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

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. Prepared by Natalie Rose

Types of Information Systems Transaction Processing Systems Management Information Systems Decision Support Systems Executive Support Systems Prepared by Natalie Rose

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 Prepared by Natalie Rose

Payroll Transaction Processing System Prepared by Natalie Rose

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 Prepared by Natalie Rose

Management Information Systems (MIS) Prepared by Natalie Rose

Prepared by Natalie Rose 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. Prepared by Natalie Rose

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 Prepared by Natalie Rose

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. Prepared by Natalie Rose

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 Prepared by Natalie Rose MapPoint File

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 Prepared by Natalie Rose

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) Prepared by Natalie Rose

Knowledge Level System Support knowledge and data workers Information systems aim to: Integrate new knowledge into business Help control flow of paperwork Prepared by Natalie Rose

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 Prepared by Natalie Rose

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 Prepared by Natalie Rose

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 Prepared by Natalie Rose Finance Accounting Human Resources

Prepared by Natalie Rose 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 Prepared by Natalie Rose

Prepared by Natalie Rose 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 Prepared by Natalie Rose

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 Prepared by Natalie Rose

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 Prepared by Natalie Rose

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 Prepared by Natalie Rose

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 Prepared by Natalie Rose

Prepared by Natalie Rose 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 Prepared by Natalie Rose

Sales and Marketing Requirements for an Information System Order processing Market analysis (from Market Research, demographics etc) Sales analysis Pricing analysis Sales forecasting Prepared by Natalie Rose

Prepared by Natalie Rose 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 Prepared by Natalie Rose

Manufacturing/Production Requirements for an Information System Inventory Machine control Computer aided design (CAD) for new products Production planning Facilities (new plant) location Prepared by Natalie Rose

Prepared by Natalie Rose 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 Prepared by Natalie Rose

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 Prepared by Natalie Rose

Prepared by Natalie Rose 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 Prepared by Natalie Rose