Structured Decisions: tend to be repetitive and well defined (e.g.

inventory
replenishment decisions):
a standardized approach is used to make the decision;
a specific methodology is applied routinely;

the type of information needed to make the decision is known precisely.

It is easy to provide information systems support for these types of decisions. Many
structured decisions can be made by the system itself (e.g. rejecting a customer order
if the customer's credit with the company is less than the total payment for the
order). Yet managers must be able to override these "system decisions" because
managers have information that the system doesn't have (eg: the customer's order is
not rejected because alternative payment arrangements have been made with the
customer).
In other cases the system may make only part of the decision required for a particular
activity (eg: it may determine the quantities of each inventory item to be reordered,
but the manager may select the most appropriate vendor for the item on the basis of
delivery lead time, quality and price).

Unstructured Decisions: tend to be unique (e.g. policy formulation for the allocation
of resources):
the information needed for decision making is unpredictable;
no fixed methodology exists;

multiple alternatives are involved;

the decision variables as well as their relationships are too many and/or too
complex to fully specify.

The manager's experience and intuition play a large part in making the decision.

Semi-structured decisions: the information requirements and the methodology to be applied

are often known, but some aspects of the decision still rely on the manager: e.g. selecting
the location to build a new warehouse. Here the information requirements for the decision
such as land cost, shipping costs are known, but aspects such as local labor attitudes or
natural hazards still have to be judged and evalueated by the manager.

Major Types of Systems

Transaction Processing Systems (TPS) record daily routine transactions such as sales
orders from customers, or bank deposits and withdrawals. TPS are vital for the
organization, as they gather all the input necessary for other types of systems. Think
about how one could generate a monthly sales report for middle management or
critical marketing information to senior managers without TPS. TPS provide the basic
input to the company's database. A failure in the TPS often means disaster for the
organization. Imagine what happens when the reservation system at Turkish Airlines
fails: all operations stop, no transactions can be carried out until the system is up
again. Long queues form in front of ATMs and tellers when a bank's TPS crashes.
Knowledge Work Systems (KWS) support highly skilled knowledge workers in the
creation and integration of new knowledge into the company. Computer Aided Design
(CAD) systems used by product designers not only allow them to easily make
modifications without having to redraw the entire object (just like word processors
for documents), but also enable them to test the product without having to build
physical prototypes. Three dimensional graphical simulation systems like GRASP
(Graphical Robotics Applications Simulation Package) are used by British Aerospace
and Rolls Royce for evaluating and programming industrial robots. Architects use CAD
software to create, modify, evaluate and test their designs; such systems can
generate photorealistic pictures, simulating the lighting in rooms at different times of
the day, perform calculations, for instance on the amount of paint required. Surgeons
use sophisticated CAD systems to design operations.

Financial institutions are using knowledge work systems to support trading and
portfolio management with powerful high-end PC's. These allow managers to get
instantaneous analyzed results on huge amounts of financial data and provide access
to external databases.
Office Automation Systems (OAS) support general office work for handling and
managing documents and facilitating communication. Text and image processing
systems evolved from word processors to desktop publishing, enabling the creation of
professional documents with graphics and special layout features. Spreadsheets,
presentation packages like Powerpoint, personal database systems and note-taking
systems (appointment book, notepad, cardfile) are part of OAS.
In addition OAS include communication systems for transmitting messages and
documents ( e-mail ) and teleconferencing capabilities.
Management Information Systems (MIS) generate information for monitoring
performance (e.g. productivity information) and maintaining coordination (e.g.
between purchasing and accounts payable).

MIS extract, process and summarize data from the TPS and provide periodic (weekly,
monthly, quarterly) reports to managers.
A sales TPS stores transaction data (name of salesperson, customer name and address,
name and quantity of item sold, line sales amount, total sales amount, form of
payment) on every sale made. The MIS then generates reports (the frequency of the
report being specified by users) such as:
total sales for each item
total sales for region

sales for each salesperson.

MIS reports can be classified by content or time. In terms of content, reports may be
comprehensive (listing each sales transaction over a specified period in a given sales
region), summary (showing the total sales of each item sold in a given region) or
exception reports (listing items that have shown a drop in sales by over 20% in a given
region since the last period).
In terms of time, MIS produce historical reports (comparing past sales information
with the present); status reports (only showing current sales); and predictive reports
(forecasts of next months sales).
Today MIS are becoming more flexible by providing access to information whenever needed
(rather than prespecified reports on a periodic basis). Users can often generate more
customized reports by selecting subsets of data (such as listing the products with 2% increase
in sales over the past month), using different sorting options (by sales region, by salesperson,
by highest volume of sales) and different display choices (graphical, tabular).

