JOMO KENYATTA UNIVERSITY OF

AGRICULTURE AND TECHNOLOGY

BACHELOR SCIENCE IN PROJECT

MANAGEMENT

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HEPM 2306 PROJECT MANAGEMENT
INFORMATION SYSTEMS

CLASS LECTURES

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Course Instructor:
DR MBITHI MUTUA

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CHAPTER TWO: Role of Information Systems Learning
outcomes

 After completing this chapter you will be able to answer

the following questions.
 How do information systems support the major business
functions.
 How do systems serve the various levels of
management in a business and how are the systems
related.
 How do enterprise applications, collaborations and
communication systems, and intranets improve
organizational performance?

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Introduction

 Due to different interests, specialties and levels

in an organization, there are different kinds of
systems.
 No single system can provide all the
information an organization needs.
 Organization and information systems can be
divided into
 Strategic,
 Management,

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Introduction cont’d
 operational level. (Constituency Perspective)
 All the above mentioned levels of an
organization can be further divided into five
functional areas:
 Sales and marketing,
 Manufacturing,
 Accounting,
 Finance and
 Human resources (Functional perspective)

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Introduction cont’d
 The hierarchy of management is composed of
senior management which deals with long
range strategic decisions about products and
services as well as financial performance of the
firm.
 Middle management – Which carries out the
programs and plans of senior management.
 Knowledge workers which such as engineers,
scientists, or architects design products or
services and create new knowledge for the
firm.
 Operational Management – Responsible for
monitoring the daily activities of the firm.

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Perspective cont’d
 Data workers such as secretaries or clerks
assist with paperwork at all levels of the firm
 Production or service workers actually produce
the products and deliver the service.

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Perspective cont’d
 Strategic level systems help senior manager
with long-term planning.
 The principle concern at this level is
matching changes in the external
environment with existing organizational
capabilities.
 It supports the long-range planning activities
of senior management.
 It also helps the senior management to
tackle and address strategic issues both in
the firm and in the external environment

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Perspective cont’d

 Management level systems help middle

managers monitor and control.
 It typically provides periodic reports rather than
instant information on operations.
 It supports the monitoring, controlling, decision-
making and administrative activities of middle
managers.
 Some of the management level systems support
non-routine decision making where they tend to
focus on less-structured decisions for which
information requirements are not always clear.

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Perspective cont’d
 Operational level systems help operational
manager keep track of the firm’s day-today
activities.
 The principle purpose is of operational level
system is to answer routine questions and to
track the flow of transactions through the
organization.

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Six Major Types of Systems

 Information systems are built to serve each of

the four levels of an organization based on the
five main functional area of business.
 Transaction Processing Systems (TPS) serve the
operational level of an organization.
 Decision-support Systems (DSS) and
Management Information Systems (MIS) serve
the management level of an organization.
 Executive Support Systems (ESS) serves the
strategic level of an organization.

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Operational Level Information Systems
 The information system that involved at
operational level of an organization is
Transaction Processing Systems.
 Transaction processing systems (TPS) are the
basic business systems that serve the
operational level of the system.
 A transaction processing system is a
computerized system that performs and
records the daily routine transactions
necessary to the conduct of the business.
 TPSs are interfaced with applications that
provide clerical workers and operational
managers with up-to-date information.

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Operational Systems Cont’d

 A TPS is any system that records transaction (a

business event: a sale, a purchase, the hiring of a
new employee).
 TPS is the entry point where data are entered at its
source at the time of transactions take place.

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Operational Systems Cont’d

 At the operational level, tasks, resources and

goals are predefined and highly structured.
 The decision to grant credit to customer,
for instance, is made by a lower-level
supervisor according to predefined criteria.
 All that must be determined is whether the
customer meets the criteria.
 Example of TPS is a payroll TPS

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Operational Systems Cont’d

 TPS are often so central to a business that TPS

failure for a few hours can spell the demise of a
firm and perhaps other firms linked to it.
 Manager needs TPS to monitor the status of
internal operations and the firm’s relations with
the external environment.
 TPS are also major producers of information for
other types of systems.

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Operational Systems Cont’d

 Information inputs for TPS are normally

transactions and events.
 The processing process for TPS is to sort,
list, merge or update the data based on the
transactions or events.
 Information output from TPS is detailed
reports, lists or summaries.

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Management Level Information Systems

 For management level of an organization, two

types of information systems involved, which
is:
 Management Information System (MIS)
 and Decision Support System (DSS).
 Management Information Systems serves the
management level of the organization,
provides managers with reports and in some
cases with on-line access to organization’s
current performance and historical records.

