View metadata, citation and similar papers at [Link].

uk brought to you by CORE

provided by Bulgarian Digital Mathematics Library at IMI-BAS

International Book Series "Information Science and Computing" 213

BUSINESS INFORMATICS

Krassimir Markov, Krassimira Ivanova, Ilia Mitov, Valeria Mitova

Abstract: A definition of the concept "business informatics" based on the General Information Theory is
discussed in the paper.

Keywords: Business Informatics, General Information Theory

ACM Classification Keywords: K.4 Computers and Society; Automation; J. Computer Applications, J.0 General,
J.1 Administrative Data Processing, Business

Conference topic: Philosophy and methodology of informatics.

1. Introduction
The concept "Business informatics" became popular about fifteen years ago when the usual concepts had lost
theirs generality, abstractness and actuality. Concepts such as "automation of the company’s management",
"information service of the decision making", "information modeling of the micro-economical processes", and so
on, had caused theoretical rationalizing of the whole information basics and searching of a new unified concept.
Till now there is no common definition of the concept "Business informatics". In the paper we propose our
understanding of it based on the General Information Theory [Markov et al, 2006].

1.1. Business
We use the law oriented understanding of the concept "business". We assume only formally registered
companies as main business structures – it is correctly to hold on law-determined meaning and to connect the
concept "business" with more concrete definition as doing some activities as juridical-registered organization and
the name (firm) with defined in advance purposes, with adhering to some rules, norms and laws, received by the
community as a regulator of these activities.
Let's remember that like every social formation the company is a social organism, which, like other organisms,
generates, develops and dies. The life cycle of the company strongly depends on harmonic development of each
their elements, which is subordinated of the main goal of existing of every organism – to develop itself,
searching its place in the environment. From here follows that not "making money" but "development and
entering in the environment" are main goals of each company. Every deviation of this goal leads to isolating of the
company and step-by-step disappearing.
There exist different ways to represent the structure of the company. Here we will represent two main approaches
from the point of view of:
- the elements, which construct the company – so cold "horizontal" view;
- the management structure and levels of decision making – so cold "vertical" view.

The main elements of every company (horizontal view) are:

- Human resources (H) - this concept usually is connected with the firm staff. Here we expand the
examining and we will mention that each company is connected with sizeable number of "non-staff"
physical or juridical persons, which in one or a different way contribute to its development. No one
company can develop without a contingent of "partners". The market presence of the company is
214 Artificial Intelligence and Decision Making

unthinkable without "clients". The activity of "competitors" is one of the main stimuli for the development
of the company. So, the external relationships determine the place of the company in the business
environment.
- Material resources (M) include all objects which are processed by the "human resources". Material
resources include the means of production and needed prime and raw materials as well as the output
production which is still under the control of the company.
- Financial resources (F) are indication of the company capabilities.
Some resources may belong to the company (i.e. its own) as well as some may belong to the other companies or
individuals but for the given period are on disposition of the company (black and gray circles around the letters)
(Fig. 1).

H M

F
Fig.1. The main elements of a company

In general, the company’s development is quantity and quality changing of its main resources to achieve the
basic goal – adaptation to the neighboring environment and consolidation the relationships with the business
partners.

The companies are functioning as cybernetic systems. So this is another (vertical) view to the company (Fig. 2).

Level 1. "Strategy"

Level 2. "Analysis"

Level 3. "Service"

Fig. 2. The cybernetic structure of a company

 International Book Series "Information Science and Computing" 215

We may separate at least three levels depending of types of management – strategic, tactical and operative
management:
- Level 1. "Strategy" – The Leaders make long-term strategic decisions;
- Level 2. "Analysis" – The internal business relations are concentrated at this level. As a rule, the
accountancy department serves as mediator between leaders and the staff of the company and provides
the tactical management and the short-term decision making;
- Level 3. "Service" – The realization of the leaders’ strategy is provided at this level by the company’s
staff. Staff members provide operative management and decision making.
When the company is a small one, the contacts between the leaders and the staff are direct and may be provided
by the leaders. It is clear, the great companies and corporations need a middle level for support the
communication between high and low management levels. The good practice advices to have direct contacts,
too. But they are episodic and have more informative character.

