Management

Information Systems

Types of the Decision

and Information
Systems
 Business Processes and
Information Systems
• Information technology enhances
business processes in two main ways:

• Increasing efficiency of existing processes

• Automating steps that were manual

• Enabling entirely new processes that are

capable of transforming the businesses
• Change flow of information
• Replace sequential steps with parallel steps
• Eliminate delays in decision making
 Business Processes and Information Systems

The Order Fulfillment Process

Fulfilling a customer order involves a complex set of steps that requires the
close coordination of the sales, accounting, and manufacturing functions.
 Management Information Systems

Decision Making and Information Systems

⚫ Business value of improved decision making

◦ Improving hundreds of thousands of “small” decisions
adds up to large annual value for the business
⚫ Types of decisions:
◦ Unstructured: Decision maker must provide judgment,
evaluation, and insight to solve problem
◦ Structured: Repetitive and routine; involve definite
procedure for handling so they do not have to be
treated each time as new
◦ Semistructured: Only part of problem has clear-cut
answer provided by accepted procedure

4 © Pearson Education 2012

 Management Information Systems
INFORMATION REQUIREMENTS OF KEY DECISION-MAKING GROUPS IN A FIRM

Decision Making and Information Systems

FIGURE
Senior managers, middle managers, operational managers, and employees have different
types of decisions and information requirements.

5 © Pearson Education 2012

 Types of Business
Information Systems
⚫ Systems from a constituency perspective
◦ Transaction processing systems: supporting
operational level employees
◦ Management information systems and
decision-support systems: supporting managers
◦ Executive support systems: supporting
executives
 Types of Business
Information Systems
⚫ Transaction processing systems
◦ Perform and record daily routine transactions
necessary to conduct business
◦ Allow managers to monitor status of operations and
relations with external environment
◦ Serve operational levels
◦ Serve predefined, structured goals and decision
making
◦ E.g. sales order entry, payroll, shipping
 Types of Information Systems

A Payroll TPS
A TPS for payroll
processing captures
employee payment
transaction data
(such as a time
card). System
outputs include
online and
hard-copy reports
for management and
employee
paychecks.

10 © Pearson Education 2012

Transaction processing systems

⚫ Real Time Transaction Processing

◦ Reservation System
⚫ Batch Processing
◦ Clearing of Presented Cheques, Generation of
Bills
 Types of Business
Information Systems
⚫ Management information systems
◦ Serve middle management
◦ Provide reports on firm’s current performance,
based on data from TPS
◦ Provide answers to routine questions with
predefined procedure for answering them
◦ Typically have little analytic capability
 Types of Business
Information Systems
How Management Information Systems Obtain their Data from the
Organization’s TPS
 Types of Business
Information Systems
Sample MIS Report
Sample MIS Report
 Types of Business
Information Systems
⚫ Decision support systems
◦ Serve middle management
◦ Support non-routine decision making
◦ Focus on problems that are unique and rapidly
changing
● E.g. What is impact on production schedule if December
sales doubled?
◦ Often use external information as well from TPS
and MIS
◦ DSS are designed so that users can work with
them directly
◦ Include user friendly software
 Types of Business
Information Systems
 Management Information Systems

⚫ Decision support systems

◦Use mathematical or analytical models
◦Allow varied types of analysis
●“What-if” analysis
●Sensitivity analysis
●Multidimensional analysis / OLAP
◦E. g. pivot tables

22 © Pearson Education 2012

A PIVOT TABLE THAT
EXAMINES
CUSTOMER
REGIONAL
DISTRIBUTION AND
ADVERTISING
SOURCE

In this pivot table, we

are able to examine
where an online training
company’s customers
come from
in terms of region and
advertising source.

FIGURE 12-6

23 © Pearson Education 2012

 Types of Business
Information Systems
⚫ Executive support systems
◦ Support senior management
◦ Address non-routine decisions requiring judgment,
evaluation, and insight
◦ Incorporate data about external events (e.g. new
tax laws or competitors) as well as summarized
information from internal MIS and DSS
◦ Filter, Compress, and track critical data, displaying
the data of greatest importance to senior manager
◦ E.g. ESS that provides minute-to-minute view of
firm’s financial performance as measured by
working capital, accounts receivable, accounts
payable, cash flow, and inventory
 Types of Business
Information Systems
⚫ Executive support systems
◦ Enables users to extract summary data and solve
complex problem\
◦ Provides rapid and direct access to timely information
and management report
◦ Capable of both accessing both internal and external
data
◦ Provides extensive online analysis like trend analysis,
scenario analysis
Digital Dashboard
 Types of Business
Information Systems
⚫ Relationship of systems to one another
◦ TPS: Major source of data for other systems
◦ ESS: Recipient of data from lower-level systems
◦ Data may be exchanged between systems
 Types of Business
Information Systems
Interrelationships Among Systems
 Management Information Systems
Expert system

⚫ An Expert System (ES) is a knowledge-based

information system that uses its knowledge about a
specific, complex application area to act as an
expert consultant to end users
⚫ The components of an ES include:
◦ Knowledge Base
◦ Inference Engine
◦ User Interface.
 The Expert System
Expert
Advice User Inference
Interface Engine Knowledge
Programs Program Base

User Workstation

Expert System Development

Knowledge
Engineering
Knowledge
Acquisition
Program
Components of Expert Systems
Expert and/or
Workstation Knowledge Engineer
An Expert System (ES) is a knowledge-based information
system that uses its knowledge about a specific, complex
application area to act as an expert consultant to end users.
The components of an ES include:
Knowledge Base. A knowledge base contains knowledge
needed to implement the task. There are two basic types of
knowledge:
Factual knowledge. Facts, or descriptive information, about a
specific subject area.
Heuristics. A rule of thumb for applying facts and/or making
inferences, usually expressed as rules.
Inference Engine. An inference engine provides the ES with its
reasoning capabilities. The inference engine processes the
knowledge related to a specific problem. It then makes
associations and inferences resulting in recommended courses
of action.
User Interface. This is the means for user interactions.
To create an expert system a knowledge engineer
acquires the task knowledge from the human expert
using knowledge acquisition tools.

