1. Types of information systems
Transaction processing to executive decision making

2. Information System from business perspective
Types of system Groups Served
STRATEGIC LEVEL SENIOR MANAGERS
MANAGEMENT LEVEL MIDDLE MANAGERS
Vertical information flows
KNOWLEDGE LEVEL KNOWLEDGE &
DATA WORKERS
OPERATIONAL
OPERATIONAL
Horizontal information flows
LEVEL
MANAGERS
SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN
MARKETING
& ENGINEERING
RESOURCES

3. Management Structures and Information Requirements
Higher up the pyramid, the less structured the decision
Less defined (structured)
internal/External orientation
More summarized information
Lower down the pyramid, the more structured the decision
More defined (structured)
Internal orientation
More detailed information

4. Classification (types) of for IS
Executive Support Systems (ESS)
Management Information Systems (MIS)
Decision Support Systems (DSS)
Transaction Processing Systems (TPS)

5. Transaction Processing Systems (TPS)
Computerized system that performs and records the daily routine transactions necessary to conduct the business; these systems serve the operational level of the organization
TYPE: Operational-level
INPUTS: transactions, events
PROCESSING: updating; e.g. stock levels)
OUTPUTS: detailed reports
USERS: operations personnel, supervisors
DECISION-MAKING: highly structured. (sale of products)
EXAMPLE: payroll, accounts payable, point of sale (P.O.S.)

6. TPS payroll system

7. Management information systems(MIS)
Information system at the management level of an organization that serves the functions of planning, controlling, and decision making by providing routine summary and exception reports.

8. Differences between the TPS and the MIS
Transaction Processing Systems (TPS)
Support operation
Management and control
Routine, normal operations
structured
Management Information Systems (MIS)
Provide decision-making support for routine, structured decisions
Closely linked to and fed by TPS
Structure and sem-structure

9. Characteristics of Management information Systems
1. MIS support structured decisions at the operational and management control levels. However, they are also useful for planning purposes, semi-structured problems, of senior management staff. 2. MIS are generally reporting and control oriented. They are designed to report on existing operations, sales , production costs…, and therefore to help provide day-to-day control of operations. 3. MIS rely an existing corporate data-and data flows. 4. MIS have little analytical capability. 5. MIS generally aid in decision making using past and present data. 6. MIS are relatively inflexible. 7. MIS have an internal rather than an external orientation.

10. Management problems
Most management problems, involving decisions have three elements – objectives, decision variables, and constraints.
Objective
Maximize profit
Provide earliest entry into market
Minimize employee discomfort/turnover
Decision variables
Determine what price to use
Determine length of time tests should be run on a new product/service
Determine the responsibilities to assign to each worker
Constraints
Can’t charge below cost
Test enough to meet minimum safety regulations
Ensure responsibilities are at most shared by two workers

11. Structured Decision
Structured decisions are those which are made according to specified procedures of rules or structured decisions are those that are easily made from a given set of inputs.
Deciding to send a reminder notice to a customer for an overdue balance is considered to be structured decision

12. Semi-structured Decision
Semi-structured decisions are those for which information obtained from a computer system or information system is only a portion of the total knowledge needed to make decision.
Advertise a new product or how much to spend on MIS.

13. Unstructured Decision
Unstructured decisions are novel.
There is no cut and dried  method for handling the problem because it hasn't arisen before or because it's precise nature and structure are mysterious or complex, or because it so important' that it deserves a custom tailored treatment.
They may require a lot of creativity and intuitions from the decision maker to tell what factors will come into play in an unstructured play.
Deciding whether to use an integrated or intensive strategy for a product that is the star quadrant of the BCG matrix
How successful to improving market size was the recent marketing campaign

14. Information Systems to support decisions
Management Information Systems
Decision Support Systems
Decision support provided
Provide information about the performance of the organization
Provide information and techniques to analyze specific problems
Information form and frequency
Periodic, exception, demand, and push reports and responses
Interactive inquiries and responses
Information format
Prespecified, fixed format
Ad hoc, flexible, and adaptable format
Information processing methodology
Information produced by extraction and manipulation of business data
Information produced by analytical modeling of business data

15. Decision support system
Information system at the management level of an organization that combines data and sophisticated analytical models or data analysis tools to support semi-structured and unstructured decision making.
E.g.:sales region analysis [OLAP systems]

16. Characteristics of Decision-Support Systems
DSS offer users flexibility, adaptability, and a quick response.
DSS provide support for decisions and problems whose solutions cannot be specified in advance.
DSS use sophisticated data analysis and modelling tools.
Decision support system (DSS) tends to be used in planning, modelling, analysing alternatives, and decision making by using  small, simple models which can easily be understood and used by the manager

17. Examples
Typical information that a decision support application might gather and present would be:
Accessing all of your current information assets, including legacy and relational data sources, cubes, data warehouses, and data marts
Comparative sales figures between one week and the next
Projected revenue figures based on new product sales assumptions
The consequences of different decision alternatives, given past experience in a context that is described
Could be use to aid Strategic systems: SCM / CRM

18. Tools used in aiding the DSS
Functions
Functions: pre-stored formulas that enable a user to perform a calculator type task as soon as the function is invoked
Analysis
Analysis: review a set of facts and to assist in drawing conclusions based on there facts.
Statistical Tools: regression/correlation
Optimizing tools: best decision for “structured”: maximise production capacity (labour, capacity)
What if analysis: if increase cost what is the effect on sales; check for various increases (€1, €2….)

19. Executive Support Systems (ESS)
Information system at the strategic level of an organization that address unstructured decision making through advanced graphics and communications.
TYPE: Strategic level
INPUTS: aggregate data; internal and external
PROCESSING: interactive
OUTPUTS: projections
USERS: senior managers
DECISION-MAKING: highly unstructured
EXAMPLE: 5 year operating plan

20. Executive Support Systems: other properties
Tailored to individual executives
Not to managers in other levels
Easy to use
Drill down capabilities (more specific details)
Support need for external data: demographics, competitors…
Can help when uncertainty is high
Future-oriented
Linked to value-added processes: competitive advantage…
Although executive support systems have much in common with decision support systems, they have important differences. Generally, a DSS provides a number of modeling tools and is designed to help a user answer a question. Executive support systems allow executives to ask the right questions. An ESS is interactive and helps an executive focus, filter and organize data and information.
Unlike a DSS, an ESS is usually customized for a specific individual. Content and format can both be customized.
Since executives are typically busy, an ESS must be easy to learn and to use – or it won’t be used.

21. Sample questions answered by ESS
What business should we be in?
What are the competitors doing?
What new acquisitions' would protect us from cyclical business swings?
Which units should we sell to raise cash for acquisitions?

22. Question
Management information systems (MIS); Decision support systems (D.S.S); and Executive information systems (EIS) are important types of information systems used by management to solve structured, semi-structured and unstructured problems .
Describe, using suitable examples, the types of problems each one is designed to solve
(6 marks)
The M.I.S. and D.S.S. play a significant role in the formulation of strategic decisions: compare and contrast, using suitable examples both types of information systems.
(24 marks)