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Amity Business School

MBA, Semester 3 Management Of Software Projects Module 2 Teena Bagga

Module II
Types of IS

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Resources and components of Information System Integration and automation of business functions and developing business models. Role and advantages of Transaction Processing System, Management Information System, Expert Systems and Artificial Intelligence, Executive Support Systems and Strategic Information Systems.
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IS Vs IT
INFORMATION TECHNOLOGY Hardware Software Databases are used to build INFORMATION SYSTEMS

Payroll System

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Inventory System

Networks
Other related components

Marketing System

Customer Service System

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Information Systems
Levels of management:

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In order to understand who the users of an IS are and what information they need, one must first understand the levels of management and the types of decisions are made at each level.

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Levels of Management
Lower level management makes decisions that affect day to day operations.

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Programmed decisions that are predetermined by rules and procedures. They lead to a desired result. The information needs of lower-level mgrs. can be met by administrative data processing activities.

Levels of management
Middle-level mgrs. plan working capital, schedule production, formulate budgets, and make short-term forecasts.

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Mid-level managers make tactical decisions that usually involve time periods of up to two years. Many Mid-level mgmt decisions are nonprogrammed decisions. No specific predetermined steps cab be followed to each solution. The information needs of Mid-level mgrs. must be specific.

Levels of management

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Top-level mgrs. provide direction for the company by planning for the next five years +.
Top-level mgrs. make strategic decisions that involve a great deal of uncertainty. Top-level mgt. decisions are non-programmed decisions.

Today Strategic and Management levels are combined. Why?

Categories of IS

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Strategic Level

ESS GDSS

Management Level

Expert Systems DSS MIS

Operational Level

Office Automation System Transaction Processing System

Different Categories of Systems

Three main categories of information systems function at different organizational levels:

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1. Operational - level systems: Support operational managers keep track of the elementary activities and transactions.
2. Management-level systems: Serve the monitoring, controlling, decision-making, and administrative activities Strategic-level systems: Help senior management tackle and address strategic issues.

3.

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Historic Development

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The concept of MIS has changed substantially over the years. In the 50s and 60s, the management saw the potential of computers to process large amounts of data speedily and accurately. The departments that were involved with such activities were known as Electronic Data Processing (EDP) departments. The focus of EDP was Record Keeping e.g. accounting data Payroll data. In the 70s, there was a discernible shift from data to information. The focus was not on data but on the analysis of Organisation data. There was a shift in the philosophy. Such a concept came to be widely known as Management Information System. In the 70s the top management relied on the staff of EDP& MIS to supply the necessary information. 11

Historic Development

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The 80s saw the Personal Computer (PC) revolution. The Personal Computer & the desk-top metaphor changed the picture completely. The biggest pay-off for such direct use was the what-if analysis capability. This led to the emerge of Decision Support Systems (DSS).
The information and decision hungry managers of 80s saw a huge potential in the expert systems as a result of spectacular growth in the Artificial Intelligence area. Combined with DSS philosophy the expert systems could supply superior class of managerial information support, known as Knowledge Based Systems (KBS). The EDP targeted the operational level of management. The MIS/DSS/KBS target the middle management. Attempts were made to provide information to top management as well, known as Executive Information System (EIS).

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Classification of IS
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Information Systems

Operations Support System

Management Support System

Transaction processing systems

Process control systems

Office automation systems

Management information systems

Decision support systems

Executive information systems

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IS Types

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EDP - Focus on Data OAS - Focus on Communication MIS - Focus on Information DSS - Focus on Decision Support EIS - Focus on Decision Support for Top Management ES - Focus on Consultation AI - Focus on self-learning / thinking systems
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Different ISs
Categories of Information systems:
Transaction Processing Systems (TPS) Office Automation Systems (OAS) Management Information Systems (MIS) Decision Support Systems (DSS) Expert Systems (ES) Group Decision Support Systems (GDSS) Executive Support Systems (EES) or (EIS) Strategic Information Systems.