1.2. Informatics
Our understanding of the "informatics" follows the General Information Theory (GIT) [Markov et al, 2006].
The concept information is defined as special kind of reflection of one entity in another for which there exists
reflection evidence.
The real world contains unlimited number of entities. When an entity contacts another, there exists a great
possibility to join third entity in this process. It is clear; the third entity may contact and reflect each of others as
well as the process of realization of the interaction between them – the process of realization of the contact is a
specific (temporal) forming relationship between entities and during the process of establishing the contact the
entities form new (temporal) entity which in the same moment may be reflected by the third entity. So, the third
entity may reflect any traces of this interaction from both first and second entities.
In the special case when the third entity contains reflections of the first entity received by both two different ways:
1. by transitive impact of the first entity on the third one through the second entity,
2. by impact of the first entity on the third one which is different from the transitive one, i.e. it can be direct
impact or transitive impact through another entity (-ies)
then the third entity became as an external relationship between first entity and its reflection in the second entity –
it became as "reflection evidence" of this relationship.
The first entity is called reflection source; the second entity is called reflection recipient; and the third entity is
called reflection evidence.
In this special case, when there exist the triple
"(source, recipient: evidence)",
the reflection of the first entity in the second is called information in the second for the first entity.
In the nature there exist countless entities, interactions and reflections. The "Theory of reverberation" is a good
step to understanding the reflection phenomena [Павлов, 1987]. From point of view of the General information
theory it is important that only the subject may use reflections and reflection evidences in accordance with any
goals. For instance, in the story "Cinderella" the crystal shoe is only a beautiful entity till the moment of proving
that this is the shoe which reflects exactly the foot of Cinderella and it became an element of information triad
presenting in a given way the Cinderella, i.e. any information about her.
216 Artificial Intelligence and Decision Making

For the Subject:

a reflection
of an entity (source)
in another entity (recipient)
is information about the first entity,
iff there exists corresponded
evidence (reflection evidence).

In other words, every reflection may be assumed by the Subject as information provided that there exists
evidence what really it reflects. I.e. the information is a kind of reflection, but not every reflection is information.
Information is only these reflections for which the subject has evidences what they reflect.
This understanding is in the foundation of the General Information Theory (GIT). The basic structure of the GIT
presented in [Markov et al, 2006] is reproduced in the Table 1.
GIT is completed by three theories: "Theory of the information", "Theory of the information subject (INFOS)" and
"Theory of the information interaction (inforaction)". We have no place to present GIT in details.

Table 1. Basic Structure of the General Information Theory

Occurrence Specificity Subject Theory
Reflection Information Relationship Evidence Theory of the Information
Activity Information Expectation Witness
Theory of the Infos
Modeling Information Modeling Information Subject (Infos)
Interaction Information Interaction Society Theory of the Inforaction

The main result that follows from the Table 1 is the definition of the informatics in more general view as science
about the types and properties of:
- information and the information structures;
- information subjects;
- information interaction.

2. Business Informatics
The traditional understanding of the concept "Business Informatics" is as an interdisciplinary discipline, which is
aimed to study information structures, operations and processes that are inherent to the business and support
theirs automation.
Now we can try to extend this definition taking into account the concepts presented in GIT as well as the views of
the company structure presented above.
At the first place, the concept of "Business Informatics" we may define as a science about the unity of:
- Business Information,
- Business Information Subjects,
- Business Information Interaction.
Integrating the horizontal and vertical views of the company we may build a specific "pyramidal" model
[Марков и др., 1994] separated on three levels (Fig. 3):
 International Book Series "Information Science and Computing" 217

- "Strategy" (the highest level of the model);

- "Analysis";
- "Service" (the lowest level).

