UNIT-2

Introduction to Organizational Systems

Complied by: Dr. Vanita Joshi

1 UNIT-2 Introduction to Organizational

Systems
Content

 Transaction Processing System (TPS)

 Management Information System
(MIS)
 Executive Information System (EIS)
 Decision Support System (DSS)
 Expert System (ES)

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 Transaction Processing System

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Systems
Transaction Processing System (TPS)
TPS
 Is an information system designed to process
routine business transactions.
 seeks time- and cost-efficiency by automating
repetitive operations in large volumes.
 interfaces with an organization’s other information
systems, such as IRS, DSS, EIS.
 centers around accounting and finance
transactions.
 e.g. airline reservation systems, order
entry/processing systems, bank’s account
processing systems.

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 Characteristics of TPS
 Large amounts of data are processed.
 The sources of data are mostly internal, and the output is
intended mainly for an internal audience.
 The TPS processes information on a regular basis: daily,
weekly, monthly, etc.
 Large storage (database) capacity is required.
 High processing speed is needed due to the high volume.
 TPS basically monitors and collects past data.
 Input and output data are structured (i.e., standardized).
 Low computation complexity is usually evident in TPS.
 A high level of accuracy, data integrity, reliability and
security is needed.
 Inquiry
5 processing is a
UNIT-2 must. to Organizational Systems
Introduction
Applications of TPS
 Order Processing
 Purchasing
 Accounts Receivables & Accounts Payables
 Receiving & Shipping
 Inventory on Hand
 Payroll
 General Ledgers

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 Transaction Processing System Functions

Input function :Processing function :Output function

• Capture input data • Perform computation • Produce screen output
• Enter input data • Make decision • Print output
• Validate input data

:Storage function

• Stored data
• Access data
• Update data

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Systems
Batch versus On-Line Transaction Processing

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Systems
Integration of a Firm’s TPSs

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Systems
Competitive Advantages of Transaction
Processing

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Systems
Transaction Processing Systems

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Systems
Transaction Processing Activities

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Systems
Order Processing Systems
 Order entry
 Sales configuration
 Shipment planning
 Shipment execution
 Invoicing
 Customer Relationship Management (CRM)
 Routing and scheduling
 Scheduling systems

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Systems
Order Processing Systems

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Systems
 Management Information System

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Management Information System
 An MIS is
 An integrated (computer-based) user-machine
system for providing information to support
decision-making functions in an organization.
 An organized collection of people, procedures,
software, databases, and devices used to
provide routine information to managers and
decision makers.
 Basic functions of MIS includes data
capturing, processing of data, storage,
retrieval and dissemination of MI – finished
product of MIS.
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Systems
 Management Information System
(MIS)
 An MIS provides managers with
information and support for effective
decision making, and provides feedback
on daily operations
 Output, or reports, are usually
generated through accumulation of
transaction processing data
 Each MIS is an integrated collection of
subsystems, which are typically
22 organizedUNIT-2
along functional
Introduction lines within
to Organizational Systems
Characteristics of a Management
Information System

 Provides reports with fixed and

standard formats
 Hard-copy and soft-copy reports
 Uses internal data stored in the
computer system
 End users can develop custom
reports
 Requires formal requests from users
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Systems
MIS for Competitive Advantage

 Provides support to managers as

they work to achieve corporate
goals
 Enables managers to compare
results to established company
goals and identify problem areas
and opportunities for improvement

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Systems
Outputs of Management Information
System

 Scheduled reports
 Produced periodically, or on a schedule (daily,
weekly, monthly)
 Key-indicator report
 Summarizes the previous day’s critical activities
 Typically available at the beginning of each day
 Demand report
 Gives certain information at a manager’s request
 Exception report
 Automatically produced when a situation is unusual
or requires management action

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 Internet
Internet An Organization’s
MIS

Financial
MIS
Business
transactions

Drill down reports

Accountin
Transaction Databases g Exception reports
processing of MIS
Demand reports
systems valid
transactions Key-indicator reports
Marketing
MIS Scheduled reports

Business
transactions
Databases Human
of
Resources Etc.
external
data MIS
Extranet
Extranet
Etc.

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Systems
 Databases of Financial
Databases of
internal data external data DSS

Business
transactions
Transaction Databases
processing of valid
Financial
systems transactions MIS Financial
for each applications
TPS databases

Business
transactions
Financial statements
Financial
Operational Uses and management ES
Internet databases of funds
Internet
or
or Financial statistics
Extranet
Extranet for control

Business Customers,
transactions Suppliers

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Systems
 Databases of Manufacturing
Databases of
internal data external data DSS

Business
transactions
Transaction Databases
processing of valid
Manufacturing
systems transactions MIS Manufacturing
for each applications
TPS databases

Business Quality control reports

transactions
Process control reports Manufacturing
Operational ES
JIT reports
Internet databases
Internet MRP reports
or
or
Extranet Production schedule
Extranet
CAD output

Business Customers,
transactions Suppliers

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 Databases of Manufacturing
Databases of
internal data external data DSS

Transaction Databases
Business processing of valid
Marketing
transactions systems transactions MIS Marketing
for each applications
TPS databases

Sales by customer

Sales by salesperson Manufacturing

Operational Sales by product ES
databases Pricing report
Total service calls
Customer satisfaction

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 Databases of Manufacturing
Databases of
internal data external data DSS

Transaction Databases Human

Business processing of valid Resource Human
transactions systems transactions MIS resource
for each applications
TPS databases

Benefit reports

Salary surveys Manufacturing

Operational Scheduling reports ES
databases Training test scores
Job applicant profiles
Needs and planning
reports

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 Executive Information System

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Executive Information System

A computer-based system that

serves the information needs of top
executives
Provides rapid access to timely
information and direct access to
management reports
Very user-friendly, supported by
graphics
Provides exceptions reporting and
32"drill-down"UNIT-2
capabilities
Introduction to Organizational Systems
EIS (Contd..)