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Transaction Processing Systems (TPS)

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TPS are computerized information systems developed to process large amount of data for routine business transactions Automated TPSs consist of hardware, software, procedures, telecommunications, databases, and people. These components are organized to support the basic TPS processes of data collection, data editing, data correction, data manipulation, data storage, and document production. Example: Inventory or Payroll system

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Payroll TPS

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TPS
Transaction processing can be done in two ways:
batch processing and online transaction processing (OLTP).

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With batch processing systems, business transactions are accumulated over a period of time and prepared for processing as a single unit or batch. With online transaction processing (OLTP), each transaction is processed immediately, without the delay of accumulating transactions into a batch.

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Advantages
Organizations expect TPSs to accomplish a number of specific objectives, including the following:
Process data generated by and about transactions Maintain a high degree of accuracy and integrity Avoid processing fraudulent transactions Produce timely user responses and reports Increase labor efficiency Help improve customer service Help build and maintain customer loyalty Achieve competitive advantage

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Applications

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Traditional Transaction Processing Applications Transaction processing applications permeate an organization. From order entry to purchasing and from payroll to accounting, nearly every fundamental business process relies on transaction processing. Order Processing Systems capture the basic data needed for a customer to place an order. Order entry :Sales configuration, Shipment planning, Shipment execution, Inventory control, Accounts receivable Purchasing Systems: Inventory control, Purchase order processing, Receiving Accounts payable Accounting Systems :Budget, Accounts receivable, Payroll, Asset management, General ledger
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Office Automation Systems (OAS) ABS

Office Automation Systems (OAS):
Includes analysis of information so as to transform data or manipulate it in some way before sharing or formally disseminating it Example: Word processing, spreadsheets, desktop publishing, electronic scheduling, communication through voice email, email and voice conference etc.

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Management Information Systems (MIS)

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MIS supports broader spectrum of organizational tasks than TPS, including decision analysis and decision making The primary purpose of an MIS is to help an organization achieve its goals by providing managers with insight into the regular operations of the organization so that they can control, organize, and plan more effectively and efficiently. An MIS provides managers with information, typically in reports, that supports effective decision making and provides feedback on daily operations. MISs are used by managers at all levels of an organization. The MIS is just one of many sources of managerial information. Top Managers also utilize decision support systems, executive support systems, and expert systems in decision making.
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Management Information Systems

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MIS
The MIS concept is recognized as vital to efficient and effective information systems in organizations for two major reasons:

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It emphasizes the management orientation of information technology in a business. A major goal of computer-based information systems should be the support of management decision making not merely the processing of data generated by business operations. It emphasizes that a systems framework should be used for organizing information systems applications. Business applications of information technology should be viewed as interrelated and integrated computer-based information systems and not as independent data processing jobs.
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Inputs to a MIS

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Data that enters the MIS originates from both internal and external sources. The most significant internal source of data is the organizations various TPSs and ERP systems. Note however, that data warehouses and data marts also provide important input data. External sources of data for the MIS include customers, suppliers, competitors, and stockholders whose data is not already captured by the TPS, as well as extranets, and the Internet.
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Outputs of a MIS

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The output of most management information systems is a collection of reports that are distributed to managers. These include:
Scheduled reports: produced periodically, or on a schedule, such as daily, weekly, or monthly. A key-indicator report summarizes the previous days critical activities and is typically available at the beginning of each workday. Demand reports: developed to give certain information upon request. Exception reports: automatically produced when a situation is unusual or requires management action. Drill-down reports: provide increasingly detailed data about a situation.

