1) Introduction to Information Systems · PDF file1) Introduction to Information Systems ......

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1) Introduction to Information Systems a) System: A set of related components, which can process input to produce a certain output.

b) Information System (IS): A combination of hardware, software and telecommunication systems, which can support

business operations to increase productivity, and help managers make decisions.

i) Components of IS: Five

(1) Hardware: The physical embodiment of an information system. It is one of

the main elements which create the information system cycle.

Basic Hardware of a Computer: Input, Process, Output & Storage hardware

(2) Software: (a) System Software controls the computer and contains the operating system and device drivers, which

can communicate with the hardware.

(b) Application Software contains programs which can help users and enable companies to perform

business functions.

(3) Data: Refers to the raw facts on anything or entities like student names, courses and marks.

(a) Information: An organised, meaningful and useful interpretation of data

(4) Process: A guide consisting of orderly steps, which need to be followed and implemented in order to get a

certain decision on a certain matter.

(5) Human (Users): Managers and the Users are the people to whom the invaluable information has to be

provided by the Information System as a main objective. 3 Categories of Users:

(a) End‐Users: Consists of the staff, customers, suppliers and others who communicate with the

information system.

(b) Internal Users: Includes the managers, technicians, sales representatives and corporate officers.

(c) External Users: Consists of the customers who use the company's system for performing transactions,

suppliers who use the system for planning sales, and the staff who use the system outside office hours.

ii) Categories of IS: Six

(1) Transaction Processing System: Access and record information

about all transactions related to the organisation. Eg sales order

processing, accounts receivable, accounts payable, inventory

and ordering as well as payroll

(2) Management Information System: Takes information extracted

from TPS and generate reports which are required by the management for planning and controlling a

company's business.

(3) Executive Information System: Decision support system specifically used by the executive management in

making strategic decisions.

(4) Decision Support System: Focuses on the effectiveness of the manager in analysing the information and

making a decision. It is used for handling decisions that are not structured, i.e. decisions which are made

when an emergency happens.

(5) Office Information System: Wider than word processing and form processing, This information system

covers activities in the office, which can improve work flow and communication among workers, whether

inside or outside the office.

(6) Expert System: a program that produces a decision which is almost similar to decisions made by an expert

in a certain discipline.

iii) Two impacts of IS on business operations

(1) Many companies today use information as a basis to increase productivity, producing quality products,

providing quality services, creating customer confidence, and making timely decisions.

(2) Information technology has become the prime reason for the success and failure of a company to compete

in business.

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c) Systems Analyst: Responsible for planning, analysing and implementing

information systems.

d) Individuals in the IS:

i) Systems Owner: Bears the cost of system development and maintenance, has the right over the system,

determines the interest over the system and determines the policies over its use. Thinks of return value.

ii) Systems User: An individual who uses the system for producing something

(1) Internal User: Employees who work in the company to develop the information system.

(2) Mobile User: Users who often do jobs outside the company. Eg Salesmen and Sales representatives.

(3) External User: Other organisations, partners, suppliers, customers and end users connected to the system

iii) Systems Designer: Experts in the technical field who would design a

system for fulfilling the needs of users.

iv) Systems Developer: Experts in the technical field who would

develop, test and produce a system, which can operate

successfully, based on the design specifications of the system

designers.

e) Business Profile, Model and Process:

i) Business Profile covers ownership, structure, and management of the company, together with its customers

and suppliers.

ii) Business Model: Can take the form of a brick‐and‐mortar type, a virtual store, and so on.

iii) Business Process: Explains a certain process, activity, and the results expected, begins with the customer and

ends with the customer.

2) Information System Development: Methodology & Tools a) System Development Methodology: A comprehensive plan to be followed, which covers all the necessary activities

in the system's development life cycle.

b) Methodologies: includes the model to be followed, plus the tools and techniques to be used.

i) Model: A graphical presentation which can represent a real situation or a real world.

