TYPES OF INFORMATION

SYSTEMS
 
OFFICE AUTOMATION SYSTEMS
• An office automation system (OAS) facilities
everyday information processing tasks in
office and business organizations. These
systems use a wide range of tools in office and
business organizations.
Tools generally grouped within the OASs
category include: 
        Spreadsheet programs,
       Text and image processing systems,
        Presentation packages
• Communication system:
Help provide work together by interacting and
sharing information in many different forms.
• Transaction processing system (TPS): collects and
stores information about transactions; controls some
aspects of transactions.
• Management information system (MIS) and
executive information system (EIS): converts TPS
data into information for monitoring performance and
managing an organizing; provide executives
information in a readily accessible interactive format.
• Decision support system (DSS): helps people
make decisions by providing information,
models, or analyze tools.

• Enterprise System: creates and maintains

consistent data processing methods and an
integrated database across multiple business
functions.
 Examples of Each Type of Information System in Three Functional
Area of Business
System type Sales example Manufacturing Finance
examples examples
Spreadsheet to         Spreadsheet to analyze     Spreadsheet to
Office        
a production schedule compare several loan
automation analyze different         Word processor to arrangements.
System possible prices write a memo about how to         Word processor
        Word processor fix a machine. to write a memo about
to create sales new financial
procedures
contract
Communication         E-mail and fax used         E-mail and v-mail used         V-mail and fax to
System to contact customer to discuss a problem with a communicate with
        Video conference to new machine. bank about loan
present new sales         Video conference to arrangements
materials to sales force coordinate manufacturing         Video conference
        Work flow system and sales efforts. to explain effect of
to make sure all sales         Workflow system to financing on factory
steps are completed make sure engineering investments
        System to changes and improved         Workflow system
coordinate all work on a to make sure invoice
complex sales contract approval precedes
payment.
       
 Manufacturing Finance
System type Sales example
examples examples

Transaction         Point of sale         Tracking         Processing

processing system for sales movement of work- credit card
system transactions in-process in a payments
        Keeping track factory         Payment of
(TPS)
of customer         Tracking stock dividends
contacts during a receipts of materials and bond
sales cycle from suppliers. interest.
Managemen         Weekly sales         Weekly         Receivables
t report by product production report report showing
information and region by product and invoices and
        Consolidation operation payments
system
of sales         Determination         Monthly
(MIS) and projections by of planned financial plan
executive product and purchases based on consolidation
information region a production         Flexible
system(EIS)         Flexible access schedule. access to
to sales data by         Flexible access corporate
product and to production data financial plan by
region by product and line item.
operation.  
 System Sales Manufacturing Finance
type example examples examples

