Business-related Information
Systems

EIS - Executive Information Systems
MIS - Management Information
Systems
 Decision Support Systems


Transaction Processing Systems
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

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

Decision Support Systems
Similar in some ways to MIS
 Used to solve unusual problems, and
problems that fall outside the
capabilities of the MIS

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

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

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.

Transaction Processing Systems
(cont’d)
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

Structure of a typcial TPS
On-line data
entry
Transaction
files
Keypunched
cards
Scanning
devices
INPUTS
Transaction Processing System
- Record
- Merge
- Perform
- Sort
- List
- Update
Products
Documents
TPS
Data for
other systems
OUTPUTS
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.

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

General Properties of a MIS
(cont’d)
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

General Properties of a MIS
(cont’d)
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

Dynamics of a MIS

Inputs:
– Summary of Transaction Data
– High-volume data
– Simple models

Processing:
– Routine Reports
– Simple Models
– Low-level analysis
Dynamics of a MIS (cont’d)

Outputs:
– Summary and Exception Reports
Typical MIS Users: Professionals and Staff
Managers
Structure of a typical MIS
TPS
Order File
Products
Master File
MIS
Order
Processing
System
Materials
Resource
Planning
System
Sales Data
Unit Product
Cost
MIS
Product
Change Data
Accounting
File
General
Ledger
System
Reports
Expense Data
MIS Files
Data flow
Decision Support Systems
(and more!)
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
Differences between DSS and
MIS
MIS
DSS
Reports summaries of basic
transactions and exceptions
from plan
Provides data and models for
decision making
Users simple analytical tools
Uses sophisticated analysis
and modelling tools
Solves structured, repetitive
Solves semi-structured problems
problems
Produces routine reports
Provides interactive answers to
non-routine questions
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
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

Components of a DSS (cont’d)

DSS software system - program to allow
easy interaction between users of the
system and the DSS database and
model base
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?

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

DSS - Answers (cont’d)

Provides rapid access to up-to-date
information. Also aids quick reaction to
unanticipated problems that occur
Structure of a generic DSS
DSS
System
Software
Model Base
- Spreadsheets
- Statistical Analysis
- Simulation
DSS Database
- Sales Data
- Financial Data
- Production Data
Order Processing
System
Materials Resource
Planning System
General Ledger
System
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.
Example of a What-If table

Formula: +B1-B2
Incoming:
Outgoing:
10000
1000
9000
500
600
700
800
900
1000
5000
4500
4400
4300
4200
4100
4000
6000
5500
5400
5300
5200
5100
5000
7000
6500
6400
6300
6200
6100
6000
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

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.

Regression Analysis (cont’d)

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.
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
What problems does the DDS
solve?
Monitoring and controlling of
production processes
 Better quality control of final product
 Better planning capabilities
 Faster reaction times

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
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.

Executive Information Systems

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.
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

General Properties of an EIS




Graphically oriented to provide readily
understandable views of complex data
Tailored to suit an executive’s 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.
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.
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.
What are the information needs of
executives (cont’d)

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)
Types of EIS
For focusing on executive
communications and office work, e.g. email, document handling, scheduling
 Better interface for existing corporate
data
 For developing elaborate scenarios
involving business data

Model of a typical EIS
External db
EIS
External db
EIS db
Models
External db
Order
Processing
Planning
System
General
Ledger
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
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

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

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.

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
EIS Problems and Issues

Organisational
– Cost of implementing the system
– Changes may be needed to create, install,
and use the new EIS system
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
Comparsion table of EIS, DSS
and MIS.