Mod-TWO

Transaction Processing System (TPS)

Office Automation System (OAS)

Management Information System (MIS)

TPS, MIS, DSS, and AI/ES

Hierarchy:

AI/ES

DSS

MIS

TPS

Information

Data

Less More Less More

More MoreLess Less

RoutineDecisionsupport

Input &output

Sophistication& complexity of

processing & analysis

Transactions

Transactions… Basic business operations such as customer

orders, purchase orders, receipts, time cards, invoices, and payroll checks in an organization

Transaction processing systems (TPS) Perform routine operations and serve as a

foundation for other systems

Purpose : Support operations Recording Processing Reporting

TPSs exist in e.g. Purchase of an airline ticket Deposit or withdrawal of funds at a bank

Transaction Processing Systems (TPS)

Computerized system that performs and records the daily routine transactions necessary to conduct the business; these systems serve the operational level of the organization

TYPE: Operational-level INPUTS: transactions, events PROCESSING: updating OUTPUTS: detailed reports USERS: operations personnel, supervisors DECISION-MAKING: highly structured  EXAMPLE: payroll, accounts payable

Batch vs. On-Line Transaction Processing

Two types of TPS: Batch processing

A system whereby business transactions are accumulated over a period of time and prepared for processing as a single unit or batch

On-line transaction processing (OLTP) A system whereby each transaction is processed

immediately, without the delay of accumulating transactions into a batch

Batch Schematic

Data entryof accumulated

transactions

Input(batched)

Output

On-line Schematic

Output

Terminal

Terminal

Terminal

Terminal

Terminal

Terminal

Immediateprocessingof eachtransaction

Objectives of TPS Process data generated by and about transactions Maintain a high degree of accuracy Ensure data and information integrity and accuracy Produce timely documents and reports Increase labour efficiency Help provide increased and enhanced service Help build and maintain customer loyalty Achieve competitive advantage

Simplified Overview of aTransaction Processing System

Schematic

Data entry & input

ProcessingDocuments& reports

Database

Internally generatedtransactions:

• shipped orders

• purchase orders

• employee time cards

Externally generated transactions:

• customer orders

• vendor invoices

• customer payments

Internally generatedtransactions:

• shipped orders

• purchase orders

• employee time cards

Externally generated transactions:

• customer orders

• vendor invoices

• customer payments

Database update:

• customer orders

• inventory

• purchase orders

• customers

• suppliers

Database update:

• customer orders

• inventory

• purchase orders

• customers

• suppliers

Documents:

• pick list

• cheques to vendors

• receiving notices

• paycheques

Operational reports:

• finished product inventory status

• raw materials; packing materials; spare parts; inventory status

Documents:

• pick list

• cheques to vendors

• receiving notices

• paycheques

Operational reports:

• finished product inventory status

• raw materials; packing materials; spare parts; inventory status

Data Processing Activities Common to TPSs

A transaction processing cycle Data collection Data editing Data correction Data manipulation Data storage Document production

Schematic

Datacollection

Dataedit

Datamanipulation

Datastorage

Documentproduction

Datacorrection

Original data

Source Data Automation

Source data automation The process of capturing data at its source with minimal

manual effort Data are entered directly into the computer

Transaction Processing Systems

Collects and Store data about transactions Are designed based on detailed specifications for how the

transactions should be performed and how to control the collection of specific data in specific data formats and in accordance with rules and procedures for work done by clerks and customer service agents

A well-designed TPS has back-up and recovery procedures that minimize disruptions resulting from computer outages

Two types of TPS Batch Processing

Information for individual transaction is gathered but not processed immediately

Real Time Processing Each transactions is processed immediately

Point-of-Sale Transaction Processing System

Customer’sreceipt

Inventorydatabase

Managementinformation

system

Exceptionreport

Purchasesdatabase

Scanner

Point-of-saletransactionprocessing

system

Itemdatabase

UPC andquantity

Item, quantity,date, time, price

UPC Price

UPC

Quantity,Date,time

Traditional TPS – Order Processing

Order processing Processing an order from entry to delivery,

including traditional accounting transactions

Schematic

Customer

Order entry/sales configuration

Shipmentplanning

Routing

Scheduling

Shipmentexecution

Invoicing

Finishedproduct

inventory

Customer order in person or viamail, phone, EDI, internet

OrdersPlannedshipments

Plannedshipments& routes

Pick list

Shipped orders

Inventory status

Products

Invoice

Requestfor

proposalSale

Problem, idea,request forinformation

Othercontacts

Marketresearch

Sales

Marketing

Qualitycontrol

Productdevelopment

Customerinteraction

system

Customer

Transaction Processing System (TPS)

Typical Applications of TPS

A transaction processing cycle

Data collection Data editing Data correction Data manipulation Data storage Document production

Management Information Systems (MIS)

WHAT IS MIS? The MIS program combines the

fundamental intellectual content of both Computer Science and Business Management Economics.

