Basic Understanding

of
Information System
Data, Information and
Knowledge
 Data, Information and Knowledge
● In the context of an Information System (IS), data refers to raw,
unprocessed facts and figures that are collected and stored for processing
and analysis.

● It has no context and it is just numbers and text.

● For Example: 51218

 Data, Information and Knowledge
● Information is processed, organized, or structured data that is
meaningful and useful to the person who receives it.
● Information is data that has been given context, making it valuable for
decision-making.
● Data: 51218
● Information:
● ₹ 512.18 The price of a share.
● ₹ 51,218 The average starting salary of a Marketing Manager.
● 51218 Zip code of Drastin, Croatia
 Data, Information and Knowledge

Data Information
⚫ Raw facts ⚫ Data with context
⚫ No context ⚫ Processed data
⚫ Just numbers and text ⚫ Value-added to data
⚫ summarized
⚫ organized
⚫ analyzed
 Data, Information and Knowledge
● Information

Information = Data + Context + Meaning

Processing

Data – raw facts and figures

Information – data that has been processed (in a context) to give it meaning
Data, Information and Knowledge

Data and Information

 Data, Information and Knowledge
● Knowledge goes a step beyond information.

● Knowledge is information that has been processed by the human mind

through learning, experience, or instruction.

● Information becomes knowledge when it is processed, understood, and

internalized by an individual or group, allowing it to be applied to make
decisions, solve problems, or perform tasks.
Data, Information and Knowledge

Figure 1: The flow from Data to Information to Knowledge

 Data, Information and Knowledge
Attributes of Information

Usability Quality Delivery

⚫ Relevant ⚫ Accurate ⚫ Timely

⚫ Simple ⚫ Verifiable ⚫ Accessible
⚫ Flexible ⚫ Complete ⚫ Secure
⚫ Economical ⚫ Reliable
 Data, Information and Knowledge
● Characteristics of Good Information

● Relevant

● Complete

● Accurate

● Current

● Economical
Types of Digital Data
 Types of Digital Data
● Definition:

● Digital data is data stored on a computer system as a series of 0's and 1's in
a binary language. It is defined as the data that is stored on digital format.
● All data in the computer is in digital form.
● It may be in the form of a picture, document or video etc.
● Digital data is a binary language.
● Each digit is known as a bit.
● A byte is composed of eight bits.
Types of Digital Data
Types of Digital Data
 Types of Digital Data
1. Structured Data:

● The data which is in an organized form (e.g. in rows and columns) and can be
used by a computer program are called as “Structured Data”.

● The term structured data generally refers to data that has a defined length
and format for big data.

● Structured data is data that has been organized into a database, so that its
elements can be made addressable for more effective processing and analysis.
 Types of Digital Data
● Example:
 Types of Digital Data
2. Unstructured Data:

● Unstructured data, in contrast, refers to data that doesn't fit neatly into the
traditional row and column structure of relational databases.

● Unstructured data is information that either does not have a pre-defined

data model or is not organized in a pre-defined manner.
 Types of Digital Data
● Example:
 Types of Digital Data
3. Semi-structured Data:

● Data which does not conform to a data model but has some structure. It
is not in a form which can be used easily by a computer program.
● It is structured data, but it is not organized in a rational model, like a
table.
● Semi-structured data is information that does not reside in a relational
database but that have some organizational properties that make it easier to
analyze.
● With some process, you can store them in the relation database.
 Types of Digital Data
● Example:
Meaning of Information
System
 Meaning of Information System
● Definition
● “Information systems are interrelated components working together to
collect, process, store, and disseminate information to support decision
making, coordination, control, analysis, and visualization in an
organization.”
● Information system:
● Set of interrelated components
● Collect, process, store, and distribute information
● Support decision making, coordination, and control
● Hardware, Software, Networking communication, people, process are
important components of any information system.
Components of Information
System
Components of Information System
Functions of Information
System
Functions of Information System
Need and Benefits of
Information System
 Need and Benefits of Information System
1. Operational excellence (Ex: Office automation system)
2. New products, services, and business models (Ex: Zomato, Uber,
Ola, Swigy)
3. Customer and supplier intimacy (closeness) (Ex: Walmart and
P&G)
4. Improved decision making (Ex: Inventory management -
Automobile brand during festival season)
5. Competitive advantage (Ex: Customer information – Ravel)
6. Survival
Classifications of Information
System
 Classification of
Information
System

