Explain the principles of business and the role of information technology 114050

PURPOSE OF THE UNIT STANDARD This unit standard is intended: To provide conceptual knowledge of the areas covered For those working in, or entering the workplace in the area of Information Technology As additional knowledge for those wanting to understand the areas covered

People credited with this unit standard are able to: Describe fundamental business concepts Describe systems theory with respect to information systems Explain how IT can be used in business Explain the relationship between a business and its data requirements The performance of all elements is to a standard that allows for further learning in this area.

LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF PRIOR LEARNING The credit value of this unit is based on a person having the prior knowledge and skills to: Demonstrate an understanding of fundamental Communication Skills at NQF Level 4 Demonstrate an understanding of fundamental Mathematics (at least NQF Level 3)

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INDEX

Competence Requirements Page Unit Standard 114050 alignment index Here you will find the different outcomes explained which you need to be 70 proved competent in, in order to complete the Unit Standard 114050. Unit Standard 114050 72 Describe fundamental business concepts 75 Describe systems theory with respect to information systems 86 Explain how IT can be used in business 96 Explain the relationship between a business and its information needs 108 Self-assessment Once you have completed all the questions after being facilitated, you need to check the progress you have made. If you feel that you are competent in the areas mentioned, you may tick the blocks, if however you feel that you 119 require additional knowledge, you need to indicate so in the block below. Show this to your facilitator and make the necessary arrangements to assist you to become competent.

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Unit Standard 114050 – Alignment Index SPECIFIC OUTCOMES AND RELATED ASSESSMENT CRITERIA SO 1 Describe fundamental business concepts The description distinguishes types of business organisations. Range: Sole trader, AC 1 Partnership, Limited Co, Private Co, Public Ltd Company. The description outlines the common objectives within which businesses operate. AC 2 Range: Buying & Selling activity, Profit, Charity, Social Clubs AC 3 The description outlines the environment within which businesses operate SO 2 Describe systems theory with respect to information systems The description defines the concept of a system. Range: A "whole" composed of AC 1 "parts" in an orderly arrangement according to a plan. The description identifies theoretical components of a system. Range: Input - AC 2 Process - Output The description distinguishes types of information systems. Range: Transaction Processing System (TPS), Knowledge Work System (KWS), Management AC 3 Information Systems(MIS), Decision Support Systems(DSS), Management/Executive Support Systems(ESS) (any three types) SO 3 Explain how IT can be used in business AC 1 The explanation identifies the purpose of computer applications in business. AC 2 The explanation outlines the functions of computer applications in business AC 3 The explanation illustrates the effects of IT on business systems SO 4 Explain the relationship between a business and its information needs The explanation distinguishes data and information. Range: Data is raw AC 1 unprocessed material. Information is processed data. The explanation outlines the role of information in decision making. Range: AC 2 Communication, Price control, Quality control, Marketing, Business performance The explanation identifies the main threats to data security and integrity. AC 3 Range: Unauthorised access, Viruses, Disgruntled staff (sabotage) The explanation identifies the sub-systems that make up a business and the information needs associated with each sub-system. Range: HR (employment), AC 4 Production (manufacture), Marketing (branding), Financial (cash flow), Administration (general) (any two)

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CRITICAL CROSS FIELD OUTCOMES UNIT STANDARD CCFO WORKING Work effectively with others as a member of an organisation.

UNIT STANDARD CCFO ORGANISING Organise and manage him/her self and his/her activities responsibly and effectively.

UNIT STANDARD CCFO COLLECTING Collect, analyse, organise, and critically evaluate information.

UNIT STANDARD CCFO COMMUNICATING Communicate effectively using visual, mathematical and or language skills in the modes of oral and/ or written persuasion when engaging with systems development.

UNIT STANDARD CCFO SCIENCE Use science and technology effectively and critically, showing responsibility towards the environment and health of others.

UNIT STANDARD CCFO DEMONSTRATING Demonstrate an understanding of the world as a set of related systems by recognising that problem solving contexts do not exists in isolation ESSENTIAL EMBEDDED KNOWLEDGE 1. Performance of all elements is to be carried out in accordance with organisation standards and procedures, unless otherwise stated. Organisation standards and procedures may cover: quality assurance, documentation, security, communication, health and safety, and personal behaviour. An example of the standards expected is the standards found in ISO 9000 Certified Organisations.

2. Performance of all elements complies with the laws of South Africa, especially with regard to copyright, privacy, health and safety, and consumer rights.

3. All activities must comply with any policies, procedures and requirements of the organisations involved, the ethical codes of relevant professional bodies and any relevant legislative and/ or regulatory requirements.

4. Performance of all elements should be performed with a solid understanding of the use of development tools needed in the areas applicable to the unit standard. Examples of such tools are, but is not limited to CASE tools, programming language editors with syntax checking, program source version control systems systems.

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All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.

SOUTH AFRICAN QUALIFICATIONS AUTHORITY REGISTERED UNIT STANDARD: Explain the principles of business and the role of information technology

SAQA ID UNIT STANDARD TITLE 114050 Explain the principles of business and the role of information technology ORIGINATOR SGB Information Systems and Technology FIELD SUBFIELD Field 10 - Physical, Mathematical, Computer and Life Information Technology and Computer Sciences Sciences ABET BAND UNIT TYPE PRE-2009 NQF LEVEL NQF LEVEL CREDITS Undefined Regular Level 5 Level TBA: Pre-2009 was 4 L5 REGISTRATION STATUS REGISTRATION START REGISTRATION END SAQA DECISION DATE DATE NUMBER Reregistered 2018-07-01 2023-06-30 SAQA 06120/18 LAST DATE FOR LAST DATE FOR ACHIEVEMENT ENROLMENT 2024-06-30 2027-06-30

PURPOSE OF THE UNIT STANDARD This unit standard is intended:  To provide conceptual knowledge of the areas covered  For those working in, or entering the workplace in the area of Information Technology  As additional knowledge for those wanting to understand the areas covered

People credited with this unit standard are able to:  Describe fundamental business concepts  Describe systems theory with respect to information systems  Explain how IT can be used in business  Explain the relationship between a business and its data requirements The performance of all elements is to a standard that allows for further learning in this area.

LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF PRIOR LEARNING The credit value of this unit is based on a person having the prior knowledge and skills to:  Demonstrate an understanding of fundamental Communication Skills at NQF Level 4  Demonstrate an understanding of fundamental Mathematics (at least NQF Level 3)

Specific Outcomes and Assessment Criteria: SPECIFIC OUTCOME 1 Describe fundamental business concepts. ASSESSMENT CRITERION 1 1. The description distinguishes types of business organisations. ASSESSMENT CRITERION RANGE Sole trader, Partnership, Limited Co, Private Co, Public Ltd Company. ASSESSMENT CRITERION 2 2. The description outlines the common objectives within which businesses operate. ASSESSMENT CRITERION RANGE Buying & Selling activity, Profit, Charity, Social Clubs. ASSESSMENT CRITERION 3 3. The description outlines the environment within which businesses operate.

