LO3 Part 2

3.4 - Types of information systems 

1. Transaction Processing systems
2. Customers Relationship management systems
3. Business intelligence system
4. Knowledge management system

• Transaction Processing Systems

Transaction processing systems meet the data collection, storage, processing and outputting functionalities for the core operations of a business. TPS information systems collect data from user inputs and then generate outputs based on the data collected. An example of TPS system could be an online air ticket booking system. In such a system, travelers select their flight schedule and favorite seats (the input), and the system updates the seats available list, removing those selected by the traveler (the processing). The system then generates a bill and a copy of the ticket (the output). TPS information systems can be based on real-time or batch processing, and can help business owners meet demand without acquiring additional personnel.

• Customer Relationship Management Systems

Business owners use customer relationship systems to synchronize sales and marketing efforts. CRM systems accumulate and track customer activities, including purchasing trends, product defects and customer inquiries. The capabilities of typically CRM information systems allow customers to interact with companies for service or product feedback and problem resolutions. Businesses may also use CRM systems internally as a component of their collaboration strategies. As such, CRM information systems allow business partners to interact with each other as they develop ideas and products. Collaboration can occur in real time even when business partners are in remote locations.

• Business Intelligence Systems

Business intelligence systems can be complex as they identify, extract and analyze data for various operational needs, particularly for decision-making purposes. BIS information systems may provide analyses that predict future sales patterns, summarize current costs and forecast sales revenues. Business intelligence systems collect data from the various data warehouses in an organization and provide management with analyses according to lines of business, department or any breakdown that management desires. For example, financial institutions use BIS systems to develop credit risk models that analyze the number and extent of lending or credit given to various sectors. These systems may use various techniques and formulas to determine the probability of loan defaults.

• Knowledge Management Systems

Knowledge management systems organize and dissect knowledge and then redistribute or share it with individuals of an organization. The purpose of these information systems is to bring innovation, improve performance, bring integration and retain knowledge within the organization. Although KMS information systems are typically marketed to larger enterprises, small businesses can also benefit from harvesting knowledge. KMS information systems serve as a central repository and retain information in a standard format. These systems can help business owners maintain consistency and enable speedy responses to customer and partner inquiries.

3.4.1 - Management information systems

A management information system (MIS) is a computerized database of financial information organized and programmed in such a way that it produces regular reports on operations for every level of management in a company. It is usually also possible to obtain special reports from the system easily. The main purpose of the MIS is to give managers feedback about their own performance; top management can monitor the company as a whole. Information displayed by the MIS typically shows "actual" data over against "planned" results and results from a year before; thus it measures progress against goals. The MIS receives data from company units and functions. Some of the data are collected automatically from computer-linked check-out counters; others are keyed in at periodic intervals. Routine reports are preprogrammed and run at intervals or on demand while others are obtained using built-in query languages; display functions built into the system are used by managers to check on status at desk-side computers connected to the MIS by networks. Many sophisticated systems also monitor and display the performance of the company's stock.

- HANDLES WHO DEPARTMENTS

3.4.2 - others

Other names for MIS include information systems (IS) and information technology (IT).

3.4.2.1 - marketing information system (sales, performance, competitors etc)

A marketing information system (MkIS) is a software program that provides information about marketing research. It allows users to compile and analyze data in a very easy, organized fashion. MkIS systems are also effective tools that help users make decisions about consumer behavior and the marketing mix, including products and how they are placed, priced, and promoted. The more sophisticated the management information system, the more information it can provide.

3.4.2.2 - Financial information system (financial costs, investment returns etc) - ALL ABOUT MONEY

Financial data analysis may be conducted through trend evaluations, ratio analyses and financial planning modeling. Data outputs that are produced by FIS can include

• Operating and capital budgets
• Working capital reports
• Accounting reports
• Cash flow forecasts

The predictive analytics included in these applications may also narrow down exactly what could be expected from a business interaction or transaction that has yet to take place.

3.4.2.3 - Human resource (HR) information systems (staffing, professional development etc) - ALL ABOUT HUMAN

 basically an intersection of human resources and information technology through HR software. This allows HR activities and processes to occur electronically.

To put it another way, a HRIS may be viewed as a way, through software, for businesses big and small to take care of a number of activities, including those related to human resources, accounting, management, and payroll. A HRIS allows a company to plan its HR costs more effectively, as well as to manage them and control them without needing to allocate too many resources toward them.