MIS is the application of information technology to support the major functions and activities of either a private sector business or public sector institution.

These systems provide feedback on organisational activities and help to support managerial decision making.

In the past, organizations recognized the importance of managing resources such as labor, capital, and raw materials.

Today, it is widely accepted that managing the information resource is very often equally important. MIS supports the process of collection, manipulation, storage, distribution and utilization of an organization's information resources.

WHAT IS MIS?

The vast majority of information systems are developed for and used by people in functional areas (e.g., manufacturing, human resources, accounting, finance and marketing). To develop information systems that address the needs of the organization, MIS professionals must possess a solid mix of business and technical knowledge.

They must understand organizational structures, objectives, operations (including processes and the flows of data between processes) and the financial implications related to these factors.

MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems.

Business information systems (BIS) The interactive relationships between the

information systems and organizations, both technically and socially, and the business opportunities and challenges brought about by the BIS.

This describes information systems used to support the functional areas of business.

MIS helps:

to establish relevant and measurable objectives to monitor results and performances (reach ratios) to send alerts, in some cases daily, to managers at

each level of the organization, on all deviations between results and pre-established objectives and budgets.

Decision-Support Systems (DSS)

Interaction among Systems

Summary Different types of IS by organizantional levels

include: Transaction Processing Systems (TPS) Management Information Systems (MIS),

and Decision Support Systems (DSS) Executive Support Systems (ESS), also

known as Executive Information Systems (EIS)

Purposes of Information Systems

Types of Operations Support Systems Transaction Processing Systems

Record and process business transactions Examples: sales processing, inventory systems, accounting

systems

Process Control Systems Monitor and control physical processes Example: using sensors to monitor chemical processes in a

petroleum refinery

Enterprise Collaboration Systems Enhance team and workgroup communication Examples: email, video conferencing

Two Ways to Process Transactions Batch Processing

Accumulate transactions over time and process periodically

Example: a bank processes all checks received in a batch at night

Online Processing Process transactions immediately Example: a bank processes an ATM withdrawal

immediately

Components of an IS

Office Automation Systems (OAS)

Computer system, such as word processing, electronic mail system, and scheduling system, that is designed to increase the productivity of data workers in the office.

Office Automation Systems

Facilitates everyday information processing tasks in offices and business organization

Includes a wide range of tools Spreadsheets Word processors Presentation packages Personal database systems and note-taking systems

Help people perform personal record keeping, writing and calculation chores efficiently

TYPE: Knowledge-level INPUTS: documents, schedules PROCESSING: document management,

scheduling, communication OUTPUTS: documents; schedules USERS: clerical workers

EXAMPLE: document imaging system

Decision Support Systems (DSS)

Information system at the management level of an organization that combines data and sophisticated analytical models or data analysis tools to support semi-structured and unstructured decision making.

TYPE: Management-level INPUTS: low volume data PROCESSING: simulations, analysis OUTPUTS: decision analysis USERS: professionals, staff managers DECISION-MAKING: semi-structured

EXAMPLE: sales region analysis

Characteristics of Decision-Support Systems

1. DSS offer users flexibility, adaptability, and a quick response.

2. DSS operate with little or no assistance from professional programmers.

3. DSS provide support for decisions and problems whose solutions cannot be specified in advance.

4. DSS use sophisticated data analysis and modelling tools.

Decision Process

Decision makers goes through a fairly systematic process.

Act on itAct on it

Review ItReview It

Definethe

“Process or Problem”

Definethe

“Process or Problem”

DevelopAlternative

Courses of Action

DevelopAlternative

Courses of Action

SelectThe “Best”

One

SelectThe “Best”

One

Intelligence phaseIntelligence phase

Modeling phaseModeling phase

Choice phaseChoice phase

Implementation Implementation phasephase

Decision Support Systems

Decision support system (DSS) is a computer-based information system that combines models and data in an attempt to solve semistructured and unstructured problems with user involvement.

Decision Support Systems - Components

Every DSS consists of at least data management, user interface, model management components, and the end users.A few also contain a knowledge management component.

