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Information System

A set of people, procedures and resources that collects,


transforms and disseminates information in an organization. It
is an organized combination of people, Physical devices
(hardware), information processing instructions (software),
communication channels or networks, stored data (data
resources), and policies and procedures that stores, retrieves,
transforms, and disseminates information in an organization.
The focus on IS earlier was for the support of operations,
management, analysis ,planning & control and decision-making
in organizations.
IS expanded from the support not only of decision-making,
but for improved communication support during the late
1980s and early 1990s.
The explosion of the internet has added the important
characteristic of providing information access.
The support of business processes are on the emphasis in
organizations today.

We breathe information, eat information, drink information, wake up


with information, sleep with information etc. So information is as life
blood of any organization, without information survival of any
organization is not possible.
Information means processing of data or analyses of data in a specific
context to get required information. It is a basis of decision making.
The decision taken on basis of complete and accurate information is
less risky.
The value of perfect information is calculated by finding out the
difference between the optimal policy with and without perfect
information.

Types Of Information System

Depending on how you create your classification, you can find almost
any number of different types of information system. However, it is
important to remember that different kinds of systems found in
organizations exist to deal with the particular problems and tasks that
are found in organizations. Consequently, most attempts to classify
Information systems into different types rely on the way in which task
and responsibilities are divided within an organization. As most
organizations are hierarchical, the way in which the different classes of
information systems are categorized tends to follow the hierarchy. This
is often described as "the pyramid model" because the way in which
the systems are arranged mirrors the nature of the tasks found at
various different levels in the organization.

While there are several different versions of the pyramid model, the
most common is probably a four level model based on the people who
use the systems. Basing the classification on the people who use the
information system means that many of the other characteristics such
as the nature of the task and informational requirements, are taken
into account more or less automatically.

I)

TPS(Transaction Processing System) :- Most fundamental


computer system which is concerned with processing of business
is called TPS. The objective of TPS is to improve routine business
activities on which functions of organization depends. The main
work of TPS is to record and process the data resulting from
business transactions. A transaction is an event or entity which
affects the organization. Transaction processing could also be
considered as a set of procedures for handling transactions and it

includes activities like calculation, classification, storage and


retrieval, sorting, validation, verification, summarization etc.
These activities occur at operational level in nay organization. TPS
produces a variety of information system for internal and external
cause.

Some examples of TPS

Payroll systems
Order processing systems
Reservation systems
Stock control systems
Systems for payments and funds transfers

The role of TPS

II)

Produce information for other systems


Cross boundaries (internal and external)
Used by operational personnel + supervisory levels
Efficiency oriented

OAS(Office Automation System) :- OAS collects, processes, stores


and transmits data and information in the form of electronic office
communication. These automatic systems rely on text processing,
telecommunication and offer information system technologies.
Example- word processing, electronic mail, desktop publishing,
telecommunication and document image processing. It enhances the
abilities of users to communicate with their colleagues within their

work groups and organization and with external contact such as


customers and suppliers.
Advantages They provide more time to managers to concentrate on their
basic jobs.
They improve the quality of work in terms of content,
throughness, timeliness and accuracy.
They speed up specific functions and thereby increases the
quantity of clerical output.
They reduce the time spent on input capture and creation.
They co-ordinate and integrate office tasks.
They enable more cost- effective and time- effective
communications.
They increase the productivity of office workers at all levels.
Disadvantages
Cost of automated office hardware is very high.
Oas can disrupt traditional office work roles and environment.
Oas may lead to security problems.
III) Management Information Systems
For historical reasons, many of the different types of Information
Systems found in commercial organizations are referred to as
"Management Information Systems". However, within our pyramid
model, Management Information Systems are management-level
systems that are used by middle managers to help ensure the smooth
running of the organization in the short to medium term. The highly

structured information provided by these systems allows managers to


evaluate an organization's performance by comparing current with
previous outputs.
Functions of a MIS
MIS are built on the data provided by the TPS

Some examples of MIS

Sales management systems


Inventory control systems
Budgeting systems
Management Reporting Systems (MRS)
Personnel (HRM) systems

The role of MIS

Based on internal information flows


Support relatively structured decisions
Inflexible and have little analytical capacity
Used by lower and middle managerial levels
Deals with the past and present rather than the future
Efficiency oriented?