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SPECIFIC OUTCOME 2 Describe systems theory with respect to information systems. ASSESSMENT CRITERION 1 1. The description defines the concept of a system. ASSESSMENT CRITERION RANGE A "whole" composed of "parts" in an orderly arrangement according to a plan. ASSESSMENT CRITERION 2 2. The description identifies theoretical components of a system. ASSESSMENT CRITERION RANGE Input - Process - Output ASSESSMENT CRITERION 3 3. The description distinguishes types of information systems. ASSESSMENT CRITERION RANGE Transaction Processing System (TPS), Knowledge Work System (KWS), Management Information Systems(MIS), Decision Support Systems(DSS), Management/Executive Support Systems(ESS) (any three types)

SPECIFIC OUTCOME 3 Explain how IT can be used in business. OUTCOME RANGE Wordprocessor- Document creation, editing, printing. Spreadsheet - Grid of rows & columns - (calculations, graphs), Databases- Mostly based on tables - (record keeping), Graphics - Presentations; Integrated - MS-Office, Lotus Smartsuite, Corel Suite. ASSESSMENT CRITERION 1 1. The explanation identifies the purpose of computer applications in business. ASSESSMENT CRITERION 2 2. The explanation outlines the functions of computer applications in business. ASSESSMENT CRITERION 3 3. The explanation illustrates the effects of IT on business systems.

SPECIFIC OUTCOME 4 Explain the relationship between a business and its information needs. ASSESSMENT CRITERION 1 1. The explanation distinguishes data and information. ASSESSMENT CRITERION RANGE Data is raw unprocessed material. Information is processed data. ASSESSMENT CRITERION 2 2. The explanation outlines the role of information in decision making. ASSESSMENT CRITERION RANGE Communication, Price control, Quality control, Marketing, Business performance. ASSESSMENT CRITERION 3 3. The explanation identifies the main threats to data security and integrity. ASSESSMENT CRITERION RANGE Unauthorised access, Viruses, Disgruntled staff (sabotage).

ASSESSMENT CRITERION 4 4. The explanation identifies the sub-systems that make up a business and the information needs associated with each sub-system. ASSESSMENT CRITERION RANGE HR (employment), Production (manufacture), Marketing (branding), Financial (cash flow), Administration (general) (any two).

UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS The relevant Education and Training Quality Authority (ETQA) must accredit providers before they can offer programs of education and training assessed against unit standards Moderation Process: Moderation of assessment will be overseen by the relevant ETQA according to the moderation guidelines in the

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relevant qualification and the agreed ETQA procedures.

UNIT STANDARD ESSENTIAL EMBEDDED KNOWLEDGE 1. Performance of all elements is to be carried out in accordance with organisation standards and procedures, unless otherwise stated. Organisation standards and procedures may cover: quality assurance, documentation, security, communication, health and safety, and personal behaviour. An example of the standards expected is the standards found in ISO 9000 Certified Organisations. 2. Performance of all elements complies with the laws of South Africa, especially with regard to copyright, privacy, health and safety, and consumer rights. 3. All activities must comply with any policies, procedures and requirements of the organisations involved, the ethical codes of relevant professional bodies and any relevant legislative and/ or regulatory requirements. 4. Performance of all elements should be performed with a solid understanding of the use of development tools needed in the areas applicable to the unit standard. Examples of such tools are, but is not limited to CASE tools, programming language editors with syntax checking, program source version control systems systems.

Critical Cross-field Outcomes (CCFO): UNIT STANDARD CCFO WORKING Work effectively with others as a member of an organisation. UNIT STANDARD CCFO ORGANISING Organise and manage him/her self and his/her activities responsibly and effectively. UNIT STANDARD CCFO COLLECTING Collect, analyse, organise, and critically evaluate information. UNIT STANDARD CCFO COMMUNICATING Communicate effectively using visual, mathematical and or language skills in the modes of oral and/ or written persuasion when engaging with systems development. UNIT STANDARD CCFO SCIENCE Use science and technology effectively and critically, showing responsibility towards the environment and health of others. UNIT STANDARD CCFO DEMONSTRATING Demonstrate an understanding of the world as a set of related systems by recognising that problem solving contexts do not exists in isolation.

REREGISTRATION HISTORY As per the SAQA Board decision/s at that time, this unit standard was Reregistered in 2012; 2015. UNIT STANDARD NOTES Works effectively with others by working co-operatively to achieve a security goals. Supplementary information: None. Sub-Sub-Field (Domain): Information Systems and Technology Management

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Describe fundamental business concepts Time: 180 minutes Activity: Self and Group

Let’s take a closer look at the different types of businesses there are, from which you must chose for your own setup.

FORMS OF ENTEPRISES

SOLE CLOSED PARTNERSHIP COMPANY PROPRIETOR CORPORATION

Company (PTY Ltd) The company (which functions under Act 61 of 1973, as amended) may be considered as a more advanced form of ownership that eliminates the disadvantages of the sole proprietorship, partnership and close corporation, especially regarding unlimited liability and the possibilities to acquire capital. In South Africa two types of profit-seeking companies are found, namely the private and the public company. The most important differences between these two business forms are briefly summarized below: Private Company Public Company Number of members Between one and 50 At least seven (Shareholders) Directors At least one At least two Shares May not be offered to the May be offered to the general public general public Transferability of Limited, may occur only with Freely transferable shares the consent of the board of directors Name Ends with: (Pty.) Ltd. Or Ends with: Ltd. Or Limited Proprietary (Limited) Legal requirements and Subject to less requirements Subject to numerous limitations and limitations requirements and limitations

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Closed Corporations (CC) This type of business provides a simple, flexible, inexpensive and legal business structure for up to ten natural persons involved in business together. A closed corporation may not have more than ten members and must be registered with the Registrar of Closed Corporations in Pretoria.

A closed corporation is seen as a legal person who can enter into contracts, operate a bank account, own C C property, sue or be sued in court. Certain registration and formation formalities as laid down in the Closed Corporations Act need to be completed before it is recognized. A closed corporation continues to exist until it is wound up or reregistered in terms of the Act.

A closed corporation is formed and owned by its members, but it exists independently of them. Therefore, it continues to be a legal person even if membership changes or if all the members die.

Only law, in terms of the Act, can do Establishment, existence or termination. A closed corporation is owned and managed by its members; each has an interest (a percentage) in the business and this must always add up to 100 percent. A company, corporation or trust may not be a member of a closed corporation.

Partnerships This is a particular type of business association concluded between people who intend making and sharing profits. A partnership is not a legal person. The rights, duties and liabilities of a partnership bind the individual partners. In case of insolvency, a partnership estate may be sequestrated as it is then recognized as having a separate existence. If a partnership is sequestrated due to insolvency, the estates of all the partners are simultaneously sequestrated.’

Partnerships have a minimum of two and a maximum of 20 partners. However, certain professional partnership may have more partners. A partnership is managed according to the agreement between the partners. Each partner is an agent of the partnership and thereby binds all other partners. Partners are jointly and severally liable for partnership debts.

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If you enter a partnership, it is always advisable to have a properly worded agreement drawn up by an attorney and signed by yourself and your partner. Among other things, the agreement should stipulate the action that needs to be taken if one of the partners should die or if the partnership should be dissolved.

