TYPES OF INFORMATION SYSTEMS MIS (2).ppt

Transaction Processing System (TPS)
•A transaction is any business related exchange, such as a sale to a
client or a payment to a vendor.
•Transaction processing systems process and record transactions as
well as update records.
•They automate the handling of data about business activities and
transactions.
•They record daily routine transactions such as sales orders from
customers, or bank deposits and withdrawals.
• Although they are the oldest type of business information system
around and handle routine tasks, they are critical to business
organization.

TPS cont’d
•TPS are vital for the organization, as they gather all the input necessary for
other types of systems.
•It could be difficult to generate a monthly sales report for middle
management or critical marketing information to senior managers without
TPS.
•TPS provide the basic input to the company’s database. A failure in TPS
often means disaster for the organization.
•Imagine what happens when an airline reservation system fails: all
operations stops and no transaction can be carried out until the system is up
and running again.
•There would be long queues form in front of ATMs and tellers when a
bank’s TPS crashes.

• Transaction processing systems were created to maintain records and
do simple calculations faster, more accurately and more cheaply than
people could do the tasks.
• Examples—Airline reservation systems, Automated Teller Machines
(ATMs,) order processing systems, registration systems, Payroll
systems and point of sale systems.

Management Reporting System (MRS)
• Management Reporting Systems (MRS) formerly called Management
information systems (MIS) provide routine information to decision
makers.
• They are used to make structured, recurring and routine decisions,
such as restocking decisions or bonus awards.
• They focus on operational efficiency and provide summaries of data.
• A MRS takes the relatively raw data available through a TPS and
converts it into meaningful aggregated form that managers need in
order to conduct their responsibilities.

MRS cont’d
•MRS generate information for monitoring performance (e.g.
productivity information) and maintaining coordination (e.g. between
purchasing and accounts payable).
•The main input to an MRS is data collected and stored by transaction
processing systems.
•A MRS further processes transaction data to produce information
useful for specific purposes.
•Generally, all MIS output have been pre-programmed by information
systems personnel.

MRS cont’d
Outputs from MRS include :
1.Scheduled Reports
•These were originally the only reports provided by early management
information systems.
•Scheduled reports are produced periodically, such as hourly, daily, weekly
or monthly.
•An example might be a weekly sales report that a store manager gets each
Monday showing total weekly sales for each department compared to sales
this week last year or planned sales.
2. Demand Reports
•These provide specific information upon request.
•For instance, if the store manager wanted to know how weekly sales were
progressing on Friday, and not wait until the scheduled report on Monday,
she could request the same report using figures for the part of the week
already elapsed.

Outputs cont’d
3. Exception Reports
•These are produced to describe unusual circumstances. For example,
the store manager might receive a report for the week if any
department’s sales were more than 10% below planned sales.

Decision Support System (DSS)
•Decision support systems provide problem-specific support for non-
routine, dynamic and often complex decisions or problems.
•DSS users interact directly with the information systems, helping to
model the problem interactively.
•DSS basically provide support for non-routine decisions or problems
and an interactive environment in which decision makers can quickly
manipulate data and models of business operations.
•A DSS might be used to help a management team decide where to
locate a new distribution facility. This is a non-routine, dynamic
problem.

DSS cont’d
•Each time a new facility has to be built, the competitive,
environmental, or internal contexts are most likely different.
•New competitors or government regulations may need to be
considered, or the facility may be needed due to a new product line or
business venture.
•When the structure of a problem or decision changes, or the
information required to address it is different each time the decision is
made, then the needed information cannot be supplied by an MIS, but
must be interactively modelled using a DSS.
•DSS provide support for analytical work in semi-structured or
unstructured situations.

• DSS enable mangers to answer ‘What if’ questions by
providing powerful modelling tools to evaluate alternatives
e.g. evaluating alternative marketing plans.
• DSS have less structure and predictable use.
• They are user-friendly and highly interactive.

Executive information system (EIS) / Executive Support Systems (ESS)
•EIS provide a generalized computing and communication
environment to senior managers to support strategic
decisions.
•They draw data from the MIS and allow communication with
external sources of information.
•Unlike DSS, the EIS are not designed to use analytical models
for specific problem solving.
•EIS are designed to facilitate senior managers’ access to
information quickly and effectively.

• ESS has menu-driven user-friendly interfaces, interactive graphics to
help visualization of the situation.
• It also has communication capabilities that link the senior executives
to the external databases they require.
• Top executives need ESS because they are busy and need information
quickly and in an easy to read form.
• Senior executives want to have direct access to information and want
their computer set-up to directly communicate with others.
• They want structured forms for viewing and want summaries rather
than details.

