MANAGING INFORMATION SYSTEM

LESSON 15: FUNCTIONAL MANAGEMENT

The Five fundamental types of Information system are: 1. Transaction processing system to support the operational and day to day activities of the organization. 2. Management information system which facilitates the management of their day to day activities. 3. Decision support system which are special purpose application that support the decision of less structured problem. 4. Office automation system which support interpersonal communication activities for correspondence. 5. Executive support system which is used by senior manager to keep abreast of the organization in broad overview terms. 1. Transaction processing system (TPS): This is basically to support day to day operation by maintaining detailed records. This system helps the company to conduct its operation and keep tract of its activities. Keep business functions such as order entry, accounts payable, accounts receivable, payroll, inventory control, processing depend upon TPS. TPS are the oldest type of information system. Basic Characteristics are: 1. Detailed 2. Record oriented 3. Performance 4. Reliability critical 5. Supporting technology stable The basis purpose is to support the operations of organization. 2. Management Information System (MIS): The term MIS has different meaning. The broad definition and narrow definition. It is the development and use of effective information system in organization. As per narrow definition of MIS, it is an information system that facilitates management by producing summarised, structured report on a regular and recurring basis. Such MIS outputs are produced routinely and used primarily for controlling activities through they can also be used for planning and organizing. The restricted meaning of MIS is the management reporting system and another name for this is information reporting system. The management reporting system generates pre planned reports for managers. The basic purpose of MIS is to support management of operations. Characteristics of MIS are: 1. Summarized and standardized reports 2. Regular 3. Recurring reports 4. Timeless 5. Reliability 6. Simple model with static structure 7. Technology stable 3. Decision Support System (DSS): The DSS are interactive computer based facilities that assist decision making in less structured situation. DSS differ from TPS & MIS in that they do not always support an ongoing process. DSS are often created to solve particular problem on an ad hoc processing basis. The need for DSS can be irregular. DSS are designed to facilitate the solutions of less structured problems and MIS & TPS are better for the solution of very structured problems. The DSSs is not flexible and not adoptable easily to every situation. DSS involves models of business activity. These models are quite complex. 4. Office automation system: This system create, store, modify and process interpersonal communication whether in written, verbal or video form. Various office automation system are electronic mail, female, voice mail, video conferences, multimedia systems. The technology or OAS is exploring, leading to extremely rapid changes in the types of OAS applications that are available. The basic purpose of OAS is to support in the personal communication. The characteristics of OAS are: 1. Multimedia applications 2. Inter connectedness and reliability important 3. Specific application selected to meet local needs 4. Technology exploring. 5. Executive support system : This system is a new system which supports the information needs of very senior executivesby summarizing and presenting data at the highest level of aggregation. ESS involves presenting reports in standard formats and they often involves profiles. The basic purpose of ESS is to support senior executive information needs. The characteristics of ESS are: 1. Graphical 2. Easy to use interface 3. Broad & aggregated perspective 4. Able to expand detail

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MANAGING

5. Integrates many source of data 6. Timeliness crucial. The primary goal of an ESS is to obtain data from a variety of sources, interpret and aggregate that data and display the resulting information in a easy to use comprehensible format. ESS provides broad, highly aggregated information apart from the above, the other sub system of MIS are expert system and artificial intelligence. These two are part of knowledge based system. An ESS us a typically a rule based system that solves problem in a manner similar to a human experts method. Artificial intelligence includes robotics and application such as vision inspection system for spotting defects. The following are the specific purposes for which information system can help an organisation. 1. To improve operational efficiency Operational efficiency refers to doing routine tasks better, faster or cheaper. The TPS has served this purpose. Ex: Inventory control personnel use the computers to help cut the costs of carrying inventory. They used to use computer driven mathematical models that find optimum inventory levels for their stock. Another prime area for operational efficiency is the office. 2. To increase functional effectiveness Functional effectiveness is to improve the functional efficiency of the executive. DSS is often oriented towards functional effectiveness. Information available to sales persons at the point of sale can improve effectiveness. 3. To improve Quality customer service : Better information system provides improved service to customer. Customer service means getting the customer the right product at the right time and giving refunds with a smile with disgruntled customers. 4. Product creation and enhancement In some industries especially banking, insurance, financial services, travels, information is often a major force in creating the product being sold. It is typically the effective use of information that distinguishes a good investment portfolio from a bad one. Products that can be differentiated largely on the basis of information inherent in them are called information intensive products. Many companies have recognized the potential of investing information technology to support research and development activities. 5. To alter the basis of competition By creation of new products through information technology some businesses may also change the very basis of competition within their industries. 6. To identify and exploiting business opportunities Business world changing fast adopting quickly to change taking advantage shorter product life cycles, and exploiting niche markets are keys to success in the environment. Under these circumstances the computer is an ideal tool for spotting

suitable change or trends in the market data that are not visible to human eyes and helping an organization to move rapidly forward. 7. To lock in customers and to lockout competitors : Information technology can be used to lock in customers and lockout competitors. Here customer support system is much useful to the customer that allows the customers to access companys computer to place order, Check the status of their orders and check prices and product availability. Some companies have also enabled customers using their system to access certain software for their own use. 8. To 1 beverage the investment in IT Now a days many organizations started to leverage their substantial technology investment through outsources or smaller MIS products on the side. Many large banks leverage or spread out their huge investment in technology by offering their services to smaller banks. These MIS goals indicate that organizations are now using computer systems for much more than supporting day to day transaction processing operations. The IS can provide competitive advantages in a variety of ways.

INFORMATION SYSTEM

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