UNIT II

System Development: Concept of System, Types of Systems – Open, Closed, Deterministic,

Probabilistic, etc. Relevance of Choice of System in MIS, Integration of Organization Systems
and Information Systems, System Development Life Cycle, System Analysis, Design and
Implementation, MIS Applications in Business.

SYSTEM
A system is a collection of elements or components that are organized for a common purpose.
The word sometimes describes the organization or plan itself (and is similar in meaning
to method, as in "I have my own little system") and sometimes describes the parts in the system
(as in "computer system").

A computer system consists of hardware components that have been carefully chosen so that
they work well together and software components or programs that run in the computer.

The word system is derived from the Greek word “system” which means a organized relationship
among the following unit or component. "A system is an orderly grouping of interdependent
components linked together according to a plan to achieve a specific goal". 
The word component may refer to physical parts (engine, wheels of cars), management steps
(planning, organizing, controlling) or a sub subsystem in a multi level structure. It is to be noted
that a system is not a randomly arranged set. It is arranged with some logic governed by rules,
regulation, principles and policies.
In MIS we are usually concerned with man-made system involving input, process and output, as
represented in figure. A system may have multiple inputs and multiple outputs.
All systems operate in an environment. The environment may influence the system in its design
and performance. When a system is designed to achieve certain objective, it automatically sets
the boundaries for itself. The understanding of boundaries of the system is essential to bring
clarity in explaining the system components and their arrangement.
                                                         A typical system

Characteristics of System:
 
Following characteristics are present in all systems:
a) Organization
b) Interaction
c) Interdependence
d) Integration
e) Central Objective
 
Organization: Organization implies structure and order. It is the arrangement of components
that helps to achieve objectives. Hierarchical relationship starting with the president on top and
leading down ward to the blue collar worker represent the organization structure
Interaction: Interaction refers to the procedure in which each component interact with other
components of the system. In an organization, for example purchasing must interact with
product, advertising with sales and payroll with personnel.
Interdependence: Independence is concerned with how a system is tied together; it is more than
sharing a physical part or location. It means that parts of the system part or location with in the
system, even through each part performance. A unique function successful integration will
typically produce a better request as whole rather than if each component works independently.
Central Objective: Objective may be real or stated. Objective is determined by higher
management and user must be aware about the central objective well in advance.

DIFFERENT TYPES OF SYSTEM

Different kinds of system may be understood as
Abstract and physical systems
An abstract or conceptual system is an orderly arrangement of interdependent ideas or constructs,
which may or may not have any counterpart in the real world.
On the other hand, physical systems are generally concrete operational systems made up of
people, materials, machines, energy and other physical things; Physical systems are more than
conceptual constructs.
Deterministic and Probabilistic Systems
A deterministic system is one in which the occurrence of all events is known with certainty.
A probabilistic system is one in which the occurrence of events cannot be perfectly predicted.
Though the behavior of such a system can be described in terms of probability, a certain degree
of error is always attached to the prediction of the behavior of the system.
Open and Closed Systems
An open system is one that interacts with its environment and thus exchanges information,
material, or energy with the environment, including random and undefined inputs. Open systems
are adaptive in nature, as they tend to react with the environment in such a way, so as to favor
their continued existence. Such systems are ‘self organizing’, in the sense that they change their
organisation in response to changing conditions.
A closed system is one, which does not interact with its environment. Such systems in business
world, are rare, but relatively closed systems are common. Thus, the systems that are relatively
isolated from the environment but not completely closed, are termed closed system.
User Machine Systems
Most of the physical systems are user-machine (or human –machines) systems. It is difficult to
think of a system composed only of people who do not utilize equipment of some kind to achieve
their goals. In user-machine systems, both, i.e. human as well as machine perform some
activities in the accomplishment of a goal (e.g. decision-making). The machine elements (may
be computer hardware and software) are relatively closed and deterministic, whereas the human
elements of the system are open and probabilistic.

Open Systems
a. Involve continuous interaction with the environment.
b. So exchanges the information, material, energy with the environment.
c. Is open and self-organizing in the nature.
d. Is also adoptive or adaptive to the changing environment as it is flexible.

Closed Systems
a. Shuns any kind of the exchange with the environment.
b. Is rigid in nature.
c. Is not at all amenable to the change.
d. Is also self-contained.
e. Is somewhat isolated in the nature.
f. Is having a well-defined boundary.
g. Is not at all adaptive in the nature.

Natural Systems
a. Such Systems exist and abound in the nature.
b. Are also not at all the results of the human endeavors.
c. Rivers, mountains, minerals etc. are the major examples of the natural Systems.
Artificial Systems
a. Are manufactured (man-made).
b. Examples of such Systems are dams, canals, roads, machines, factories etc.

