Business-related Information Systems

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Business-related Information Systems

• EIS - Executive Information Systems
• MIS - Management Information Systems
• Decision Support Systems
• Transaction Processing Systems

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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

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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

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Decision Support Systems

• Similar in some ways to MIS
• Used to solve unusual problems, and problems that
  fall outside the capabilities of the MIS

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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

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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

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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.

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Transaction Processing Systems (contd)

• 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

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Structure of a typcial TPS
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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.

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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

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General Properties of a MIS (contd)

• 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

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General Properties of a MIS (contd)

• 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

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Dynamics of a MIS

• Inputs
• Summary of Transaction Data
• High-volume data
• Simple models
• Processing
• Routine Reports
• Simple Models
• Low-level analysis

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Dynamics of a MIS (contd)

• Outputs
• Summary and Exception Reports
• Typical MIS Users Professionals and Staff
  Managers

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Structure of a typical MIS
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Decision Support Systems

• (and more!)

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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

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Differences between DSS and MIS
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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

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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

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Components of a DSS (contd)

• DSS software system - program to allow easy
  interaction between users of the system and the
  DSS database and model base

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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?

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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

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DSS - Answers (contd)

• Provides rapid access to up-to-date information.
  Also aids quick reaction to unanticipated
  problems that occur

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Structure of a generic DSS
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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.

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Example of a What-If table

• Formula B1-B2

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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

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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.

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Regression Analysis (contd)

• 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.

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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

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What problems does the DDS solve?

• Monitoring and controlling of production
  processes
• Better quality control of final product
• Better planning capabilities
• Faster reaction times

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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

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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.

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Executive Information Systems
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• 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.

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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

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General Properties of an EIS

• Graphically oriented to provide readily
  understandable views of complex data
• Tailored to suit an executives 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.

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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.

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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.

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What are the information needs of executives
(contd)

• 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)

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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

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Model of a typical EIS
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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

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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

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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

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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.

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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

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EIS Problems and Issues

• Organisational
• Cost of implementing the system
• Changes may be needed to create, install, and use
  the new EIS system

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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

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Comparsion table of EIS, DSS and MIS.
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