Most models used are in graphical form, known as graphs and charts.

ii) Tools: Supporting software used to create models or other components that are needed

in a certain project.

iii) Technique: A strategy which can be used for implementing a specific system development

activity.

c) Systems Development Life Cycle (SDLC): Complete process for

developing information systems, which begins with the initial

investigation phase and ends with the operations and support

phase.

i) Phase 1: Initial Investigation: To identify problems or

information requirements. Delivers Initial investigation report.

ii) Phase 2: System Analysis: To study the current system and to

determine the new system requirements. Delivers System requirements documentation.

iii) Phase 3: System Design: To design a new information system. Delivers System design specifications

iv) Phase 4: System Development and Implementation: To develop, acquire and test new hardware and software.

To install and to adapt for the users environment. Delivers A Complete Information System

v) Phase 5: Support and Operation: To maintain and evaluate the system. Delivers An operational Information

System

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d) Approaches to Systems Development:

i) Structured Analysis Approach: a traditional systems development method

easy to understand. Uses a series of phases, called the system

development life cycle (SDLC), to plan, analyze, design, implement and

maintain an information system.

ii) Object‐oriented Analysis and Design (OOAD): Combines data and the

processes (called methods) into single item called objects. OOAD is an

approach that is intended to facilitate the development of systems that

must change rapidly in response to dynamic business environments.

(1) Objects: Persons, places or things that are relevant to the system.

(2) Class: Defines the set of shared attributes and behaviours found in each object in the class.

(3) Attribute: Describes some property that is possessed by all objects of the class

(4) Method: An action that can be requested from any object of the class

(5) Object‐oriented analysis (OOA) looks at the problem domain, with the aim of producing a conceptual

model of the information that exists in the area being analyzed.

(6) Object‐oriented design (OOD) transforms the conceptual model produced in object‐oriented analysis to

take into account of the constraints imposed by the chosen architecture and any non‐functional,

technological or environmental constraints, such as transaction throughput, response time, run‐time

platform, development environment, or programming language.

iii) Information Engineering Approach: Concentrates more on the collection of information, focusing on strategic

planning, data modelling and hardware automation. The main activity of this approach is to study the business

mission, the objectives and to identify its information system architecture, and to plan how to manipulate

information systems for helping organisations achieve their business objectives.

iv) Rapid Application Development (RAD) Approach: Used to speed‐up activities and processes found inside every

phase of system development, such as speeding‐up the analysis phase by scheduling intensive meetings among

the parties involved for the purpose of information collection. In this way, decisions on a certain matter can be

made immediately and rapidly.

(1) Iterative development: An approach that is combined with RAD, similar to the Spiral Life Cycle Model. This

model is capable of speeding‐up the acquisition process up to the design and implementation phases.

(2) Prototype system building during the analysis and design phases of System Development Life Cycle (SDLC)

can also speed‐up the development process.

3) Information System Development: Project Management a) Four types of Skills needed by a Systems Analyst:

i) Knowledge on Business and Organisation

ii) Skills in Solving Problems

iii) Skills in Inter‐personal Communication

iv) Knowledge and Skills in Information Technology

b) Project: Set of related activities which require a certain time‐duration to be completed by using a pre‐defined set of

resources. Elements that a project contains are; time, budget and objective.

c) Project Management: Use of knowledge, skills, tools and also certain techniques on activities of a certain project to

fulfil a requirement and to satisfy the wishes of the project stakeholders.

d) Project Planning: An activity which divides the phases that need to be executed inside a certain project into smaller

units to simplify management.

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e) Factors leading to an IS request:

i) Failure of the Old System: Due to old hardware or old software with constraints to upgrade.

ii) Legal Requirements: The government may introduce new tax rates or other laws.

iii) New Industry Standards: Failure to conform to the standard practices of the industry may result in the

company losing its linkages and competitiveness. Eg. ATM, bar‐coding, online payment, etc.

iv) To Exploit New Technology: Internet technology, mobile devices, physical tracking, etc. These new

technologies can improve performances several times, or can cut down on manpower costs a great deal, thus

making its operations more competitive.

v) To Improve Services: Improve or add additional services to users and customers. Eg. Enable share investors to

check their account balances on the Website, saving data about taxis, etc

vi) More Information: The current system may not provide information required by the organisation.