Probabilistic Systems
a. Based on the predictability of the behavior or the outcome.

Deterministic Systems
a. In such Systems, the interaction of the elements is known.
b. As the behavior of the elements is predetermined, it becomes possible to work upon the
reaction well in the advance.

MIS Systems Analysis and Design

Systems analysis and design refers to two closely related disciplines system analysis and system
design.

 System analysis is concerned with understanding the business objectives, goals and
developing business processes. The end product of systems analysis is systems
specifications.
 System design uses the output from system analysis as its input. The main objective of
system design is to interpret the system requirements into architectural, logical and
physical designs of how the information system to be implemented.

Systems Development Life Cycle (SDLC)

SDLC stands for "Systems Development Life Cycle". SDLC refers to some steps/phases. As

its name implies, if an expert develops a system through SDLC phases then the life of a
developed system will be long.

It's a common phenomenon that any organization who wants to create a new system like
machine, tool, logical or physical system, they create the system in such a way so that it will
have its long life. To create a new system with its long life, an expert member (system analyst)
follows some phases, these phases are known as SDLC phases.

The SDLC phases are as follows

 1. Problem identification
2. Requirement analysis
3. System design
4. Implementation
5. Testing
6. Deployment
7. Maintenance

Following figure shows the phases architecture of system development life cycle –
The detailed description of the SDLC phases is as follows –
1) Problem identification

This is the first and initial phase of SDLC. In this phase, the analyst, identify the actual problem
for which they want a solution or create a system. The main concern of this phase is to recognize
the real problem, if the problem is significant then the solution will be useful otherwise the
solution will not be fruitful or it will be useless. If the experts work on the unrealistic problem
then the solution is a waste of time, efforts, costs, etc. So, the problem must be realistic. To
identify the problem, the analyst pays more attention to it.

2) Requirement analysis

After getting the problem identification, the next step is to work on requirement analysis. In
requirement gathering, the analyst thinks about the solution to a problem. The requirement
analysis is a detailed analysis which includes the answer to different questions like –

 What is the problem?

 What is the solution?
 Is solution feasible?
 How much time required solving the problem?
 How it will be resolved?
 How many resources will be required?
 Do we have sufficient resources to solve the problem?
 What kind of environment required by solution?

These are the few key questions for which an analyst finds real solutions. It shows the proper
planning to get all solutions in our hands before solving the actual problem. Without proper
planning or without knowing the actual problem to work upon its solution or implement a system
always fails.

3) System design

System design is a blueprint of the solution. It is similar to before making a car the designers
make a sketch of the car and then connect all parts of the car according to its predefined design.

The process follows the steps i.e. first creates logical design and gets design confirmation by top
management or decision-makers of the company. During the designing process, if any changes
required, analysts redesign it. The changes are easily done because the logical design reflects on
papers. So, it is good to make the required changes on papers rather than the physical system.
Changes in the physical system always make losses to the company in terms of wastage of time,
resources, money, etc. So, logical design is the most important concept of designing. Once they
confirm the logical design then the analyst looks after on its physical design.

Physical designing shows the proper connection of different components of the system according
to its logical system.

4) Implementation

The implementation shows the final integration of the system. Implementation describes how the
product will get converted it into its final form. There are different components associated with
the system and during the implementation process, all parts of the system are linked with one
another according to a proper plan so that they can work properly and fulfill the objective of the
system.

5) Testing

Testing is a process to validate the objective of the system through various steps. It is a
mechanism that makes sure that the system is working properly or not. After the implementation
of the system, it is tested on different aspects. Different inputs are given and test the output
accuracy. The system is also tested on different parameters like accuracy rate, system feasibility,
system performance, load balancing, etc.

The testing phase is one of the most important phases of SDLC. Once, experts are 100% sure
about the system’s smooth-running process, performance, accuracy, etc then only they forward it
on the next phase.

6) Deployment

After successful testing of the developed system, it is deployed to the concern candidate or
company for which it has designed. Deployment is a process to deploy the new one designed
system at clients/customers end.

7) Maintenance

Maintenance is the last and one of the most important phases of SDLC. Maintenance of the
system gives long life to the new system. After the successful deployment of the system at
clients end, it is compulsory to maintain it from time to time. As, if any system maintains
properly then the life cycle of the system increases and the organization can utilize the system for
a long time which will be profitable to the companies.
INTEGRATION OF ORGANIZATION SYSTEM AND INFORMATION SYSTEM

There are different levels in an organization. Each of these levels has different information
requirements for decision support and different constituencies or groups that information systems
need to serve (see Figure 13-2). The four different decision-making constituencies in a firm are
the following:

FIGURE 13-2 Information requirements of key decision-making groups

Various levels of management in the firm have differing information requirements for decision
support because of their different job responsibilities and the nature of the decisions made at
each level.
  Senior management. Senior management is concerned with general yet timely
information on changes in the industry and society at large that may affect both the
long-term and near-term future of the firm, the firm’s strategic goals, short-term and
future performance, specific bottlenecks and trouble affecting operational
capabilities, and the overall ability of the firm to achieve its objectives.
 Middle management and project teams. Middle management is concerned with
specific, timely information about firm performance, including revenue and cost
reduction targets, and with developing plans and budgets to meet strategic goals
established by senior management.

