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Management information systemFrom Wikipedia, the free encyclopedia

(Redirected from Management Information System)

This article is written like a personal reflection or essay and may require cleanup. Please help improveit by rewriting it in an encyclopedic style. (January 2011)

A management information system (MIS) is a system that provides information needed to manage

organizations effectively.[1] Management information systems involve three primary resources: technology,

information, and people. It's important to recognize that while all three resources are key components when

studying management information systems, the most important resource is people[according to whom?]

. Management

information systems are regarded as a subset of the overall internal controls procedures in a business, which

cover the application of people, documents, technologies, and procedures used by management

accountants to solve business problems such as costing a product, service or a business-wide strategy.

Management information systems are distinct from regular information systems in that they are used to analyze

other information systems applied in operational activities in the organization. [2] Academically, the term is

commonly used to refer to the group of information management methods tied to the automation or support of

human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems.[2]

Contents

[hide]

1 Overview

2 Types of Information Management Systems

3 Advantages of Information Management Systems

4 Enterprise Applications

5 See also

6 References

7 External links

[edit]Overview

Initially in businesses and other organizations, internal reporting was made manually and only periodically, as a

by-product of the accounting system and with some additional statistic(s), and gave limited and delayed

information on management performance. Previously, data had to be separated individually by the people as

per the requirement and necessity of the organization. Later, data was distinguished from information, and so

instead of the collection of mass of data, important and to the point data that is needed by the organization was

stored.

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Earlier, business computers were mostly used for relatively simple operations such as tracking sales or payroll

data, often without much detail. Over time, these applications became more complex and began to store

increasing amount of information while also interlinking with previously separate information systems. As more

and more data was stored and linked man began to analyze this information into further detail, creating entire

management reports from the raw, stored data. The term "MIS" arose to describe these kinds of applications,

which were developed to provide managers with information about sales, inventories, and other data that would

help in managing the enterprise. Today, the term is used broadly in a number of contexts and includes (but is

not limited to): decision support systems, resource and people management applications, Enterprise Resource

Planning (ERP), Enterprise Performance Management (EPM), Supply Chain Management (SCM), Customer

Relationship Management (CRM), project management and database retrieval applications.

"The five eras are general-purpose mainframe and minicomputer computing, personal computers, client/server

networks, enterprise computing, and cloud computing."(Management Information Systems: Managing the

Digital Firm, 11th Edition. Prentice Hall/CourseSmart, 12/30/2008. p. 164). The first era was ruled by IBM and

their mainframe computers, these computers would often take up whole rooms and require teams to run them,

IBM supplied the hardware and the software. As technology advanced these computers were able to handle

greater capacities and therefore reduce their cost. By 1965 microprocessors began to take the market away

from mainframe computers. This technology allowed small desktop computers to do the same work that it

previously would have taken a room full of computers. This also decentralized computing power from large data

centers to smaller offices. In the late 1970s minicomputer technology gave way to personal computers, now for

a relatively low cost anyone could have a computer in their own home. This allowed for businesses to give their

employees access to computing power that 10 years before would have cost tens of thousands of dollars. This

proliferation of computers also helped create a need to connect these computers together on a network giving

birth to the internet. As technology has increased and cheapened the need to share information across a large

company had also grown, this gave way to the client/server era. With this era computers on a common network

were able to access shared information on a server. This allows for large amounts of data to be accessed by

thousands and even millions of people simultaneously. The latest evolution of Information Systems is cloud

computing a recent development, cloud computing lets users access data stored on a server, where they can

not only see the data but also edit, save, download or upload. This along with high speed networks has lead to

a much more mobile view of MIS. In cloud computing the manager does not have to be at a desk to see what

their employees are working on but instead can be on a laptop, tablet pc, or even smartphone.

An 'MIS' is a planned system of the collection, processing, storage and dissemination of data in the form of

information needed to carry out the management functions. In a way, it is a documented report of the activities

that were planned and executed. According to Philip Kotler " A marketing information system consists of people,

equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate

information to marketing decision makers."[3]

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The terms MIS and information system are often confused. Information systems include systems that are not

intended for decision making. The area of study called MIS is sometimes referred to, in a restrictive sense,

as information technology management. That area of study should not be confused with computer science. IT

service management is a practitioner-focused discipline. MIS has also some differences with ERP which

incorporates elements that are not necessarily focused on decision support.

The successful MIS must support a business's Five Year Plan or its equivalent. It must provide for reports

based upon performance analysis in areas critical to that plan, with feedback loops that allow for titivation of

every aspect of the business, including recruitment and training regimens. In effect, MIS must not only indicate

how things are going, but why they are not going as well as planned where that is the case. These reports

would include performance relative to cost centers and projects that drive profit or loss, and do so in such a

way that identifies individual accountability, and in virtual real-time.

Anytime a business is looking at implementing a new business system it is very important to use a system

development method such as System Development Life Cycle. The life cycle includes Analysis, Requirements,

Design, Development, Testing and Implementation.