Sole Proprietor Only one person owns this type of business; there are no partners or co-owners. In this form of business there is no need for formal registration, administration or termination; no statues regulate sole owners and no documentation needs registering. You do not necessarily have to carry on business alone and may employ people to manage or help you run the business. If your business becomes insolvent, it means that you will personally become insolvent. You will need to asses and research the need for this type of business in the area. In order to do this, you will have to take the following into account:  Your skills – can you do it or do you need help to successfully achieve it  Your interests – will you enjoy doing this type of business and the hours that comes with it?  Your other commitments – family, friends, other job or any other item that requires you attention away from this  Is there a market for the business? There must be a need for that type of business for it to be able to succeed.  Who is the market? Who are your clients going to be? Businesses or private individuals.  How big is the market? Do you need to be able to produce in masses or can you take orders and produce on order?  Who will your competition be? Are they close to your prospective location or not?  Is the market you would like to enter, still growing or is it stagnant? Are there other companies of similar nature? Are they growing or closing?  Where will you open your business? Will it be in an office block or do you need retail space?  What are the capital requirements of your business? How much do you need to open your business and operate it, until there is enough to provide for all the debts?  How big must the business be to be successful, not too big (costing too much) or too small (will not have the capability to complete all the work)?  What will the working hours be? Long working hours will require additional (overtime) pay, shorter working hours can affect productivity.

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 How many people will be employed? Employing 10 if you need 20 can cause a delay in your delivery time to your clients, known as seen as bad service; vice versa; if you have 20 and only need 10, then you will be paying for the staff that you do not need.  What is the risk? How many other companies offer the same as you? Are they flourishing or closing down? Do you have existing clients? Can you afford to lose what you put into the company?  Can the business operate from home? This will save on costs as well as travelling and many other expenses.

You may have a few ideas for a business that you would like to start. Taking the above criteria and rating them on a scale of 1-10, for each of the business ideas you have, will give you a better understanding of which business to start with at first. Another factor you may want to consider is the purchase of an existing business. The advantages being that the business is an ongoing concern and revenue would come in from day one.

In addition, there is already a customer and supplier base; you would not have to hunt for premises or equipment. Bear in mind, however, that you will also be paying for goodwill and there may be unseen flaws.

You could also decide upon opening a franchised business. This is a type of in between business, from the two mentioned above. It is a new business, yes, you will be the first owner of the business, but it is also a known business (brand), so it is also an ongoing concern. Franchising is becoming a very popular in South Africa, it can be explained as a marriage between a big business and a small business.

The franchisor is usually a person or company with a highly marketable product or service. The franchisee is a person or company who is licensed by the franchisor to perform the marketing function and who provides most of the capital required for this purpose. The franchisor achieves rapid expansion at relatively low cost to him. The franchisee sets up a business with a good (already successful) product or service and obtains a number of big businesses purchasing and advertising advantages.

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The relatively small size of the franchisees business provides small business advantages such as personal dedication and commitment and is therefore particularly suited for service-types businesses.

Franchising has provided numerous opportunities for individuals to set up a business at relatively low risk. In South Africa today, franchising probably represents one of the best opportunities for aspiring entrepreneurs. According to the South African Franchisee Association, franchising is about to explode in South Africa.

Advantages of Franchising The chances of success are far greater because the franchisor can provide goods (or services) to the franchisee more cheaply than in the case of an independent business. The franchisor obtains bigger discounts by buying in bulk for his outlets The franchisee sets up a business with a product or service which has an existing or acceptable image. Customers know the business, even if the outlet is new An accepted image (brand) often takes years to build up, while a franchise business has this image (brand) from the start Most franchisors offer franchises a complete package which includes an operations manual, an accounting system, marketing assistance (including advertising and promotional aids) assistance with the design of the outlet as well as staff selection and training. Franchisees can look to the franchisor for any management advice, on an ongoing basis, because it is in the franchisor’s own interest to ensure the success of every franchised outlet.

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Disadvantages of Franchising The franchisee normally enjoys selling rights which are restricted to a particular area only Franchising demands strict controls by the franchisor in order to maintain uniform quality standards and cleanliness Disadvantages may develop if the franchisee becomes too dependent on the franchisor It does cost money to buy a franchise; initial franchise fees as well as ongoing royalty fees are charged.

What do you need to be a franchisee? You must possess the qualities of a successful entrepreneur You must do a thorough investigation of the franchisor whose product or service interests you Research the franchisors’ track record with other franchisees and outlets Research the growth of the industry from within which the franchisor operates Contact existing franchisees to find out how satisfied they are with the business Establish what training will be provided Get an attorney to scrutinise the franchise agreement form The legal and financial aspects of the franchise business are important considerations and should be clearly defined and fair to both parties Loans from financial institutions are more readily available to franchise businesses because of the reduced risk factor What are franchised businesses?

It is basically a business that has the same name, trades the same goods at more or less the same prices. The largest criteria for franchised outlets are that they must all look uniformly the same as well as sell the branded products which the franchisor suggests. More and more these products are being labelled as “house brands” which is a building tool for the franchise brand name.

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It gives the consumer the peace of mind that no matter where they are doing their purchases, they can be confident that they will receive the same quality from one outlet, than what they would from the next. This is the brand that consumers long for, which gives them confidence in the quality of the product they are buying.

Introduction When a sole trader sets up they may have some unstated aims or objectives - for example to survive for the first year. Other businesses may wish to state exactly what they are aiming to do, such as Amazon, the Internet CD and bookseller, who wants to “make history and have fun”.

An aim is where the business wants to go in the future, its goals. It is a statement of purpose, e.g. we want to grow the business into Europe.

Business objectives are the stated, measurable targets of how to achieve business aims. For instance, we want to achieve sales of €10 million in European markets in 2004.

A mission statement sets out the business vision and values that enables employees, managers, customers and even suppliers to understand the underlying basis for the actions of the business.

Business Objectives Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards to its stated aims. The most effective business objectives meet the following criteria: S – Specific – objectives are aimed at what the business does, e.g. a hotel might have an objective of filling 60% of its beds a night during October, an objective specific to that business. M - Measurable – the business can put a value to the objective, e.g. €10,000 in sales in the next half year of trading. A - Agreed by all those concerned in trying to achieve the objective. R - Realistic – the objective should be challenging, but it should also be able to be achieved by the resources available. T- Time specific – they have a time limit of when the objective should be achieved, e.g. by the end of the year.

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The main objectives that a business might have are:

Survival – a short term objective, probably for small business just starting out, or when a new firm enters the market or at a time of crisis.

Profit maximisation – try to make the most profit possible – most like to be the aim of the owners and shareholders.

Profit satisfying – try to make enough profit to keep the owners comfortable – probably the aim of smaller businesses whose owners do not want to work longer hours.

Sales growth – where the business tries to make as many sales as possible. This may be because the managers believe that the survival of the business depends on being large. Large businesses can also benefit from economies of scale. A business may find that some of their objectives conflict with one and other:

Growth versus profit: for example, achieving higher sales in the short term (e.g. by cutting prices) will reduce short-term profit. Short-term versus long-term: for example, a business may decide to accept lower cash flows in the short-term whilst it invests heavily in new products or plant and equipment. Large investors in the Stock Exchange are often accused of looking too much at short-term objectives and company performance rather than investing in a business for the long-term.

Alternative Aims and Objectives Not all businesses seek profit or growth. Some organisations have alternative objectives. Examples of other objectives:

Ethical and socially responsible objectives – organisations like the Co-op or the Body Shop have objectives which are based on their beliefs on how one should treat the environment and people who are less fortunate.

