Types of Information Systems(Chap 5)

TYPES OF INFORMATION SYSTEMS

OFFICE AUTOMATION SYSTEMS• An office automation system (OAS) facilities

everyday information processing tasks in office and business organizations. These systems use a wide range of tools in office and business organizations.

Tools generally grouped within the OASs category include:

Spreadsheet programs, Text and image processing systems, Presentation packages

• Communication system:

Help provide work together by interacting and sharing information in many different forms.

• Transaction processing system (TPS): collects and stores information about transactions; controls some aspects of transactions.

• Management information system (MIS) and executive information system (EIS): converts TPS data into information for monitoring performance and managing an organizing; provide executives information in a readily accessible interactive format.

• Decision support system (DSS): helps people make decisions by providing information, models, or analyze tools.

• Enterprise System: creates and maintains consistent data processing methods and an integrated database across multiple business functions.

Examples of Each Type of Information System in Three Functional Area of Business

System type Sales example Manufacturing examples

Finance examples

Office automation System

Spreadsheet to analyze different possible prices Word processor to create sales contract

Spreadsheet to analyze a production schedule Word processor to write a memo about how to fix a machine.

Spreadsheet to compare several loan arrangements. Word processor to write a memo about new financial procedures

Communication System

E-mail and fax used to contact customer Video conference to present new sales materials to sales force Work flow system to make sure all sales steps are completed System to coordinate all work on a complex sales contract

E-mail and v-mail used to discuss a problem with a new machine. Video conference to coordinate manufacturing and sales efforts. Workflow system to make sure engineering changes and improved

V-mail and fax to communicate with bank about loan arrangements Video conference to explain effect of financing on factory investments Workflow system to make sure invoice approval precedes payment.

Transaction processing system (TPS)

Point of sale system for sales transactions Keeping track of customer contacts during a sales cycle

Tracking movement of work-in-process in a factory Tracking receipts of materials from suppliers.

Processing credit card payments Payment of stock dividends and bond interest.

Management information system (MIS) and executive information system(EIS)

Weekly sales report by product and region Consolidation of sales projections by product and region Flexible access to sales data by product and region

Weekly production report by product and operation Determination of planned purchases based on a production schedule. Flexible access to production data by product and operation.

Receivables report showing invoices and payments Monthly financial plan consolidation Flexible access to corporate financial plan by line item.

System type Sales exampleManufacturing

examplesFinance

examples

Decision support system (DSS)

Model helping insurance salespeople test alternatives Marketing data and models to analyze sales

Model determining current priorities for machine operator. Production data and models to analyze production results.

Analysis of characteristics of customers who pay bills promptly Stock database and models to help in selecting stocks to buy or sell.

Enterprise system

Help a sales rep enter an order and establish that enough capacity exists to meet the schedule

Help the manufacturing manager to schedule maintenance based on minimizing disruption to sales.

Help the finance department track the cost of production back to purchase orders.

System type

Sales example

Manufacturing examples

Finance examples

COMMUNICATION SYSTEMS• Electronic communication system help people work

together by exchanging or sharing information in many different forms. New communication capabilities have changed the way many business operate by making it possible to do many things at a distance that previously required being present in a specific location. This section covers a wide range of these tools. Teleconferencing systems make it possible to hold same-time, different-place meetings. A variety of technologies including e-mail, voice mail, fax, instant messaging, and chat rooms make it possible to transmit specific messages to specific individuals or groups of individuals

TRANSACTION PROCESSING SYSTEMS

• A transaction processing system (TPS) collects and stores data about transactions and sometimes control decisions made as part of a transaction. A transaction is a business event that generates or modifies data stored in an information system. TPSs were the first computerized information systems that were used widely. Encounter computerized TPSs frequently, including every time we write a check, use a credit card or pay a bill sent by a company. A TPS used to record a sale and generate a receipt is primarily concerned with collecting and storing data.

Batch versus Real-Time Processing

• The two main types of transaction processing are batch processing and real-time processing. With batch processing, information for individual transactions is gathered and stored but isn’t processed immediately. Later, either on a schedule or when a sufficient number of transactions have accumulated, the transactions are processed to update the database. With real-time processing, each transaction is processed immediately. The person providing the information is typically available to help with error correction and receives confirmation of transaction completion.

MANAGEMENT AND EXECUTIVE INFORMATION SYSTEMS

A management information system (MIS) provides information for managing an organization. The idea of MIS predates the computer age.

• From MIS to EIS An executive information system (EIS) is a highly interactive system providing managers and executives flexible access to information for monitoring operating results and general business conditions. These systems are sometimes called executive support systems (ESS). EIS attempts to take over where the traditional MIS approach falls short. Although sometimes acceptable of providing prespecified reports on a scheduled basis is too inflexible for many questions executives really care about, such as understanding problems and new situations.

DECISION SUPPORT SYSTEMS

• A decision support system (DSS) is an interactive information system that provides information, models, and data manipulation tolls to help make decision in semi structured and unstructured situations where no one knows exactly how the decisions should be made. The traditional DSS approach includes interactive problem solving, direct use of models, and user-controllable methods for displaying and analyzing data and formulating and evaluating decisions.

