Chapter 2: IT Components of Business Information Systems

Introduction

An information system is a set of hardware, software, and communication networks working together to collect, filter, process, store, organize, and disseminate data throughout the organization. Information systems are used to support decision making, coordination, control, analysis, and visualization in an organization. Information systems are made up of five components: hardware, software, data, network communication, and people. The first four components (hardware, software, data, and network) fall under the information technology category.

The term business intelligence refers to technologies, applications and practices for the collection, integration, analysis, and presentation of business information.

Hardware

The physical parts of computing devices are referred to as hardware. The user can see and touch hardware. Some examples of hardware are:

• Computers (laptop, desktop, tablet)
• Mobile phones
• Hand terminals
• Storage devices (hard disk, flash disk)
• Input devices (keyboard, mouse, optical scanner)
• Output devices (printers, speakers)
• Video monitor

Computers are the key components of the information and communication technology. The binary number system is the basis for representing data in computer systems.

The binary numeral system is a positional system with a base of 2, in which numeric values are represented using two symbols: 0 and 1.

The smallest element of data is called a bit , a group of eight bits is called a byte . The capacity of memory and persistent data storage are measured in terms of bytes. The prefixes listed in Table 2.1 are used to make storage capacities more human readable. For example, instead of saying 2 ¹⁰ = 2014 bytes we say 1 kilobyte, 1KB in short.

Table 2.1 Binary Prefixes for Storage Capacity

Prefix	Actual	Approximation	Example	Abbr.
kilo	2 10	one thousand	kilobyte	KB
mega	2 20	one million	megabyte	MB
giga	2 30	one billion	gigabyte	GB
tera	2 40	one trillion	terabyte	TB
peta	2 50	one quadrillion	petabyte	PB
exa	2 60	one quintillion	exabyte	EB

ASCII stands for A merican S tandard C ode for I nformation I nterchange. It is based on 2 ⁷ = 128 symbols including 10 numbers, 26 letters of English alphabet, a number of punctuation marks and certain symbols such as @ and $.

A typical computer has the following hardware components: a CPU, memory, motherboard, storage device(s), and input/output devices. The external peripheral devices are called either input devices or output devices depending on the direction of data flow between computer and the peripheral device.

Input devices : Webcam, barcode reader, microphone, scanners, and sensors (e.g. heat or humidity).

Output devices : Headphone, projector, speaker, printer, monitor.

Although CD-ROM, DVD, and USB flash drive are capable of receiving data from a computer system, they are not referred to as output devices. Instead, they are considered as storage devices.

Random access memory (RAM) is used to store programs that are currently running. It can transfer data much faster than the hard disk since information is accessed randomly instead of sequentially. However, unlike the hard drive, RAM is volatile. If the computer is turned off, all data stored in RAM is lost. Thus, the computer also needs a persistent data storage that retains data when the computer is turned off. Hard disk drives (HDDs) and solid-state drives (SSDs) are the two commonly used types of persistent storage. The SDDs have faster reading and more speed writing systems compared to HDDs. Read only memory (ROM) is a permeant memory. ROM can be read but not erased or overwritten. Firmware is a small and permanent software programmed into a read-only memory.

Volatile memory can store data as long as it receives power. Persistent storage can retain data after the device is shut off. It is also referred to as nonvolatile storage.

Booting is a process or set of operations that starts a computer when it is turned on. B asic I nput O utput S ystem (BIOS) is a software stored on a small memory chip on the motherboard thus it is part of the motherboard hardware. BIOS instructs the computer on how to perform booting and keyboard control.

The C entral P rocessing U nit (CPU) is the brain of computer that executes instructions. Each CPU has an instruction set which is a group of commands in the machine language. Cache memory is a high-speed temporary storage located in a CPU for storing parts of a program or data during computer processing.

The G raphics P rocessing U nit (GPU) is an electronic circuit (processor) specialized for display functions. The GPU renders images, animations and video for the computer’s screen.

There is a fundamental difference between a GPU and a CPU, which is based on how they process tasks. A CPU consists of a few cores with lots of cache memory and it is optimized for sequential serial processing of tasks. By contrast, a GPU consists of thousands of smaller cores and it is designed for parallel processing from the very beginning. The ability to handle thousands of threads simultaneously makes GPUs more efficient than the general-purpose of CPUs for algorithms where the compute-intensive portions can be executed in parallel. If CPU is the brains of the computer, then GPU is the soul of the computer.

Software

Software is a set of instructions for a computer to follow to accomplish a user defined task. Computer software falls into two broad classes: system software and application software.

System software interacts with the hardware at a very basic level. System software includes Operating Systems, device drivers, firmware and some utility software to perform fundamental activities such as formatting a hard disk.

Application software is designed to perform a group of correlated tasks for the sake of the end user. Generalpurpose applications software includes database programs, word processors, Web browsers, spreadsheets, accounting applications, media players, photo editors and games. The most popular Web browsers are Google Chrome, Yandex Browser, Opera, Firefox, Safari and Microsoft Edge.