Public sector corporations are run to not only generate a profit but provide a service to the public. This service will need to meet the needs of the less well off in society or help improve the ability of the economy to function: e.g. cheap and accessible transport service.

Public sector organisations that monitor or control private sector activities have objectives that are to ensure that the business they are monitoring comply with the laws laid down.

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Health care and education establishments – their objectives are to provide a service – most private schools for instance have charitable status. Their aim is the enhancement of their pupils through education. Charities and voluntary organisations – their aims and objectives are led by the beliefs they stand for.

Changing Objectives A business may change its objectives over time due to the following reasons: A business may achieve an objective and will need to move onto another one (e.g. survival in the first year may lead to an objective of increasing profit in the second year).

The competitive environment might change, with the launch of new products from competitors. Technology might change product designs, so sales and production targets might need to change.

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Activities – Questioning in your groups Explain the following types of companies: Sole trader

Partnership

Limited Co

Private Co

Public Ltd Company

Explain how these companies interact with their clients with regards to: Buying & Selling activities

Profit

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Charity

Social Clubs

Explain these businesses activities and the environment within which such businesses operate

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Systems theory with respect to information systems Time: 90 minutes Activity: Self and Group

Business Environment A manager is someone skilled in knowing how to analyse and improve the ability of an organization to survive and grow in a complex and changing world. This means that managers have a set of tools that enable them to grasp the complexity of the organization's environment.

A management system describes the organization and the set of significant interacting institutions and forces in the organization's complex and rapidly changing environment that affect its ability to serve its customers. The firm must continuously monitor and adapt to the environment if it is to survive and prosper. Disturbances in the environment may spell profound threats or new opportunities for the firm. The successful firm will identify, appraise, and respond to the various opportunities and threats in its environment.

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Internal Environment The management system can be conceptualised on two levels. The first level involves the organization's internal environment. Internally, an organization can be viewed as a resource conversion machine that takes inputs (labour, money, materials and equipment) from the external environment (i.e., the outside world), converts them into useful products, goods, and services, and makes them available to customers as outputs.

External Environment The second level of the management system involves the organization's external environment. It consists of all the outside institutions and forces that have an actual or potential interest or impact on the organization's ability to achieve its objectives: competitive, economic, technological, political, legal, demographic, cultural, and ecosystem.

Environmental forces create challenges and opportunities for the organisation. Managers must react and adapt to changes in their internal and external environment. Globalization is an example of an opportunity for an organization. Improving technologies, such as transportation and communications, have enabled companies to expand into global or worldwide markets. Globalisation affects how organizations are managed.

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Managers must learn to deal effectively with multiple cultures and political systems in the midst of rapidly changing markets and technology. They must be able to anticipate this changing environment and develop the vision and competencies at all levels in their organisations to embrace this dynamic future.

The description distinguishes types of information systems. (Transaction Processing System (TPS), Knowledge Work System (KWS), Management Information Systems(MIS), Decision Support Systems(DSS), Management/Executive Support Systems(ESS) (any three types)

Transaction Processing System A Transaction Processing System (TPS) is a type of information system. TPS’s collect, store, modify, and retrieve the transactions of an organization. A transaction is an event that generates or modifies data that is eventually stored in an information system. To be considered a transaction processing system the computer must pass the ACID test.

Types of Transaction Processing Systems Contrasted with batch processing Batch processing is not transaction processing. Batch processing involves processing several transactions at the same time, and the results of each transaction are not immediately available when the transaction is being entered. Features of Transaction Processing Systems

Rapid Response Fast performance with a rapid response time is critical. Businesses cannot afford to have customers waiting for a TPS to respond, the turnaround time from the input of the transaction to the production for the output must be a few seconds or less.

Reliability Many organisations rely heavily on their TPS; a breakdown will disrupt operations or even stop the business. For a TPS to be effective its failure rate must be very low. If a TPS does fail, then quick and accurate recovery must be possible. This makes well–designed backup and recovery procedures essential.

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Inflexibility A TPS wants every transaction to be processed in the same way regardless of the user, the customer or the time for day. If a TPS were flexible, there would be too many opportunities for non-standard operations, for example, a commercial airline needs to consistently accept airline reservations from a range of travel agents, accepting different transactions data from different travel agents would be a problem.

Controlled processing The processing in a TPS must support an organisation's operations. For example if an organisation allocates roles and responsibilities to particular employees, then the TPS should enforce and maintain this requirement.

ACID Test Properties: First Definition Atomicity A transaction’s changes to the state are atomic: either all happen or none happen. These changes include database changes, messages, and actions on transducers.

Consistency A transaction is a correct transformation of the state. The actions taken as a group do not violate any of the integrity constraints associated with the state. This requires that the transaction be a correct program.

Isolation Even though transactions execute concurrently, it appears to each transaction T, that others executed either before T or after T, but not both.

Durability Once a transaction completes successfully (commits), its changes to the state survive failures.

Storing and Retrieving Storing and retrieving information from a TPS must be efficient and effective. The data are stored in warehouses or other databases, the system must be well designed for its backup and recovery procedures.

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Databases and files The storage and retrieval of data must be accurate as it is used many times throughout the day. A database is a collection of data neatly organized, which stores the accounting and operational records in the database. Databases are always protective of their delicate data, so they usually have a restricted view of certain data. Databases are designed using hierarchical, network or relational structures; each structure is effective in its own sense.

Hierarchical structure: organises data in a series of levels, hence why it is called hierarchal. Its top to bottom like structure consists of nodes and branches; each child node has branches and is only linked to one higher level parent node.

Network structure: Similar to hierarchical, network structures also organizes data using nodes and branches. But, unlike hierarchical, each child node can be linked to multiple, higher parent nodes.

Relational structure: Unlike network and hierarchical, a relational database organises its data in a series of related tables. This gives flexibility as relationships between the tables are built.

Knowledge Work System Technology in the Business Environment The diagram shows a typical pyramid hierarchy and the technology that is there to serve its needs:

For management to control and plan the organisation Management

Managers Information Systems For clerical and professional people to process and create information Information Knowledge Work and knowledge workers Systems

Production Data Processing/ workers Transaction Processing For production workers to deal Systems with customers and suppliers Data Processing Systems are also known as transaction processing systems. A

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transaction is any event that is recorded, whether it’s a sale, or signing up to a college course. The data is recorded and dealt with by some process. There are two ways in which transactions can be dealt with:  In batch systems, a number of transactions are collected over a period of time and dealt with all in one go. For example goods ordered at a mail-order warehouse may have the tickets collected into a batch of 50 and the details are keyed in and save onto disk. Only when that has been done is the stock-control program run. It may take several hours for this to happen, but when someone is waiting for four or five days for delivery, this is not so critical.  On-line systems where updates of data are done immediately. This is important when time is critical. The sensors feeding in data for the management of a production line need to update the program constantly, so that imbalances can be checked immediately. When you buy a ticket at a travel agent, the airline’s computer is updated almost immediately. This is pseudo-on-line processing, where a delay of a few seconds is neither here nor there.

Knowledge work systems are there to help to deal with problems requiring technical expertise or knowledge. Software includes:  Word-processing for clerical staff;  Spreadsheets for accounts, and sales staff;  Database managements systems for keeping records;  CAD for designers;  Project management systems;  Expert systems for specialist staff. An example of this may be a system that enables an engineer to select a particular metal alloy for a bearing. He could type in the parameters he needs and the system can suggest several different alloys. It is then up to the engineer to us his knowledge and experience to decide what alloy he will use.

