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CHAPTER 2 SUB SYSTEMS OF INFORMATION SYSTEM

Transaction Processing System (TPS)

The main information systems used for operational support in a business are transaction
processing systems. A transaction is any event or activity that affects the organization which
occur as part of doing business, such as sales, purchases, deposit, withdrawals, refunds and
payments. A TPS collects and stores information about transactions, and controls some aspects
of transactions. This type of system processes data about transactions, which are events that have
occurred that affect the business, such as the sale or purchase of goods. The types of transactions
that occur vary from organization to organization. Transaction processing, the set of procedures
for handling the transactions, often includes the activities like calculation, storage and retrieval,
classification, summarization, sorting. Transaction processing procedures are often called
standard operating procedures. For example, the routines associated with general banking
transactions typify the use of standard operating procedures for the handling of deposits and
withdraws, cashing of cheques, and other processes. Transaction processing systems exist in all
areas of an organization, and in all types of organizations. TPSs can be used by employees (order
entry) or customers (bank ATMs). They can use various types of hardware, software, and
networks. TPSs use stored data in both files and databases, and many types of programs.

A transaction processing system has three main purposes: keep record about the state of an
organization, process transactions that affect these records, and produce outputs that report on
transactions that have occurred. For example, an inventory control system tracks records about
inventory, processes sales and purchases of inventory and produces reports about the amount and
value of items on hand, on order etc.
Transaction processing systems capture and process data describing business
transactions. Then they update organizational files and databases and produce a variety of
information products for internal and external use.

Objectives of TPS
1. To serves the most elementary day-to-day activities of an organization
2. To supports the operational level of the business
3. Supplies data for higher-level management decisions
4. Very often critical to survival of the organization
5. Mostly for predefined, structured tasks
6. To helps strategic consequences (e.g. airline reservation system)
7. It has high volumes of input and output
8. To provides data which is summarized into information by systems used by higher
levels of management
9. Need to be fault-tolerant.

Transaction Processing Cycle

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1. Data Entry
The input activity in transaction processing systems involves a data entry process In this
process, data is captured, or collected by recording, coding, and editing activities. Then
the data may be converted to a form that can be entered into a computer system. Data
entry activities have always been a bottleneck in the use of computers for transaction
processing. In transaction processing systems, data can be entered in three ways. These
are manual data entry, semi-automated data entry and fully automated data entry. In
manual data entry, a person called operator enters the data by hand For example, a census
department personnel collecting information about population growth and then enter this
data manually. The problem with manual data entry is it is difficult to enter data quickly
and accurately into the computer. To overcome this problem, manual data entry is
replaced by semi-automated and automated data entry methods. In semi-automated data
entry, a data capturing device like bar code reader or scanner is used to enter data with
some human intervention. For example, in retail stores, billing details are entered by
scanning a product by the salesperson. The use of semi-automated method speeds up the
transaction entry and processing. In fully automated data entry, data is entered completely
without any human intervention. In this method, two computers interact with each other
through a computer network. For example, this method is used in EDI (electronic data
interchange).
2. Transaction Processing
Transaction processing systems process data in two ways:
a. Batch processing and
b. Real-time or online processing
(a) Batch Processing Systems
In a batch processing system, transaction data is accumulated over a period of time and
processed periodically. It usually involves the following activities.
1. Gathering source documents originated by business transactions, such as sales orders
and invoices, into group called batches.
2. Recording transaction data on an input medium, such as magnetic disks or magnetic
tapes.
3. Sorting the transactions in a transaction file in the same sequence as records in a
sequential master file.
4. Processing transaction data and creating an updated master file and a variety of
documents (such as customer invoices or pay cheques) and reports)
5. Capturing and storing batches of transactions data at remote sites, and then
transmitting it periodically to central computers for processing. This is called remote job
entry or RJE.

Examples of Batch TPS

1. Cheque clearance involves checking that the person who wrote the cheque has enough
money in his/her account to cover the cheque.
2. Bill generation organisations create a bill, or invoice, for goods or services that have
been supplied to a customer. They usually generate a group of bills at a scheduled time
and done as a group.
3. Credit cards are performed in real-time, but the only online checks are that the card is
not listed as lost, stolen, cancelled or over the card limit.
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4. The printing of documents from the print queue is a batch process. The document is
written to a file before being printed at the printer.

(b) Real-time Processing Systems

Real-time processing systems process transaction data immediately after they are
generated and can provide immediate output to end users.

1. In full-fledged real-time processing systems, data is processed as soon as it is originated

or recorded, without waiting to accumulate batches of data.
2. Data is fed directly into the computer system from online terminals, without being
sorted, and it is always stored online in direct access files.
3. Files and databases are always up to data since they are updated as and whenever data is
originated, regardless of its frequency.
4. Responses to end users' inquiries are immediate, since information stored on direct
access devices can be retrieved almost instantaneously.
5. Real-time processing depends on telecommunication networks of online terminals and
computers.

Examples of Real Time TPS

1. Reservation systems are used in many businesses to put aside a service or product for a
customer. For example, Travel Agents.
2. Point of Sale Terminals are used by retail store to sell goods and services. product is
generally identified by its bar code, and price and other relevant data about the product can
be found form the database.
3. A library loan system is used to keep track of items borrowed from the library

Batch Processing Systems Real-time Processing Systems

Each transaction is unique. It is not part a The database is not accessible all of the of
group of transactions. time for batch processing.
Requires the master file to be available The data is organized and stored before the
more often for updating and reference. master file is updated.
Have fewer errors as transaction data is Errors can occur during these steps.
validated and entered immediately.
More computer operators are required,

as the operations are not centralized.

More difficult to maintain.

3. File and Database Processing

File and database processing are the basic activities of transaction processing systems.
These are also known as file and database maintenance. This term emphasizes that an
organization's files and databases must be maintained by its transaction processing
systems so that they are always correct and up to date. Transaction processing systems
update and make changes to corporate databases, which are then used to
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a. Provide data needed to produce proper information products, and

b. Provide data needed for further processing by management information systems.
4. Document and Report Generation
The final stage in the transaction processing cycle is the generation of information
products such as documents and reports. Documents produced by transaction processing
systems are called transaction documents. There are various types of documents such as
a. Action documents that initiate actions or transactions on the part of their recipient. For
examples, a pay cheque authorizes a bank to pay the customer.

b. Information documents relate, confirm or prove to their recipients that transactions

have occurred. For examples, sales receipts, customer statements etc.

c. Turnaround documents say that some types of transaction documents are designed to
be read by magnetic or optical scanning equipment. Forms produced in this manner
designed to be returned to the sender. For examples, many computer printed invoices
consist of a turnaround portion, which is returned to the customer along with his/her
payment.

