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Mod-TWO
Transaction Processing System (TPS)
Office Automation System (OAS)
Management Information System (MIS)
TPS, MIS, DSS, and AI/ES
Hierarchy:
AI/ES
DSS
MIS
TPS
Information
Data
Less More Less More
More MoreLess Less
RoutineDecisionsupport
Input &output
Sophistication& complexity of
processing & analysis
Transactions
Transactions… Basic business operations such as customer
orders, purchase orders, receipts, time cards, invoices, and payroll checks in an organization
Transaction processing systems (TPS) Perform routine operations and serve as a
foundation for other systems
Purpose : Support operations Recording Processing Reporting
TPSs exist in e.g. Purchase of an airline ticket Deposit or withdrawal of funds at a bank
Transaction Processing Systems (TPS)
Computerized system that performs and records the daily routine transactions necessary to conduct the business; these systems serve the operational level of the organization
TYPE: Operational-level INPUTS: transactions, events PROCESSING: updating OUTPUTS: detailed reports USERS: operations personnel, supervisors DECISION-MAKING: highly structured
EXAMPLE: payroll, accounts payable
Batch vs. On-Line Transaction Processing
Two types of TPS: Batch processing
A system whereby business transactions are accumulated over a period of time and prepared for processing as a single unit or batch
On-line transaction processing (OLTP) A system whereby each transaction is processed
immediately, without the delay of accumulating transactions into a batch
Batch Schematic
Data entryof accumulated
transactions
Input(batched)
Output
On-line Schematic
Output
Terminal
Terminal
Terminal
Terminal
Terminal
Terminal
Immediateprocessingof eachtransaction
Objectives of TPS Process data generated by and about transactions Maintain a high degree of accuracy Ensure data and information integrity and
accuracy Produce timely documents and reports Increase labour efficiency Help provide increased and enhanced service Help build and maintain customer loyalty Achieve competitive advantage
Simplified Overview of aTransaction Processing System
Schematic
Data entry & input
ProcessingDocuments& reports
Database
Internally generatedtransactions:
• shipped orders
• purchase orders
• employee time cards
Externally generated transactions:
• customer orders
• vendor invoices
• customer payments
Internally generatedtransactions:
• shipped orders
• purchase orders
• employee time cards
Externally generated transactions:
• customer orders
• vendor invoices
• customer payments
Database update:
• customer orders
• inventory
• purchase orders
• customers
• suppliers
Database update:
• customer orders
• inventory
• purchase orders
• customers
• suppliers
Documents:
• pick list
• cheques to vendors
• receiving notices
• paycheques
Operational reports:
• finished product inventory status
• raw materials; packing materials; spare parts; inventory status
Documents:
• pick list
• cheques to vendors
• receiving notices
• paycheques
Operational reports:
• finished product inventory status
• raw materials; packing materials; spare parts; inventory status
Data Processing Activities Common to TPSs
A transaction processing cycle Data collection Data editing Data correction Data manipulation Data storage Document production
Schematic
Datacollection
Dataedit
Datamanipulation
Datastorage
Documentproduction
Datacorrection
Original data
Source Data Automation
Source data automation The process of capturing data at its source with minimal
manual effort Data are entered directly into the computer
Transaction Processing Systems
Collects and Store data about transactions Are designed based on detailed specifications for how the
transactions should be performed and how to control the collection of specific data in specific data formats and in accordance with rules and procedures for work done by clerks and customer service agents
A well-designed TPS has back-up and recovery procedures that minimize disruptions resulting from computer outages
Two types of TPS Batch Processing
Information for individual transaction is gathered but not processed immediately
Real Time Processing Each transactions is processed immediately
Point-of-Sale Transaction Processing System
Customer’sreceipt
Inventorydatabase
Managementinformation
system
Exceptionreport
Purchasesdatabase
Scanner
Point-of-saletransactionprocessing
system
Itemdatabase
UPC andquantity
Item, quantity,date, time, price
UPC Price
UPC
Quantity,Date,time
Traditional TPS – Order Processing
Order processing Processing an order from entry to delivery,
including traditional accounting transactions
Schematic
Customer
Order entry/sales configuration
Shipmentplanning
Routing
Scheduling
Shipmentexecution
Invoicing
Finishedproduct
inventory
Customer order in person or viamail, phone, EDI, internet
OrdersPlannedshipments
Plannedshipments& routes
Pick list
Shipped orders
Inventory status
Products
Invoice
Requestfor
proposalSale
Problem, idea,request forinformation
Othercontacts
Marketresearch
Sales
Marketing
Qualitycontrol
Productdevelopment
Customerinteraction
system
Customer
Transaction Processing System (TPS)
Typical Applications of TPS
A transaction processing cycle
Data collection Data editing Data correction Data manipulation Data storage Document production
Management Information Systems (MIS)
WHAT IS MIS? The MIS program combines the
fundamental intellectual content of both Computer Science and Business Management Economics.
