Mod-TWO

Transaction Processing System

(TPS)
Office Automation System
(OAS)
 TPS, MIS, DSS, and AI/ES

 Hierarchy:

Information AI/ES Less More Less More

DSS
Decision Input & Sophistication
Routine support output & complexity of
processing & analysis
MIS

Data TPS More Less More Less

Transactions

 Transactions…
 Basic business operations such as customer
orders, purchase orders, receipts, time cards,
invoices, and payroll checks in an organization
 Transaction processing systems (TPS)
 Perform routine operations and serve as a
foundation for other systems
 Purpose : Support operations
 Recording
 Processing
 Reporting
 TPSs exist in e.g.
 Purchase of an airline ticket
 Deposit or withdrawal of funds at a bank
 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
 OUTPUTS: detailed reports
 USERS: operations personnel, supervisors
 DECISION-MAKING: highly structured
  
EXAMPLE: payroll, accounts payable
 Batch vs. On-Line
Transaction Processing
 Two types of TPS:
 Batch processing
 A system whereby business transactions are
accumulated over a period of time and prepared for
processing as a single unit or batch
 On-line transaction processing (OLTP)
 A system whereby each transaction is processed
immediately, without the delay of accumulating
transactions into a batch
Batch Schematic

Data entry
Input
of accumulated Output
transactions (batched)
On-line Schematic

Terminal

Terminal
Terminal

Output

Immediate
Terminal processing
of each
transaction

Terminal

Terminal
Objectives of TPS
 Process data generated by and about transactions
 Maintain a high degree of accuracy
 Ensure data and information integrity and accuracy
 Produce timely documents and reports
 Increase labour efficiency
 Help provide increased and enhanced service
 Help build and maintain customer loyalty
 Achieve competitive advantage
Simplified Overview of a
Transaction Processing System

Schematic
Data entry & input

Documents
Processing
& reports

Documents:
Documents:
Internally
Internallygenerated
generated
transactions: •• pick
picklist
list
transactions:
Database •• cheques
••shipped
shippedorders
orders chequestotovendors
vendors
••purchase •• receiving
receivingnotices
purchaseorders
orders notices
Database
Databaseupdate:
update: •• paycheques
••employee
employeetime
timecards
cards paycheques
••customer
customerorders
orders
Externally
Externallygenerated
generated Operational
Operationalreports:
reports:
transactions:
transactions: ••inventory
inventory •• finished
finishedproduct
product
••customer
customerorders
orders ••purchase
purchaseorders
orders inventory
inventorystatus
status
••vendor ••customers •• raw
rawmaterials;
materials;packing
vendorinvoices
invoices customers packing
materials;
materials;spare
spareparts;
parts;
••customer
customerpayments ••suppliers
suppliers inventory
payments inventorystatus
status
Data Processing Activities
Common to TPSs
 A transaction processing cycle
 Data collection
 Data editing
 Data correction
 Data manipulation
 Data storage
 Document production

Schematic
 Original data

Data
collection

Data
edit

Data
Data manipulation
correction

Data
storage

Document
production
Source Data Automation

 Source data automation

 The process of capturing data at its source with minimal
manual effort
 Data are entered directly into the computer
 Transaction Processing Systems
 Collects and Store data about transactions
 Are designed based on detailed specifications for how the
transactions should be performed and how to control the collection of
specific data in specific data formats and in accordance with rules
and procedures for work done by clerks and customer service agents
 A well-designed TPS has back-up and recovery procedures that
minimize disruptions resulting from computer outages
 Two types of TPS
 Batch Processing

 Information for individual transaction is gathered but not processed

immediately
 Real Time Processing
 Each transactions is processed immediately
 Point-of-Sale Transaction
Processing System
Customer’s
receipt Management Exception
Inventory information report
database system
UPC and
Point-of-sale quantity
UPC transaction
Scanner
Quantity, processing
Date, system Item, quantity,
time date, time, price

UPC Price Purchases

database

Item
database
 Traditional TPS –
Order Processing
 Order processing
 Processing an order from entry to delivery,
including traditional accounting transactions

Schematic
Invoice
Customer
Products Customer order in person or via
mail, phone, EDI, internet

Inventory status Order entry/

sales configuration

Orders
Planned
Finished Shipment shipments
product Routing
planning
inventory
Pick list Planned
shipments
Shipment & routes
execution

Shipped orders Scheduling

Invoicing
 Customer

Request Problem, idea,

Other
for Sale request for
contacts
proposal information

Customer
interaction
system

Market Product
research development

Sales Quality
control
Marketing
Transaction Processing System
(TPS)
Typical Applications of TPS
A transaction processing
cycle
 Data collection
 Data editing