Transaction processing systems also produce several types of reports and are used by
managers. Such reports provide an audit trail for transaction control purposes.

d. Control listings, are detailed reports that describe each transaction occurring during a
period. They are also called logs. For examples, a payroll register lists every pay cheque
printed on a specified payday by a payroll system.

e. Edit reports, describe errors detecting during processing. For examples, invalid
Account Number, missing data etc. would be presented in edit reports.

f. Accounting statements are such reports that legally document the financial
performance or status of a business. For examples, statements of cash flow, income
statements etc.
5. Inquiry Processing
Many transaction processing allows us to use Internet and web browsers or database
management query languages to make inquiries and receive responses concerning the
results of transaction processing activity. Typically responses are displayed in a variety of
pre specified formats or screens. For example, checking balance in account and receive
immediate response on personal computer.
6. Sub-species of TPS
Manufacturing and production systems: Systems that supply data to operate, monitor and
control the production process like purchasing, receiving, shipping, process control,
robotics, inventory systems, scheduling, engineering, operations, quality control, resource
management etc.
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Importance of TPS
Transaction Processing System (TPS) is an information system that processes data arising
from the occurrence of business transactions, supports day-to-day operations.
These systems help any company to conduct operations and keep track of its activities.
The most fundamental computer-based system in an organisation pertains to the
processing of business transactions. A transaction is any event or activity that affects the
organisation. Common transactions include the placing of orders, billing of customers,
hiring of employees, depositing of cheques etc. The types of transactions vary from
organisation to organisation. But all firms have to process some type of transactions as a
major part of their daily business activities. Transaction processing is the set of
procedures for handling the transactions.
The common activities include:
(i) Calculation
(ii) Classification
(iii) Sorting
(iv) Storage and
(v) Summarisation.
These activities occur at the operations level. Computers are essential to
process large volumes of transaction data, because they provide speed and accuracy and
can be programmed to follow routines without any variance. Computers can be given a
task which people are not interested to do and people can focus their attention on other
work which is of interest to them.
TPS is able to perform one or more of the following operations:
(i) Storing transaction data to create a file of transaction record;
(ii) Sorting, sequencing or arranging records;
(iii) Merging the contents of two or more files;
(iv) Performing calculations on the file data;
(v) Accumulating amounts to develop summary total;
(vi) Storing data for future use;
(vii) Retrieving stored data;
(viii) Displaying or printing out data and/or reports from files for use by employees and.
or managers.

Management Information System

From the above discussions, MIS can thus be defined as information system designed to
support the management of organizational functions at the managerial level of the
organization. Many authors and management gurus have defined the concept
management information systems.

Definitions of MIS
A proper Management Information System is "structured to provide the information
needed when needed and where needed", further, the system "represents the internal
communication network of the business providing the necessary intelligence to plan,
execute and control". - Frederick B. Cornish
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Need for MIS

Management Information System addresses the use of Information Technology (IT) to
improve individual and organizational performance at two levels
Level 1: "Better" Tangible Outputs
Information Technology (IT) is used to make the process in producing a tangible output
more efficient and more effective.
Level 2: Intangible Outputs
Management Information System (MIS) involves identifying the key decisions that are
related to reaching objectives, on determining the proper information needed to make
these decisions, and on improving the decision processes employed to make the decisions.
Thus, MIS supports in improving intangible outputs by developing tools and processes
that allow better management decision making.

The role of MIS is to recognize information as a resource and then using that resource
for effective and better achievement of organizational objectives.

Scope of MIS
1. To provide a variety of reports and displays to management.
2. To provide managerial end user with information products that support much of
their day-to-day decision-making needs.
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3. To provide information on the contents of the information products specified in

advance by managers.
4. To obtain data about the business environment from external sources so as to
process them to server the managers in a better way.

Objectives of MIS
1. To provide requisite information support for managerial functions within the
organisation.
2. To make available, right information at the right place at the right time at the
lowest cost.
3. To ensure that wrong and unwanted information is not generated; the condition of
data overload is avoided.

Functions of MIS
MIS provided for the identification relevant information needs, the collection of relevant
information, processing of the same to become usable by the business managers, and
timely dissemination of processed information to the users of the information for properly
managing the affairs of an enterprise by informed decisions.

For example, in a competitive market for products manufactured by an enterprise, its

management needs information on the pricing policy of the competitors, especially of
competing products, sales techniques etc ., to effectively combat the effect of the
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competition.
The Functions of MIS are as follows:
1. MIS facilitates free flow of information throughout the multilayered organisations.
2. MIS may be given a functional subsystems, as production or marketing is, with the
chief information officer becoming part of top management.
3. MIS is oriented towards achieving management goals and objectives.
4. MIS has a crucial role in keeping the organisation integrated by providing facilities for
information exchanges.
5. MIS supports many models in its model base so that managers can draw upon this
model base to manipulate data retrieved from the database for analysing decision
situations and generating optimum solutions.
6. For effective management of the organisation, several layers of management have to
be created and supported with information and data analysis facilities which is taken
care by management information system.

Characteristics of MIS
1. Management oriented: It means that effort for the development of the information
system should start from an appraisal of management needs and overall business
objectives. Such a system is not necessarily for top management only, it may also meet
the information requirements of middle level or operating levels of management as
well.
2. Management directed: Because of management orientation of MIS, it is necessary
that management should actively direct the system's development efforts. Mere one
time involvement is not enough. For system's effectiveness, it is necessary for
management to devote their sufficient time not only at the stage of designing the
system but for its review as well, to ensure that the implemented system meets the
specifications of the designed system. In brief, management should be responsible for
setting system specifications. It must play a key role in the subsequent trade off
decisions that occur in system development.
3. Integrated: Development of information should be an integrated one. It means that all
the functional and operational information sub-system should be tied together into the
entity. An integrated information system has the capability of generating more
meaningful information to management. The word integration here means taking a
comprehensive view or a complete look at the interlocking sub-systems that operate it
in a company.
4. Common data flows: It means the use of common input, processing and output
procedures and media, whenever possible, is desirable. Data is captured by system
analysts only once and as close to its original source as possible. Then, they try to
utilize a minimum of data processing procedures and sub-systems to process the data
and strive to minimize the number of output documents and reports produced by the
system. This eliminates duplication in data collection, documents and procedures. It
simplifies operations and produces an efficient information system.
However, some duplication is necessary in order to insure effective information
system.
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5. Heavy planning element: An MIS usually takes 3 to 5 years and sometimes even
more period to get established firmly within a company. Therefore, a heavy planning
element must be present in MIS development. It means that MIS designer should keep
in view future objectives and requirements of firm's information in mind. The designer
must avoid the possibility of system obsolescence before the system gets into
operation mode.
6. Sub-system concept: Even though the information system is viewed as a single entity,
it must be broken into sub-systems which can be implemented one at a time by
developing a phasing plan
7. .Common database: Database is the mortar that holds the functional systems together.
It is defined as a "superfile" which consolidates and integrates data records formerly
stored in many separate data files. The organization of a database allows it to be
accessed by several information sub-systems and thus, eliminates the necessity of
duplication in data storage, updating, deletion and protection. Although it is possible to
achieve the basic objectives of MIS without common database ,thus paying the price
of duplicate storage and duplicate file updating, database is a definite characteristic of
MIS.
8. Computerized: It is possible to have MIS without using a computer. But use of
computers increases the effectiveness of the system. In fact, its use equips the system
to handle a wide variety of applications by providing their information requirements
quickly. Other necessary attributes of the computer to MIS are accuracy and
consistency in processing data and reduction in clerical staff. These attributes make in
computer a prime requirement in management information system.

