DEPARTMENT OF BUSINESS ADMINISTRATION AND ENTREPRENEURSHIP

BAYERO UNIVERSITY, KANO

SEMESTER, 2021 / 2022 SESSION

Facilitator: Dr. Muktar M. Daneji

Assignment Question

Information System Categories (Enterprise Applications)

Transaction Support System (TSS)

Management information system (MIS)

Decision Support System (DSS)

Executive Support System (ESS)

By

Abubakar Umar Adam

SPS/20/MMN/00001

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1.0 INTRODUCTION

Information is considered, without any doubt, a main and foundational element in managerial

decision making in all organizations, due to current challenges in this century. The concept of

information system has received an observable and increased attention in different fields of

modern human life whether on the individual or organization level. Information is a major

resource for the organization and an important source of its success. It is also a factor in

increasing the efficiency and effectiveness of the various administrative activities. This has made

information systems in the various organizations particularly important, helping organizations to

perform their functions successfully and efficiently. The organization needs information so that it

can connect its different parts to achieve its objectives as well as it can successfully adapt to the

surrounding environment. Information is valuable whenever it is of greater use in managerial

decision-making and operations. The changes in the various environmental factors, the growth

and the development that took place in the economic organizations, and the complexity of the

problems they faced, increased the need for the means of collecting and processing the enormous

data, which was difficult to deal with by traditional means. This was made easy due to the

modern technological revolution that led to means that have facilitated and accelerated the

processing of those data and their timely delivery to decision-making centers.

The process of managerial decision-making depends mainly on the information system used to

gather and process information in a scientific manner. The more reliable and timely the

information is, the more correct and beneficial the decision is. Consequently there should be an

integrated information system that provides the organization with the current and future data

helping in correct managerial decision making.

2.0 Systems for Different Management Groups

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A business firm has systems to support different groups or levels of management. These systems

include transaction processing systems, management information systems, decision-support

systems, and systems for business intelligence.

2.1 Transaction Processing Systems

Operational managers need systems that keep track of the elementary activities and transactions

of the organization, such as sales, receipts, cash deposits, payroll, credit decisions, and the flow

of materials in a factory. Transaction processing systems (TPS) provide this kind of information.

A transaction processing system is a computerized system that performs and records the daily

routine transactions necessary to conduct business, such as sales order entry, hotel reservations,

payroll, employee record keeping, and shipping (Laudon & Laudon, 2012). TPS or transaction

processing system is a type of information system that collects, stores, modifies and retrieves the

data transaction of an enterprise (Rehman, 2023). According to Rahmatian, (2003) a Transaction

Processing System (TPS) is a system that captures, enters, stores, retrieves, and processes the

relevant details of business events and generates the information and documents necessary for

running the business

2.1.1 Components of the Transaction Processing System (TPS)

1 An input

An input is an original request for a product or payment that an outside party sends to a

company’s TPS. If your company uses batch processing, its TPS stores groups of inputs and then

processes them at a later time. In comparison, if your company uses a real-time system, it

processes each input as it arrives. Inputs typically include: Invoices, Bills, Coupons, Custom

orders.

2. Processing system

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The processing system reads each input and creates a useful output, such as a receipt. This

element can help you define the input data and what the output should be. Based on the kind of

TPS your company is using, processing times can vary.

3. Storage

The storage component of TPS refers to where a company keeps its input and output data. Some

companies store these documents in a database. The storage component ensures the organization,

security and accessibility of every document for later use.

For example, if a vendor would like to confirm that your company has paid an invoice, you can

check your system’s storage to find the invoice and determine if you delivered a payment.

4. Outputs

TPS outputs are documents the system generates once it completes processing all inputs, such as

receipts the company stores in its records. These documents can help validate a sale or

transaction and provide important reference information for tax and other official purposes.

2.1.2 Types of the Transaction Processing System (TPS)

According to Amin,et al.,(2012) there are two types of transaction processing systems: Batch and

Real or Online Transaction Processing System (OTPS).

Batch Processing System

A transaction that is done in a batch or group is known as a batch processing system. The batch

processing is not done immediately. First, the data is collected and then placed in a group or

batch then the processing is started. Examples of batch processing systems are:-Credit card

transaction, Payment by cheque

Online Transaction Processing System (Real-Time Processing)

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A transaction that is done immediately without any delay is known as an online transaction

processing system (OLTP). It is also known as a real-time transaction. Examples of OLTP are:-

Use card for payment, online transaction

2.2 Management Information Systems (MIS)

The term management information systems (MIS) designates a specific category of information

systems serving middle management. MIS provide middle managers with reports on the

organization’s current performance. This information is used to monitor and control the business

and predict future performance.

MIS is define as type of information systems that transform data to information and

summarized the information to Meaningful and useful forms as management reports to use

it in managerial decision making (Al-Mamary et al., 2013) .

MIS summarize and report on the company’s basic operations using data supplied by transaction

processing systems. The basic transaction data from TPS are compressed and usually presented

in reports that are produced on a regular schedule. MIS Provide information in the form of pre

specified reports and displays to support business decision making (Al-Mamary et al., 2013).

Today, many of these reports are delivered online. Some of the reports are a summary report,

on-demand report, ad-hoc reports and an exception report. Example: Sales management

systems, Human resource management system.

