EAI- MBA 2012-14 Study Material On Information Systems Faculty: Mr.

Prashant Barge INTRODUCTION The term Information System (IS) sometimes refers to a system of persons, data records and activities that process the data and information in an organization, and it includes the organizations manual and automated processes. Computer-based information systems are the field of study for information technology, elements of which are sometimes called an "information system" as well, a usage some consider to be incorrect. In this way, the term "information system" has different meanings: History of Information Systems The study of information systems, originated as a sub-discipline of computer science, in an attempt to understand and rationalize the management of technology within organizations. It has matured into a major field of management that is increasingly being emphasized as an important area of research in management studies, and is taught at all major universities and business schools in the world. Information technology is a very important malleable resource available to executives. Many companies have created a position of Chief Information Officer (CIO) that sits on the executive board with the Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO) and Chief Technical Officer (CTO).The CTO may also serve as CIO, and vice versa. The Evolution of the Concept of Strategic Information Systems Since the 1950's, the concept of information systems has evolved from electronic accounting machines speeding paperwork and bureaucracy, to providing general information support in functional areas through the generation of routine performance reports in the 1960's (early Management Information Systems). In the 1970's and beginning of the 80's systems that provided customized information to improve decision making emerged (DSS and ESS). Since the mid-eighties, the role of information systems has taken a different turn. Computing power and networks have placed information systems at the heart of the business. The concept of Strategic Information Systems has gained acceptance, emphasising the fact that information is a strategic resource. You must not confuse strategic information systems with strategic-level systems like ESS. Strategic information systems can be at any level. They are systems that fundamentally change the organisation itself. So viewed from this perspective, each of the six types of systems, Transaction Processing Systems (TPS), Knowledge Work Systems (KWS), Office Automation Systems (OAS), Management Information Systems (MIS), Decision Support Systems (DSS), and Executive Support System (ESS) can potentially be regarded as

strategic information systems if their impact transforms the goals, business processes, products and external relations of the company to produce competitive advantage. In fact strategic information systems can change the very nature of the business. In the next section we will see applications of strategic information systems at the business level, firm level and industry level. Types of Information Systems Information systems support different types of decisions at different levels of the organizational hierarchy. While operational managers mostly make structured decisions, senior managers deal with unstructured decisions; middle managers are often faced with semi structured decisions. For each functional area in the organization, three or four levels of organisational hierarchy depending on the author can be identified: the operational level, knowledge level, management level and strategic level. Each of these levels is served by different types of information systems. Major Types of Systems Transaction Processing Systems (TPS) The system records daily routine transactions such as sales orders from customers, or bank deposits and withdrawals. TPS are vital for the organisation, as they gather all the input necessary for other types of systems. Think about how one could generate a monthly sales report for middle management or critical marketing information to senior managers without TPS. TPS provide the basic input to the company's database. A failure in the TPS often means disaster for the organisation. Imagine what happens when the reservation system at Airlines fails: all operations stop, no transactions can be carried out until the system is up again. Long queues form in front of ATMs and tellers when a bank's TPS crashes. Knowledge Work Systems (KWS) The System supports highly skilled knowledge workers in the creation and integration of new knowledge into the company. Computer Aided Design (CAD) systems used by product designers not only allow them to easily make modifications without having to redraw the entire object (just like word processors for documents), but also enable them to test the product without having to build physical prototypes. Three dimensional graphical simulation systems like GRASP (Graphical Robotics Applications Simulation Package) are used by British Aerospace and Rolls Royce for evaluating and programming industrial robots. Architects use CAD software to create, modify, evaluate and test their designs; such systems can generate photo realistic pictures, simulating the lighting in rooms at different times of the day, perform calculations, for instance on the amount of paint required. Surgeons use sophisticated CAD systems to design operations. Financial institutions are using knowledge work systems to support trading and portfolio management with powerful high-end PC's. These allow managers to get instantaneous analyzed results on huge amounts of financial data and provide access to external databases.