Model of MIS
The basic model of MIS contains database, report writing software and mathematical
models. The database contains the data provided by the subsystems. Both data and
information are entered from the environment. Many a times, MIS gets its data from the
transaction processing system (TPS). So, most Management Information System have
interface with TPS.

The database contents are used by software that produces periodic and special reports. The
mathematical models simulate various aspects of the firm's operations. The software
outputs are used by persons who are responsible for solving the firm's problems.

Fig: Model of Management Information System

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Types of Report by MIS

MIS helps in generating a variety of reports that are useful to managers through the
management reporting system. MIS supports management by providing various types of
reports, which are prepared based on the inputs received from the transaction processing
systems, data obtained from customers , suppliers, external data etc.
The various types of reports generated by MIS are explained below :
1. Periodic scheduled reports are in a pre-specified format and are used for
providing information to managers on a regular basis. For example a daily sales
report, monthly report on students attendance are periodic reports.
2. Exceptional reports are not generated on regular basis but only in exceptional
situations. For example report on students who stop coming classes, report on
customers whose loan installments have been delayed by more than the cut-off date.
3. Demand reports and responses are also called as ad-hoc reports. These are
generated as and when required by the manager. For example Collage principal
asking for a report on students who have failed in a particular subject.
4. Push reports are the reports which are pushed on to the manger to keep him
informed about a certain situation. For example a faculty pushes the report about
the students who are not performing well to the HOD to keep him updated about
their performance.

Constraints in Operating A MIS

MIS systems are complex and expensive pieces of software, and many people are involved
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with the design both within the organisation and from outside. MIS failures can be
expensive and bring bad publicity to all parties. They can arise due to:\

1. Inadequate analysis: problems, needs and constraints aren't understood in the early
stages.
2. Lack of management involved in the design: wrong expectations of a new system/
no-one understands the system.
3. Emphasis on the computer system: Need procedures for handling input and
output/select the right hardware and software
4. Concentration on low-level data processing: Information must be easily accessible
and understood.
5. Lack of management knowledge of ICT systems and capabilities: managers know
what they want from the system but don't understand the technology.
6. Lack of teamwork: An ICT manager must co-ordinate the accounts, marketing, sales
etc ., departments and help everyone understand the benefits of the system.
7. Lack of professional standards: All systems need clear documentation that all users
can understand.

Limitations of MIS
1. The quality of the outputs of MIS is basically governed by the quality of input and
processes.
2. MIS is not a substitute for effective management. It means that it cannot replace
managerial judgment in making decisions in different functional areas. It is merely an
important tool in the hands of executives for decision making and problem solving.
3. MIS may not have requisite flexibility to quickly update itself with the changing needs
of time, especially in fast changing and complex environment.
4. MIS cannot provide tailor-made information packages suitable for the purpose of every
type of decision made by the executives.
5. MIS takes into account mainly quantitative factors and ignores the non quantitative
factors like morale and attitude of the organization, which have an important bearing on
the decision making process of executives.
6. MIS does not support unstructured decision making, which are non-routine in nature.

Structure of MIS
Describing the structure of management information system is a bit challenging since there
is no standard or universally accepted framework of management information system
structure. However, the structure of management information system can be described by
various different approaches, few of them are explained below
a. Physical Structure of Management Information System
A management information system (MIS) is an organized combination of people
hardware, communication networks and data sources that collects, transforms and
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distributes information in an organization. An management information system helps

decision making by providing timely, relevant and accurate information to managers.
The physical components of an MIS include hardware, software, database, personnel
and procedures.
(i) Hardware
All physical components of a computer system compose the computer hardware.
Important components include the central processing unit, input/output devices, storage
units and communication devices. Communication can be over fiber-optic cables or
wireless networks.
(ii) Software
Software provides the interface between users and the information system. Software can
be divided into two generic types: system software and applications. The system
software comprises of the operating system, utility programs and special purpose
programs. Applications are developed to accomplish a specific task. For users of
management information system it is much more important to understand the software
than the hardware. Software maintenance can take 50% to 70% of all personnel activity
in the MIS function. When the organization moves to implement an advanced
information system the hardware and software environment becomes more complex.
(iii) Database
A database is a centrally controlled collection of organized data. Central control reduces
redundancy and duplication of data. Data is stored in an organized and structured way to
facilitate sharing and improve availability to those who need it. The database improves
efficiency of storage by elimination of redundant files and improves efficiency of
processing by providing all required data in a single file rather than separate files.
(iv) Procedures
Three types of procedures are required for an management information system to
operate effectively: user instructions, instructions for input preparation and operating
instructions for MIS personnel who maintain the management information system.
(v) Personnel
The personnel in the MIS function include computer operators, programmers, systems
analysts and managers. Human resource requirements should be assessed by both the
present system needs and the future system growth. The quality management
information system personnel is a key factor in its effectiveness. An manager needs a
combination of both managerial and technical skills.
b. MIS Structure based on Management Activity
Hierarchy of Management activities:
-Strategic Planning organization.- Definition of goals, policies, objectives andgeneral
guidelines for an
-Management control and tactical planning - Acquisition of resources, tactics. plant
location, new products. Establishment and monitoring of budgets.
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-Operational planning and control - Effective and efficient use of existing facilities
and resources to carry out activities within budget constraints.
The following sections summarize the characteristics of information system support for
the three levels of hierarchy of Management planning and control.
1. Operational Control: This is a process of ensuring that the operational activities are
carried out effectively and efficiently. A large percentage of decisions are programmable
and the procedure used is quite stable. It makes use of pre established procedures and
decision rules. Individual transactions are often important; hence the system must be
able to respond to both individual transactions and summaries of transactions. The data
required for this process is generally current and the sequence of processing is often
significant.
Processing support for operational control consists:
(i) Transaction processing - Inventory withdrawal transaction can examine balance on
hand, calculate order quantity, produce action document.
(ii) Enquiry processing - An enquiry for personal files describing the requirement for a
position.
(iii) Report processing - A report showing orders still outstanding after 30 days.
2. Management Control: This system is required by managers of departments, profit
centers to measure performance, decision on control actions, formulate new decision
rules and allocate resources. Summary information is needed and it must be processed so
that trends may be observed, reasons for performance variations and solutions may be
suggested.
The control process requires the following types of information:
(i) Planned performance - To assist managers in finding problems and reviewing plans
and budgets. It projects the effect of current action.
(ii)Variance from planned performance - This report shows performance and
variations from planned performance.
(iii)Problem analysis models to analyze data to provide input for decision making.
(iv)Decision models to analyze a problem situation and provide possible solutions.
(v) Inquiry model to provide assistance to enquiries.
3.. Strategic Planning: The purpose of strategic planning is to develop strategies by
which an organization will be able to achieve its objectives. These activities do not
occur on a periodic basis. Data required for strategic planning are generally for
processed summarized data from a variety of sources. Information system support can
provide substantial aid to the process of strategic planning.
-Evaluation of current capabilities based on internal data.
-Internal projection of future capabilities by analyzing past data.
-Fundamental market data on the industry and the competitors.
-Databank of public information regarding industry and competitors.
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c. MIS structure based on Organizational Functions

