UNIT 1 INTRODUCTION TO SYSTEMS

1.0 INTRODUCTION

This unit introduces you to the basic concepts of systems and theories of information
management. This is meant as an overview to understanding the background to
information system analysis and design.

2.0 OBJECTIVES

By the end of this unit, you should be able to

• Describe the key elements of a system

• Explain the measures of system performance
• Explain the structural patterns of analyzing systems
• Explain the difference between open and closed systems

3.0 MAIN CONTENT

3.1 Overview

It is informative to find out exactly what is meant by a system. A system

can be defined as: an inter-related set of components that work together
within an identifiable boundary to achieve some overall goals.

Put another way, a system is a collection of parts which are related to each
other and which may depend on each other and which work together as a
coherent whole. A system has input, process (or transform), output,
feedback and control mechanisms. We are primarily concerned with
organizational and information systems.

However, it is important to note that the term ‘system’ does not solely
apply to computer systems. It can apply to things as diverse as the legal
system, the transport system, the social services system, the solar system
and even the digestive system! Any phenomenon which exhibits a
relationship among interrelated components can be termed a system.

3.2 Key Elements of a System

3.2.1 The Transformation Process

All systems consist of input, process and output:

 • Input: Capturing and assembling elements that enter the system to
be processed e.g. raw materials, people, skills, money.

• Processing: The transformation processes which convert input into

output, e.g. a production process, a mathematical calculation, a
meeting of people.

• Output: Transferring elements that have been produced by a

transformation process to their ultimate destination in a form which
will be meaningful to its recipient, e.g. a product, a piece of
information. In the case of information, output in the form of a
report, a telephone call etc.

Input Processing Output

It is not necessary to consider all the inputs and outputs of a system, but consider
only those inputs which are considered to affect the outputs and only those outputs
which are relevant to the systems objectives.

3.2.2 Outside and Inside the System

Environment: All those external elements, whose changes in behavior, attitude etc.,
effect the working of the system and all those external elements, which are effected
by the system’s environment.

Boundaries: The separation of a system from its environment i.e. the features
or constraints which depict the scope of activities for a system and delineate areas
of responsibility. The system is inside the boundary, whereas the environment
lies outside. Boundaries can be imposed by the nature of the system itself or can be
decided upon by management. They may be flexible, changing over time or as the
wider organization changes. Interfaces: It is the area of contact between one
system boundary and another. Several systems may share the same environment
and may be connected to one another by means of a shared boundary or interface.

Sub-system: A system representing a component of a larger system. Systems

often consist of numerous subsystems. Each subsystem has elements, interactions
with other subsystems, and objectives. Subsystems perform specialized task for the
overall system. In business, functions such as marketing, finance, and manufacturing
are subsystems.
 3.3 System Performance

Two measures of system performance are:

Effectiveness: The degree to which set goals are achieved. It is therefore

concerned with the results or the outputs of a system.

Efficiency: A measure of the use of inputs (or resources) to achieve

results. How much money is used to generate a certain level of sales.

The efficiency and effectiveness of a system can be measured by having

the following two elements built into the system:

Feedback: a flow of information from the output component to the

decision-maker concerning the system’s output or performance. Indicates
if the system performance is meeting standards. Based on this, the
decision- maker, who acts as a control, may decide to modify the inputs or
the processes or both.

Control: A major system function which monitors and evaluates system

feedback, to establish to what degree system goals are being achieved

A key element in the success of a system is its ready adaptation to

changes in its environment. This again emphasizes the need for
monitoring and control of systems based on relevant, timely feedback.

Thus a system is composed of subsystems or components that are inter-

related, has boundaries, exists within an environment, has interfaces
between subsystems and with the environment, faces constraints
(limitations) and receives inputs from and delivers outputs to
its environment in order to fulfill its purpose (goal oriented).

