Types of Information Systems

Business Information Systems

Objectives What are the key information systems in a business? What role do they play ?Classify IS based on the organizational level they support How do information systems support the major business functions? How do these functions interrelate? What role does software have in management of those interrelationships?

Business Information Systems

Why Organizations need Information Systems

Linking Departments whose functions are different Enhancing Worker Productivity Improving the Quality of Goods and Services Meeting Global Challenges Capturing opportunities in the Market Place Supporting Corporate Strategy

BIS -Objectives

To provide requisite information support for managerial functions within the organization. To make available, right information at the right place at the right time at the lowest cost To ensure that wrong and unwanted information is not generated; the condition of the information overload is avoided

Management Functions
Planning Organising Staffing Directing and Controlling

Management Hierarchy
Top (Strategic) Management Middle (Tactical) Management
Line (Operational) Management

Information Systems
IS support needed by people depends on their role in the organization.
Top managers make strategic decisions Middle managers make tactical decisions Line managers make operations decisions Knowledge workers create and integrate knowledge Clerical workers use and manipulate information

Types of Information Systems

Information Systems

Types of Information Systems

1. Operations Support Systems

Efficiently process business transactions Control industrial processes Support communication and collaboration Update corporate databases

2. Management Support Systems

Provide information as reports and displays Give direct computer support to managers during decision-making

1. Operations Support Systems

Efficiently process business transactions Control industrial processes Support communications and collaboration Update corporate databases

Types of Operations Support Systems

1.1 Transaction Processing Systems 1.2 Process Control Systems 1.3 Enterprise Collaboration Systems

Transaction Processing Systems (TPS): A computerized system that performs and records daily routine transactions necessary to the conduct of the business Inputs: Transactions or events Processing: Sorting; listing; merging; updating Outputs: Detailed reports; lists; summaries Users: Operational personnel; supervisors

Examples: payroll system; production instructions Student grade cards preparation

Two Ways to Process Transactions

Batch Processing
Accumulate transactions over time and process periodically Example: a bank processes all cheques received in a batch at night

Online Processing
Process transactions immediately Example: a bank processes an ATM withdrawal immediately

Operations Support Systems-contd

1.2 Process Control Systems

Monitor and control physical processes Example: using sensors to monitor chemical processes in a petroleum refinery

1.3 Enterprise Collaboration Systems

Enhance team and workgroup communication Examples: email, video conferencing

2. Management Support Systems

Provide information and support for effective decision making by managers

2.1 Management information systems 2.2 Decision support systems 2.3 Executive information systems

Management Information System (MIS):

Inputs: Summary transaction data Processing: Simple models; low level analysis Outputs: Summary reports,displays Users: Middle managers

Example: Weekly, monthly, and annual resource allocation. Not five year plans and not daily details, but something in between.

Decision Support System (DSS):

Inputs: databases optimized for statistical analysis Processing: Interactive. Simulations and statistical analysis Outputs: Responses to queries; statistical test results. Users: Professionals, staff
We need to trim 5% of our service offerings to limit complexity in operations. Which items are the worst performing? Sales analysis- which regions to concentrate? etc

Example: Could answer the following query:

Types of DSS - Analytical Modeling

What-if Analysis
Goal Seeking Analysis Optimization Analysis

MIS Vs DSS DSS has more analytical capabilities built into it. Perform what-if analysis.managers can change inputs and get an idea of the changes in the output Some characteristics of MIS that make them differ from DSS
Structured and semi-structured decisions Output is often the kind that you need routinely each term (quarter, month, year) to evaluate how to proceed next (quarterly sales data for past 5 years)

Executive Information System (EIS):

Top level (strategic level) Inputs: Aggregate data. Internal and external Processing: Interactive and graphical simulations Outputs: Projections Users: Senior managers

Example: 5-year operating plan. Answer questions like what are long-term industry cost trends and how are we doing relative to them? What business should we be in ?How to diversify?Competition scenario?Which unit to sell?What to buy? etc Gets data from all internal IS plus external industry data bases

Characteristics of Executive Information Systems (EIS) Top level management Designed for the individual requirements
Ties CEO to all levels Very expensive to keep up Extensive support staff

Interrelationships among systems

EIS

MIS

DSS

KWS

TPS

Systems - Overlapping perspective

A single software package like Microsoft Office or even an application like Microsoft Excel could be classified as any or all of the following: DSS, TPS, MIS, or EIS What matters here is how the tool is used Basically, a CBIS meets a need posed by the environment A service provided by the CBIS is a solution. It is a MIS, DSS, EIS etc depending on what solution in the corporate hierarchy it serves.

TPS,MIS,DSS,EIS
INTERRELATIONSHIPS:

TPS generally feed all other systems

MIS generally indicate when a DSS is needed and provide input for them to crunch EIS take all internal data but usually only summary data from MIS and DSS level

Output data from one is input data for others to process

3) Other Information Systems

3.1 Expert Systems

Provide expert advice Example: credit application advisor

3.2 Knowledge Management Systems

Support creation, organization, and dissemination of business knowledge throughout company Encompasses the organizational knowledge mainly useful for professionals , tech staff Example: intranet access to best business practices

Other Information Systems

3.3 Strategic Information Systems

Help get a strategic advantage over customer Examples: shipment tracking, e-commerce Web systems

3.4 Functional Business Systems

Focus on operational and managerial applications of basic business functions Examples: accounting, finance, or marketing

History of the role of Information Systems

1950-1960 Data Processing 1960-1970 Management Reporting 1970-1980 1980-1990 1990-2000 Electronic Commerce

Decision Support

Strategic & End User

Electronic Data Processing - TPS

Management Information Systems

Decision Support Systems - Ad hoc Reports

End User Computing Exec Info Sys Expert Systems

Electronic Business & Commerce -Internetworked E-Business & Commerce

e-Business

Using Internet technologies to empower

Business processes Electronic commerce Collaboration within a company Collaboration with customers, suppliers, and other business stakeholders

In essence, an online exchange of value

How E-Business is Being Used

E-Business Use

Reengineering
Internal business processes

Enterprise collaboration systems

Support communications, coordination and coordination among teams and work groups

Electronic commerce
Buying, selling, marketing, and servicing of products and services over networks

Information Architecture and Information Technology Infrastructure

TOWARDS THE DIGITAL FIRM

Identify the TPS,MIS,DSS,EIS in the following functional areas

Sales and Marketing Manufacturing and production

Finance and accounting

Human resources

Write down at least two items for each IS in each of the functional areas

Sales and Marketing

TPS MIS

Order Processing
Sales management

DSS Sales analysis - region wise

EIS

Sales trend forecasting 5year

Manufacturing and Production

TPS MIS DSS EIS Material movement monitoring and control

Inventory control Production scheduling

Operations analysis Inventory analysis Production planning and control

Operations planning 5 year Facilities location

KWS - CAD

Human resources
TPS MIS

Employee records/attendance keeping

Personnel Info systems

DSS Employee cost analysis

EIS

Personnel planning Succession planning

Finance and accounting

TPS MIS Payroll Accounts payable

Annual budgeting

DSS Profitability analysis Cost analysis EIS

Profit planning Investment planning

Measuring IT Success

Efficiency
Minimize cost, time, and use of information resources

Effectiveness
Support business strategies Enable business processes Enhance organizational structure and culture Increase customer and business value