Information System Types

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Introduction to business applications• Businesses need information systems for a wide

variety of tasks.

• These business systems help firms to supervise employees, control production processes, forecast future events and maintain records for managers, investors, and government agencies.

• Different types of application software are used for processing data in all kinds of business.

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Introduction to business applications

Manual system

Mechanical System

TPS System

MIS SystemDSS System

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Expert System

The above figure suggests six different types of information systems.

1. Manual systemThese system consists primarily of documentation: handbooks, procedure manuals and other written materials that describe system functions provide instructions.

2. Mechanical SystemThese system were able to substitute mechanical processes from manual procedures. The devices used facilitated data processing, improved computational accuracy and decreased the time required to prepare reports.

3. TPSThe first computerized applications were basically automated manual or mechanical systems that simply computerized earlier processing method

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4. MIS

5. DSS

6. ES

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Types of Information systems

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Information system types

Operational Information system

Business Information system

Specialized Information system

TPS

DSS

MIS

EIS

AI

OLAP

KIS

GIS & DVS

TPS(TRANSACTION PROCESSING SYSTEM)

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Introduction

• Transaction Processing Systems (TPS) are cross functional systems that process data resulting from the daily routine transactions necessary for business functions.

• Transactions are events that occur as part of doing business, such as sales, purchases, deposits, payments etc.

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• Automated TPSs consist of all the components of a computer based information system (CBIS), including databases, telecommunications, people, procedures, software and hardware devices used to process transactions.

• TPSs are considered as operational level systems as they keep track of the elementary activities and transactions of the organization.

• These systems are used mainly by operational level

employees of an organization. 9

• Input to a TPS: Basic business transactions such as customer orders, purchase orders, receipts and invoices are inputs to a TPS.

• Processing: In order to produce the required output

processing is carried out on input data. The processing activities include data collection, data editing, data correction, data manipulation and data storage and document production.

• Output of a TPS: Updated records after the last transaction.

• Users: Operational personnel; supervisors

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Types of TPS Functional Area

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• As TPSs often perform activities related to customer contacts - such as order processing and invoicing

• These information systems play a critical role in providing value to the customer. Apart from external customers, internal stakeholders also heavily rely on TPSs to carry out routine operations of the organization.

• Therefore, if TPSs fail to operate correctly, the impact on the organization can be high.

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Transaction Processing Cycle

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TPS Application

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TPS support the order processing, purchasing and accounting business processes. Although each organization may have unique business processes, only a generalized view is presented.

Order Processing System

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Purchasing transaction process system

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Accounting processing system

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MIS(MANAGEMENT INFORMATION SYSTEM)

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Introduction • The main objective of MIS is to provide lower and middle

management with printed or electronic reports with inquiry capabilities so that they can control, organize and plan more effectively and efficiently.

• Computerized MISs typically extract and summarize data from TPSs to allow managers to monitor and direct the organization.

• MISs can also provide employees accurate feedback about easily measured aspects of their work.

• The same data could be summarized in measure of performance, such as total sales for each type of item, for each salesperson and for each hour of the day.

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Five Characteristics of a MIS In general MIS perform the following functions.

1. Provide reports with fixed and standard formatsFor example, scheduled reports for inventory control may contain the same type of information placed in the same locations on the reports

2. Produce hard-copy and soft-copy reportsSome MIS reports are printed on paper. Other reports can be soft-copy reports where typically the output is displayed on a computer screen.

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3. Use internal data stored in the computer systemThese sources of data can be outputs generated by TPSs or ERP systems. Some MISs use external sources of data about competitors, the industry, economy and so on. The Internet is often used as a source for external data.

4. Allow end users to develop their own custom reports

Typically, analysts and programmers involve in developing and implementing complex MIS reports.

5. Require user requests for reports developed by systems personnelAs mentioned previously, typically, IS personnel develop and implement MIS. If any user needs to access these systems, they typically require to submit a formal request to the IS department.