vii) More Stable Control: A system may need to add on new effective controls to ensure that data is accurate and

safe. Eg. Passwords, various levels of user access, and encryption or data encoders. etc

viii) Reducing Operating Cost: Operating costs of the existing system may incur high updating costs due to technical

problems, poor design, or changing requirements in terms of the business direction.

f) Evaluating a System Request:

i) Evaluation Committee: In larger organisations, one committee is formed to bring together various skills and

knowledge for evaluating system requests. This committee normally consists of the information technology

director and various departmental managers.

ii) Evaluating Feasibility:

(1) Objectives of the feasibility evaluation: (a) To determine the feasibility of an information system;

(b) If the project is suitable, a re‐study on the factors that determine its priority will be done;

(c) To determine whether there is a relationship between this project and another project; and

(d) To obtain the terms of reference for the project.

(2) Three main yardsticks to measure or to ensure the success of the system to be developed:

(a) Operational feasibility: Tries to measure how far the solution proposed can be used by the

organisation.

(b) Technical feasibility: Is present in a system request if the organisation has the resources to develop or

buy, and to operate the system at user locations.

(c) Economic feasibility: Tries to answer the question of whether the system to be introduced can be

developed within budgetary constraints, and whether it can improve the organisation's economy by

giving back in the form of benefits.

(i) Tangible Benefits: Benefits that can be measured in the form of money, or those that can be easily

quantified.

(ii) Intangible Benefits: Difficult to measure in monetary form, but this category needs to be

identified. They can be of strategic importance that may override the numerical benefits

g) Initial Investigation of the system can be defined as an initial study on a certain project before making a decision

on whether or not the project can be continued.

i) Activities inside Initial Investigation:

(1) Understanding Organisation's Problems and Opportunities

(2) Determining Project Scope and Limitations

(3) Doing Information Search

(4) Determining Project Feasibility

(5) Estimating Time and Cost in Order to Proceed with Development

(6) Presenting a Proposal to the Management

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4) Determination of System Requirements a) Functional Requirements: System requirements that are concerned with functions or process that needs to be

performed by the system. Eg. Record Customer Information, Accept Payments, Generate Reports etc.

b) Non‐Functional Requirements: System requirements that are concerned with anything else other than functions.

They constitute operational objectives that are related to hardware, software, the environment, etc. Eg. Ability to

operate in the client‐server and Unix environment, Ability to process on‐line etc.

c) Stakeholders: Individuals who have interests in the information system. 3 Categories:

i) Users: People who use the system daily.

(1) Business Users: use the system for performing the daily operation activities or functions of an organisation.

These daily operations are also known as transactions.

(2) Information Users: are individuals who need current information from the system. Can be present inside or

outside the organisation, and they include customers.

(3) Management Users: need information that is brief and detailed from the system.

(4) Executive Users: are made up of managers at the top level. They prepare for organisation's strategic plan

for duration of five, ten, or twenty years.

(5) External Users: System's access by users who are present outside the organisation can be made easily via

the Internet.

ii) Owners: People who own and pay for the system.

iii) Technical Staff: People who ensure that the system operates in the organisational computing environment.

d) Two of the most important skills in System Analysis are:

i) Fact finding to identify system requirements,

ii) Business process modelling based on the system requirements

e) Work Procedure explains the way a certain job is performed by an

individual or a group of individuals, together with data being used,

and information being produced in the job.

f) Formal System: A system that is identified by official documentation of the organisation

g) Informal System: Actual way jobs are done in the organisation. Informal systems exist because of the work habit

and individual's preference, conflicts, and other factors.

h) System Report is the third type of report that is of no less importance. As the main output of a system, reports

enable us to know which data are important to produce the report.

i) Techniques used in fact finding (collect information):

i) Looking at Current Documents

ii) Interview: In this technique, the analyst meets with users

individually or in a group. However, it is not practical if it involves a

large number of individuals because it takes a long time, costs a lot,

and only a limited number of questions can be asked.

(1) Open Questions allow users to answer spontaneously in whatever way that is suitable. Open questions are suitable if you want to understand a complex process or to get an opinion, attitude or proposals of the

user.