The structure of information system can also be described in terms of organizational
functions which use information. There are no standard classifications of functions but a
typical set of functions in an organization includes Production, Sales and Marketing,
Finance and Accounting, Logistics and Personal information system. Top management
can also be considered as a separate function. Each of these functions has unique
information needs and each requires information system support designed for it.
1. Sales and Marketing: The transactions involved in this subsystem are sales order,
promotion order, etc. Operational activities include hiring and training of sales force,
day to day scheduling of sales and promotion effort, periodic analysis of sales volume
by region, product, customer, etc. Managerial control concerns comparison of overall
performance against planned. Strategic planning involves new markets and marketing
strategies.
2.Production: It includes planning, scheduling and operation of production facility,
employment and training of production personnel, quality control and inspection.
Transactions include production order, assembly order, finished parts tickets, scrap
tickets. Operational control requires reports comparing actual performance to the
production schedule. Management control requires summary report comparing oval
planned performance to standard performance. Strategic planning includes alternative
manufacturing approach and approach to automation.
3.Logistics: Transaction process includes purchase, manufacturing and receiving report.
Tickets for inventory, shipping and orders. Operational control includes past-due
purchases, shipment, out of stock items. Strategic planning involves analysis of new
distribution strategy, policies etc.
4. Finance and Accounting: Transaction involves credit applications, sales, payment
vouchers, checks, ledgers, stock transfer, etc. Operations include exception reports,
records of processing delays and reports of unprocessed transactions. Managerial control
utilizes information on budget vs. actual costs of financial resources and processing
accounting data. Strategic planning includes accounting policies for minimizing tax
impact, long run strategies to ensure adequate financing.
5. Information Processing: These is responsible for ensuring that the other functions
are provided the necessary information processing services and resources. Typical
transactions for information processing are requests for processing, request for
corrections or changes in data and programs, reports of hardware and program
performance and project proposals. Operational control of information processing
operations requires information on the daily schedule of jobs, error rates and equipment
failures, for new project development it requires daily or weekly schedules of
programmer progress and test time. Managerial control over information processing
requires data on planned versus actual utilization, equipment costs, overall programmer
performance and progress compared to schedule for projects to develop and implement
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new applications. Strategic planning for information systems involves the organization
of the function, overall information system plan, selection of strategic uses of
information and the general structure of hardware and software environment.
6. Top Management Subsystem: Top management functions separately from the
functional areas. The transactions processed by top management are primarily inquiries
for information and support for decision making. The information for operational control
in the top management includes meeting schedules, contact file etc. Managerial control
by top management uses information which summarizes the management control being
exercised by other functions to evaluate whether the functions are performing as planned.
This requires access to the plans and actual performance of all the functions. Strategic
planning activities relate to issues like areas of diversification, resources management,
etc. Strategic planning requires information from internal and external source.
d. Conceptual Structure
The conceptual structure of an information system consists of a group of information
subsystems for different functions. Each subsystem provides support for transaction
processing, operational control, management control and planning. The conceptual
structure includes some unique files for each subsystem a common database. There is
unique software for each subsystem and there is software used by all subsystems, i.e. a
data management system, some routines, planning and decision models.

Goals of MIS
1.MIS is very useful for efficient and effective planning and control functions of the
management. Management is the art of getting things done through others. MIS will be
instrumental in getting the things done by providing quick and timely information to
the management.
2. Reports give an idea about the performance of men, materials, machinery, money and
management. Reports throw light on the utilization of resources employed in the
organisation.
3. MIS is helpful in controlling costs by giving information about idle time, labour
turnover, wastages and losses and surplus capacity.
4.By making comparison of actual performance with the standard and budgeted
performance, variances are brought to the notice of the management by MIS which
can be corrected by taking remedial steps.
5.MIS brings to the notice of the management strength (i.e ., strong points) of the
organisation, to take advantage of the opportunities available.
6.MIS reports on production statistics regarding rejection, defective and spoilage and
their effect on costs and quality of the products.

Components with Integrated IPOF

Information systems components are hardware, software, database, network and people and
theses five components integrated to perform IPOF i.e. Input, processing, output, Feedback.
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Software consists of various programs and procedures whereas hardware consists of I/O
devices, operating system and the other media devices. Database consists of data that
organized in structured way. Network consist hubs, communication media, and network
devices. People are device operators, system analysis and network administrators.
Whereas to integrate all the components and process information consist of
input, data process, output and control. During the input feeding instructions are fed to the
computer and during processing stage worked upon by software programs and other queries.
While in the output phase data is represented in structured form of documents and same in
the reports.

Input : is a piece of data which is embed in the system by the user for some use. There are
various types of input devices are: keyboard, scanner, microphone, mouse and so on.
Whatever we input in the system has some purpose until it processed and generate in
another format, is not meaningful.
Processing: This phase is used after input phase and take place in the internal pat of the
system. Main purpose it serve is to take inputted data and convert it into something usable.
What we see in today's computer world is what we see is what we get which is a result of
input data that user feed to the system and processed by some program and turn that data
into usable output.
Output: This is the third and second last phase in which usable output user get on the
computer screen after feeding input to the computer. For user this is the second phase but
according to the system this is third because processing phase which is the internal part not
seen by the user of the system. Output comes in different forms like: monitor and printer for
the visual work, and a speaker for the audio. Some output are for the short term like printing
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a photo but some of them needs to keep record that's where feedback or storage comes in
existence.

Feedback: This term is used to save data for some time. There may be many reasons to save
data: for future reference, to prevent loss of data, but it is vital. There are several mediums
to keep you data save like hard disk, a USB or a CD.

Challenges of MIS
A. Operational Challenges
1. Bad Communication: Lack of understanding/planning for customer, organization
and other stakeholders requirements/needs for the project.
2. Unclear Requirements: When requirements are not clearly identified, this will lead
to change of requirements during middle of the project which will increase project
delivery time and anger many customers.
3. Increasing Cost: All of this will lead to added labour and project cost. Thus making
the project less profitable and takes away interest from stakeholders.
4. Delayed Project Delivery: The result of what mentioned above will cause project
milestones to be pushed back and a potential software with less functionality than
what agreed upon in the beginning agreement with the client.
5. Market Pressure: Another important aspect is the rapid development of software to
meet the ever-changing market demands.