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Management Level Information Systems

 Management information systems can be

defined as the study of information systems in
business and in management.
 The term Management information systems
also designates a specific category of
information systems serving middle
management.

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Management Level Information Systems

 Most of the systems oriented almost

exclusively to internal, not environmental or
external events.
 MIS primarily serve the functions of planning,
controlling and decision making at the
management level.
 Generally, they are dependant on underlying
TPS for their data.
 MIS summarize and report on the basic
operations of the company.

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Management Level Information Systems

 MIS usually serve managers interested in

weekly, monthly or yearly results – not day-
today activities.
 MIS generally address structured questions
that are known well in advance but the
systems are not flexible and have little
analytical capability.
 Most MIS uses simple routines such as
summaries and comparisons as opposed to
sophisticated mathematical models or
statistical techniques.
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 Management Level Information Systems

 Some of the characteristics of MIS are as

follows:
 MIS support structured decisions at
operational and management control levels.
However, they are useful for planning
purpose of senior management staff.
 MIS are generally reporting and control
oriented. They are designed to report on
existing operations and therefore to help
provide day-to-day control of operations.

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Management Level Information Systems

 MIS rely on existing corporate data and data

flows.
 MIS have little analytical capability.
 MIS generally aid in decision making using
past and present data.
 MIS are relatively inflexible.
 MIS have an internal rather than an external
orientation.

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 Management Level Information Systems
 Decision Support Systems (DSS, information
system at the management level of an
organization that combine data and
sophisticated analytical models or data analysis
tools to support semi-structured and
unstructured decision making) also serve the
management level of the organization.
 DSS helps manager make decisions that are
semi-structured, unique or rapidly changing
and not easily specified in advance

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Management Level Information Systems

 Besides using internal information from TPS

and MIS, they often bring in information from
external sources like current stock prices or
product prices of competitors.
 DSS have more analytical power than other
systems.

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 Management Level Information Systems
 They built explicitly with a variety of models to
analyze data, or they condense large amounts of
data into a form where they can be analyzed by
decision makers.
 DSS are normally designed in a way where the
user can work with them directly, which means
the system explicitly include user-friendly
software.
 DSS are interactive where the user can change
assumptions, ask new questions and include new
data.

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 Management Level Information Systems

 Some of the characteristics of DSS:

 DSS offers users flexibility, adaptability and
quick response.
 DSS operate with little or no assistance from
professional programmers.
 DSS provide support for decisions and
problems whose solutions cannot be specified
in advance.
 DSS use sophisticated data analysis and
modeling tools.

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 Management Level Information Systems
 Information input for MIS are summary
transaction data, high-volume data and
simple models.
 For DSS, the information input are low-
volume data or massive databases optimized
for data analysis, analytic models and data
analysis tools.

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Management Level Information Systems

 Processing for MIS are routine reports, simple

models and low-level analysis, meanwhile for
DSS are interactive, simulations and analysis.
 Information outputs for MIS are summary and
exception reports.
 For DSS, the information outputs are special
reports, decision analysis or responses to
queries.

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Strategic Level Information Systems

 Senior managers use Executive Support System

(ESS) to make decisions.
 ESS serve the strategic level of an organization
and address unstructured decisions and create
a generalized computing and communications
environment rather than providing any fixed
application or specific capability.

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Strategic Level Information Systems
 ESSs are designed to incorporate data about
external events but they also draw summarized
information from MIS and DSS.
 They filter, compress and track critical data,
emphasizing the reduction of time and effort
required to obtain information useful to
executives.
 ESSs employ the most advanced graphics
software and can deliver graphs and data from
many sources immediately to a senior
executive’s office or to a boardroom.

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Strategic Level Information Systems
 Unlike other types of information systems, ESSs
are not designed primarily to solve specific
problems.
 Instead, ESSs provide a generalized
computing and telecommunications capacity
that can be applied to a changing array of
problems.
 While many DSS are designed to be highly
analytical, ESS comes with less analytical
capabilities.
 Since ESSs are designed to be used by senior
managers who often have little, is any, direct
contact or experience with computer-based
information systems, they incorporate easy-to-use
graphic interfaces.
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Functional perspective

 These systems are located in specific

departments.
 They include:
 Sales and Marketing systems
 Manufacturing and production systems
 Finance and accounting systems
 Human resource systems
 Project management information systems

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Relationship of systems to one another
 Diagram

ESS

MIS DSS

TPS

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Exercise

 Discuss the role of Information systems in

organizations.
 Discuss the diagram showing the relationship
of systems to one another.
 What's the solution to all these kinds of
information systems.

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