3.4 Classification of Systems

3.4.1 Open vs. Closed Systems

Closed Systems: A system that is cut off from its environment and does not interact
with it. These systems have no exchange with the environment, i.e. all interaction
goes on within the system’s own boundaries. This term normally applies to
machinery where, if inputs are known, then outputs can be accurately predicted.
Systems within organisations cannot be described in this way - interaction with other
systems is an inherent characteristic of organisational systems. A closed community
would be an example of a (social) closed system.

Open Systems: A system that interacts freely with its environment. It receives
inputs from its environment, processes or transforms these inputs and passes outputs
of various types back into its environment. In this type of system, only some of the
relevant inputs can be identified, others may occur unexpectedly, for example, a
company’s competitor may unexpectedly lower prices etc.

I Known O
System
NU
PT
Subject to know and unknown
Unknown P inputs and environmental
U disturbances

T U

S Disturbance T

3.4.2 Adaptive Systems

A system that has the ability to change itself or its environment in order to survive

3.4.3 Deterministic vs. Probabilistic Systems

Deterministic/Mechanistic Systems: These are predictable systems where, if the

inputs are known, as well as the present state of the system, then the system’s
outputs can be accurately forecast. Machines and computer programs are examples.
Probabilistic/Stochastic Systems: The output of these systems can only
be predicted as a probability rather than a certainty. This is true of almost
 all social or organizational systems as it is always impossible to account
for all inputs.

3.4.4 Shared and Overlapping Sub-Systems

Systems consist of sub-systems, or in commercial terms, organizations are

composed of departments and sections and these sections interact and are
therefore inter-dependent. One sub-system can belong to one or more
systems, therefore it can be inferred that a change to one sub-system may
affect more than one system. The use of overlapping systems is often a
sound economical arrangement, for example, a centralized computer
facility can be used by a number of departments in an organization to
reduce overall costs. Shared systems do however cause some problems.
There is a need for a high level of co-ordination and in the event of
change, approval will need to be sought from a number of sources, making
shared systems less flexible where rapid change is needed.

3.5 The Systems Approach (or Systems Theory)

The Systems Approach or Systems Theory has a set of ideas with which
we can view systems. This set of ideas can be summarized as follows:

All systems are composed of inter-related parts or sub-systems and the

system itself can only be fully explained and understood when viewed as a
whole. This is known as holism or synergy. The systems approach takes
the view that the whole is greater than the sum of the parts and that by
looking at separate parts of a system in isolation, vital inter-relationships
will be ignored or misunderstood.

Systems are hierarchical in structure, i.e. a system is made up of sub-

systems and each subsystem is made up of further sub-systems. For
example, your course is a sub-system of the degree courses offered by the
school, which is a subset of the Faculty, subset of the National Open
University. It is important to decide where to impose a boundary when
attempting to analyze a system, so that, only those sub-systems which
relate to your area of interest are considered.

The components of a system form an indissoluble whole so that when one

part is changed, this change will effect other parts of the overall system.

When change is effected, it is important to realise what systems it does effect and
what needs to be done to ensure that the changes are properly implemented.
Sub-systems need to work towards the goals of the system to which they belong and
not pursue their own goals independently. Where this latter situation does occur, a
condition of sub-optimization occurs. This is to be avoided if possible, but it must be
recognized that in most organizations, conflicting objectives across departments is
inevitable. In these cases, some form of compromise need to be reached. For
example, one department’s goal may be to clear up a backlog of work. To do this
they decide to work overtime. This in turn affects the Computer Services department
who are quite content with leaving work at 5.00pm. How is this resolved?

3.6 Analyzing a System

Important questions to be answered when analyzing a system are:

• What are its boundaries?

• What are its inputs, processes and outputs?
• What feedback and control mechanisms are in place?
• How can its efficiency and effectiveness be measured?

The systems approach recommends the following steps:

• Decompose a system into smaller, more manageable and understandable

subsystems, preferably of uniform size. This facilitates the focusing of
attention on one area (subsystem)
at a time without interference from other parts.