B. Technical Challenges
1. Knowing the Technical needs: This is and about the understanding programming
languages, the frameworks, the systems and the algorithms needed for a particular
information system to be successful. An important factor today is making sure that
your web based information system works on all browsers and devices. It also about
knows your developers programming expertise and using that to your advantage.
2. Right Design Patterns: Identifying the right design patterns for your information
system software and establishing an actual design review, quality evaluation criteria
and design management is something highly neglected today because of the time and
effort it takes.
3. Quality Control: Sometimes codes are not built with a "sanity in mind" which can
lead to significant challenges in the future. Building quality and maintainable code
that can scale to multiple systems to serve millions and millions of customers is a
key challenge today if addressed can save the company from catastrophes and put
them ahead of their competition.
4. Security: Security is highly important especially with today's cyber warfare and
attacks. Ensuring no leaks are open during information system development is key in
safeguarding your customer and employee private data. Educating your employees
about reverse engineering is also another key important thing that developers and
technical staff overlook.
5. Always Debugging: You're always on the lookout in fixing logical errors debugging
those infinite loop or divide by zero bugs in the code. According to Linu's law,
always have enough eyeballs to lookout for bugs in the system.
These challenges and many more should be properly addressed and defined way
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before programmers even start coding. The key takeaway in production quality is to
have a polished/optimized/efficient program with strong business logic and always
tested and documented information system development project.

DECISION SUPPORT SYSTEMS (DSS)

Strategic management staff (often senior managers) make decisions by providing information,
models, or analysis tools. For support of semi-structured and unstructured decisions. Used for
analytical work, rather than general office support. They are flexible, adaptable and quick.
The user controls inputs and outputs. They support the decision process and often are
sophisticated modeling tools so managers can make simulations and predictions. Decision
support systems are a major category of management support systems. They are computer-
based information systems that provide interactive information support to managers during the
decision-making process.

Decision support systems use -

(1) Analytical models,
(2) Specialized databases,
(3)A decision maker's own insights and judgments, and
(4)An interactive, computer-based modeling process to support the making of semi- structured
and unstructured decisions by individual managers.
Therefore, they are designed to be ad hoc, quick-response systems that are initiated and
controlled by managerial end users. Decision support systems are thus able to directly support
the specific types of decisions and the personal decision-making styles and needs of individual
managers.
Definitions of DSS
"Decision support system (DSS) is an interactive computer based system, which help decision
makers, utilize and model to solve unstructured problems". - Scott Morton
A DSS is an interactive, flexible, and adaptable CBIS, specially developed for
supporting the solution of a non-structured management problem for improved decision
making. It utilizes data, it provides easy user interface, and it allows for the decision maker's
own insights.
For example, advertising managers may use an electronic spreadsheet package to do 'what-if
analysis as they test the impact of alternative advertising budgets on forecasted sales of new
products.
DSS can be divided into two categories:
1.Data driven-to mine customer data gathered from their websites and from enterprise
systems.
2. Model driven (stand alone systems) used some type of model to perform "what if’’and other
kind of analysis.

Characteristics of DSS
A DSS enables its users to solve a particular problem using the 'what-if analysis Using this
analysis, one can make modifications to the data related to the problem and find out the effect of
these changes on the results. Thus, a DSS is used for analyzing the various possibilities and
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deriving an appropriate strategy for each situation.

The characteristics of Decision support system are explained as follows
1. Ability to support the solution of complex problems: A DSS aids the solution of
complex problems that cannot be solved by other computerised approaches or can be
solved at a much slower pace.
2. Fast response to unexpected situations that result in changed inputs: It enables a
through quantitative analysis in a very short time. Even major changes in a scenario can
be evaluated objectively in a timely manner.
3. May be constructed to support one time decisions: Helpful to those that are infrequent,
however, the type of problem or opportunity best addressed through use of a DSS is one
that requires human judgement.
4. Designed to help support decisions: These are formulated as semi-structured, complex
problems. These problems remain resistant to complete computerised.
5. It is a way to organize information intended for use in decision-making: It involves
the use of a database for a specific decision-making Process. A DSS does not just
automate transactions performed on data nor simply provide output in the form of reports.
6. DSS generator (software) can be used: Rather than building a specific DSS from
scratch, a system analyst can use a package of interrelated hardware and a software called
DSS generator.
7. A decision support system is best conceptualized as a process instead of a product:
The following figure shows the product orientation of traditional MIS versus the process
oriented DSS.
8. Ability to quickly and objectively try different strategies under different configurations.

Activities of DSS
Using a DSS software package for decision support may result in a series of displays in response
to alternative what-if changes entered by a manager. This differs from the demand responses of
information reporting systems, since managers are not demanding pre specified information but
they are exploring possible alternatives. Thus, they do not have to specify their information
needs in advance. Instead, they use the DSS to find the information they need to help them make
a decision. That is the essence of the decision support system concept. Using a decision support
system involves four basic types of analytical modeling activities:
1. What-if Analysis: In what-if analysis, an end user makes changes to variables, or
relationships among variables, and observes the resulting changes in the values of other
variables. For example, if you were using a spreadsheet, you might change a revenue
amount (a variable) or a tax rate formula (a relationship among variables) in a simple
financial spreadsheet model. Then you could command the spreadsheet program to
instantly recalculate all affected variables in the spreadsheet. A managerial user would be
very interested in observing and evaluating any changes that occurred to the values in the
spreadsheet, especially to a variable such as net profit after taxes. To many managers, net
profit after taxes is an example of the bottom line, that is, a key factor in making many
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types of decisions. This type of analysis would be repeated until the manager was
satisfied with what the results revealed about the effects of various possible decisions.
2. Sensitivity Analysis: Sensitivity analysis is a special case of what-if analysis
Typically, the value of only one variable is changed repeatedly, and the resulting changes
on other variables are observed. So sensitivity analysis is really a case of what-if analysis
involving repeated changes to only one variable at a time. Some DSS packages
automatically make repeated small changes to a variable when asked to perform
sensitivity analysis. Typically, sensitivity analysis is used when decision makers are
uncertain about the assumptions made in estimating the value of certain key variables. In
our previous spreadsheet example, the value of revenue could be changed repeatedly in
small increments, and the effects on other spreadsheet variables observed and evaluated.
This would help a manager understand the impact of various revenue levels on other
factors involved in decisions being considered.
3. Goal-seeking Analysis: Goal-seeking analysis reverses the direction of the analysis done
in what-if and sensitivity analysis. Instead of observing how changes in a variable affect
other variables, goal-seeking analysis (also called how can analysis) sets a target value (a
goal) for a variable and then repeatedly changes other variables until the target value is
achieved. For example, you could specify a target value (goal) of Rs.20 lakhs for net
profit after taxes for a business venture. Then you could repeatedly change the value of
revenue or expenses in a spreadsheet model until a result of Rs.20 lakhs is achieved. Thus
you would discover what amount of revenue or level of expenses the business venture
needs to achieve in order to reach the goal of Rs.20 lakhs in after-tax profits. Therefore,
this form of analytical modeling would help answer the question, "How can we achieve
$2 million in net profit after taxes?" instead of the question, "What happens if we change
revenue or expenses?" Thus, goal-seeking analysis is another important method of
decision support.
4. Optimization Analysis: Optimization analysis is a more complex extension of goal-
seeking analysis. Instead of setting a specific target value for a variable, the goal is to find
the optimum value for one or more target variables, given certain constraints. Then one or
more other variables are changed repeatedly, subject to the specified constraints, until the
best values for the target variables are discovered. For example, you could try to
determine the highest possible level of profits that could be achieved by varying the
values for selected revenue sources and expense categories. Changes to such variables
could be subject to constraints such as the limited capacity of a production process or
limits to available financing. Optimization, typically, is accomplished by special-purpose
software packages for optimization techniques such as linear programming, or by
advanced DSS generators.

