BUSINESS INFORMATION SYSTEM

Question 2a: List and explain four (4) major types of information system in an
organization.

An information system is any organized system for the collection, organization,

storage and communication of information. A computer Information System (IS) is a system
composed of people and computers that processes or interprets information. The term is also
sometimes used in more restricted senses to refer to only the software used to run a
computerized database or to refer to only a computer system (Wikipedia, 2015).

Information systems also play an important role in small businesses, helping

companies improve their productivity, efficiency and customer service (Linton, 2012). There
are four major types of information system in an organization. The hierarchy of the
organization, usually transaction processing systems at the bottom of the pyramid, followed
by management information systems, decision support systems, and ending with executive
information systems at the top. Refer to figure 2.0 below.

Figure 2.0: Four level pyramid models based on the different levels of hierarchy in the
organization.

Source from: http://www.chris-kimble.com/Courses/World_Med_MBA/Types-of-

Information-System.html.

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Transaction Processing Systems (TPS)

Transaction Processing System (TPS) are operational-level systems at the bottom of

the pyramid. They are usually operated directly by shop floor workers or front line staff,
which provide the key data required to support the management of operations. They
record routine transaction that take place in everyday operations. This data is usually
obtained through the automated or semi-automated tracking of low-level activities and
basic transactions. The functions of TPS in term of data processing systems are showed in
table 2.0 below.

Table 2.0: TPS are ultimately little more than simple data processing systems.

Functions of a TPS in terms of data processing requirements

Inputs Processing Outputs
Transactions Validation Lists
Events Sorting Detail reports
Listing Action reports
Merging Summary reports?
Updating
Calculation

The examples of TPS are such as payroll systems; order processing systems; reservation
systems; stock control systems and systems for payments and funds transfers. The main role
of TPS is to produce information for other systems. Secondly, it is a cross boundaries
(internal and external). TPS also used by operational personnel and supervisory levels.
Besides, TPS is efficiency oriented.

Management Information Systems (MIS)

Management Information System (MIS) is a data processing by computers has been

extremely effective because of several reasons. The main reason is that huge amount of
data relating to accounts and other transactions can be processed very quickly. MIS are
more concerned with levels of management with information essential to the running of
smooth business (Thakur, 2013). This Information must be as relevant, timely, accurate,
complete and concise as is economically feasible. The functions of a MIS are as showed
below.

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Table 2.1: MIS are built on data processing requirements

Functions of a MIS in terms of data processing requirements

Inputs Processing Outputs
Internal Transactions Sorting Summary reports
Internal Files Merging Action reports
Structured data Summarizing Detailed reports

The some examples of MIS are Sales management systems; Inventory control systems;
Budgeting systems; Management Reporting Systems (MRS) and Personnel (HRM) systems.
However, the roles of MIS are based on internal information flows; support relatively
structured decisions; inflexible and have little analytical capacity; used by lower and middle
managerial levels and deals with the past and present rather than the future.

Decision Support Systems (DSS)

Decision Support System (DSS) is an information system that offers the kind of
information that may not be predictable. Business professionals may need such information
only once. These systems do not produce regularly scheduled management reports. Instead,
they are designed to respond to wide range of requests. It is true that all the decisions in an
organization are not of a recurring nature. Decision support systems assist managers, who
make decisions that are not highly structured, often called unstructured or semi structured
decision. The decision support systems support, but do not replace, judgments of managers.
The functions of a DSS are

Table 2.2: DSS manipulate and build upon the information from a MIS and/or TPS to
generate insights and new information.

Functions of a DSS in terms of data processing requirements

Inputs Processing Outputs
Internal Transactions Modelling Summary reports
Internal Files Simulation Forecasts
External Information? Analysis Graphs / Plots
Summarizing

The examples of DSS are like Group Decision Support Systems (GDSS); Computer
Supported Co-operative work (CSCW); Logistics systems; Financial Planning systems and

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Spreadsheet Models? Furthermore, the roles of DSS are such as support ill of structured or
semi-structured decisions; have analytical and/or modelling capacity; used by more senior
managerial levels and concerned with predicting the future.

Executive Information Systems (EIS)

Executive Information Systems are strategic-level information systems that are found at
the top of the Pyramid. They help executives and senior managers analyze the environment in
which the organization operates, to identify long-term trends, and to plan appropriate courses
of action. The information in such systems is often weakly structured and comes from both
internal and external sources. Executive Information System are designed to be operated
directly by executives without the need for intermediaries and easily tailored to the
preferences of the individual using them. The functions of an EIS are drawn in table below.

Table 2.3: EIS organizes and presents data and information from both external data
sources and internal MIS or TPS in order to support and extend the
inherent capabilities of senior executives.

