Information Systems:

Concept, purpose & types

 Contents
• Contextual
• Information Systems (IS)
• Two perspectives of an Information Systems
• Components of an information systems
• Systems Features and Characteristics
• Purpose/Functions of an Information Systems
• Types of information systems
– Office Information Systems
– Transaction Processing Systems
– Management Information Systems
– Decision Support Systems
– Expert Systems
 Data, Information & Knowledge
Data: Information: Knowledge:
• Plural form of datum • Data that has been processed • Organized body of
• Raw facts and figures that within a context to give it information or capability of
on their own have no meaning. understanding the
meaning Example: relationship between pieces
• Unorganized piece of of information and what to
information Raw Data 40, 60, 80 actually do with the
Example: 40, 60, 80, information.
Yes, No Example:
Context Test scores Average test score is 60%.
achieved by This shows that the first
Processing students student’s marks is below
average

Information ???

Information = Data + Context + Meaning

Processing
 Information Systems (IS)
• Information = Latin words (Formation and Forma)
• An Information System (IS) is a group of components that interact to
produce information.
• An Information System is an integrated and cooperating set of
software directed information technologies supporting individual,
group, organizational, or societal goals.
• It is the study of complementary networks that people and
organizations use to collect, filter, process, create and distribute data.
 Information System Example
Patient

Health Care

Describes the procedure of the

medical treatment

Fig. 1 An integrated view of an information system.

• An information system is a software system to capture, transmit, store,

retrieve, manipulate, or display information, thereby supporting
people, organizations, or other software systems.
Example: In the example of the family doctor, the Information System
is the software system that stores the data of the patient. This
information system supports a person: the doctor.
 Two perspectives of an Information Systems
– Function
– Structure

Functional perspective Structural perspective

Information system is a technologically An information system consists of a

implemented medium for the purpose collection of people, processes, data,
of recording, storing, and models, technology and partly
disseminating linguistic expressions as formalized language, forming a
well as for the supporting of inference cohesive structure which serves some
making”. organizational purpose or function.

Example: Communicate with experts Example: Socio-technical systems,

to i.e., systems consisting of humans,
solve a particular problem. behavior rules, and conceptual and
technical artifacts.
 Components of an information systems
1. Hardware: Physical computer equipment's and associate device,
input and output devices, storage devices and communications
devices.
2. Software: The term software refers to computer programs and the
manuals that support hardware (programs and procedures).
3. Data: Data are facts that are used by programs to produce useful
information. (data and knowledge bases).
4. Procedures/process: Procedures are the policies that govern the
operation of a computer system.
5. People: Every system needs people if it is to be useful (end users and
IS specialists, system analyst, programmers, data administrators etc.)
6. Networks: Communications media and network support (Internet,
intranets, extranets, computers, communications processors, and other
devices).
 Systems Features and Characteristics
Systems also exhibit certain features and characteristics:
1.) Objective 2) Standards 3) Environment 4) Feedback 5) Boundaries and
6) Interfaces
1. Objective
• Every system has a predefined goal or objective towards which it
works.
• An organization would have an objective of earning maximum possible
revenues.
2. Standards
• Systems should be designed to meet standards.
• Standards can be business specific or organization specific.
• There should be standard rules to use a particular system.
 Systems Features and Characteristics
3. Environment
• Every system whether it is natural or man made co-exists with an
environment. Example: Y2K problem for computer systems.
• Systems that are not Y2K compliant will not work properly after year
2000.
• It is important to make the systems Y2K compliant.
4. Feedback
• The output of a system needs to be scrutinised by taking feedbacks
for improving the system .
• Also some feedback can come from customer or it can be some
intermediate
data.
5. Boundaries
• Every system has defined boundaries within which it operates.
• Personnel system in an organization has its work domain with defined
procedures.
6. Interfaces
• Through interfaces, the system interacts with the outside world.
• These UIs should be as user friendly as possible.
 Purpose/Functions of an Information
Systems
• Inputs
• Processing
• Outputs
• Control
 Types of information systems:
1. Office Information Systems
2. Transaction Processing Systems
3. Management Information Systems
4. Decision Support Systems
5. Expert Systems
 Office Automation Systems
(OAS)
• OAS refers to the computer machinery and software used to digitally
create, collect, store, manipulate, and relay office information.
Main types of tools include:
– MS Word, MS excel etc.
– Text & image processing systems (DTP)
– Personal database systems and note-taking systems
• OAS includes the following roles/activities:
– Exchange of information
– Management of administrative documents
– Handling of numerical data
– Meeting planning and management of work schedules
 Office Automation Systems (OAS)
Function of OAS Need/Advantages for office
Automation
• Create data entry and procedure • Labor and time saving
• Generate Documents/Presentations • Accuracy
• Sends Email • Less chances of committing fraud
• Maintain data • Uniformity
• Create stand alone apps • Control of Information
Main office suites
• AppleWorks
• Corel WordPerfect
• IBM/Lotus SmartSuite
• Microsoft Office
• Sun Star Office
• Open Office (freeware)
 Transaction Processing Systems (TPS)
• A computerized system that performs and records daily routine
transactions necessary to the conduct of the business.
• Usually operated directly by shop floor workers or front line staff,
which provide the key data required to support the management of
operations.
• This data is usually obtained through the automated or semi-automated
tracking of low-level activities and basic transactions.
Five Stages of Transaction Processing System
• Data Entry
• Processing
• Database Maintenance
• Document and Report Generation
• Inquiry Processing
 Functions of a TPS
Functions of a TPS in terms of data processing requirements
Inputs Processing Outputs
Transactions Validation Lists
Events Sorting Detail reports
Examples of Listing Action reports
MIS Merging Summary reports?
Updating
•
Calculation
Examples:
• Payroll system
• Reservations systems
• Order processing systems
• Systems for payments and funds transfers
• Billing systems to send invoices to customers
• Systems to calculate the weekly and monthly tax payments
 Two types of Transaction Processing Systems
i) Batch Processing
• Batch processing requires separate programs for input, process and output.
• Batch processing is a resource-saving transaction type that stores data for
processing at pre-defined times.
• It is useful for enterprises that need to process large amounts of data using limited
resources.
Example
– Credit card’s monthly statement for the customer.
– Library books overdue reminders, Journals missing issues reminders.
– NEFT transfer (National Electronic Funds Transfer).
ii) Real Time Processing
• Involves a continual input, process and output of data.
• Data must be processed in a small time period (or near real time).
Example
• A bank customer withdraws a sum of money from his or her account. The account
balance updated as soon as possible.
• Airline ticket booking.
• IMPS (Immediate Payment Service)
 Features/Characteristics
of Transaction Processing
1. Rapid Processing Systems
• The rapid processing of transactions is vital to the success of any
enterprise.
• TPS systems are designed to process transactions instantly.
2. Reliability
• TPS systems are designed to incorporate comprehensive measures to
safeguards and disaster recovery.
• These measures keep the failure rate well within tolerance levels.
3. Standardisation
• Transactions must be processed in the same way each time to maximise
efficiency.
• TPS interfaces are designed to acquire identical data for each
transaction, regardless of the customer.
4. Controlled Access
• Access must be restricted to authorized employees to use.
• Employees who lack the skills and ability to control, cannot do
the transaction process.
 Management Information Systems (MIS)
• Management Information Systems are management-level systems that
are used by middle managers to help ensure the smooth running of
the organization in the short to medium term.
• The highly structured information provided by these systems allows
managers to evaluate an organization's performance by comparing
current with previous outputs.
• MIS primarily serve the functions of planning, controlling, and
decision making at the management level.
 Functions of MIS
• MIS are built on the data provided by the TPS