[edit]Types of Information Management Systems

There are many types of information management systems in the market that provide a wide range of benefits

for companies.

T ransaction processing systems ( TP S) collect and record the routine transactions of an organization.

Examples of such systems are sales order entry, hotel reservations, payroll, employee record keeping, and

shipping.

M anagement information systems ( MIS) produce fixed, regularly scheduled reports based on data

extracted and summarized from the firm¶s underlying transaction processing systems (TPS) to middle and

operational level managers to provide answers to structured and semi-structured decision problems.

Decision-support systems ( DSS) are computer program applications used by middle management to

compile information from a wide range of sources to solve problems and make decisions.

Ex ecutive support systems ( E SS) is a reporting tool that provides quick access to summarized reports

coming from all company levels and departments such as accounting, human resources and operations.

[edit] Advantages of Information Management Systems

The following are some of the benefits that can be attained for different types of information management

systems.[4] (1)The company is able to highlight their strength and weaknesses due to the presence of revenue

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reports, employee performance records etc. The identification of these aspects can help the company to

improve their business processes and operations. (2) The availability of the customer data and feedback can

help the company to align their business processes according to the needs of the customers. The effective

management of customer data can help the company to perform direct marketing and promotion activities.

(3)Information is considered to be an important asset for any company in the modern competitive world. The

consumer buying trends and behaviors can be predicted by the analysis of sales and revenue reports from

each operating region of the company.

[edit]Enterprise Applications

E nterprise systems, also known as enterprise resource planning ( ER P ) systems provide a user-interface

for the entire organization to manage business processes. This may include project management,

accounting, personnel, manufacturing, and distribution.

S upply Chain M anagement ( S C M) systems enable more efficient management of the supply chain by

integrating the links in a supply chain. This may include suppliers, manufacturer, wholesalers, retailers and

final customers.

Customer R elationship M anagement (C R M) systems help businesses manage relationships with potential

and current customers and business partners across marketing, sales, and service.

K nowledge M anagement S ystem ( K MS) helps organizations facilitate the collection, recording,

organization, retrieval, and dissemination of knowledge. This may include documents, accounting records,and unrecorded procedures, practices and skills.

[edi

Decision support systemFrom Wikipedia, the free encyclopedia

(Redirected from Decision Support System)

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Example of a Decision Support System for John Day Reservoir .

A decision support system (DSS) is a computer-based information system that supports

business or organizational decision-making activities. DSSs serve the management,

operations, and planning levels of an organization and help to make decisions, which may

be rapidly changing and not easily specified in advance.

DSSs include knowledge-based systems. A properly designed DSS is an interactive

software-based system intended to help decision makers compile useful information from a

combination of raw data, documents, personal knowledge, or business models to identify

and solve problems and make decisions.

Typical information that a decision support application might gather and present are:

inventories of information assets (including legacy and relational data sources,

cubes, data warehouses, and data marts),

comparative sales figures between one period and the next,

projected revenue figures based on product sales assumptions.

Contents

[hide]

1 History

2 Taxonomies

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3 Components

o 3.1 Development Frameworks

4 Classification

5

Applications

6 Benefits

7 See also

8 References

9 Further reading

[edit]History

According to Keen (1978),[1]

the concept of decision support has evolved from two main

areas of research: The theoretical studies of organizational decision making done at

the Carnegie Institute of Technology during the late 1950s and early 1960s, and the

technical work on interactive computer systems, mainly carried out at the Massachusetts

Institute of Technology in the 1960s. It is considered that the concept of DSS became an

area of research of its own in the middle of the 1970s, before gaining in intensity during the

1980s. In the middle and late 1980s, executive information systems (EIS), group decision

support systems (GDSS), and organizational decision support systems (ODSS) evolved

from the single user and model-oriented DSS.

According to Sol (1987)[2]

the definition and scope of DSS has been migrating over the

years. In the 1970s DSS was described as "a computer based system to aid decision

making". Late 1970s the DSS movement started focusing on "interactive computer-based

systems which help decision-makers utilize data bases and models to solve ill-structured

problems". In the 1980s DSS should provide systems "using suitable and available

technology to improve effectiveness of managerial and professional activities", and end

1980s DSS faced a new challenge towards the design of intelligent workstations.[2]

In 1987 Texas Instruments completed development of the Gate Assignment Display System

(G ADS) for United Airlines. This decision support system is credited with significantly

reducing travel delays by aiding the management of ground operations at various airports,

beginning with O'Hare International Airport in Chicago and Stapleton Airport

in Denver Colorado.[3][4]

Beginning in about 1990, data warehousing and on-line analytical processing (OL AP) began

broadening the realm of DSS. As the turn of the millennium approached, new Web-based

analytical applications were introduced.

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The advent of better and better reporting technologies has seen DSS start to emerge as a

critical component of management design. Examples of this can be seen in the intense

amount of discussion of DSS in the education environment.

