Organisations and individuals use different types of systems for different
purposes. Here are some of the main types of information systems and their
uses.
Components of information systems: people, equipment, procedures, data.
The main ones you need to know are TPS, MIS & DSS, and EIS.
Transaction processing system (TPS):
A TPS collects and stores information about transactions, and controls some
aspects of transactions. A transaction is an event of interest to the
organisation. e.g. a sale at a store.
A TPS is a basic business system. It:
is often tied to other systems such as the inventory system which
tracks stock supplies and triggers reordering when stocks get low;
serves the most elementary day-to-day activities of an organisation;
supports the operational level of the business;
supplies data for higher-level management decisions (e.g. MIS, EIS);
is often critical to survival of the organisation;
mostly for predefined, structured tasks;
can have strategic consequences (eg airline reservation system);
usually has high volumes of input and output;
provides data which is summarised into information by systems used
by higher levels of management;
need to be fault-tolerant.
On-line transaction processing: A transaction processing mode in which
transactions entered on-line are immediately processed by the CPU.
Decision support system (DSS):
Helps strategic management staff (often senior managers) make decisions by
providing information, models, or analysis tools. For support of
semistructured and unstructured decisions (structured decisions can be
automated). Used for analytical work, rather than general office support.
They are flexible, adaptable and quick. The user controls inputs and outputs.
They support the decision process and often are sophisticated modelling tools
so managers can make simulations and predictions.
Their inputs are aggregate data, and they produce projections. An example
job for a DSS would be a 5 year operating plan.
Management information system (MIS) :
Condenses and converts TPS data into information for monitoring
performance and managing an organisation.
Transactions recorded in a TPS are analyzed and reported by an MIS.
They have large quantities of input data and they produce summary reports as
output. Used by middle managers. An example is an annual budgeting
system.
Executive information system (EIS):
Also known as an Executive Support System (ESS), it provides executives
information in a readily accessible, interactive format. They are a form of
MIS intended for top-level executive use. An EIS/ESS usually allows
summary over the entire organisation and also allows drilling down to
specific levels of detail. They also use data produced by the ground-level TPS
so the executives can gain an overview of the entire organisation.
Used by top level (strategic) management. They are designed to the
individual. They let the CEO of an organisation tie in to all levels of the
organisation. They are very expensive to run and require extensive staff
support to operate.
Office automation system (OAS) :
OAS provides individuals effective ways to process personal and
organisational data, perform calculations, and create documents. e.g. word
processing, spreadsheets, file managers, personal calendars, presentation
packages
They are used for increasing personal productivity and reducing "paper
warfare". OAS software tools are often integrated (e.g. Word processor can
import a graph from a spreadsheet) and designed for easy operation.
OAS Subspecies:
Communication systems: helps people work together by sharing information
in many different forms
Teleconferencing (including audioconferencing, computer conferencing,
videoconferencing), electronic mail, voice mail, fax
Groupware system: helps teams work together by providing access to team
data, structuring communication, and making it easier to schedule meetings.
For sharing information, controlling work flows, communication/integration
of work
Expert Systems
Expert system (noun): "a computer system or program that uses artificial
intelligence techniques to solve problems that ordinarily require a
knowledgeable human. The method used to construct such systems,
knowledge engineering, extracts a set of rules and data from an expert or
experts through extensive questioning. This material is then organized in a
format suitable for representation in a computer and a set of tools for
inquiry, manipulation, and response is applied. While such systems do not
often replace the human experts, they can serve as useful adjuncts or
assistants. Among some of the successful expert systems developed are
INTERNIST, a medical diagnosis tool that contains nearly 100,000
relationships between symptoms and diseases, and PROSPECTOR, an aid to
geologists in interpreting mineral data."
([Link]
Expert systems imitate human experts in many different fields of expertise.
Such systems contain rules (such as decision tables) that help a human answer
expert questions.
This is a classic example of how deskilling can affect people: imagine you are
an expert rock identifier and people from around the world treat you like a
living national treasure because of your brilliant ability to identify rocks. One
day, a system is built that contains all the rules you intuitively use to make
your rock identification decisions. By answering a few simple questions
presented by the expert system, a human can identify a rock just as well as
you can.
Expert systems are built with decision-making rules, and they can ask humans
a series of questions to narrow down the correct answer. One early and
influential expert system wasMYCIN, a disease diagnosis system.
Advantages of expert systems:
The computer can store far more information than a human.
