Transactional Processing System

Transaction Processing System is the information system that processes

data resulting from the occurrences of business transactions.

Their objectives are to provide transaction in order to update records and

generate reports i.e to perform store keeping function.

The transaction is performed in two ways: Batching processing and Online

Transaction processing.

Example: Bill system, payroll system, Stock control system.

A Transaction Processing System (TPS) is an information processing

system for business transactions involving the collection, modification and
retrieval of all transaction data. Characteristics of a TPS include
performance, reliability and consistency.

TPS is also known as real-time processing.

Transaction processing systems are used to record day to day business

transactions of the organization. They are used by users at the operational
management level.

The main objective of a transaction processing system is to answer routine

questions such as:

 How printers were sold today?

 How much inventory do we have at hand?
 What is the outstanding due for John Doe?

By recording the day to day business transactions, TPS system provides

answers to the above questions in a timely manner.

The decisions made by operational managers are routine and highly

structured.

The information produced from the transaction processing system is very

detailed.

Transaction Processing System is a type of information processing

system, software and hardware combination, which supports Transaction
processing.

Transaction processing is a type of computer processing in which each

individual indivisible task, called a transaction, is worked upon and
executed as and when it comes. The response to requests is immediate.
In contrast to this is batch processing in which a batch of requests are
stored and then executed all at once. A transaction Processing System is
also used to collect, store, retrieve and modify transactions executed by an
organization.

In Transaction Processing, user or customer interaction is required, unlike

batch processing. It allows only certain predefined, typically short duration,
tasks and transactions to be performed by the user and provides a
predictable request execution time, which is pre- programmed.

This gives it the following characteristics:

• Predictability • Reliability • Consistency

Examples of transaction processing systems include:

• Point of Sale Systems – records daily sales.

• Payroll systems – processing Employees Salary, Loans
management, etc.
• Stock Control systems – keeping track of inventory levels.
• Airline booking systems – flights booking management.
• ATM (Automatic Teller Machine)

Expert System
Experts systems include expertise in order to aid managers in
diagnosing problems or in problem-solving. These systems are based
on the principles of artificial intelligence research.

Experts Systems is a knowledge-based information system. It uses its

knowledge about a specify are to act as an expert consultant to users.

Knowledge base and software modules are the components of an

expert system. These modules perform inference on the knowledge
and offer answers to a user’s question.

An Expert System is defined as an interactive and reliable computer-

based decision-making system which uses both facts and heuristics to
solve complex decision-making problems. It is considered at the
highest level of human intelligence and expertise. It is a computer
application which solves the most complex issues in a specific domain.

The expert system can resolve many issues which generally would
require a human expert. It is based on knowledge acquired from an
expert. It is also capable of expressing and reasoning about some
domain of knowledge. Expert systems were the predecessor of the
current day artificial intelligence, deep learning and machine learning
systems.
Following are Important characteristics of Expert System:

The Highest Level of Expertise: The expert system offers the highest
level of expertise. It provides efficiency, accuracy and imaginative
problemsolving.

Right on Time Reaction: An Expert System interacts in a very

reasonable period of time with the user. The total time must be less
than the time taken by an expert to get the most accurate solution for
the same problem.

Good Reliability: The expert system needs to be reliable, and it must

not make any a mistake.

Flexible: It is vital that it remains flexible as it is possessed by an

Expert system.

Effective Mechanism: Expert System must have an efficient

mechanism to administer the compilation of the existing knowledge in
it.

Capable of handling challenging decision & problems: An expert

system is capable of handling challenging decision problems and
delivering solutions.

The expert System consists of the following given components:

User Interface

The user interface is the most crucial part of the expert system. This
component takes the user's query in a readable form and passes it to
the inference engine. After that, it displays the results to the user. In
other words, it's an interface that helps the user communicate with the
expert system.

Inference Engine

The inference engine is the brain of the expert system. Inference

engine contains rules to solve a specific problem. It refers the
knowledge from the Knowledge Base.