DSS also have a weak connection to the user interface paradigm of hypertext. Both

the University of Vermont PROMIS system (for medical decision making) and the Carnegie

Mellon ZOG/KMSsystem (for military and business decision making) were decision support

systems which also were major breakthroughs in user interface research. Furthermore,

although hypertext researchers have generally been concerned with information overload,

certain researchers, notably Douglas Engelbart, have been focused on decision makers in

particular

[edit]Taxonomies

As with the definition, there is no universally-accepted taxonomy of DSS either. Differentauthors propose different classifications. Using the relationship with the user as the

criterion, Haettenschwiler [5]

differentiates passive, active, and cooperative DSS . A passive

DSS is a system that aids the process of decision making, but that cannot bring out explicit

decision suggestions or solutions. An active DSS can bring out such decision suggestions

or solutions. A cooperative DSS allows the decision maker (or its advisor) to modify,

complete, or refine the decision suggestions provided by the system, before sending them

back to the system for validation. The system again improves, completes, and refines the

suggestions of the decision maker and sends them back to him for validation. The whole

process then starts again, until a consolidated solution is generated.

Another taxonomy for DSS has been created by Daniel Power. Using the mode of

assistance as the criterion, Power differentiates communication-driven DSS , data-driven

DSS , document-driven DSS ,k nowledge-driven DSS , and model-driven DSS .[6]

A communication-driven DSS supports more than one person working on a shared

task; examples include integrated tools like Microsoft's NetMeeting or Groove[7]

A data-driven DSS or data-oriented DSS emphasizes access to and manipulation of

a time series of internal company data and, sometimes, external data.

A document-driven DSS manages, retrieves, and manipulates unstructured information

in a variety of electronic formats.

A knowledge-driven DSS provides specialized problem-solving expertise stored as

facts, rules, procedures, or in similar structures.[6]

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A model-driven DSS emphasizes access to and manipulation of a statistical, financial,

optimization, or simulation model. Model-driven DSS use data and parameters provided

by users to assist decision makers in analyzing a situation; they are not necessarily

data-intensive. Dicodess is an example of an open source model-driven DSS

generator.[8]

Using scope as the criterion, Power [9]

differentiates enterprise-wide DSS and desk top DSS .

An enterprise-wide DSS is linked to large data warehouses and serves many managers in

the company. Adesk top, single-user DSS is a small system that runs on an individual

manager's PC.

[edit]Components

Design of a Drought Mitigation Decision Support System.

Three fundamental components of a DSS architecture are:[5][6][10][11][12]

1. the database (or knowledge base),

2. the model (i.e., the decision context and user criteria), and

3. the user interface.

The users themselves are also important components of the architecture.[5][12]

[edit]Development Framewor ks

DSS systems are not entirely different from other systems and require a structured

approach. Such a framework includes people, technology, and the development

approach.[10]

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DSS technology levels (of hardware and software) may include:

1. The actual application that will be used by the user. This is the part of the application

that allows the decision maker to make decisions in a particular problem area. The

user can act upon that particular problem.2. Generator contains Hardware/software environment that allows people to easily

develop specific DSS applications. This level makes use of case tools or systems

such as Crystal, AIMMS, and iThink.

3. Tools include lower level hardware/software. DSS generators including special

languages, function libraries and linking modules

An iterative developmental approach allows for the DSS to be changed and redesigned at

various intervals. Once the system is designed, it will need to be tested and revised for the

desired outcome.

[edit]Classification

There are several ways to classify DSS applications. Not every DSS fits neatly into one of

the categories, but may be a mix of two or more architectures.

Holsapple and Whinston[13]

classify DSS into the following six frameworks: Text-oriented

DSS, Database-oriented DSS, Spreadsheet-oriented DSS, Solver-oriented DSS, Rule-

oriented DSS, and Compound DSS.

A compound DSS is the most popular classification for a DSS. It is a hybrid system thatincludes two or more of the five basic structures described by Holsapple and Whinston.

[13]

The support given by DSS can be separated into three distinct, interrelated categories[14]

:

Personal Support, Group Support, and Organizational Support.

DSS components may be classified as:

1. Inputs: Factors, numbers, and characteristics to analyze

2. User Knowledge and Expertise: Inputs requiring manual analysis by the user

3. Outputs: Transformed data from which DSS "decisions" are generated

4. Decisions: Results generated by the DSS based on user criteria

DSSs which perform selected cognitive decision-making functions and are based

on artificial intelligence or intelligent agents technologies are called Intelligent Decision

Support Systems(IDSS).[citation needed ]

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The nascent field of Decision engineering treats the decision itself as an engineered object,

and applies engineering principles such as Design and Quality assurance to an explicit

representation of the elements that make up a decision.

[edit] Applications

As mentioned above, there are theoretical possibilities of building such systems in any

knowledge domain.

One example is the clinical decision support system for medical diagnosis. Other examples

include a bank loan officer verifying the credit of a loan applicant or an engineering firm that

has bids on several projects and wants to know if they can be competitive with their costs.

DSS is extensively used in business and management. Executive dashboard and other

business performance software allow faster decision making, identification of negative

trends, and better allocation of business resources.

