KINDS OF INFORMATION SYSTEMS 1.

Transaction Processing systems (TPS): Cross functional informational systems that process data resulting from the occurrence of business transactions. Transactions are events that occur as part of doing business. Ex: Sales, Purchases, deposits, withdrawal, refunds, payments etc. Ex: Business sells something to customer on credit in a retail store or in ecommerce site. Data about customer, product, salesperson, store etc must be captured and processed. This in turn causes additional transactions such as credit checks, customer billing, inventory changes and increases in accounts receivable balances that generate even more data. Transaction processing activities are needed to capture and process such data or the operations of a business would grind to a halt. Online transaction processing systems plays a strategic role in e-commerce. Firms use internet, extranets and other networks that tie them electronically to their customers or suppliers for online transaction processing (OLTP). Such REAL TIME systems, which capture and process transactions immediately can help firms provide superior service to customers and other trading partners. TPS CYCLE:

TPS CYCLE: 1. Data Entry: First step of the transaction processing cycle is capturing of business data. Transaction data may be collected by point of sale terminals using an optical scanning from bar codes and credit card readers at a retail store or other business.Or It can be captured at an electronic commerce website on the internet(www.) 2. Transaction processing: Transaction processing systems process data in two basic ways: a. Batch Processing: Where transaction data are accumulated over a period of time and processed periodically. b. Real-time Processing(online processing): Where data are processed immediately after a transaction occurs. 3. Database maintenance: Through TPS, organizations database must be maintained, so that they are always correct up to date. It updates the corporate databases of an organization to reflect changes resulting from day to day business transactions. Ex: Credit sales made to customers will cause customer a/c balances to be increased and the amount of inventory on hand to be decreased. Database maintenance ensures that these and other changes are reflected in the data records stored in the companys address. 4. Document and report generation: TPS produce a variety of documents and reports. Ex: Purchase orders, paychecks, sales receipts, invoice, customer statements etc 5. Inquiry Processing: Many transaction processing systems allow you to use the internet, intranets, extranets and web browsers to make enquiries and receive responses concerning the results of transaction processing activity. Typically responses are displayed in a variety of prespecified formats or screens. Ex: You might check on the status of a sales order, the balance in an account, or the amount of stock in inventory and receive immediate responses on PC. Ex: Ticket reservation system: The TPS data contains the location of available seats,

Online Shopping: In the case of an order, the data contains a list of products available for sale, their prices and related data. Cheque Processing: Data contains the account balance, customer lists and other data. TPS generates 2 types of outputs: 1. It sends message back to the operator terminal 2. It generates printed documents. Ex: Ticket reservation system displays a message on the terminal indicating seats sold out to the people. It also prints the tickets and perhaps a mailing label for sending them. Data Base: It is integrated collection of logically related data elements or records and files. Ex: Sales database, customer database. Programs used to build a database Database Management Software(Oracle 9i, DB2, Access etc) Database Management: It is the organization of storage and processing of data in which independent files are consolidated into a common pool or database of records available for different application programs and end users for processing and data retrieval. Functions of DBMS: 1. Permits an organization to centralize data, manage them efficiently and provide access to the stored data by application i.e. storage and processing of data, updating and maintaining of common databases. 2. Shares the data in the database using common users application programs and an inquiry/ response capability to the end users. 3. Acts as an interface between the application programmes and the data files. 4. Create and maintain a database; enable individual business applications to extract the data they need without having to create separate files or data definitions in their computer programs. 5. Relieves the enduser or programmes from the task of understanding how the data are actually stored by separating the logical and physical views of the data.