It selects facts and rules to apply when trying to answer the user's
query. It provides reasoning about the information in the knowledge
base. It also helps in deducting the problem to find the solution. This
component is also helpful for formulating conclusions.

Knowledge Base

The knowledge base is a repository of facts. It stores all the knowledge

about the problem domain. It is like a large container of knowledge
which is obtained from different experts of a specific field.

Thus we can say that the success of the Expert System mainly
depends on the highly accurate and precise knowledge.

The process of building a Expert Systems

• Determining the characteristics of the problem.

• Knowledge engineer and domain expert work in coherence to
define the problem.
• The knowledge engineer translates the knowledge into a
computerunderstandable language. He designs an inference
engine, a reasoning structure, which can use knowledge when
needed.
• Knowledge Expert also determines how to integrate the use of
uncertain knowledge in the reasoning process and what type of
explanation would be useful.

Human Expert vs. Expert system

Conventional System vs. Expert system

Benefits of Expert System

• It improves the decision quality.

• Cuts the expense of consulting experts for problem-solving.
• It provides fast and efficient solutions to problems in a narrow
area of specialization.
• It can gather scarce expertise and used it efficiently.
• Offers consistent answer for the repetitive problem.
• Maintains a significant level of information.
• Helps you to get fast and accurate answers.
• A proper explanation of decision making.
• Ability to solve complex and challenging issues.
• Expert Systems can work steadily work without getting
emotional, tensed or fatigued.

Limitations of Expert System

• Unable to make a creative response in an extraordinary

situation.
• Errors in the knowledge base can lead to wrong decision.
• The maintenance cost of an expert system is too expensive.
• Each problem is different therefore the solution from a human
expert can also be different and more creative.
 Applications of Expert System

• Information management
• Hospitals and medical facilities
• Help desks management
• Employee performance evaluation
• Loan analysis
• Virus detection
• Useful for repair and maintenance projects
• Warehouse optimization
• Planning and scheduling
• The configuration of manufactured objects
• Financial decision making Knowledge publishing
• Process monitoring and control
• Supervise the operation of the plant and controller
• Stock market trading
Airline scheduling & cargo schedules

Decision Support System

Decision Support Systems (DSS) are a class of computerized information
system that support decision-making activities.

DSS are interactive computer-based systems and subsystems intended to

help decision makers use communications technologies, data,
documents, knowledge and/or models to complete decision process
Tasks.

A decision support system may present information graphically and may

include an expert system or artificial intelligence (AI). It may be aimed at
business executives or some other group of knowledge workers.

Decision support systems (DSS) are interactive software-based systems

intended to help managers in decision-making by accessing large
volumes of information generated from various related information
systems involved in organizational business processes, such as office
automation system, transaction processing system, etc.

DSS uses the summary information, exceptions, patterns, and trends

using the analytical models. A decision support system helps in decision-
making but does not necessarily give a decision itself. The decision
makers compile useful information from raw data, documents, personal
knowledge, and/or business models to identify and solve problems and
make decisions.
Attributes of a DSS

• Adaptability and flexibility

• High level of Interactivity
• Ease of use
• Efficiency and effectiveness
• Complete control by decision-makers
• Ease of development
• Extendibility
• Support for modeling and analysis
• Support for data access
• Standalone, integrated, and Web-based

Characteristics of a DSS

• Support for decision-makers in semi-structured and unstructured

problems.
• Support for managers at various managerial levels, ranging from
top executive to line managers.
• Support for individuals and groups. Less structured problems often
requires the involvement of several individuals from different
departments and organization level.
• Support for interdependent or sequential decisions.
• Support for intelligence, design, choice, and implementation.
• Support for variety of decision processes and styles.
• DSSs are adaptive over time.

Benefits of DSS

• Improves efficiency and speed of decision-making activities.

• Increases the control, competitiveness and capability of futuristic
decision-making of the organization.
• Facilitates interpersonal communication.
• Encourages learning or training.
• Since it is mostly used in non-programmed decisions, it reveals
new approaches and sets up new evidences for an unusual
decision.
• Helps automate managerial processes.