A growing area of DSS application, concepts, principles, and techniques is in agricultural

production, marketing for sustainable development. For example, the DSS AT4

package,[15][16]

developed through financial support of US AID during the 80's and 90's, has

allowed rapid assessment of several agricultural production systems around the world to

facilitate decision-making at the farm and policy levels. There are, however, many

constraints to the successful adoption on DSS in agriculture.[17]

DSS are also prevalent in forest management where the long planning time frame demands

specific requirements. All aspects of Forest management, from log transportation, harvest

scheduling to sustainability and ecosystem protection have been addressed by modern

DSSs. A comprehensive list and discussion of all available systems in forest management

is being compiled under the COSTaction Forsys

A specific example concerns the Canadian National Railway system, which tests its

equipment on a regular basis using a decision support system. A problem faced by

any railroad is worn-out or defective rails, which can result in hundreds of derailments per

year. Under a DSS, CN managed to decrease the incidence of derailments at the same

time other companies were experiencing an increase.

[edit]Benefits

1. Improves personal efficiency

2. Speed up the process of decision making

3. Increases organizational control

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4. Encourages exploration and discovery on the part of the decision maker

5. Speeds up problem solving in an organization

6. Facilitates interpersonal communication

7. Promotes learning or training

8. Generates new evidence in support of a decision

9. Creates a competitive advantage over competition

10. Reveals new approaches to thinking about the problem space

11. Helps automate managerial processes

Executive information systemFrom Wikipedia, the free encyclopedia

(Redirected from Executive Information System)

An Executive Information System (EIS) is a type of management information

system intended to facilitate and support the information and decision-making needs of

senior executives by providing easy access to both internal and

external information relevant to meeting the strategic goals of the organization. It is

commonly considered as a specialized form of a Decision Support System (DSS)[1]

The emphasis of EIS is on graphical displays and easy-to-use user interfaces. They offer

strong reporting and drill-down capabilities. In general, EIS are enterprise-wide DSS thathelp top-level executives analyze, compare, and highlight trends in important variables so

that they can monitor performance and identify opportunities and problems. EIS and data

warehousing technologies are converging in the marketplace.

In recent years, the term EIS has lost popularity in favour of Business Intelligence (with the

sub areas of reporting, analytics, and digital dashboards, v.gr. MicroStrategy).

Contents

[hide]

1 History

2 Components

o 2.1 Hardware

o 2.2 Software

o 2.3 User interface

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o 2.4 Telecommunication

3 Applications

o 3.1 Manufacturing

o 3.2

Marketing

o 3.3 Financial

4 Advantages and disadvantages

o 4.1 Advantages of EIS

o 4.2 Disadvantages of EIS

5 Future trends

6 See also

7 References

8External links

[edit]History

Traditionally, executive information systems were developed as mainframe computer -based

programs. The purpose was to package a company¶s data and to provide sales

performance or market research statistics for decision makers, such as financial officers,

marketing directors, and chief executive officers, who were not necessarily well acquainted

with computers. The objective was to develop computer applications that would highlight

information to satisfy senior executives¶ needs. Typically, an EIS provides data that would

only need to support executive level decisions instead of the data for all the company.

Today, the application of EIS is not only in typical corporate hierarchies, but also at personal

computers on a local area network. EIS now cross computer hardware platforms and

integrate information stored on mainframes, personal computer systems, and

minicomputers. As some client service companies adopt the latest enterprise information

systems, employees can use their personal computers to get access to the company¶s data

and decide which data are relevant for their decision makings. This arrangement makes all

users able to customize their access to the proper company¶s data and provide relevant

information to both upper and lower levels in companies.

[edit]Components

The components of an EIS can typically be classified as:

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[edit]Har dware

When talking about hardware for an EIS environment, we should focus on the hardware that

meet the executive¶s needs. The executive must be put first and the executive¶s needs must

be defined before the hardware can be selected. The basic computer hardware needed for

a typical EIS includes four components:

1. Input data-entry devices. These devices allow the executive to enter, verify, and

update data immediately;

2. The central processing unit (CPU), which is the kernel because it controls the other

computer system components;

3. Data storage files. The executive can use this part to save useful business

information, and this part also help the executive to search historical business

information easily;4. Output devices, which provide a visual or permanent record for the executive to save

or read. This device refers to the visual output device such as monitor or printer.

In addition, with the advent of local area networks (L AN), several EIS products for

networked workstations became available. These systems require less support and less

expensive computer hardware. They also increase access of the EIS information to many

more users within a company.

[edit]Software

Choosing the appropriate software is vital to design an effective EIS.[citation needed ] Therefore,

the software components and how they integrate the data into one system are very

important. The basic software needed for a typical EIS includes four components:

1. Text base software. The most common form of text are probably documents;

2. Database. Heterogeneous databases residing on a range of vendor-specific and

open computer platforms help executives access both internal and external data;

3. Graphic base. Graphics can turn volumes of text and statistics into visual information

for executives. Typical graphic types are: time series charts, scatter diagrams, maps, motion graphics, sequence charts, and comparison-oriented

graphs (i.e., bar charts);

4. Model base. The EIS models contain routine and special statistical, financial, and

other quantitative analysis.