Functions of a EIS in terms of data processing requirements

Inputs Processing Outputs
External Data Summarizing Summary reports
Internal Files Simulation Forecasts
Pre-defined models "Drilling Down" Graphs / Plots

Executive Information Systems tend to be highly individualized and are often custom
made for a particular client group; however, a number of off-the-shelf EIS packages do exist
and many enterprise level systems offer a customizable EIS module. The role of EIS are
concerned with ease of use and predicting the future; it is effectiveness oriented; highly
flexible; support unstructured decisions; use internal and external data sources and used only
at the most senior management levels in an organization.

The various types of systems in an organization have interdependencies. TPS are

major producers of information that is required by the other systems which, in turn, produce
information for other system. These different types of systems have been loosely coupled in
most organizations. The key elements for all these four systems are integrated.

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Question 4

a. There are several methods the digital firm can use to piece together the disparate
systems. Explain three (3) of them.

i. Computer Hardware Platforms

The microprocessor is the heart of any computing device no matter how small or large.
Two companies produce most micro processing chips: Intel and Advanced Micro Devices
(AMD). The most popular and widely known is Intel. Since the network is becoming so
commonplace and the heart of computing, network service providers have the server
backbone in place to meet the increased demand. Blade servers are meeting the needs of
service providers cheaper and easier than traditional big-box servers. IBM offers mainframe
computers that can also provide the network processing although they are more expensive
and require Unix software.

ii. Operating System Platforms

Operating systems tell computers what to do, when to do it, and how. Operations such
as logging on, file management, and network connectivity are controlled by the operating
system. By far the most prolific operating system is Microsoft Windows in various versions.
Windows is also the operating system used by some non-traditional computing devices such
as hand-held PDAs and cell phones. Unix and Linux are often associated with large networks
that require less application overhead and faster processing. Linux open-source software is
becoming the operating system of choice for organizations looking to save money.

iii. Enterprise Software Applications

Integrating applications into seamless processes across the organization is the goal of
enterprise software applications. Customer relationship management and supply chain
management systems are the two most popular applications in this category.

"In the back office, business processes that have historically been optimized for
internal efficiency can now add the dimension of superior customer service,
personalized to each customer, leveraging the skills of trained agents in the call
centre. With better information from the customer, back office processes are
improved. And in the long run, agents can gradually decrease the flow of paper into
the back office, in favour of more efficient communication channels such as e-mail
and the web. (TechWorld.com, copied March 21, 2005).

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b. Briefly explain the below terms:

i. DBMS - It is known as database management system (DBMS). It is a

combination of software and data that makes it possible to organize and
analyze data. DBMS software is typically not designed to work with a specific
organization or a specific type of analysis. A database management system
(DBMS) is system software for creating and managing databases. The DBMS
provides users and programmers with a systematic way to create, retrieve,
update and manage data. A DBMS makes it possible for end users to create,
read, update and delete data in a database. The DBMS essentially serves as an
interface between the database and end users or application programs,
ensuring that data is consistently organized and remains easily accessible
(Wikipedia, 2015).

ii. DML- It is a data manipulation language (DML) which is family of syntax

elements similar to a computer programming language used for selecting,
inserting, deleting and updating data in a database. Performing read-only
queries of data is sometimes also considered a component of DML. A popular
data manipulation language is that of Structured Query Language (SQL),
which is used to retrieve and manipulate data in a relational database. Other
forms of DML are those used by IMS/DLI, CODASYL databases, such
as IDMS and others (Wikipedia, 2015). Data manipulation language comprises
the SQL data change statements, which modify stored data but not the schema
or database objects.

iii. DDL- A data definition language or data description language (DDL) is a

syntax similar to a computer programming language for defining data
structures, especially database schemas in some way, typically by creating,
deleting, or modifying schema objects such as databases, tables, and views.
Most Impala DDL statements start with the keywords CREATE, DROP,
or ALTER (Wikipedia, 2015).

iv. SQL- is a Structured Query Language which is a special-purpose

programming language designed for managing data held in a relational
database management system (RDBMS), or for stream processing in
a relational data stream management system (RDSMS) (Wikipedia, 2015).

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Furthermore, it is originally based upon relational algebra and tuple relational

calculus, SQL consists of a data definition language, data manipulation
language, and a data control language. The scope of SQL includes data insert,
query, update and delete, schema creation and modification, and data access
control.

v. Data Dictionary- A data dictionary is a collection of descriptions of

the data objects or items in a data model for the benefit of programmers and
others who need to refer to them. A first step in analyzing a system of objects
with which users interact is to identify each object and its relationship to other
objects (Wikipedia, 2015).

REFERENCES

Thakur, D. (2013). Discuss the major types of Information System. Retrieved November 18,
2015, from,
http://ecomputernotes.com/mis/structure-and-classification/discuss-the-major-types-of-
information-system

Retrieved November 18, 2015, from

http://www.chriskimble.com/Courses/World_Med_MBA/Types-of-
InformationSystem.html

Retrieved November 18, 2015, from

http://searchsqlserver.techtarget.com/definition/database-management-system

Retrieved November 18, 2015, from www.google.com

Retrieved November 18, 2015, from www.wikipedia.com