Components of a DSS

Following are the components of the Decision Support System: −

Database Management System (DBMS) − To solve a problem the
necessary data may come from internal or external database. In an
organization, internal data are generated by a system such as TPS
and MIS. External data come from a variety of sources such as
newspapers, online data services, databases (financial, marketing,
human resources).

Model Management System − It stores and accesses models that

managers use to make decisions. Such models are used for designing
manufacturing facility, analyzing the financial health of an organization,
forecasting demand of a product or service, etc.

Support Tools − Support tools like online help; pulls down menus,
user interfaces, graphical analysis, error correction mechanism,
facilitates the user interactions with the system.

Types of DSS

Following are some typical DSSs −

Status Inquiry System − It helps in taking operational, management

level, or middle level management decisions, for example daily
schedules of jobs to machines or machines to operators.

Data Analysis System − It needs comparative analysis and makes

use of formula or an algorithm, for example cash flow analysis,
inventory analysis etc.

Information Analysis System − In this system data is analyzed and

the information report is generated. For example, sales analysis,
accounts receivable systems, market analysis etc.

Accounting System − It keeps track of accounting and finance related

information, for example, final account, accounts receivables, accounts
payables, etc. that keep track of the major aspects of the business.

Model Based System − Simulation models or optimization models

used for decision-making are used infrequently and creates general
guidelines for operation or management.

Executive Information System

An Executive Information System can be defined as a specialized
Decision Support System. This type of the system generally includes
the various hardware, software, data, procedures and the people. With
the help of all this, the top level executives get a great support in taking
and performing the various types of the decisions.
The executive information system plays a very important role in
obtaining the data from the different sources, then help in the
integration and the aggregation of this data. After performing these
steps the resulting information is displayed in such a pattern that is
very easy to understand.

Executive information system is ‘a computer based system that serves

the information that is needed by the various top executives. It
provides very rapid access to the timely information and also offers the
direct access to the different management reports.’

Executive Information System is very user friendly in the nature. It is

supported at a large extent by the graphics.

Executive support system can be defined as the comprehensive

executive support system that goes beyond the Executive Information
System and also includes communications, office automation, analysis
support etc.

According to Watson, Executive Information System depends on some

of the factors that can be summarized as the follows:

1. Internal factors
i. Need for the timely information.
ii. Need for the improved communications. iii.
Need for the access to the operational data.
iv. Need for the rapid status updates on the various business
activities.
v. Need for the access to the corporate database.
vi. Need for very accurate information. vii. Need for the
ability to identify the various historical trends.

2. External Factors
1. Increasing and intensifying the global competition.
2. Rapidly changing the business environment.
3. Need to be more pro active.
4. Need to access the external database.
5.Increasing the various government regulations.

Characteristics of the Executive Information

System

1. Informational characteristics
1. Flexibility and ease of use.
2. Provides the timely information with the short response time and
also with the quick retrieval.
3. Produces the correct information.
 4. Produces the relevant information.
5. Produces the validated information.

2. User interface/orientation characteristics

1. Consist of the sophisticated self help.
2. Contains the user friendly interfaces consisting of the graphic
user.
3. Can be used from many places.
3. Managerial / executive characteristics
1. Supports the overall vision, mission and the strategy.
2. Provides the support for the strategic management.
3. Sometimes helps to deal with the situations that have a high
degree of risk.
4. Is linked to the value added business processes.

Executive Information System

benefits

1. Achievement of the various organizational objectives.

2. Facilitates access to the information by integrating many sources of
the data.
3. Facilitates broad, aggregated perspective and the context.
4. Offers broad highly aggregated information.

5. User’s productivity is also improved to a large extent.

6. Communication capability and the quality are increased.
7. Provides with the better strategic planning and the control.
8. Facilitates pro active rather than a reactive response.

Recent Development in Information Technology

Introduction

21st century has been defined by application of and advancement in

information technology. Information technology has become an integral
part of our daily life. According to Information Technology Association of
America, information technology is defined as “the study, design,
development, application, implementation, support or management of
computer-based information systems.”