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Perhaps a more difficult problem for executives is choosing from a range of highly technical

software packages. Ease of use, responsiveness to executives' requests, and price are all

reasonable considerations. Further, it should be considered whether the package can run

on existing hardware.

[edit]User interface

An EIS needs to be efficient to retrieve relevant data for decision makers, so the user

interface is very important. Several types of interfaces can be available to the EIS structure,

such as scheduled reports, questions/answers, menu driven, command language, natural

language, and input/output. It is crucial that the interface must fit the decision maker¶s

decision-making style. If the executive is not comfortable with the information

questions/answers style, the EIS will not be fully utilized. The ideal interface for an EIS

would be simple to use and highly flexible, providing consistent performance, reflecting the

executive¶s world, and containing help information.

[edit]Telecommunication

As decentralizing is becoming the current trend in companies, telecommunications will play

a pivotal role in networked information systems. Transmitting data from one place to

another has become crucial for establishing a reliable network. In addition,

telecommunications within an EIS can accelerate the need for access to distributed data.

[edit] Applications

EIS enables executives to find those data according to user-defined criteria and promote

information-based insight and understanding. Unlike a traditional management information

system presentation, EIS can distinguish between vital and seldom-used data, and track

different key critical activities for executives, both which are helpful in evaluating if the

company is meeting its corporate objectives. After realizing its advantages, people have

applied EIS in many areas, especially, in manufacturing, marketing, and finance areas.

[edit]Manufacturing

Basically, manufacturing is the transformation of raw materials into finished goods for sale,

or intermediate processes involving the production or finishing of semi-manufactures. It is a

large branch of industry and of secondary production. Manufacturing operational control

focuses on day-to-day operations, and the central idea of this process is effectiveness and

efficiency. To produce meaningful managerial and operational information for controlling

manufacturing operations, the executive has to make changes in the decision processes.

EIS provides the evaluation of vendors and buyers, the evaluation of purchased materials

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and parts, and analysis of critical purchasing areas. Therefore, the executive can oversee

and review purchasing operations effectively with EIS. In addition, because production

planning and control depends heavily on the plant¶s data base and its communications with

all manufacturing work centers, EIS also provides an approach to improve production

planning and control.

[edit]Mar keting

In an organization, marketing executives¶ role is to create the future. Their main duty is

managing available marketing resources to create a more effective future. For this, they

need make judgments about risk and uncertainty of a project and its impact on the company

in short term and long term. To assist marketing executives in making effective marketing

decisions, an EIS can be applied. EIS provides an approach to sales forecasting, which can

allow the market executive to compare sales forecast with past sales. EIS also offers an

approach to product price, which is found in venture analysis. The market executive can

evaluate pricing as related to competition along with the relationship of product quality with

price charged. In summary, EIS software package enables marketing executives to

manipulate the data by looking for trends, performing audits of the sales data, and

calculating totals, averages, changes, variances, or ratios. All of these sales analysis

functions help marketing executives to make final decisions.

[edit]Financial

A financial analysis is one of the most important steps to companies today. The executive

needs to use financial ratios and cash flow analysis to estimate the trends and make capital

investment decisions. An EIS is a responsibility-oriented approach that integrates planning

or budgeting with control of performance reporting, and it can be extremely helpful to

finance executives. Basically, EIS focuses on accountability of financial performance and it

recognizes the importance of cost standards and flexible budgeting in developing the quality

of information provided for all executive levels. EIS enables executives to focus more on the

long-term basis of current year and beyond, which means that the executive not only can

manage a sufficient flow to maintain current operations but also can figure out how to

expand operations that are contemplated over the coming years. Also, the combination of EIS and EDI environment can help cash managers to review the company¶s financial

structure so that the best method of financing for an accepted capital project can be

concluded. In addition, the EIS is a good tool to help the executive to review financial ratios,

highlight financial trends and analyze a company¶s performance and its competitors.

[edit] Advantages and disadvantages

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[edit]Advantages of EIS

Easy for upper-level executives to use, extensive computer experience is not required in

operations

Provides timely delivery of company summary information

Information that is provided is better understood

Filters data for management

Improves to tracking information

Offers efficiency to decision makers

[edit]Disadvantages of EIS

System dependent

Limited functionality, by design Information overload for some managers

Benefits hard to quantify

High implementation costs

System may become slow, large, and hard to manage

Need good internal processes for data management

May lead to less reliable and less secure data

[edit]Future trends

The future of executive info systems will not be bound by mainframe computer systems.

This trend allows executives escaping from learning different computer operating systems

and substantially decreases the implementation costs for companies. Because utilizing

existing software applications lies in this trend, executives will also eliminate the need to

learn a new or special language for the EIS package. Future executive information systems

will not only provide a system that supports senior executives, but also contain the

information needs for middle managers. The future executive information systems will

become diverse because of integrating potential new applications and technology into the

systems, such as incorporating artificial intelligence ( A

I) and integrating multimediacharacteristics and ISDN technology into an EIS. EIS - timely, efficient and effective in

supporting the decision making process.