The computer does not 'forget', make silly mistakes or get drunk when
it is most needed.
Data can be kept up-to-date.
The expert system is always available 24 hours a day and will never
'retire'.
The system can be used at a distance over a network.
Expert systems are computer application programs that take the knowledge of
one or more human experts in a field and computerize it so that it is readily
available for use. The human experts do not need to be physically present to
accomplish a specialized project or task. Expert systems are only designed to
be “expert” in a very narrow and specific task or subject field. They contain
the acquired expert knowledge and try to imitate the expert’s evaluation
processes to offer a conclusion. An advantage of an expert system is that it
may include the knowledge of many experts in one specific field.
Expert systems usually contain two components: a knowledge base and an
inference engine program, enabling it to suggest conclusions. The knowledge
base is programmed in an IF ... THEN logical rules structure. Such a structure
is a series of IF conditions that, if met, THEN a specific result may be
concluded. An example would be:
IF the animal is a bird
it does not fly
it swims
it is black and white
THEN it is a penguin
The expert system rules out options with each question until there remains an
option with high probability. The rules and questions, of course, are provided
by expert humans in the first place.
Expert systems can be used for many different types of knowledge: here are a
few examples.
These are links to the web, so they may not work after a while... (but still
work at 4 March 08)
Whale identification
The identification of Coriosolite coins from Brittany in Caesar's time
You're not too sure about thermodynamics?
You're having problems with case law?
A truckload of medical expert systems
A good introduction to expert systems and their history.
Management Information
Systems Notes
Lecture 2
September 2005
* These notes are for class use only. They were created from several research and academic
references. Any use of these notes for making profit is not permitted. 2
Introduction to the Computer-Based
Information System
INFORMATION MANAGEMENT
Five Main Resources:
A manager is required to manage five main types of resources effectively:
• Personnel
• Material
• Machines (including facilities and energy)
• Money
• Information (including data)
INTEREST IN INFORMATION MANAGEMENT
1. Increasing complexity of business activity
– International economy
Firms of all sizes are subject to economic influences that can originate
anywhere in the world. Such influences can be seen in the relative values of
the currencies of each nation, where purchases are made in those countries
with the highest currency value.
– Worldwide competition
Competition exists on a worldwide scale. Its effects can be seen in the
imports from foreign countries.
– Increasing complexity of technology
Technology is used everywhere in business. Examples are bar code scanners,
computer based airline reservation systems, automated teller machines,
factory robots ..etc.
– Shrinking time frames
All phases of business operations are performed more rapidly than ever
Physical
Conceptual3
before. (telemarketing, electronic sales orders, “just in time “ delivery of
raw materials ..etc)
– Social constraints
Some products and services are found undesirable by society. Therefore,
business decisions must be based on economic factors, but social costs and
payoffs must be considered as well. Plant expansion, new products, new
sales outlets and similar actions must all be weighed in terms of their
environmental impact.
2. Improved computer capabilities
– Size
– Speed
Today’s users, have keyboard terminals or microcomputers in their offices.
Many of the micros are connected to other computers in a network and users
know how to use them.
WHO ARE THE INFORMATION USERS?
• Managers
The idea of using the computer as a management information system was a
breakthrough because it recognized managers’ need for problem solving
information. Embracing the MIS concept made several firms develop
applications specifically aimed at management support.
• Non-managers
Non-manages and staff specialists also use the MIS output.
• Persons & organizations in the firm’s environment
Users outside the company benefit from the MIS as well. They can be
customers receiving invoices, stockholders getting dividend checks, and the
federal government checking tax reports. 4
Management Levels
Strategic Planning Level
The strategic planning level involves mangers at the top of the organizational
hierarchy. The term strategic indicates the long-term impact of top managers’
decisions on the entire organization. The term executive is often used to describe a
manager on the strategic planning level.
Management Control Level
Middle-level managers include regional managers, product directors, and division
heads. Their level is called “management control level” due to their responsibility of
putting plans into action and ensuring the accomplishment of goals.
Operational Control Level
Lower level managers are persons responsible for carrying out the plans specified by
managers on upper levels. Their level is called the “operational control level” because
this is where the firm’s operations occur.
Influence of Management Level on Information Source and Form
When designing information systems, it is important to consider the manager’s level.
Such levels can influence both the source of information and how it is presented.
Managers on the strategic level place greater emphasis on environmental information
than do managers on the lower levels. Managers on the operational control level
regard internal information as vital.
