INTRODUCTION TO COMMON USED SYSTEM AND MODELS

Functions of an Information System: The concept of an information system began to emerge around the
year 1960. An information system can be analyzed from at least three different, but complementary
perspectives:

a) The contribution they made: From this perspective, information systems are defined as a means
that allows wider systems to achieve their objectives. This type of definition emphasizes that
information systems are subsystems that contribute to wider systems.”An Information system is
a system designed to support operations, management and decision making in an organization”
and “”An information system is a system that facilitates communication among its users”.
b) Their structure and behavior: This perspective emphasizes the structure and bahaviour or the
physical and abstract elements that make up information systems. Both structure and behavior
may be characterized in greater or lesser detail.
c) The functions they perform: From this perspective, “An Information system is a system that
collects, stores, processes and distributes information”.

Types of business information system

Information systems may be divided into two categories or systems that support an
organization’s day-to-day business activities and systems that support managerial decision
making.

 Operations Information Systems are generally concerned with process control,

transaction processing and communications.
 Management Information Systems (MIs) are concerned with providing support to
managerial decision making.

When considering the procedures of manufacturing industry IS should be coordinated at many

levels.

 Engineers should design products according to a standard in which the industry can sell
and manufacture the product at competitive price.
 Marketing department should sell the products that are manufactured in the firm.
 The production staff builds reliable products using tools and skills.
 Material staff should make sure that the enough materials are on hand to ensure smooth
production.

Information systems coordinate these groups increase competitive advantages and workflow.
Information systems in manufacturing industry

Transactional Processing System (TPS): These systems are used to collect, store, modifies and
retrieves data about various transactions in manufacturing industry. The success of industry
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.

Executive Support System: These systems help senior managers to make strategic decision by
providing analyzed and summarized internal and external information of the industry. ESS
typically involves lots of data analysis and modeling tools such as "what-if" analysis to help
strategic decision-making.

Material Resource Planning (MRP): This is an integrated information system used by businesses.
The system is designed to centralize, integrate and process information for effective decision
making in scheduling, design engineering, inventory management and cost control in
manufacturing.

Enterprise Resource Planning System: ERP system refers a particular set of technologies which
seep into the whole industry and outline the way business works at many levels. ERP are setting
up majority of manufacturing operations. These systems consist of functions such as accounting,
customer order fulfillment, manufacturing, materials management, human resources and
financial systems and offer close integration among these functions. By using ERP systems
industry can increase quality and efficiency, decrease costs, get decision support and get
enterprise agility.

Information System Strategy

Equivalent to manufacturing strategy, information system strategy can also be conceptualized in

terms of structure and infrastructure. Structural decision consist of three dimensions namely

 System competencies: The main components are costs of information processing,

flexibility to provide different kind of information and capability to provide specified
information.
 Technology scope: The types and range of information systems and capabilities available
in the industry such as expert systems, robots, and local area networks are known as
technology scope.
 Information system alliance: The choices of structural mechanisms available to industry
to gain the required information technology capabilities are referred as information
technology alliance.
Fig: Block diagram of Manufacturing IS functions

Relationship between IS, organizations and business processes:

Business process and relation with Information system: A business process is a logically related
set of activities that define how specific business tasks are performed. Business processes are the
ways in which organizations coordinate and organize work activities, information, and
knowledge to produce their valuable products or service.

These Processes are something that businesses go through every day in order to accomplish
their mission. The better their processes, the more effective the business. Some businesses
see their processes as a strategy for achieving competitive advantage.

There are three levels in any organization and their respective information systems in
contemporary organizations.

a) Operational-level systems are transaction processing systems (TPS), such as payroll or

order processing, that track the flow of the daily routine transactions that are necessary to
conduct business.
b) Management-level systems (MIS and DSS) provide the management control level with
reports and access to the organization’s current performance and historical records. Most
management information systems (MIS) reports condense information from TPS and are
not highly analytical. Decision-support systems (DSS) support management decisions
when these decisions are unique, rapidly changing, and not specified easily in advance.
c) Executive support systems (ESS) support the strategic level by providing data of greatest
importance to senior management decision makers, often in the form of graphs and charts
delivered via portals. They have limited analytical capabilities but can draw on
sophisticated graphics software and many sources of internal and external information.
 The various types of systems in the organization exchange data with one another.
TPS are a major source of data for other systems, especially MIS and DSS. ESS primarily
receives data from lower-level systems. Today’s business environment calls for more
integration among systems than in the past, but such integration is not easy to achieve.

