Systems Analysis and Design Chapter - 1

Chapter 1: Fundamentals of Information System

 Meaning and role of an Information
 Systems definition and concepts
 Introduction to Information System
 Types of Information Systems

1. Fundamentals of Information System

1.1 Meaning and role of an Information

Information is very important part of any business, which helps the managers to take
decisions. The data flows throughout the organization and makes it active. There are lot
of data available in the business, at every time a transaction takes place ( Ex. a sale ),
some data is recorded. It could be recorded on paper or in a computer system.
The difference between data and information
 Data are raw (unprocessed) facts about people, objects, events in an organization
(Ex. all the sales orders for the year)
 Information is data that have been processed and presented in a form suitable for
human interpretation. (how many of each product were ordered in each month,
may be shown on a graph)
1.2 Systems definition and concepts
System
 A System is an interrelated set of business procedures (or components) used
within one business unit, working together for some purpose.
For Ex. an inventory system in the materials department keeps track of the raw
materials supply.
 The system takes input from outside, processes it, and sends the resulting output
back to its environment.
 A system can also defined as collections of people using information
technology and processes that define how people carry out their work. The
system also includes informal interactions that take place in an organization Ex.
emails, phone calls.
Characteristics of a System
A System has nine characteristics
1. Components – A component is either an irreducible part or an aggregate of
parts , also called as a subsystem

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Figure-1: Characteristics of System

2. Interrelated Components – The function of one component is tied to the

functions of the others. Output from one is input for another, the dependence
of a part on one or more other parts.
3. Boundary – A system has boundary, within which all of its components are
contained and which establishes the limits of a system, separating it from
other systems. Components within the boundary can be changed whereas
systems outside the boundary cannot be changed.
4. Purpose – All components work together to achieve the overall purpose of the
system.
5. Environment – A system exist within an environment, everything outside the
system’s boundary that influences and / or interacts the system.
6. Interfaces – The points at which the system meets its environment and there
are also interfaces between subsystems.
7. Input – System takes input from its environment
8. Output - System returns output to its environment as a result of its
functioning to achieve the purpose. Output from individual subsystems may
be inputs to other subsystems.
9. Constraints – There are limits to what the system can do (capacity, speed, and
capability), some of these constraints are imposed inside the system and others
are imposed by the environment.

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Some important Systems concepts

 Decomposition – is the process of breaking down a system into its smaller
components, decomposing a system also allows us to focus on one particular part
of a system, making it easier to think of how to modify that one part
independently of the entire system.
 Modularity is a direct result of decomposition which divides a system into
modules of a relatively uniform size. This makes it easier to understand the
system.
 Coupling means that subsystems are dependent on each other, messages are
passed between subsystems. A good system will have very independent
subsystems with minimal flows of data between them. This makes the system
simpler and easier to change just one part of the system without affecting the
other parts.
 Cohesion is the extent to which a subsystem performs single functions. Generally
coupling must be reduced and cohesion increased, so that it performs only one
function.
1.3 Introduction to Information System
Information System
An Information System is an arrangement of people, data, processes, interfaces,
networks and technology that interact for the purpose of supporting and improving both
day-to-day operations in a business (data processing) as well as supporting the problem
solving and decision making needs of management (information services).

Information Techonology

Documents People
Database
Informal
Interactions
Computer
Network

Processes

Figure-2 : The basic components of a computer based information system- People,

Processes, Information technology and informal interactions

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The Information System includes the following

 Hardware – Computers, servers and printers
 Software- System software’s and application software’s
 Documentation and training materials – The materials created by Systems
Analyst to help users to use the software
 Specific job roles – The roles associated with the overall system, such as the
people who run the computers and the software operating.
 Controls- which are the parts of the software written to prevent fraud and theft
 People- Who use the software in order to do their job.

Figure-3: Components of IS Application

1.4 Types of Information Systems

The main types of IS are
 Transaction Processing Systems
 Management Information Systems
 Decision Support Systems
 Expert Systems
Transaction Processing Systems (TPS)
 TPS automates the handling and capture of data about transactions or business
activities
 For each transaction, the system must capture the data, verify that it is valid
transaction and accept or reject it
 Accepted transactions are stored in the system database
 Reporting provides summaries of transactions (ex. daily, weekly)

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 The analysis and design of a TPS requires focusing on the firm’s current
procedures for processing transactions. How the organization tracks, capture,
process and output data?
 The goal of TPS development is to improve transaction processing by speeding it
up, using fewer people, improving efficiency and accuracy, integrating it with
other organizational information systems, or providing information not previously
available.
Management Information System (MIS)
 MIS takes the raw data available through a TPS and converts them into a
meaningful aggregated form.
 It provides reports of this information to managers
 Developing MIS calls for good understanding of what kind of information
mangers require and how managers use information in their jobs.
 Thus, the System Analyst must develop a good understanding of the business and
the transaction processing systems that provide data for an MIS

Figure-4: Types of Information Systems

Decision support System (DSS)

 Helps the manager to take decisions by analyzing the data
 It provides an interactive environment in which decision maker can quickly
manipulate data and models of business operations
 DSS has three parts, the first part is composed of a database, extracted from a TPS
or MIS
 The second part consists of mathematical or graphical models of business
processes. The third part is made up of a user interface that provides a way for the
decision maker to communicate with the DSS.
 System Analyst is to concentrate on the three main components database, model
base and user dialogue.

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Expert Systems (ES)

 An Es is different from other information systems, it replicates the decision
making process by applying rules to information in the way that an expert would
 An ES is developed for a particular area of knowledge or domain, Ex Medical
diagnosis, Weather forecasting, etc.
 The ES asks questions, and the end user supplies the answers, rules applied on the
answers and the ES provides a recommendation.
 The focus on developing and ES is acquiring the knowledge of the expert in the
particular problem domain. Knowledge engineers perform knowledge acquisition.

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