The second figure shows that strategic planning-level managers prefer information in
a summary format, whereas operational control-level managers prefer detail.
Figure 2.1
Strategic planning level
Management control level
Operational control level
Summary5
Figure 2.2
Business Areas
Managers are found in various business areas of the firm. The three traditional
business areas are marketing, manufacturing, and finance in addition to other two
areas that have gained major importance-human resources and information services.
Figure 2.3
What managers do
According the French management theorist, Henri Fayol, managers perform five
major functions.
• They plan what they are to do
• They organize to meet the plan.
• They staff their organization with the necessary resources.
• They direct the available resources to execute the plan.
• Finally, they control the resources, keeping them on course.
Finance
Function
Human
Resources
Function
Information
Services
Function
Manufacturing
Function
Marketing
Function
Strategic planning level
Management Control Level
Operational Control
Level
51-
Detail
Strategic planning level
Management control level
Operational control level6
All managers perform these functions, however with varying emphasis as shown
below.
Figure 2.4
Management Knowledge
• Computer literacy
This knowledge includes an understanding of computer terminology, a
recognition of its strengths and weaknesses, an ability to use the computer ..etc
• Information literacy
A manager should also have information literacy which consists of
understanding how to use information at each step of the problem solving
process, where this information can be obtained from, and how to share
information with others.
Information literacy is not dependent on computer literacy. A manager can be
information literate but computer illiterate.
THE MANAGER AND SYSTEMS
System Components
A system is a group of elements that are integrated with the common purpose of
achieving an objective.
Not all systems have the same combination of elements, but a basic configuration is
illustrated in the figure below: 7
Objectives
Control
mechanism mechanism
Input Input Transformation Transformation Output
1-1
Figure 2.5
Input resources are transformed into output resources. The resources flow from the
input element, through the transformation element, and to the output element.
A control mechanism monitors the transformation process to ensure that the system
meets its objectives. The control mechanism is connected to the resource flow by
means of a feedback loop, which obtains information from the system output and
makes it available to the control mechanism. The control mechanism compares the
feedback signals to the objectives and directs signals to the input element when it is
necessary to change the system operation.
Open Loop and Closed Loop Systems
Input Input Transformation Transformation Output
Figure 2.6
Not all systems are able to control their own operations. A system without the control
mechanism, feedback loop, and objective elements is called an open loop system.
A system with the three control elements is called a closed loop system.
Open and Closed Systems
• Open system: Connected to its environment by means of resource flows (e.g.,
heating system)
• Closed system: Not connected to its environment. They usually exist in tightly 8
controlled laboratory systems.
What is a subsystem?
A subsystem is simply a system within a system. This means that systems exist on
more than one level and can be composed of subsystems or elemental parts.
Subsystem A-2
Subsystem A-3
Subsystem B-2
Subsystem B-1
System
Subsystem A Subsystem B
Elemental
Part C
Subsystem A-1
Elemental
part B1 1-1
Figure 2.7
What is a Super System? (not frequently used)
When a system is part of a larger system, the larger system is the super system.
Physical and Conceptual Systems
Physical system
The business firm is a physical system, composed of physical resources
Conceptual system
It’s a system that uses conceptual resources-information and data- to represent a
physical system.
Eg. : The Computer is a physical system, but the data and information stored in it can
be viewed as a conceptual system.
The Importance of a System View
A systems view regards business operations as systems embedded within a larger
environmental setting. It’s an abstract way of thinking, but it has potential value to the
manager. The systems view: 9
– reduces complexity
– requires good objectives
– emphasizes working together
– acknowledges interconnections
– values feedback
DATA VERSUS INFORMATION
o Data consists of facts and figures that are relatively meaningless to the user.
(e.g., number of hours worked by an employee)
o Information is processed data or meaningful data. (e.g., multiplying the hours
worked by the hourly rate to get each employee’s gross earnings).
The transformation of data into information is performed by an information processor.
The information processor is one of the key elements in the conceptual system and
can include:
– Computer components
– Non-computer components
– Combination of the two
THE EVOLUTION OF COMPUTER BASED INFORMATION SYSTEMS
Data Processing (DP) during the first half the twentieth century
Management Information Systems (MIS) 1964
o IBM promoted the concept as a means of selling disk files and terminals
o The MIS concept recognized that computer applications should be implemented
for the primary purpose of producing management information.
