Chapter 5

TYPES OF INFORMATION SYSTEMS

1. Transaction Processing System (TPS)
2. Management Information System (MIS)
3. Decision Support System (DSS)
4. Executive Information System (EIS)
5. Expert System (ES)
6. Office Automation System [OAS]
7. E-commerce Systems [EC]
8. Knowledge Work Systems [KWS]
9. Information Retrieval Systems [IRS]
 TYPES OF INFORMATION
Three types of IS levels:
1. Strategic information:
• For long term planning
• Top level management
• Unstructured
• Small volume
• Source: external
• Difficult to obtain
2. Tactical information:
• For medium term planning to run the business efficiently
• Middle level management
• Less unstructured
• Volume is more than strategic information
• Source: internal and external
 3. Operational information:

• For short term planning (day to day operations of an organization)

• Supervisory level management
• Easy to obtain
• Volume is much more than tactical information
• Source: internal
Decision-Making Levels of an Organization
A. Executive level (top)
• Long-term decisions
• Unstructured decisions
B. Managerial level (middle)
• Decisions covering weeks and months
• Semi-structured decisions
C. Operational level (bottom/on-line)
• Day-to-day decisions
• Structured decisions
Three level pyramid model based on the type
of decisions in the organizations
1. TRANSACTION PROCESSING SYSTEM [TPS]
• Transaction Processing System are operational-level systems at
the bottom of the pyramid.
• They are usually operated directly by shop floor workers or front line staff,
• Transaction = an event that generates or modifies data
• Used at Operational level of the organization
• Processes business events and transactions to produce reports
• Goal: to automate repetitive information processing activities within organizations
Increases speed
Increases accuracy
Greater efficiency
• Supports the monitoring, collection, storage, processing, and dissemination of the
organization’s basic business transactions
• Mainly includes accounting and financial transactions mainly used for providing other
information systems with data.
TPS Objectives:
• Efficient and effective operation of the organization
• Provide timely documents and reports
• Increases the competitive advantage
• Provides necessary data for tactical and strategic systems such as DSS
• Provide a framework for analyzing an organization’s activities
TPS…
Role of TPS
• Produce information for other systems
• Cross boundaries (internal and external)
• Used by operational personnel + supervisory levels
• Efficiency oriented
Examples
• Payroll processing
• Sales and order processing
• Inventory management
• Accounts payable and receivable
 2. MANAGEMENT INFORMATION SYSTEM[MIS]
• Management Information Systems are management-level systems that are used
by middle managers to help ensure the smooth running of the organization in the
short to medium term.
• Refers to the data, equipment and computer programs that are used to develop
information for managerial use
• Converts raw data from transaction processing system into meaningful form
• Focus on the information requirements of low to middle level managers
Its objectives are Provide summary information of organisational activity at
periodical intervals, Operational control and efficiency, Focus on internal
information and Useful to structured decisions
 MIS…
Role of MIS:
• Based on internal information flows
• Support relatively structured decisions
• Inflexible and have little analytical capacity
• Used by lower and middle managerial levels
• Deals with the past and present rather than the future
• Efficiency oriented
Some examples of MIS:
• Sales management systems
• Inventory control systems
• Budgeting systems
• Management Reporting Systems (MRS)
 3.Decision Support System [DSS]
A Decision Support System can be seen as a knowledge based system, used
by senior managers, which facilitates the creation of knowledge and allow
its integration into the organization.
These systems are often used to analyze existing structured information and
allow managers to project the potential effects of their decisions into
the future.
Such systems are usually interactive and are used to solve ill structured
problems. They offer access to databases, analytical tools, allow "what if"
simulations, and may support the exchange of information within the
organization.
 DSS…
• Refers to systems which support the process of decision-making
dealing with unstructured problems
• May be defined as the “what-if” approach that assists management
in formulating policies and projecting the likely consequences of
Decisions. - Considered as an extension of MIS
• An effective blend of human intelligence, information technology and
Software. - Provides strategic information.
DSS…
Role of DSS
• Support ill- structured or semi-structured decisions
• Have analytical and/or modelling capacity
