DNIPROPETROVS’K ALFRED NOBEL UNIVERSITY

LECTURE NOTES

Discipline

“Information Systems and Technologies in International Economy”

Lecture

“TYPES OF INFORMATION SYSTEM”

Lecturer N.O. Rizun

DNIPROPETROVSK

2012

CONTENTS

1 Transaction Processing System (TPS)/Data Processing System 4

2 Management Information Systems 7

3 Executive Support System 10

4 Decision Support System 15

5 Expert System 23

6 Office Automation System 30

For most businesses, there are a variety of requirements for information.

Senior managers need information to help with their business planning.

Middle management need more detailed information to help them monitor and control business activities.

Employees with operational roles need information to help them carry out their duties.

As a result, businesses tend to have several "information systems" operating at the same time.

The main kinds of information systems in business are described briefly below:

Information System	Description
Management Information Systems MIS	A management information system is mainly concerned with internal sources of information. MIS usually take data from the transaction processing systems (see below) and summarise it into a series of management reports. MIS reports tend to be used by middle management and operational supervisors.
Executive Support Systems ESS	An ESS is designed to help senior management make strategic decisions. It gathers, analyses and summarises the key internal and external information used in the business. A good way to think about an ESS is to imagine the senior management team in an aircraft cockpit - with the instrument panel showing them the status of all the key business activities. ESS typically involve lots of data analysis and modelling tools such as "what-if" analysis to help strategic decision-making.
Decision-Support Systems DSS	Decision-support systems are specifically designed to help management make decisions in situations where there is uncertainty about the possible outcomes of those decisions. DSS comprise tools and techniques to help gather relevant information and analyse the options and alternatives. DSS often involves use of complex spreadsheet and databases to create "what-if" models.
Knowledge Management Systems KMS	Knowledge Management Systems exist to help businesses create and share information. These are typically used in a business where employees create new knowledge and expertise - which can then be shared by other people in the organisation to create further commercial opportunities. Good examples include firms of lawyers, accountants and management consultants. KMS are built around systems which allow efficient categorisation and distribution of knowledge. For example, the knowledge itself might be contained in word processing documents, spreadsheets, PowerPoint presentations. internet pages or whatever. To share the knowledge, a KMS would use group collaboration systems such as an intranet.
Transaction Processing Systems TPS	As the name implies, Transaction Processing Systems are designed to process routine transactions efficiently and accurately. A business will have several (sometimes many) TPS; for example: - Billing systems to send invoices to customers - Systems to calculate the weekly and monthly payroll and tax payments - Production and purchasing systems to calculate raw material requirements - Stock control systems to process all movements into, within and out of the business
Office Automation Systems (OАS)	Office Automation Systems are systems that try to improve the productivity of employees who need to process data and information. Perhaps the best example is the wide range of software systems that exist to improve the productivity of employees working in an office (e.g. Microsoft Office XP) or systems that allow employees to work from home or whilst on the move. Examples ERP applications for the company

Here we describe the following types of computer based information systems, corresponding to the three management layers and their requirements.

Organizational Information System
Transaction Processing System	(IPS)	Lower Level
Management Information System	(MIS)	Middle Level
Decisions Support System	(DSS)	Top Level
Executive Information System	(EIS)
Office Automation System	(OIS)	All Levels of Management
Expert System	(ES)

1Transaction Processing System (tps)/Data Processing System

A transaction processing system (TPS) supports the processing of a firm's business transactions.

Transaction processing system keep on organization running smoothly by automating the processing of the large amount of paper work that must be handled daily. These systems include the accurate recording of transactions as well as the control procedures used in issuing such documents as pay checks, invoices, customer statements, payment reminders, tuition bills, and student schedules unlike other components of management information system, the transaction processing system of an organization extending out of the organization linking together the entire financial system, factory, customers, and suppliers. The movements toward Electronic Data Interchange (EDI) and the establishment of electronic links with suppliers & customers is an example of an extension of an organization's transaction processing system.

Sometimes, the term data processing system is used for TPS. The primary purpose of these systems is to effectively process the data that arise from transactions.