• Analyze each subsystem separately. This allows attention to concentrate

on the part of the system pertinent to a particular audience, without confusing
people with details irrelevant to their interest.

• Describe the subsystems/components and their relationships with each other

and the external environment.

4.0 CONCLUSION

Thus, a system is the smallest conceptual unit of a holistic structure. It is made up of

many components, and each component operates on a specific set of rules and
regulations. System approach is always tackled from the point of view of analyzing
systems on a component basis, because understanding the components may lead to
understanding the entire structure, and thus predicting and controlling it.

5.0 SUMMARY
 In this unit you have learnt about the key elements of a system, and the
factors that affect system performance. You have also learnt about the
boundaries of systems, and the relationship between these boundaries and
system performance. Finally, you have been able to classify systems into
categories of control.

UNIT 2 INFORMATION CONCEPTS

1.0 INTRODUCTION

The terms ‘data’ and ‘information’ are used interchangeably in everyday speech as
meaning the same thing. However, the terms have distinct meanings. System
analysis and design are about data and information management, and this unit sets
out to introduce you to the basic concepts of information.

2.0 OBJECTIVES

By the end of this unit, you should be able to:

• Define the concept of information

• Distinguish between data and information
• Explain the qualities of good information
• Explain the levels of information
3.0 MAIN CONTENT

3.1 Overview

Raw facts, figures, images or sounds collected from observations or recordings about
events, objects or people, which can be stored on a manual or computer-based
medium e.g. employee’s name and number, number of hours worked in a week,
inventory part numbers, or sales orders. Data has little meaning/value in its own
right, it only has meaning when it is processed and put into context as information.
For example, if we are told that John scored 85 in a test, it does not tell us a lot. Is it
85 marks? If it is 85% it may appear a good result, but how did the other people
taking the test perform? What is the pass mark in the test? If it is 85 marks, what was
the number of marks available? To be of any value, it needs to be processed in some
ways to produce information e.g. collected, sorted, organized, presented in
acceptable formats. Data is the input raw materials from which information is
produced.

3.2 Information

Information is a data that has been processed and presented in a useful

format that will enable an individual to gain knowledge in order to be able
to make a decision. The act of producing data does not itself produce
information. Information is data that have been interpreted and understood
by the recipient of the message.

Information has meaning within a specific context and is useful for

making a decision, solving a problem, performing a task etc. It is
important to note that different individuals may need the same data
arranged in quite different ways to give them information. The
information required varies with the type of decision, problem, or task, the
type of person and his/her needs.

3.3 Data vs Information

Data

Data Collected Processed Presented Information

Data

Examples of Data and Information

3.4 Quality of Information

Good information is that which is used and which creates value. Research shows that
good information has numerous qualities as follows:

• Relevance/Appropriateness: Information must be relevant to the problem

being considered. Too often reports etc, contain irrelevant parts which make
understanding more difficult and cause frustration to the user and lead to
information overload.

• Accuracy: Information should be sufficiently accurate for the purpose

for which it is intended, Need for accuracy varies according to
information usage e.g. marketing director only interested in sales figures to
+/- N15,000?
• Completeness: The information should be complete in respect of the key
elements of the problem.

• Timeliness: Good information is that which is communicated in time to be

used.

• Reliable: Users must have confidence in the source of the information

for it to be used.

• Communicated to the right person: Information suppliers need to analyze

the key decision points in an organization in order to direct information
exactly where it is required.

• That which contains the right level of detail: Information should contain
the least amount of detail consistent with effective decision making. The
level of detail should vary with the level in
the organisation; the higher the level the greater the degree of
compression and summarisation.

• Communicated by an appropriate channel of communication. To be

useable by the manager, information must be transmitted by means of a
communication process.