Hierarchical Functional
Information Information Enterprise System
System System

Bottom to Top • MkIS • ERP

• TPS • SCM
• HRIS
• MIS • CRM
• FIS
• DSS • BI
• ESS/EIS • POIS
• ES

Module - I Module - II
Hierarchical Information
System
 The Level of People
Types of Decisions and their
Information Needs
 The Level of People
Types of Decisions and their Information Needs

Strategic Information

Tactical Information

Operational Information
 The Level of People
Types of Decisions and their Information Needs

ES
ESS/EIS
DSS
MIS
TPS
Transaction Processing System
(TPS)
 Transaction Processing System - TPS
Definition:
A Transaction Processing System (TPS) is a type of information system
that collects, stores, modifies and retrieves the data transactions of an
enterprise.
Meaning and Functions of TPS:
Transaction is an event that generates or modifies data to be stored in
an information system.
It is a computerised system that performs and records the daily routine
transactions necessary to conduct business, such as sales order entry,
hotel reservations, payroll, employee attendance record, shipping,
etc…
 Transaction Processing System - TPS
• Each transaction must succeed or fail as a complete unit; it can
never be only partially complete.

• Transaction Processing System are operational-level systems at

the bottom of the pyramid.

• They are usually operated directly by shop floor workers or front

line staff.

• It is used to record day to day business transactions of the

organization.
 Transaction Processing System - TPS
• Examples of transaction processing systems include;

• Point of Sale Systems – records daily sales

• Payroll systems – processing employees salary, loans management, etc.

• Stock Control systems – keeping track of inventory levels

• Airline booking systems – flights booking management

• By recording the day to day business transactions, TPS system provides

answers to the below questions in a timely manner.
 Transaction Processing System - TPS
Principal purpose of this system is to answer question such as:
How many products were sold today?

How much inventory do we have at hand?

What is the outstanding due for Mr. Mehta?

How many orders received today?

How much stock of a product X is left in inventory?

How many leaves left of Mr. ABC?

How many units in production are defective in single lot size?

How many times advertising was in aired today?

Transaction Processing System - TPS
Meaning and Functions of TPS
 Transaction Processing System - TPS
The general elements of transaction processing include:
1. Data capture and validation
2. Transaction - dependent processing steps
3. Database maintenance
The outputs provided by TPSs may be classified as:
1. Transaction documents
2. Query responses
3. Reports
 Transaction Processing System - TPS
Applications of TPS :
1. Reservation systems
Used in any business where it reserves the capacity for customers who booked
in advance
Hotel, Restaurant, Multiplex, Transportations, Hospitals
2. Point of sale terminals
Used by retail stores to sell goods and services
Minimize the error
Effective handling of huge portfolio of products
3. Inventory Management
 Transaction Processing System - TPS
Applications of TPS – D-Mart

1. Efficient Sales Processing

2. Inventory Management
3. Supplier Coordination
4. Data Accuracy
5. Customer Loyalty Programs
6. Financial Reporting
Management Information System
(MIS)
 Management Information System (MIS)
Definition:
It comprise of technology, people, and business processes to record,
store and process data to produce information that decision makers
can use to make day to day decisions.
Meaning of MIS:
Management information system, or MIS, broadly refers to a
computer-based system that provides managers with the tools
to organize, evaluate and efficiently manage departments
within an organization.
 Management Information System (MIS)
Functions of MIS:
● Data collections and storage
● Data processing
● Information retrieval
● Support decision making
● Integration of business function
● Data security
 Management Information System (MIS)
Components of MIS:
● Hardware – it include computers, servers, data storage device, networking
equipment, printers, etc.
● Software – these are programs used to control the hardware and process the
data. These include system, application, database management software, etc.
● Data – The raw facts and figures that are processed to generate useful
information.
● People – people who use the information system
● Procedures – procedures put in place on how to record, store and analyze data
● Network – The communication infrastructure that allows different parts of the
MIS to connect and share data.
 Management Information System (MIS)
Components of MIS:
● Hardware – it include computers, servers, data storage device, networking
equipment, printers, etc.
● Software – these are programs used to control the hardware and process the
data. These include system, application, database management software, etc.
● Data – The raw facts and figures that are processed to generate useful
information.
● People – people who use the information system
● Procedures – procedures put in place on how to record, store and analyze data
● Network – The communication infrastructure that allows different parts of the
MIS to connect and share data.
Management Information System (MIS)
 Management Information System (MIS)
Example of Apparel Store:

