Introduction to Business Information Systems

Fundamental Definitions in Business Information Systems

• Business Information Systems: These systems provide the information organizations require to manage themselves efficiently and effectively. These systems are often integrated into a single product and can be delivered within the same software package.

• Data: Defined as raw facts that are unorganized, sometimes unrelated, and unprocessed observations. Specifically regarding computers and transmission media, data is information converted into binary digital form. Data can be stored, transmitted, and presented in an infinite variety of forms and formats.

  • Examples of data sets include: price indices (such as the consumer price index), unemployment rates, literacy rates, and census data.

• Information: Data that has been converted into a meaningful, organized, and useful context for specific end users. It is knowledge derived from data that provide details of a subject matter.

  • Transitions: When information is entered and stored in a computer, it is generally referred to as data. After processing (formatting, printing, etc.), the output data is again perceived as information.

• System: An interrelated set of business procedures used within one business unit, working together for a specific purpose. It is a collection of objects (people, resources, concepts, and procedures) intended to perform an identifiable function or serve a goal. Every system contains three major components:

  • Input
  • Processing
  • Output
  • Control: A well-designed system includes this additional element to ensure objectives are met.

• Information System (IS): A set of interrelated elements or components that collect, manipulate, store, and disseminate data and information, while providing a corrective reaction to meet an objective. It provides information to decision-makers and facilitates the effective and efficient communication of results.

  • Examples include: Transaction Processing Systems ($TPS$) and Knowledge Management Systems ($KMS$).

• Information Communication Technology (ICT): A broader term for IT that refers to all communication technologies. It is the infrastructure and components enabling modern computing, comprising hardware, software, telecommunications, database management, and other information processing technologies used in computer-based information systems.

Components of Business Information Systems

• Hardware: Computer equipment utilized to perform input, processing, output, and storage activities.
• Software: Sets of instructions that tell the computer how to take data in, how to process it, how to display information, and how to store data and information.
• Data: The input the system takes to produce information.
• Telecommunications and Networks: Telecommunication is the transmission of information (multimedia: text, pictures, sound, and animation in the form of electronic data) by various technologies over wire, radio, optical, or other electromagnetic systems.
• People: Includes information systems professionals and users who analyze organizational information needs.
• Procedures: Defined as the rules for achieving optimal and secure operations in data processing (including design, development, and documentation).

Information Quality and Characteristics

• Information Product: The degree to which information is appropriate and useful for users; examples include messages, reports, forms, and graphic images.
• Information Quality: The degree to which information possesses content, form, and time characteristics that give it value to specific end-users.

Dimensions of Information

• Time Dimension:

  • Timeliness.
  • Currency.
  • Frequency.
  • Time period.

• Content Dimension:

  • Accuracy (accurate for purpose).
  • Relevance (relevance for purpose).
  • Completeness.
  • Auditability.
  • Conciseness.
  • Performance.

• Form Dimension:

  • Clarity (ease of understanding).
  • Detail.
  • Order.
  • Presentation.
  • Media.

Additional Qualities of Good Information

• Communicated in an appropriate channel.
• Understandable.
• Communicated to the right person.
• Cost-effective.
• Reputable source.
• Appropriate volume.
• Scope.

Information Processing Activities

Information processing is the acquisition, recording, organization, retrieval, display, and dissemination of information. It involves changing or converting information into a meaningful form through five main parts:

1. Input: The process of entering data into the computer and feeding collected raw data into the cycle for processing using various devices.
2. Process: The computer applies instructions to raw data using suitable methods to produce information. This involves all operations necessary to arrive at the end product, usually carried out by the $CPU$ (Central Processing Unit).
3. Storage: Saving information for subsequent use in either soft or physical forms.
4. Output: The computer sends information to people in a usable format. This is the outcome of stage one, resulting in end products such as annual reports, financial statements, or payroll.
5. Communication: The process of transmitting information from one place to another.
   • Feedback: The response, reaction, or information provided by a recipient to a sender. Feedback may be positive or negative.

