Lecture 2

1. Lecture 2 (a) Four Information System Levels and (b) Six major types of Information Systems Paul Tate's MIS

2. What is an Information System? Another definition of it: • Information System (IS): Interrelated components working together to collect, process, store and disseminate information to support decision making, co-ordination, control, analysis, and visualisation in an organisation. Paul Tate's MIS

3. Information Systems: More than computers • Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems. All information systems can be described as organizational and mangement solutions to challenges posed by the environment. Paul Tate's MIS

4. Contemporary Approaches to Information Systems • Technical Approach: • Computer Science • Operations Research • Management Science • Behavioural Approach: • Sociology • Political Science • Psychology Paul Tate's MIS

5. Socio-technical Approach • Another approach is the Socio-technical approach: In a socio-technical perspective, the performance of a system is optimized when both the technology and the organization mutually adjusted to one another until a satisfactory fit is obtained. • This is a combination of technical and behavioural approach. This is an ideal approach as an organization has many facets that pull on both the technical and behavioural. Paul Tate's MIS

6. I.S. Terms • Computer-Based Information Systems (CBIS): Information systems that rely on computer hardware and software for processing and disseminating information. • Formal System: System resting on accepted and fixed definitions of data and procedures, operating with predefined rules. Paul Tate's MIS

7. Organisations and SOPs • Organisation is comprised of people, structure, operating procedures, politics and culture. • Standard Operating Procedures (SOPs): Formal rules for accomplishing tasks that have been developed to cope with expected situations. Many firms’ SOPs are incorporated their IS. Paul Tate's MIS

8. DIFFERENT KINDS OF SYSTEMS Four main types of information systems serve different organisation levels: • Operational-level systems • Knowledge-level systems • Management-level systems • Strategic-level systems Paul Tate's MIS

9. Operational-level systemssupport operational managers by keeping track of the elementary activities and transactions of the organisation, such as sales, receipts, cash deposits, payroll, credit decisions, and flow of materials in a factory. The principal purpose of systems at this level is to answer routine questions and to track the flow of transactions through the organisation. Paul Tate's MIS

10. Knowledge-level systemssupport knowledge and data workers in an organisation. The purpose of knowledge-level systems is to help the business firm integrate new knowledge into the business and to help the organisation control the flow of paperwork. Knowledge-level systems, especially in the form of workstations and office systems, are the fastest growing applications in business today. Paul Tate's MIS

11. Management-level systemsare designed to serve the monitoring, controlling, decision-making, and administrative activities of middle managers. • Strategic-level systemshelp senior management tackle and address strategic issues and long-term trends, both in the firm and in the external environment. Their principal concern is matching changes in the external environment with existing organisational capability. Paul Tate's MIS

12. SIX MAJOR TYPES OF SYSTEMS In this section, we describe the specific categories of systems serving each organisational level and their value to the organisation. The organisation has: • Executive Support System (ESS) at the Strategic Level; (Note, ESS is also called Executive Information System – EIS). • Management Information Systems (MIS) and Decision-Support System (DSS) at the Management Level; • Knowledge Work Systems (KWS) and Office Automation Systems (OAS) at the Knowledge Level. • Transaction Processing Systems (TPS) is found at the Operational Level. (see diagram to illustrate the levels above) Paul Tate's MIS

13. This diagram shows where the 6 major types of information systems fall into the four system levels: Strategic Level ESS Management Level MIS DSS Knowledge Level KWS OAS Operational Level TPS Paul Tate's MIS

14. Paul Tate's MIS

15. TPS • Transaction processing systems (TPS) are the basic business systems that serve the operational level of the organisation. A transaction processing system is a computerised system that performs and records the daily routine transactions necessary to the conduct of the business. Examples are sales order entry, hotel reservation systems, payroll, employee record keeping, and shipping. Paul Tate's MIS

16. KWS • Knowledge Work Systems (KWS) and Office Automation Systems (OAS) serve the information needs at the knowledge level of the organisation. Knowledge work systems aid knowledge workers, whereas office automation systems primarily aid data workers (although they are also used extensively by knowledge workers. In general, knowledge workers are people who hold formal university degrees and who are often members of a recognised profession like engineers, doctors, lawyers, and scientists Paul Tate's MIS

17. OAS • Office automation systems (OAS) are information technology applications designed to increase the productivity of data workers in the office by supporting the co-ordinating and communicating activities of the typical office. Word processing, desktop publishing and document imaging systems are OAS applications. Paul Tate's MIS

18. MIS • Management Information Systems (MIS): Information systems at the management level of an organization that serve the functions of planning, controlling, and decision making by providing routine summary and exception reports. Paul Tate's MIS

19. MIS • Management information systems (MIS) serve the management level of the organisation, providing managers with reports and, in some cases, with on-line access to the organisation’s current performance and historical records. Typically, they are oriented almost exclusively to internal, not environmental or external events. MIS primarily serve the functions of planning, controlling, and decision making at the management level. Generally, they are dependent on underlying transaction processing systems for their data. MIS summarise and report on the basic operations of the company. The basic transaction data from TPS are compressed and are usually presented in long reports that are produced on a regular schedule. Paul Tate's MIS

20. Characteristics of Management Information Systems: • MIS support structured and semi-structured decisions at the operational and management control levels. However, they are also useful for planning purposes of senior management staff. • MIS are generally reporting and control oriented. They are designed to report on existing operations and therefore to help provide day-to-day control of operations. • MIS reply on existing corporate data and data flows. • MIS have little analytical capability. • MIS generally aid in decision making using past and present data. • MIS are relatively inflexible. • MIS have an internal rather than an external orientation. • Information requirements are known and stable. • MIS often require a lengthy analysis and design process. Paul Tate's MIS

21. DSS • Decision Support Systems (DSS): Information systems at the management level of an organization that combine data and sophisticated analytical models to support semi-structured and unstructured decision making. Paul Tate's MIS

22. DSS • Decision-support systems (DSS) also serve the management level of the organisation. DSS help managers make decisions that are semi-structured, unique, or rapidly changing, and not easily specified in advance. DSS have to be responsible enough to run several times a day in order to correspond to changing conditions. While DSS use internal information from TPS and MIS, they often bring in information from external sources, such as current stock prices or product prices of competitors Paul Tate's MIS

23. DSS • Characteristics of Decision-Support Systems • DSS offer users flexibility, adaptability, and a quick response. • DSS allow users to initiate and control the input and output. • DSS operate with little or no assistance from professional programmers. • DSS provide support for decisions and problems whose solutions cannot be specified in advance. • DSS use sophisticated analysis and modelling tools. Paul Tate's MIS

24. ESS • Executive Support Systems (ESS): Information systems at the strategic level of an organization designed to address unstructured decision making through advanced graphics and communications. Paul Tate's MIS