Functions of DSS Applications

1. Becoming familiar with the problem domain (DSS can be used to identify
relationships among the key elements of the problem).
2. Determining sensitivity of results to changes in decision variables (knowing which
decision variables have the greatest impact on the outcome enables the decision-makers
to focus attention on the important matter).
3. Identifying patterns (using both statistical techniques and the usual display of
quantitative data, helps the analysts to identify patterns in either input data or result).
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4. Predicting decision outcomes (DSS can be used to estimate the impact on sales of
doubting the size of the sales force, increasing the advertising budget or introducing a
product into a new market).
5. Developing models of business processes (models may consist of one or more equations
that relate output to input e.g.: relating sales to the number of sales personnel, sales as a
function of advertising statistical programs that estimate the parameters of such
equations).
6. Computing optimum mixes (say problem of allocating people to jobs, match between
skills and available jobs etc. or techniques like linear programming can be used to
compute the optimum solutions).
7. Facilitating group communication (DSS applications involve always a group. Frequent
decisions are made by consensus. Group must have common understanding of the
problem. DSS facilitates the group process by making the facilities of the system
available to all group members).

Components of DSS
Different authors identify different components in a DSS. Sprague and Carlson identify
three fundamental components of DSS:
a. Database management system (DBMS),
b. Model-base management system (MBMS), and
c. Dialog generation and management system (DGMS).
According to Power, academics and practitioners have discussed building DSS in terms
of four major components:
a. User interface,
b. Database,
c. Model and analytical tools, and
d.DSS architecture and network.
Hattenschwiler identifies five components of DSS:
a. Users with different roles or functions in the decision making process (decision maker,
advisors, domain experts, system experts, data collectors),
b. A specific and definable decision context,
c. A target system describing the majority of the preferences,
d. A knowledge base made of external data sources, knowledge databases, working
databases, data warehouses and meta-databases, mathematical models and methods,
procedures, inference and search engines, administrative programs, and reporting systems,
e. A working environment for the preparation, analysis, and documentation of decision
alternatives.
Marakas proposes a generalized architecture made of five distinct parts:
a. Data management system,
b. Model management system,
c. Knowledge engine,
d. User interface and
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e. User(s).

Following text will explain the basic components of DSS:

1. Hardware Resource: Workstation connected through network to other components
can also be used forms as the a stand-alone basic hardware system resource or
connected for the through DSS. Personal network computers to larger computer
system to access DSS software.
2. Software Resource: DSS software packages are called DSS generators. They contain
models of databases, model and dialogue managers. A database Management module
provides the creation, interrogation and maintenance of the DS database. A model
base management module provides the ability to create, maintain and manipulate
modeling the mathematical packages. A models model base in the includes model a
base library using of capabilities provided by analytical techniques stored in a variety
of program mathematical and files. models A dialogue and generator and
management module provides user modules interface that supports interactive input
and output by managers. A data based. management helps in creation, use and
maintenance of a DSS database. It helps define and modify the structure of the data
records and relationships in the database, the storage and retrieval of data, the
updating of database and the control over integrity of the database.
3. Data Resource: A DSS contains data and information extracted from the databases of
the organization, external databases. It includes summarized data and information
needed by the manager for specific decision making purpose.
4. People Resource: The manager and his staff who are involved in decision making
process and need to explore decision alternatives can use a DSS.
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Classification of DSS
1. Based on the type of support offered by DSS (Alters’ collapsed DSS classification
Scheme)
Data centric DSS
Model centric DSS
2. Based on the attributes of problem solving context
3. Based on Decision situation
4. Based on degree of user guidance or procedurality
5. Orientation toward data, text, rules and models
6. Focus on individual versus multiple decision makers

Alter's collapsed DSS classification Scheme

(Individual Vs Group DSS)

DSS Type DSS Activity DSS Support Orientation

File Drawer Systems Data Retrieval Data centric ( Based on
retrieval and analysis.
Data Analysis Systems Data Analysis
Analysis Information Systems Simulation Model centric (includes
activities such as simulation
maximising and optimising
scenarios)
Accounting Models Suggestion
Representation Models
Optimisation Models
Suggestion Models

7. Based on the attributes of Problem Solving Context

The classifications as indicated by Donovan and Madnick in 1977 are as under:
Formal or Institutional: DSS is designed to focus on decisions that are periodic or
recurring within an organisation. These require regular interaction with a DSS to
ensure consistent and effective decision outcomes.
Ad hoc DSS is designed to focus on a very narrow problem context or set out of
decisions that is usually not recurring or easily anticipated.
8. Based on the degree to which the system provides decisional guidance Silver
classified these as under:
Directed DSS are the ones where the manner in which a DSS guides its users in
constructing and executing decision making processes by providing assistance in
choosing and using its operators (operators are those elements of the DSS-menus,
buttons, models, algorithms, tools) that can, or must be manipulated by the user in the
course of the decision making process.
Silvers classification initially categorizes a DSS by the type of guidance provided:
Mechanical Guidance and Decisional Guidance.
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Mechanical Guidance is the most common firm of directiveness in a DSS and

generally consists of assisting users with the mechanics of the operating system like
menus, buttons, commands.

Decisional Guidance assists the users in dealing with the various decision making
concepts relevant to the probleming context. This is again broken into the structuring
or execution of the decision making process. Finally each decisional guidance
subcategory can be classified by the form the guidance takes: Suggestive or
Informational.
9. Procedural System: It refer to the degree to which a user of a DSS can specify
whatever information he or she wants from that DSS in whatever form he/she wants it.
DSSs can be positioned on a continuum according to their degree of procedurality.

Non-procedural System: It is just opposite to procedural system.

10. Hypertext System: To provide knowledge management for the problem context-one
such technique is the document centric hypertext system

Spread sheet system

11. Individual DSS: Ability to provide support to a single decision maker.

Group DSS (GDSS): Ability to provide a support to a group of decision makers

Advantages of DSS
1. Designed to facilitate solving complex problems; for group decision making.
2. Uses three types of management like dialog management, database management
model base management to solve a specific problem.
3. Supports semi-structured or unstructured decision making.
4. Provides users with a flexible set of tools and capabilities for analysing important
blocks of data.
5. It does not give a final solution to a complex problem but analyses; The DSS user has
to take the final decision.
6. Provides interactive information support to managers and business professionals for
decision making process.
7. Provides what if analysis, sensitivity analyses, goal seeking analysis, optimisation
analysis etc. as analytical modeling for decision support to the DSS users.

Difference between MIS & DSS

MIS DSS
MIS is normally used only with DSS can handle unstructured problems.
structured problems. time for batch processing.
MIS usually emphasizes information DSS emphasizes actual decision and
only decision making styles.
MIS is typically oriented towards printed DSS reports are usually screen oriented,
reports and documents. with the capability to generate reports on
a printer.
MIS gives an indirect support system that DSS gives a direct support system that
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uses regularly produced reports provides interactive reports on screens.