Data Processing Modes and Strategies

• Batch Processing: Transaction data is accumulated over a specific period and processed periodically.
• On-line Processing: A mode where all computer peripherals and equipment are under the control of the central processor; devices are in direct communication with the $CPU$.
• Time Sharing Processing: The central processor serves two or more users with different processing tasks or requirements simultaneously.
• Real-Time Processing: Involves the immediate processing of data after a transaction occurs. Master files are updated immediately without the delay of batch accumulation.
• Distributed Processing: The system includes multiple computers linked by a communication network, allowing processing tasks to be distributed around the system.
• Centralized Processing: All information is processed in a central location, such as a computer center at a Head Office. Many users access the central computer to process data simultaneously.

Factors Determining Processing Strategies

• Ability to have updates.
• Usage of the computer.
• Organizational needs and Quality of Output.
• Cost/financial ability.
• Scale of operation.
• Accuracy concerns and reliability.
• Business size and nature.
• Urgency in feedback.
• Linkage between applications.

Information Management

• Definition: Information management is the design/plan, development, management, and use of information with insight, understanding, and innovation.
• Significance: It is vital for data-driven businesses to support better decision-making and goal achievement. It empowers stakeholders to utilize resources, expertise, and time effectively.
• Importance of Information Management:
  • Improvement of productivity and efficiency.
  • Development of effective information policies for work processes.
  • Improved risk management.
  • Faster information access.
  • Enhanced compliance.
  • Availability of robust cybersecurity.
  • Enhanced support of business needs.
  • Informed business decisions.
• Challenges:
  • Historical data and legacy systems.
  • Data silos.
  • Employee turnover.
  • Increasing data volumes.

Communication Systems Management

• Communication Management: An umbrella term referring to the flow of information within a company or between multiple companies.
• Essential Components of a Communication System:
  1. Transmitter.
  2. Channel.
  3. Receiver.
  • Other components include: Source, message, feedback, environment, context, and interference.
• Applications of Communication Systems:
  • $MIMO$ (Multiple-Input Multiple-Output).
  • Wireless systems using $RF$ (Radio Frequency) and microwave.
  • Mobile phones.
  • Cable testing and wireless $LAN$s.
  • Base station monitoring and satellite communications.
  • Surveillance and bus testing.
  • Antenna and transmitter testing.

The Information Systems Triangle

This framework describes the relationship between three key components essential for enterprise strategy:

• People: Individuals who use and interact with the information system.
• Processes: Procedures and methods used to carry out business activities.
• Technology: Hardware, software, and infrastructure supporting the system.

Alignment of these three components leads to significant benefits, while lack of alignment causes organizational problems.

Strategic Use and Business Value of Information Systems

Why Data and ICT are Critical

• Data Use: Used for informed decision-making, problem-solving, greater understanding, improving processes, and understanding customer behavior.
• Managerial Understanding: Managers must understand $ICT$ to identify strategic competitive advantage opportunities, ensure linkage between business and $ICT$, and provide leadership for $ICT$ projects.

Strategic IT Roles and Outcomes

• Improving Business Processes/Cost Reduction: Use $IT$ to reduce the cost of doing business. Result: Enhanced efficiency.
• Promote Business Innovation: Use $IT$ to create new products or services. Result: Create new business opportunities.
• Locking in Customers/Suppliers: Use $IT$ to improve quality and link business to customers/suppliers. Result: Maintain valuable relationships.
• Raising Barriers to Entry: Increase the amount of investment or complexity of $IT$ needed to compete. Result: Increased market share.
• Build a Strategic $IT$ Platform: Leverage investment in $IS$ resources from operational uses to strategic uses. Result: Create new business opportunities.
• Build a Strategic Information Base: Use $IT$ to provide information supporting the firm's competitive strategy. Result: Enhanced organizational collaboration.
• Training: Aids in training and retaining workers using multimedia.
• Creating Switching Costs: Discourages customers from moving to competitors.

