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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]