business-related information systems l eis - executive information systems l mis - management...
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Business-related Information Systems EIS - Executive Information Systems
MIS - Management Information Systems
Decision Support Systems
Transaction Processing Systems
Transaction Processing Systems The lowest level of information
system Used by businesses to record
“transaction” information Transactions include things like
booking airline tickets, purchasing goods or services
Management Information Systems A step up from TPS This type of systems is used for
routine reporting Reports are used to monitor and
control normal business activities
Decision Support Systems
Similar in some ways to MIS Used to solve unusual problems,
and problems that fall outside the capabilities of the MIS
Executive Information Systems The King of the Hill!! (Topmost
systems) High-level systems designed to
provide Senior Management with information on general trends in business activities rather than the intimate details
Used to help S.M.. formulate business strategies, and plan for the future
Characteristics of decisions and information needs when ascending the diferent business levels.
Less structured problems and decisions
Greater need for summarised information
Greater need for external information
Longer time horizion
Transaction Processing Systems The lowest level of Business
system Provides raw data used in
processing in EIS, MIS and DSS TPS are important for a business.
They manage the data that keeps the business going, e.g. Airline ticket bookings, etc.
Transaction Processing Systems (cont’d) TPS accept input related to a
transaction event, process it, and produce output
The primary users of a TPS are staff at the Operational, or lowest-level, of a business
Structure of a typcial TPSOn-line dataentry
Transactionfiles
Keypunchedcards
Scanningdevices
Transaction Processing System
- Record - Merge
- Perform - Sort
- List - Update
Products Documents Data forother systems
INPUTS
TPS
OUTPUTS
What is a Management Information System? A MIS provides Managers with
reports on an organisations performance - both past and present.
MIS server Managers by helping them monitor actual business performance, and predict future performance.
General Properties of a MIS? Used to help Managers track current
performance, and predict future performance
Based upon underlying TPS. Transaction data is compressed by summarisation, and presented in long reports.
Reports are produced on a regular basis answering routine, structured questions
General Properties of a MIS (cont’d) MIS serve Managers interested in
Weekly, Monthly, and/or Yearly resuts, not day-to-day.
Data is provided from internal company sources only.
Uses simple calculatory routines such as summaries and comparisons, not sophisticated statistical analysis
General Properties of a MIS (cont’d) Not very flexible. Reports and data are
structured according to the original MIS design, this generally cannot be easily changed to provide different data.
Development of a MIS requires a lengthy analysis and design process, typcially in the order of 1 to 2 (or more!) years
Less graphically-oriented than EIS
Dynamics of a MIS
Inputs:– Summary of Transaction Data– High-volume data– Simple models
Processing:– Routine Reports– Simple Models– Low-level analysis
Dynamics of a MIS (cont’d)
Outputs:– Summary and Exception Reports
Typical MIS Users: Professionals and Staff Managers
Structure of a typical MISTPS MIS
Order File OrderProcessingSystem
Products Master File
MaterialsResourcePlanningSystem
AccountingFile
GeneralLedgerSystem
Sales Data
Unit ProductCost
ProductChange Data
Expense Data
MIS Files
MIS
Reports
Data flow
Decision Support Systems
(and more!)
Decision Support Systems
Definition: A DSS is a coherent system of computer based technology used by managers as an aid to their decision making in semi-structured tasks.
Conceptually, DSS and MIS overlap in many aspects, but generally:– MIS are used to produce routine reports– DSS use more sophisticated analysis and
data modelling tools to solve semi-structured problems
Differences between DSS and MIS
MIS DSS
Reports summaries of basictransactions and exceptionsfrom plan
Users simple analytical tools
Solves structured, repetitive
problems
Produces routine reports
Provides data and models for decision making
Uses sophisticated analysisand modelling tools
Solves semi-structured problems
Provides interactive answers tonon-routine questions
The characteristics of a DSS
Structured and semi-structured decisions
Used by managers at different levels Used both by groups and individuals Supports a variety of decision styles and
processes It has adaptability and flexibility Ease of use Its based on effectiveness and not
effciency
Components of a DSS
DSS Database - data from internal TPS. Unlike MIS, this can contain data from inventory, production, and accounting sources
Model Base - Analytical tools used by the DSS. These include built-in spreadsheeting, statistical analysis, and simulation
Components of a DSS (cont’d) DSS software system - program to
allow easy interaction between users of the system and the DSS database and model base
DSS - Questions
Where does it obtain its data from? What does it do with the data? What Management and Business
problems does the system solve? What difference does a DSS make
for a firm?
DSS - Answers
From the organisations internal transaction files
Spreadsheet modelling, What-If scenarios, Regression Analysis, Graphical projection of performance
Monitoring and controlling a production process. Frees Managers time to control production
DSS - Answers (cont’d)
Provides rapid access to up-to-date information. Also aids quick reaction to unanticipated problems that occur
Structure of a generic DSSDSS
SystemSoftware
Model Base
- Spreadsheets - Statistical Analysis - Simulation
DSS Database
- Sales Data- Financial Data- Production Data
Order ProcessingSystem
Materials ResourcePlanning System
General LedgerSystem
Tools used in a DSS
What-If analysis tools (found in most spreadsheets)– What-if analysis allows users of a
system to quickly calculate and display the results of many combinations of input values in a model.