2.3 Decision Support Systems (DSS)

Decision support systems (DSS) are interactive software-based systems intended to help

managers in decision-making by accessing large volumes of information generated from

various related information systems involved in organizational business processes, such as

office automation system, transaction processing system (Tutorialspoint, 2022). Decision

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support system is interactive well integrated systems that provide with data tools and models

to facilitate semi-structured decision or tactical decisions (Gupta et al., 2010). DSS uses the

summary information, exceptions, patterns, and trends using the analytical models. A decision

support system helps in decision-making but does not necessarily give a decision itself. The

decision makers compile useful information from raw data, documents, personal

knowledge, and/or business models to identify and solve problems and make decisions.

Additionally, Navaz (2013), asserted that Decision Support System is defined as a computer-

based system to be used by a manager or group of managers at any organizational level

decision process for problem solving. Šerifi, et al.(2007) added that unlike MIS (Management

Information System) DSS system provides greater help in analysis and decision making.

Decision Support System Examples

Organizations use decision support systems in several different contexts, including the following:

GPS routing. GPS route planning is an example of a typical DSS. It compares different routes,

taking into account factors such as distance, driving time and cost. The GPS navigating system

also enables users to choose alternative routes, displaying them on a map and providing step-by-

step instructions.

ERP dashboards. ERP (enterprise resource planning) dashboards can use a decision support

system to visualize changes in production and business processes, monitor current business

performance against set goals and identify areas for improvement. ERP dashboards let business

owners see a snapshot of their company's most important numbers and metrics.

Clinical decision support system. A clinical decision support system (CDSS) is a software

program that uses advanced decision-making algorithms to help physicians make the best

medical decisions. Healthcare professionals often use these to interpret patient records and test

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results, and to calculate the best treatment plan. CDSS in healthcare can help providers identify

abnormalities during specific tests, as well as monitor patients after certain procedures to

determine if they are having any adverse reactions.

Components of A DSS

According to Management Study HQ, decision support systems consist of three key components:

the database, software system, and user interface.

1. DSS database. The database draws on a variety of sources, including data internal to the

organization, data generated by applications, and external data purchased from third parties or

mined from the Internet. The size of the DSS database will vary based on need, from a small,

standalone system to a large data warehouse.

2. DSS software system. The software system is built on a model (including decision context

and user criteria). The number and types of models depend on the purpose of the DSS.

Commonly used models include:

A. Statistical models. These models are used to establish relationships between events and

factors related to that event. For example, they could be used to analyze sales in relation to

location or weather.

B. Sensitivity analysis models. These models are used for “what-if” analysis.

C. Optimization analysis models. These models are used to find the optimum value for a target

variable in relation to other variables.

D. Forecasting models. These include regression models, time series analysis, and other models

used to analyze business conditions and make plans.

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E. Backward analysis sensitivity models. Sometimes called goal-seeking analysis, these

models set a target value for a particular variable and then determine the values other variables

need to hit to meet that target value.

3. DSS user interface. Dashboards and other user interfaces that allow users to interact with and

view results.

2.4 Executive Support Systems (ESS)

Executive support systems are intended to be used by the senior managers directly to

provide support to non-programmed decisions in strategic management. These information are

often external, unstructured and even uncertain. ESS also draw summarized information from

internal MIS and DSS. Exact scope and context of such information is often not known

beforehand. Gupta et al., (2010) defines Executive information system are form of data retrieval

system that provided selected and summarized information for senior executives, engaged in

different kinds of crisis management and other strategic decision. It is a user friendly interactive

system having excellent means and graphical capabilities.

Advantages:

1. Enhances personal thinking.

2. Easy to use for upper level executives.

3. Better reporting system.

4. Improve office automation.

Disadvantages:

1. System dependent.

2. Limited functionality.

3. Information overloaded.

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CONCLUSION

The relationship between information system and decision making is a central concern in the

field of information system (IS). The main objective of information systems is helping decision

makers by providing accurate and time based information helping them in making the right

decisions in turbulent environment. A successful organization nowadays relies heavily on

information systems to improve its work in one hand, and on the other hand achieving its goals

and benefits. Management Information Systems helps in solving both structured and unstructured

problem environments. This system is consisted of computers, People, procedures, databases,

interactive query facilities and… Information is considered as a most important ingredient for

success decision making in now a days companies, Due to the importance of information in

decision making a developed system has emerged to serve the appropriate information's to

managers for good decision making process; called information system. Such systems as DSS,

MIS, TPS

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REFERENCES

Amin, Mohammad , Alauddin, MD Azad, M. M. (2012). Business Transaction Processing

System. International Journal of Computer Information Systems, 4(5), 11–15.

Gupta, C. L. P., Sharma, S., & Tripathi, S. (2010). Importance of Management Information

System in Electronic-Information Era. SAMRIDDHI : A Journal of Physical Sciences,

Engineering and Technology, 1(02), 107–114. [Link]

Hasan Al-Mamary, Y., & Shamsuddin, A. (2013). The Impact of Management Information

Systems Adoption in Managerial Decision Making: A Review. Management Information

Systems, 8(4), 10–17.

Laudon, Kenneth C. Laudon, J. P. (2012). Management information systems: managing the

digital firm. In Pearson Education, Inc (Vol. 7, Issue 1). [Link]

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Navaz, V. M. (2013). Concepts and Applications of Management Information Systems. Arabian

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Rahmatian, S. (2003). Transaction Processing Systems. Encyclopedia of Information Systems, 4,

479–488. [Link]

Rehman, J. (2023). What is transaction processing system (TPS) with example - IT Release.

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Šerifi, Veis Ranđić, Siniša Dašić, P. (2007). Examples of software tools for decision support

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