A DSS data management subsystem contains all the data that flow from several sources, and are extracted prior to their entry into a DSS database or a data warehouse.

A model management subsystem contains completed models (financial, statistical, management science, or other quantitative models), and the routines to develop DSSs applications.

The user interface covers all aspects of the communications between a user and the DSS.

The Users. The person (manager, or the decision maker) faced with the problem or decision that the DSS is designed to support

A knowledge-based or intelligent subsystem provides the expertise for solving some aspects of the problem, or the knowledge that can enhance the operation of the other DSS components.

DSS Process

DataData

ModelModel

Group Decision Support System (GDSS) A Group Decision Support System

(GDSS), also known as an Electronic Meeting System or groupware, is commonly defined as a collection of software, hardware, and procedures designed for the automated support of group work

(Dennis, et al., 1988; Kraemer & King, 1988).

Group Decision Support Systems

Groups One-room group whose members are in one place

Virtual group, whose members are in different locations

The DSS methodology was initially designed to support individual decision makers. However, decision making is frequently a shared process. Where a group may be involved in making the decision. When a decision-making group is supported electronically, the support is referred to as a group decision support system (GDSS).

a DSS whose design, structure, and usage reflect the way in which people cooperate to make a particular decision or type of decision

an interactive, computer-based system which facilitates the solution of unstructured problems by a set of decision makers working together as a group

consisting of a set of software, hardware, language components, and procedures that support a group of people engaged in a decision-related meeting

Characteristics of a GDSS

Special design: Effective communication Group decision making

Ease of use Flexibility

Accommodate different perspectives Anonymous input

Individuals’ names are not exposed Parallel communication

Characteristics of a GDSS

Decision-making support Delphi approach: Decision makers are scattered around

the globe Brainstorming: Say things as you think---think out loud Group consensus approach: The group reaches a

unanimous decision (everybody agrees) Nominal group technique: Voting

Reduction of negative group behavior A trained meeting facilitator to help with sidetracking

Automated record keeping

Executive Information (Support) Systems

An executive information system (EIS), also known as an executive support system (ESS), is a technology designed in response to the specific needs of top-level managers and executives.

Executive Support Systems (ESS or EIS)

Internal Data• TPS/MIS data• Financial data• Office systems• Modeling/ analysis

External Data• Dow Jones• Internet news• Standard & Poor’s

EIS are: Very user friendly Is supported by graphics Provides the capabilities of exception reporting (reporting only

the results that deviate from a set standard) Provide drill down (investigating information in increasing detail).

ESS goes beyond EIS to include: Analyse support Communications Office automation Intelligence support

ESS - Expansion ESS can be enhanced with:

Multidimensional analysis and presentation Friendly data access User-friendly graphical interface Imaging capabilities Intranet access E-mail Internet access Modeling

ESS goes beyond EIS to include: Analyse support Communications Office automation Intelligence support

Intelligent ESS saves an executive's time in conducting drill downs, Intelligent ESS saves an executive's time in conducting drill downs, exceptions, or identifying trends by automating these activitiesexceptions, or identifying trends by automating these activities..

ISS - Artificial Intelligence The development of machines that exhibit intelligent characteristics draws upon several sciences and technologies, ranging from linguistics to mathematics.

Expert Systems (ES) – One type of ISS

Expert systems (ESs) are attempts to mimic human experts. It is decision-making software that can reach a level of performance comparable to a human expert in some specialized and usually narrow problem area. The idea is simple: expertise is transferred from an expert or other source of expertise to the computer.

The transfer of expertise from an expert to a computer and then to the user involves four activities:

Knowledge acquisition (from experts or other sources)

Knowledge Base -Knowledge representation (organized as rules or frames in the computer)

Knowledge Engine

Knowledge inferencing is performed in a component called the inference engine of the ES and results in the recommendation.

Knowledge transfer to the user (the expert’s knowledge has been transferred to users).

Components of Expert Systems (ES)

Expert Systems (ES) – Benefits:

Expert Systems

Attributes DSS ES

Objective Assist Dm Duplicate Dm

Recommendation About Decision Made By User/System System

Major Orientation Dm T/F Of Expertise

Query Direction Human System System

Data Manipulation Numerical Human Symbolic

Characteristics Of Problem Area Complex/Broad Specific

Types Of Database Factual Knowledge Rules

Reasoning Ability Absent Present

Explanation Limited Total

Learning Capability Absent Present

Nature Of Support Personal Personal & Group