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Transaction processing systemFrom Wikipedia, the free encyclopedia

(Redirected from Transaction Processing System)

A transaction processing system is a type of information system. TPSs collect, store,

modify, and retrieve the transactions of an organization. A transaction is an event that

generates or modifiesdata that is eventually stored in an information system. To be

considered a transaction processing system the computer must pass the ACID test. The

essence of a transaction program is that it manages data that must be left in a consistent

state. E.g. if an electronic payment is made, the amount must be both withdrawn from one

account and added to the other; it cannot complete only one of those steps. Either both

must occur, or neither. In case of a failure preventing transaction completion, the partially

executed transaction must be 'rolled back' by the TPS. While this type of integrity must be

provided also for batch transaction processing, it is particularly important for online

processing: if e.g. an airline seat reservation system is accessed by multiple operators, after

an empty seat inquiry, the seat reservation data must be locked until the reservation is

made, otherwise another user may get the impression a seat is still free while it is actually

being booked at the time. Without proper transaction monitoring, double bookings may

occur. Other transaction monitor functions include deadlock detection and resolution

(deadlocks may be inevitable in certain cases of cross-dependence on data), and

transaction logging (in 'journals') for 'forward recovery' in case of massive failures.

Transaction Processing is not limited to application programs. The 'journaled file system'

provided with IBMs AIX Unix operating system employs similar techniques to maintain file

system integrity, including a journal.

Contents

[hide]

1 Types

o 1.1

Contrasted with batch processing

o 1.2 Real-time and batch processing

2 Features

o 2.1 Rapid response

o 2.2 Reliability

o 2.3 Inflexibility

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o 2.4 Controlled processing

3 ACID test properties: first definition

o 3.1 Atomicity

o 3.2

Consistency

o 3.3 Isolation

o 3.4 Durability

o 3.5 Concurrency

4 Storing and retrieving

o 4.1 Databases and files

o 4.2 Data warehouse

o 4.3 Backup procedures

4.3.1

Recovery process

4.3.2 Types of back-up procedures

4.3.2.1 Grandfather-father-son

4.3.2.2 Partial backups

4.3.3 Updating in a batch

4.3.4 Updating in real-time

5 References

6 See also

7 Further reading

[edit]Types

[edit]Contrasted with batch processing

Batch processing is not transaction processing. Batch processing involves processing

several transactions at the same time, and the results of each transaction are not

immediately available when the transaction is being entered;[1]

there is a time delay.

Transactions are accumulated for a certain period (say for day) where updates are made

especially after work.

[edit]Real-time and batch processing

There are a number of differences between real-time and batch processing. These are

outlined below:

Each transaction in real-time processing is unique. It is not part of a group of transactions,

even though those transactions are processed in the same manner. Transactions in real-

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time processing are stand-alone both in the entry to the system and also in the handling of

output.

Real-time processing requires the master file to be available more often for updating and

reference than batch processing. The database is not accessible all of the time for batch

processing.

Real-time processing has fewer errors than batch processing, as transaction data is

validated and entered immediately. With batch processing, the data is organised and stored

before the master file is updated. Errors can occur during these steps.

Infrequent errors may occur in real-time processing; however, they are often tolerated. It is

not practical to shut down the system for infrequent errors.

More computer operators are required in real-time processing, as the operations are not

centralised. It is more difficult to maintain a real-time processing system than a batch

processing system.

[edit]Features

[edit]Rapid response

Fast performance with a rapid response time is critical. Businesses cannot afford to have

customers waiting for a TPS to respond, the turnaround time from the input of the

transaction to the production for the output must be a few seconds or less.

[edit]Reliability

Many organizations rely heavily on their TPS; a breakdown will disrupt operations or even

stop the business. For a TPS to be effective its failure rate must be very low. If a TPS does

fail, then quick and accurate recovery must be possible. This makes well±

designed backup and recovery procedures essential.

[edit]Inflexibility

A TPS wants every transaction to be processed in the same way regardless of the user, the

customer or the time for day. If a TPS were flexible, there would be too many opportunities

for non-standard operations, for example, a commercial airline needs to consistently accept

airline reservations from a range of travel agents, accepting different transactions data from

different travel agents would be a problem.

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[edit]Controlled processing

The processing in a TPS must support an organization's operations. For example if an

organization allocates roles and responsibilities to particular employees, then the TPS

should enforce and maintain this requirement.

Example : ATM Transaction

[edit] ACID test properties: first definition

[edit]Atomicity

M ain article: Atomicity (database systems )

A transaction¶s changes to the state are atomic: either all happen or none happen. These

changes include database changes, messages, and actions on transducers.