Specific Information Systems Applications

• School Management Systems (SMS): Designed to streamline administrative and academic tasks.
  • Registration/Attendance: Moves from daily registers to digital records.
  • Student Performance: Records academic progress.
  • Computer-Aided Learning ($CAL$): Systems assisting in academic teaching.
• Online Booking Systems: Reservation systems allowing guests to book and pay for activities $24/7$.
• Banking Systems:
  • Automatic Teller Machines ($ATM$): Cash deposits/withdrawals, balance checks, cheque deposits, bill payments, mini-statements, and transfers.
  • Electronic Funds Transfer ($EFT$): Sending money transfer instructions directly to banks.
  • Credit/Debit Cards: Equipped with magnetic stripes and chips containing $PIN$ information.
  • Internet Banking: Transactions conducted electronically via the internet.
• Medicine:
  • Patient/Pharmacy Records: Databases for medical history and diagnosis sharing.
  • $3D$ Printers: Innovative use for medical manufacturing.
• Expert Systems: Mimic human expertise using a user interface, explanation system, inference engine, knowledge base, and rule base.
  • Applications: Medical diagnosis, mineral/oil prospecting, strategy games (chess), engine diagnostics, route scheduling, and financial planning.
• Retail Industry:
  • Point-of-Sale ($POS$) Terminals: Hardware for processing card payments and scanning barcodes for article pricing/stock control.
  • Electronic Funds Transfer at Point-of-Sale ($EFTPOS$): Secure internet connections for payments via Chip and $PIN$, contactless cards, and near-field communication ($NFC$).
  • Internet Shopping: E-shopping via web browsers or mobile apps.
• Recognition Systems: Computer applications for speech, fingerprints, facial recognition, and writing.
  • Includes: $QR$ code readers, barcode readers, $OMR$, $ANPR$, $OCR$ (scanner + special software), $RFID$ (radio waves), and biometric recognition.
• Satellites and Location Services:
  • Artificial Satellites: Contain antennas, transponders, solar panels, and propulsion; signals are delivered by carrier radio waves.
  • Global Positioning Systems ($GPS$): Used for navigation, tracking, monitoring, mapping, and timing.
  • Geographic Information Systems ($GIS$): Amalgamates information into maps to model/analyze large amounts of data based on location.
• Computer Modeling: Simulations of real systems to study behavior.
  • Applications: Flood water management, bridge/building design, traffic management, and weather forecasting.
• Computer-Controlled Systems: Regulate other devices via control loops.
  • Robotics: Used in manufacturing for heavy and delicate work, controlled by embedded microprocessors or linked computers.

Networking Fundamentals

• Network Hardware: Physical devices vital for communicating with hardware resources, such as routers, switches, hubs, and bridges.
• Network Software: Manages infrastructure to support security, communication, and data sharing.

Types of Network Software

• Network Storage: Makes data uninterruptedly available for collaboration.
• Patch Management: Applies updates to drivers, software, and firmware to protect against vulnerabilities.
• Data Archiving: Stores unused data and permits retrieval based on search parameters.
• Asset Management: Minimizes spending on obtaining, operating, and maintaining assets.
• Security Surveillance: Video software for observing operations and workforce.
• Deployment and Migration: Monitoring data movement between databases and hardware.
• Network Management: Framework for managing independent components.
• Printer and Fax Software: Drivers and printer utilities.

Architectural Layers of Network Software

1. Application Layer: Applications and services running on the network.
2. Control Layer: The "brain" of the system; includes the Network Operating System ($NOS$) and control software.
3. Infrastructure Layer: Also called the data plane layer; comprises actual virtual and physical network devices.

Resources

• Sonny Nyeko and Musa Moya ($2024$). Information and Communication Technology in Business, Second Edition Text, $ISBN: 9789970153008$ (Available in $MUBS$ Library).