Expert System (ES)
•It is an advanced DSS that provides expert advice by asking users a
sequence of questions dependent on prior answers that lead to a
conclusion or recommendation.
•It is made of a knowledge base (database of decision rules and
outcomes), inference engine (search algorithm), and a user interface.
•ES use artificial intelligence technology.
•It attempts to codify and manipulate knowledge rather than
information
•It can assist the design phase of the decision making process by
suggesting alternative scenarios for "what if" evaluation.

• An ES assists a human in the selection of an appropriate model for
the decision problem.
• ES can simplify model-building. Simulation modeling lends itself to
this approach.

Other Information Systems
These are special purpose information systems. They are more recent types
of information systems that cannot be characterized as one of the types
discussed above.
Office Automation Systems (OAS)
•Office automation systems support general office work for handling and
managing documents and facilitating communication.
•Text and image processing systems evolved as from word processors to
desktop publishing, enabling the creation of professional documents with
graphics and special layout features.
•Spreadsheets, presentation packages like PowerPoint, personal database
systems and note-taking systems (appointment book, notepad, card file) are
part of OAS.
•In addition OAS include communication systems for transmitting messages
and documents (e-mail) and teleconferencing capabilities.

Artificial Intelligence Systems
•Artificial intelligence is a broad field of research that focuses on
developing computer systems that simulate human behaviour, that is,
systems with human characteristics.
•These characteristics include, vision, reasoning, learning and natural
language processing.
•Examples: Expert systems, Neural Networks, Robotics.

Knowledge Work Systems (KWS)
•Knowledge Work Systems support highly skilled knowledge workers in
the creation and integration of new knowledge in the company.
•An example of KWS is Computer Aided Design (CAD) systems.
•These can be used by product designers not only allow them to easily
make modifications without having to redraw the entire object, but
also enable them to test the product without having to build physical
prototypes.
•Architects use CAD software to create, modify, evaluate and test their
designs; such systems can generate photo-realistic pictures, simulating
the lighting in rooms at different times of the day, perform calculations,
for instance on the amount of paint required.

KWS cont’d
•Surgeons use sophisticated CAD systems to design operations.
•Financial institutions use knowledge work systems to support trading
and portfolio management with powerful high-end PCs.
•These allow managers to get instantaneous analysed results on huge
amounts of financial data and provide access to external databases.

MANAGEMENT INFORMATION SYSTEM (MIS)
• Management Information System is a system for processing data in
order to give proper information to the management for decision
making.
• Management information system is a system that collects raw data
and analyzes it for useful decision making by management.
• MIS provides managers with information and support for effective
decision making and feedback.
• MIS is organized along functional lines within an organization. MIS
provides information to the users in the form of reports, which are
usually generated through accumulation of transaction processing
data.

• Management needs full information before taking any decision. Good
decisions can minimize costs and optimize results.
• Management information system can be helpful to the management in
undertaking management decisions smoothly and effectively.
• Management information system can be analyzed thus:
• Management: management covers the planning, control, and
administration of the operations of a concern. The top management
handles planning; the middle management concentrates on controlling;
and the lower management is concerned with actual administration.
• Information: information, in MIS, means the processed data that helps the
management in planning, controlling and operations. Data means all the
facts arising out of the operations of the concern. Data is processed i.e.
recorded, summarized, compared and finally presented to the
management in the form of MIS report.

• System: data is processed into information with the help of a system.
a system is made up of inputs, processing, output and feedback or
control.
• Hence;
M = Management = Practical Use of Power of Decision Making
I = Information = Useful Data
S = System = Technique of Use of Data for Business

The traditional roles of managers are:
•Planning
•Organizing
•Coordinating
•Controlling
•Forecasting
•Decision making
An information system is not just for the use of “managers”. Anyone
who shares the above roles can make use of an MIS.

INFORMATION
•Information is data that has been organized. Information is data given
context, and endowed with meaning and significance.
•Information is a value-added data. “A set of classified and interpreted
data used in the decision making process".
•Information is important at every level in the organization for decision
making, planning, organizing, implementing, and monitoring and
controlling. Information is valuable because of its content, form and
timing of presentation.
•Information is the basis for every decision taken in an organization.
The efficiency of management depends upon the availability of regular
and relevant information.

A good system must be able to produce information that carries the
following characteristics:
•Relevant – information must pertain to the problem at hand.
•Complete – partial information is often worst than no information.
•Accurate – erroneous information may lead to disastrous decisions.
•Current – decisions are often based upon the latest information
available.
•Economical – in a business setting, the cost of obtaining information
must be considered as one cost element involved in any decision.