[2]

[edit]Consistency

Consistency: A transaction is a correct transformation of the state. The actions taken as a

group do not violate any of the integrity constraints associated with the state. This requires

that the transaction be a correct program![2]

[edit]Isolation

Even though transactions execute concurrently, it appears to each transaction T, that others

executed either before T or after T, but not both.[2]

[edit]Durability

Once a transaction completes successfully (commits), its changes to the state survive

failures.[2]

[edit]Concurrency

Ensures that two users cannot change the same data at the same time. That is, one user

cannot change a piece of data before another user has finished with it. For example, if an

airline ticket agent starts to reserve the last seat on a flight, then another agent cannot tell

another passenger that a seat is available.

[edit]Storing and retrieving

Storing and retrieving information from a TPS must be efficient and effective. The data are

stored in warehouses or other databases, the system must be well designed for its backup

and recovery procedures.

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[edit]Databases and files

The storage and retrieval of data must be accurate as it is used many times throughout the

day. A database is a collection of data neatly organized, which stores the accounting and

operational records in the database. Databases are always protective of their delicate data,

so they usually have a restricted view of certain data. Databases are designed using

hierarchical, network or relational structures; each structure is effective in its own sense.

Hierarchical structure: organizes data in a series of levels, hence why it is called

hierarchal. Its top to bottom like structure consists of nodes and branches; each child

node has branches and is only linked to one higher level parent node.

Network structure: Similar to hierarchical, network structures also organizes data using

nodes and branches. But, unlike hierarchical, each child node can be linked to multiple,

higher parent nodes. Relational structure: Unlike network and hierarchical, a relational database organizes its

data in a series of related tables. This gives flexibility as relationships between the

tables are built.

A hierarchical structure. A network structure.

A relational structure.

The following features are included in real time transaction processing systems:

Good data placement: The database should be designed to access patterns of data

from many simultaneous users.

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Short transactions: Short transactions enables quick processing. This avoids

concurrency and paces the systems.

Real-time backup: Backup should be scheduled between low times of activity to

prevent lag of the server.

High normalization: This lowers redundant information to increase the speed and

improve concurrency, this also improves backups.

Archiving of historical data: Uncommonly used data are moved into other databases

or backed up tables. This keeps tables small and also improves backup times.

Good har dware configuration: Hardware must be able to handle many users and

provide quick response times.

In a TPS, there are 5 different types of files. The TPS uses the files to store and organize its

transaction data:

Master file: Contains information about an organization¶s business situation. Most

transactions and databases are stored in the master file.

Transaction file: It is the collection of transaction records. It helps to update the master

file and also serves as audit trails and transaction history.

Report file: Contains data that has been formatted for presentation to a user.

or k file: Temporary files in the system used during the processing.

Program file: Contains the instructions for the processing of data.

[edit]Data warehouseM ain article: Data warehouse

A data warehouse is a database that collects information from different sources. When it's

gathered in real-time transactions it can be used for analysis efficiently if it's stored in a data

warehouse. It provides data that are consolidated , subject-oriented , historical and read-only :

Consolidated: Data are organised with consistent naming conventions, measurements,

attributes and semantics. It allows data from a data warehouse from across the

organization to be effectively used in a consistent manner. Subject-oriented: Large amounts of data are stored across an organization, some data

could be irrelevant for reports and makes querying the data difficult. It organizes only

key business information from operational sources so that it's available for analysis.

Historical: Real-time TPS represent the current value at any time, an example could be

stock levels. If past data are kept, querying the database could return a different

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response. It stores series of snapshots for an organisation's operational data generated

over a period of time.

Read-only: Once data are moved into a data warehouse, it becomes read-only, unless

it was incorrect. Since it represents a snapshot of a certain time, it must never be

updated. Only operations which occur in a data warehouse are loading and querying

data.

[edit]Backup procedures

A Dataflow Diagram of backup and recovery procedures.

Since business organizations have become very dependent on TPSs, a breakdown in their

TPS may stop the business' regular routines and thus stopping its operation for a certain

amount of time. In order to prevent data loss and minimize disruptions when a TPS breaks

down a well-designed backup and recovery procedure is put into use. The recovery process

can rebuild the system when it goes down.

[ edit ] Recovery process

A TPS may fail for many reasons. These reasons could include a system failure, human

errors, hardware failure, incorrect or invalid data, computer viruses,software application

errors or natural or man-made disasters. As it's not possible to prevent all TPS failures, a

TPS must be able to cope with failures. The TPS must be able to detect and correct errors

when they occur. A TPS will go through a recovery of the database to cope when the

system fails, it involves thebackup, journal, checkpoint, and recovery manager:

Journal: A journal maintains an audit trail of transactions and database changes.

Transaction logs and Database change logs are used, a transaction log records all the

essential data for each transactions, including data values, time of transaction and

terminal number. A database change log contains before and after copies of records

that have been modified by transactions.

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Checkpoint: T he purpose of chec k pointing is to provide a snapshot of the data within the

database. A checkpoint, in general, is any identifier or other reference that identifies at

a point in time the state of

the database. Modifications to database pages are performed in memory and are not

necessarily written to disk after every update.