iv) Decision Support Systems


A Decision Support System can be seen as a knowledge based system,
used by senior managers, which facilitates the creation of knowledge
and allow its integration into the organization. These systems are often
used to analyze existing structured information and allow managers to
project the potential effects of their decisions into the future. Such

systems are usually interactive and are used to solve ill structured
problems. They offer access to databases, analytical tools, allow "what
if" simulations, and may support the exchange of information within
the organization.
Functions of a DSS
DSS manipulate and build upon the information from a MIS and/or TPS
to generate insights and new information

Some examples of DSS

Group Decision Support Systems (GDSS)


Computer Supported Co-operative work (CSCW)
Logistics systems
Financial Planning systems
Spreadsheet Models?

The role of DSS

Support ill- structured or semi-structured decisions


Have analytical and/or modelling capacity
Used by more senior managerial levels
Are concerned with predicting the future
Are effectiveness oriented?

v) Executive Information Systems


Executive Information Systems are strategic-level information systems
that are found at the top of the Pyramid. They help executives and
senior managers analyze the environment in which the organization
operates, to identify long-term trends, and to plan appropriate courses

of action. The information in such systems is often weakly structured


and comes from both internal and external sources. Executive
Information System are designed to be operated directly by executives
without the need for intermediaries and easily tailored to the
preferences of the individual using them.
Functions of an EIS
EIS organizes and presents data and information from both external
data sources and internal MIS or TPS in order to support and extend the
inherent capabilities of senior executives.

Some examples of EIS

Executive Information Systems tend to be highly individualized and are often


custom made for a particular client group; however, a number of off-the-shelf
EIS packages do exist and many enterprise level systems offer a
customizable EIS module.
The role of EIS

Are concerned with ease of use


Are concerned with predicting the future
Are effectiveness oriented
Are highly flexible
Support unstructured decisions
Use internal and external data sources
Used only at the most senior management levels

Thus, with computer based EIS provides top management with


immediate and easy access to selective information, which reduces the

information overload on executives and help to achieve firms strategic


objective.
Others
I)

ES(Expert System):- Expert system aims at formalizing expertise


and makes it available for repetitive types of business decisions.
They use artificial intelligence tools to generate knowledge out of
information. It helps human experts perform their jobs effectively
and is important where expertise is scarce and is therefore
expensive. The expert system has been developed for the purpose
of expertise from those with the knowledge in a convenient and
easily accessed manner. Expert systems are designed to replace the
function formed by human experts. Expert system provide
information to managers as expert advice.
An expert system supports the intellectual work of professionals
engaged in design, diagnosis or evaluation of complex situation
requiring expert knowledge in a well- defined area.
Advantages: Planning:- ES can make a valuable contribution to
planning. It can use information from earlier project
which can be used to improve subsequent plans.
Decision making:- ES can support decision making by
storing information in its knowledge base from several
experts rather than a single expert.
Monitoring:- ES can be used to monitor the process, activities of
employees and cash management etc.

Diagnosis:- ES can be used in diagnosing different conditions. Exin diagnosing the reasons for manufacturing equipment, human
diseases in medicine etc.
Training:- when an ES is being used as a regular nature in the
course of work, users learn the way the system reaches destination.
Timely response:- ES are available on call at all the time and, can
be used to provide immediate support and to perform task
immediately.
Reliability:- they are reliable in the sense that they do not
become tired or bored. They pay attention to all details and do not
overlook any relevant information
Disadvantages: Expert system are not problem solver.
It may take longer time to solve problem than an expertise.
Expert system take long development time and are expensive.

Management information system (MIS)


A management information system (MIS) is a system that provides or
generates the needed information for effective decision making by the
managers. MIS + Information for prudent business decision . An MIS
is a business information system designed to provide past, present, and
future information appropriate for planning, organizing, staffing
directing and controlling the operations of the organization

The MIS is defined as a system which provides information support


for decision making in the organization.
The MIS is defined as an integrated system of man and machine for
providing the information to support the operations, the
management and the decision making function in the organization.
The MIS is defined as a system based on the database of the
organization evolved for the purpose of providing information to
the people in the organization

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