Chapter 2

Information Systems
Introduction
Business organizations always had some kind of information systems. Not fully recognized processing The computer was initially used to process accounting transactions & this function was called Electronic Data Processing (EDP). Transactions & data processing Periodic standardized reports effective panning & control of activities. EDP locate & fix problems- computer based Information System

Information Systems: Generating Information Computer-based ISs take data as raw material, process it, and produce information as output.

Information system
Information system generates information from data. Data raw material- useful information Managerial use- planning & control- (MIS) Management Information Systems MIS - Decision makers- timely, relevant & reliable Information System can be any organized combination of people, hardware, software, communications network & data resources that collects, transformation & disseminates information in an organization.

Information Systems:- Types

Information Systems

Transaction Processing System

Process Control System

Decision Support System

Expert System

Office Automation System

Information Reporting System

Executive Support System

Transaction Processing Systems (TPS)

Support day-to-day operations Detailed records- managers-track Operations like a\c receivables, a\c payable, inventory control, payroll & customer order processing etc.

Office Automation Systems (OAS)

Technology mix - Improving efficiency Computer based application like word-processing, DTP, E-mail, teleconferencing etc Collects, process, store & transmit electronic message, doc. Others communication among others. Reduce time & effort for handling of business communication.

Office Automation Systems :Tools & Systems

Knowledge workers
Word Processing DTP E-mail Image storage & retrieval

Office Automation Systems

Teleconferencing Voice Mail FAX

Clerical Workers

Electronic fund transfer Multimedia

The important areas in office automation are:

Word processing : typing in documents , creation storage & retrieval. Desktop Publishing:- professional print quality- combine text, artwork, photos & variety fonts. E-mail:- communication b/w computers transfer of messages - quick, continent & economic. Facsimile (FAX):- sends & receives text & images. Converted => digital . Voice mail:- sends digitalized speech. Teleconferencing- face to face video communications. Electronic fund transfer:- transfer funds b/w A/cs .

Process Control System

The physical production flow controlled computerized PCS. Like cement, steel, paper & chemical products. PCS sensors measures process related variables & transfer to computer. Feedback to adjust & variable control

Information Reporting Systems (MIS)

Pre-planned reports- summarizes Contains routine summary. is a system that provides information needed to manage organizations effectively . internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy. Regular reports :- weekly, monthly, quarterly etc.. ex : payroll Ad-hoc reports:- not planned to designed & produced user-request Exception reports:-

TPS & IRS- A Comparison

Generates raw data
Decision Support System (DSS)
is a computer-based information system that supports business -decision-making activities. management, operations &planning levels of an organization - make decisions, which may be rapidly changing & not specified in advance. comparative sales figures between one period and the next, projected revenue figures based on product sales assumptions

Expert system
Evolved out of the work on artificial intelligence Gathers a database of knowledge or expertise to offer advice or solution for problems in a particular area. Expert knowledge in given area so that the advice or solution offered is better than that of a single consultant or expert. given answers are checked against the rule base.

Executive supporting system

Designed for the top level managers of an organization . Its a kind of DSS designed to meet information & analysis requirement of top level management of a business

Role of Information Systems

Information System

Support To Business Operations

Support To Managerial Decision Making

TPS

PCS

OAS

IRS

DSS

ES

ES

Potential Risk of Information Systems

Information strategic advantage Technologies available for data capturing, data warehousing, data minig etc.. They facilitate analysis of datain a variety of innovative ways. Deskilling of workers :-Deskilling is the process by which skilled labor within an industry or economy is eliminated by the introduction of technologies operated by semiskilled or unskilled workers. Retained or employed in other activities.

 Information overload:- huge storage capacity. Decision-makers- not able to digest Employee mistrust:-technology- replace employers. Increased competitive pressure:information- successful- do not employ Poor returns from IT investment:support service returns- business Challenges in developing information system:- very difficult takes more time & within budget Security breaches:- responsibility to protect- ensuring security is expensive & difficult.