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Characteristics of a MIS

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In general, MISs perform the following functions for organizations:

Provide reports with fixed and standard formats Produce hard-copy and soft-copy reports Use internal data stored in the computer system Allow users to develop their own custom reports Require user requests for reports developed by systems personnel

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Financial Management Information Systems

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A financial MIS provides finance information for executives and other people within the organization who need to make better decisions on a daily basis. It is composed of a number of subsystems including:
Profit/loss and cost systems, such as profit and revenue centers Internal and external auditing Use and management of funds
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Marketing Management Information Systems

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Marketing MISs support management in their efforts to develop, promote, and sell new products. Included among the subsystems of a marketing MIS are:
Marketing research Product development Promotion and advertising Product pricing Sales analysis
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Human Resource Management Information Systems

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Human resource MISs are concerned with activities related to employees or future employees, such as:
Human resource planning Personnel selection and recruitment Training and skills inventory Scheduling and job placement Wage and salary administration Outplacement
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Manufacturing Management Information Systems

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A manufacturing MIS supports the production operations within an organization and typically has subsystems comprised of:
Design and engineering (CAD systems) Master production scheduling and inventory control (EOQ, MRP, and JIT methods) Process control (CAM, CIM, and FMS) Quality control and testing
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Decision Support systems (DSS)

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DSS is similar to the traditional MIS because they both depend on a database (TPS) as a source of data Information system to provide managerial end users with ad hoc support of their decision-making process. Support would be tailored to the unique decision-making styles of managers as they confronted specific types of problems in the real world. A DSS operates from a managerial perspective and is often designed to take managerial decision-making styles into consideration. Whereas an MIS helps an organization "do things right," a DSS helps a manager "do the right thing."
Example: Production increase decision by trend analysis
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Decision-Support Systems

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DSS

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Decision support systems (DSSs) are organized collections of people, procedures, software, databases, and devices that are in place to support managerial decision-making and problem-solving activities. DSSs are generally structured for use at all levels within an organization, although upper managers are more likely to find a need for these systems. DSSs are used to bring structure to the unstructured problems that are found within a firm. Quite often, DSSs are used to assist in routine problems since many contain programmable parameters.
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Characteristics of a DSS
Provide rapid access to information Handle large amounts of data from different sources Provide report and presentation flexibility Offer both textual and graphical orientation Support drill-down analysis Perform complex, sophisticated analysis and comparisons using advanced software packages Support optimization, satisficing, and heuristic approaches

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A Comparison of DSS and MIS

Factor DSS MIS

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Problem Type
Users

A DSS can handle unstructured problems that cannot be easily programmed.

A DSS supports individuals, small groups, and the entire organization. In the short run, users typically have more control over a DSS.

An MIS is normally used only with structured problems.

An MIS supports primarily the organization. In the short run, users have less control over an MIS.

Support

A DSS supports all aspects and phases of decision making; it does not replace the decision makerpeople still make the decisions.

This is not true of all MIS systemssome make automatic decisions and replace the decision maker.

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A Comparison of DSS and MIS

Factor DSS MIS

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Emphasis
Approach

A DSS emphasizes actual decisions and An MIS usually emphasizes decision-making styles. information only.
A DSS is a direct support system that provides interactive reports on computer screens. The computer equipment that provides decision support is usually online (directly connected to the computer system) and related to real time (providing immediate results). Computer terminals and display screens are examplesthese devices can provide immediate information and answers to questions. An MIS is typically an indirect support system that uses regularly produced reports. An MIS, using printed reports that might be delivered to managers once per week, cannot provide immediate results.

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A Comparison of DSS and MIS

Factor DSS MIS

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Speed

Because a DSS is flexible and can be implemented by users, it usually takes less time to develop and is better able to respond to user requests.
DSS reports are usually screen oriented, with the ability to generate reports on a printer. DSS users are usually more directly involved in its development. User involvement usually means better systems that provide superior support. For all systems, user involvement is the most important factor for the development of a successful system.

An MISs response time is usually longer.

Output

An MIS, however, typically is oriented toward printed reports and documents. An MIS is frequently several years old and often was developed for people who are no longer performing the work supported by the MIS.

