Introduction to MIS 1

Copyright © 1998 by Jerry Post

INFSY540Information Resources in Management

Lesson 3

Chapter 4

Operations and Transactions

Introduction to MIS 2

Classes of Information Systems

Transaction processing systems Management information systems Decision support systems Expert systems Office automation systems

Introduction to MIS 3

Transaction Processing

Transaction processing systems are information system applications that capture and process data about business transactions.

Includes data maintenance, which provides for custodial updates to stored data.

Business process redesign (BPR) is the study, analysis, and redesign of fundamental business (transaction) processes to reduce costs and/or improve value added to the business.

Introduction to MIS 4

Management Information Systems

A management information system (MIS) is an information system application that provides for management-oriented reporting. These reports are usually generated on a predetermined schedule and appear in a prearranged format.

Introduction to MIS 5

Decision Support SystemsA decision support system (DSS) is an information system application that provides its users with decision-oriented information whenever a decision-making situation arises. When applied to executive managers, these systems are sometimes called executive information systems (EIS).

A data warehouse is a read-only, informational database that is populated with detailed, summary, and exception data and information generated by other transaction and management information systems. The data warehouse can then be accessed by end-users and managers with DSS tools that generate a virtually limitless variety of information in support of unstructured decisions.

Introduction to MIS 6

Expert Systems

An expert system is a programmed decision-making information system that captures and reproduces the knowledge and expertise of an expert problem solver or decision maker and then simulates the “thinking” or “actions” of that expert.

Expert systems are implemented with artificial intelligence technology that captures, stores, and provides access to the reasoning of the experts.

Introduction to MIS 7

Office Automation Systems

Office automation (OA) systems support the wide range of business office activities that provide for improved work flow and communications between workers, regardless of whether or not those workers are located in the same office.

Personal information systems are those designed to meet the needs of a single user. They are designed to boost an individual’s productivity.

Work group information systems are those designed to meet the needs of a work group. They are designed to boost the group’s productivity.

Introduction to MIS 8

Introduction to MIS 9

Decision Levels Operations Tactical Management Strategic Management

Data Capture Point of Sale Process Control Electronic Data Interchange (EDI)

Data Quality The Role of Accounting Human Resource Transactions

Business Operations

TacticalManagement

Strategic

Mgt.

EIS

ESD

SSTr

ansa

ctio

n

Proc

essi

ng

Proc

ess

Con

trol

Introduction to MIS 10

Traditional Transaction Processing

Batch On-line

Real-time Online transaction processing (OLTP)

On-line entry with delayed processing

Introduction to MIS 11

Transaction Processing System Objectives

Process data generated for and about transactions. Maintain a high degree of accuracy and integrity. Produce timely documents & reports Increase labor efficiency Help provide improved service Help build and maintain customer loyalty Achieve competitive advantage

Introduction to MIS 12

Control & Management Issues Business resumption planning Disaster recovery

Backups Hot sites Cold sites

Backups

Introduction to MIS 13

Transaction Processing Audit Does the system meet its business requirements? Are there procedures and controls? Are the procedures & controls properly used?

Introduction to MIS 14

Information in DecisionsDecisions are based on uncertainty and statisticsInformation reduces uncertainty

Type I error: Reject when trueType II error: Accept when falseChanging critical value decreases one error but increases the other.Added information

Tighter distributionReduce both errors

It costs money to get more information

Click image to start/stop video.

Introduction to MIS 15

Decision Levels

Competitive advantageMarket leader

Long term

Improve operationswithout restructuring

Day-to-day actionskeep company running

New productsthat changethe industry

External events,rivals, sales, costs

quality, trends.Strategies

Tactics

Operations

New tools tocut costs or imp-rove efficiency

Schedulingemployees,

placing orders.

Expenses,schedules, salesmodels, forecast

Transactions,accounting,

HRM, inventory

Decision Level Description Example Type of Information

Introduction to MIS 16

Data Capture Point of Sale Process Control Electronic Data Interchange

Central Computer

Sales ReportsPOSCashRegisters

Customers

EDI

Supplier

Bank

Process Control

AdditionalStores Strategy

Tactics

Operations

Warehouse InventoryManagement

CEO Information

Introduction to MIS 17

Electronic Data Interchange: Proprietary

Supplier 1

Customer 1

Queries &Orders

Invoices &confirmationProduction

Database& Accounts

OrderDatabase

& Accounts

Convert data

Convert data

Convert

data

Differ

ent f

ormat

Customer 2

Supplier 2Convert dataDifferent format

Everyone mustsupport multiple

data formats!