Example of a What-If table Formula: +B1-B2
Incoming: 10000Outgoing: 1000
9000 5000 6000 7000500 4500 5500 6500600 4400 5400 6400700 4300 5300 6300800 4200 5200 6200900 4100 5100 61001000 4000 5000 6000
Projection
Projection tools typically use historical data gathered by the TPS and compressed by the MIS
This data is used to project future trends based upon past and present information about market behaviour
Generally makes use of the What-If capabilities in a DSS
Regression Analysis
Advanced routines to predict values based upon relationships in existing data.
Seeks to analyse how a single dependant variable is affected by the values of one or more independent variables.
Regression Analysis (cont’d) Example:
– Several factors may contribute to an athletes performance: Age, Sex, Height, Weight. Regression apportions shares in the performance measure to each of the factors based up a set of performance data.
Regressive results can be used to try and predict the performance of a new, untested athlete.
Cash Flow analysis
Important to know:– what incomings and outgoings there
are in a company for planning purposes
– When do they take place?– the lead time between incurring an
expense and paying for it– the lag time between making a sale
and collecting money from debtors
What problems does the DDS solve?
Monitoring and controlling of production processes
Better quality control of final product
Better planning capabilities Faster reaction times
What differences does it make to the company? Increase in the number of alternatives
examined Better understanding of the business Improved communication and control Lowering of costs Improved efficiency Improved productivity Makes better use of data resources Better decisions
Examples of DSS
American airlines: for pricing decisions and choosing air routes
IBM: for determining routing for repair people
Texas oil and gas: for evaluating potential drill sites
National Gypsum: corporate planning and forecasting.
Executive Information Systems
Definition: An EIS is a software product, front-ended by a user friendly terminal and software interface which electronically provides executives (senior management) with rapid and relaible access to information regarding key areas of the business.
General Properties of an EIS Used for strategic business planning Relatively long time-frame
considered Unstructured and open-ended
(many variables can be considered) For accurate results EIS require
information from inside and outside the business
General Properties of an EIS Graphically oriented to provide readily
understandable views of complex data Tailored to suit an executive’s decision
making style provides rapid access to current
information and filters and tracks critical data
Its major activity is information scanning and evaluation, it deals mainly with the intellegence phase of decision-making.
Benefits of executive information systems
Improved financial and operational control
Enhances business problem solving (eg British Airways during the 1986
libyan crisis). Helps in the identification of new
opportunities (eg tour operators use it to identify new holiday destinations)
Increases IT awareness among senior management.
What are the information needs of executives
Three classical criteria: Timeliness, accuracy and relevance.
Should focus on the critical success factors:– The limited number of areas in which
results, if satisfactory, will ensure successful competitive performance for the organisation.
What are the information needs of executives (cont’d)
Five main types of information based on CSF:– Key problem narravtives (highlights overall
performance, key problems and causes of problems)
– Highlight charts (highlight areas of concern)– Top-level financial displays– Key factors (displays measures of key
performance indicators)– Detailed KPI responsibility reports (performance
reports on areas critical to the success of the company)
Types of EIS
For focusing on executive communications and office work, e.g. e-mail, document handling, scheduling
Better interface for existing corporate data
For developing elaborate scenarios involving business data
Model of a typical EIS
EIS
EIS db Models
External db
External db
External db
Order
Processing
PlanningSystem General
Ledger
EIS and corporate planning EIS are ideal for aiding Executives
in planning for an organisation or business– EIS give a good overview of trends in
business data that can be used to more accurately determine planning for the future
EIS Graphics Display
Strong graphical element in displaying data
Data is displayed in as simple a form as possible, e.g. line/bar charts etc..
Colour is often used to provide extra information
From an EIS screen the Manager can usually “drill down” for more info
Tools and Techniques
Typically the EIS resides on a central computer, e.g. a powerful PC or even mainframe
Executives access the information from a PC on their desktop via a network
The information can be viewed and manipulated on-screen, and printed out on paper
Consolidation of Information Data is extracted from a number of
sources Outside the company - Customers,
News Services, Government Inside the company - TPS, financial
systems, HR, Marketing depts.
EIS Problems and Issues
People– What data do Executives really want?– Changes in Executives data
requirements over time– Level of computer skills in the group
using the system
EIS Problems and Issues
Organisational– Cost of implementing the system– Changes may be needed to create,
install, and use the new EIS system
EIS Problems and Issues
Technology– Retaining compatibility with older
“Legacy” systems– Integrating data from different
sources into the new system can be complex. At worst it may need to be typed into the new system
– Obsolescence
Comparsion table of EIS, DSS and MIS.