In most organisations computers are networked, and in large organisations there will be several local area networks linked together. These will contain hardware and software to allow groups of staff to communicate, using e-mail, document scanning, web-cams, and video conferencing.

Management Information Systems are designed to help managers monitor and control organisational performance, and plan for the future. We will look at this in the next topic.

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The five classical functions of a manager are: 1. Planning – the direction a company takes e.g. diversifying, where to operate. 2. Organising - resources such as people, space, equipment and services. 3. Coordinating - the activities of various departments. 4. Decision-making - about the organisation, products or services made or sold, the employees, use of I.T. 5. Controlling - monitoring and supervising the activities of others.

The role of a management information system (MIS) is to provide a manager with sufficient information to make informed decisions to help him to carry out the above functions. The best definition of an MIS is:

The role of a management information system is to convert data from internal and external sources into information that can be used to aid in making effective decisions for planning, directing and controlling. We need to make the distinction between a data-processing system and an information system: · Data processing systems record day too day transactions, e.g. sale of a CD to a customer. · Operational Information systems read the collected data and do things like producing lists of items that need to be re-ordered. · The MIS will analyse the sales data to highlight sales trends of different product lines, to enable decisions to be made as to whether the product needs special promotion, or whether it should be discontinued.

The MIS deals with internal and external information. The internal information can be got quite easily from the various systems on the company network, e.g. sales figures for each product line. The external information is gathered from: · Intelligence about competitors’ activities. This can come through reading articles in the press, leaks, or even industrial espionage. · Information about population shifts. As the population gets older, the less likely they are to be interested in pop-music or customising cars, but are more likely to be interested in weight-loss products or holidays for the over 50s. · Economic and social factors. Sales of cars would go down in an area where a major employer had just closed down a plant. · Government Legislation. Financial forecasts would change if the minimum wage rose.

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The MIS can be used to gather information from both formal and informal flows of information. · A formal flow of information is one in which a procedure is adopted, e.g. the downloading of sales figures from several branches first thing on a Monday morning. External data can be collected using specialised data collection agencies such as Dun and Bradstreet who produce economic data for academic and commercial organisations. Formal flows can also come from people working on the same document at several locations, or by use of e-mail, or by use of company intranets. · Informal information flows come from chance meetings, reading magazines or newspapers, or watching the news on TV.

The MIS must produce information for managers on three levels: · Operational – day-to-day decisions such as ordering in more stock · Tactical – decisions that have a short to medium term effect, e.g. introducing a new product to a particular retail outlet; · Strategic – long term decisions that will affect the future of the organisation, e.g. whether to open a new store, or take over a rival concern.

Types of Decision A manager can make two kinds of decision: · Structured – which are repetitive and need a definite routine and procedure to deal with them, e.g. stock is below 15 %, so an order need to be place with a supplier. · Unstructured – require knowledge, insight, and evaluation. They may well crop up without warning, and the right decision can be critical.

The manager may well go through the following stages when considering what decision to take: 1. Recognise the problem. The MIS may give information about the performance of the department, and where there is a problem. 2. Consider the solution. A spreadsheet could be used to consider “What if” scenarios. 3. The solution is chosen using the manager’s experience as well as the information produced by the MIS. 4. The solution is implemented and reviewed. Again the MIS can provide the data on which the solution is evaluated. Often solutions do not proceed smoothly and there may have to be backtracking from one stage to another.

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Activities – In your groups – Questioning Explain the concept of a system making reference to whole or parts in an orderly arrangement according to a plan.

Explain the theoretical components of systems (Input-Process-Output)

Distinguish between three different types of information systems. Type 1

Type 2

Type 3

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Explain how IT can be used in business Time: 120 minutes Activity: Self and Group

ord Processors Using a computer to create, edit, and print documents. Of all computer applications, word processing is the most common. To perform word processing, you need a computer, a special program called a word processor, and a printer. A word processor enables you to create a document, store it electronically on a disk, display it on a screen, modify it by entering commands and characters from the keyboard, and print it on a printer.

The great advantage of word processing over using a typewriter is that you can make changes without retyping the entire document. If you make a typing mistake, you simply back up the cursor and correct your mistake.

If you want to delete a paragraph, you simply remove it, without leaving a trace. It is equally easy to insert a word, sentence, or paragraph in the middle of a document. Word processors also make it easy to move sections of text from one place to another within a document, or between documents.

When you have made all the changes you want, you can send the file to a printer to get a hardcopy. Word processors vary considerably, but all word processors support the following basic features: Insert text: Allows you to insert text anywhere in the document. Delete text: Allows you to erase characters, words, lines, or pages as easily as you can cross them out on paper. Cut and paste: Allows you to remove (cut) a section of text from one place in a document and insert (paste) it somewhere else. Copy: Allows you to duplicate a section of text. Page size and margins: Allows you to define various page sizes and margins, and the word processor will automatically readjust the text so that it fits. Search and replace: Allows you to direct the word processor to search for a particular word or phrase. You can also direct the word processor to replace one group of characters with another everywhere that the first group appears.

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Word wrap: The word processor automatically moves to the next line when you have filled one line with text, and it will readjust text if you change the margins. Print: Allows you to send a document to a printer to get hardcopy.

Word processors that support only these features (and maybe a few others) are called text editors. Most word processors, however, support additional features that enable you to manipulate and format documents in more sophisticated ways. These more advanced word processors are sometimes called full-featured word processors.

Full-featured word processors usually support the following features: File management: Many word processors contain file management capabilities that allow you to create, delete, move, and search for files.

Font specifications: Allows you to change fonts within a document. For example, you can specify bold, italics, and underlining. Most word processors also let you change the font size and even the typeface.

Footnotes and cross-references: Automates the numbering and placement of footnotes and enables you to easily cross-reference other sections of the document. Graphics: Allows you to embed illustrations and graphs into a document. Some word processors let you create the illustrations within the word processor; others let you insert an illustration produced by a different program.

Headers, footers, and page numbering: Allows you to specify customized headers and footers that the word processor will put at the top and bottom of every page. The word processor automatically keeps track of page numbers so that the correct number appears on each page.

Layout: Allows you to specify different margins within a single document and to specify various methods for indenting paragraphs.

Macros: A macro is a character or word that represents a series of keystrokes. The keystrokes can represent text or commands. The ability to define macros allows you to save yourself a lot of time by replacing common combinations of keystrokes.

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Merges: Allows you to merge text from one file into another file. This is particularly useful for generating many files that have the same format but different data. Generating mailing labels is the classic example of using merges.

Spell checker: A utility that allows you to check the spelling of words. It will highlight any words that it does not recognize.

Tables of contents and indexes: Allows you to automatically create a table of contents and index based on special codes that you insert in the document.

Thesaurus: A built-in thesaurus that allows you to search for synonyms without leaving the word processor.

Windows: Allows you to edit two or more documents at the same time. Each document appears in a separate window. This is particularly valuable when working on a large project that consists of several different files.

WYSIWYG (what you see is what you get): With WYSIWYG, a document appears on the display screen exactly as it will look when printed. The line dividing word processors from desktop publishing systems is constantly shifting. In general, though, desktop publishing applications support finer control over layout, and more support for full-colour documents.

