Business Information Systems

Major Types of Systems

Level 1-Transaction Processing Systems (TPS) Level 2-Management Information Systems (MIS) Level 2-Decision Support Systems (DSS) Level 3-Executive Support Systems (ESS)

Transaction Processing System

Traditional System which is a combination of people, software, hardware and database Focus on completion of a business transaction An atomic activity which ensures consistency of database Objectives of a TPS :
Reduce Costs Reduce Efforts Automation of business transactions

Ways of dealing with TPS :

Batch Processing System Online Transaction Processing System (OLTP) Inputs: Transactions or events Processing: Sorting; listing; merging; updating Outputs: Detailed reports; lists; summaries Users: Operational personnel; supervisors

Transaction Processing Cycle

Batch Processing System

Different transactions are queued and are executed one after another The transactions keep modifying the database and the preceding transaction operate on the data processed by previous transaction Example : Payroll system, electricity billing , telephone billing

Online Transaction Processing System (OLTP)

Processes data instantaneously OLTP provides operational level support to the organisation by processing business transactions Requests are received and data may be stored in database on line Failure in the system is costly and recovery is time consuming and intricate Eg : Railway Ticket Booking , Bank Accounting System

Typical Applications of TPS

Sales and Marketing Systems Functions : Sales Management Market Research Promotion Pricing Major Applications : Sales Order Info System Market Research System Pricing System

Typical Applications of TPS

Manufacturing & Production Systems Functions : Scheduling Purchasing Shipping / Receiving Operations Major Applications : Materials Requirements Planning Systems Purchase Order Control Systems Logistics Systems Quality Control Systems

Typical Applications of TPS

Finance and Accounting Systems Functions : Budgeting Accounting Billing Cost Accounting Major Applications : General Ledger Accounts Receivable / Payable Budgeting Funds Management Systems

Typical Applications of TPS

Human Resource Systems Functions : Personnel Records Benefits Compensation Labor Relations Training Major Applications : Payroll Employee Records Benefit Systems Career Path Systems Personnel Training Systems

Office Automation System

Support all, but mainly knowledge level (average office workers) Automate office tasks and production/distribution of documents Support paperless office environment Example: word processing, electronic scheduling /calendars, spreadsheet, integrated office software

Office Automation Systems

Managing Documents Creation Storage Retreival Dissemination Scheduling (individuals & groups) Electronic calendar Intranet Communicating (initiating, receiving, managing) Voice Digital Documents Managing Data Employees, Customers & Vendors

Management Information Systems

Consolidates data obtained from TPS Provides feedback / report for management to execute the tasks correctly Used in all areas such as accounts, inventory, sales, purchase and marketing etc.
Inputs: Summary transaction data Processing: Simple models; low level analysis Outputs: Summary reports Users: Middle managers

Applications of MIS

Inbound Logistics
Sourcing of components Buying of Commodities

Operations
Flexible Manufacturing Systems Automatically guided Vehicles

Marketing & Sales

Online Sales

Decision Support Systems

It is a collection of hardware and software to support decision making in a specific environment Main objective is to provide the right option Supports management to solve problems
Inputs: databases optimized for statistical analysis Processing: Interactive. Simulations and statistical analysis Outputs: Responses to queries; statistical test results. Users: Professionals, staff

MIS vs. DSS

MIS
Support Info about performance

DSS
Info and modeling to analyze problems Interactive Inquiries Flexible and Adaptable Analytical modeling of data

Report Form Periodic reports or On Demand Format Pre-specified Fixed format Processing Extract and manipulate data

GROUP DECISION-SUPPORT SYSTEMS

What Is a GDSS?
Group Decision-Support System (GDSS) is an interactive computer-based system used to facilitate the solution of

unstructured problems by a set of decision makers working

together as a group.

Databases

Model base

GDSS processor

GDSS software

Access to the internet and corporate intranet, networks, and other computer system

Dialogue manager

External database access

External databases

Users

Three Main Components of GDSS

Hardware (conference facility, audiovisual equipment, etc.)

Software tools (Electronic questionnaires, brainstorming tools, voting tools, etc.) People (Participants, trained facilitator, support staff)

Overview of a GDSS Meeting

In a GDSS electronic meeting, each attendee has a workstation.

The workstations are networked and are connected to the facilitators console, which serves as the facilitators workstation and control panel, and to the meetings file server. All data that the attendees forward from their workstations to the group are collected and saved on the file server.

Overview of a GDSS Meeting (Continued)

The facilitator is able to project computer images onto the projection screen at the front of the room. Many electronic meeting rooms have seating arrangements in semicircles and are tiered in legislative style to accommodate a large number of attendees.

The facilitator controls the use of tools during the meeting.

