Foundations of information systems BIS 1202 IS AN ORGANIZATIONS Chapter 5

Overview  Types of Information Systems  Inter-relationship between the various types of Information Systems.  IS on different levels of an organization  Role of IS in an organization

AIM By the end of this lecture, you should be able to:.  Recognise the different types of information systems.  Understand the relationships between ISs.  Relate IS to business functions and processes

Types of IS Six categories of Information systems: Transaction processing systems (TPS) Management information systems (MIS) Office automation systems (OAS) Knowledge work systems (KWS) Decision support systems (DSS) Executive support systems (EES)

TYPES OF INFORMATION SYSTEMS TYPES OF INFORMATION SYSTEMS DATA WORKERS KIND OF SYSTEM GROUPS SERVED STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS OPERATIONAL OPERATIONAL MGRS LEVEL KNOWLEDGE LEVEL KNOWLEDGE & SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCES MARKETING 2.5

…Types of IS

Transaction Processing Systems (TPS)  Operational managers need systems that keep track of the elementary activities and transactions of the organizations such as sales, receipts, cash deposits, payroll, credit decisions and the flow of materials in a factory.  Transaction processing systems (TPS) provide this kind of information.

Transaction Processing Systems  Is a computerized system that performs and records the daily routine transactions necessary to conduct business such as sales orders entry, hotel reservations, payroll, employee recording keeping and shipping.  The principal purpose of these systems at this level is to answer routine questions and to track the flow of transactions through the organizations. How many parts are in the inventory? What happened to Mr. Bernard's top up payment?  To answer these kinds of questions, information generally must be easily available, current and accurate

Transaction Processing Systems  It records all of the daily routine transactions that take place within organization.  It is used primarily by clerks and operations staffs that either input or maintain the data on the system  The TPS records the data from everyday operations throughout every division or dept in the organization.  Each dept is tied together thru the TPS to give a clear cut set of information to management level thru out the company.  TPS are also major producers of information for other types of systems.

Office automation systems (OAS)  Is a computerized package designed to increase the productivity of data workers by providing access to basic systems such as electronic mail and word processing.  The main aim of OAS is to capture and then distribute knowledge around an organization.  OAS is used by data workers to fulfill the coordination and communication functions vital to the company.  Data workers are employed to process data and information( accountants,secretaries or managers whose jobs are principally to use, manipulate or disseminate information.)  Example document imaging systems convert documents and images into digital form so that that they can be stored and accessed by the computer.

Knowledge Work Systems(KWS)  A knowledge work system is a computerized package designed to provide knowledge workers with the means to create and integrate new knowledge into the organization.  Knowledge workers create new knowledge or information by research, experimentation and investigation into existing trends and products.  KWSs will be tailored to meet the requirements of individual knowledge workers.  example computer aided design

Management Information Systems  Is an integrated computer based user machine system that provides information for supporting operations and decision making functions.  MIS summarize and report on the basic operations of the company  MIS typically compress TPS data to present regular reports on the company's basic operations

Management Information Systems  In the system illustrated by this diagram, three TPS supply summarized transaction data to the MIS reporting system at the end of the time period. Managers gain access to the organizational data through the MIS, which provides them with the appropriate reports.

Characteristics of MIS.  They are generally reporting and control oriented.  They have little analytical capability  They generally aid in decision making using past and present data.  They have an internal rather than an external orientation.  The information requirements are known and stable.  They often require a lengthy analysis and design process.

“A set of interactive software programs that provide managers with data, tools, and models to make semi structured and unstructured decisions.”  “Decision Support Systems are computer- based information systems that provide interactive information support to managers and business professional during the decision- making process. Decision support systems use: Decision Support Systems

Decision support systems (DSS) - analytical models, - specialized databases, - a decision maker’s own insight and judgments, and - an interactive, computer- based modeling process to support the making of semi structured and unstructured business decisions.”

