Systems Analysis & Design – Introduction to Information Systems

Definition of a System

  • A system is a group of interacting or inter-related elements that act according to a set of rules to form a unified whole.

  • Key attributes:

    • Interconnection and interdependence of components.

    • Purposeful, rule-governed behaviour.

    • Yields outputs / results that none of the parts could produce alone.

  • Importance in IS context:

    • Frames thinking around boundaries, inputs, processing, outputs, feedback and environment.

    • Encourages holistic analysis rather than piecemeal programming.

System vs. Software vs. Information System (IS)

  • Software

    • A set of instructions, data or programs executed by computers to perform tasks.

    • Exists in two broad categories:

    • System software (OS, drivers, security modules).

    • Application software (business-facing programs).

  • Information System (IS)

    • An integrated set of components for collecting, storing and processing data, and for providing information, knowledge and digital products.

    • Embeds hardware + software + data + processes + people.

  • Relationship hierarchy

    • System (broad concept) ⟹ Information System (specialised system) ⟹ Software (one of its components).

Key Terms You Must Use Correctly

  • System

  • Hardware

  • Software

  • Data

  • Processes

  • People (users & stakeholders)

Why Organisations Use Information Systems

  • Handle day-to-day routines automatically.

  • Support better operational, tactical and strategic decisions.

  • Examples: Library Management System, Food Ordering System, Training Management System.

Five Core Components of an Information System

  1. Hardware

    • Physical layer.

    • Includes servers, workstations, networks, scanners, digital capture devices, telecommunication equipment, fibre-optic cables, mobile devices, etc.

  2. Software

    • Controls hardware and produces desired results.

    • Split into:

      • System Software – background programs that synchronise hardware & apps; middle-layer between user applications and hardware.
        • Operating Systems • Device Drivers • Security Systems

      • Application Software – supports day-to-day business functions & information needs.
        • Legacy Systems (old but still in use) • Horizontal Systems (generic, adaptable across industries) • Vertical Systems (tailored to specific business requirements)

  3. Data

    • Raw facts with no inherent meaning until processed.

    • Transformed by IS into useful information for decision-making.

  4. Processes

    • Tasks and business functions users/managers/IT staff perform to reach specific results.

    • Mirror actual day-to-day operations.

  5. People

    • Anyone with an interest in or interaction with the IS.

    • Users (interact directly or consume information), Stakeholders (broader interest, may fund or be affected).

Types of Information Systems (Classified by Function / Features)

  • Four canonical types mapped to organisational levels

    • Operational Level ➜ Transaction Processing Systems (TPS)

    • Tactical/Middle Management ➜ Management Information Systems (MIS)

    • Senior Management (Analytical) ➜ Decision Support Systems (DSS)

    • Executive/Strategic ➜ Executive Support Systems (ESS)

Transaction Processing Systems (TPS)

  • Purpose: Perform & record routine daily transactions essential for running the business.

  • Operate at the operational level.

  • Typical queries: "How many items sold today?" “Current inventory?" “Outstanding due for John Doe?"

  • Examples:

    • Point-of-Sale (POS) – records daily sales.

    • Payroll – salaries & loans management.

    • Stock Control – tracks inventory.

    • Airline Booking – flight reservations.

Management Information Systems (MIS)

  • Used by tactical managers to monitor current performance.

  • Input: aggregated TPS data.

  • Processing: routine algorithms (aggregate, compare, summarise).

  • Output: periodic reports for monitoring, control and short-term forecasting.

  • Example systems:

    • Sales management system (feeds on POS data).

    • Budgeting system (tracks expenditure vs. plan).

    • Human Resource management system (staff turnover, welfare).

Decision Support Systems (DSS)

  • Target users: senior management for non-routine, semi-structured decisions.

  • Inputs: internal (TPS, MIS) + external data.

  • Capabilities:

    • "What-if" and sensitivity analysis using statistical & mathematical models.

    • Highly interactive; adapts to frequently changing questions.

  • Sample questions: "Impact on performance if production lot doubled?" "Effect on sales if a new competitor enters?"