Dis-advantages of DSS
1. DSS are very costly.
2. DSS are used only for specific
3. DSS system alternatives will not ultimate solution but only indicates the results of
each alternatives from which DSS user after analyzing has to take the final decision.

Group Decision Support System

The GDSS started originally from the Management Information System at University of Arizona.
Some kind of problems have always been observed that are associated more with large meetings
than with small meetings. By large meetings we mean meetings with generally more than 15
participants, but can go much beyond that, e.g. 40 or even 50. Some of the identified problems
are:
- Time consuming;
- Dominance over the meeting; and
-Honesty and participation.
The decision support systems discussed till now were computerized support for an
individual making a decision of semi-structured or unstructured type. Many decisions taken
within an organization are not usually taken by an individual but are the result of a group
deliberations. A Group Decision Support System (GDSS) is an interactive, computer-based
system that helps a team of decision-makers solve problems and make choices. GDSS are
targeted to supporting groups in analyzing problem situations and in performing group decision-
making tasks.
In a GDSS environment, there is usually a big room with something like 40 seats,
which means that 40 people can be at the meeting at any one time. There are not only 40 seats
but also 40 microcomputers. This enables every participant to have the use of one
microcomputer during the course of the meeting. The reason why each participant needs a
microcomputer depends on how GDSS works.
In the GDSS, with special computer software, the facilitator of each meeting will
first make the agenda of the meeting, which will be projected onto a big screen that everyone can
see. Then the participants will type simultaneously in their ideas of the topic of discussion on the
individual microcomputers next to them. Then the computer will sort the ideas, and then the
participants will then vote or comment on which ideas they like or they dislike. In the course of
the whole meeting, GDSS stores, categorizes and prints out all the ideas, comments and vote
tallies, so that each of the meeting participants will get a summary of the meeting when it ends.
What so special about GDSS is that it enables meeting participants to simultaneously
"talk", when the computer sorts and sends ideas to each of the terminal, all at the same time. That
saves a tremendous amount of time, because all these are done electronically instead of manually,
and the time saved will enable participants to spend more time manipulating and expressing their
ideas. This can consequently increase the productivity and efficiency of the group. The time-
consuming benefit also has an added bonus: when productivity and efficiency in meetings
increase, it is likely that the team spirit can be consolidated, resulting in an increase of the
strength of binding among team members.
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Office Automation System (OAS)

Office Automation Systems (OAS)s are a collection of hardware and software for developing
documents, scheduling resources and communicating. Document development tools include
word processing and desktop publishing software as well as hardware for printing and producing
documents. Scheduling tools include electronic calendars that help manage resources like
equipment, conference rooms etc. Communicating tools include electronic mail, voice mail, fax,
video conference.

1. Word Processing: Word Processing refers to the software and hardware technology
that creates, edits, formats, stores and prints documents.
2. Desktop Publishing: Desktop publishing produces professional quality documents
combining output from word processors with design, graphics and special layout
features.
3. Communication Systems: Communication systems helps people work together by
sharing information in many different forms like teleconferencing (including audio
conferencing, computer conferencing, video-conferencing), electronic mail, voice mail,
fax.
4. Groupware System: Groupware system helps teams work together by access to team
data, structuring communication, and making it easier to meetings. For sharing
information, controlling work flows, communication/ integration of work.
Goals or Benefits of OAS
OASs help in increasing personal productivity. They reduce "paper warfare". OAS software tools
are often integrated (e.g ., Word processor can import a graph from a spreadsheet) and designed
for easy operation. Thus, Office Automation Systems
-Is targeted at meeting the knowledge needs of data workers within the organisation.
- Tend to process data workers rather than create information. Primarily involved in information
use, manipulation or dissemination.
-Handle and manage documents, scheduling and communication.

Process Control System (PCS)

A process-control system monitors a manufacturing environment and electronically controls the
process or manufacturing flow based on limits set by the user. In a representative process-control
system, a measuring device (laser diode) is used to detect gas or liquid present in an industrial
environment. The frequency signature of the specific gas or liquid is sent to the receiver where it
is converted to a digital signal and then identified by the processor. This identification is used by
the host controller and automation system for system tasks.

Altera Cyclon devices, combined with intellectual property (IP) cores, help reduce development
costs, increase design flexibility, and shorten the development cycle for process control
applications. By combining the 32-bit Nios embedded processor with a Cyclone device,
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designers have the flexibility to implement application-specific peripherals to achieve the needed
core performance. You can balance cost and performance performance system to achieve with a
the low-end, core optimized low-cost for slave speed system and required or a higher-end,
peripherals higher.

Executive Information System (EIS)

Executive Support Systems (ESS)s provide critical information in easy-to-use displays to a
variety of managers at the strategic level in an organization.For example top executives may use
touch screen terminals to instantly view text and graphics displays that highlight key areas of
organizational and competitive performance. These systems are easy to use and provide high-
level summary data and trend analysis at the touch of a button, using graphics as a way of
presenting the information. For the executive's PC, telecommunication links are often made to
public databases and World Wide Web, so that external data can be browsed and incorporated
into while making strategic decisions
Executive Information Systems provide a generalized computing and communication
environment to senior managers to support strategic decisions. They draw data from the MIS and
allow communication with external sources of information. But unlike DSS, they are not
designed to use analytical models for specific problem solving. ESS are designed to facilitate
senior managers' access to information quickly and effectively.
An executive information system is a type of management information system that
facilitates and supports senior executive information and decision-making needs. It provides easy
access to internal and external information relevant to organizational goals. It is commonly
considered a specialized form of decision support system.
EIS emphasizes graphical displays and easy-to-use user interfaces. They offer
strong reporting and drill-down capabilities. In general, EIS are enterprise-wide DSS that help
top-level executives analyze, compare, and highlight trends in 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 favor of
business (with the sub areas of reporting, analytics, and digital dashboards).
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Advantages of EIS
1. Provides timely delivery of company summary information.
2. Information that is provided is better understood.
3. Filters data for management.
4. Improves to tracking information.
5. Offers efficiency to decision makers.

Disadvantages of EIS
1. Functions are limited, cannot perform complex calculations.
2. Hard to quantify benefits and to justify implementation of an EIS.
3. Executives may encounter information overload.
4. System may become slow, large, and hard to manage.
5. Difficult to keep current data.
6. May lead to less reliable and insecure data.
7. Small companies may encounter excessive costs for implementation.
8. Too detailed oriented.

Applications of EIS
1. Manufacturing: of purchased EIS provides materials the and evaluation parts, and
analysis of vendors of critical and buyers, purchasing the evaluation areas. Therefore, the
executive can oversee and review purchasing operations effectively with EIS.
2. Marketing: 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. 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.
3. Financial: 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 is a good tool to help the executive to
review financial ratios, highlight financial trends and analyze a company's performance
and its competitors.