 Data correction

 Data manipulation

 Data storage

 Document production
Management Information
Systems (MIS)
WHAT IS MIS?
 The MIS program combines the
fundamental intellectual content of both
Computer Science and Business
Management Economics.
 MIS is the application of information
technology to support the major functions
and activities of either a private sector
business or public sector institution.
 These systems provide feedback on
organisational activities and help to
support managerial decision making.
 In the past, organizations recognized the
importance of managing resources such as
labor, capital, and raw materials.
 Today, it is widely accepted that managing
the information resource is very often equally
important. MIS supports the process of
collection, manipulation, storage, distribution
and utilization of an organization's
information resources.
 WHAT IS MIS?
 The vast majority of information
systems are developed for and used
by people in functional areas (e.g.,
manufacturing, human resources,
accounting, finance and marketing).
To develop information systems that
address the needs of the
organization, MIS professionals must
possess a solid mix of business and
technical knowledge.
 They must understand organizational structures,
objectives, operations (including processes and the
flows of data between processes) and the financial
implications related to these factors.
 MIS managers and professionals must stay up-to-
date with evolving information technologies and
have a solid foundation of technical skills to select
appropriate technologies and to implement
computer-based information systems.
Business information systems
(BIS)
 The interactive relationships between the
information systems and organizations, both
technically and socially, and the business
opportunities and challenges brought about by the
BIS.
 This describes information systems used to support
the functional areas of business.
MIS helps:
 to establish relevant and measurable objectives
 to monitor results and performances (reach ratios)
 to send alerts, in some cases daily, to managers at
each level of the organization, on all deviations
between results and pre-established objectives and
budgets.
Decision-Support Systems
(DSS)
Interaction among Systems
Summary
 Different types of IS by organizantional levels
include:
 Transaction Processing Systems (TPS)

 Management Information Systems (MIS),

and Decision Support Systems (DSS)

 Executive Support Systems (ESS), also

known as Executive Information Systems

(EIS)
Purposes of Information
Systems
Types of Operations Support
Systems
 Transaction Processing Systems
 Record and process business transactions
 Examples: sales processing, inventory systems, accounting
systems
 Process Control Systems
 Monitor and control physical processes
 Example: using sensors to monitor chemical processes in a
petroleum refinery
 Enterprise Collaboration Systems
 Enhance team and workgroup communication
 Examples: email, video conferencing
Two Ways to Process
Transactions
 Batch Processing
 Accumulate transactions over time and process
periodically
 Example: a bank processes all checks received in
a batch at night
 Online Processing
 Process transactions immediately
 Example: a bank processes an ATM withdrawal
immediately
Components of an IS
 Office Automation
Systems (OAS)
 Computer system, such as word
processing, electronic mail
system, and scheduling system,
that is designed to increase the
productivity of data workers in the
office.
 Office Automation
Systems
 Facilitates everyday information processing tasks
in offices and business organization
 Includes a wide range of tools
 Spreadsheets
 Word processors
 Presentation packages
 Personal database systems and note-taking systems
 Help people perform personal record keeping,
writing and calculation chores efficiently
 TYPE: Knowledge-level
 INPUTS: documents, schedules
 PROCESSING: document management,
scheduling, communication
 OUTPUTS: documents; schedules
 USERS: clerical workers


EXAMPLE: document imaging system

Decision Support Systems
(DSS)
 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.
 TYPE: Management-level
 INPUTS: low volume data
 PROCESSING: simulations, analysis
 OUTPUTS: decision analysis
 USERS: professionals, staff managers
 DECISION-MAKING: semi-structured


EXAMPLE: sales region analysis

 Characteristics of
Decision-Support Systems
1. DSS offer users flexibility, adaptability, and a
quick response.
2. DSS operate with little or no assistance from
professional programmers.
3. DSS provide support for decisions and
problems whose solutions cannot be
specified in advance.
4. DSS use sophisticated data analysis and
modelling tools.
 Decision Process

Decision makers goes through a fairly systematic process.