  • Example systems:

    • Financial planning system – evaluates alternative paths to profit maximisation.
      • Formula used: Net Profit=Total Sales−(Cost of Goods+Expenses)\text{Net Profit} = \text{Total Sales} - (\text{Cost of Goods} + \text{Expenses})

    • Bank loan management system – assesses creditworthiness; predicts default likelihood.

  • Dashboard sample (illustration in slides): land subdivision lots, families moving, births, precinct distributions, year-to-year %. Demonstrates DSS ability to visualise multi-variable trends.

Executive Support Systems (ESS) / Executive Information Systems (EIS)

  • Built for top executives—strategic, long-term decision making.

  • Features

    • Gathers & synthesises key internal + external information.

    • Provides drill-down, trend-spotting, competitor tracking, opportunity identification.

    • Typical executive questions: “What business should we enter/exit?” “How are competitors performing?” “Which units to sell or buy?”

  • Operates through ESS workstations integrating TPS/MIS data, finance numbers, customer feedback, competitor news, etc.

Integrated Example Walk-through (Retail Mall Scenario)

  1. Cashier / POS (TPS) collects sales & customer data ➜ updates purchase DB ➜ produces ledger entries & management reports.

  2. Branch Manager (MIS) receives summarised sales & inventory reports ➜ monitors branch performance.

  3. Regional Manager (DSS) accesses analytical database combining sales, inventory, customer data ➜ devises strategic plan to raise employee productivity, marketing initiatives.

  4. Senior Manager (ESS) reviews competitive landscape & internal metrics ➜ maintains mall’s competitive advantage.

Current Trends in IS Development Projects

Two dominant methodological paradigms:

Structured Analysis & Design (SAD)

  • Employs sequential, top-down, graphical techniques to analyse existing systems and specify new ones.

  • Values clear, logical documentation easily understood by users.

  • Follows a waterfall-like progression of phases.

  • Key techniques:

    • Data Flow Diagram (DFD)

    • Data Dictionary

    • Structured English

    • Pseudo Code

    • Hierarchy Chart

Object-Oriented Analysis & Design (OOAD)

  • Iterative & incremental; spans entire software development life cycle.

  • Models functional requirements via objects—encapsulation of data & behaviour—while remaining implementation-agnostic.

  • Promotes reusability, modularity, closer alignment with real-world entities.

  • Principal techniques/tools:

    • Unified Modelling Language (UML) – class, sequence, use-case diagrams, etc.

    • Rational Unified Process (RUP) – phased iterative framework (Inception, Elaboration, Construction, Transition).

Ethical, Philosophical & Practical Considerations (Implicit Relevance)

  • Data component foregrounds issues of privacy, security & data accuracy; system designers must respect regulations (GDPR, PDPA, etc.).

  • People/stakeholders dimension highlights importance of change management and user acceptance, echoing socio-technical philosophy.

  • Methodological choice (SAD vs. OOAD) influences project risk, maintainability, cost—practical trade-offs for managers.

Numerical Highlights from DSS Example Dashboard (Slides)

  • Proposed undeveloped lots by precinct: Pakenham East 34%34\%, Officer 38%38\%, Cardinia Road 15%15\%.

  • Families moving to the shire: 66 per day (YTD comparison shows +23%+23\%).

  • Subdivision lots lodged year comparison: 1.3K1.3\text{K} (14/15) ➜ 2.1K2.1\text{K} (15/16) … trend indications (66%66\% rise in certain metrics).

  • Babies born in the shire: steady 1.5–2.1K1.5–2.1\text{K} range across years.
    (These highlight DSS capacity for multi-year analytical insights.)

Summary Cheat-Sheet

  • System = related components producing specific results.

  • Five IS components = hardware, software, data, processes, people.

  • Four main IS types = TPS (operational), MIS (tactical), DSS (analytical), ESS (strategic).

  • Development trends = SAD (sequential, DFD-centric) vs. OOAD (iterative, UML-centric).

  • Remember core formula: Net Profit=Total Sales−(COGS+Expenses)\text{Net Profit} = \text{Total Sales} - (\text{COGS} + \text{Expenses}) used within financial DSS.

  • Master terminology, organisational levels, examples, and methodological tools to excel in exams & assignments.

End of notes – prepare questions for the upcoming Q&A and gear up for next session on Systems Analyst & Project Manager.