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Information System
Transaction Processing System(TPS), Decision Support System (DSS)

Information System
• An Information System is a system that gathers & stores data and
disseminates information with the sole purpose of providing
information to its users.
• The purpose of an Information system is to help an organization to
manage its business in a better way.
• But Now-a-days, information systems are not merely required for
improving efficiency of business operations; rather these systems
are used for effective business decisions and achieving strategic
advantage.
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• Management information system is a system

consisting of people, machines, procedures,
databases and data models, as its elements. The
system gathers data from the internal and external
sources of an organization; processes it and
supplies Information to assist managers in the
process of decision-making.

Types of Information System:

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Other classification of Information system

• Strategic information Systems

• Knowledge management Systems
• Experts systems F
• Functional business systems

Employees

Corporate
Databases Corporate
databases
of intranet
of
external
internal
data
data Decision
support
systems

Transaction Databases Management Executive

Business processing of information Application support
transactions systems valid systems databases systems
transactions

Drill-down reports Expert

Exception reports systems
Demand reports
Operational Key-indicator reports
databases
Input and Scheduled
error list reports
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Operation support systems

• The role of operational support system is to efficiently
process business transaction, control industrial process,
support enterprise communication and update corporate
database.
• The Information system generally deals with the support of
business operations known as operation support system
• It produces a variety of information product for external and
internal use, however such products produced by OSS needs
further processing for efficient use by manager.
• The various Operation Support System are:
Transaction Processing System (TPS)
Process Control System (PCS)
Enterprise Collaboration System (ECS)

Definition of TPS
• A Transaction Processing System (TPS) is a type of
information system that collects, stores, modifies and
retrieves the data transactions of an enterprise. e.g.;
airline reservation systems, electronic transfer of funds,
bank account processing systems.
• TPS is Designed to process routine business
transactions
• TPS Seeks time and cost efficiency by automating
repetitive operations in large volumes.
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Transaction Processing System (TPS):

• It is a category of OSS that generally record and process

data resulting from business transaction.
• It generally process sales, purchase, inventory and other
organizational database.
• Perform routine operations and serve as a foundation
for other systems
• These database then provide the data resources that can
be processed and used by DSS and EIS.

Data entry & input

Documents
Processing & reports

Documents:
Internally generated
transactions: • pick list
Database • cheques to vendors
• shipped orders
• purchase orders • receiving notices
Database • paycheques
• employee time
update:
cards Operational reports:
• customer orders
Externally • finished product
generated • inventory inventory status
transactions:
• purchase orders • raw materials;
• customer orders packing materials;
• customers
• vendor invoices spare parts;
• suppliers inventory status
• customer payments
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Features of TPS
• Rapid response – Fast performance with a
rapid response time is critical. Transaction
processing systems are usually measured by
the number of transactions they can process in
a given period of time.
• Continuous Availability – The system must be
available during the time period when the users
are entering transactions. Many organizations
rely heavily on their TPS. A breakdown will
disrupt operations or even stop the business.

• Data Integrity – The system must be able to

handle hardware or software problems without
corrupting data. Multiple users must be
protected from attempting to change the same
piece of data at the same time, for example
two operators cannot sell the same seat on an
airplane.
• Ease Of Use – Often users of transaction
processing systems are casual users. The
system should be simple for them to
understand, protect them from data-entry
errors as much as possible, and allow them to
easily correct their errors.
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Components of TPS
• The user of the information system is the
person belonging to the organization that owns
the transaction system.
• Participants are the people who conduct the
information processing.
• People from the environment become
participants of the system as they directly enter
transactions and perform validation.

• TPS processes transaction into two ways:

Batch Processing
Real Time Processing
• Batch Processing: Data is accumulated over a
period time and processed periodically.
• Real Time Processing: Data is immediately
processed after a transaction occurs.
Ex: Sales and Inventory Processing
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Batch processing
• Batch processing is where the information is collected
and stored as a batch but not processed immediately.

• Batch processing is useful for enterprises that need to

process large amounts of data using limited resources.

• Example: Payment by cheque, Credit card

transactions, etc.

Batch Schematic

Data entry
Input
of accumulated Output
(batched)
transactions
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Online/real time processing

• On-line transaction processing (OLTP) is a system
whereby each transaction is processed immediately,
without the delay of accumulating transactions into a
batch.

