Business-related Information Systems EIS - Executive Information Systems

MIS - Management Information Systems

Decision Support Systems

Transaction Processing Systems

Transaction Processing Systems The lowest level of information

system Used by businesses to record

“transaction” information Transactions include things like

booking airline tickets, purchasing goods or services

Management Information Systems A step up from TPS This type of systems is used for

routine reporting Reports are used to monitor and

control normal business activities

Decision Support Systems

Similar in some ways to MIS Used to solve unusual problems,

and problems that fall outside the capabilities of the MIS

Executive Information Systems The King of the Hill!! (Topmost

systems) High-level systems designed to

provide Senior Management with information on general trends in business activities rather than the intimate details

Used to help S.M.. formulate business strategies, and plan for the future

Characteristics of decisions and information needs when ascending the diferent business levels.

Less structured problems and decisions

Greater need for summarised information

Greater need for external information

Longer time horizion

Transaction Processing Systems The lowest level of Business

system Provides raw data used in

processing in EIS, MIS and DSS TPS are important for a business.

They manage the data that keeps the business going, e.g. Airline ticket bookings, etc.

Transaction Processing Systems (cont’d) TPS accept input related to a

transaction event, process it, and produce output

The primary users of a TPS are staff at the Operational, or lowest-level, of a business

Structure of a typcial TPSOn-line dataentry

Transactionfiles

Keypunchedcards

Scanningdevices

Transaction Processing System

- Record - Merge

- Perform - Sort

- List - Update

Products Documents Data forother systems

INPUTS

TPS

OUTPUTS

What is a Management Information System? A MIS provides Managers with

reports on an organisations performance - both past and present.

MIS server Managers by helping them monitor actual business performance, and predict future performance.

General Properties of a MIS? Used to help Managers track current

performance, and predict future performance

Based upon underlying TPS. Transaction data is compressed by summarisation, and presented in long reports.

Reports are produced on a regular basis answering routine, structured questions

General Properties of a MIS (cont’d) MIS serve Managers interested in

Weekly, Monthly, and/or Yearly resuts, not day-to-day.

Data is provided from internal company sources only.

Uses simple calculatory routines such as summaries and comparisons, not sophisticated statistical analysis

General Properties of a MIS (cont’d) Not very flexible. Reports and data are

structured according to the original MIS design, this generally cannot be easily changed to provide different data.

Development of a MIS requires a lengthy analysis and design process, typcially in the order of 1 to 2 (or more!) years

Less graphically-oriented than EIS

Dynamics of a MIS

Inputs:– Summary of Transaction Data– High-volume data– Simple models

Processing:– Routine Reports– Simple Models– Low-level analysis

Dynamics of a MIS (cont’d)

Outputs:– Summary and Exception Reports

Typical MIS Users: Professionals and Staff Managers

Structure of a typical MISTPS MIS

Order File OrderProcessingSystem

Products Master File

MaterialsResourcePlanningSystem

AccountingFile

GeneralLedgerSystem

Sales Data

Unit ProductCost

ProductChange Data

Expense Data

MIS Files

MIS

Reports

Data flow

Decision Support Systems

(and more!)

Decision Support Systems

Definition: A DSS is a coherent system of computer based technology used by managers as an aid to their decision making in semi-structured tasks.

Conceptually, DSS and MIS overlap in many aspects, but generally:– MIS are used to produce routine reports– DSS use more sophisticated analysis and

data modelling tools to solve semi-structured problems

Differences between DSS and MIS

MIS DSS

Reports summaries of basictransactions and exceptionsfrom plan

Users simple analytical tools

Solves structured, repetitive

problems

Produces routine reports

Provides data and models for decision making

Uses sophisticated analysisand modelling tools

Solves semi-structured problems

Provides interactive answers tonon-routine questions

The characteristics of a DSS

Structured and semi-structured decisions

Used by managers at different levels Used both by groups and individuals Supports a variety of decision styles and

processes It has adaptability and flexibility Ease of use Its based on effectiveness and not

effciency

Components of a DSS

DSS Database - data from internal TPS. Unlike MIS, this can contain data from inventory, production, and accounting sources

Model Base - Analytical tools used by the DSS. These include built-in spreadsheeting, statistical analysis, and simulation

Components of a DSS (cont’d) DSS software system - program to

allow easy interaction between users of the system and the DSS database and model base

DSS - Questions

Where does it obtain its data from? What does it do with the data? What Management and Business

problems does the system solve? What difference does a DSS make

for a firm?

DSS - Answers

From the organisations internal transaction files

Spreadsheet modelling, What-If scenarios, Regression Analysis, Graphical projection of performance

Monitoring and controlling a production process. Frees Managers time to control production

DSS - Answers (cont’d)

Provides rapid access to up-to-date information. Also aids quick reaction to unanticipated problems that occur

Structure of a generic DSSDSS

SystemSoftware

Model Base

- Spreadsheets - Statistical Analysis - Simulation

DSS Database

- Sales Data- Financial Data- Production Data

Order ProcessingSystem

Materials ResourcePlanning System

General LedgerSystem

Tools used in a DSS

What-If analysis tools (found in most spreadsheets)– What-if analysis allows users of a

system to quickly calculate and display the results of many combinations of input values in a model.