Office Automation Systems (OAS) The system supports general office work for handling and managing documents and facilitating communication. Text and image processing systems evolved from word processors to desktop publishing, enabling the creation of professional documents with graphics and special layout features. Spreadsheets, presentation packages like PowerPoint, personal database systems and note-taking systems (appointment book, notepad, card file) are part of OAS. In addition OAS includes communication systems for transmitting messages and documents (e-mail) and teleconferencing capabilities. Management Information Systems (MIS) The system generates information for monitoring performance (e.g. productivity information) and maintaining coordination (e.g. between purchasing and accounts payable). MIS extract process and summaries data from the TPS and provide periodic (weekly, monthly, quarterly) reports to managers. Today MIS are becoming more flexible by providing access to information whenever needed (rather than pre-specified reports on a periodic basis). Users can often generate more customized reports by selecting subsets of data (such as listing the products with 2% increase in sales over the past month), using different sorting options (by sales region, by salesperson, by highest volume of sales) and different display choices (graphical, tabular). Decision Support Systems (DSS) The system supports analytical work in semi structured or unstructured situations. They enable managers to answer "What if?" questions by providing powerful models and tools (simulation, optimization) to evaluate alternatives (e.g. evaluating alternative marketing plans). DSS are userfriendly and highly interactive. Although they use data from the TPS and MIS, they also allow the inclusion of new data, often from external sources, such as current share prices or prices of competitors. The system is designed to solve specific business problems. Executive Support Systems (ESS) or Executive Information Systems (EIS) The system provides a generalized computing and communication environment to senior managers to support strategic decisions. They draw data from the MIS and allow communication with external sources of information. But unlike DSS, they are not designed to use analytical models for specific problem solving. ESS/EIS are designed to facilitate senior managers' access to information quickly and effectively. ESS/EIS have menu driven user friendly interfaces, interactive graphics to help visualization of the situation, and communication capabilities that link the senior executive to the external databases he requires (e.g. Dow Jones News/Retrieval, or the Gallop Poll). Relationship of Systems to One Another Different types of systems exist in organizations. Not all organizations have all of the types of systems described here. Many organizations may not have knowledge work systems, executive support systems or decision support systems. But today most organisations make use of office

automation systems and have a portfolio of information system applications based on TPS and MIS (marketing systems, manufacturing systems, human resources systems). Some organizations have hybrid information systems that contain some of the characteristics of different types of systems. The field of information systems is moving so quickly that the features of one particular type of system are integrated to other types (e.g. MIS having many of the features of ESS). System characteristics evolve and new types of systems emerge. Yet the classification of information systems into these different types is useful because each type of system has certain features that are relevant in particular situations. Though there are different perspectives to the definition of information system, there are basic elements associated with each definition. Also, even as the different types of information systems keep emerging as new technologies emerge by the day, information systems are still basically responsible for making business operations to be effective and productive. SUMMARY Though there are different perspectives to the definition of information system, there are basic elements associated with each definition. Also, even as the different types of information systems keep emerging as new technologies emerge by the day, information systems are still basically responsible for making business operations to be effective and productive. This unit is summarized as follows: The term Information System (IS) sometimes refers to a system of persons, data records and activities that process the data and information in an organisation, and it includes the organisation's manual and automated processes. Since the 1950's, the concept of information systems has evolved from electronic accounting machines, speeding paperwork and bureaucracy, to providing general information support in functional areas through the generation of routine performance reports in the 1960's (early Management Information Systems). The structure of an information system may be visualised as infrastructure plus applications. The applications have a conceptual structure based on the purpose or needs being met and the functions of the organisation that employ them. Information systems support different types of decisions at different levels of the organisational hierarchy. While operational managers mostly make structured decisions, senior managers deal with unstructured decisions; middle managers are often faced with semi structured decisions. Different types of systems exist in organisations. Not all organisations have all of the types of systems described here. Many organisations may not have knowledge work systems, executive support systems or decision support systems.

REFERENCES / FURTHER READING

Angell, I.O. and Smithson S. (1991). Information Systems Management: Opportunities and Risks. Beynon-Davies P. (2002). Information Systems: An Introduction to Informatics in Organisations. Palgrave, Basingstoke, UK. ISBN: 0-333-96390-3. Federal Standard 1037C, MIL-STD-188, and National Information Systems Security Glossary. OBrien J.A.; Introduction to Information Systems, ISBN:0-256-20937-5. Sloan Management Review. Sloan Career Cornerstone Center. (2008). Information Systems. Alfred P. Sloan Foundation. Oxford: Oxford University Press. Master of Science in Information Systems at the University of Mnster.