MIS is the application of information technology to support the major functions and activities of either a private sector business or public sector institution.
These systems provide feedback on organisational activities and help to support managerial decision making.
In the past, organizations recognized the importance of managing resources such as labor, capital, and raw materials.
Today, it is widely accepted that managing the information resource is very often equally important. MIS supports the process of collection, manipulation, storage, distribution and utilization of an organization's information resources.
WHAT IS MIS?
The vast majority of information systems are developed for and used by people in functional areas (e.g., manufacturing, human resources, accounting, finance and marketing). To develop information systems that address the needs of the organization, MIS professionals must possess a solid mix of business and technical knowledge.
They must understand organizational structures, objectives, operations (including processes and the flows of data between processes) and the financial implications related to these factors.
MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems.
Business information systems (BIS) The interactive relationships between the
information systems and organizations, both technically and socially, and the business opportunities and challenges brought about by the BIS.
This describes information systems used to support the functional areas of business.
MIS helps:
to establish relevant and measurable objectives to monitor results and performances (reach ratios) to send alerts, in some cases daily, to managers at
each level of the organization, on all deviations between results and pre-established objectives and budgets.
Decision-Support Systems (DSS)
Interaction among Systems
Summary Different types of IS by organizantional levels
include: Transaction Processing Systems (TPS) Management Information Systems (MIS),
and Decision Support Systems (DSS) Executive Support Systems (ESS), also
known as Executive Information Systems (EIS)
Purposes of Information Systems
Types of Operations Support Systems Transaction Processing Systems
Record and process business transactions Examples: sales processing, inventory systems, accounting
systems Process Control Systems
Monitor and control physical processes Example: using sensors to monitor chemical processes in a
petroleum refinery Enterprise Collaboration Systems
Enhance team and workgroup communication Examples: email, video conferencing
Two Ways to Process Transactions Batch Processing
Accumulate transactions over time and process periodically
Example: a bank processes all checks received in a batch at night
Online Processing Process transactions immediately Example: a bank processes an ATM withdrawal
immediately
Components of an IS
Office Automation Systems (OAS)
Computer system, such as word processing, electronic mail system, and scheduling system, that is designed to increase the productivity of data workers in the office.
Office Automation Systems
Facilitates everyday information processing tasks in offices and business organization
Includes a wide range of tools Spreadsheets Word processors Presentation packages Personal database systems and note-taking systems
Help people perform personal record keeping, writing and calculation chores efficiently
TYPE: Knowledge-level INPUTS: documents, schedules PROCESSING: document management,
scheduling, communication OUTPUTS: documents; schedules USERS: clerical workers
EXAMPLE: document imaging system
Decision Support Systems (DSS)
Information system at the management level of an organization that combines data and sophisticated analytical models or data analysis tools to support semi-structured and unstructured decision making.
TYPE: Management-level INPUTS: low volume data PROCESSING: simulations, analysis OUTPUTS: decision analysis USERS: professionals, staff managers DECISION-MAKING: semi-structured
EXAMPLE: sales region analysis
Characteristics of Decision-Support Systems
1. DSS offer users flexibility, adaptability, and a quick response.
2. DSS operate with little or no assistance from professional programmers.
3. DSS provide support for decisions and problems whose solutions cannot be specified in advance.
4. DSS use sophisticated data analysis and modelling tools.
Decision Process
Decision makers goes through a fairly systematic process.
Act on itAct on it
Review ItReview It
Definethe
“Process or Problem”
Definethe
“Process or Problem”
DevelopAlternative
Courses of Action
DevelopAlternative
Courses of Action
SelectThe “Best”
One
SelectThe “Best”
One
Intelligence phaseIntelligence phase
Modeling phaseModeling phase
Choice phaseChoice phase
Implementation Implementation phasephase
Decision Support Systems
Decision support system (DSS) is a computer-based information system that combines models and data in an attempt to solve semistructured and unstructured problems with user involvement.
Decision Support Systems - Components
Every DSS consists of at least data management, user interface, model management components, and the end users.A few also contain a knowledge management component.