Example of a What-If table Formula: +B1-B2

Incoming: 10000Outgoing: 1000

9000 5000 6000 7000500 4500 5500 6500600 4400 5400 6400700 4300 5300 6300800 4200 5200 6200900 4100 5100 61001000 4000 5000 6000

Projection

Projection tools typically use historical data gathered by the TPS and compressed by the MIS

This data is used to project future trends based upon past and present information about market behaviour

Generally makes use of the What-If capabilities in a DSS

Regression Analysis

Advanced routines to predict values based upon relationships in existing data.

Seeks to analyse how a single dependant variable is affected by the values of one or more independent variables.

Regression Analysis (cont’d) Example:

– Several factors may contribute to an athletes performance: Age, Sex, Height, Weight. Regression apportions shares in the performance measure to each of the factors based up a set of performance data.

Regressive results can be used to try and predict the performance of a new, untested athlete.

Cash Flow analysis

Important to know:– what incomings and outgoings there

are in a company for planning purposes

– When do they take place?– the lead time between incurring an

expense and paying for it– the lag time between making a sale

and collecting money from debtors

What problems does the DDS solve?

Monitoring and controlling of production processes

Better quality control of final product

Better planning capabilities Faster reaction times

What differences does it make to the company? Increase in the number of alternatives

examined Better understanding of the business Improved communication and control Lowering of costs Improved efficiency Improved productivity Makes better use of data resources Better decisions

Examples of DSS

American airlines: for pricing decisions and choosing air routes

IBM: for determining routing for repair people

Texas oil and gas: for evaluating potential drill sites

National Gypsum: corporate planning and forecasting.

Executive Information Systems

Definition: An EIS is a software product, front-ended by a user friendly terminal and software interface which electronically provides executives (senior management) with rapid and relaible access to information regarding key areas of the business.

General Properties of an EIS Used for strategic business planning Relatively long time-frame

considered Unstructured and open-ended

(many variables can be considered) For accurate results EIS require

information from inside and outside the business

General Properties of an EIS Graphically oriented to provide readily

understandable views of complex data Tailored to suit an executive’s decision

making style provides rapid access to current

information and filters and tracks critical data

Its major activity is information scanning and evaluation, it deals mainly with the intellegence phase of decision-making.

Benefits of executive information systems

Improved financial and operational control

Enhances business problem solving (eg British Airways during the 1986

libyan crisis). Helps in the identification of new

opportunities (eg tour operators use it to identify new holiday destinations)

Increases IT awareness among senior management.

What are the information needs of executives

Three classical criteria: Timeliness, accuracy and relevance.

Should focus on the critical success factors:– The limited number of areas in which

results, if satisfactory, will ensure successful competitive performance for the organisation.

What are the information needs of executives (cont’d)

Five main types of information based on CSF:– Key problem narravtives (highlights overall

performance, key problems and causes of problems)

– Highlight charts (highlight areas of concern)– Top-level financial displays– Key factors (displays measures of key

performance indicators)– Detailed KPI responsibility reports (performance

reports on areas critical to the success of the company)

Types of EIS

For focusing on executive communications and office work, e.g. e-mail, document handling, scheduling

Better interface for existing corporate data

For developing elaborate scenarios involving business data

Model of a typical EIS

EIS

EIS db Models

External db

External db

External db

Order

Processing

PlanningSystem General

Ledger

EIS and corporate planning EIS are ideal for aiding Executives

in planning for an organisation or business– EIS give a good overview of trends in

business data that can be used to more accurately determine planning for the future

EIS Graphics Display

Strong graphical element in displaying data

Data is displayed in as simple a form as possible, e.g. line/bar charts etc..

Colour is often used to provide extra information

From an EIS screen the Manager can usually “drill down” for more info

Tools and Techniques

Typically the EIS resides on a central computer, e.g. a powerful PC or even mainframe

Executives access the information from a PC on their desktop via a network

The information can be viewed and manipulated on-screen, and printed out on paper

Consolidation of Information Data is extracted from a number of

sources Outside the company - Customers,

News Services, Government Inside the company - TPS, financial

systems, HR, Marketing depts.

EIS Problems and Issues

People– What data do Executives really want?– Changes in Executives data

requirements over time– Level of computer skills in the group

using the system

EIS Problems and Issues

Organisational– Cost of implementing the system– Changes may be needed to create,

install, and use the new EIS system

EIS Problems and Issues

Technology– Retaining compatibility with older

“Legacy” systems– Integrating data from different

sources into the new system can be complex. At worst it may need to be typed into the new system

– Obsolescence

Comparsion table of EIS, DSS and MIS.