• Timeliness: Information must reach the user in a timely manner, just
when it is needed; not too early, because by the time it is used it
would be out-of-date; not too late because the user will not be able to
incorporate it into his/her decision-making.
• Appropriateness: Information must be relevant to the person who is
using it. It must be within the sphere of his/her activities so that it can
be used to reduce uncertainty in his/her decision-making.
• Conciseness: Information should always contain the minimum
amount of detail that’s appropriate for the user. Too much detail
causes Information overload.

• Information Hierarchy- Business Intelligence point of view
• Data, Information, Knowledge, Wisdom
• Data are raw facts such as employee number, hours worked in a
week, inventory part numbers, or sales orders.
• Information is a collection of facts organized and processed so that
they have additional value beyond the value of individual facts.
• Knowledge is the awareness and understanding of a set of
information and ways that information can be made useful to support
a specific task or reach a decision.
• Wisdom is the ability to make a good judgment based on what you
have learned, from experience, or the knowledge and understanding
that gives you this ability

• Where is information needed?

MIS requirements and objectives
•Levels of information requirements
•Organizational level
•Application level
•Technical
•Database

MIS components
•Inputs: High volume data
•Processing: Simple models
•Outputs: Summary reports
•Users: Middle managers
•Example: Annual budgeting
Sources of information
Information may be internal or external.
•Internal information includes data from transaction processing of the data
processing system.
•External information includes market research, details about the activities
of competitors, information about social trends, economic factors,
government legislation, and so on.

MIS objectives
•Data capturing
•Processing-simple models
•Storage of information
•Retrieval of Information
•Dissemination of Information- Users: Middle managers

MIS CHARACTERISTICS
•System approach
MIS follows the system approach, which implies a step by step approach to
the study of system and its performance in the light of the objective for
which it has been constituted.
It means taking an inclusive view at sub-systems to operate within an
organization.
•Management oriented:
The management-oriented characteristic of MIS implies that top-down
approach needs to be followed for designing MIS.
- A top-down method says the initiation of system development determines
management requirements as well as business goals.
- MIS implies the management dynamically to the system development
towards the completion of management decision.

• Need based as per requirements:
- The design and development of MIS should be as per the information
required by the managers.
- The required design and development information is at different
levels, i.e. Strategic planning, management control and operational
control.
- It means MIS should cater to the specific needs of managers in the
hierarchy of an organization.
• Future-oriented
The design and development of MIS should also be future purpose so
that the system is not restricted to provide only the past information.

 Integrated:
A complete MIS is a combination of its multiple sub-components to
provide the relevant information to take out a useful decision. An
integrated system, which blends information from several operational
areas, is a necessary characteristic of MIS.
 Common data flows:
This concept supports numerous basic views of system analysis such
as avoiding duplication, combining similar functions and simplifying
operations. The expansion of common data flow is a cost-effectively
and logical concept.

 Long-term planning:
MIS should always develop as a long term planning because it involves
logical planning to get success of an organization. While developing MIS,
the analyst should keep future oriented analysis and needs of the company
in mind.
 Relevant connection of sub-system planning:
The MIS development should be decomposing into its related sub-systems.
These sub-systems must be meaningful with proper planning.
 Central database:
it contains data in tabular form. The data base is responsible to operations
like insertion, deletion, updation of records. This database covers
information related to inventory, personnel, vendors, customers, etc. the
data stored in the database.

Reports managers can use to make decisions
•Scheduled reports: Produced periodically, or on a schedule (daily,
weekly, monthly).
•Key-indicator reports: Summarizes the previous day’s critical activities
and typically available at the beginning of each day.
•Ad hoc (Demand reports): Gives certain information at a manager’s
request.
•Exception reports: Automatically produced when a situation is
unusual or requires management action. These reports summarize the
exceptions to the norm i.e. students obtaining low marks over a period
of time.
•Drill-down reports: Provide detailed data about a situation

Relation between TPS and MIS

• TPS and MIS

MIS System Architecture:

Organizational structure and MIS
•MIS has been described as a pyramidal structure, with four levels of
information resources.
•The levels of information would depend upon the organizational structure.
•The top level supports strategic planning and policy making at the highest
level of management.
•The second level of information resources aid tactical planning and decision
making for management control.
•The third level supports day-to-day operations and control.
• The bottom level consists of information for transaction processing.
• It then follows that since decision making is specific to hierarchical levels in
an organization, the information requirements at each level vary
accordingly.

Information systems and functional areas

TYPES OF INFORMATION SYSTEMS MIS (2).ppt

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