An EIS is a special type of DSS

designed to support decision making at
the top level of an organization.
An EIS may help a CEO to get an
accurate picture of overall operations,
and a summary of what competitors
are doing.
These systems are generally easy to
operate and present information in
ways easy to quickly absorb (graphs,
charts, etc.).
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Systems
 Decision Support System

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Decision Support System
 A Decision Support System (DSS) is an
interactive computer-based system or
subsystem intended to help decision makers
use communications technologies, data,
documents, knowledge and/or models to
identify and solve problems, complete
decision process tasks, and make decisions.
 Decision Support System is a general term
for any computer application that enhances a
person or group’s ability to make decisions.
 Also, Decision Support Systems refers to an
academic field of research that involves
designing and studying Decision Support
Systems in their context of use.
 A DSS helps aUNIT-2
manager “do
Introduction to the right
Organizational thing”
Systems
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DSS (contd..)
 Systems designed to support managerial
decision-making in unstructured problems.
 More recently, emphasis has shifted to
inputs from outputs.
 Mechanism for interaction between user
and components.
 Usually built to support solution or
evaluate opportunities.
 DSS can be characterize as Flexible;
Adaptive; Interactive; GUI-based; Iterative;
and Employs modeling.

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Business Intelligence (BI)

 Proactive BI focusses on accelerating

decision-making
 Increases information flows
 Five components of proactive BI:
 Real-time warehousing
 Exception and anomaly detection
 Proactive alerting with automatic recipient
determination
 Seamless follow-through workflow
 Automatic learning and refinement

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Components of DSS

 Subsystems:
 Data management
 Managed by DBMS
 Model management
 Managed by MBMS
 User interface
 Knowledge Management and
organizational knowledge base

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Systems
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 Expert System

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Expert System
An expert system is…
A computer application that performs a task
that would otherwise be performed by a
human expert gives the computer the ability to
make suggestions and to act like an expert in a
particular field.
Examples: Diagnose human illnesses, make
financial forecasts, schedule routes for delivery
vehicles
 Expert systems typically include
“artificial intelligence”.
 It was discovered that many problems
were being solved by chaining through
rules
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(if-then UNIT-2
statements) that
Introduction to Organizational Systemswould
Components of an ES
1. Knowledge Base

2. Reasoning or Inference Engine

3. User Interface

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Systems
Expert System Structure

Knowledge
Expert
Interpreter Based Natural
Rules
Inference Language
Engine Data base Interface
Context
Set of facts
User

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Systems
Knowledge Base

 Represents all the data and

information imputed by experts in the
field.

 Storesthe data as a set of rules that

the system must follow to make
decisions.

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Systems
Knowledge Acquisition

Expert Knowledge Human

System Engineer Expert

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Systems
Inference Engine
 Asks the user questions about what
they are looking for.

 Applies the knowledge and the rules

held in the knowledge base.

 Appropriately uses this information to

arrive at a decision.

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Systems
User Interface
 Allows the expert system and the
user to communicate.

 Finds
out what it is that the system
needs to answer.

 Sends the user questions or answers

and receives their response.

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Systems
Development of an Expert System

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Role of Artificial Intelligence (AI)

 An algorithm is an ideal solution guaranteed to yield a

solution in a finite amount of time.
 When an algorithm is not available or is insufficient,
we rely on Artificial Intelligence (AI).
 Expert system relies on inference – we accept a
“reasonable solution.”

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 Uncertainty

 Both human experts and expert systems must be

able to deal with uncertainty.
 It is easier to program expert systems with
shallow knowledge than with deep knowledge.
 Shallow knowledge – based on empirical and
heuristic knowledge.
 Deep knowledge – based on basic structure,
function, and behavior of objects.

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Some Early Expert Systems

 DENDRAL – used in chemical mass

spectroscopy to identify chemical constituents
 MYCIN – medical diagnosis of illness
 DIPMETER – geological data analysis for oil
 PROSPECTOR – geological data analysis for
minerals
 XCON/R1 – configuring computer systems

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Medical Diagnosis & Expert Systems
(PEIRS)
 Pathology is the study of the origin, nature, and
course of diseases.
 Pathology reports explain the outcomes of tests on
the patient and the diseases various information.
 Pathologists were in need of a comprehensive
interpretative service to help them interpret these
reports.
 PEIRS (Pathology Expert Interpretative Reporting
System) was created as a user-maintained expert
system for automating the interpretation of
chemical pathology reports.
 The system uses over 2500 rules to generate
interpretive comments on the reports.
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