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Unit 3 (P4, P5, P6, D2): Features and Functions of Information Systems

Describe the features and functions of information systems (P4)



Data collected must be accurate so when it is processed, it will not output wrong information. The data will then be summarised to create information which may not be the easiest, cheapest and most logical information, but it is done how the business wants it.


People have an involvement in collecting and the using information. Those who collect data will put it through the information system. The people who use the information will use it to benefit the business.


Hardware used depends on the size of the business. Small businesses manage and store information on few computers whereas bigger businesses have servers to manage and store their information. These servers can be accessed by many different users depending on their access within the business.


Most information systems will use specialised software that has all the basic functions of an information system. Basic functions include describing the database and structure, source of data, queries and how it will be summarised. The more complex the information system, than the cost will become more expensive. Depending on your business needs, you may decide to have a basic information system to save on money.


Telecommunications in a business is used since information can be sent to others users through an intranet connection. An intranet connection in a business makes the information that is transferred secure and safe since you need to be within that area to access intranet. A firewall will be needed for the intranet for better security.



Detailed data is put into the information system which is stored, processed and then forms the basis of the output. Depending on the business, the user can have certain levels of functions they can tell the system to perform which will determine the output of the system. This part is done by the IT department and is not available to users.


Data is stored at the highest detailed level possible. Data that is stored needs to be safe and secure. The IT department should make backups on a scheduled basis every day. In case of disaster, backups should also be stored outside the business which is also safe and secure.


Processed data will be analysed by the information system to produce information for the business to use. Data such as sales will produce graphs to represent sales over a period of time.


Output can be displayed in either a graphical or textual format:

  • Graphical is a better format to present information in charts, graphs, diagrams or pictures. Sales would be better for a graphical format which could display a trend of a graph.

  • Textual is best for when the business wants to find specific details or sufficiently accurate values.

This does not mean to say that you have to only have one output. You can use both graphical and textual information together to produce better information to further benefit the business.

Control and Feedback Loops

Control or feedback loops is a result of the output from an information system. It should take effect on future inputs to the information system. If wrong data has output from the information system, then a feedback would be sent back to the user who deals with inputting and tell them to not input that data because it is wrong.

Closed and Open Systems

In a closed system, users may have some choice over what they can report on but are limited to predefined output formats. These consist of graphical formats and are aimed at managers.

Whilst an open system here is great flexibility on what can be reported on and the format it is presented in. Due to the flexibility of this system more training may be needed before systems can be used effectively. These systems are more aimed at analysts and use both graphical and textual formats.

Types of Information System


Businesses that sell products can use a management information system to determine the increase or decrease in sales and what items are doing good or bad. This can help any marketing business to help improve their sales. For example, if a product is doing badly and is not selling as well, the business could put the product on an offer and advertise that to get customers attention. They can use the management information system to identify how successful this was and see if the product is selling better.

Most businesses have competition with other businesses that offer similar services to their customers. Shops like ASDA, Tesco and Sainsbury’s are big competitive supermarkets that need to take into consideration what they are doing. If a store drops their prices then you might want to do the same so you can keep customers satisfied. Also, if a store recently got a brand new product that is selling a lot, then you might want to include that in your store as well.


Spreadsheets can be used to identify trends which can find out what is selling the most and find out the price of that item, should the price increase or decrease to make a profit?

Banks is also a good example of financial systems. They can use the system to identify investments and whether or not should they risk investing to gain a profit.

Human Resources

Most businesses need human resources to operate them. An information system can help identify who is in or out of work and the total hours the employee spent working to work out how much they are paid. The system can also show details about the employee such as same, age, gender and the skills that they have and what job they do. In addition to this, the management information system can cover what is needed, such as staff training.

Identify the Information Systems Used In a Specified Organisation

Identify the information systems used in a specified organisation (P5)

The Nobel School operate a stationery shop to provide basic school products to the students as cheaply as possible, it is currently run by Year 7 students. They stock things such as pens, pencils, rulers and pairs of headphones.

At the moment the method of keeping track of what has been sold and what is in stock is done by students keeping a tally chart and then this is passed on to a member of staff for safe keeping in a folder. Stock levels are not tracked; they just order more when it looks like its running low.

I think that a financial system would be beneficial to The Nobel School. The students who manage the shop can put all items that have been sold on a spreadsheet which enables them to identify patterns and easily find out if they are low on stock. They can send the spreadsheet to the teacher’s that help them manage the shop that they can take to the financial department, so they can order more. Without having the information system, the stocks can be unreliable as the students who run the shop may have forgotten to tally that it has been sold.

Select Information to Support a Business Decision-Making Process

Select information to support a business decision-making process (P6)

The information system I have used for the scenario is a financial system. To make a financial system work, they would need several pieces of data. One of the data they need to manage this system is the sales that they have made. The member of staff would need this piece of data from the students to check for accuracy. In case of stolen items or managing profit made. They need to know how much profit is made so they can raise or lower the cost of items so they can keep ordering more. This brings me into the next piece of data which is the price/product list. The students need to get the price/product list from the member of staff which is supervising them so they know what items are being sold at what price. The students need to know the price/product list so they do not under/over sell an item and also do not sell an item that they do not want being sold.

Justify the Information Selected to Support a Business Decision-Making Process

Justify the information selected to support a business decision-making process (D2)

In order to make the financial system for the selected business, I would need to collect specific information before I build the system. The information I need is:

Popular Products

To know what products are selling well would be useful information to have as the financial department would know to order more of one item that is selling more than the other item which is doing the opposite. To identify which product is selling the most, we would need to get the information from the tally chart that the students have made. This may be unreliable as the students may have over or under tallied. The tally chart is stored safe by a member of staff. This member of staff would then need to communicate with the financial department to make a business decision to order more than usual or just order the normal amount for the product that is selling the most.

Supplier Information

Supplier information would be useful to have as when the stocks get low; the financial department are able to order more from the same supplier because it will be the same quality as the school is used to. We also need supplier information to be sure we are getting the cheapest value possible; checking other suppliers for cheaper but better quality would be better to make a profit.

Cost to Buy and Selling Price

I would also need to know the cost to buy the Stationery. Depending on the supplier information, costs may vary depending on how much you spent purchasing the product. The cost of the product that was purchased from the supplier would be used to set an initial point. Depending on what supplier you choose also depends on what you want to sell the product as so the school does not lose money.

Product Name

Finding out the product name would be useful for the tally chart as without it, you would not know what the tally was linked to. If you want to change suppliers, it would be useful to know what type of pencil it is so you get the right pencil, unless you specifically want to change the pencil. To get the product names, they would need to talk to the person who is ordering the stock, which is the financial department. This then can be transferred onto the tally chart so you know what is being sold the most.

Stock Levels

Stocks levels would be useful for the financial department because they need to order more products. Knowing the product name and supplier information, the financial department can order the products from the same supplier or they can look at another supplier to see if they sell what they are looking for cheaper. My management information system will show supplier information, the quantity of how many you get in a pack and the price of the product (this also includes the link to their website).

Past Sales

The students keep a tally chart on how many sales they have each day. Surely we could be able to collect all the past sales and figure out the profit made or what sold most on what day? Not in this case. This is because a tally chart produced by students can end up being unreliable. For this reason, I am unable to include past sales in my management information system. Having said this, upon the creation of the management information system, there will be a way to put sales in a table per month which will then produce a graph for the whole year.

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