Fig.3. The "pyramidal" model of a company

This way we have possibility to make more detailed description of the main scientific areas of the Business
Informatics.
- Business Information: The variety of reflections in the business does not allow us to present and discuss
all of them in the frame of this paper. Important task of the Business Informatics is to propose relatively
complete investigation and classification of the business-reflections. In the same time we need to remark
that the dynamics of the development of the different companies as well as of the changing of the business
environment, on principle does not allow complete description. As a rule the scientists are contented by the
systematizing of the formally defined reflections which are used by the community structures - taxation
authorities, statistics, etc. Usually out of consideration are types of reflections created by the company in the
environment and vice versa – by the environment in the company;
- Business Information Subjects: One business reflection can be perceived in a different manner from
different business subjects. The classification of the business subjects has a crucial role because of the
subjective character of perception of business reflections. Often even formally defined types of reflection
have perceived differently and this leads to serious practical problems. As we mentioned above, in general
the business information subjects may be divided in two main groups – which belong to the company and
the rest, which belong to the environment: partners, clients, rivals and neutrals, which in given moment may
change their type;
- Business Information Interaction: The investigation of the business information subjects is determined by
the necessity of provide qualitative automated service of theirs interaction. The important information need
to be collected, stored, processed and distributed to corresponded decision makers in appropriate mode
suitable for quick and non-vague perceiving, in one hand, and ensuring correct information interaction in the
frame of the company as well as in the environment, from other hand. That is the main goal of the
information service.
218 Artificial Intelligence and Decision Making

3. Conclusion
Building of adequate information models of business activities, based on common theoretical foundation, leads to
more clear and deep understanding of these activities and thence to theirs optimizing and automating.
Let's underline that main subject of the Business Informatics is to examine as a whole both forming elements of
the business – "organization" and "information" [Марков и др., 1994].
In conclusion we need to point that main goal of the Business Informatics is to ensure the automation of business
activities in accordance with the pyramidal information model [Марков и др., 1994]. For instance there exists
variety of software systems for information service, which may be classified to separate levels of the pyramid:
- the lowest level "Service" is formed by components for the operative information service of activities of and
with the main company resources – human, material and financial. In concrete implementations here we
may see program systems for information service of processing the personal information, the salaries and
other working contracts, the logistic activity in one or more storehouses, the fixed assets amortization, etc.;
- the level "Analysis" contains the systems for information service of accounting activities. These are the
systems from new quality where the accent is made on the serious analysis and preparation of prognoses;
- the highest level "Strategy" includes systems for information service of the decision making in the
conditions of collective information interaction and multi-variant decisions. Usually, the OLAP and Data
Warehouses are classified at this level.
The leading information service systems render an account to main areas of the Business Informatics – Business
Information, Business Information Subjects and Business Information Interaction in accordance with different
levels of management.
The approach, presented in this paper, had been implemented in the Complex FOI – a Bulgarian program
product for information service of company management and accounting.

Bibliography
[Markov et al, 2006] Kr. Markov, Kr. Ivanova, I. Mitov. Basic Structure of the General Information Theory. IJ ITA, Vol.14,
No.: 1, pp.5-19.
[Марков и др., 1994] К.Марков, К.Иванова, И.Митов, Й.Икономов, В.Василев. Информационно моделиране на
фирмени дейности. Списание "Известия на Икономическия Университет - Варна"; бр. 3-4, 1994; стр.119-127.
[Павлов, 1987] Т.Павлов. Избрани философски съчинения в три тома, Том 2, Теория на отражението. Изд. "Наука и
изкуство", София, 1987.

Authors' Information
Krassimir Markov - Institute of Mathematics and Informatics - BAS, Sofia, Bulgaria,
e-mail: kkmarkov@[Link]
Krassimira Ivanova - Institute of Mathematics and Informatics - BAS, Sofia, Bulgaria,
e-mail: kivanova@[Link]
Ilia Mitov - Institute of Information Theories and Applications FOI ITHEA, Sofia, Bulgaria,
e-mail: mitov@[Link]
Valeria Mitova - Institute of Information Theories and Applications FOI ITHEA, Sofia, Bulgaria,
e-mail: mitova@[Link]