Knowledge and Office systems: These systems serve information needs at the knowledge level of the organization. Knowledge work systems aid knowledge workers. Knowledge workers hold formal university degrees and who are often members of recognized professions such as engineers, scientists, IT specialists etc.They create information and knowledge through scientific and engineer design workstation. They promote the creation of new knowledge and technical expertise are properly integrated into the business. Modelling, simulations are examples of knowledge work stations. Office systems aid data workers. They have less formal advanced educational degrees. People who work under this category are secretaries, book keepers, data entry operators, clerks etc. They only process the information in the organization. Office Automation Systems: OAS are configurations of networked computer hardware and software. A variety of office automation systems are now applied to business and communication functions that used to be performed normally or in multiple locations of a company, such as preparing written communications and strategic planning. In addition, functions that once required co-ordinating the expertise of outside specialists in typesetting, printing or electronic recording can now be integrated into the everybody work of an organization saving both time and money. Types of functions integrated by OAS systems include.. 1. Electronic publishing: Systems include word processing and desktop publishing. Word processing software (e.g. Microsoft word, corel word- perfect) allows users to create, edit, revise, store and print documents such as letters, memos, reports etc. Desktop Publishing (DTP) software (e.g. Adobe page maker, Corel Ventura, Microsoft publisher) enables users to integrate text images, photographs and graphics to produce high quality printable output. 2. Electronic communication: System include electronic mail(e-mail), voice mail, fax, desktop video conferencing. a. Email: It is a software that allows users, via their computer keyboards to create, send and receive messages and file to or from anywhere in the world. Email software- Eudora, Lotus notes, Microsoft outlook. b. Voice mail: Voice mail is a sophisticated telephone answering machine. It digitizes incoming voice messages and stores them on disk. When the recipient is

ready to listen, the message is converted from its digitized version back to audio or sound. 3. Electronic collaboration: Is made possible through electronic meeting and collaborative work systems and teleconferencing. E-meeting and collaborative work systems allow teams of co-workers to use networks of micro-computers to share information update schedules and plans and co-operate on projects regardless of geographic distance. A. Teleconferencing: also known as video conferencing. This technology allows people in multiple locations to interact and work collaboratively using real time sound and images. B. Telecommuters: Perform some or all the work at home instead of travelling to office each day, usually with the aid of office automation systems, including those that allow collaborative work or meetings. A micro computer, a modem, software that allows the sending and receiving of work, and an ordinary telephone line are the tools that make this possible. C. Image Processing Systems: include electronic document management, presentation graphics, and multimedia systems. Imaging systems convert text, drawings, and photographs into digital form that can be stored in a computer system. D. Presentation graphics: Software uses graphics and data from other software tools to create and display presentations. The graphics include charts, bullet lists, text, sound, photos, animation and video clips. E. Multimedia systems: are technologies that integrate two or more types of media such as text, graphic, sound, voice, full-motion video, or animation, into a computer based application. Multimedia is used for electronic books and newspapers, video conferencing, imaging, presentations and websites. F. Office management systems: include electronic office accessories, electronic scheduling and task management. These systems provide an electronic means of organizing people, projects and data.

MANAGEMENT INFORMATION SYSTEMS: 1. MIS provides managers with reports and online access to the organizations current performance and historical records. 2. They are oriented exclusively to internal, not environmental or external events. 3. Primarily solve the functions of planning, controlling and decision making at the management level. 4. MIS summarize and report on the companys basic operations. 5. The basic transaction data from TPS are compressed and are usually presented in long reports that are produced on a regular schedule.

Management Information systems are original type of information system developed to support managerial decision making. MIS produces information products that support many of the day to day business decision making needs of managers and business professionals. Reports, displays and responses produced by MIS provide information that these decision makers have specified in advance as adequately meeting their information needs. Such predefined information products satisfy the information needs of decision makers at the operational and tactical levels of the organization, who are faced with more structured types of decision situations. For ex: Sales managers rely on heavily on sales analysis reports to evaluate differences in performance among sales people who sell the same types of products to the same type of customers. They have a pretty good idea of the kinds of information about sales results they need to manage sales performance efficiently. Managers and other decision makers use an MIS to request information at their networked workstations that supports their decision making activities. This information takes the form of Periodic, Exception and demand reports and immediate responses to inquiries. Web browsers, application programs, and database management software provide access to information in the intranet and other operational databases of the organization.