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MIS in Functional Areas of Business • Most organizations are structured along functional lines or

areas.

• Some of the traditional functional areas include 1. Finance2. Manufacturing3. Marketing4. human resources

• The MIS can be divided along those functional lines, in order to produce reports tailored to individual functions.

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1. Financial MISThe following figure describes a basic financial MIS. The typical inputs to a MIS include internal TPS databases, additional corporate databases of internal data and external data. 1. Profit/Loss and Cost systems2. Auditing (Internal External)3. Funds Usage and Management

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2. Marketing MIS A marketing MIS supports managerial activities related to product development, distribution, pricing decisions, promotions, and sales forecasting. 1. Market research2. Product development3. Promotion and advertising4. Product pricing

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3. Human Resource MISThe personnel function relates to all other functional areas in the business, the human resource MIS plays a valuable role in ensuring organizational success.

1. Human resource planning 2. Personnel selection and Recruiting3. Training and skills inventory4. Scheduling and job placement 5. Wage and salary administration (medical

payments, saving plans, retirement accounts) 6. Outplacement (job counselling and training, job

and executive search, retirement and financial planning)

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4.Manufacturing MISManufacturing has been improved by advances in technology. With emphasis on greater quality and productivity, having an efficient and effective manufacturing process is becoming critical to the success of manufacturing organizations

1. Design and engineering2. Master production schedule and inventory

control 3. Process control 4. Quality control and testing

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5. Other Management Information SystemsIn addition to finance, manufacturing, marketing and human resource MIS some companies have other functional MIS. Accounting MIS

An information system provides aggregate information on accounts payable, accounts receivable, payroll and many other applications.

Geographical Information Systems A computer system is capable of assembling, storing, manipulating and displaying geographically referenced information, that is data identified according to its location.

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DSS(DECISION SUPPORT SYSTEMS)

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Introduction • Decision support systems (DSS) helps in making decision and also in its

performance evaluation.

• These systems can be used to sense the decision by performing sensitivity analysis on various parameters of the problem.

• DSS help such manager solve the semi structured and unstructured problems they typically face in the real world.

• Decision support system can be defined as – Computer based systems– That help decision makers– Confront ill-structured problems– Through direct interaction– With data and analysis models

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• Characteristic and Components of DSS– DSS focus on decision processes rather than

transactions processing . DSS aim at top managers and executive decision maker.

– DSS can be easily designed, it is simple in structure, and can be quickly implementation and altered.

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• Inputs: databases optimized for statistical analysis

• Processing: Interactive. Simulations and statistical analysis � �

• Outputs: Responses to queries; statistical test results. �

• Users: Professionals, staff �

• Example: Could answer the following query: “We need to trim 5% of our menu offerings to limit complexity in operations. Which items are the worst performing; are most likely to lead to sales of other products left on the menu, and have the most ingredients unique to their recipes?”

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DSS Components • Main components of a DSS include a database and a

model base.

• In addition a typical DSS contains a dialogue manager, which allows decision makers to easily access and manipulate the DSS and to use common business terms and phrases.

• Apart from the dialogue manager additional components include access to the internet, networks and other computer-based systems.

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The database • The database management system allows managers and decision

makers to perform qualitative analysis on the company’s vast stores of data in databases, data warehouses, and data marts.

• Data-driven DSSs tap into vast stores of information contained in the corporate database, retrieving information on inventory, sales, personnel, production, finance, accounting and other areas.

• A database management system can also be connected to external databases to give managers and decision makers even more information and decision support. External databases can include the Internet, libraries, government databases, and more.

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The Model base• The model base allows managers and decision makers to

perform quantitative analysis on both internal and external data.

• It is a software component that consists of models used in computational and analytical routines that mathematically express relationships among variables.

