2. Learning Outcomes
Discuss the roles of information workers and
computers in the information economy.
Describe the social responsibilities of information
workers and organisations.
Describe the components of a system.
Describe an Information System and explain its
components and characteristics.
Explain how transaction-processing systems are
used to support business processes.
Discuss how computers are used to support
automated manufacturing and design.
3. Three Monumental Changes
Prehistoric people were mostly nomadic hunters and gatherers.
The Agricultural Economy
The transformation to an agricultural
economy took place over several centuries
around 10,000 years ago. The result was a
society in which most people lived and
worked on farms, exchanging goods and
services in nearby towns. The agricultural
age lasted until about a century ago, when
technological advances triggered what has
become known as an industrial
revolution.
4. The Industrial Economy
By the end of the nineteenth century, the
world was dominated by an industrial
economy in which more people worked in
urban factories than on farms. Increasingly,
more wealth was in the hands of fewer
people. As towns grew into cities, crime,
pollution, and other urban problems grew
with them.
5. The Information Economy
Twentieth-century information technology produced
what‘s been called a second industrial revolution, as
people turned from factory work to information-related
work. In today‘s information economy (sometimes called a
post-industrial economy), clerical workers out number
factory workers, and most people earn their living working
with words, numbers, and ideas. Instead of planting corn
or making shoes, most of us shuffle bits in one form or
another.
Technology was central to each of these transformations.
The agricultural economy grew from the plow, machines
sparked the industrial revolution, and the information age
is so dependent on computers that it‘s often called the
computer age.
6. System
A system is a set of interrelated parts that
work together to accomplish a purpose. To
accomplish its purpose, a system performs
three basic functions: input, processing, and
output.
A system has two additional functions:
feedback and control. Every system has a
boundary that defines its limits; anything
outside the system‘s boundary is part of the
system‘s environment. A system can be a
part, or a subsystem, of a larger system.
7. Example
A manufacturing system accepts raw materials
as input and produces finished goods as output.
An Information System accepts resources (data)
as input and processes them into products
(information) as output. A business is a system
where economic resources are transformed by
various system processes into goods and
services.
8. Business Organizations as Systems
A business organization is a system.
It consists of many subsystems, such
as departments, divisions, process
teams and other workgroups.
Organizations are designed for the
purpose of creating products and
services for customers.
9. INFORMATION SYSTEMS
An information system is a set of interrelated
parts that work together to produce, store,
distribute, and use information products and
services. It uses people, hardware, data and
procedures for input, processing, output,
storage, and control activities to produce
valuable information for users.
We are now ready to apply the system concepts
we have leant to understand how information
system works. How does an information system
accept input and process them into information?
What system components are involved?
10. People
People are required for the operation of all
information system. As a group, these people
are referred to as information system users or
end users. They can be accountants,
salesperson, clerks, engineers, or customers.
The structure and design of an information
system is defined by another group of people—
the system designers.
11. Another group of people in the organization;
managers decides how money, time, and other
resources should be allocated to design,
implement, and maintain the organization's
information systems.
Tasks
Tasks can be categorized into four areas: tasks
related to communication among people in the
organization, tasks related to making decisions
within the organization, tasks related to the
operations of the organization, and tasks related
to strategic management of the organization.
12. Information
As a commodity, information refers to
facts, statistics, or other data that are
valuable or useful to a person for
accomplishing a task. These valuable
pieces of information are organized and
represented in some physical or digital
form.
13. Organisation
A business or other organization can be
defined by its purpose, the tasks or
activities that it performs, and its structure.
Environment
The global, competitive business
environment presents problems and
opportunities that a business organization
must cope with to thrive.
14. INFORMATION TECHNOLOGY
In the context of business, these technologies
perform five information functions:
Acquisition is a process of capturing data about
an event that is important to the organization.
Processing is an activity that manipulates and
organizes information in ways that adds value
to the information so it is useful to users.
Storage and retrieval is an activity that
systematically accumulates information for
later use and then locates the stored
information when needed.
15. Presentation is the process of showing
information in a format and medium useful
to the user.
Transmission is the process of sending and
distributing data and information to various
locations.
16. BENEFITS OF INFORMATION SYSTEMS
A firm can reap the following benefits:
High-quality information.
Access to information.
Utilization of information.
Perform organizational work efficiently.
Better communication and decision-
making.
Better products and services for
customers.
17. INFORMATION SYSTEMS FOR BUSINESS
TRANSACTIONS
A transaction is an event that occurs in any of the
primary activities of the company. A transaction
processing system (TPS) is a firm‘s basic accounting
and record-keeping system that keeps track of
routine daily transactions necessary to conduct
business. Transaction processing systems typically
involve large amounts of data stored in large
databases; they require high processing speeds to
manipulate large volumes of data. A transaction
processing system must ensure a high level of
accuracy and security of the data.
18. The Transaction Processing Cycle
Transaction processing is a cyclical process with five
steps:
Entering the data. This involves online data entry or
transcribing paper source documents. Data entry can
also use electronic data interchange (EDI) to
electronically exchange business transactions.
19. Processing the data. Data can be
processed in two ways: batch processing
or real-time processing.
Storing and updating the data.
This step involves storing the
transaction data in database files. Many
large organizations use data
warehousing software to create and
maintain very large databases
containing data on all aspects of the
company.
20. Document and report preparation. A
transaction processing system produces several
types of action documents and reports. An
action document initiates an action by the
recipient or verifies for the recipient that a
transaction has occurred.
User inquiry. Managers and other workers can
use a database query language to ask questions
and retrieve information about any transaction
activity.
21. Example
Payroll System to handle employee savings plan
deductions
An employee provides input by completing a
deduction form. A human resources representative
submits the completed form to the payroll
department, which enters the deduction. The system
performs processing and produces output, including a
paycheck deduction, a report to the employee on
check stub, and a credit to the employee‘s account.
22. Enterprise Resource Planning
Transaction processing systems exist in all functional
areas of a business. Each subsystem is itself a
transaction processing system. The subsystems
exchange information; the output of one subsystem
is the input to another subsystem. Many managers
in organizations look for ways to create cross-
functional information systems by re-engineering,
or combining and integrating, two or more
transaction processing systems. This approach of
creating information systems to support an
organization's operational business processes is
referred to as enterprise resource planning (ERP).
23. AUTOMATED INFORMATION SYSTEMS FOR
DESIGN AND MANUFACTURING
Computer-Aided Design (CAD)
Product designers and engineers use computer-
aided design (CAD) with computer workstations
and software to draw product or process designs
on the screen. CAD is used in a wide variety of
industries, but a prime example of the importance
of CAD is its use in the design of the Boeing 777,
the first commercial aeroplane to be designed
entirely with CAD software.
24. Computer-Aided Manufacturing (CAM)
Computers and other information technology are
used to automate the manufacturing process with
computer-aided manufacturing (CAM). The
software in a CAM system retrieves the design
specifications of the product from the CAD
database; controls specific tools, machines, and
robots on the factory floor to manufacture the
product; and monitors the overall physical process
of manufacturing the product.
25. Computer-Integrated Manufacturing (CIM)
Computer-integrated manufacturing (CIM)
is a concept, or management philosophy,
emphasizing the co-ordination of CAD and
CAM systems along with other information
systems in the company.