• Real-time transaction –Mostly in Online shopping –

Uses PCI cards (Payment Card Industry): –PayPal or
World Pay, We Pay, e-Way, ICEPAY, ATM’s.
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On-line Schematic

Terminal
Terminal Terminal

Output
Immediate
Terminal processing
of each
transaction

Terminal
Terminal
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Process Control System (PCS):

• In a manufacturing organization, certain decisions

are made by a computer system without any
manual intervention. In this type of system, critical
information is fed to the system on a real-time
basis thereby enabling process control. This kind of
systems is referred as process control systems.
• Ex: A petroleum refining center uses electronic
sensors which are linked to the computers to
continuously monitor chemical processes and make
instant adjustments that control the refined
process.
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Enterprise Collaboration System (ECS):

• In recent times, there is more stress on team effort

or collaboration across different functional teams.
• A system which enables collaborative effort by
improving communication and sharing of data is
referred to as an enterprise collaboration system.
• It is the information system that uses a variety of
information technology to help the people to work
together.
• Ex: E-mail, chat, video conferencing

Management Support System:

• This generally deals with providing information and
support for effective decision making.
• It helps in management decision making and
processing of data generated by business
operation.
• The various management support systems:
• Management Information System (MIS)
• Decision Support System (DSS)
• Executive Information System (EIS)
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Management Information System (MIS)

• MIS is a form of MSS that provides managerial end user

with information that support their day to day decisions.
• It provides a variety of information in the form of report
and display to management that contain information,
specified in advance by manager.
• Information is generally provided on demand or
periodically to the managers.
• Ex: Sales manager may use their network computer, net
web browser to get instant display of the sales, result of
their product and access their daily sales report.

Functional Aspects
• MIS is an integrated collection of functional
information systems, each supporting particular
functional areas.

Schematic
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Internet An Organization’s
MIS

Financial
MIS
Business
transactions

Drill down reports

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

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

• Financial MIS provides financial information to all financial

managers within an organization through various reports
such as reports on financial statements, uses &
management of funds, financial statistics, etc.
• Manufacturing MIS enables Quality Control, Process
Control, JIT, MRP, etc. through various reports such as
Quality control reports, process control reports, jit reports,
MRP reports, production schedule, CAD output, etc.
• Marketing MIS supports managerial activities in product
development, distribution, pricing decisions, and
promotional effectiveness by producing reports for the
same.
• HR MIS is concerned with all of the activities related to
employees and potential employees of the organization. It
supports Hiring, training, remunerating, etc. through various
reports.

•
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Databases of Financial
Databases of
internal data external data DSS

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

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

Business Customers,
transactions Suppliers
Figure 9.3

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
MRP reports
or
Extranet Production schedule
CAD output

Business Customers,
transactions Suppliers
Figure 9.6
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Databases of Manufacturing
Databases of
internal data external data DSS

Transaction Databases
Business processing Marketing
of valid
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

Figure 9.9

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

Figure 9.12
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Decision Support System (DSS):

• Decision support systems are computer based
information systems that provide interactive
information support to managers and business
professionals during the decision making process.
• It provides managerial end user with information in
an interactive manner i.e, analytical modeling, data
retrieval information presentation capability.
• Ex: Product pricing, Risk Analysis
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DSS classification (based on relationship with user)

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DSS Classification (based on Mode of Assistance)

DSS Classification (based on Scope)

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Capabilities/role of DSS
• Supports
• Problem solving phases
• Different decision frequencies
• Highly structured problems
• Straightforward problems, requiring known facts and
relationships.
• Semi-structured or unstructured problems
• Complex problems wherein relationships among data
are not always clear, the data may be in a variety of
formats, and are often difficult to manipulate or obtain

Components of a DSS
• Database
It is a combination of internal corporate data and
data from external sources. Data warehouse is used for
handling a huge data
• Model base
• Provides decision makers with access to a variety of models (lib
of models)
• It may include Econometric model for forecast demand;
statistical, financial and graphical models. It may contain data
mining tools to extract trends & patterns.
• Dialogue Box
• A user interface through which the user can communicate with
DSS. Allows decision makers to easily access and manipulate
the DSS
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Executive Information System (EIS):

• A specialized DSS that includes all the hardware, software,

data, procedures, and people used to assist senior-level
executives within the organization
• An Information System that provides Strategic information
tailored to the needs of executives and other decision
makers (top management).
• It provides top management with immediate and easy
access to select information about key factors that are
critical to organizational strategic objectives.

Characteristics of ESSs
• Tailored to individual executives
• Easy to use
• Drill down capabilities
• Support the need for external data
• Help with situations with high degree of
uncertainty
• Futures orientation (predictions, forecasting)
• Linked with value-added business processes