Application software which is exclusively developed to satisfy the needs of an organization rather than individual users is called enterprise software . Business Intelligence (BI) software, Customer Relationship Management (CRM) software, Enterprise Recourse Planning (ERP) software, and accounting software are all the samples of enterprise software.

ERP software allows an organization to use a system of integrated applications (e.g., product planning, development, manufacturing, sales and marketing) in order to manage the business and automate many back o ice functions.

CRM software collects, manages and links information about the customer in order to create marketing campaigns, view a customer’s entire of history of interactions with a business.

BI software extracts important data from an organization’s raw data in order to infer insights to help a business make faster and more accurate decisions.

Malicious software , malware in short, is an umbrella term that covers a variety of forms of hostile or intrusive software. Computer viruses, worms, Trojan horses, ransomware, spyware, adware, and scareware are the examples of malicious software.

An operating system (OS) is a system software that provides basic functionality needed by users so that users can run programs in a convenient and efficient manner.

An operating system is a program that manages the computer hardware. It provides a container environment in which other programs can work. The most basic functions of an operating system:

• Memory Management
• Processor Management
• File Management
• Device Management
• Protection and Security

Microsoft Windows , also shortened as Windows, is a family of commercial operating systems developed and marketed by Microsoft Inc. It is the dominant OS in the desktop operating system market share.

Macintosh OS ( MacOS ) is the current series of Unixbased operating systems developed Apple Inc. exclusively for Apple’s Macintosh computers, which are popular among graphic designers and software developers.

Linux is an operating system originally designed by Linus Torvalds while a student at the University of Helsinki. Since Linux is freely available along with its source code, it is a non-proprietary software. Hence, Linux is an alternative to the commercial OS on the market.

Proprietary software is software that is owned by an individual or a company (usually the one that developed it). ere are almost always major restrictions on its use, and its source code is almost always kept secret.

Pardus is a Linux distribution developed by the Turkish government. In addition to being an open source operating system, Pardus is the first effort to make open source and free software more prevalent in public institutions of Turkey.

Android is a mobile operating system developed by Google Inc., based on the Linux kernel and designed primarily for touchscreen mobile devices such as smartphones and tablets.

iPhone OS ( iOS ) is a mobile operating system created and developed by Apple Inc. for the company’s mobile devices, including the iPhone, iPad, and iPod Touch.

Software versioning is the process of assigning either unique version names or unique version numbers to unique states of computer software. A version number is composed of three number categories named major, minor, and patch. These numbers are incremented when a new development is made in the software. Given a version number in the form of MAJOR. MINOR.PATCH, an increment in the:

• MAJOR version corresponds incompatible API changes
• MINOR version corresponds addition of functionality in a backwards-compatible manner
• PATCH version corresponds backwards- compatible bug fixes

A bug is a mistake, flaw or fault in a computer software that causes incorrect or unexpected results.

Data

Data are obtained by means of measurement, counting, experimentation, observation or research. The data collected through measurement and counting are called quantitative data type. For example, the age of your car and the temperature of your room are quantitative.

The data that cannot be written down with numbers are called qualitative data. Some examples of qualitative data are the softness of your hair and the color of your skin. Qualitative data can be further classified into two subcategories: nominal and ordinal . Nominal scales are used for labelling variables. Some examples of nominal data:

• gender (male, female)
• traffic light colors (red, yellow, green)
• blood type (0, A, B, AB)

In ordinal data, the order of labels is known and important, but the difference between each label is not clearly known.

A collection of related data is stored into what is called database. A D atabase M anagement S ystem ( DBMS ) is a collection software packages that is used for creating and maintaining a database. The database and DBMS software together are referred to as a database system .

The advantages of using a DBMS in information system are:

• Controlling redundancy
• Restricting unauthorized access
• Providing persistent storage for program objects and data structures
• Permitting inferencing and actions using rules
• Providing multiple user interfaces
• Representing complex relationships among data
• Enforcing integrity constraints
• Providing backup and recovery

The relational database model is the most widely used database structure. In the relational model, all data are stored in the form simple two-dimensional tables .

A primary key is a special relational database table column (or combination of columns) designated to uniquely identify all table records. A primary key cannot be null and must be unique for each row of data.

A foreign key is a field (or collection of fields) in one table that refers to the primary key in another table. A foreign key is used to link two tables.

The most popular relational database management systems are MySQL, Oracle Database, Microsoft SQL Server, Microsoft Access, Sybase, IBM Informix, PostgreSQL, and IBM Db2.

The steps of the database design and data planning are summarized in Figure 2.8 (Page 49).

S tructured Q uery L anguage ( SQL ) is a standard language for storing, manipulating and retrieving data in databases.

