Automated Information Systems

For most businesses, there are a variety of requirements for information. Senior managers need
information to help with their business planning. Middle management needs more detailed information to
help them monitor and control business activities. Employees with operational roles need information to
help them carry out their duties. As a result, businesses tend to have several "information systems"
operating at the same time.

Transaction processing system (TPS):

A TPS collects and stores information about transactions, and controls some aspects of transactions. A
transaction is an event of interest to the organisation. e.g. a sale at a store. A TPS is a basic business
system. It is often tied to other systems such as the inventory system which tracks stock supplies and
triggers reordering when stocks get low. It serves the most elementary day-to-day activities of an
organisation and it supports the operational level of the business.

TPS usually has high volumes of input and output and provides data which is summarised into
information by systems used by higher levels of management. it need to be fault-tolerant.

Sub-species of TPS:

Manufacturing and production systems: Systems that supply data to operate, monitor and
control the production process. e.g. purchasing, receiving, shipping, process control, robotics,
inventory systems, scheduling, engineering, operations, quality control, resource management
etc.
e.g. A system in a factory that:
gets information from measuring samples of products
does statistical analysis of samples
shows when operators should take corrective action

Sales and Marketing systems: Systems that support the sales and marketing function by
facilitating the movement of goods and services from producers to customers.
Examples:

sales support - keep customer records, follow-up

telemarketing - use phone for selling

order processing - process orders, produce invoices, supply data for sales analysis and inventory
control

point-of-sale - capture sales data at cash register often by scanner

customer credit authorisation - advise on credit to be allowed to customer.

Example:
A Store's Sales System would:
automatically record and total purchase transactions and prints out a packing list
improve customer service
maintain customer data

Finance & Accounting Systems: Systems that maintain records concerning the flow of funds in
the firm and produce financial statements, such as balance sheets and income statements.e.g.
for Budgeting; General Ledger; Billing: Cost Accounting, Accounts Receivable / Payable; Funds
Management Systems, Payroll. They were among the earliest systems to be computerised.
Examples of financial systems: cash management, loan management, check processing,
securities trading.
Example: Visa's Credit Card payment system.

Human Resources System: Systems that deal with recruitment, placement, performance
evaluation, compensation, and career development of the firm's employees.
Examples: personnel record keeping, applicant tracking, positions, training and skills, benefits.

Decision support system (DSS):

Helps strategic management staff (often senior managers) make decisions by providing information,
models, or analysis tools. For support of semistructured and unstructured decisions (structured decisions
can be automated). Used for analytical work, rather than general office support.
They are flexible, adaptable and quick. The user controls inputs and outputs. They support the decision
process and often are sophisticated modelling tools so managers can make simulations and predictions.

Their inputs are aggregate data, and they produce projections. An example job for a DSS would be a 5
year operating plan.

Management information system (MIS):

Condenses and converts TPS data into information for monitoring performance and managing an
organisation.
Transactions recorded in a TPS are analyzed and reported by an MIS.
They have large quantities of input data and they produce summary reports as output. Used by middle
managers. An example is an annual budgeting system.

Executive information system (EIS):

Also known as an Executive Support System (ESS), it provides executives information in a readily
accessible, interactive format. They are a form of MIS intended for top-level executive use. An EIS/ESS
usually allows summary over the entire organisation and also allows drilling down to specific levels of
detail. They also use data produced by the ground-level TPS so the executives can gain an overview of
the entire organisation.
Used by top level (strategic) management. They are designed to the individual. They let the CEO of an
organisation tie in to all levels of the organisation. They are very expensive to run and require extensive
staff support to operate.

Office automation system (OAS):

OAS provides individuals effective ways to process personal and organisational data, perform
calculations, and create documents. e.g. word processing, spreadsheets, file managers, personal
calendars, presentation packages
They are used for increasing personal productivity and reducing "paper warfare". OAS software tools are
often integrated (e.g. Word processor can import a graph from a spreadsheet) and designed for easy
operation.
OAS Subspecies:
Communication systems: helps people work together by sharing information in many different
forms

Teleconferencing (including audioconferencing, computer conferencing, videoconferencing),

electronic mail, voice mail, fax
Groupware system: helps teams work together by providing access to team data, structuring
communication, and making it easier to schedule meetings. For sharing information, controlling
work flows, communication/integration of work

Expert Systems: This is a computer system or program that uses artificial intelligence techniques to
solve problems that ordinarily require a knowledgeable human. The method used to construct such
systems, knowledge engineering, extracts a set of rules and data from an expert or experts through
extensive questioning. This material is then organized in a format suitable for representation in a
computer and a set of tools for inquiry, manipulation, and response is applied. While such systems do not
often replace the human experts, they can serve as useful adjuncts or assistants. Among some of the
successful expert systems developed are INTERNIST, a medical diagnosis tool that contains nearly
100,000 relationships between symptoms and diseases, and PROSPECTOR, an aid to geologists in
interpreting mineral data."

Expert systems imitate human experts in many different fields of expertise. Such systems contain rules
(such as decision tables) that help a human answer expert questions.
One day, a system is built that contains all the rules you intuitively use to make your rock identification
decisions. By answering a few simple questions presented by the expert system, a human can identify a
rock just as well as you can.
Expert systems are built with decision-making rules, and they can ask humans a series of questions to
narrow down the correct answer. One early and influential expert system was MYCIN, a disease
diagnosis system.
Advantages of expert systems:

The computer can store far more information than a human.

The computer does not 'forget', make silly mistakes or get drunk when it is most needed.

Data can be kept up-to-date.

The expert system is always available 24 hours a day and will never 'retire'.

The system can be used at a distance over a network.

Expert systems are computer application programs that take the knowledge of one or more human
experts in a field and computerize it so that it is readily available for use. The human experts do not need
to be physically present to accomplish a specialized project or task. Expert systems are only designed to
be expert in a very narrow and specific task or subject field. They contain the acquired expert knowledge
and try to imitate the experts evaluation processes to offer a conclusion. An advantage of an expert
system is that it may include the knowledge of many experts in one specific field.

Expert systems usually contain two components: a knowledge base and an inference engine program,
enabling it to suggest conclusions. The knowledge base is programmed in an IF ... THEN logical rules
structure. Such a structure is a series of IF conditions that, if met, THEN a specific result may be
concluded.
An example would be:
IF the animal is a bird
it does not fly
it swims
it is black and white
THEN it is a penguin

The expert system rules out options with each question until there remains an option with high probability.
The rules and questions, of course, are provided by expert humans in the first place.

SO 6

Information for decision making

Operational level
At the lowest level is the operational level of decision making. Supervisors or foremen ensure that specific
tasks are planned and properly carried out within a factory or office. The information must be very detailed
and related to the present operations.

Tactical level
At the middle level is the tactical level of decision making. Middle management will decide how the
resources of the organisation should be employed to achieve the goals set at the lower strategic level.
Information required at this level are usually periodic, one time or what-if-reports. It will be more detailed
than at the strategic level but less than the operational level.

Strategic level
At the highest level is the strategic level of decision making. This is where the highest level of
management is responsible for deciding the long-term objectives of the organisation. The information
required will be overall reports such as the profitability of the organisation or of specific segments or
regions, future marketing prospects, human resource requirement and current levels. The information is
then summarised.