Decision         Model helping         Model         Analysis of

insurance determining characteristics
support salespeople test current priorities of customers
system alternatives for machine who pay bills
(DSS)         Marketing operator. promptly
data and models         Production data         Stock
to analyze sales and models to database and
analyze production models to help
results. in selecting
stocks to buy or
sell.
Enterprise         Help a sales         Help the         Help the
system rep enter an manufacturing finance
order and manager to department
establish that schedule track the cost of
enough capacity maintenance based production back
exists to meet the on minimizing to purchase
schedule disruption to sales. orders.
 COMMUNICATION SYSTEMS
• Electronic communication system help people work
together by exchanging or sharing information in many
different forms. New communication capabilities have
changed the way many business operate by making it
possible to do many things at a distance that previously
required being present in a specific location. This section
covers a wide range of these tools. Teleconferencing
systems make it possible to hold same-time, different-
place meetings. A variety of technologies including e-
mail, voice mail, fax, instant messaging, and chat rooms
make it possible to transmit specific messages to specific
individuals or groups of individuals
 TRANSACTION PROCESSING
SYSTEMS
• A transaction processing system (TPS) collects and
stores data about transactions and sometimes control
decisions made as part of a transaction. A transaction is
a business event that generates or modifies data stored
in an information system. TPSs were the first
computerized information systems that were used
widely. Encounter computerized TPSs frequently,
including every time we write a check, use a credit card
or pay a bill sent by a company. A TPS used to record a
sale and generate a receipt is primarily concerned with
collecting and storing data.
 Batch versus Real-Time Processing
• The two main types of transaction processing are batch
processing and real-time processing. With batch
processing, information for individual transactions is
gathered and stored but isn’t processed immediately. Later,
either on a schedule or when a sufficient number of
transactions have accumulated, the transactions are
processed to update the database. With real-time
processing, each transaction is processed immediately.
The person providing the information is typically available
to help with error correction and receives confirmation of
transaction completion.
 MANAGEMENT AND EXECUTIVE
INFORMATION SYSTEMS
A management information system (MIS) provides
information for managing an organization. The idea of MIS
predates the computer age.
• From MIS to EIS
An executive information system (EIS) is a highly interactive
system providing managers and executives flexible access to
information for monitoring operating results and general
business conditions. These systems are sometimes called
executive support systems (ESS). EIS attempts to take over
where the traditional MIS approach falls short. Although
sometimes acceptable of providing prespecified reports on a
scheduled basis is too inflexible for many questions
executives really care about, such as understanding problems
and new situations.
 DECISION SUPPORT SYSTEMS
• A decision support system (DSS) is an
interactive information system that provides
information, models, and data manipulation tolls
to help make decision in semi structured and
unstructured situations where no one knows
exactly how the decisions should be made. The
traditional DSS approach includes interactive
problem solving, direct use of models, and user-
controllable methods for displaying and
analyzing data and formulating and evaluating
decisions.
 Important Techniques Sometimes Used in Supporting
Decision-Making
Techniques Related discipline Approach

Research on different Create a mathematical

simulation techniques model of the situation.
Define the main decision
variables and operate the
Simulation model under different
assumptions or with
different starting
conditions to help explore
alternative paths for the
real situation.
Mathematical optimization Create a mathematical
techniques model of the situation.
Design the model so that
Optimization optimization techniques
can be used to search for
optimal values of decision
variables.
Important Techniques Sometimes Used in Supporting Decision-Making

Techniques Related discipline Approach

Statistics Use statistical

(mathematical techniques to analyze
OLAP and data
techniques) and business results and
mining
computer science find hidden
(database techniques) relationships.

Al research on Summarize an expert’s

language and view of an area of
knowledge knowledge in terms of
Expert Systems representation facts and rules. Apply
the facts and rules to a
particular situation to
help someone else
decide what to do.
Important Techniques Sometimes Used in Supporting Decision-Making

Techniques Related discipline Approach

Statistics (mathematical Start with a large setoff

coded example that
techniques) and Al
represent the range and
research related to frequency of possibilities in
perception. the situation being studied .
Neural Apply automated statistical
“learning” techniques to
networks find the statistical
parameters that bets
represent correlations
between groups of
characteristics with the
training set.

Research on alternative Control decision processes

using logic systems that
formal logic systems.
Fuzzy logic replace “either-or” logic
with logic based on relative
degrees of inclusion in sets.
 Important Techniques Sometimes Used in Supporting Decision-Making

Techniques Related discipline Approach

Al research on Create a database of

representing knowledge examples that may help
in making decisions.
Cased-based Add another example to
reasoning the database when the
database does not cover
a new situation.