NoSQL databases are the new alternatives to the relational databases for big data and real-time Web applications. Such databases have become popular by the needs of Web 2.0 companies such as Facebook, Google, and Amazon.

A data warehouse is a special type of relational database that is specifically designed and optimized for query and analysis. It may contain not only the historical data derived from transaction data, but also data from the other sources. us, data from several external or internal sources are consolidated by organizations.

Network

A computer network is a system that enables computing devices to exchange data among themselves. The primary networking hardware components are:

N etwork I nterface C ontrollers ( NIC ) is an interface between the computer and physical network connection in order to transmit data through the cable, address data with an identifier, control data flow, and connect to another computer.

A repeater is a device that receive and retransmit the signal in order to protect the signal strength required to reach further away on the network.

A hub is a device that transmits the data to the all connected computers without checking the destination address.

A bridge is a device including software that connects two networks which uses the same protocol.

A switch connects computers in a network like hubs but unlike hubs, switches learn destination address after the first communication and do not disturb irrelevant computers with message traffic.

A router is a hardware that receives, analyzes and forwards the data to the another network. A router is programmable and it can divide a network into various subnets.

A modem is a device that enables computers to exchange information and communicate using telephone lines.

A firewalls is a software utility or hardware device that acts as a filter for data entering or leaving a network or computer. It monitors incoming and outgoing network traffic and decides whether to allow or block specific traffic based on a predefined set of security rules.

The Internet is a network of networks, defined by the TPC/IP standards. A protocol defines rules and conventions between two or more devices over a network. The Internet uses TCP/IP to link billions of devices. The Web is the open mechanism for people to share information, to use for commerce and for entertainment. The first three specifications for Web technologies are defined as URLs, HTTP, and HTML.

In computer networks, the connections among the communicating devices are established using transmission media which is the pathway that carries information from sender to receiver. As can be observed from Figure 2.11 (Page 53), transmission media is classified into two groups as guided media and unguided media.

Guided media is the type of transmission media that is physically tangible. The signals propagate over a solid substance. Three types of guided media are twisted pair cables, coaxial cables, and fiber optic cables.

Unguided media is the type of transmission media that sends the data through the air. Two types of unguided media are radio waves and microwaves.

One way of classifying the computer networks is using their geographical scale. Ranging from smallest to largest, computer networks are classified into four groups as personal area networks, local area networks, metropolitan area networks, and wide area networks.

A p ersonal a rea n etwork ( PAN ) connects electronic devices such as laptops, smart phones, and tablets around a person.

A l ocal a rea n etwork ( LAN ) interconnects communication devices within a small geographical area such as an office, home, building, or factory.

A m etropolitan a rea n etwork ( MAN ) is a computer network that usually covers a campus or a city.

A w ide a rea n etwork ( WAN ) is a computer network that connects multiple LANs that are located in different geographical regions.

Network topology is a schematic description that shows the arrangement of the elements in the network. The most commonly used topologies are bus, star, ring, mesh, and tree topologies.

The devices in bus topology (Figure 2.15, Page 55) share a single communication line named bus. A device sends a message by broadcasting it to the bus, and the intended receiver accepts the message and processes it.

In star topology (Figure 2.16, Page 55), all the devices connect to a central device, which is usually a network hub. Since each device has its connection to the hub, the failure of one device does not affect the functionality of the others.

In ring topology (Figure 2.17, Page 55), all the devices are connected in a closed loop that forms a ring. Data transmission occurs around this ring, allowing the intended devices to read the data. Ring topology is easy to install and expand, but a failure in a single device disturbs the whole network.

Each device in mesh topology (Figure 2.18, Page 56), has a point-to-point connection with a single or multiple devices. Since there are redundant connections in the network, the cost of cabling is high in this topology.

A tree topology (Figure 2.19, Page 56) is an approach that brings star and bus topologies together. Multiple hub devices are connected to the bus and each of these hubs acts as the root of a singular star topology. Tree topology is efficient to manage large networks as it divides the network into smaller parts.

Network management is the process of administering the computer networks by using various tools and techniques. The requirements of network management are described with the FCAPS model. FCAPS is an acronym for f ault, c onfiguration, a ccounting, p erformance, and s ecurity.

In fault management , a network system should ensure that all of its components work properly. In the case of a fault, the system should be able to detect, isolate, resolve and log the event.

The primary functions of the configuration management include naming managed devices, initializing or shutting down controlled devices, changing the network settings, and obtaining notifications about device updates.

Accounting management aims to track the usage of computation and network resources in order to provide a fair distribution of resources among the users.

Performance management is concerned with keeping the network performance at acceptable levels. In order to monitor and control the performance of a network, statistical information is gathered. By analyzing these statistics, baseline performance levels are established. If the fulfillment of a component is lower than the baseline, it indicates a possible issue that requires attention.

Security management is concerned with the application of security policies. e main issues in security management are controlling the access to the resources and protecting the system against cyber or physical attacks.