• Used by more senior managerial levels
• Are concerned with predicting the future
• Are effectiveness oriented
 Some examples of DSS
• Group Decision Support Systems (GDSS)
• Computer Supported Co-operative work (CSCW)
• Logistics systems
• Financial Planning systems
• Spreadsheet Models
COMPARISON BETWEEN MIS AND DSS:
 4. Executive Information Systems[EIS]
Executive Information Systems are strategic-level information systems that
are found at the top of the Pyramid.
They help executives and senior managers analyze the environment in which
the organization operates, to identify long-term trends, and to plan
appropriate courses of action.
The information in such systems is often weakly structured and comes from
both internal and external sources.
Executive Information System are designed to be operated directly by
executives without the need for intermediaries and easily tailored to the
preferences of the individual using them.
 EIS…
Specialized form of DSS - Used by top-level managers
Reduce the information overload on executives - Makes use of internal and
external information.
Provides managers and executives flexible access to information for
monitoring operational results and general business conditions.
Provides a comprehensive picture of business performance by analysing key
performance indicators for growth.
Meets strategic information needs of the top management also known as
Executive Support System[ESS]
EIS…
Role of EIS
• Are concerned with ease of use
• Are concerned with predicting the future
• Are effectiveness oriented
• Are highly flexible
• Support unstructured decisions
• Use internal and external data sources
• Used only at the most senior management levels
Some examples:
• Executive Information Systems tend to be highly individualized and are often
custom made for a particular client group; however, a number of off-the-shelf
EIS packages do exist and many enterprise level systems offer a customizable EIS module
 5. Expert systems
Expert systems can be defined as programs that help the computer make
decisions in a similar way as an expert advice in specific domain, a particular
subject area of interest.
It makes use of artificial intelligence[AI] to generate knowledge out of the
information, existing theories, beliefs and experiences of managers in
various business activities.
• Artificial intelligence is referred to as the capabilities which can be imparted to
computers to enable them to display intelligent humanlike behavior.
The judgment of experts by following sets of rules that experts would follow.
They’re useful in such diverse areas as medical diagnosis, portfolio management,
and credit assessment.
 ES…
Expert systems can be used in several areas of an organisation:
Accounting and finance
• In selecting forecasting models
• In providing tax advice
Marketing
• In establishing sales quotas
• In responding to customer inquiries
Manufacturing
• In determining whether process is running correctly
• In analysing quality and providing corrective actions
• In product design and layout
Others
• In assessing project proposals, etc
 6. Office automation systems[OAS]
Office automation is the integration of computer, telecommunications and
office equipment technologies to improve the execution of business
functions through increasing the productivity, effectiveness and working
conditions of office support.
The concept of office automation encompasses the application of computer
and communication technology to improve the productivity of all types of
office workers including clerical, administrative, professional and executive.
Components Of OAS And Their Functions
 7. Professional Support Systems
• Professional support systems help in tasks specific to various professions.
• As both organizational and individual experience with information
systems grow, more and more specialized categories of professional
support systems emerge.
• Knowledge Work System[KWS] is an IS that the creation of new works in
the organizations.
 8. Electronic Commerce[EC]
• E-commerce is the Use of Internet and Web (provide easy access)to
transact business.

• The use of the global Internet for purchase and sale of goods and services, including
service and support after the sale.

• Distributing, buying, selling and marketing products and services over electronic
systems.
9.Information Retrieval system[IRS]
• Information retrieval (IR) is the process of finding material of an unstructured
nature that satisfies an information need of the user from within large collections
(usually stored on computers).
Balancing two things:
• Information item- from Document side
• Information need- from users side
Large collections of documents from various information sources:
news articles,
research papers,
books,
digital libraries,
Web pages, etc.
 …
Documents in a collection are frequently represented by a set of index
terms or keywords.