Using an expert system shell, which contains the

user interface and inference engine software modules,
the KE then encodes the knowledge into the
knowledge base.

A iterative approach is used to test and refine the

expert system's knowledge base until it is deemed
complete
 Decision Management

Diagnostic/Troubleshooting

Maintenance/Scheduling

Design/Configuration
Major
Application
Selection/Classification
Categories
of Expert
Expert
Systems System Applications
Process Monitoring/Control
Expert Systems can be used to accomplish many business tasks:
•Decision Management.
• This includes systems that appraise situations or consider alternatives and
make recommendations based on criteria supplied during the discovery
process.
•Examples include loan portfolio analysis, employee evaluation, insurance
underwriting, demographic forecasts.
•Diagnostic/Troubleshooting.
• This is the use of systems that infer underlying causes from reported
symptoms and history.
• Examples include, help desk operations, software debugging, medical
diagnosis.
•Maintenance/Scheduling.
• This includes systems that prioritize and schedule limited or time-critical
resources.
•Examples include maintenance scheduling, production scheduling, education
scheduling, project management.
•Design/Configuration.
•This is the use of systems that help configure equipment components, given
existing constraints that must be taken into account.
•Examples include computer option installation, manufacturability studies,
communications networks, optimum assembly plan.
•Selection/Classification.
•These are systems that help users choose products or processes from among
large or complex sets of alternatives.
•Examples include material selection, delinquent account identification,
information classification, suspect identification.
•Process Monitoring/Control.
• This includes systems that monitor and control procedures or processes.
•Examples include machine control (including robotics), inventory control,
production monitoring, chemical testing.
⚫ Group Decision Support Systems
(GDSS)
◦ Interactive system to facilitate solution
of structured problems by group
◦ Specialized hardware and software;
typically used in conference rooms
● Overhead projectors, display screens
● Software to collect, rank, edit participant
ideas and responses
● May require facilitator and staff
◦ Promotes collaborative atmosphere,
guaranteeing anonymity
◦ Uses structured methods to organize
and evaluate ideas
Group Decision Support
Systems (GDSS)
Group Decision Support
Systems (GDSS)
What is Office Automation
System?
⚫ The movements towards automation
in the new hardware and software
technologies like word processors,
spreadsheets, electronic mail, and so
on, which make office workers more
productive.
⚫ These combinations of technologies
that have a dramatic impact on
day-to-day office operations are called
office automation(information)
systems (OAS).
What is Office Automation
System?
⚫ Office Automation (OA) is the use of
technology to help people do their jobs
better and faster.
⚫ "The use of computers, micro electronics,
and telecommunications to help us
produce, store, obtain and send
information in the form of pictures, words
or numbers, more reliably, quickly and
economically."
Office Automation System
 Types of Office Automation
Systems:

⚫Three major types/categories of office

applications are:
1. Document management systems
2. Message handling systems
3. Teleconferencing systems
 Document management systems
⚫ Word Processing:
⚫ Desktop Publishing:
◦ Desktop publishing (DTP) enables you to
produce well-designed pages that combine
charts and graphics with text, it lets you to do
all this at your desk, without a ruler, pen or
paste.
◦ Corel Draw, Microsoft Publisher, PowerPoint,
Photoshop
⚫ Image Processing System:
◦ Optical Character Recognition (OCR), scanners
are used to convert paper or microfilm records
to a digital format for storage in secondary
storage devices
Message Handling Systems

⚫ Telex:
⚫ Fax:
⚫ Teletext
⚫ Voice Mail:
Teleconferencing Systems
a. Audio conferencing
b. Video conferencing
c. Computer conferencing
d. Telecommuting
⚫ Fulbert Timber Merchants in Brixton, UK features a large selection of
building supplies, including timber, fencing and decking, mouldings,
hardwood flooring, sheet materials, windows, doors, ironmongery,and
other materials. The prices of building materials are constantly changing.
When a customer inquires about the price on fixtures, fittings, hangings,
and other items, sales representatives consult a manual price sheet and
then call the supplier for the most recent price. The supplier in turn uses a
manual price sheet, which has been updated each day. Often, the supplier
must call back Fulbert’s sales reps because the company does not have
the newest pricing information immediately on hand.

⚫ Assess the business impact of this situation, describe how this process
could be improved with information technology, and identify the decisions
that would have to be made to implement a solution.
⚫ Quincaillerie is a small family hardware store in Paris, France. The
owners must use every square foot of store space as profitably as
possible. They have never kept detailed inventory or sales
records. As soon as a shipment of goods arrives, the items are
immediately placed on store shelves. Invoices from suppliers are
only kept for tax purposes. When an item is sold, the item
number and price are rung up at the cash register. The owners
use their own judgment in identifying items that need to be
reordered.

⚫ What is the business impact of this situation? How could

information systems help the owners run their business?
⚫ What data should these systems capture? What decisions could
the systems improve?