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
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
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
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
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
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.
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. e-mail, document handling, scheduling • Better interface for existing corporate data • For developing elaborate scenarios involving business data
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