Important Techniques Sometimes Used in Supporting Decision-Making

Techniques Related discipline Approach

Simulation

Research on different simulation techniques

Create a mathematical model of the situation. Define the main decision variables and operate the model under different assumptions or with different starting conditions to help explore alternative paths for the real situation.

Optimization

Mathematical optimization techniques

Create a mathematical model of the situation. Design the model so that optimization techniques can be used to search for optimal values of decision variables.

OLAP and data mining

Statistics (mathematical techniques) and computer science (database techniques)

Use statistical techniques to analyze business results and find hidden relationships.

Expert Systems

Al research on language and knowledge representation

Summarize an expert’s view of an area of knowledge in terms of facts and rules. Apply the facts and rules to a particular situation to help someone else decide what to do.



Neural networks

Statistics (mathematical techniques) and Al research related to perception.

Start with a large setoff coded example that represent the range and frequency of possibilities in the situation being studied . Apply automated statistical “learning” techniques to find the statistical parameters that bets represent correlations between groups of characteristics with the training set.

Fuzzy logic

Research on alternative formal logic systems.

Control decision processes using logic systems that replace “either-or” logic with logic based on relative degrees of inclusion in sets.



Cased-based reasoning

Al research on representing knowledge

Create a database of examples that may help in making decisions. Add another example to the database when the database does not cover a new situation.

Intelligent agents

Al research on controlling systems that operates on many levels.

Specify decision parameters for a computerized “agents” that searches one or more database to find a specific answer, such as the lowest price for a particular camera.



ENTERPRISE SYSTEMS:• This would provide a consistent, readily accessible

repository of information used in business processes such as purchasing, inventory control, manufacturing, sales, delivery, billing, accounts receivable, and personnel. Achieving this degree of integrated is the idealized goal of enterprise systems, firm-wide information systems that serve as a common, integrated information infrastructure for basic business processes.

• This type of enterprise system seemed beyond reach until the mid-1990s when several software vendors started selling enterprise resource planning (ERP) systems.

LIMITATIONS AND USES OF INFORMATION SYSTEM CATEGORIES

Someone speaking of a web-based communication system might mean any combination of e-mail, voice mail, instant messaging, chat rooms, intranets, and extranets.

Someone speaking of a DSS might mean potentially useful, general-purpose software or might mean a specific information system that is currently playing an important role in a work system.

Someone speaking of a sales force automation system might mean an information system that helps the salesperson, or might mean an information system in which salespeople are obligated to enter data needed by the headquarters finance group

Someone speaking of an ERP system might mean an enterprise-wide information system or might a single module purchased from an ERP vendor.

Someone speaking of a knowledge-based system might mean an expert system and might mean some other kind of system that codifies or uses knowledge.

How typical Goals of information System Categories Are Sometimes Garbled or Subverted.

Category Typical goal How the goal is sometimes garbled or subverted

CAD

Design products through computerized specifications that can be stored, changed, and shared conveniently.

Use CAD as a tool for individual work but don’t achieve consistency needed to gain additional benefits from internal and external coordination.

MRP

Order materials so that they arrive when needed to meet the production schedule.

The lead times built into MRP are averages or estimates. Incorrect lead time result in the same problems that MRP tries to solve.

EDI

Transfer data between suppliers and their customers electronically to improve efficiency

Large companies shift costs to suppliers who may be forced to revamp their own systems.

SCM

Create an integrated supply chain that minimizes delays and waste.

If the supply chain is too tightly integrated, a mishap in one area will ripple quickly to other areas.

CIM

Create an integrated manufacturing environment that permits sharing of data across all manufacturing operations.

Computerize data used in manufacturing but don’t integrate various manufacturing processes enough to gain important benefits.


POS

Record every sale of every item to maintain complete control of inventory.

If the POS system goes down, the sales process stops or it is necessary to do workarounds that often result in errors.

Direct marketing

and telemarket

ing

Send marketing communications to potential customers who would be interested.

Send catalogs and other mailings that seem likes junk mail. Annoy potential customers by interrupting them.

SFA

Provide benefits to sales force by automating their data handling.

Provide new information to headquarters to support sales and financial planning, but require the sales force to do a lot of extra data entry.


CRM

Understand the customers more completely and provide a clearer view of the complete relationship with customers.

Cause the sales force to handle a lot of data that they don’t use very much.

OAS

Use general-purpose office applications to make office work efficient.

Use office software as a tool for individuals but don’t achieve the consistency needed to make the office more efficient.

Communication

systems

Link employees, customers, and suppliers electronically to facilitate communication and coordination.

Overwhelm employees with too much communication and too many communication options.


TPSProcess transactions efficiently and record them accurately.

Ignore judgment that should be exercised when aspects of the transaction do not conform with the idealized assumptions about the situation.

MIS and EIS

Provide managers and executives the information they really need.

Provide convenient ways to obtain ad hoc summaries of recent operational results, but do very little to link these results to strategies or plans.

DSSProvide data, models, and analysis tools that support decision-making.

Provide data, models, and tools, but fall to integrate these into processes. As a result the DSS is not used effectively.

Enterprise systems

Coordinate major systems across a firm and permit seamless access to any information needed for decision-making.

To operate within the limits of commercially available software, impose limits on business processes, sometimes making them less efficient.


Types of Information Systems(Chap 5)

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