● Discuss Different Report Generated

● Discuss Strategies based on Report

 Management Information System (MIS)
Applications of MIS – D-Mart
● Inventory Management
● Sales Analysis and Reporting
● Customer Relationship Management (CRM)
● Supplier and Procurement Management
● Point of Sale (POS) Integration
● Human Resource Management (HRM)
● Financial Management
● Supply Chain Management
● Demand Forecasting
● Security and Risk Management
● Market Research and Competitive Analysis
● Employee Performance and Training
Decision Support System
(DSS)
 Decision Support System (DSS)
Definition:
A decision support system (DSS) is a specific class of
computerized information system that supports business and
organizational decision-making activities.
It is used in various industries to improve the quality and speed
of decision-making, particularly in situations where decisions are
complex, involve large datasets, or require analysis of different
variables.
 Decision Support System (DSS)
Key Functions of a DSS:
1. Data Collection and Management:
● Data Integration: DSS collects data from multiple internal and
external sources, such as databases, spreadsheets, sensors, and real-time
data feeds, and integrates it for decision-making purposes.
● Data Storage: DSS stores the data in a structured format that is easily
retrievable for analysis. This may involve databases or data warehouses.
● Data Filtering and Cleansing: It ensures the accuracy, relevance, and
quality of the data by filtering out irrelevant or inaccurate information.
 Decision Support System (DSS)
Key Functions of a DSS:
2. Data Analysis and Processing:
● Statistical Analysis: DSS allows users to perform statistical analysis to
identify patterns, trends, and relationships in the data, helping
decision-makers gain insights into the data.
● Data Mining: DSS can apply data mining techniques to discover
hidden patterns and generate predictive models based on large
datasets.
● Sensitivity Analysis: It performs sensitivity analysis to assess how
changes in input variables impact the outcomes, helping users
understand the sensitivity of decisions to varying factors.
 Decision Support System (DSS)
Key Functions of a DSS:
3. Modeling and Simulation:
● What-If Analysis: DSS supports “what-if ” analysis, allowing users to
simulate various scenarios by adjusting variables and evaluating the
potential outcomes.
● Optimization: DSS helps identify the best solution from a set of
alternatives by optimizing specific criteria (e.g., minimizing costs,
maximizing profits, etc.).
● Simulation Modeling: DSS can run simulations to replicate
real-world processes, enabling users to forecast potential outcomes
under different scenarios or constraints.
 Decision Support System (DSS)
Key Functions of a DSS:
4. Decision Alternatives and Recommendations:
● Alternative Generation: DSS helps generate multiple alternatives or
courses of action by analyzing data and models, allowing
decision-makers to compare different options.
● Ranking and Evaluation: It ranks and evaluates alternatives based on
specific decision criteria, such as cost, risk, efficiency, or impact.
● Recommendations: Based on the analysis, DSS provides decision
recommendations, enabling users to make more informed choices by
highlighting the most favorable options.
 Decision Support System (DSS)
Key Functions of a DSS:
5. Reporting and Visualization:
● Data Visualization: DSS presents data and analysis results in graphical
formats, such as charts, graphs, dashboards, and heat maps, making
it easier for decision-makers to interpret complex data.
● Custom Reports: DSS generates detailed and customizable reports
that summarize the analysis and key findings, helping users
understand the results and make decisions based on solid evidence.
● Interactive Interfaces: It often includes interactive tools like sliders,
filters, and dropdown menus that allow users to explore data and
perform analysis in real-time.
 Decision Support System (DSS)
Key Functions of a DSS:
6. Communication and Collaboration:
● Facilitating Group Decisions: In group decision-making
environments, DSS enables multiple users to share and access
information, collaborate on analysis, and make collective decisions
(e.g., through group decision support systems or GDSS).
● Integration with Communication Tools: Modern DSS systems can
integrate with communication platforms (e.g., email, chat, video
conferencing) to enhance collaboration between decision-makers
located in different locations.
 Decision Support System (DSS)
Characteristics of DSS:
● Interactive and user-friendly interface
● Supports semi-structured and unstructured decision-making
● Integrates data from multiple sources
● Provides data analysis, modeling, and simulation tools
● Facilitates "what-if" and scenario analysis
● Provides real-time data processing and feedback
● Enhances decision-making speed and accuracy
● Allows for collaboration and group decision-making
● Generates reports and visualizations for better understandings
● Offers flexibility and adaptability in decision processes
 Decision Support System (DSS)
Components of DSS:
● DSS Database: The DSS collects and stores data from internal and external
sources, such as databases, spreadsheets, and real-time information feeds. This
data is essential for analysis.
● Model Management: DSS includes mathematical, statistical, or
simulation models that allow decision-makers to analyze data and predict
outcomes. These models help in understanding relationships between
variables.
● User Interface: The system provides an easy-to-use interface through
which users can input data, interact with the models, and view results or
reports.
 Decision Support System (DSS)
Example: D-Mart
● Inventory optimization:
● Based on demand forecasts, the DSS suggests optimal inventory levels for
each product.
● It recommends increasing stock for high-demand products and reducing
stock for items with declining sales.
● What-If Analysis:
● The store manager can perform a "what-if" analysis, such as checking how
increasing promotional discounts will impact inventory levels and sales.
 Decision Support System (DSS)
Types of DSS
1. Communication-Driven DSS: Facilitates communication and
collaboration among decision-makers. It is commonly used in group
settings, such as project management or boardroom decisions.