Al research on Specify decision

controlling systems that parameters for a
operates on many levels. computerized “agents”
Intelligent agents that searches one or
more database to find a
specific answer, such as
the lowest price for a
particular camera.
 ENTERPRISE SYSTEMS:
• This would provide a consistent, readily accessible
repository of information used in business processes such
as purchasing, inventory control, manufacturing, sales,
delivery, billing, accounts receivable, and personnel.
Achieving this degree of integrated is the idealized goal
of enterprise systems, firm-wide information systems
that serve as a common, integrated information
infrastructure for basic business processes.
• This type of enterprise system seemed beyond reach until
the mid-1990s when several software vendors started
selling enterprise resource planning (ERP) systems.
 LIMITATIONS AND USES OF
INFORMATION SYSTEM CATEGORIES
         Someone speaking of a web-based communication system might mean
any combination of e-mail, voice mail, instant messaging, chat rooms,
intranets, and extranets.
         Someone speaking of a DSS might mean potentially useful, general-
purpose software or might mean a specific information system that is
currently playing an important role in a work system.
         Someone speaking of a sales force automation system might mean an
information system that helps the salesperson, or might mean an information
system in which salespeople are obligated to enter data needed by the
headquarters finance group
         Someone speaking of an ERP system might mean an enterprise-wide
information system or might a single module purchased from an ERP vendor.
         Someone speaking of a knowledge-based system might mean an expert
system and might mean some other kind of system that codifies or uses
knowledge.
 How typical Goals of information System Categories Are
Sometimes Garbled or Subverted.
Category Typical goal How the goal is sometimes
garbled or subverted

Design products Use CAD as a tool for individual work but

through don’t achieve consistency needed to gain
computerized additional benefits from internal and
CAD
specifications that external coordination.
can be stored,
changed, and shared
conveniently.
Order materials so The lead times built into MRP are averages
that they arrive when or estimates. Incorrect lead time result in
MRP needed to meet the the same problems that MRP tries to solve.
production schedule.
Category Typical goal How the goal is sometimes garbled or
subverted

Transfer data Large companies shift costs to suppliers

between suppliers who may be forced to revamp their own
EDI and their customers systems.
electronically to
improve efficiency
Create an integrated If the supply chain is too tightly integrated,
supply chain that a mishap in one area will ripple quickly to
SCM minimizes delays other areas.
and waste.

Create an integrated Computerize data used in manufacturing

manufacturing but don’t integrate various manufacturing
environment that processes enough to gain important
CIM
permits sharing of benefits.
data across all
manufacturing
operations.
Category Typical goal How the goal is sometimes garbled or
subverted

Record every sale of If the POS system goes down, the sales process
every item to maintain stops or it is necessary to do workarounds that
POS complete control of often result in errors.
inventory.

Send marketing Send catalogs and other mailings that seem

Direct communications to likes junk mail. Annoy potential customers by
marketing potential customers interrupting them.
and who would be
telemarket interested.
ing

Provide benefits to Provide new information to headquarters to

sales force by support sales and financial planning, but
SFA automating their data require the sales force to do a lot of extra data
handling. entry.
Category Typical goal How the goal is sometimes garbled or
subverted

Understand the Cause the sales force to handle a lot of data

customers more that they don’t use very much.
completely and
CRM
provide a clearer
view of the complete
relationship with
customers.
Use general-purpose Use office software as a tool for individuals
office applications to but don’t achieve the consistency needed to
OAS make office work make the office more efficient.
efficient.

Link employees, Overwhelm employees with too much

Communi customers, and communication and too many
cation suppliers communication options.
electronically to
systems
facilitate
communication and
coordination.
Category Typical goal How the goal is sometimes garbled or
subverted

Process transactions Ignore judgment that should be exercised

TPS efficiently and record when aspects of the transaction do not
them accurately. conform with the idealized assumptions
about the situation.
Provide managers Provide convenient ways to obtain ad hoc
MIS and and executives the summaries of recent operational results, but
EIS information they do very little to link these results to
really need. strategies or plans.
Provide data, models, Provide data, models, and tools, but fall to
DSS and analysis tools that integrate these into processes. As a result the
support decision- DSS is not used effectively.
making.
Coordinate major To operate within the limits of commercially
Enterprise systems across a firm available software, impose limits on
systems and permit seamless business processes, sometimes making them
access to any less efficient.
information needed
for decision-making.