• Communication involves the interchange of facts, thoughts, value

judgements and opinions and the communication process may take many
forms: face-to-face conversations, telephone calls, informal and formal
meetings, reports, tabulations, VDU transmissions etc. Whatever the process,
good communication results where the sender and receiver are in
accord over the meaning of a particular message.
• That which is understandable by the user. Understandability is what
transforms data into information. If the information is not understood it
cannot be used and thus cannot add value.

From above, we can see that many, many things need to be right before
information can be considered as good. Note particularly, how many of
the factors relate to social and behavioral characteristics. It is not
sufficient merely to consider the technical aspects of data capture and
processing; these are only one aspect of information system.

Information is crucial to business operation and survival interacting with

environment -customers, suppliers etc. and for interaction/communication
within the business. It is crucial that the business has information systems
to manage this information.

3.5 Information Levels

Information within an organization can be analyzed into three levels.

These levels of information are referred to as:

Strategic Information: used by senior managers to plan the objectives of

their organisation and to assess whether the objectives are being met in
practice e.g. population statistics, investment statistics, national resource
availabilities. Much of this information must come from environmental
sources, although internally generated information will also be used. It
relates to long-term planning in an organisation, typically 3-5 years.

Tactical Information: used by middle management to ensure that the resources of

the business are employed efficiently and effectively to achieve the strategic
objectives of the organisation e.g. sales analyses and forecasts, production
requirements, annual financial statements, predicted course/student numbers. A large
proportion of this information will be generated from within the organisation.
Tactical information is usually prepared regularly - perhaps weekly or monthly and it
is for medium-term planning, typically 6-24 months.

Operational Information: used by frontline managers such as foremen or head

clerks to ensure that specific tasks are planned and carried out properly within
a factory or office. Operational information is prepared regularly - perhaps weekly or
daily and it is used for short-term planning, days, weeks, possibly hourly e.g. stock
levels, overdue purchase orders, production control, module enrolments.

The destination level of information is very important as the information must be

material to the user, but without going into unnecessary and time consuming detail in
order to achieve pointless accuracy. For example: Operational control may need
information accurate to the nearest penny. Management control may be satisfied
with costs to the nearest hundred or thousand pounds. Greater detail would serve no
purpose. Strategic planning may be satisfied with figures to the nearest ten thousand,
hundred thousand or even million pounds. In all cases, the information and reports
must be relevant to the particular user.

4.0 CONCLUSION

Information is crucial to business operation and survival interacting with

environment -customers, suppliers etc. and for interaction/communication within the
business. It is crucial that the business has information systems to manage this
information.

5.0 SUMMARY

In this unit, you have learnt the concept of information, and the differences between
data and information. The unit has also explained the qualities of good information,
as well as the various levels of information. All these are sub-sets of information
needed for systems analysts before they begin the analysis and design of systems.

INFORMATION SYSTEMS

1.0 INTRODUCTION

Information systems are generally used in organizations to help provide for the
information needs of the organization. An information system can be defined as: a
set of interrelated components that collects, stores, and processes data from various
sources to provide information necessary to support and improve the day-to-day
operations in a business.

Thus graphically, the expression would look like this:

Data Information System Information

2.0 OBJECTIVES

By the end of this unit, you should be able to:

 • Describe the components of a computerized information system.

• Distinguish between information system and information

technology.

• Explain the objectives of an information system in an organization.

• Classify major categories of information systems.

3.0 MAIN BODY

3.1 Overview

Information systems transform data into useful information and include

both technology and people. An information system generally incorporates
one or more computers and the software to control them. In this case, the
information system is said to be a computerized information system.
3.2 Components of CIS

A computerized information system (CIS) can be understood as having the

following parts:

• Users - the people who add information to the system and request
information from the system

• Hardware - not only the computers in the system but also any
networks linking the computers, input devices like keyboards and
mice, output devices like monitor and printers.

• Data - what the system stores and processes.

• Software - the electronic coding which controls all aspects of the

hardware and the data.