2. Data-Driven DSS: Focuses on the collection and analysis of data. It is

useful for decisions that require data insights, such as sales
forecasting or market analysis.
 Decision Support System (DSS)
Types of DSS
3. Document-Driven Decision Support System (DSS):
● It is a type of DSS that focuses on managing, retrieving, and analyzing
documents to support decision-making.
● It helps users access relevant documents such as reports, policies, contracts,
and research papers, which contain information needed for making decisions.
These systems are useful when decisions require reviewing and analyzing
large volumes of text-based information.
● For example, a legal firm might use a document-driven DSS to retrieve and
analyze case files, legal precedents, or contracts to make informed decisions.
 Decision Support System (DSS)
Types of DSS
4. Model-Driven DSS: Primarily uses statistical models, optimization
algorithms, or simulation to guide decision-making. Examples
include financial modeling and risk analysis.

5. Knowledge-Driven DSS: Provides expert knowledge and rules to

guide decisions. It is often used in specialized areas like medical
diagnostics or troubleshooting systems.
MIS Vs. DSS
 MIS Vs. DSS
MIS DSS
▪ MIS support to take more of structured decision ▪ DSS support semi-structured and unstructured
making problem analysis
▪ Produce answers to routine questions and fixed, ▪ Helps make decisions that are unique, dynamic and
regularly scheduled reports not specified in advance
▪ Mostly based on data from internal source only ▪ Bring information from external sources also
▪ Focuses more on efficiency ▪ Focuses more on effective decisions
▪ Oriented to mostly internal events ▪ Oriented to internal & external events
▪ Make use of simple methods such as summaries and ▪ Make use of mathematical models/statistical
comparisons techniques
▪ Provides input to middle and low level management ▪ Provides input to senior managers and analyst
▪ Depend on TPS for their data ▪ Uses input from both MIS and TPS
 Group Decision Support System (GDSS)
Definition:
A Group Decision Support System (GDSS) is a type of decision
support system designed to help groups or teams collaborate and
make decisions more effectively.
It combines tools and technology to facilitate communication,
brainstorming, information sharing, and decision-making in a
group setting.
GDSS aims to enhance the productivity and quality of decisions
made by teams, especially when decisions are complex or involve
multiple stakeholders.
 Executive Support System (ESS)
or
Executive Information System (EIS)
 Executive Support System (ESS)
or
Executive Information System (EIS)
Definition:
An Executive Support System (ESS), also known as an Executive
Information System (EIS), is a specialized type of Management
Information System (MIS) designed to help senior executives and
top-level management in decision-making.
ESS provides easy access to both internal and external
information relevant to strategic goals of the organization.
 Executive Support System (ESS)
or
Executive Information System (EIS)
It also assist senior managers in answering the following questions:
What are the current key performance indicators (KPIs) for the company?