Introduction to MIS 18

Electronic Data Interchange : Standards

Supplier

Customer 1

ProductionDatabase

& Accounts

OrderDatabase

& Accounts

Customer 2

Bank/EDI consolidator

Convert t

o

Standard

RouteMessages

Messagesto/fromany customer

Convert t

o

Standard

Convert t

o

Standard

Introduction to MIS 19

EDI Standards

Message

SegmentComposite Data Element

Data Element

Code Lists

UN Edifact http://www.edi-tie.com/edifact/index.htm

US ANSI X12 http://net.gap.net/content.htm

Segments for each area Detail data formats

Introduction to MIS 20

ANSI X12 Segments

Partial List of segments

Detailed specifications for each segment Data needed Format

104 - Air Shipment Information 110 - Air Freight Details and Invoice 125 - Multilevel Railcar Load Details 126 - Vehicle Application Advice 127 - Vehicle Buying Order 128 - Dealer Information 129 - Vehicle Carrier Rate Update 130 - Student Educational Record (Transcript) 131 - Student Educational Record (Transcript) Acknowledgment 135 - Student Loan Application 139 - Student Loan Guarantee Result 140 - Product Registration 141 - Product Service Claim Response 142 - Product Service Claim 143 - Product Service Notification 144 - Student Loan Transfer and Status Verification 146 - Request for Student Educational Record (Transcript) 147 - Response to Request for Student Ed. Record (Transcript) 148 - Report of Injury or Illness

Introduction to MIS 21

EDI On The Internet

The Internet

Advantages Low cost. Anyone can connect. Worldwide reach. Many tools and standards. Designed to be robust,

minimizes impact of network failures.

Drawbacks No service guarantee.

Delays might be unacceptable.

Questionable reliability. Security is challenging.

Introduction to MIS 22

Date & TimeValue

Item

Buyer

Seller

Item_IdDescriptionLocation. . .

Transactions Items

Buyer_IdAddressPhone

Seller_IdAddressPhone

Buyers

Sellers

Transaction Objects Example Attributes

Date & time Price Quantity Item Number Buyer Seller

Example Methods Store Print Verify

Introduction to MIS 23

Data Quality Integrity

Errors in data entry. Missing data. Failure to make updates.

Multitasking/Concurrency Changes by two people at

same time gives bad data. Volume

Cost Errors harder to spot. Transmission costs. Difficulty of searching. System overload.

Summaries Too much detail. Hard to get detail.

Time Report and decision

deadlines. Departments get data at

different times. Sequencing problems.

Introduction to MIS 24

Concurrency and Data Integrity

Customer Accounts

Sanchez 500

Transaction A Transaction B

1) receive 300 payment2) read balance (500)

5) subtract payment6) store new result (200)

Sanchez 200

3) new purchase (350)4) read balance (500)

7) add purchase8) store new result (850)

Sanchez 850

Multitasking and Concurrency Data Integrity Multitasking & concurrency Data volume Data summaries Time

Introduction to MIS 25

Traditional Transaction Processing Applications

Introduction to MIS 26

Accounting Financial data and reports What do things really cost? The accounting cycle Inventory Checks and balances

Double-entry Separation of duties Audit trails

Introduction to MIS 27

Accounting Software General Ledger

Sample chart of accounts Automatic posting Automatic entry of vendors Fiscal years Keep past data books open Post to prior years Allocate department expenses

Accounts Receivable Automatic early discounts Interest on late payments Multiple shipping addresses Sales tax Automatic reminder notices Automatic monthly fees Keep monthly details

Accounts payable Check reconciliation Automatic recurring entries Monitor payment discounts Select bills from screen Pay by item, not just total bill

General Features Printer support Use of preprinted forms Custom reports Custom queries Security controls Technical support costs

Introduction to MIS 28

Accounting

Suppliers

Customers

Management

Shareholders

Banksand

Creditors

Departments& Employees

Sales &Accounts

Receivable

ProduceManagementAccounting

Reports

ProduceShareholder

Reports

Sales & Receivables

Inventory ChangesPurchases &Payables

Loans & Notes

Expenses Equity

ShareholderReports

ManagementReports

ProductInventory

Orders &Accounts Payable

InventoryManagement,& Fixed Asset& Cost Acct.

Payroll &EmployeeBenefits

CashManagement,Investments,

ForeignExchange

Supply &In-processInventory

Governments

TaxFiling &

Planning

Strategic& TacticalPlanning

Inventory Changes

Payables

Capital Acct

Sales Tax

Tax Filings

Tax data

ReceivablesInventory &Assets

Payroll

Planning Reports

PlanningData

Introduction to MIS 29

HRMManagement

Managers

Employees

Customers

Government

ProcessPayrollBenefitsVacation

CompileMerit

Evaluations& SalaryChanges

JobApplicants

ProduceManagement

EmployeeReports

ScreenJobs &

Applications

ProduceGovernment

Reports

Employee Data Files

EmployeeData

Evaluations

Salary

Merit &Salary

Sales Data &Commission

EmployeeData

Merit

Applicant Data

EmployeeSummaries

Job &ApplicantData

EEO Data

GovernmentReports

Management Reports

Introduction to MIS 30

Questions?