 The type of problems managers and business professionals face can be described as:  Structured Problems which are routine and repetitive. A standard solution method or a set of decision rules will exist. Therefore, the method of finding the best solution is clear. Examples of such problems are: finding an appropriate inventory level, choosing an optimal investment strategy, or approving credit. As you can see they are mostly about minimising cost or maximising profit. Decision Support Systems

 Unstructured Problems are novel, non-routine, and complex. The decision making is mostly based on human instinct, experience and knowledge. Therefore, there are no decision rules or the decision method is fuzzy, and it is almost impossible to find the best solution. Rather a satisfactory solution will be found. Examples of such problems are: selecting a cover for a magazine, planning new services, hiring an executive, or personnel selection  Some decisions are semi-structured; in such cases only part of the problem has a clear-cut answer provided by a routine procedure. Decision Support Systems

 DSS support management decision making by integrating:  Company performance data  Business rules based on decision tables  Analytical tools and models for forecasting and planning  An easy-to-use graphical interface Decision Support Systems

 Today most decisions within organizations are not taken by one single person but by a group of people. In the new business models which have arisen due to the use of advanced communication technologies, not only there exist group decision making but members of the decision making team can be dispersed in different geographical locations  GDSS are computer-based systems that enhance group decision making and improve the flow of information among group members Group Decision Support Systems (GDSS)

 GDSS provide facilities which are typical in group decision making, such as, brainstorming, idea organizers, questionnaires, and voting tools, and provide anonymity when required  GDSS software attempts to eliminate the negative factors associated with group decision making, such as: a few people dominating the discussions, time consuming, possibility of deviating from the problem concerned, and reluctance of members of expressing their ideas in the fear of being victimized by top management or internal politics Group Decision Support Systems (GDSS)

Executive support systems (ESS)  Serves at the strategic level.  For long-term decision making  Receives from the MIS and DSS.  Used by executive and strategic managers.  Operates at the strategic management level.

 An IS that is focused on meeting the strategic needs of the organisation  Designed explicitly for the purposes of senior management  Used by senior management without technical intermediaries Executive Support Systems (ESS)

Use state-of-the-art integrated graphics, text, and communication technology Web browsing, , groupware tools, DSS and Expert System capabilities Also known as Executive Information Systems (EIS) Executive Support Systems (ESS)

The primary objective of Executive information systems is to provide top executives with quick and easy access to strategic information They combine many of the features of MIS and DSS Characterized by their easy-to-use graphical interfaces and graphical displays that can be customized to decision makers preferences Other features: exception reporting, trend analysis, and drill down capabilities Executive Support Systems (ESS)

 Executive Information Systems (EIS):  Provide the information needs of top executives  Executive Support Systems (ESS):  Goes beyond EIS to include communication, office automation, analysis support, and business intelligence  Enterprise Information Systems (EIS):  Corporate-wide system that provide holistic information from a corporate view IS EIS vs. ESS

Relationships among Systems

IS at the Organisational Level  Operational-level  They provide support to operational managers by tracking the individual transactions that occur with in the organization. e.g individual sales invoices, specific goods sold to one customer.  All data will be collected in the transaction processing systems.  Knowledge-level  knowledge and data workers  Introduce new knowledge into the business  Organise and provide access to existing knowledge.  Examples include: OAS, KWS

IS at the Organisational Level  Management-level  Systems designed to assist with the monitoring, control, decision-making of other systems.  Is the business working well?e.g DSS, MIS  S trategic-level  Helps managers address more long term issues and problems such as the over all strategic direction of the organisation., where to invest in new factories &products  Provide mgt with summarised strategic information needed to make these decisions e.g. ESS, EIS.

Role of IS in Organizations  Flattening organizations: reduce levels in org’s  Separates work from Location – collaborative  Reorganize work flows: replace manual procedures  Increasing flexibility in Org’s: mass customization  Facilitate the mgt process: capabilities to plan, organize, lead & control (use of ERP)  Redefine org’al boundaries: e-transactions and Inter organizational systems (link org to suppliers/distributors/customers)

Global Challenges in Information Systems  Cultural challenges  Language challenges  Infrastructure challenges  Technology transfer issues  Currency challenges  State, regional, and national laws

Conclusion  The different information Systems in an organization will ultimately improve the efficiency, effectiveness and profitability of an organization.  IS Aid in management, communication, decision making and work tasks.  They should be faster, more reliable, simpler and should give the organization a competitive edge against it’s competitors.

Questions…  Analyze the role played by the six major types of information systems in organizations and their relationship to each other  Describe the types of information systems supporting the major functional areas of the business  Identify and describe the four levels of the organizational hierarchy. What types of information systems serve each level?  What are the five types of TPS in business organizations? What functions do they perform? Give examples of each.

 FUNCTIONAL BUSINESS SYSTEMS