Management Information System

Chapeter#11_
Transaction Processing System
Management Information System
 Transaction Processing System
Definition: A TPS performs, records and processes routine transactions.
Finance and accounting TPS The major functions would typically include:
Budgeting
The nominal ledger
Invoicing
Management accounting
The system might be split into
a number of modules including:
Nominal ledger
Accounts payable
Accounts receivable
Budgeting
Treasury management
 Transaction Processing System

Human resources TPS The major functions would typically include:

Personnel records
Benefits
Salaries
Labour relations
Training
The system might be split into a number of modules including:
Payroll
Employee records
Employee benefits
Career path systems (appraisal)
 Management Information Systems (MIS)
Definition: A management information system digests inputted data
(distinct pieces of information such as facts, numbers and words) and
processes it into useful information.
A management information system is characterized as follows:
It support structured decisions
It reports on existing operations
An MIS has little analytical capability and is relatively inflexible
MIS has an internal focus
Used to generate regular reports and typically would allow online access
to a wide range of users.
Will incorporate both current and historical information
 Decision Support System
Definition: A decision support system is a set of related computer
programs and data required to assist with the analysis and decision-
making within an organization. DSS were initially developed to overcome
the rigid nature of management information systems.
The characteristics of decision support systems include:
DSS assists managers at the tactical level when they are required to
make intelligent guesses
A DSS uses formula and equations to enable mathematical modeling
DSS are real-time systems enabling managers to solve problems through
queries and modeling
User inputs queries and variables for the model through a user interface
Contains a natural language interpreter for querying the system
The user interface is integrated with data management and modeling
software from the key components
Spreadsheet packages can become the tool for the development of a
decision support system Q(b): What is meant by ‘Decision Support
Systems’ (DSS)? Identify the characteristics of a
typical DSS. (04)
 Executive Information System
Definition: An executive information system is a type of management
information system that facilitates and supports senior executives in their
decision-making. An EIS incorporates both internal and external data and
tends to be more forward looking rather than historical-based.
Other characteristics of EIS include:
Helps senior managers to make unstructured decisions with many
contributing factors such as price fixing
Tends to be very expensive and real-time
Often limited in use to a small number of senior managers within the
business
Q.10 (a) Explain briefly what is an Executive Information System
(EIS). Identify any five characteristics of an efficient EIS. (07)
(b) Identify any four advantages of an Electronic Point of Sales
system for a supermarket which has a high rate of daily sales
turnover. (03) [S17]
 Expert System
Definition: An expert system is a computer program that simulates the
judgment and behavior of a human or an organization that has expert
knowledge and experience in a particular field.
Expert systems are most effective when the following preconditions
exist:
The problem is reasonably well-defined
The expert can define some rules
The problem cannot be solved through conventional transaction
processing systems
The expert can be released to focus on more difficult problems
The investment is cost-justified
 Integrated IT Systems
Definition: An integrated IT system describes the scenario where all
modules of the system are linked and function together as a system in a
coordinated fashion.
An integrated system links all modules of the system to function
together as a system in a coordinated fashion.
Integrated finance system An integrated finance system would link a
number of underlying modules such as
Accounts payable control
Accounts receivable control
Accruals and prepayments
Bank and cash
Inventory
Purchases
Sales
 Integrated IT Systems
So for example a new sales order would be simultaneously reflected in
the accounts receivable, sales and inventory modules.
Advantages of integrated systems
Offers a more complete view
Enables better informed decisions
Should ultimately lead to a more efficient operation
Which would lead to greater customer satisfaction and hence
profitability
Disadvantages of integrated systems
Greater risk that if one module fails the whole system could fail
More complex and therefore prone to error
More expensive than standalone systems
May require a greater level of support as the system is likely to need
to be bespoke (tailored) specifically to the organization
 Manufacturing Resource Planning
Orders
Pushing work through production. The focus of the
computer based technology is to draw together the
appropriate resources to meet demand. Functions
include

Order to
Suppliers

⌂ Stock
Workforce
Planning
Mubashir Wasim (MSc. Economics, MBA
Marketing, MS-IT, MPhil Business
Economics)
 Technological Changes & Products
Enterprise Resource Planning

MRP include just manufacturing

related issues while ERP is concerns
with wider issues related with
Marketing, Distribution, Customer
Relationship, Research &
Development, financial issues etc.

ERP is management system that integrates all aspects of the

business into a single computer-base system to meet the needs of
all organizational users.

Its scope moves into HR application, logistics, sales, marketing and

comprehensive management accounting as well as an Extranet to
coordinate those outsideMubashir
of the organization.
Wasim (MSc. Economics, MBA
Marketing, MS-IT, MPhil Business
Economics)
 Enterprise Resource Planning (ERP)
Definition: Enterprise resource planning (ERP) is a cross-functional
system driven by an integrated suite of software modules supporting the
basic internal processes of a business. The system incorporates a real-
time view of core business processes such as:
Order processing
Inventory management
Productions
Business resources ERP systems track business resources such as:
Cash
Raw materials
Production capacity
Personnel
 Enterprise Resource Planning (ERP)

Commitments ERP systems also track the status of commitments such

as:
Purchase orders
Employee costs
Customer orders
Tracking is permanently updated irrespective of the department that
entered the information – hence the term ‘enterprise’.