Remember, operational databases are maintained by TPS. Data about business environment are obtained from internet or extranet databases when necessary. MIS provide a variety of information products to managers. Four major reporting alternatives are provided by such systems: Management reporting alternatives. 1. Periodic Scheduled Reports: This traditional form of providing information to managers uses a pre specified format designed to provide managers with information on a regular basis. Typical examples of such periodic scheduled reports are daily or weekly sales analysis reports and monthly financial statements. 2. Exception reports: In some, cases, reports are produced only when exceptional conditions occur. In other cases, reports are produced periodically but contain information only about these exceptional conditions. For ex: A credit manager can be provided with a report that contains only information on customers who exceed their credit limits. Exception reporting reduces information overload, instead of overwhelming decision makers with periodic detailed reports of business activity. 3. Demand reports and responses: Information available whenever a manager demands it. For ex: Web browsers and DBMS query languages and report generators enable managers at PC workstations to get immediate responses or find and obtain customizes reports as a result of their requests for the information they need. Thus managers dont have to wait for periodic reports to arrive as scheduled. 4. Push reporting: Information is pushed to a managers networked workstation. Thus many companies are using webcasting software to selectively broadcast reports and other information to the networked PCs of managers and specialists through their corporate intranets.

DECISION SUPPORT SYSTEMS: 1. DSS serve management level of the organization. 2. Help managers make decisions that are unique, rapidly changing. 3. DSS use internal information from TPS and MIS. They often bring in information from external sources. Ex: Current stock prices or product prices of competitors.

4. DSS are interactive- User can change assumptions, asks new questions or include new data.

DSS answers: Which vessel should be assigned at what rate to maximize profits? What is the optimum speed at which a particular vessel can maximize its profit and still meet its delivery schedule? DSS are computer based information systems that provide interactive information support to managers and business professionals during the decision making process. DSSs use 1. Analytical modeling- Models and analytical techniques used to express much more complex relationships. ex: 1. Linear programming models 2. Multiple regression forecasting models

3. Capital budgeting PV value models. 2. Specialized databases 3. A decision makers own sights and judgments. 4. An interactive, computer based modeling process to support the making of semi structured and unstructured business decisions. Ex: An example might help at this point. Sales managers typically rely on MIS to produce sales analysis reports. These reports contain sales performance figures by product line, salesperson, and sales region and so on. A DSS, on the other hand, would also interactively show a sales manager the effects on sales performance of changes in a variety of factors (such as promotion expense and sales person compensation). The DSS could then use several criteria (such as expected gross margin and market share) to evaluate and rank several alternative combinations of sales performance factors. Therefore, DSS are designed to be ad-hoc, quick response systems that are initiated and controlled by business decision makers. DSS are thus able to directly support the specific types of decisions and the personal decision making styles and needs of individual executives, managers and business professionals. DSS components: Unlike MIS, DSS rely on MODEL BASES as well as databases as vital system resources. A DSS model base is a software component that consists of models used in computational and analytical routines that mathematically express relationship among variables. For ex: A spreadsheet program might contain models that express simple accounting relationships among variables such as Revenue- Expenses = Profit or DSS model base could include models and analytical techniques techniques used to express much more complex relationships. For ex: It might contain linear programming models, multiple regression forecasting models and capital budgeting present value models. Such models may be stored in the form of spreadsheet models or templates or statistical and mathematical programs and program modules. DSS software packages can combine model components to create integrated models that support specific types of decisions. DSS software typically