Therefore, periodically, the database system

must perform a checkpoint to write these updates which are held in-memory

to the storage disk. Writing these updates to storage disk

creates a point in time in which the database

system can apply changes contained in a transaction log during recovery

after an unexpected shut down or crash of the database system.

If a checkpoint is interrupted and a recovery is

required, then the database system must start recovery from a previoussuccessful checkpoint. Chec k pointing can be either transaction-consistent or non-

transaction-consistent (called also fuzzy checkpointing). T ransaction-

consistent chec k pointing produces a persistent database image that is

sufficient to recover the database to the state that was externally perceived at the

moment of starting the checkpointing. A non-transaction-consistent chec k pointing results in

a

persistent database image that is insufficient to perform a recovery of the database state. T

o perform the database recovery, additional information is needed, typically contained in

transaction logs.

Transaction consistent checkpointing refers to a consistent database, which doesn't necess

arily include all the latest committed transactions, but all modifications made

by transactions, that were committed at the time checkpoint creation was started,

are fully present. A non-consistent transaction refers to a checkpoint which is not

necessarily a consistent database, and can't be recovered to one without

all log records generated for open transactions included in the checkpoint. Depending on

the type of database management system implemented a chec k point may incorporate

inde x es or storage pages (user data ), inde x es and storage pages. If no indexes areincorporated into the

checkpoint, indexes must be created when the database is restored from

the checkpoint image.

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Recovery Manager: A recovery manager is a program which restores the database to a

correct condition which can restart the transaction processing.

Depending on how the system failed, there can be two different recovery procedures used.

Generally, the procedures involves restoring data that has been collected from a backup

device and then running the transaction processing again. Two types of recovery

are bac k ward recovery and forward recovery :

Backward recovery: used to undo unwanted changes to the database. It reverses the

changes made by transactions which have been aborted. It involves the logic of

reprocessing each transaction, which is very time-consuming.

Forward recovery: it starts with a backup copy of the database. The transaction will then

reprocess according to the transaction journal that occurred between the time the

backup was made and the present time. It's much faster and more accurate.

S ee also: Chec k point restart

[ edit ] T ypes of back-up procedures

There are two main types of Back-up Procedures: Grandfather-father-son and Partial

backups:

[edit]Grandfather-father-son

This procedure refers to at least three generations of backup master files. thus, the most

recent backup is the son, the oldest backup is the grandfather. It's commonly used for a batch transaction processing system with a magnetic tape. If the system fails during a

batch run, the master file is recreated by using the son backup and then restarting the

batch. However if the son backup fails, is corrupted or destroyed, then the next generation

up backup (father) is required. Likewise, if that fails, then the next generation up backup

(grandfather) is required. Of course the older the generation, the more the data may be out

of date. Organizations can have up to twenty generations of backup.

[edit]Partial backups

This only occurs when parts of the master file are backed up. The master file is usually

backed up to magnetic tape at regular times, this could be daily, weekly or monthly.

Completed transactions since the last backup are stored separately and are

called journals, or journal files. The master file can be recreated from the journal files on

the backup tape if the system is to fail.

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[ edit ] U pdating in a batch

This is used when transactions are recorded on paper (such as bills and invoices) or when

it's being stored on a magnetic tape. Transactions will be collected and updated as a batch

at when it's convenient or economical to process them. Historically, this was the most

common method as the information technology did not exist to allow real-time processing.

The two stages in batch processing are:

Collecting and storage of the transaction data into a transaction file - this involves

sorting the data into sequential order.

Processing the data by updating the master file - which can be difficult, this may involve

data additions, updates and deletions that may require to happen in a certain order. If an

error occurs, then the entire batch fails.

Updating in batch requires sequential access - since it uses a magnetic tape this is the only

way to access data. A batch will start at the beginning of the tape, then reading it from the

order it was stored; it's very time-consuming to locate specific transactions.

The information technology used includes a secondary storage medium which can store

large quantities of data inexpensively (thus the common choice of a magnetic tape).

The software used to collect data does not have to be online - it doesn't even need a user

interface.

[ edit ] U pdating in real-time

This is the immediate processing of data. It provides instant confirmation of a transaction.

This involves a large amount of users who are simultaneously performing transactions to

change data. Because of advances in technology (such as the increase in the speed of data

transmission and larger bandwidth), real-time updating is now possible.

Steps in a real-time update involve the sending of a transaction data to an online database

in a master file. The person providing information is usually able to help with error correction

and receives confirmation of the transaction completion.

Updating in real-time uses direct access of data. This occurs when data are accessedwithout accessing previous data items. The storage device stores data in a particular

location based on a mathematical procedure. This will then be calculated to find an

approximate location of the data. If data are not found at this location, it will search through

successive locations until it's found.

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The information technology used could be a secondary storage medium that can store large

amounts of data and provide quick access (thus the common choice of a magnetic disk). It

requires a user-friendly interface as it's important for rapid response time.

Reservation Systems Reservation systems are used for any type of business where a

service or a product is set aside for a customer to use for a future time.

[edit]

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