At each level of the organization information systems support the major functional areas of the
business. Sales and marketing systems help the firm identify customers for the firm’s products or
services, develop products and services to meet customers’ needs, promote the products and
services, sell the products and services, and provide ongoing customer support. Manufacturing
and production systems deal with the planning, development, and production of products and
services, and controlling the flow of production. Finance and accounting systems keep track of
the firm’s financial assets and fund flows. Human resources systems maintain employee records;
track employee skills, job performance, and training; and support planning for employee
compensation and career development.

Transaction Processing system:

Types of Data

The five primary types of data in today’s information systems are:

1. Predefined Data Items: Numerical/alphabetical items whose meaning and format are
specified explicitly. For example, credit card number, date, and social security number.
Common in transaction oriented systems and programs are written based on the precise
meaning and format of these data items. Reason for importance of the Y2K problem.
2. Text: A series of characters; meaning is not important for the program. Example is a
document that is interpreted by the user.
3. Images: Photographs, hand sketches, graphs, etc. which are stored, modified and transmitted
much like text.
4. Audio: Data in the form of sounds.
5. Video: Pictures and sounds displayed over time.

Transaction Processing System: TPS supports day to day operations in any organization.
Examples of TPS are order entry systems, cheque processing system, payroll systems, ticket
reservation system etc. TPS was first developed in 1950s in accounting departments of major
corporations in US.

An event occurs in the business world and the same is recorded by keying it into the computer
system as a transaction. The transaction is a representation of the event. TPS is nothing but a
computer program which processes the transaction against TPS data.

Any TPS program generates two types of outputs:

 a) It sends message back to the operator’s terminal
b) It generates some printed
output.

Architecture of a generic TPS application

Types of TPS: There are two types

of TPS based on the tasks they
perform.

a) On-line systems: Online

processing is possible by using a
computer system. It involves
immediate results. They are used to
process a single transaction at a
time.
b) Batch systems: This is a type of TPS where transaction are grouped together and
processed as a unit. The transaction s are grouped into a transaction file as a batch. In a
cheque processing system, the cheques are batched and sorted by the account numbers or
type of cheques like same bank and other banks.

Differences between online and batch processing

Online Processing: An online system handles transactions when the occur and provides output
directly to users. Because it is interactive, online processing avoids delays and allows a constant
dialog between the user and the system. The system processes transactions completely when and
where they occur. Users interact directly with the information system. Users can accesss data
randomly. The information system must be available whenever necessary to support business
functions.

Batch Processing: Data is processed in groups or batches. Batch processing is typically used for
large amounts of data that must be processed on a routine schedule, such as paychecks or credit
card transactions. A batch processing system has several main characteristics: collect, group, and
process transactions periodically. Batch programs require no user involvement and requires
significantly fewer network resources than online systems.

Office Automation System:

All tools and methods that are applied to office activities which make it possible to process
written, visual, and sound data in a computer-aided manner.

Raw data storage, electronic transfer, and the management of electronic business information
comprise the basic activities of an office automation system. Office Automation helps in
optimize or automate existing office procedures.
Office automation means the complete integration of:

 Word processing
 Electronic filing
 Diary management
 Communications, including electronic mail, telex and fax

Office automation aims to organize the functions in such a way that they do not have to be
carried out on a variety of equipment. The backbone of office automation is a LAN (Local Area
Network), which allows users to transmit data, mail and even voice across the network.

OAS Requirements:

• User interface
– GUI with an online facility.
– Fields on the screen have intuitive labels and list of valid values, example icons,
buttons, etc.
• Hardware interface
– Computers: desktop as well as a server.
– Printers: printing the various documents & reports.
– Digitizer: data analysis generate graph.
– Scanner: image processing.
– Webcam: video conferencing, net meeting.
– Microphone: voice recognition.
• Network Interface
– Local Area Network (LAN) at each of the locations to access data from the server
– Printers: printing the various documents & reports.

Advantages of Office Automation The goals of office automation may be expressed in terms
of

 Greater efficiency
 Better service,
 Better accuracy
 Demanding for timeliness
 Facility in control
 Standardization of office routine
 Relieves of monotony
 Prevention of fraud
 Better information retrieval
 Lower operating cost
 Reduction in paper work
 Improved communication environment.
Categories -Office Conceptual Models: Office conceptual models can be
classified into categories based on the fundamental elements that they take into
consideration.