(2) Closed Questions limit the answers to shorter and limited set of answers, or specific alternatives. Closed

questions are asked if you want information that is more specific, or when you want to confirm facts.

iii) Questionnaires: Addresses the problems in interviews, can be printed in large volumes and can be distributed

to respondents at a cost that is not too high per individual.

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(1) Free Format the space and style that is more flexible to the respondents to answer. Respondents will

answer inside the space provided, just below the free format

question.

(2) Fixed Format consists of questions that require respondents to

choose an answer from a limited choice. Respondents need to

answer based on the given alternatives only. This simplifies the

answer to be collected for entering into the table.

iv) Observation: Personally looking at the working system in operation, you can understand better the business

process being executed, and you can see the system in a different perspective. Enables you to confirm

information from the interviews besides ensuring that the business process operates as stated

Prototype: An initial model of a complete system. It represents parts of the entire system, and so is certainly

not a complete system.

v) Joint Application Design (JAD): A technique for determining system requirements or system design rapidly that

involves all the related participants in a single session.

(1) Facilitator: An individual with the experience and skills in the conduct of JAD sessions. He determines the

meeting agenda and provides guidance on discussion, but does not participate in the participants'

discussion.

(2) Users: Several types of users that have been discussed before can participate in JAD sessions according to their respective requirements. Normally, the manager makes the decision on issues being discussed.

(3) Technical Staff: Besides handling the tools, hardware and software in JAD, they are also required to explain the detailed aspects of the technical system.

(4) System Development Team: This includes the analyst and user experts. They help in discussions,

clarification, model building, documenting the result of discussions, and ensuring that system requirements

are defined clearly. They also ensure that JAD session objectives are met.

vi) Business Process Re‐Engineering (BPR): Process of re‐thinking and re‐designing the business process to achieve

dramatic improvement in terms of cost, quality and services (Hammer et al, 1993). Eg. A credit checking

process that took six days before can now be reduced to four hours only.

(1) Identifying Processes Needed in BPR: The process that needs to be changed must be understood before hand. Prior to that,

you need to understand which process represents the key

business process of the organisation.

(a) Key Business Process is a group of activities (that can be

measured) that produces certain outputs for the customers or for a certain market. It focuses on

products or services and customers of the organisation.

(b) The main tasks in BPR is to understand all activities in the key business process, and then to change

the sequence or the structure of activities in order to upgrade quality, speed and customer satisfaction

radically.

(2) Use of Information Technology: After the key business process and its activities have been identified,

information technology (IT) is applied to upgrade the business process in a radical way.

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5) Process Modelling a) Process Modelling: A formal way of explaining how a system operates. It shows processes, activities, business

functions and data flow among them.

b) Data flow diagrams (DFD): describes the entire system in the graphic form that is easily understood. DFD shows

the main components of a system with processes, data flows, data

stores, and external entities. Two sections:

i) Logical DFD: Shows what processes are operating inside an

organisation without touching on how the processes are

implemented. Eg. Ticket booking process and a Ticket issuing process

ii) Physical DFD: Explains how the processes are actually implemented.

Eg. the ticket booking process via the telephone, and ticket printing

from the computer system

c) DFD Symbols: Four symbols to represent:

i) Process: Refers to an activity, function, or task that is done to

achieve organisational objectives whether directly or indirectly. A

process can be manual or computerised.

ii) Data Flow: Consists of data that is moving or flowing as input to a

process or as output from a process.

iii) Data Store: is used to show data at rest. It is a situation in which data

is stored to be used by processes inside a system, when needed.

iv) External Entity: Consists of individuals, institutions, units,

departments, organisations or information systems that are present

outside the system, but are interacting by giving input or getting output from the system.

d) DFD Rules:

i) Process:

(1) Process cannot contain output only. Output cannot be produced without input (otherwise it’s a Miracle).

(2) Process cannot have input only (otherwise it’s a Black Hole) (3) Process needs to use suitable input to produce output (otherwise it’s a Grey Hole).

ii) Data Flow:

(1) Links between process and a data‐store has only one direction. Two directions only when a process is linked to a data store for showing data being retrieved before being processed.

(2) Branched data flow shows that data from the same source flow to several processes, data stores, or

external entities.