Spreadsheets A spreadsheet is a rectangular table (or grid) of information, often financial information.

The word came from "spread" in its sense of a newspaper or magazine item (text and/or graphics) that covers two facing pages, extending across the centre fold

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and treating the two pages as one large one.

The compound word "spread-sheet" came to mean the format used to present bookkeeping ledgers—with columns for categories of expenditures across the top, invoices listed down the left margin, and the amount of each payment in the cell where its row and column intersect—which were traditionally a "spread" across facing pages of a bound ledger (book for keeping accounting records) or on oversized sheets of paper ruled into rows and columns in that format and approximately twice as wide as ordinary paper.

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Database In computer science, a database is a structured collection of records or data that is stored in a computer system so that a computer program or person using a query language can consult it to answer queries.

The records retrieved in answer to queries are information that can be used to make decisions. The computer program used to manage and query a database is known as a database management system (DBMS).

The properties and design of database systems are included in the study of information science.

A typical query could be to answer questions such as, "How many hamburgers with 2 or more beef patties were sold in the month of March in region 4?".

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To answer such a question, the database would have to store information about hamburgers sold, including number of patties, sales date, and the region of sales. The term "database" originated within the computing discipline.

Although its meaning has been broadened by popular use, even to include non-electronic databases, this article is about computer databases. Database-like records have been in existence since well before the Industrial Revolution in the form of ledgers, sales receipts and other business-related collections of data.

The central concept of a database is that of a collection of records, or pieces of information. Typically, for a given database, there is a structural description of the type of facts held in that database: this description is known as a schema.

The schema describes the objects that are represented in the database, and the relationships among them. There are a number of different ways of organizing a schema, that is, of modelling the database structure: these are known as database models (or data models).

The model in most common use today is the relational model, which in layman's terms represents all information in the form of multiple related tables each consisting of rows and columns (the true definition uses mathematical terminology).

This model represents relationships by the use of values common to more than one table. Other models such as the hierarchical model and the network model use a more explicit representation of relationships.

The term database refers to the collection of related records, and the software should be referred to as the database management system or DBMS. When the context is unambiguous, however, many database administrators and programmers use the term database to cover both meanings.

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Graphics Computer graphics is a sub-field of computer science and is concerned with digitally synthesizing and manipulating visual content.

Although the term often refers to three- dimensional computer graphics, it also encompasses two-dimensional graphics and image processing. Computer graphics is often differentiated from the field of visualization, although the two have many similarities.

A broad classification of major subfields in computer graphics might be: Geometry: studies ways to represent and process surfaces Animation: studies with ways to represent and manipulate motion Rendering: studies algorithms to reproduce light transport Imaging: studies image acquisition or image editing

Microsoft Office Microsoft Office is an office suite from Microsoft for Microsoft Windows and Apple Mac OS X operating systems.

Along with core office applications, it includes associated servers and web-based services. Recent versions of Office are referred as "Office system".

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Office was introduced in 1989 on the Mac, with a version for Windows in 1990. Initially a marketing term for a bundled set of applications, the first version of Office contained Microsoft Word, Microsoft Excel, and Microsoft PowerPoint.

Additionally, a "Pro" version of Office included Microsoft Access and Schedule Plus. Over the years, Office applications have grown substantially closer with shared features such as a common spell checker, OLE data integration and Microsoft Visual Basic for Applications scripting language.

A major feature of the Office suite is the ability for users and third party companies to write Component Object Model add-ins, which are supplemental programs that extend the capabilities of an application by adding custom commands and specialized features. Microsoft also positions Office as a development platform for line-of-business software.

The current versions are Office 2007 for Windows, launched on January 30, 2007, and Office 2004 for Mac, released May 19, 2004. Office 2007, announced on February 15, 2006, was released on November 30, 2006 for businesses via volume License and MSDN channels. It features a distinct user interface and a new XML-based primary file format. The new Mac version, Microsoft Office 2008 for Mac, is expected to be released in January 2008.

Lotus SmartSuite SmartSuite is an office suite from IBM's Lotus Software group. IBM purchased Lotus in 1995 and Lotus made versions for IBM's OS/2, as well as Windows versions. The following applications are included in SmartSuite for Microsoft Windows:  Lotus Word Pro — word processor (previously called Ami Pro) .lwp-files  Lotus 1-2-3 — spreadsheet .123 .wk1 .wk3 .wk4-files  Lotus Freelance Graphics — presentation software .prz-files  Lotus Approach — relational database .apr (data entry & reports) .dbf (database) -files  Lotus Organizer — personal information manager .org .or2 .or3-files  Lotus SmartCenter — a toolbar that let users quickly access programs, their calendar, Internet bookmarks, and other resources  Lotus FastSite — web design software. .htm-files  Lotus ScreenCam — recording of screen activity for demos and tutorials. .scm .exe .wav-files

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Most or all SmartSuite programs are capable of reading and writing the corresponding Microsoft Office files. The Microsoft programs, however, are capable of reading only a few vintage formats of the Lotus programs, such as the older 1-2-3 .wks and .wk1 files. Furthermore, several of the SmartSuite components provide functionality not found in the Microsoft Office suite, for example Lotus FastSite and Lotus SmartCenter.

SmartSuite is in maintenance mode, and supported with fixes and fixpacks on Windows 2000 and Windows XP. SmartSuite is not supported by IBM on the Windows Vista operating system, although it should work on the 32-bit version of Vista, according to tests done by Microsoft. IBM has no plans to release specific Vista-compatible versions of SmartSuite or Organizer. In 2007, IBM introduced a new office suite called Lotus Symphony.

CorelSuite Corel was founded by Michael Cowpland in 1985, who intended it to be a research laboratory ("Corel" is an abbreviation of "Cowpland Research Laboratory"). The company saw great success early in the high-tech boom of the nineties with the product CorelDraw, and became, for a time, the biggest software company in Canada.

Corel made many early investors very wealthy, but its strong growth did not last. It attempted to compete with Microsoft after acquiring the WordPerfect software in 1996, but it failed badly. Corel was forced to lay-off large numbers of employees and Cowpland came under investigation by the Ontario Securities Commission for insider trading.

Concerning the WordPerfect acquisition, Cowpland believed that WordPerfect could be the "Pepsi to Microsoft's Coke". This was a classical marketing perspective, but fundamentally flawed, perhaps reflecting Cowpland's lack of expertise in the software industry. Unlike

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food items, software programs have strong compatibility dependencies, which make entrenched applications much harder to compete against.

Even if WordPerfect was marketed strongly with a perceived benefit, there would also need to be a compelling reason for existing Microsoft Word users to switch, and new users generally want to be compatible with existing users. Corel also failed to stop Microsoft from pushing pre-loaded copies of Word onto new computers, a strategy which eroded WordPerfect's higher market share. However, as the company is no longer subject to the same rules governing publicly traded corporations now, these claims can be difficult to verify.

It should also be noted that many WordPerfect users received their software as a preload on their new computer. Corel generally charges the hardware manufacturer very little per copy for the bundled software. The WordPerfect acquisition also changed the nature of Corel itself.

