1. Prepared by Natalie Rose
INFORMATION SYSTEM
Lecture 3
Prepared by Natalie Rose

2. What is an Information System?
An information system (IS) is an arrangement of people, data processes, and information technology that interact to collect, process, store, and provide as output the information needed to support an organization.
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3. Types of Information Systems
Transaction Processing Systems
Management Information Systems
Decision Support Systems
Executive Support Systems
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4. Transaction Processing Systems
A transaction processing system (TPS) is an organized collection of people, procedures, software, databases, and devices used to record completed business transactions.
Process business exchanges
Maintain records about the exchanges
Handle routine, yet critical, tasks
Perform simple calculations
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5. Payroll Transaction Processing System
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6. Management Information Systems (MIS)
Routine information for routine decisions
Prepare reports for routine information
Use transaction data as main input
Databases integrate MIS in different functional areas
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7. Management Information Systems (MIS)
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MIS Outputs
Detail Reports. Detail reports provide managers with information useful in overseeing the day-to-day operations of a department or working group.
Summary Reports. Summary reports or statistical reports show totals, averages, maximums, minimums, or other statistical data aggregated over time, personnel, products, or some other quantity.
Exception Reports. An exception report alerts managers to potential problems by showing only data that fall outside an accepted or expected range.
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9. Decision Support Systems (DSS)
DSS- A decision support system is an organized collection of people, procedures, software, databases, and devices used to support problem-specific decision making.
Interactive support for non-routine decisions or problems
End-users are more involved in creating a DSS than an MIS
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10. Executive Information System
An executive information system is software that supports executive activities, often specifically designed for a particular executive, reflecting his or her style and information requirements. Most EISs include mainly hard information; however, increasingly they include soft information.
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11. Technology Toolbox: GIS
Microsoft MapPoint
Data Mapping Wizard
Shaded Area: Demographics, Population 2002 by County
Multiple Symbol
Households with Internet Access
Three levels, lowest uses Blank8x8.bmp
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MapPoint File

12. Types of information system by their: Relevance to different organizational levels/users
Senior Managers
Middle Managers
Knowledge and Data Workers
Strategic Level
Sales and Marketing
Accounting
Management Level
Knowledge Level
Operational Level
Finance
Manufacturing
Human Resources
INFORMATION SYSTEM
USERS
Operational Managers
FUNCTIONS SERVED
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13. Operational Level System
Support operational managers
Information systems aim to:
Answer routine questions
Track flow of transactions
Keep track of elementary activities (e.g. sales, receipts, cash deposits)
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14. Knowledge Level System
Support knowledge and data workers
Information systems aim to:
Integrate new knowledge into business
Help control flow of paperwork
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15. Management Level System
Support middle managers
Information systems aim to assist in:
Monitoring, controlling, decision making and administration
Producing periodic reports
Some non-routine decision making
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16. Strategic Level System
Support senior managers
Information systems aim to assist:
In their understanding of strategic issues/long- term trends
To utilise internal and external information
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17. Types of information system by their: Relevance to different business functions
5-year sales trend forecasting
5-year operating plan
5-year budget forecasting
Profit planning
Personal planning
Strategic-Level Systems
Executive Support Systems (ESS)
Sales Management
Sales Region analysis
Management-Level Systems
Inventory control
Production scheduling
Annual budgeting
Cost analysis
Capital investment analysis
Pricing/profitability analysis
Relocation analysis
Contract cost analysis
Management Information Systems (MIS)
Decision-Support Systems (DSS)
Knowledge-Level Systems
Engineering Workstations
Word processing
Graphics workstations
Document Imaging
Managerial workstations
Electronic calendars
Knowledge Work System (KWS)
Office Systems
Order tracking
Order processing
Operational-Level Systems
Machine control
Plant scheduling
Machine movement control
Securities trading
Cash management
Payroll
Accounts payable
Accounts receivable
Compensation
Training & development
Employee record keeping
Transaction Processing Systems (TPS)
Sales and Marketing
Manufacturing
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Finance
Accounting
Human Resources

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Specific types of Information System Transaction Processing Systems (TPS)
Aid operational managers
Most common form of information system
Handle routine information manipulation –sorting, listing, merging etc
Many online so users can interact with database simultaneously
Provide information to other types of systems
Critical
Example –airline computerised reservation systems
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Specific types of Information System Management Information Systems (MIS)
Aid middle managers
Provide focused view of information flow
Regular reports on internal events –weekly, monthly, yearly Planning, controlling, decision making
Depend on TPS
Not flexible or analytical –answer predefined questions
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20. Specific types of Information System Decision Support Systems (DSS)
Primarily aid middle managers
Unique, rapidly changing decisions, not predefined
Analytical
Use internal information from TPS and MIS
Use external information –stock prices, competitor prices
Have variety of models to analyse data, and user- friendly software
Flexible
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21. Specific types of Information System Decision Support Systems (DSS)
Examples: Airlines –passenger demand forecasting, flight scheduling
Insurance companies –customer buying patterns and fraud detection
Customer relationship management – getting data from website log
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22. Specific types of Information System Executive Support Systems (ESS)
Historically, executives have received numerous reports, 100’s of pages long
Information overload
Need to detect warning signals indicating threats or opportunities
Senior managers (executives) Non-routine decisions requiring judgment, evaluation, insight
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23. Specific types of Information System Executive Support Systems (ESS)
General, not fixed or specific
Use MIS, DSS, and external databases Filter, compress, track
Use advanced graphics software, little training required
Allow drilling down to detailed data underneath
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Considering information systems in terms of business functions Sales and Marketing
Sales
Contact customers
Sell products and services
Take orders
Follow up
Marketing
Identify customers
Determine needs/wants
Plan and develop products and services to meet needs
Advertise and promote so customers aware of products/services
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25. Sales and Marketing Requirements for an Information System
Order processing
Market analysis (from Market Research, demographics etc)
Sales analysis
Pricing analysis
Sales forecasting
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Considering information systems in terms of business functions Manufacturing/Production
Production of products/services
Planning, development, maintenance of production facilities
Establishing production goals Acquiring & storing materials, ensuring their availability
Scheduling
Quality control
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27. Manufacturing/Production Requirements for an Information System
Inventory
Machine control
Computer aided design (CAD) for new products
Production planning
Facilities (new plant) location
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Considering information systems in terms of business functions Finance and Accounting
Finance
Managing firm’s financial assets –cash, stocks, bonds etc
Maximising return on assets
Acquiring new financial assets
Accounting
- Managing/maintaining financial records –receipts, payroll, etc
Accounting for flow of funds
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29. Finance and Accounting Requirements for an Information System
Tracking flow of funds in the firm
Designing portfolio of investments
Budget preparation, control of financial resources
Profit planning and long term investment goals
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Considering information systems in terms of business functions Human Resources
Attract, develop and maintain workforce
Identify potential employees
Maintain complete records on existing employees
Develop training and development programs
Evaluate employee performance
Enroll employees in benefit plans
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