Information technology has served as a big change agent in different

aspect of business and society. It has proven game changer in resolving
economic and social issues.
Advancement and application of information technology are ever
changing. Some of the trends in the information technology are as follows:

Cloud Computing

One of the most talked about concept in information technology is the

cloud computing. Clouding computing is defined as utilization of
computing services, i.e. software as well as hardware as a service over a
network. Typically, this network is the internet.

Cloud computing offers 3 types of broad services mainly Infrastructure as

a Service (IaaS), Platform as a Service (PaaS) and Software as a Service
(SaaS).

Some of the benefit of cloud computing is as follows:

o Cloud computing reduces IT infrastructure cost of the company.

o Cloud computing promotes the concept of virtualization, which
enables server and storage device to be utilized across organization.
o Cloud computing makes maintenance of software and hardware
easier as installation is not required on each end user’s computer.

Some issues concerning cloud computing are privacy, compliance,

security, legal, abuse, IT governance, etc.

Mobile Application

Another emerging trend within information technology is mobile

applications (software application on Smart phone, tablet, etc.)

Mobile application or mobile app has become a success since its

introduction. They are designed to run on Smartphone, tablets and
other mobile devices. They are available as a download from various
mobile operating systems like Apple, Blackberry, Nokia, etc. Some of
the mobile app are available free where as some involve download
cost. The revenue collected is shared between app distributor and app
developer.

User Interfaces

User interface has undergone a revolution since introduction of touch

screen.
The touch screen capability has revolutionized way end users interact
with application. Touch screen enables the user to directly interact
with what is displayed and also removes any intermediate hand-held
device like the mouse.

Touch screen capability is utilized in smart phones, tablet, information

kiosks and other information appliances.
 Analytics

The field of analytics has grown many folds in recent years. Analytics is
a process which helps in discovering the informational patterns with
data. The field of analytics is a combination of statistics, computer
programming and operations research.

The field of analytics has shown growth in the field of data analytics,
predictive analytics and social analytics.

Data analytics is tool used to support decision-making process. It

converts raw data into meaningful information.

Predictive analytics is tool used to predict future events based on

current and historical information.

Social media analytics is tool used by companies to understand and

accommodate customer needs.

The every changing field of information technology has seen great

advancement and changes in the last decade. And from the emerging
trend, it can be concluded that its influence on business is ever
growing, and it will help companies to serve customers better.

Recent Development in Information Technology

Information technology systems are used by organizations to perform
various tasks. Some use IT to provide for the basic processing of
transactions, while others enable customers, distributors and suppliers to
interact with the organization through various communication technology
systems such as the internet.

Some of the impacts of information technology on organization are:

Flow of Information: Information is a key resource for all organizations.

What information describes might be internal, external, objective or
subjective.

External information describes the environment surrounding the

organization.

Objective information describes something that is known.

Subjective information describes something that is currently unknown.

With information technology the flow of all these three types of information
is made simple buy use of centralized data centers where all this data can
be retrieved. Information in an organization can flow in four direction and
these include upward flow of information, downward flow of information,
outward flow of information and horizontal flow of information.
Transaction processing: Information technology simplifies the
transaction process of an organization.

A transaction process system (TPS) is a system that processes

transactions that occur within an organization. At the heart of every
organization are IT systems whose main role is to capture transaction
information, create new information based on the transaction information.

TPS will update any transaction process and store that information in a
database, so any concerned party in the organization can access that
information via a centralized information storage network of internet.

Decision support: A decision support system (DSS) is a highly flexible

and interactive IT system that is designed to support decision making
when the problem is not structured. A DSS works together with an
artificial intelligence system to help the worker create information through
(OLAP) online analytical process to facilitate decision making tasks that
require significant effort and analysis.

Workgroup support: Since information technology facilitates in the

creating an information sharing environment, workers can easily consult
each other across different department without any interruption. They can
use emails, text chatting services to inquire something related to a given
task at work. With work group support systems, group decision making
becomes easier.

Executive support: An executive information system (EIS) is an

interactive management information system (MIS) combined with decision
support systems and artificial intelligence for helping managers identify
and address problems and opportunities.