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

Examples of MIS
• Sales management systems
• Inventory control systems
• Budgeting systems
• Management Reporting Systems (MRS)
 MIS Reports
• Several types of reports can be produced
– Summary reports present all activity over a given time period,
geographic region, or other categorization in aggregate form.
– Exception reports only present information that is out of normal
ranges.
– On-demand reports present anticipated summaries only when a
manager wants or needs to check the status of activities.
 Applications of MIS
• Strategy Support
– Computers cannot create business strategies by themselves but assist
management and help in taking effective decision-making.
– MIS systems can be used to transform data into information that is
useful for decision making.
• Data Processing
– MIS systems provide a valuable time saving benefit to the
workforce.
– They allow for faster decision making and quicker reflexes for
the enterprise as a whole.
Benefit of MIS
• Core Competency
• Supply Chain Management
• Quick Reflexes
 Decision support systems (DSS)
• Computer-based information system that supports business or organizational decision-
making activities, typically resulting in ranking, sorting or choosing from among
alternatives.
• Knowledge based system, used by senior managers, which facilitates the creation of
knowledge and allow its integration into the organization.
• DSS are interactive and are used to solve ill structured problems.
• They offer access to databases, analytical tools, allow "what if" simulations, and
support the exchange of information within the organization.
• DSS usually have three major components:
– Database
• Stores large amounts of data relevant to problems the DSS has been designed
to tackle.
– Model base
• Contains one or more models that can be used to analyze the decision
situation
– Dialogue module
• Provides a way for the decision maker, usually a non-technical manager, to
communicate with the DSS.
 Decision support systems (DSS)
• 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 Modeling Summary reports
Internal Files Simulation Forecasts
External Information? Analysis Graphs / Plots
Summarizing
Examples of DSS
• Group Decision Support Systems (GDSS)
• Computer Supported Co-operative work (CSCW)
• Logistics systems
• Financial Planning systems

DSS Advantage
• Improve in overall efficiency
• Competitive advantage
• Better Satisfaction
 Expert systems (ES)
• Support professionals faced with complex situations requiring expert
knowledge in a well-defined area.
• Expert systems are based on principles of artificial intelligence
research.
• These systems use human knowledge captured in a computer to solve
problems that ordinarily need human expertise. Mimicking human
expertise and intelligence requires that the computer
– recognize, formulate and solve a problem;
– explain solutions and
– learn from experience.
These systems explain the logic of their advice to the user; hence, in
addition to solving problems they can also serve as a teacher.
They use flexible thinking processes and can accommodate new
knowledge.
 Expert systems (ES)
• Expert systems are based on probabilities computers can be
programmed with “subject knowledge” to mimic the role of experts.
• There are two primary parts to expert systems
– Knowledge base
• The knowledge base contains both factual and judgmental
knowledge.
– Reasoning engine.
• The reasoning engine uses inference to solve problems, often
using "if-then" decision chains.
 Expert systems (ES)
Example:
• Artificial intelligence system that
emulates an auto mechanic's
knowledge in diagnosing automobile
problems. This hypothetical expert
system would likely be the result of
engineering using an actual mechanic's
knowledge base.
• One of the most common uses
of expert systems is in medicine
– The ONCOLOG system shown
here analyses patient data to
provide a reference for doctors, and
help for the choice, prescription
and follow-up of chemotherapy
 References
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