Expert System (ES)

One the most practical and widely implemented applications of artificial intelligence in business
is the development of expert systems and other knowledge based information systems. A
knowledge-based information system (KBIS) adds a knowledge base to the major components
found in other types of computer-based information systems. An expert system (ES) is a
knowledge-based information system that uses its knowledge about a specific, complex
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application area to act as an expert consultant to end users. Expert systems can be classified
conceptually as either operations or management support systems, depending on whether they
are giving expert advice to control operational processes or helping managers make decisions.
Expert systems are related to knowledge-based decision support systems that add a knowledge
base to the database and model base of traditional decision support systems. However, unlike
decision support systems, expert systems provide answers to questions in a very specific problem
area by making humanlike inferences about knowledge contained in a specialized knowledge
base. They must also be able to explain their reasoning process and conclusions to a user. So
expert systems can provide decision support to managers in the form of advice from an expert
consultant in a specific problem area.
Expert system is defined as "a computer system or program that uses artificial intelligence
techniques to solve problems that ordinarily require a knowledgeable human. The method used
to construct such systems, knowledge engineering, extracts a set of rules and data from an expert
or experts through extensive questioning. This material is then organized in a format suitable for
representation in a computer and a set of tools for inquiry, manipulation, and response is applied.
While such systems do not often replace the human experts, they can serve as useful adjuncts or
assistants.
Among some of the successful expert systems developed are INTERNIST, a
medical diagnosis tool that contains nearly 1,00,000 relationships between symptoms and
diseases, and PROSPECTOR, an aid to geologists in interpreting mineral data".

This is a classic example of how deskilling can affect people: imagine you are a expert rock
identifier and people from around the world treat you like a living nation. treasure because of
your brilliant ability to identify rocks. One day, a system is built that contains all the rules you
intuitively use to make your rock identification decisions By answering a few simple questions
presented by the expert system, a human can identify a rock just as well as you can.
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Expert systems are built with decision-making rules, and they can ask humans a series of
questions to narrow down the correct answer. One early and influential expert system was
MYCIN, a disease diagnosis system.

Expert systems are computer application programs that take the knowledge of one or more
human experts in a field and computerize it so that it is readily available for use. The human
experts do not need to be physically present to accomplish a specialized project or task. Expert
systems are only designed to be "expert" in a very narrow and specific task or subject field. They
contain the acquired expert knowledge and try to imitate the expert's evaluation processes to
offer a conclusion. An advantage of an expert system is that it may include the knowledge of
many experts in one specific field.

Expert systems usually contain two components: a knowledge base and an inference engine
program, enabling it to suggest conclusions. The knowledge base is programmed in an IF ...
THEN logical rules structure. Such a structure is a series of II conditions that, if met, THEN a
specific result may be concluded. An example would be:

IF the animal is a bird

it does not fly
it swims
it is black and white

THEN it is a penguin

The expert system rules out options with each question until there remains option with high
probability. The rules and questions, of course, are provided by humans in the first place.

Components of an Expert System

The components of an expert system include a knowledge base and software modules that
perform inferences on the knowledge and communicate answers to a user's questions.

Knowledge Base

An expert system is a computer based information system in which knowledge is represented in

data, in which the processing of the knowledge in directed primarily by computer program . This
system has the greatest degree of computer control of the three systems studied. The
development of systems that process the knowledge of a true human expert has proven to be
difficult and expensive. The technology however is useful in the solution of many smaller
problems.

The knowledge base of an expert system contains - (i) facts about a specific subject area and (ii)
heuristics (rules of thumb) that express the reasoning procedures of an expert on the subject (for
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PROF SHRADHA. A

example: IF John is an analyst, THEN he needs a workstation). There are many ways that such
knowledge is represented in expert systems. Examples are rule-based, frame-based, object-based,
and case-based method of knowledge representation.
Software Resources
An expert system software package contains an inference engine and other programs for refining
knowledge and communicating with users. The inference engine program processes the
knowledge related to a specific problem. It then makes associations and inferences resulting in
recommended courses of action for a user. User interface programs for communicating with end
users are also needed, including an explanation program to explain the reasoning process to auser
if requested. Knowledge acquisition programs are not part of an expert system but are software
tools for knowledge base development. Other software packages, such as expert system shells,
are important software resources for developing expert systems.

Benefits of Expert systems

Many real-world situations do not fit the suitability criteria for expert system solutions.
Therefore, expert systems should be developed cautiously, especially if sensitive or strategic
applications are involved. Hundreds of rules may be required to capture the assumptions, facts,
and reasoning that are involved in even simple problem situations. For example, a task that might
take an expert a few minutes to accomplish might require an expert system with hundreds of
rules and take several months to develop. A task that may take a human expert several hours to
do may require an expert system with thousands of rules and take several years to build.

An expert system captures the expertise of an expert or group of experts in a computer-based

information system. Thus, it can outperform a single human expert in many problem situations.
That's because an expert system is faster and more consistent, can have the knowledge of several
experts, and does not get tired or distracted by overwork or stress.

Expert systems also help preserve and reproduce the knowledge of experts. They allow a
company to preserve the expertise of an expert before she leaves the organization. This expertise
can then be shared by reproducing the software and knowledge base of the expert system. This
allows novices to be trained and supported by copies of an expert system distributed throughout
an organization. Finally, expert systems can have the same competitive advantages as other types
of information technology. That is, the effective use of expert systems can allow a firm to (1)
improve the efficiency of its operations, (2) produce new products and services, (3) lock in
customers and suppliers with new business relationships, (4) build knowledge-based strategic
information resources.

Advantages of Expert Systems

1. The computer can store far more information than a human.
2. The computer does not 'forget', make silly mistakes or get drunk when it is most needed.
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3. Data can be kept up-to-date.

4. The expert system is always available 24 hours a day and will never 'retire'.
5. The system can be used at a distance over a network.
Disadvantages of Expert Systems
The major limitations of expert systems arise from their limited focus, inability to learn,
maintenance problems, and developmental cost. Expert systems excel only in solving specific
types of problems in a limited domain of knowledge. They fail miserably in solving problems
requiring a broad knowledge base and subjective problem solving. They do well with specific
types of operational or analytical tasks, but falter at subjective managerial decision making. For
example, an expert system might help a financial consultant develop alternative investment
recommendations for a client. But it could not adequately evaluate the nuances or current
political, economic, and societal developments, or the personal dynamics of a session with a
client. These important factors would still have to be handled by the human consultant before a
final investment decision could be reached.
Expert systems may also be difficult and costly to develop and maintain
properly. The costs of knowledge engineers, lost expert time, and hardware and software
resources may be too high to offset the benefits expected from some applications. Also, expert
systems can't maintain themselves. That is, they can't learn from experience but must be taught
new knowledge and modified as new expertise is needed to match developments in their subject
areas. However, some of these limitations can be overcome by the use of expert system shells
and other developmental tools that make the job of development and maintenance easier.

Difference between DSS and ES

Attribute DSS ESS
Objective Assist human decision maker Duplicate a human adviser
and replace him
Recommendations about Made by the user and/or the The System
decision system
Major orientation Decision making Transfer of expertise and
rendering advice
Query direction Human system System
Data manipulation Numerical Human symbolic
Characteristics of problem Complex, broad Narrow, specific
area
Type of database and Factual knowledge Factual knowledge
procedures
Reasoning capability Absent Present
Explanation Limited Total
Learning capability Absent Present
Nature of support Personal, groups & Personal and groups
institutional