Decision Support Systems (DSS) support analytical work in semi-structured or unstructured

situations. They enable managers to answer "What if?" questions by providing powerful models
and tools (simulation, optimization) to evaluate alternatives (e.g. evaluating alternative
marketing plans).
DSS are user-friendly and highly interactive. Although they use data from the TPS and MIS,
they also allow the inclusion of new data, often from external sources, such as current share
prices or prices of competitors.

Executive Support Systems (ESS) or Executive Information Systems (EIS) provide a

generalized computing and communication environment to senior managers to support
strategic decisions. They draw data from the MIS and allow communication with external
sources of information. But unlike DSS, they are not designed to use analytical models for
specific problem solving. ESS are designed to facilitate senior managers' access to information
quickly and effectively.
ESS have menu driven user friendly interfaces, interactive graphics to help visualization of the
situation, and communication capabilities that link the senior executive to the external
databases he requires (e.g. Dow Jones News/Retrieval, or the Gallop Poll).

TPS: Transaction Processing Systems

The success of commercial enterprises depends on the reliable processing of
transactions to ensure that customer orders are met on time, and that partners and
suppliers are paid and can make payment. The field of transaction processing,
therefore, has become a vital part of effective business management, led by such
organisations as the Association for Work Process Improvement and the Transaction
Processing Performance Council.
Transaction processing systems offer enterprises the means to rapidly process
transactions to ensure the smooth flow of data and the progression of processes
throughout the enterprise. Typically, a TPS will exhibit the following characteristics:
Rapid Processing
The rapid processing of transactions is vital to the
success of any enterprise now more than ever, in
the face of advancing technology and customer
demand for immediate action. TPS systems are
designed to process transactions virtually instantly
to ensure that customer data is available to the
processes that require it.
Reliability
Similarly, customers will not tolerate mistakes. TPS systems must be designed to
ensure that not only do transactions never slip past the net, but that the systems
themselves remain operational permanently. TPS systems are therefore designed to
incorporate comprehensive safeguards and disaster recovery systems. These

measures keep the failure rate well within tolerance levels.

Standardisation
Transactions must be processed in the same way each time to maximise efficiency.
To ensure this, TPS interfaces are designed to acquire identical data for each
transaction, regardless of the customer.
Controlled Access
Since TPS systems can be such a powerful business tool, access must be restricted
to only those employees who require their use. Restricted access to the system
ensures that employees who lack the skills and ability to control it cannot influence
the transaction process.
Transactions Processing Qualifiers
In order to qualify as a TPS, transactions made by the system must pass the ACID
test. The ACID tests refers to the following four prerequisites:
Atomicity
Atomicity means that a transaction is either completed in full or not at all. For
example, if funds are transferred from one account to another, this only counts as a
bone fide transaction if both the withdrawal and deposit take place. If one account
is debited and the other is not credited, it does not qualify as a transaction. TPS
systems ensure that transactions take place in their entirety.
Consistency
TPS systems exist within a set of operating rules (or integrity constraints). If an
integrity constraint states that all transactions in a database must have a positive
value, any transaction with a negative value would be refused.
Isolation
Transactions must appear to take place in isolation. For example, when a fund
transfer is made between two accounts the debiting of one and the crediting of
another must appear to take place simultaneously. The funds cannot be credited to
an account before they are debited from another.
Durability
Once transactions are completed they cannot be undone. To ensure that this is the

case even if the TPS suffers failure, a log will be created to document all completed
transactions.
These four conditions ensure that TPS systems carry out their transactions in a
methodical, standardised and reliable manner.
Types of Transactions
While the transaction process must be standardised to maximise efficiency, every
enterprise requires a tailored transaction process that aligns with its business
strategies and processes. For this reason, there are two broad types of transaction:
Batch Processing
Batch processing is a resource-saving transaction type that stores data for
processing at pre-defined times. Batch processing is useful for enterprises that need
to process large amounts of data using limited resources.
Examples of batch processing include credit card transactions, for which the
transactions are processed monthly rather than in real time. Credit card
transactions need only be processed once a month in order to produce a statement
for the customer, so batch processing saves IT resources from having to process
each transaction individually.
Real Time Processing
In many circumstances the primary factor is speed. For example, when a bank
customer withdraws a sum of money from his or her account it is vital that the
transaction be processed and the account balance updated as soon as possible,
allowing both the bank and customer to keep track of funds.
Further information regarding transaction processing systems can be found at the
University of Illinois and John Hopkins University.

Different examples of transaction processing include automated teller machines, credit card
authorizations, online bill payments, self-checkout stations at grocery stores, the trading of
stocks over the Internet, and various other forms of electronic commerce.
Every business has to deal with some form of transactions. How a company decides to manage
these transactions can be an important factor in its success. As a business grows, its number of
transactions usually grows as well. Careful planning must be done in order to ensure that

transaction management does not become too complex. Transaction processing is a tool that can
help growing businesses deal with their increasing number of transaction