Define Intelligence phase

the
“Process or Problem”
Develop Modeling phase
Alternative
Courses of Action
Select
The “Best”
One Choice phase
Review It

Act on it

Implementation
phase
 Decision Support Systems

Decision support system (DSS) is a

computer-based information system
that combines models and data in an
attempt to solve semistructured and
unstructured problems with user
involvement.
Decision Support Systems - Components

Every DSS consists of at least data

management, user interface, model
management components, and the
end users.
A few also contain a knowledge
management component.
 A DSS data management subsystem
contains all the data that flow from several
sources, and are extracted prior to their
entry into a DSS database or a data
warehouse.
 A model management subsystem
contains completed models (financial,
statistical, management science, or other
quantitative models), and the routines to
develop DSSs applications.
 The user interface covers all aspects of the
communications between a user and the DSS.
 The Users. The person (manager, or the
decision maker) faced with the problem or
decision that the DSS is designed to support
 A knowledge-based or intelligent subsystem
provides the expertise for solving some aspects
of the problem, or the knowledge that can
enhance the operation of the other DSS
components.
 DSS Process

Data

Model
Group Decision Support System
(GDSS)
 A Group Decision Support System
(GDSS), also known as an Electronic
Meeting System or groupware, is
commonly defined as a collection of
software, hardware, and procedures
designed for the automated support of
group work
 (Dennis, et al., 1988; Kraemer & King,
1988).
Group Decision Support
Systems
The DSS methodology was initially designed to
support individual decision makers. However,
decision making is frequently a shared process.
Where a group may be involved in making the
decision. When a decision-making group is
supported electronically, the support is referred
to as a group decision support system (GDSS).
 Groups
 One-room group whose members are in one place
 Virtual group, whose members are in different locations
 a DSS whose design, structure, and
usage reflect the way in which people
cooperate to make a particular decision
or type of decision
 an interactive, computer-based system which
facilitates the solution of unstructured
problems by a set of decision makers
working together as a group
 consisting of a set of software, hardware,
language components, and procedures that
support a group of people engaged in a
decision-related meeting
Characteristics of a GDSS
 Special design:
 Effective communication
 Group decision making
 Ease of use
 Flexibility
 Accommodate different perspectives
 Anonymous input
 Individuals’ names are not exposed
 Parallel communication
Characteristics of a GDSS
 Decision-making support
 Delphi approach: Decision makers are scattered around
the globe
 Brainstorming: Say things as you think---think out loud
 Group consensus approach: The group reaches a
unanimous decision (everybody agrees)
 Nominal group technique: Voting
 Reduction of negative group behavior
 A trained meeting facilitator to help with sidetracking
 Automated record keeping
Executive Information (Support) Systems

An executive information system

(EIS), also known as an executive
support system (ESS), is a
technology designed in response to
the specific needs of top-level
managers and executives.
Executive Support Systems (ESS
or EIS)

Internal Data External

• TPS/MIS data Data
• Financial data • Dow Jones
• Office • Internet
systems news
• Modeling/ • Standard
analysis &
Poor’s
 EIS are:
 Very user friendly
 Is supported by graphics
 Provides the capabilities of exception reporting (reporting only
the results that deviate from a set standard)
 Provide drill down (investigating information in increasing detail).
 ESS goes beyond EIS to include:
 Analyse support
 Communications
 Office automation
 Intelligence support
 ESS - Expansion
 ESS can be enhanced with:
 Multidimensional analysis and presentation
 Friendly data access
 User-friendly graphical interface
 Imaging capabilities
 Intranet access
 E-mail
 Internet access
 Modeling
 ESS goes beyond EIS to include:
 Analyse support
 Communications
 Office automation
 Intelligence support

Intelligent ESS saves an executive's time in conducting drill downs,

exceptions, or identifying trends by automating these activities.
 ISS - Artificial Intelligence
The development of machines that exhibit intelligent characteristics draws
upon several sciences and technologies, ranging from linguistics to
mathematics.
Expert Systems (ES) – One type of
ISS
Expert systems (ESs) are attempts to mimic
human experts. It is decision-making software
that can reach a level of performance
comparable to a human expert in some
specialized and usually narrow problem area.
The idea is simple: expertise is transferred from
an expert or other source of expertise to the
computer.
 Components of Expert Systems
The(ES)
transfer of expertise from an expert to a computer and then to the
user involves four activities:
 Knowledge acquisition (from experts or other sources)
 Knowledge Base -Knowledge representation (organized as
rules or frames in the computer)
 Knowledge Engine
 Knowledge inferencing is performed in a component called
the inference engine of the ES and results in the
recommendation.
 Knowledge transfer to the user (the expert’s knowledge has
been transferred to users).
Expert Systems (ES) – Benefits:
Expert Systems
 Attributes DSS ES
Objective Assist Dm Duplicate Dm
Recommendation About Decision Made By User/System System
Major Orientation Dm T/F Of Expertise
Query Direction Human System System
Data Manipulation Numerical Human Symbolic
Characteristics Of Problem Area Complex/Broad Specific
Types Of Database Factual Knowledge Rules
Reasoning Ability Absent Present
Explanation Limited Total
Learning Capability Absent Present
Nature Of Support Personal Personal & Group