1. CIBM
BUSINESS
INFORMATION
SYSTEMS
INTRODUCTION TO INFORMATION
SYSTEMS Ch01

2. 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.

3. 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.
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.
Another group of people in the organisation; managers decides how
money, time, and other resources should be allocated to design,
implement, and maintain the organisation’s information systems.

4. Tasks
Tasks can be categorised into four areas: tasks related to communication
among people in the organisation, tasks related to making decisions
within the organisation, tasks related to the operations of the
organisation, and tasks related to strategic management of the
organisation.
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 organised and represented in some
physical or digital form.
Organisation
A business or other organisation 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 organisation must cope with to thrive.

5. Benefits of Information Systems
A firm can reap the following benefits:
High-quality information.
Access to information.
Utilisation of information.
Perform organisational work efficiently.
Better communication and decision-making.
Better products and services for customers.

6. 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.

7. 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.
Processing the data. Data can be processed in two
ways: batch processing or real-time processing.

8. Storing and updating the data. This step involves storing the
transaction data in database files. Many large organisations use
data warehousing software to create and maintain very large
databases containing data on all aspects of the company.
• 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.

9. 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.

10. 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 organisations look for ways
to create cross-functional information systems by
reengineering, or combining and integrating, two or more
transaction processing systems. This approach of creating
information systems to support an organisation’s
operational business processes is referred to as enterprise
resource planning (ERP).

11. 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.

12. 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.
Manufacturing (CIM)
Computer-integrated manufacturing (CIM) is a
concept, or management philosophy, emphasising the
co-ordination of CAD and CAM systems along with
other information systems in the company.

13. Remember to answer all self check questions, these help you prepare
for the exam
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