MANAGEMENT INFORMATION SYSTEM (06200101)

Faculty of Management Studies, Parul University

 Chapter-2
TYPES OF INFORMATION SYSTEMS
1)Overview
Topics
• Kinds of Information Systems :
2) Definition of Marketing
• Transaction Research
Processing System (TPS)
• Office Automation System (OAS)
3) A Classification of Marketing
• Management Information System (MIS) Research
• Decision Support System (DSS)
4) Marketing Research Process
• Group Decision Support System (GDSS)
• Executive Support System (ESS)
5) The Nature of Marketing
• Expert System (ES)
Research
• Other Functional Systems:
• Enterprise Resource Planning (ERP)
• Supply Chain Management (SCM)
• Customer Relationship Management (CRM)
TRANSACTION PROCESSING SYSTEM (TPS)
Operational managers need systems that keep track of the
operational activities and transactions of the organization, such
as sales, purchase, goods receipt, payments, payroll, credit
decisions etc., and the flow of materials in a factory. Transaction
processing systems (TPS) provide this kind of information.

A Transaction Processing System is a computerized system that

performs and records the daily routine transactions necessary to
conduct business, such as sales order entry, shipping, payroll,
employee record keeping, etc.

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.
 A Transaction Processing System(TPS) is a type of information
system that collects, stores, modifies and retrieves the data
transactions of an enterprise.

A TPS should be capable to answer following questions and more:

o What is the current level of inventory for a specific material?

o What is the delivery status of finished goods for a particular
customer?
o What is the payment status for a supplier?

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In a Nutshell, a TPS:
 Performs and records daily routine transactions necessary to conduct
business
 Allow managers to monitor status of operations and relations with
external environment
 Serve operational levels
 Serve predefined, structured goals and decision making
TPS can be classified into:
1. Real Time Transaction Processing/Online Transaction Processing
(OLTP) (for e.g. Reservation System)
2. Batch Processing (Generations of Bills, Clearing of presented cheques)
Generally two types of transaction processing files are required for TPS these
are;
I. Transaction file:
II. Master file:

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An Example of a Payroll TPS

 OFFICE AUTOMATION SYSTEM (OAS)
An office automation system is an information system that automates
different administrative processes like documenting, recording data,
and office transactions, among others. The office automation system is
divided into managerial and clerical activities.

Office automation refers to the varied computer machinery and

software used to digitally create, collect, store, manipulate, and relay
office information needed for accomplishing basic task.

For example word processing, electronic mail, desktop publishing,

telecommunication and document image processing.
 MANAGEMENT INFORMATION SYSTEM (MIS)
Management Information Systems abbreviated as MIS, are used to
guide middle level managers to make semi-structured decisions. The
output from the transaction processing system is used as input to the
MIS system.

For e.g. reports showing Sales done by a particular region, Cost

incurred by a particular cost center, Open purchase orders, Non-
moving inventory etc.

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MIS System :

 Serves Middle Level Management

 Provide reports on firm’s current performance, based
on data from TPS
 Provide answers to routine questions with predefined
procedure for answering them
 Typically have little analytic capability

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Outputs of MIS:

Scheduled Reports: Produced Periodically, or on a schedule (daily,

weekly, monthly)

Key-indicator Report: Summarizes previous day’s critical activities.

Typically available at the beginning of each day

Demand Report: Gives information on request by a manager

Exception Report: Automatically produced when a situation is unusual

or required management action.

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 DECISION SUPPORT SYSTEM (DSS)
Decision support systems are used by top level managers to make
semi-structured decisions. The output from the Management
Information System is used as input to the decision support
system. DSS systems also get data input from external sources
such as current market forces, competition, etc.
Decision-support systems (DSS) focus on problems that are
unique and rapidly changing, for which the procedure for
arriving at a solution may not be fully predefined in advance.
They try to answer questions such as these: What would be the
impact on production schedules if we were to double sales in
the month of December? What would happen to our return on
investment if a factory schedule were delayed for six months?
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GROUP DECISION SUPPORT SYSTEM (GDSS)
A Group Decision-Support System (GDSS) is an interactive computer-based
system used to facilitate the solution of unstructured problems by a set of
decision makers working together as a group (DeSanctis and Gallupe, 1987).

GDSS are computer based system that enhances group decision making by
facilitating the exchange and use of information by group members, and
interaction between the group and the computer to formulated and solve
unstructured problems. Generally GDSS is concerned with the electronic
questionnaires, brainstorming tools.

GDSS technology helps overcome some of the problems and weaknesses of

traditional meeting.

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EXECUTIVE SUPPORT SYSTEM (ESS)
Executive support systems (ESS) help senior management focus on
strategic issues and long-term trends. They address non-routine
decisions requiring judgment, evaluation, and insight because there is
no agreed-on procedure for arriving at a solution. ESS present graphs
and data from many sources through an interface that is easy for senior
managers to use.
Senior managers need systems that focus on strategic issues and long-
term trends, both in the firm and in the external environment. They are
concerned with questions such as: What will employment levels be in
five years? What are the long-term industry cost trends? What products
should we be making in five years? Executive support systems (ESS)
help senior management make these decisions.

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ESS are designed to incorporate data about external events, such as
new tax laws or competitors, but they also draw summarized
information from internal MIS and DSS. They filter, compress, and track
critical data, displaying the data of greatest importance to senior
managers. Increasingly, such systems include business intelligence
analytics for analyzing trends, forecasting, and “drilling down” to data at
greater levels of detail.

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In a Nutshell, ESS:
 Supports Senior Level Management
 Address non-routine decisions requiring judgment,
evaluation, and insight
 Incorporate data about external events (e.g. new tax laws
or competitors) as well as summarized information from
internal MIS and DSS
 Filter, Compress, and track critical data, displaying the
data of greatest importance to senior manager
E.g. ESS that provides minute-to-minute view of firm’s
financial performance as measured by working capital,
accounts receivable, accounts payable, cash flow, and
inventory
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Interrelationship Among Information Systems
 EXPERT SYSTEM (ES)
An Expert System (ES) is a knowledge-based information system that
uses its knowledge about a specific, complex application area to act as
an expert consultant to end users.

The components of an ES include:

 Knowledge Base
 Inference Engine
 User Interface.

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 The
The Expert
Expert System
System
Expert
Advice User
User Inference
Inference
Interface
Interface Engine
Engine Knowledge
Programs
Programs Program
Program Base

User Workstation

Expert
Expert System
System Development
Development

Knowledge
Engineering
Knowledge
Knowledge
Acquisition
Acquisition
Program
Program
Expert and/or
Workstation Knowledge Engineer
Expert System is an interactive and reliable computer-based decision-
making system which uses both facts and heuristics (gained experience)
to solve complex decision-making problems. It is considered at the
highest level of human intelligence and expertise. The purpose of an
expert system is to solve the most complex issues in a specific domain.
Expert systems were the predecessor of the current day
artificial intelligence, deep learning and machine learning systems.

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