contains built in analytical modeling routines and also enables you to build your own models. Many DSS package are now available in micro computer and web- enabled versions. Electronic spreadsheet packages also provide some of the model building(spreadsheet models) and analytical modeling(What-if analysis and goal seeking analysis) offered by more powerful DSS software. DSS Models: Models and analytical techniques used to express much more complex relationships 1. Linear Programming models 2. Multiple regression forecasting models 3. Capital budgeting present value models Using DSS: Using DSS involves an interactive analytical modeling process For ex: DSS software package for decision support may result in a series of displays in response to alternative what if changes entered by a manager. DSS involves 4 basic types of analytical modeling 1. What if analysis: Observing how changes to selected variables affect other variables. Ex: What if we cut advertising by 10%? What would happen to sales? 2. Sensitivity Analysis: Observing how repeated changes to a single variable affect other variables. Ex: Lets cut advertising by $100 repeatedly so We can see its relationship to sales 3. Goal seeking analysis: Making repeated changes to selected variables until a chosen variable reaches a target value Ex: Lets try increases in advertising until sales reach $1 million. 4. Optimization analysis: Finding an optimum value for selected variables, given certain constraints.

Ex: Whats the best amount of advertising to have, given out budget and choice of media? Executive Support Systems: 1. Senior managers use ESS to make decisions. 2. Serves strategic level of the organization 3. They address non routine decisions requiring judgment, evaluation and insight. 4. ESS are designed to incorporate data about external events such as new tax laws or competitors, but they also draw summarizes information from internal MIS and DSS. 5. They filter, compress and track critical data, emphasizing the reduction of time and effort required to obtain information useful to executives. 6. ESS employs the most advanced graphics software and can deliver graphs and data from many sources immediately to a senior executives office or to a boardroom. 7. ESS assist in answering What business should we in? What are the competitors doing? What new acquisitions would protect us from cyclical business swings?

EXPERT SYSTEMS: ES is a knowledge based information system that uses its knowledge about a specific, complex application area to act as an expert consultant to end users. ES provide answers to questions in a very specific problem area by making human like inferences (assumptions, suggestions, information)about knowledge contained in a specialized knowledge base. They must be able to explain their reasoning process and conclusions to a user. So ES can provide decision support to end users in the form of advice from an expert consultant in a specific problem area.

Components of ES: 1. A knowledge base 2. Software modules- that perform inferences on the knowledge and communicate answers to a users questions.

1. Knowledge base: It contains 1. Facts about a specific subject area. 2. Heuristics(rules of thumb) that express the reasoning procedures of an expert on the subject. 2. Software resources: An ES software package contains an inference engine and user interface programs for refining knowledge and communicating with users.

Inference engine program processes the knowledge (rules and facts) related to a specific problem. Then makes associations and inferences resulting in recommended courses of action for a user. User interface programs for communicating with end users are also needed, including an explanation program to explain the reasoning process to a user if requested. Knowledge acquisition programs are not part of an expert system but are software tools for knowledge base development, as are expert system shells, which are used for developing expert systems. Expert System Applications: Solution to a problem explored Act as a consultant to an end user. ES asks questions of the user, searches its knowledge base for facts and rules. Explains its reasoning process (analysis, calculation, interpretation) when asked, and gives advice to the user in the subject area being explored.

Application categories of ES: 1. Decision management a. Loan portfolio analysis b. Employee performance evaluation 2. Diagnostic/ trouble shooting a. Helpdesk oerations b. Medical diagnosis 3. Design/ Configuration a. Comunication networks b. Computer option installation c. Optimum assembly plan 4. Selection/ Classification

a. Material selection b. Information classification 5. Process monitoring/ control a. Machine control(including robotics) b. Inventory control c. Production monitoring d. Chemical testing GROUP DECISION SUPPORT SYSTEMS AND EXECUTIVE INFORMATION SYSTEMS (EIS): GDSS involve group members geographically dispersed to interact with decision support system as well as communicate with one another under local area network (LAN) or wide area network(WAN) of computer system, videoconferencing and email and work simultaneously to concretely arrive at the best decisions. EIS are designed to support top level managers to review decisions and use heuristic approach to arrive at the best decision and disseminate the set of top level decisions for strategic planning and implementation with appropriate comments through e- mail. Ex: Commander EIS, Executive Edge, Express EIS are some of the specialized EIS software packages popular worldwide.