 Data-based models group data into forms, which are similar to paper forms
in the traditional office. Types of data and the operations of data are the
basic elements of these conceptual models. Office activities are then seen as
a series of operations on data. The main purpose of data-based models is to
represent the office from the viewpoint of objects manipulated by office
workers, in a way similar to traditional offices, where work was primarily
based on documents.

 Process-based models analyze and describe office work by looking at

different activities performed concurrently by the users and the system. The
goal of process-based models is that of representing office activities in a
coordinated way.
 Agent-based models are based on the viewpoint of the functions performed
by active elements of the office environment, which are the agents. This type
of model describes the office by associating a set of functions to the different
agents.
 Mixed models explicitly assume more than one type of element as the basis
for system specification, and go on to define the relationships among these
elements.

Characteristics of OAS:

 Office automation system combines modern hardware and software.

 Office automation system can also use data from other operations systems.
 Cellular phone companies use automation to determine the best service
package for a particular customer.
 These systems enable businesses to streamline office tasks, reduce errors,
and improve customer service.
 ARMS provides front-line employees with up-to – the minute information.
 Insurance companies can link their claims systems directly to Enterprise’s
automated rental system, book reservation and send payments electronically,
eliminating the need for paper invoices and checks.
An MIS provides the following advantages.

1. It Facilitates planning : MIS improves the quality of plants by providing relevant information
for sound decision – making . Due to increase in the size and complexity of organizations,
managers have lost personal contact with the scene of operations.

2. In Minimizes information overload : MIS change the larger amount of data in to summarized
form and there by avoids the confusion which may arise when managers are flooded with
detailed facts.

3. MIS Encourages Decentralization : Decentralization of authority is possibly when there is a

system for monitoring operations at lower levels. MIS is successfully used for measuring
performance and making necessary change in the organizational plans and procedures.

4. It brings Co ordination : MIS facilities integration of specialized activities by keeping each

department aware of the problem and requirements of other departments. It connects all decision
centers in the organization .

5. It makes control easier : MIS serves as a link between managerial planning and control. It
improves the ability of management to evaluate and improve performance . The used computers
has increased the data processing and storage capabilities and reduced the cost .

6. MIS assembles, process , stores , Retrieves , evaluates and Disseminates the information .

Decision Support System: Decision support systems (DSS) are interactive software-
based systems intended to help managers in decision-making by accessing large volumes of
information generated from various related information systems involved in organizational
business processes, such as office automation system, transaction processing system, etc.

Fig: DSS architecture

Data management subsystem: Data management subsystem consists of database, database
management systems (DBMS), data dictionary and query language. The database of DSS usually
consists of the data extracted from different sources, combined, aggregated in different volumes
and different levels of details. Internal sources of data are data contained in ERP system database
of the organization. These are data originated from some functional fields of the organization, as
marketing, sales, accounting etc of the business organization. External sources of data can be of
very different origin. It may be the data of some ministry of business or data about the
competitors.

Model Management Subsystem: Model Management Subsystem is a specialty of DSS,

regarding it uses models receiving information necessary for describing and forecasting
phenomena, events and processes significant tasks in the organization. The main activities
supported by the models are projection, deduction and creation of alternatives, comparison of
alternatives, optimization and simulation. The models include forecasting models, statistical
models and simulation models. These models are the base for any organizational DSS activities
because they enable qualitative as well as quantitative analysis.

Dialogue Management Sub-system: Dialogue management subsystem is one of the most

important aspects of any DSS. Because it’s substantial characteristics as power, flexibility and
ease of use is derived from possibility of interaction from the computer system and the user. The
functions of DMS is to allow the users to create, update, delete database files and decision
models via database management system and model based management system. It also provide a
diversity of input and output formats along with different styles of dialogues.

Knowledge Sub-Systems: Knowledge subsystem is the intelligent part of the structure in

decision support system. Its including in the structure of DSS became a need when the
practicality gap increasingly appeared in between the model and reality. The Knowledge base
used to explain the knowledge required in any problem or opportunity. The expertise knowledge
is stored in the Knowledge base sub-systems with the help of some programming language with
proper logic.