Advantages of GDSS

Traditional decision-making meetings support an optimal size of three to five attendees. GDSS allows a greater number of attendees. Enable collaborative atmosphere by guaranteeing contributors anonymity. Enable nonattendees to locate organized information after the meeting. Can increase the number of ideas generated and the quality of decisions while producing the desired results in fewer meetings Can lead to more participative and democratic decision making

GDSS Alternatives
Decision frequency

high
Local area Wide area decision network decision network

Decision Teleconferencing room

low
close distant Location of group members

Executive Support System (ESS)

Characteristics of Executive Support Systems (ESS) Top level management Designed to the individual

Ties CEO to all levels

Very expensive to keep up Extensive support staff Inputs: Aggregate data. Internal and external Processing: Interactive and graphical simulations Outputs: Projections Users: Senior managers

Gets data from all internal IS plus external industry data bases

BI Dashboards
In many respects a reporting dashboard can be likened to a dashboard in an automobile. It provides an 'at-a-glance view' of the current operational state of the vehicle.
A dashboard is a visual display of the most important information needed to achieve one or more objectives; consolidated and arranged on a single screen so the information can be monitored at a glance.

The Role of Executive Support Systems in the Firm

ESS can bring together data from all parts of the firm and enable managers to select, access, and tailor them as needed.
It tries to avoid the problem of data overload so common in paper reports. The ability to drill down is useful not only to senior executives but also to employees at lower levels of the firm who need to analyze data. Can integrate comprehensive firmwide information and external data in timely manner Inclusion of modeling and analysis tools usable with a minimum of training

Ability to analyze, compare, and highlight trends

Graphical interface enables users to review data more quickly and with more insight, speeding decision making.

A Composite Dashboard

Interrelationships among systems

TPS generally feed all other systems MIS generally indicate when a DSS is needed and provide input for them to crunch ESS take all internal data but usually only summary data from MIS and DSS level

Output data from one is input data for others to process

Expert Systems
Definition: A knowledge-based information system that uses its knowledge about a specific, complex application to act as an expert consultant to end users

An expert system is a computer program that is designed to hold the accumulated knowledge of one or more domain experts

Characteristics of an Expert System

Can explain their reasoning or suggested decisions Can display intelligent behavior Can draw conclusions from complex relationships Can provide portable knowledge Can deal with uncertainty Not widely used or tested Limited to relatively narrow problems Cannot readily deal with mixed knowledge Possibility of error Cannot refine its own knowledge May have high development costs Raise legal and ethical concerns

Capabilities of Expert Systems

Strategic goal setting
Planning Design Decision making Quality control and monitoring Diagnosis

Explore impact of strategic goals

Impact of plans on resources Integrate general design principles and manufacturing limitations Provide advise on decisions Monitor quality and assist in finding solutions Look for causes and suggest solutions

Explanation facility

Inference engine

Knowledge base

Knowledge base acquisition facility

User interface

Components of an Expert System

Experts

User

Components of an Expert System (1)

Knowledge base
Stores all relevant information, data, rules, cases, and relationships used by the expert system

Inference engine
Seeks information and relationships from the knowledge base and provides answers, predictions, and suggestions in the way a human expert would

Rule
A conditional statement that links given conditions to actions or outcomes

Components of an Expert System (2)

Fuzzy logic
A specialty research area in computer science that allows shades of gray and does not require everything to be simply yes/no, or true/false

Backward chaining
A method of reasoning that starts with conclusions and works backward to the supporting facts

Forward chaining
A method of reasoning that starts with the facts and works forward to the conclusions

When to Use an Expert System (1) Provide a high potential payoff or significantly reduced downside risk Capture and preserve irreplaceable human expertise Provide expertise needed at a number of locations at the same time or in a hostile environment that is dangerous to human health

When to Use an Expert System (2)

Provide expertise that is expensive or rare Develop a solution faster than human experts can Provide expertise needed for training and development to share the wisdom of human experts with a large number of people

Expert System Benefits

Faster and more consistent than an expert
Can have the knowledge of several experts Does not get tired or distracted by overwork or stress Helps preserve and reproduce the knowledge of experts

Expert System Limitations

Limited focus
Inability to learn Maintenance problems Developmental costs

Applications of Expert Systems

PUFF: Medical system for diagnosis of respiratory conditions

PROSPECTOR: Used by geologists to identify sites for drilling or mining

Applications of Expert Systems

MYCIN: Medical system for diagnosing blood disorders. First used in 1979

DESIGN ADVISOR: Gives advice to designers of processor chips

Applications of Expert Systems

DENDRAL: Used to identify the structure of chemical compounds. First used in 1965

LITHIAN: Gives advice to archaeologists examining stone tools

Intelligent Agents in P&Gs Supply Chain Network

Intelligent agents are helping Procter & Gamble shorten the replenishment cycles for products, such as a box of Tide.

Why use Expert Systems?

Experts are not always available. An expert system can be used anywhere, any time. Human experts are not 100% reliable or consistent Experts may not be good at explaining decisions Cost effective

Problems with Expert Systems

Limited domain Systems are not always up to date, and dont learn No common sense Experts needed to setup and maintain system

Legal and Ethical Issues

Who is responsible if the advice is wrong?
The user? The domain expert? The knowledge engineer? The programmer of the expert system shell? The company selling the software?