Decision Support Systems (DSS) 1971
o A DSS is an information-producing system aimed at a particular problem that a
manager must solve and at decisions that the manager must make.
o Notes distinction: MIS: Organizational/group - general
DSS: Individual - specific
Office Automation (OA) 1964
o Facilitates communication 10
o Increases productivity among managers and office workers through the use of
electronic devices.
o Includes a variety of applications such as video conferencing, voice mail, electronic
mail, desktop publishing...etc.
Artificial Intelligence (AI)/ Expert Systems (ES) - 1990s
o AI is an application that enables the computer system to perform some of the same
logical reasoning tasks as humans.
o An expert system is a special subclass of AI that functions as a specialist in a certain
field. For example, it can provide management consultancy.
o Limitation of ES: It doesn’t improve its intelligence over time. One way to overcome
this limitation is to use neural networks, electronic and mathematical analogs of the
human brain.
THE CBIS MODEL
Computer-based
Information System
(CBIS)
Accounting
Information System
Management
Information System
Decision Support
Systems
The Virtual
Office
Knowledge-based
Systems
D e c is io n s
P r ob lem
Inf orm a t io n
P r ob lem
S o lu t io n
Figure 2.8
Managers make decisions to solve problems, and information is used in making these
decisions. Information is presented in both oral and written forms by an information
processor. The computer portion of the information processor contains each of the
computer-based application areas- AIS, MIS, DSS, the virtual office and knowledge
based systems. 11
THE INFORMATION SERVICES ORGANIZATION
Information Specialists
Those are the ones who have full-time responsibility for developing and maintaining
computer based systems. There are five categories of information specialists:
o System analysts work with users to define the requirements for developing
new systems and improving existing ones.
o Database administrators work with users and system analysts to create
databases that contain the data needed to produce the user’s information.
o Network specialists work with system analysts and users to establish the data
communication networks that tie together widespread computing resources.
o Programmers use the documentation prepared by the systems analysts to
encode the instructions that cause the computer to transform the data into
information needed by the user.
o Operators handle the large-scale computing equipment such as mainframe
computers and mini-computers.
THE TREND TO END USER COMPUTING
Information specialists do not always participate in the development of computerbased systems as
shown in the figure below. That is the traditional approach, the way
all systems were developed during the 1950s—1970s.
The trend towards End user Computing began by the late 1970s and then kept growing.
EUC is the development by user of all or part of their computer bases systems. 12
Database
Administrator
User
Systems
Analyst
Programmer Operator
Computer
Network
Specialist
Figure 2.9
Stimulants to EUC
– Increased computer literacy
– Information Services backlog, Information specialists have always had more
work than they can handle. Backlogs began to build up in the 1980s, when
information specialists could not respond quickly to users’ increasing
demands.
– Low-cost hardware (the PC)
– Prewritten software (electronic spreadsheets)
The Role of Information Specialists in EUC
User Computer
Information
Specialists
Support Support
Communicat ion
Figure 2.10
The EUC concept doesn’t mean that there
will be no more need for information
specialists. Rather, it means that information
specialists will assume more of a consulting
role than they used to have in the past.13
JUSTIFYING THE CBIS
The CBIS should be justified in the same manner as any other large investment of the
firm.
o Economic
– Cost reduction
– Reduced inventory investment
– Increased productivity (CAD/CAM)
o Non-economic
– Perceived value
ACHIEVING THE CBIS
In some respects, each subsystem of the CBIS is like a living organism: it is born, it
grows and matures, it functions, and eventually it dies. This evolutionary process is
called the system life cycle (SLC). It consists of the following phases:
1-1
Figure 2.11
REENGINEERING THE CBIS
The process of reworking a system is called reengineering or business process
redesign.
o A reengineered system is not always a clean-slate approach
o Good features of the system can be retained
o BPR will be the development methodology of choice, rather than the SLC. 14
MANAGING THE CBIS
Implementation
Phase Manager Information Specialist
Control
Control
Control
Control
Planning
Analysis
Design
Use
Define problem Support
System Study
Design system
Implement system
Make available
1-1
Implementation
Phase Manager Information Specialist
Control
Control
Control
Control
Planning
Analysis
Design
Use
Define problem Support
System Study
Design system
Implement system
Make available
1-1
Figure 2.12
The manager is the one responsible for managing the CBIS. Among his
responsibilities are:
o Planning the life cycle
o Controlling the information specialists involved.
o Ensuring that the CBIS provides the desired support.