A DSS data management subsystem contains all the data that flow from several sources, and are extracted prior to their entry into a DSS database or a data warehouse.
A model management subsystem contains completed models (financial, statistical, management science, or other quantitative models), and the routines to develop DSSs applications.
The user interface covers all aspects of the communications between a user and the DSS.
The Users. The person (manager, or the decision maker) faced with the problem or decision that the DSS is designed to support
A knowledge-based or intelligent subsystem provides the expertise for solving some aspects of the problem, or the knowledge that can enhance the operation of the other DSS components.
DSS Process
DataData
ModelModel
Group Decision Support System (GDSS) A Group Decision Support System
(GDSS), also known as an Electronic Meeting System or groupware, is commonly defined as a collection of software, hardware, and procedures designed for the automated support of group work
(Dennis, et al., 1988; Kraemer & King, 1988).
Group Decision Support Systems
Groups One-room group whose members are in one place
Virtual group, whose members are in different locations
The DSS methodology was initially designed to support individual decision makers. However, decision making is frequently a shared process. Where a group may be involved in making the decision. When a decision-making group is supported electronically, the support is referred to as a group decision support system (GDSS).
a DSS whose design, structure, and usage reflect the way in which people cooperate to make a particular decision or type of decision
an interactive, computer-based system which facilitates the solution of unstructured problems by a set of decision makers working together as a group
consisting of a set of software, hardware, language components, and procedures that support a group of people engaged in a decision-related meeting
Characteristics of a GDSS
Special design: Effective communication Group decision making
Ease of use Flexibility
Accommodate different perspectives Anonymous input
Individuals’ names are not exposed Parallel communication
Characteristics of a GDSS
Decision-making support Delphi approach: Decision makers are scattered around
the globe Brainstorming: Say things as you think---think out loud Group consensus approach: The group reaches a
unanimous decision (everybody agrees) Nominal group technique: Voting
Reduction of negative group behavior A trained meeting facilitator to help with sidetracking
Automated record keeping
Executive Information (Support) Systems
An executive information system (EIS), also known as an executive support system (ESS), is a technology designed in response to the specific needs of top-level managers and executives.
Executive Support Systems (ESS or EIS)
Internal Data• TPS/MIS data• Financial data• Office systems• Modeling/ analysis
External Data• Dow Jones• Internet news• Standard & Poor’s
EIS are: Very user friendly Is supported by graphics Provides the capabilities of exception reporting (reporting only
the results that deviate from a set standard) Provide drill down (investigating information in increasing detail).
ESS goes beyond EIS to include: Analyse support Communications Office automation Intelligence support
ESS - Expansion ESS can be enhanced with:
Multidimensional analysis and presentation Friendly data access User-friendly graphical interface Imaging capabilities Intranet access E-mail Internet access Modeling
ESS goes beyond EIS to include: Analyse support Communications Office automation Intelligence support
Intelligent ESS saves an executive's time in conducting drill downs, Intelligent ESS saves an executive's time in conducting drill downs, exceptions, or identifying trends by automating these activitiesexceptions, or identifying trends by automating these activities..
ISS - Artificial Intelligence The development of machines that exhibit intelligent characteristics draws upon several sciences and technologies, ranging from linguistics to mathematics.
Expert Systems (ES) – One type of ISS
Expert systems (ESs) are attempts to mimic human experts. It is decision-making software that can reach a level of performance comparable to a human expert in some specialized and usually narrow problem area. The idea is simple: expertise is transferred from an expert or other source of expertise to the computer.
The transfer of expertise from an expert to a computer and then to the user involves four activities:
Knowledge acquisition (from experts or other sources)
Knowledge Base -Knowledge representation (organized as rules or frames in the computer)
Knowledge Engine
Knowledge inferencing is performed in a component called the inference engine of the ES and results in the recommendation.
Knowledge transfer to the user (the expert’s knowledge has been transferred to users).
Components of Expert Systems (ES)
Expert Systems (ES) – Benefits:
Expert Systems
Attributes DSS ES
Objective Assist Dm Duplicate Dm
Recommendation About Decision Made By User/System System
Major Orientation Dm T/F Of Expertise
Query Direction Human System System
Data Manipulation Numerical Human Symbolic
Characteristics Of Problem Area Complex/Broad Specific
Types Of Database Factual Knowledge Rules
Reasoning Ability Absent Present
Explanation Limited Total
Learning Capability Absent Present
Nature Of Support Personal Personal & Group