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CS507 - Information Systems - Lecture Handout 07

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Types of Systems

What are Systems?

A system is a group of elements that are integrated with the common purpose of achieving an objective.


Purchase & Sales System

Components of a system

Following are the important components of the system.

  • Input elements
    Raw Data input to the computer system
  • Process
    Computation, analysis, application of any model
  • Output elements
    Results of computation or analysis
  • Control mechanism
    Comparison of actual with expected
  • Feedback system
    Corrective action
  • Objectives
    Expected/Ideal output

Types of Systems

Open-Loop System

The determinant factor is in an open loop system is that the information from the system not used for control purpose. This is done by using the output to generate feed back for control purposes.

  • The output is not coupled to the input for measurement.
  • Hence the components of open loop system do not include control and feedback mechanism due to non-existence of internally defined objectives. That is,
    • Input
    • Process
    • Output


An information system that automatically generates report on regular basis and are not used to monitor input or activities.

Closed Loop System

  • Is a system where part of the output is fed back to the system to initiate control to change Either the activities of the system or input of the system
  • Has the ability to control the output due to existence of
  • Control Mechanism
  • Feedback System
  • Objectives


Budgetary control system in a company by which

  • The results are communicated through feedback system
  • Results are compared with the objectives/budget through controls mechanism

Open Systems

  • A system that is connected to its environment by means of resource flows is called an open system.
  • The environment exerts influence on the system and the system also influences the environment.


  • Business is a system where management decisions are influenced by or have an influence on suppliers, customers, society as a whole.
  • Computerized system of a manufacturing entity, that takes influence from the society.

Closed Systems

  • A system that is not connected with its environment
  • Neither environment exerts any influence on the system nor does system influence the environment.


  • An information system designed to control data in a research laboratory is a closed system.
  • An information system designed to record highly sensitive information is a closed system so as
  • To accept no input for amendment
  • To give no output for disclosure

Objective of Having Systems

  • To subject a predefined amount of input (tangible, intangible) to predefined set of instructions in order to achieve an expected quality and amount of output.
  • Effective and efficient utilization of resources

Level of Planning

There are three levels

  • Strategic
  • Tactical / Functional
  • Operational

Strategic Planning

Is the formulation, evaluation and selection of strategies for the purpose of preparing a long-term plan of action to attain objectives.

Tactical/Functional Planning

Is the process by which managers assure the resources are obtained and used effectively and efficiently in the accomplishment of the organization’s objectives?

Operational Planning

It is the process of assuring that the specific tasks are being carried out efficiently and effectively.

Functional Strategic Planning

Commitment by Firm’s executives requires strategic planning for the following functional areas.

  • Manufacturing resources
  • Financial resources
  • Human resources
  • Marketing Resources
  • Information Resources

Strategic Planning for Information Resources (SPIR)

When a firm embraces SPIR the strategic plans for information services and the firm are developed concurrently. Business strategy and IT related strategy should go hand in hand. The IT related strategy should be driven by business strategy and the former should support the achievement what’s being mentioned in the latter. Any inconsistencies or deviations between the two should be removed and avoided.
The investment in IT is costly and inflexible. Such investment is also monitored and controlled by the IT strategy. Hence any investment not supporting the business strategy would be futile.


Business strategy

Modify inventory system to fulfill orders quickly through relocating system to warehouse and efficient shelf picking.

IS strategy

To identify information resources needed for the successful implementation of business strategy.

Information Value Chain

Raw information is transformed at various points and value is added before passing onwards. Every step of processing should make the information stored more valuable.


When customer order received, data punched into computerized system, which updates order list, customer records and store room records. When order has been served, customer orders are filed into records.