This group needs to make important decisions about allocating resources, developing
short-range plans, and monitoring the performance of departments, task forces,
teams, and special project groups. Often the work of middle managers is
accomplished in teams or small groups of managers working on a task.

 Operational management and project teams. Operational management monitors the

performance of each subunit of the firm and manages individual employees.
Operational managers are in charge of specific projects and allocate resources within
the project budget, establish schedules, and make personnel decisions. Operational
work may also be accomplished through teams.
 Individual employees. Employees try to fulfill the objectives of managers above
them, following established rules and procedures for their routine activities.
Increasingly, however, employees are granted much broader responsibilities and
decision-making authority based on their own best judgment and information in
corporate systems. Employees may be making decisions about specific vendors,
customers, and other employees. Because employees interact directly with the
public, how well they make their decisions can directly impact the firm’s revenue
streams.

TYPES OF DECISIONS

The characteristics of decisions faced by managers at different levels are quite different.
Decisions can be classified as structured, semi-structured, and unstructured.

Unstructured decisions are those in which the decision maker must provide judgment,
evaluation, and insights into the problem definition. Each of these decisions is novel, important,
and non-routine, and there is no well-understood or agreed-on procedure for making them.
           Structured decisions, by contrast, are repetitive and routine, and decision makers can
follow a definite procedure for handling them to be efficient. Many decisions have elements of
both and are considered semistructured decisions, in which only part of the problem has a clear-
cut answer provided by an accepted procedure. In general, structured decisions are made more
prevalently at lower organizational levels, whereas unstructured decision making is more
common at higher levels of the firm.

           Senior executives tend to be exposed to many unstructured decision situations that are
open ended and evaluative and that require insight based on many sources of information and
personal experience.
For example, a CEO in today’s music industry might ask, “Whom should we choose as a
distribution partner for our online music catalog—Apple, Microsoft, or Sony?” Answering this
question would require access to news, government reports, and industry views as well as high-
level summaries of firm performance. However, the answer would also require senior managers
to use their own best judgment and poll other managers for their opinions.

           Middle management and operational management tend to face more structured decision
scenarios, but their decisions may include unstructured components.
Example, A typical middle-level management decision might be “Why is the order
fulfillment report showing a decline over the last six months at a distribution center in
Minneapolis?” This middle manager could obtain a report from the firm’s enterprise system or
distribution management system on order activity and operational efficiency at the Minneapolis
distribution center. This is the structured part of the decision. But before arriving at an answer,
this middle manager will have to interview employees and gather more unstructured information
from external sources about local economic conditions or sales trends.

           Rank-and-file employees tend to make more structured decisions. For example, a sales
account representative often has to make decisions about extending credit to customers by
consulting the firm’s customer database that contains credit information. In this case the decision
is highly structured, it is a routine decision made thousands of times each day in most firms, and
the answer has been preprogrammed into a corporate risk management or credit reporting
system.

           The types of decisions faced by project teams cannot be classified neatly by
organizational level. Teams are small groups of middle and operational managers and perhaps
employees assigned specific tasks that may last a few months to a few years. Their tasks may
involve unstructured or semistructured decisions such as designing new products, devising new
ways to enter the marketplace, or reorganizing sales territories and compensation systems.

SYSTEMS FOR DECISION SUPPORT

There are four kinds of systems used to support the different levels and types of decisions just
described (see Table 13-2).

Management information systems (MIS) provide routine reports and summaries of

transaction- level data to middle and operational-level managers to provide answers to structured
and semistructured decision problems. 
Decision-support systems (DSS) are targeted systems that combine analytical models
with operational data and supportive interactive queries and analysis for middle managers who
face semistructured decision situations. 
Executive support systems (ESS) are specialized systems that provide senior
management making primarily unstructured decisions with a broad array of both external
information (news, stock analyses, industry trends) and high-level summaries of firm
performance.
Group decision-support systems (GDSS) are specialized systems that provide a group
electronic environment in which managers and teams can collectively make decisions and design
solutions for unstructured and semi-structured problems.

TABLE 13-2 Organizational Level and Systems for Decision Support