) Every system is a part of a larger system, that is it is composed of subsystems

j) Integration is about how systems are tied together. It is concerned with sharing of resources.

10. Peer-to-Peer (P2P) network & Client / Server Network


10/15

10

There are basically 2 types of networks. It depends on the size of network. P2P

networks is used for smaller network e.g. TAN (tiny area network), FHM (family

area network). For bigger network, a Client / Server network is being

implemented. There is no server involved in a P2P network. All nodes are peers

i.e. equal in capacity. In a Client/ Server, a server is needed. A server is acomputer that provides resources or information to all other computers (nodes)

that need to access information.

P2P Networks:

1. Used for smaller network2. No server is installed3. All nodes are Peer - equal capacity4. P2P is used in Ring topology or Mesh topology5. No need for a strong firewall compared to Client/ Server network6. Advantages : Less expensive than mainframe computing for network functions 7. More flexible with regard to network architecture8. More appropriate in distributed business computing environments

Client/ Server Network

1. Used for larger or bigger network2. A server is required in a Client/ Server network3. All nodes connected in a Client/ Server is known as a Client4. Client/ Server network is used in Bus Topology and also the Star topology5. A stronger firewall is required in a Client/ Server as compared to the P2P

network.

6. Servers offer services to clients7. Clients are computer/ nodes or other devices that request services from the server 8. Predominant on the internet9. Used in most MNC


11/15

11

11.1) B2B (Business to Business): In B2B e-commerce, companies are doing

business with each other e.g. manufacturers selling to distributors or

wholesalers and who in turn sells to retailers. All prices are based on the

quantity of order and is often negotiable.

2) B2C (Business to Consumer): In B2C, the business sells products orservices directly to the consumers. In internet business, the use ofshopping cart. Consumers pay for the purchased items online using credit

card. In such a business, the business if global and not local.

3) C2B (Consumer to Business): A consumer posts his project with a setbudget online and within hours companies review the consumers

requirements and bids for the project e.g. house renovation. The

consumer will review all the bids and quotations and select the company

that will be awarded to undertake the project.

4) C2C (Consumer to Consumer):There are many websites offering freeclassified, auctions, and forums where individuals can buy and sell online

e.g. E-Bay. E-Bay is an auction site that gathers millions of consumers or

buyers online.

Business Consumer Government Enterprise

Business B2B B2C B2G B2E

Consumer C2B C2C C2G C2E

Government G2B G2C G2G G2E

Enterprise E2B E2C E2G E2E


12/15

12

12. TopologyNetwork topology is defined as the physical layout of the network. There are 4

types of topologies:

1) Bus topology(must draw diagram)a. Bus topology is the most common topology in most organizationb. Bus topology is commonly used in Client/ Server network

environment

c. It is used for larger or bigger networkd. The two extreme ends of a bus topology is known as terminatorse.

Ethernet is the bus lane available to nodes or server to beconnected

2) Star topology(must draw diagram)a. Star topology is also meant for client/ server network

environment

b. All nodes are connected to a serverc.

When the server is down the whole network is down

3) Ring topology (must draw diagram)a) Ring topology is used in a P2P network environmentb) No server is required in a Ring topologyc) All nodes are connected using a daisy chaind) Data are passed around the token ring

4) Mesh Topology (must draw diagram)a. It is commonly used in a P2P network environmentb. Every node is connected to every nodec. The number of possible interconnections can be computed as nC2


13/15

13

13. Intranet/ Internet/ ExtranetIntranet

- Intranet is an internal company network- Intranet is only used by staff or employee- Intranet require a very strong firewall compared to extranet or internet- With internet, employees can share information

Extranet

- An extranet is an extension of an intranet- Extranet permit authorized or permitted outsiders to access the network e.g.

business partners, business associates, customers, suppliers, agents, students,

lecturers etc

- Firewall requirements is still needed although it is not as strong as intranet

Internet

- it is an open network- usually accessible by the public- firewall requirement is not strict- networks upon networks

14. PEST/ STEPThe forces of exerted by the external environment (PEST or STEP):

a) Political EnvironmentI. Political environment refers to the laws, official regulations, rules

and guidelines established by the government

II. It is designed to protect the consumers and the communitiesIII. Some of the regulations is designed to protect property rightsIV. Law, rules and regulations must be respected and strictly observed

b) Economical Environment


14/15

14

I. The economic environment is concerned with the production ofgoods and services

II. It is also concerned with the import and the export of goods andservices

III. Government sis more concerned about tax imposed and duties to becollected

IV. Government must collect tax just like church collect offering anduniversity collect fees

c) Social and Cultural EnvironmentI. It is concerned with the attitudes, desires, expectation, the degree of

intelligence and education, belief and the custom of the people in the

society

II. Ethical behaviour is important to maintain moraled) Technological Environment

I. Technology changes very quicklyII. Organisation must adapt to changes in the technology

III. It is important that organization must keep abreast with technologyin order to remain competitive

IV. Technology can have a strong impact on the operation andmanagement of the organization

Important chaps in coursebook

Chap 5, Pg 15 to 19 (tutorial question)

End-User Participation and End-User ComputingIn every system development, it is a must to involve the end-users. Why?

The end-users define the system and not the IT Specialist and the new

system is used by the end-user eventually.

In end-user computing, the end-user is involved in the process of getting

thing done e.g. online-banking

In end-user computing, itbenefits both parties i.e. the bank and the end-

user. The bank saves on manpower costs. Queue is lesser at the counter.

End-user is happier because he can check his/her bank balance any time

and it is more convenientto the end-user.


15/15

15

End-user computing is used to describe the fact that in the modern business

information systems domain, the development of information system resides

within a group of users or a specific user of an information system.

ICT the acquisition, processing, storage & dissemination of vocal, pictorial,

textual & numeric information by a micro-electronics-based combination ofcomputing and telecommunications.

Advantages of end user computing Encourages active user participation Improves requirements determination Strengthens user sense of ownership Increase speed of development

Tacit Knowledge gained from past experiences and difficult to express.

organisational information system

Documents