prepared by natalie rose 1 information system lecture 3

Prepared by Natalie Rose 1

INFORMATION SYSTEM

Lecture 3


What is an Information System?

An information system (IS) is an arrangement of people, data processes, and information technology that interact to collect, process, store, and provide as output the information needed to support an organization.


Types of Information Systems

Transaction Processing Systems Management Information Systems Decision Support Systems Executive Support Systems


Transaction Processing Systems

A transaction processing system (TPS) is an organized collection of people, procedures, software, databases, and devices used to record completed business transactions.

Process business exchanges Maintain records about the exchanges Handle routine, yet critical, tasks Perform simple calculations


Payroll Transaction ProcessingSystem


Management Information Systems (MIS)

Routine information for routine decisions Prepare reports for routine information Use transaction data as main input Databases integrate MIS in different

functional areas


MIS Outputs Detail Reports. Detail reports provide

managers with information useful in overseeing the day-to-day operations of a department or working group.

Summary Reports. Summary reports or statistical reports show totals, averages, maximums, minimums, or other statistical data aggregated over time, personnel, products, or some other quantity.

Exception Reports. An exception report alerts

managers to potential problems by showing only data that fall outside an accepted or expected range.


Decision Support Systems (DSS)

DSS- A decision support system is an organized collection of people, procedures, software, databases, and devices used to support problem-specific decision making.

Interactive support for non-routine decisions or problems

End-users are more involved in creating a DSS than an MIS


Executive Information System

An executive information system is software that supports executive activities, often specifically designed for a particular executive, reflecting his or her style and information requirements. Most EISs include mainly hard information; however, increasingly they include soft information.


Technology Toolbox: GIS

MapPoint File

Microsoft MapPoint

Data Mapping Wizard

Shaded Area: Demographics, Population 2002 by County

Multiple Symbol

Households with Internet Access

Three levels, lowest uses Blank8x8.bmp


Types of information system by their: Relevance to

different organizational levels/users

USERS

FUNCTIONS SERVED

ORGANIZATIONAL LEVEL

Operational Managers

Senior Managers

Middle Managers

Knowledge and Data Workers

Strategic Level

Sales and Marketing

Accounting

Management Level

Knowledge Level

Operational Level

FinanceManufacturing Human Resources

INFORMATION SYSTEM


Operational Level System

Support operational managers Information systems aim to:

Answer routine questions Track flow of transactions Keep track of elementary activities (e.g. sales,

receipts, cash deposits)


Knowledge Level System

Support knowledge and data workers Information systems aim to:

Integrate new knowledge into business Help control flow of paperwork


Management Level System

Support middle managers Information systems aim to assist in:

Monitoring, controlling, decision making and administration

Producing periodic reports Some non-routine decision making


Strategic Level System

Support senior managers Information systems aim to assist:

In their understanding of strategic issues/long- term trends

To utilise internal and external information


Types of information system by their: Relevance to

different business functions 5-year sales trend forecasting

5-year operating plan

5-year budget forecasting

Profit planning

Personal planning

Strategic-Level Systems

Sales Management

Sales Region analysis

Management-Level Systems

Inventory control

Production scheduling

Annual budgeting

Cost analysis

Capital investment analysis

Pricing/profitability analysis

Relocation analysis

Contract cost analysis

Knowledge-Level Systems

Engineering Workstations

Word processing

Graphics workstations

Document Imaging

Managerial workstations

Electronic calendars

Order tracking

Order processing

Operational-Level Systems

Machine control

Plant scheduling

Machine movement control

Securities trading

Cash management

Payroll

Accounts payable

Accounts receivable

Compensation

Training & development

Employee record keeping

Transaction Processing Systems (TPS)

Knowledge Work System (KWS)

Office Systems


Decision-Support Systems (DSS)

Executive Support Systems (ESS)

Sales and Marketing

AccountingFinanceManufacturing Human Resources


Specific types of Information SystemTransaction Processing Systems (TPS)

Aid operational managers Most common form of information system Handle routine information manipulation –sorting,

listing, merging etc Many online so users can interact with database

simultaneously Provide information to other types of systems Critical Example –airline computerised reservation systems


Specific types of Information SystemManagement Information Systems (MIS)

Aid middle managers Provide focused view of information

flow Regular reports on internal events –

weekly, monthly, yearly Planning, controlling, decision making

Depend on TPS Not flexible or analytical –answer

predefined questions


Specific types of Information SystemDecision Support Systems (DSS)

Primarily aid middle managers Unique, rapidly changing decisions, not

predefined Analytical Use internal information from TPS and MIS Use external information –stock prices,

competitor prices Have variety of models to analyse data, and

user- friendly software Flexible


Specific types of Information SystemDecision Support Systems (DSS)

Examples: Airlines –passenger demand forecasting, flight scheduling

Insurance companies –customer buying patterns and fraud detection

Customer relationship management – getting data from website log


Specific types of Information SystemExecutive Support Systems (ESS)

Historically, executives have received numerous reports, 100’s of pages long

Information overload

Need to detect warning signals indicating threats or opportunities

Senior managers (executives) Non-routine decisions requiring judgment, evaluation, insight


Specific types of Information SystemExecutive Support Systems (ESS)

General, not fixed or specific Use MIS, DSS, and external databases

Filter, compress, track Use advanced graphics software, little

training required Allow drilling down to detailed data

underneath


Considering information systems in terms of business functions

Sales and Marketing

Sales Contact customers Sell products and services Take orders Follow up

Marketing Identify customers Determine needs/wants Plan and develop products and services to meet

needs Advertise and promote so customers aware of

products/services


Sales and MarketingRequirements for an Information System

Order processing Market analysis (from Market

Research, demographics etc) Sales analysis Pricing analysis Sales forecasting



Manufacturing/Production Production of products/services Planning, development, maintenance

of production facilities Establishing production goals

Acquiring & storing materials, ensuring their availability

Scheduling Quality control


Manufacturing/Production Requirements for an Information System

Inventory Machine control Computer aided design (CAD) for new products Production planning Facilities (new plant) location



Finance and Accounting Finance

Managing firm’s financial assets –cash, stocks, bonds etc

Maximising return on assets Acquiring new financial assets

Accounting- Managing/maintaining financial records –

receipts, payroll, etc Accounting for flow of funds


Finance and Accounting Requirements for an Information System

Tracking flow of funds in the firm Designing portfolio of investments Budget preparation, control of

financial resources Profit planning and long term

investment goals



Human Resources Attract, develop and maintain

workforce Identify potential employees Maintain complete records on existing

employees Develop training and development

programs Evaluate employee performance Enroll employees in benefit plans

prepared by natalie rose 1 information system lecture 3

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