Characteristics of a DSS

a) Support for decision-makers in semi-structured and unstructured problems.

b) Support for managers at various managerial levels, ranging from top executive to line
managers.
c) Support for individuals and groups. Less structured problems often requires the
involvement of several individuals from different departments and organization level.
d) Support for interdependent or sequential decisions.
e) Support for intelligence, design, choice, and implementation.
f) Support for variety of decision processes and styles.
g) DSSs are adaptive over time.
Types of DSS:

a) Data-driven DSS: A data driven DSS emphasizes access to and manipulation of a time
series of internal company data and sometimes external and real time data. Simple file
systems accessed by query and retrieval tools provide the most elementary level of
functionality. Ex. WalMart’s data driven DSS had more than 5 terabytes of online
storage.
b) Communications-driven DSS: Communications driven DSS use network and
communications technologies to facilitate decision relevant collaboration and
communication. In these systems, communication technologies are the dominant
architectural component. Tools used include groupware, video conferencing and
computer based bulletin boards.
c) Document-driven DSS: Document-driven DSS uses computer storage and processing
technologies to provide document retrieval and analysis. Large document databases may
include scanned documents, hypertext documents, images, sounds and video. Examples
of documents that might be accessed by a document-driven DSS are policies and
procedures, product specifications, catalogs, and corporate historical documents,
including minutes of meetings and correspondence.
d) Knowledge-driven DSS: Knowledge driven DSS can suggest or recommend actions to
managers. These DSS are man machine systems with specialized problem solving
expertise. The "expertise" consists of knowledge about a particular domain,
understanding of problems within that domain, and "skill" at solving some of these
problems. Artificial Intelligence (AI) and expert systems have been used for scheduling
in reservoir operation and web based advisory systems. In recent years, connecting expert
systems technologies to relational databases with web based front ends has broadened the
deployment and use of knowledge driven DSS.

Benefits of DSS:

 Improves efficiency and speed of decision-making activities.

 Increases the control, competitiveness and capability of futuristic decision-making of the
organization.
 Facilitates interpersonal communication.
 Encourages learning or training.
 Since it is mostly used in non-programmed decisions, it reveals new approaches and sets
up new evidences for an unusual decision.
 Helps automate managerial processes.

GDSS: A group decision support system (GDSS) is an interactive computer based system that
facilitates a number of decision-makers (working together in a group) in finding solutions to
problems that are unstructured in nature. They are designed in such a way that they take input
from multiple users interacting simultaneously with the systems to arrive at a decision as a
group.

A Group decision support system (GDSS) is composed of 3 main components, namely hardware,
software tools, and people.
Hardware: It includes electronic hardware like computer, equipment used for networking,
electronic display boards and audio visual equipment. It also includes the conference facility,
including the physical setup – the room, the tables and the chairs – laid out in such a manner that
they can support group discussion and teamwork.

Software Tools: It includes various tools and techniques, such as electronic questionnaires,
electronic brainstorming tools, idea organizers, tools for setting priority, policy formation tool,
etc. The use of these software tools in a group meeting helps the group decision makers to plan,
organize ideas, gather information, establish priorities, take decisions and to document the
meeting proceedings. As a result, meetings become more productive.

People: It compromises the members participating in the meeting, a trained facilitator who helps
with the proceedings of the meeting, and an expert staff to support the hardware and software.
The GDSS components together provide a favorable environment for carrying out group
meetings.

EXECUTIVE SUPPORT SYSTEM: An executive information system (EIS) provides key

information, gathered from both internal and external sources, to senior executives and
managers. It accomplishes the multiple purposes of supporting decision making, communicating
information, and providing awareness.
Executive support systems are intended to be used by the senior managers directly to provide
support to non-programmed decisions in strategic management.
These information are often external, unstructured and even uncertain. Exact scope and context
of such information is often not known beforehand.
This information is intelligence based:
 Market intelligence
 Investment intelligence
 Technology intelligence
 Features of Executive Information System:

i. Personalized analysis
ii. Drilldown capabilities: Drill-down analysis is the ability to start from an aggregated
number and then examine (drill down to) the more detailed underlying data. As the user
moves to finer and finer levels of detail, it is possible to find more detailed analysis of
specific exceptions.
iii. Graphical and textual information
iv. Navigation of information
v. Designed with managing critical success factors in mind
vi. Varied kinds of reports

Advantages of ESS:

i. Easy for upper level executive to use

ii. Ability to analyze trends
iii. Augmentation of managers' leadership capabilities
iv. Enhance personal thinking and decision-making
v. Contribution to strategic control flexibility
vi. Enhance organizational competitiveness in the market place
vii. Instruments of change
viii. Increased executive time horizons.
ix. Better reporting system
x. Improved mental model of business executive
xi. Help improve consensus building and communication
xii. Improve office automation
xiii. Reduce time for finding information
xiv. Early identification of company performance
xv. Detail examination of critical success factor
xvi. Better understanding
xvii. Time management
xviii. Increased communication capacity and quality