The transaction processing system of a departmental store can record customer purchases, prepare billing and booking of order from suppliers and inter-relate these tasks into an overall accounting system. The transaction processing system of a college helps performing such tasks as enrolling students in courses, billing students for tuition, and issuing pay cheque.

Organizational Information System
Type of System	Information Inputs	Processing	Information on Outputs	Users
TPS	Transactions, events	Detailed reports, lists	Detailed reports, lists	Operations personnel, supervisors, lower level management
MIS	Summary transaction data, high volume data, simple models	Routine reports, simple models, low level analysis	Summary & exception reports	Middle level management
DSS	Low volume data, or massive database optimized for data analysis, analytic models and data analysis tools	Interactive, simulations, analysis	Special reports, decision analysis, responses of queries	Professionals, middle and top level management
EIS	Aggregate data, external, internal data	Graphics, simulations, interactive	Projections responses to queries	Top level management
OIS	Documents, schedules	Document management, scheduling, communication	Document s, schedules, mail	All level of management

As discussed earlier, a transaction processing system supports the processing, of an organization's transactions this include recording of transactions as well as providing support activities such as sending payment reminders (which, although not transactions themselves, are related to transactions). Recently, going competitive advantage has become a transaction processing concern in some firms, especially these who are working to tie customers and supplier together more closely with the organization's traditional transaction processing system via electronic linkages.

Function of Transaction Processing System (TPS):

a. Book keeping:

Book keeping involves keeping accurate records of firm's business transactions. Every organization is involved with day-to-day business transactions between groups such as customers and suppliers, because these transactions establish linkage among them and are so important as bread & butter for human.

For example, banks typically both human tellers and automatic teller machines to record deposits & withdrawals of account holders. Colleges and universities record student registrations and fees paid by students. All of these tasks involve keeping accurate records of the firm's business transactions.

b. Issuance:

Issuance refers to the production of such documents as pay cheque, invoices, monthly telephone and credit card bills, and payment reminders. The creation of these documents is absolutely necessary to the effective operation of the company i.e. these documents are not discretionary.

Transaction

For many businesses, a transaction refers to an exchange of goods or services for money. For example, suppose a retailer buys 100 books from a wholesale. From the retailer's end, inventory is increased and a counterbalancing promise to pay the wholesaler is established. When payment is eventually made, the retailer loses cash, but this is counterbalanced by eliminating the payable charge on its records. Organizations such as academic institutions and hospitals have other ways of defining & dealing with transaction. In general a transaction is a recorded business event, often reflecting a routine exchange that affects the financial well being of an organization

Documents and Reports Generation:

The final stage of the TPS involves the generation of outputs such as documents and reports. Documents produced by a TPS are called transaction documents, which may be categorized as follows;

a. Information Document:

Information documents verify, Confirm, or prove that transactions have occurred or were attempted. Sales receipts, order confirmation, customer invoices, and customer statements may be generated to document that a transaction took place. A credit rejection notice may serve to communicate that a transaction was attempted, but | refused because of a problem in the customer's credit history.

b. Turn Around Document:

Some invoices and customer statements contains a perforated tear-off portion that should be returned to the sender, along with the customer's payment. When this type of document is generated by TPS, it is known as turnaround document.

c. Action Document:

Action documents initiate actions or transactions on the part of J recipients. A cheque authorizes the bank to cash, or a purchase ; order similarly authorizes a supplier to send needed items to the organization that submitted it.

d. Accounting Statements:

These must be generated for legal purposes and legally document the financial performance of a business. These may include general ledger, trial balance, cash flow statements, balance sheets, and income statements. All of these are directly related to transaction processing activities.

e. Control Listing:

Control listings are detailed reports that describe each transaction' occurring during a specific time. period. These are sometimes called transaction logs. A payroll register will list every cheques issued by the payroll system.

f. Edit Report/Error Report:

Edit report/error report describe errors encountered during processing (or traditional data entry) are often called edit reports. Transaction involving invalid account numbers, incorrect totals, and missing data are usually listed in edit reports.