Whereas Adobe Systems remained in the graphics and publishing software business, Corel was suddenly no longer solely within that sphere. A barrage of new projects, such as Corel Video, Barista (a Java-based document exchange format), Corel Computer, and Corel Linux, fuelled speculation that Corel was trying to reinvent itself but wasn't sure how, or that they were "throwing stuff at the walls and looking to see what would stick."  Corel Designer - Formerly Micrografx Designer, professional technical illustration software.  CorelDRAW - A vector graphics editor. Still the company's best-selling software.  CorelDream3D  Corel Graphics Suite - Combination of CorelDRAW, PhotoPaint, R.A.V.E., Trace and Capture.  Corel KnockOut - Professional image masking plug-in.  Corel Painter - Formerly Fractal Painter. A program that emulates natural media (paint, crayons, brushes etc.)  Paint Shop Pro - In October 2004, Corel purchased Jasc Software, developer of this budget-priced bitmap graphics editing program.  Paradox - A relational database acquired from Borland and bundled with WordPerfect Office Professional Edition.  Corel Photo Album - A sophisticated program for organizing digital photographs, inherited from Jasc Software.  Corel PHOTO-PAINT - A bitmap graphics program comparable to Adobe Photoshop. Bundled with the CorelDRAW Graphics Suite.

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 Corel SnapFire - A new digital photo management suite, positioned to compete with Google's Picasa offering.  Quattro Pro - A spreadsheet program acquired from Borland and bundled with WordPerfect Office.  WordPerfect - A word processing program acquired from Novell, and originally produced by Satellite Software International.  WinZip - A file archiver and compressor acquired in 2006 from Corel's purchase of WinZip Computing.

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Activities – In your groups – Questioning Explain how the following aspects of IT can be used in businesses, making reference to their functions as well as the effects they have on the business: Word Processors

Spreadsheets

Databases

Graphics

Integrated office suites

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Relationship between a business and information needs

Time: 120 minutes Activity: Self and Group

Data, Information, Knowledge, and Wisdom by Gene Bellinger, Durval Castro, Anthony Mills (www.systemsthinking.org) There is probably no segment of activity in the world attracting as much attention at present as that of knowledge management. Yet as I entered this arena of activity I quickly found there didn't seem to be a wealth of sources that seemed to make sense in terms of defining what knowledge actually was, and how was it differentiated from data, information, and wisdom. What follows is the current level of understanding I have been able to piece together regarding data, information, knowledge, and wisdom. I figured to understand one of them I had to understand all of them.

According to Russell Ackoff, a systems theorist and professor of organisational change, the content of the human mind can be classified into five categories: 1. Data: symbols 2. Information: data that are processed to be useful; provides answers to "who", "what", "where", and "when" questions 3. Knowledge: application of data and information; answers "how" questions 4. Understanding: appreciation of "why" 5. Wisdom: evaluated understanding.

Ackoff indicates that the first four categories relate to the past; they deal with what has been or what is known. Only the fifth category, wisdom, deals with the future because it incorporates vision and design. With wisdom, people can create the future rather than just grasp the present and past. But achieving wisdom isn't easy; people must move successively through the other categories.

A further elaboration of Ackoff's definitions follows:

Data... data is raw. It simply exists and has no significance beyond its existence (in and of itself). It can exist in any form, usable or not. It does not have meaning of itself. In computer parlance, a spreadsheet generally starts out by holding data.

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Information... information is data that has been given meaning by way of relational connection. This "meaning" can be useful, but does not have to be. In computer parlance, a relational database makes information from the data stored within it.

Knowledge... knowledge is the appropriate collection of information, such that it's intent is to be useful. Knowledge is a deterministic process. When someone "memorizes" information (as less-aspiring test-bound students often do), then they have amassed knowledge. This knowledge has useful meaning to them, but it does not provide for, in and of itself, integration such as would infer further knowledge.

For example, elementary school children memorize, or amass knowledge of, the "times table". They can tell you that "2 x 2 = 4" because they have amassed that knowledge (it being included in the times table). But when asked what is "1267 x 300", they cannot respond correctly because that entry is not in their times table.

To correctly answer such a question requires a true cognitive and analytical ability that is only encompassed in the next level... understanding. In computer parlance, most of the applications we use (modelling, simulation, etc.) exercise some type of stored knowledge.

Understanding... understanding is an interpolative and probabilistic process. It is cognitive and analytical. It is the process by which I can take knowledge and synthesize new knowledge from the previously held knowledge. The difference between understanding and knowledge is the difference between "learning" and "memorizing".

People who have understanding can undertake useful actions because they can synthesize new knowledge, or in some cases, at least new information, from what is previously known (and understood).

That is, understanding can build upon currently held information, knowledge and understanding itself. In computer parlance, AI systems possess understanding in the sense that they are able to synthesize new knowledge from previously stored information and knowledge.

Wisdom... wisdom is an extrapolative and non-deterministic, non-probabilistic process. It calls upon all the previous levels of consciousness, and specifically upon special types of human programming (moral, ethical codes, etc.).

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It beckons to give us understanding about which there has previously been no understanding, and in doing so, goes far beyond understanding itself. It is the essence of philosophical probing. Unlike the previous four levels, it asks questions to which there is no (easily-achievable) answer, and in some cases, to which there can be no humanly-known answers period.

Wisdom is therefore, the process by which we also discern, or judge, between right and wrong, good and bad. I personally believe that computers do not have, and will never have the ability to possess wisdom. Wisdom is a uniquely human state, or as I see it, wisdom requires one to have a soul, for it resides as much in the heart as in the mind.

Personally I contend that the sequence is a bit less involved than described by Ackoff. The following diagram represents the transitions from data, to information, to knowledge, and finally to wisdom, and it is understanding that support the transition from each stage to the next. Understanding is not a separate level of its own.

Data represents a fact or statement of event without relation to other things. Ex: It is raining. Information embodies the understanding of a relationship of some sort, possibly cause and effect. Ex: The temperature dropped 15 degrees and then it started raining.

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Knowledge represents a pattern that connects and generally provides a high level of predictability as to what is described or what will happen next. Ex: If the humidity is very high and the temperature drops substantially the atmospheres is often unlikely to be able to hold the moisture so it rains.

Wisdom embodies more of an understanding of fundamental principles embodied within the knowledge that are essentially the basis for the knowledge being what it is. Wisdom is essentially systemic. Ex: It rains because it rains. And this encompasses an understanding of all the interactions that happen between raining, evaporation, air currents, temperature gradients, changes, and raining.

Yet, there is still a question regarding when is a pattern knowledge and when is it noise. Consider the following:  Abugt dbesbt regtc uatn s uitrzt.  ubtxte pstye ysote anet sser extess  ibxtedstes bet3 ibtes otesb tapbesct ehracts

It is quite likely this sequence represents 100% novelty, which means it's equivalent to noise. There is no foundation for you to connect with the pattern, yet to me the statements are quite meaningful as I understand the translation with reveals they are in fact Newton's 3 laws of motion. Is something knowledge if you can't understand it?

Now consider the following:  I have a box.  The box is 3' wide, 3' deep, and 6' high.  The box is very heavy.  The box has a door on the front of it.  When I open the box it has food in it.  It is colder inside the box than it is outside.  You usually find the box in the kitchen.  There is a smaller compartment inside the box with ice in it.  When you open the door the light comes on.  When you move this box you usually find lots of dirt underneath it.  Junk has a real habit of collecting on top of this box.