In most situations, a HRIS will also lead to increases in efficiency when it comes to making decisions in HR. The decisions made should also increase in quality—and as a result, the productivity of both employees and managers should increase and become more effective.

3.5 - Management information systems (MIS)

3.5.1 - Features: 

• Database Management
• Reporting
• Open Access
• Integration
• Scalability

- Database Management

The chief feature of an information management system is its ability to store data and make that data easy to retrieve by the system’s users. The type of database used determines how the information management system responds to requests or queries for information. Systems that use a relational database store the data in separate tables instead of one large table. Once the data gets stored, database administrators connect relevant tables of data to each other through the use of keys. These keys identify the relationship between data in one table and data in another table. Relational databases provide a quicker response to queries and store more information than hierarchical databases. Hierarchical databases always access data starting at the top of the database and moves down. It does not look at the relationship between different pieces of information.

- Reporting

The next most important feature of an information management system comes in the form of reports. An information management system is only as good as the reports it generates. The ability to produce information that helps in the decision-making process is a key attribute for this kind of system. Most MIS provide multiple report templates while others offer the ability to create specific reports and save these reports as a template for others to use.

- Open Access

An information management system that allows open access to its system architecture lets a company comply more easily with external regulations and internal requirements. Open access means the company can more easily integrate the IMS with existing systems. This ability reduces the need for outside service people to perform internal service changes. Open access also reduces maintenance expenses because internal resources can manage the maintenance of the system.

- Integration

Information management systems typically integrate with a company’s existing systems. How well these varied systems integrate often creates many challenges for internal and external resources. A good IMS provides ease of integration with legacy systems, thus allowing a company to maintain the equipment investments it has already made.

- Scalability

Because not all companies require the full offering of some information management systems, scalability becomes a key purchase consideration. Smaller businesses might require a scaled-down version of an IMS now, but within a few years require additional features and larger database management capabilities. Purchasing a scalable system gives a company room to grow without losing its initial investment.

3.5.2 - Benefits/advantages: 

1. It Facilitates planning : MIS improves the quality of plants by providing relevant information for sound decision – making . Due to increase in the size and complexity of organizations, managers have lost personal contact with the scene of operations.

2. In Minimizes information overload : MIS change the larger amount of data in to summarized form and there by avoids the confusion which may arise when managers are flooded with detailed facts.

3. MIS Encourages Decentralization : Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures.

4. It brings Co ordination : MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centers in the organization .

5. It makes control easier : MIS serves as a link between managerial planning and control. It improves the ability of management to evaluate and improve performance . The used computers has increased the data processing and storage capabilities and reduced the cost .

6. MIS assembles, process , stores , Retrieves , evaluates and Disseminates the information.

- promotion marketing excellence
- increases productivity
- provides updated and timely information for decision making
- it can be easily used by senior management

3.5.3 - Effectiveness criteria e.g. accuracy, sustainability, response times, confidence.

· Relevance

· Management by exception

· Accuracy - all info should be correct

· Adaptability
sustainability - info should be reliable
response time - the fastness of the system
confidence - everything must be correct 

References: 

Types of Information Systems in an Organization

http://smallbusiness.chron.com/types-information-systems-organization-43097.html [Accessed on 2nd august 2017]

Management Information Systems (MIS)

https://www.inc.com/encyclopedia/management-information-systems-mis.html [Accessed on 2nd august 2017]

MIS - management information system

http://www.webopedia.com/TERM/M/MIS.html [Accessed on 2nd august 2017]

What is a Marketing Information System? - Definition, Benefits & Example

http://study.com/academy/lesson/what-is-a-marketing-information-system-definition-benefits-example.html [Accessed on 2nd august 2017]

Financial Information System (FIS)

https://www.techopedia.com/definition/26394/financial-information-system-fis [Accessed on 2nd august 2017]

HRIS

http://www.hrpayrollsystems.net/hris/ [Accessed on 2nd august 2017]

The Features of an Information Management System

http://smallbusiness.chron.com/features-information-management-system-2114.html [Accessed on 2nd august 2017]

Various Advantages of Information Management Systems

http://www.management-hub.com/information-management-advantages.html [Accessed on 2nd august 2017]

Session 1. Management information systems

http://www.fao.org/docrep/w7506e/w7506e03.htm [Accessed on 2nd august 2017]