(3) Several data flows being combined show that data from different sources flow into the same location.

(4) Data flowing out cannot flow back to the process that produces them.

There must be a process in between.

iii) Data Store:

(1) Data cannot flow from one data store to another data store without

going through a process.

(2) Data‐store cannot be linked directly to an external entity via data flow. There must be a process in between.

iv) External Entity:

(3) External entity cannot be linked directly to another external entity via data flow, without being processed first.

b) Other General Guidelines in DFD:

i) Input to a process is different from its output.

ii) DFD symbols contain unique names.

iii) Use a unique reference number.

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c) Context Diagram: shows the boundary and scope of the system, and how the

system interacts with the external environment. Context means the context in

which the system sits.

d) Level‐0 DFD: As context diagram, Level‐0 DFD also shows the entire system

components in one diagram. The objective now is to show the main system

processes only.

i) Consistency: Every input and output data‐flow at a higher level of DFD is

retained at the lower levels to ensure that the diagrams are consistent and

balanced.

e) Lower Levels DFD: The processes inside Level‐0 Diagram are further decomposed

into sub‐processes of greater detail in the next level of DFD, i.e. Level‐1 Diagram.

Processes in Level‐1 Diagram are labelled with a kind of numbering ‐ e.g. for

process 1, it is now labelled as 1.1, 1.2, 1.3 and so on; while for process 2, it is

labelled as 2.1, 2.2, 2.3 and so on; and similarly for process 3, 4, etc.

i) Primitive Functions: Simplest processes which cannot be further

decomposed into sub‐processes, where we stop detailing the DFD. Eg. Print

Report, Record Booking, and Calculate Bill.

f) Two approaches in drawing a DFD:

i) Top‐Down Approach in which the Context Diagram is drawn first, followed

by Level‐0 Diagram, Level‐1 Diagram, until you reach the Primitive DFD

diagrams.

ii) Bottom‐Up Approach in which the primitive functions are identified first, a combination of these primitive

functions forms the lowest level DFD, called the Primitive DFD. This is followed by DFD at higher levels until you

reach the Context Diagram.

g) Process Descriptions: Would document the primitive functions. 3 ways:

i) Structured English: Explains the logical process by using simple sentences in English language.

ii) Decision Table: Shows a logical structure consisting of a combination of all process conditions and actions.

iii) Decision Tree: Shows a logical structure, which appears like a tree. Beginning with root and stem on the left, it

expands into branches and leaves towards the right.

h) Data Flow Description: By listing the data elements contained inside it, or by using algebraic symbols to describe

data structure that are more complex. Eg. Data flow "Student" contains data elements like student name, address

and field of study.

i) Data Elements Description: Can be described by listing their types, length, and the meaning of the data concerned.

Data Store Description: Normally, data store is not described anymore, because data store inside a DFD represents

data entity inside ERD. If DFD is not linked to ERD, then data store is defined as a collection of data elements,

similar to the description of data flows.

6) Design Phase a) During the initial part of the design phase, the project group changes the logical diagrams of the analysis phase

into the physical diagrams that explain how the system will be built.

b) Three approaches in creating a new system:

i) Custom in‐house application system development: Allows the development to become more flexible and

creative in solving business problems.

(1) In‐house system development will assist in:

(a) Increasing the technical skills and knowledge of the developers who work together with the business

users in the company;

Context Diagram

Level‐0 DFD for Order System

Level‐1 diagram for "receive order" process (of order system)

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(b) Understanding of business development that will make them more skilful in organising the information

system requirements and strategy; and

(c) Projects that use the same technology by making them easier to develop in future.

(2) In‐house system development has a high risk because:

(a) No guarantee that the project would be successful;

(b) Developers may get involved in other projects too;

(c) Technical incompetence can slow down system development; and

(d) Business users have no patience to wait for a long development time.

ii) Buying an application package and customising it

(1) Buying a software package is a wise decision because: (a) Programs have been created, tested, and proven;

(b) Purchased application packages can be installed in a short period compared with custom system

development; and

(c) A application package includes expertise and distribution from the supplier that created the software.