NC: IT: SYSTEMS DEVELOPMENT AUTHOR: LEARNER MANUAL REL DATE: 27/01/2020 REV DATE: 01/01/2023 DOC REF: 48872 LM MOD 2 V-1 PAGE 111

What is it? A refrigerator. You knew that, right? At some point in the sequence you connected with the pattern and understood it was a description of a refrigerator. From that point on each statement only added confirmation to your understanding. If you lived in a society that had never seen a refrigerator you might still be scratching your head as to what the sequence of statements referred to.

Communication in decision making Decision making is the cognitive process leading to the selection of a course of action among variations. Every decision making process produces a final choice. It can be an action or an opinion.

It begins when we need to do something but know not what. Therefore, decision making is a reasoning process which can be rational or irrational, and can be based on explicit assumptions or tacit assumptions.

Structured rational decision making is an important part of all science-based professions, where specialists apply their knowledge in a given area to making informed decisions. For example, medical decision making often involves making a diagnosis and selecting an appropriate treatment.

Some research using naturalistic methods shows, however, that in situations with higher time pressure, higher stakes, or increased ambiguities, experts use intuitive decision making rather than structured approaches, following recognition primed decision approach to fit a set of indicators into the expert's experience and immediately arrive at a satisfactory course of action without weighing alternatives. Also, recent robust decision efforts have formally integrated uncertainty into the decision making process.

NC: IT: SYSTEMS DEVELOPMENT AUTHOR: LEARNER MANUAL REL DATE: 27/01/2020 REV DATE: 01/01/2023 DOC REF: 48872 LM MOD 2 V-1 PAGE 112

Price Control A free price system or free price mechanism (informally called the price system or the price mechanism) is an economic system where prices are set by the interchange of supply and demand, with the resulting prices being understood as signals that are communicated between producers and consumers which serve to guide the production and distribution of resources.

Through the free price system, supplies are rationed, income is distributed, and resources are allocated. A free price system contrasts with a controlled or fixed price system where prices are set by government, within a controlled market or planned economy.

The price control of an organisation is largely governed by other organisations and the prices they charge for products and services which are similar to that sold by the company. Communication between the pricing, costing and manufacturing departments in the organisation is important to ensure that the goods or services can be rendered at the same or better price as the competitors to ensure that the organisation can sell their products or services to the market.

Quality Control In engineering and manufacturing, quality control and quality engineering are involved in developing systems to ensure products or services are designed and produced to meet or exceed customer requirements. These systems are often developed in conjunction with other business and engineering disciplines using a cross-functional approach. Quality Assurance covers all activities from design, development, production, installation, servicing and documentation. This introduced the rules: "fit for purpose" and "do it right the first time".

It includes the regulation of the quality of raw materials, assemblies, products and components; services related to production; and management, production, and inspection processes. One of the most widely used paradigms for QA management is the PDCA (Plan- Do-Check-Act) approach.

This function is in place in organisations to ensure that the quality of the products or services rendered is in line, if not above the level of quality of their competitors. Communication is highly required to ensure that the competitors’ items are checked and measured against the quality of the organisation.

Marketing

NC: IT: SYSTEMS DEVELOPMENT AUTHOR: LEARNER MANUAL REL DATE: 27/01/2020 REV DATE: 01/01/2023 DOC REF: 48872 LM MOD 2 V-1 PAGE 113

Marketing is done by means of meetings between the research and development departments and the sales and marketing departments of the organisation. The interaction between these departments is very important to ensure that the new products sold by the organisation are fully understood by the marketing department.

Once this understanding is realised, the marketing department will be able to ensure that they can market the product to the organisations consumers and, in that way increase the sales of items.

But as this occurs, the process is two way… where the marketing department will conduct surveys with its’ current clients and customers to hear what they want, and then return to the table with the research and development department to attempt to configure or manufacture products or service which the clients are requesting.

Business performance Business performance management (BPM) is a set of processes that help organizations optimize their business performance.

It is a framework for organizing, automating and analyzing business methodologies, metrics, processes and systems that drive business performance. BPM is seen as the next generation of business intelligence (BI).

BPM helps businesses make efficient use of their financial, human, material and other resources. Performance areas in the business are analysed by various individuals and departments to ensure that they understand what the performing tools are.

This way they will be able to attempt to use the same tools in the areas where the businesses do not perform as well, to ensure growth of the organisation. Communication in this field is of utmost importance, as all views, opinions and input is required to make educated decisions.

NC: IT: SYSTEMS DEVELOPMENT AUTHOR: LEARNER MANUAL REL DATE: 27/01/2020 REV DATE: 01/01/2023 DOC REF: 48872 LM MOD 2 V-1 PAGE 114

•When there are •By Production Financial understanding set standards to which employees (manufacture) which the (Cash Flow) are required to organisation manufacture delivers their products or •Once the products and • With a brand deliver services, organisaiton has services, their being established, the organisation is the required staff, clients become the organisation is able to plan their they are able to accustomed to able to slightly HR requirements manufacture or them. this assists increase their in accordance deliver these the organisation charges for their with the serivices products or in building their products and or products they services to their brand to which services as their are intending to clients, complying their clients clients are deliver to their to the need and measure all other accustomed to clients requirements of similar products their level of their clients. and services. delivery. Increasing their HR Marketing HR abilities (employment) (Branding)

NC: IT: SYSTEMS DEVELOPMENT AUTHOR: LEARNER MANUAL REL DATE: 27/01/2020 REV DATE: 01/01/2023 DOC REF: 48872 LM MOD 2 V-1 PAGE 115

Activities – In your groups – Questioning Explain how a business requires and uses data

Explain how an organisation will convert this data into information

Explain how this information will be used in the following roles for the organisation: Communication

Price control

Quality control

NC: IT: SYSTEMS DEVELOPMENT AUTHOR: LEARNER MANUAL REL DATE: 27/01/2020 REV DATE: 01/01/2023 DOC REF: 48872 LM MOD 2 V-1 PAGE 116

Marketing

Business performance

Explain how the information obtained, gathered and used holds threats in the following manners: Unauthorised access

Viruses

Disgruntled staff

NC: IT: SYSTEMS DEVELOPMENT AUTHOR: LEARNER MANUAL REL DATE: 27/01/2020 REV DATE: 01/01/2023 DOC REF: 48872 LM MOD 2 V-1 PAGE 117

Explain the information needs of the following sub-systems in organisation: HR (employment)

Production (manufacture)

Marketing (branding)

Financial (cash flow)

NC: IT: SYSTEMS DEVELOPMENT AUTHOR: LEARNER MANUAL REL DATE: 27/01/2020 REV DATE: 01/01/2023 DOC REF: 48872 LM MOD 2 V-1 PAGE 118

You are now ready to go through a check list. Be honest with yourself Tick the box with either a √ or an X to indicate your response

□ I am able to describe fundamental business concepts

□ I am able to describe systems theory with respect to information systems

□ I am able to explain how IT can be used in business

□ I am able to explain the relationship between a business and its data requirements.

You must think about any point you could not tick. Write this down as a goal. Decide on a plan of action to achieve these goals. Regularly review these goals.

My Goals and Planning: ______

NC: IT: SYSTEMS DEVELOPMENT AUTHOR: LEARNER MANUAL REL DATE: 27/01/2020 REV DATE: 01/01/2023 DOC REF: 48872 LM MOD 2 V-1 PAGE 119