• Documents - manuals on how to use the system, sometimes even

files of data which should not or could not be stored electronically.

3.3 Information System (IS) vs. Information Technology (IT)

Information System (IS): The flow of information in an organization and

between organizations encompassing the information the business creates,
 uses and stores. Concerns with efficient use of resources for providing the
required level of information support for the management of business
operations. Represents the applications perspective.

Information Technology (IT): The enabling mechanism which facilitates the

processing and flow of this information, as well as the technologies used in the
physical processing to produce a product or provide a service. Includes
telecommunications, computers and automation technologies, represents the
technical perspective. Information technology has significantly expanded the
power and potential of most information systems. Information technology is a
contemporary term that describes the combination of computer technology
(hardware and software) with telecommunications technology (data, image, and
voice networks). Technology has created a data and information explosion in
virtually all businesses. The ability of businesses to harness and manage this data
and information has become a critical success factor in most businesses.

3.4 Objectives of Information Systems in an Organization

Information systems in an organization are dedicated to improving the performance

of knowledge workers in organizations through the application of information
technology.

• Improving the performance is the ultimate objective of information

systems - not the storage of data, production of reports, or even
‘getting the right information to the right person at the right time.

• Knowledge workers (managers, professionals, staff analysts and

clerical workers) are the clientele.

• Organizations are the context. Focus is on information handling in

goal seeking organizations.

• The application of information technology is the challenge and

opportunity facing the IS professional.

3.5 Major Categories of Information Systems

It is automated information systems that we are going to study. However, these still
cover a huge variety of systems. It is useful to break them down into the following
categories:

3.5.1 Classification by functional areas:

 • Marketing Information System
• Manufacturing Information System
• Distribution
• Accounting and Finance
• Personnel
• Administration

Early stages saw ad hoc development with private ownership of data and
programs. Current wisdom is to build “integrated systems” with common
databases.

3.5.2 Classification by support provided:

• Transaction Processing System (TPS): A system that

processes data resulting from business transactions, updates
operational databases, and produces business documents.

• Management Information System (MIS): A system or group of

systems which collects and presents management information
relating to a business in order to facilitate its control. Management
Information Systems are those that support all management levels
in the conduct of their functions, such as operations, administration,
or planning and programming.

• Office Automation System (OAS): A system that automates office

procedures and enhances office communications and productivity.

• Decision Support Systems (DSS): A system that provides

interactive ad-hoc support for the decision making process of
managers.

• Expert System (ES): A knowledge-based system that provides

expert advice and acts as expert consultants to users.

• Executive Information Systems (EIS): A system that provides

critical information tailored to the information needs of top
management.

3.5.3 Relationship among TPS, MIS, DSS, EIS and ES:

• The technologies can be viewed as being unique classes of

information technology.
• They are interrelated.
 • They each support some aspects of managerial decision making.
• The evolution and creation of the newer tools help expand the role
of IT for the betterment of management in organizations.
• The interrelationship and co-ordination between these tools is still
evolving.

3.6 The Complexity of Information Systems

Information systems can be very complex even in a small organization:

• Many components (lots of information).

• Much interaction between components.
• Systems within systems.
• The intangibility of information (it is hard to define).
• The subjective nature of information.

3.6 The Benefits of Information Systems

A good information system ensures that:

• the right information is provided. • to the right degree of accuracy

• when it is required
• in the right format/layout
• to the right people
• in the most efficient way possible.

4.0 CONCLUSION

The major function of information in an organization is to improve

organizational efficiency. This can best be done through the effective use of
information technology. The variety and categories of classifying information
clusters definitely call for a more sustained process of creating information sharing
interfaces that enhance organizational efficiency.

5.0 SUMMARY

In this unit, you have learnt about the role of information in organizations
and the various components of a computerized information system. You
have also learnt about the major categories of information systems, as well
as their complexity and benefits.