The dialogue manager • The dialogue manger allows users to interact with the DSS to

obtain information. It assists with all aspects of communications between the user and the hardware and software that constitute the DSS

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Analytical modelling • Using a DSS involves four basic types of

analytical modelling activities.1. What-if analysis2. Sensitivity analysis 3. Goat seeking analysis4. Optimization analysis

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EIS(EXECUTIVE INFORMATION SYSTEMS)

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Introduction • EIS developed focusing on meeting the strategic information

needs of top management, now it is widely used by persons at middle levels in the organizational structure.

• EISs serve to indicate issues of importance to the organization, indicate new directions the company may take, and help executives monitor the company’s progress.

• Some of the major decision making that can be supported through an EIS are, ability to provide an overall vision, strategic planning and organizing, strategic control and crisis management.

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• �Inputs: Aggregate data. Internal and external • �Processing: Interactive and graphical

simulations �• Outputs: Projections • �Users: Senior managers

Example: 5-year operating plan. Answer question like “what are long-term industry cost trends and how are we doing relative to them?

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Characteristics of ESS• Tailored to individual executives

An ESS is an interactive hands-on too, that allows an executive to focus, filter and organize data and information.

• Easy to useAn ESS must be easy to learn and use and not very complex, in order to save the time of top-level executives.

• Have drill-down abilitiesAn ESS allows executives to drill down into the company to determine how certain data was produced. Drilling down allows an executive to get more detailed information if needed.

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• Support the need for external dataInformation from competitors, the federal government, trade associations and journals and consultants are required to make effective top level decisions.

• Help with uncertain situationsHandling these unknown situations using modelling and other ESS procedures help top-level managers to measure the amount of risk in a decision.

• Have a future orientationMeaning those decisions will have a broad impact for years or decades.

• Linked with value-added business processesESSs are linked with executive decision making about value added business processes.

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Types of systems at the four levels

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AI(ARTIFICIAL INTELLIGENCE)

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Introduction • Artificial Intelligence (AI) is a field of science and technology

based on disciplines such as computer science, biology, psychology, linguistic, mathematics and engineering.

• A major power of AI is the development of computer functions normally associated with human intelligence such as reasoning, learning and problem solving.

• Artificial Intelligence systems include the people, procedures, hardware, software data and knowledge needed to develop computer systems and machines that demonstrate the characteristics of intelligence.

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Major Application Areas of Artificial Intelligence

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1. Cognitive science • This area of AI is based on research on biology,

neurology, psychology, mathematics etc.

• It focuses on researching how the human brain works and how humans think and learn.

• The results of such research in human

information processing are the basis for the development of a variety of computer-based applications in AI.

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2. Robotics • Basic disciplines of robotics include AI, Engineering and

physiology.

• This technology produces robot machines with computer intelligence and computer controlled, human like physical capabilities.

• This area includes applications designed to give robots the powers of

Visual perception: sight Tactility: ability use the sense of touch Dexterity: ability in using hands skilfully Locomotion: physical ability to move over any surface Navigation: the intelligence to properly find ways to a

destination.

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3. Cognitive science • This area of AI is based on research on biology,

neurology, psychology, mathematics etc.

• It focuses on researching how the human brain works and how humans think and learn.

• The results of such research in human

information processing are the basis for the development of a variety of computer-based applications in AI.

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Natural interfaces • Development of natural interfaces is essential to the natural

use of computers by humans. This area of applications are designed for – Natural languages and Speech recognition

ability to communicate with computers and robots in conversational human languages and have them understand us as easily as we understand each other.

– Multisensory Interfacesdevelopment of multisensory devices that use variety body movements to operate computers.

– Virtual realityusing multisensory human computer interfaces that enable human users to experience computer simulated objects, spaces, activities and worlds as they actually exist.

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Expert Systems• An expert system is a knowledge-based information system

that uses its knowledge about a specific, complex application area to act as an expert consultant to end users.

• They must also be able to explain their reasoning process and conclusions to a user.

• Expert systems can provide decision support to end users in

the form of advice from an expert consultant in a specific problem area.

• Components of an Expert System– Knowledge Base– Software resource

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