What business should we do?

How are our competitors doing the business affects us in long run?

What are the implications of new projects in our business?

How are our international branches performing?

How are we progressing toward our long-term strategic goals?

What are the major risks we face in the coming months, and how can we mitigate them?
 Executive Support System (ESS)
or
Executive Information System (EIS)
EIS/ ESS is required and used at fairly senior level including
members of the board of directors and executives with the titles of
Chief Executive Officer (CEO), Chief Operating/Operations
Officer (COO), Chief Finance Officer (CFO) and the like.
While, earlier, most of the top executives were reluctant users of
Information Technology, the new generation of tech-savvy top
executives is not only open to, but expects support from
computer-based information systems like EIS/ESS.
 Executive Support System (ESS)
or
Executive Information System (EIS)
EIS/ESS is, in a way, specialized DSS that includes all hardware,
software, data, procedures, and people used to assist
senior/top-level executives within the organization.
The primary goal of EIS/ESS is to obtain data from a variety of
sources, integrate and aggregate that data and display the resulting
information in an easy-to-use comprehensible.
It is supported by tool used by top executives called as “Digital
Dashboard”.
It makes use of “Artificial Intelligence” and “Machine Learning”.
 Executive Support System (ESS)
or
Executive Information System (EIS)
Digital Dashboard
Digital dashboards are information management tools used to track and
produce a visual representation of data from a host of sources including
databases, web services or third-party platforms while empowering the
user to monitor business performance.
The user can, then, oversee number of key areas by displaying historical
trends, actionable insights, and real-time information in a digestible,
presentational format.
Data visualization is a powerful tool to do so indeed – data-driven
dashboards offer a means of gaining access to vital information and
delivering it throughout the organization with ease.
 Executive Support System (ESS)
or
Executive Information System (EIS)
 Executive Support System (ESS)
or
Executive Information System (EIS)
 Executive Support System (ESS)
or
Executive Information System (EIS)
Benefits of Digital Dashboard
Enhanced Data Visualization
Real-time Data Access
Performance Tracking
Mobile Accessibility
Alerts and Notifications
Customization and Personalization
Improved Decision-Making
 Executive Support System (ESS)
or
Executive Information System (EIS)
Components of ESS or EIS
Hardware:
Input data-entry devices (keyboard, mouse, advance data reader devices)
The central processing unit (CPU)
Data storage files (hard drives, servers)
Output devices (monitor, dashboard, printer)
Networking Equipment (Local area network)
Software:
Text (document) handling software
Database management software
Graphics based software
Modeling based software
 Executive Support System (ESS)
or
Executive Information System (EIS)
Components of ESS or EIS
User Interface:
Scheduled reports
Query processing
Menu and command driven
Natural language

Telecommunication:
Decentralised network
Network management systems
 DSS Vs. ESS/EIS
Parameters DSS ESS / EIS
Typically used by middle management and Primarily used by senior executives and top-level
Target Users operational staff for tactical and semi-structured management for strategic decision-making.
decisions.
Focuses on more specific, short-term decisions such Focuses on long-term, strategic issues like corporate
Scope of Use as operational efficiency, budgeting, or scheduling. performance, market trends, and future planning.

Data Provides detailed, analytical data, often involving Provides summarized, high-level information, often
Presentation complex simulations or models to support specific through dashboards and visualizations (e.g., KPIs,
decision-making processes. market trends).