Development

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Expert Systems

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Expert system is a very special class of information system which is capable of generating solutions to problems with the aid of Artificial Intelligence (AI) AI systems attempt to take on the characteristics of human intelligence. The subfields of AI include robotics, vision systems, natural language processing, learning systems, neural networks, and expert systems. An expert system (also called a knowledge based system) uses the knowledge of an expert for solving a particular problem. A KMS is an organized collection of people, procedures, software, databases, and devices to create, store, share, and use the organizations knowledge and experience. Virtual reality attempts to place the user into an artificial, threedimensional world that is completely generated by a computer. Expert systems can serve as consultants to users by providing expert advice in limited subject areas. Example: News Categorization software

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Group Decision Support Systems (GDSS)

Group Decision Support Systems
Another type of decision support system supports groups rather than managers. GDSS are intended to bring a group together to solve a problem with the help of various support such as polling, questionnaires, brainstorming etc. a.k.a. Computer Supported Collaborative Work Systems in a more general term CSCWS may include software support called groupware for team collaboration via network computers

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Example: video conferencing and web survey system

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Executive Support Systems (ESS)

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It helps executives to make decisions on strategic level These information systems attempt to give top executives an easy way to get the critical information they want, when they want it, tailored to the formats they prefer. It may provide graphical representation and communication support at board meeting required to make strategic decision Example: New product launching decision
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Model of a Typical
Executive Support System

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ESS

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Interrelationships Among Information systems

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Interrelationships Among Information Systems

In contemporary digital firms, different types of systems are closely linked to one another. This is the ideal.

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In traditional firms these systems tend to be isolated from one another, and information does not flow seamlessly from one end of the organization to the other.

Efficiency and business value tend to suffer greatly in these traditional firms.

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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 In reality, most businesses systems only loosely integrated
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Integrating New Technologies

New technologies are being integrated into traditional systems

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E-commerce uses the Web to perform business activities Enterprise Resource Planning (ERP) has the goal of integrating many different information systems within the corporation Wireless and handheld devices, including mobile commerce (m-commerce) Open source software

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E-Commerce Application and Web Systems

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Many businesses has found The Internet as their most favored way to pursue business growth because of the following advantages:
Increase awareness of the availability of the service, product, industry, person, or group 24-hour access for users Standardizing the design of interface Creating a global system rather than remain local
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Enterprise Resource Planning (ERP) Systems

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Many organizations predicts potential benefits from the integration of many information systems existing on different management levels. ERP systems are designed to perform this integration Example: SAP, PeopleSoft

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Advantages of ERP

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The primary benefits of implementing ERP include:

Improved access to data for operational decision making Elimination of costly, inflexible legacy systems Improvement of work processes Upgraded technology infrastructure

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Disadvantages of ERP Systems

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Although ERP systems offer many strategic advantages by streamlining a companys transaction processing system, there are some disadvantages:
Expense and time in implementation Difficulty implementing change Difficulty integrating with other systems Risks in using one vendor Risk of implementation failure
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Types of IS

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Information Systems perform important operational and managerial support roles in businesses and other organizations. Therefore, several types of information systems can be classified conceptually as either:
Operations Support Systems Management Support Systems

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OSS

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Information systems are needed to process data generated by and used in business operations. Such operations support systems (OSS) produce a variety of information products for internal and external use. Do not emphasize producing the specific information products that can best be used by managers. Further processing by management information systems is usually required. The role of a business firms operations support systems is to:
Effectively process business transactions Control industrial processes Support enterprise communications and collaboration Update corporate databases

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MSS

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Focus on providing information and support for effective decision making by managers. Support the decision making needs of
strategic (top) management, tactical (middle) management, and operating (supervisory) management.

Three major types of management support systems include:

Management Information Systems (MIS) Decision Support Systems (DSS) Executive Information Systems (EIS)
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MSS

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