(2) Problems needed to be accepted after buying:

(a) You need to accept the functions provided by the system;

(b) The package normally does not provide all the company's needs; and

(c) The package that has a big scope can lead to changes in business functions. The scenario that allows

technology to change your business functions may endanger the business industry.

(3) System Integration: Refers to the process of developing a new system by integrating or combining a

software package, an existing legacy system, and a new software.

iii) Outsourcing: Pay an external suppliers or service providers to develop the system, requires little in‐house

resources.

(1) Advantages: (a) Those parties may have a lot of experience in technology

(b) or may have a lot of resources like programming experience.

(2) Things to be observed if Outsourcing is Chosen: (a) Company's confidential information may leak out,

(b) Control over future development may be lost;

(c) In‐house development skills cannot be upgraded; and

(d) Development skills go to other parties.

(3) Steps to reduce risk of Outsourcing: (a) Identify your project requirements completely. Do not outsource something that you do not

understand at all.

(b) Choose your suppliers and developers carefully, and check their service records to see proofs of the

system and the technology that you need.

(4) Types of Contracts: (a) Time and Expenses Agreement: This type is very flexible because you agree to pay for the time and

expenses incurred to complete the job. However, this agreement can lead to a high cost, and can

exceed estimated cost.

(b) Added Value Contract: This contract appears to be the most popular. The contractor receives a

percentage of the added value after the system has been completed. You have a small risk here, but

you need to share the benefits after the system is implemented.

(c) Fixed‐Price Contract: This means you do not have to pay beyond the estimated cost. If the contractor

spends more than the agreed cost, he needs to bear the cost. So the contractor will fix the needs

clearly. Any change or addition is difficult to entertain.

(5) Guidelines to Outsourcing (a) Ensure that communication between you and the outsourcer (contractor) is always active.

(b) Define and balance up the requirements before signing the contract.

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(c) Be of the view that outsourcing is a form of partnership.

(d) Select the supplier, developer, or service provider with care.

(e) Assign someone to manage the relationship.

(f) Do not outsource something that you do not understand.

(g) Emphasise flexible requirements, long‐term relationships, and short term contracts.

c) Factors to Consider before choosing a business strategy (Choice of Design Strategies)

Needs When to use Custom Development

When to use a Software Package

When to use Outsourcing

Business Unique business requirements.

Normal business requirments.

Requirements are not important to the business.

In‐House Skills In‐house technical and functional experience is present.

In‐house functional experience is present.

In‐house functional and technical experience is absent.

Project Skills There is a need for building in‐house skills.

Skills are not strategic. Decision to outsource is a strategic decision.

Project Management

There is a very experienced project manager and a proven methodology.

There is a project manager who can coordinate suppliers.

There is a project manager in a highly skilled organisation and is suitable with the scope of outsourcing agreement.

Time‐Frame Time frame is flexible. Time frame is short. Time frame is short and flexible.

d) Alternatives Matrix: Used to organise advantages and disadvantages of the design alternatives so that the best

solution can be chosen. It is a grid containing technical, financial, and organisational feasibility for each candidate

system. It combines a number of feasibility analyses into a matrix so that alternatives can be compared easily.

e) Request For Proposal (RFP): Contains a proposed document for getting alternative solutions from development

suppliers, or service providers. Basically, RFP explains the system that you are trying to develop and the criteria

that you use to select a system.

i) Basic information to be contained in RFP:

(1) Explanation of the system needed;

(2) Specific technical requirements or situation;

(3) Evaluation criteria; (4) Instructions on how to give feedbacks; and (5) Schedules required.

f) Steps in Creating a Physical DFD:

i) Add implementation reference: Use existing logical DFD; place the direction of data stores, data flows, and

processes that will be implemented inside opening statement below each component.

ii) Sketch the man‐machine boundary: Sketch the boundary line that separates the system being automated from

the manual section.

iii) Add data stores, data flows, and processes of related system: Add data stores, data flows, and processes (of

related system) to the model. These are components that are less involved with the business process.

iv) Update data elements inside data flows: Update data flows for entering data elements of the related system.

v) Update metadata inside CASE (computer‐aided software engineering) repository: Update metadata inside

CASE repository for entering the physical characteristics.

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