Supports more structured or semi-structured to Supports unstructured or semi-structured decisions

Decision certain extent unstructured decisions with tools like that require insight into trends, forecasts, and
Type “what-if ” analysis, optimization, and predictive high-level business data.
modeling.
Can involve more detailed and complex analysis, Provides simpler, high-level summaries with
Complexity
often requiring interaction with decision models and drill-down capabilities for further detail.
of Analysis
tools like simulations.
Offers specific recommendations or alternative Offers broad, strategic insights to guide company
Output solutions for immediate decisions. direction.
Expert System (ES)
 Expert System (ES)

Human expert vs. Expert system

Human Expert Artificial Expertise

Perishable Permanent
Difficult to Transfer Transferable
Difficult to Document Easy to Document
Unpredictable Consistent
Expensive Cost effective System
 Expert System (ES)
Why do we need an Expert System?
 Expert System (ES)
Definition
An Expert System is a type of artificial intelligence (AI) software
designed to simulate the decision-making abilities of a human
expert within a specific domain.
It uses a comprehensive knowledge base and a set of rules (typically
in the form of "if-then" logic) to analyze information, solve complex
problems, and provide advice or recommendations.
Expert systems are designed to mimic human reasoning, but they
do so consistently, without the limitations of fatigue or bias that
human experts may face.
Expert System (ES)
 Expert System (ES)
Knowledge Acquisition
The term knowledge acquisition means how to get required domain
knowledge by the expert system.
The entire process starts by extracting knowledge from a human expert,
converting the acquired knowledge into rules and injecting the developed
rules into the knowledge base.
 Expert System (ES)
Participants in Expert Systems
Participant Role

He is a person or group whose expertise and knowledge is

Domain Expert
taken to develop an expert system.

Knowledge engineer is a technical person who integrates

Knowledge Engineer
knowledge into computer systems.

It is a person or group of people who are using the expert

End User system to get to get advice which will not be provided by the
expert.
 Expert System (ES)
Key Components:
Knowledge Base: Contains domain-specific knowledge, including
facts and heuristics.
Inference Engine: Applies logical rules to the knowledge base to
draw conclusions.
User Interface: Allows users to input data and receive
recommendations or solutions.
Explanation System: Provides the reasoning behind its
recommendations to users.
 Expert System (ES)
How Expert Systems Are Useful in the Business Domain:
Decision Support - Banking
Expert systems assist in making informed business decisions, such
as diagnosing system failures or assessing financial risks.
For example, an expert system in finance can evaluate loan
applications by assessing the borrower’s creditworthiness based on
predefined criteria, reducing human bias and error.

Credit Decisioning Software | ACTICO Credit Decision Platform

 Expert System (ES)
How Expert Systems Are Useful in the Business Domain:
Claim Processing - Insurance
Claims processing is another area where expert systems provide value by
automating the evaluation of claims against policy conditions, expert
systems help reduce the time required for processing and minimize errors.
Example: In the case of car insurance, when a policyholder submits a claim
after an accident, the expert system can assess the damage, check if the claim
falls within policy limits, and verify if the policyholder was at fault.
The system then suggests an approval or rejection of the claim based on
these factors. This reduces human intervention and speeds up the claims
settlement process, leading to better customer satisfaction.
 Expert System (ES)
How Expert Systems Are Useful in the Business Domain:
Flight Scheduling and Route Optimization - Airline
Example:
An airline uses an expert system to optimize its flight routes during peak
travel seasons. The system analyzes historical data, current weather
patterns, air traffic congestion, and fuel prices to suggest the best routes
that minimize delays and reduce operational costs.
This helps the airline save money and improve on-time performance,
enhancing customer satisfaction.
 Expert System (ES)
Benefits:
Helps you to get fast and accurate answers
Ability to solve complex and challenging issues
It improves the decision quality
Cuts the expense of consulting experts
It provides solutions to problems in a narrow area of specialization.
Expert Systems can work steadily work without getting emotional, tensed
or fatigued.
 Expert System (ES)
Limitations:
Errors in the knowledge base can lead to wrong decision
The maintenance cost of an expert system is too expensive
Unable to make a creative response in an extraordinary situation
Each problem is different therefore the solution from a human expert
can also be different and more creative