Information Systems Concepts Final Course Paper 6 Information Systems Audit & Control Chapter 2, Part 2 of 4 CA A.Rafeq, FCA
2 Learning Objectives To explain the basic concepts of Systems and their types To understand the concepts of Information Systems (IS) To understand Information and its applications in enterprises To explain various types of Information systems (IS) and their applications To explain the role of Information Technology (IT) in enterprises
3 2.2.4 Types of Information Systems Part-2 Operations Support Systems Management Support Systems Office Automation Systems
4 2.2.4 Types of Information Systems Operations Support Systems Management Support Systems Office Automation Systems Transaction Processing Systems (TPS) Process Control Systems (PCS) Enterprise Collaboration Systems (ECS) Management Information Systems (MIS) Decision Support Systems (DSS) Executive Information Systems (EIS) Text Processing Systems (TPS) Electronic Document Management System (EDMS) Electronic Message Communication Systems (EMCS) Teleconferencing and Video-Conferencing Systems (TVCS)
5 (i) Operations Support Systems (OSS) The main objective of OSS is to improve the operational efficiency of the enterprise Its role is to: Effectively process business transactions Control industrial processes Support enterprise communications & collaborations Update corporate database
6 (A) Transaction Processing Systems Capture data Process files / databases Generate reports Process queries
TPS Components 7
8 Features of TPS Large volume of data Automation of basic operations Benefits are easily measurable Source of input for other system
9 (B) Process Control System Computer is used to control ongoing physical processes. Computers are designed to automatically make decisions, which adjust the physical production process. For example: Assembly lines of automated factories
10 (C) Enterprise Collaboration Systems Systems use a variety of technologies to help people work together Support collaboration to communicate ideas, share resources and co-ordinate cooperative work efforts Objective is to use IT to enhance the productivity and creativity of teams in enterprises Technologies may include groupware, videoconferencing and document-sharing capabilities
Enterprise Collaboration Architecture 11
12 (ii) Management Support Systems MSS supports managers in effective decision making by providing relevant and required information at the right time to the right people.
13 (A) Management Information Systems MIS enables management at different levels in decision making and problem solving They use results produced by the TPS, and also other information Manager identify the information needed for decision making Information Systems are developed to support these recurring decisions
14 Definition of MIS An integrated user-machine system designed for providing information to support operational control, management control and decision-making functions in an organization. Davis and Olson
15 Management + Information + System Management Processes or activities that describe what managers do in the operation of their organization. Information Defined as sets of facts, figures and symbols processed for the current decision-making situation. System Defined as a set of related components, activities, process and human beings interacting together so as to accomplish some common objective.
16 (a) Characteristics of an effective MIS Management oriented Management directed Integrated Common data flows Heavy planning Sub-system concept Common database Computerised
17 (b) Misconceptions about MIS 1. MIS is about the use of computers 2. More data means more information 3. Accuracy in reporting is of vital importance
18 (c) Pre-requisites of an Effective MIS Database Qualified system and management staff Pre-requisites Support of Top Management Control and maintenance of MIS
19 (d) Evaluation of MIS Examining whether enough flexibility exists in the system to cope with any expected or unexpected information requirement in future. Ascertaining the views of users and the designers about the capabilities and deficiencies of the system. Guiding the appropriate authority about the steps to be taken to maintain effectiveness of MIS.
20 e) Constraints in operating a MIS 1. Non-availability of experts 2. Problem of selecting the sub-system 3. Non-standardized approach adopted by experts 4. Non-availability of cooperation from staff
21 (f) Limitations of MIS 1. Quality of the outputs governed by the quantity of input. 2. Not a substitute for effective management. 3. May not have requisite flexibility to quickly update itself. 4. Cannot provide tailor-made information packages. 5. Ignores the non-quantitative factors like morale and attitude. 6. Less useful for making non-programmed decisions. 7. Effectiveness is reduced where the culture not sharing information holds. 8. Effectiveness decreases due to frequent changes in top management.
22 (B) Decision Support System (DSS) Type of computerized information system Interactive software-based system Defined as a system that provides tools to managers to assist them in solving semistructured and unstructured problems in their own, somewhat personalized, way Not intended to make decisions Supports the human decision-making process
23 (a) Characteristics of DSS Supports decision making and occurs at all levels of management Help group making decisions Flexible and adaptable Focuses on decision rather than data and information Easy to use
24 (a) Characteristics of DSS Used for structured problems User-friendly Extensible and evolve overtime Used mainly for decision making rather than communicating decisions and training purposes. Impact is on decision where the manager s judgment is essential
25 (b) Components of DSS Databases Implementation of Database User Planning languages Components
26 The user Manager Staff Specialist (Analysts)
27 Databases DSS includes: One or more databases Contain both routine and non-routine data From internal and external sources Users may construct additional databases themselves Generates data in the normal course of operations Captures data from other subsystems
28 Implementation of Database Physical Level External Level Logical Level
29 Planning languages Generalpurpose planning languages Specialpurpose planning languages Languages in most electronic spreadsheets Languages enable user to tackle abroad range Some statistical languages, such as SAS and SPSS, are examples of special purpose planning languages
30 Model base DSS allows the user to maintain a dialogue with the model base Many types of model bases but most of them are custom developed models that do some types of math. functions
31 (c) Examples of Decision Support Systems in Accounting Cost Accounting System Capital Budgeting System Budget Variance Analysis System General Decision Support System
32 Cost Accounting System Health care industry Managing costs Cost accounting applications Health care organization
33 Capital Budgeting System High-technology investment decisions Decision makers need to supplement analytical techniques DSS designed to support decisions about investments
34 Budget Variance Analysis System Financial institutions rely heavily on their budgeting systems Computerized DSS to generate monthly variance Forecasting tools provided in the system Control budgets for the cost-center managers
35 General Decision Support System Ability to analyze many different types of problems Decision-maker s tools User needs to input data and answer questions about a specific problem domain to make use of this DSS.
36 General DSS Example Program called Expert Choice Supports a variety of problems requiring decisions. User works interactively with computer to develop a hierarchical model of the decision problem.
37 General DSS Example DSS asks user to compare decision variables with each other. For instance: System might ask the user how important cash inflows are vs. initial investment amount to a capital budgeting decision. Decision maker also makes judgments about which investment is best with respect to these cash flows and which requires the smallest initial investment. Expert choice analyzes these judgments and presents the decision maker with the best alternative.
d) Difference between DSS and traditional MIS 38
39 (C) Executive Information Systems (EIS) It serves the strategic level i.e. top level managers of the organization. ESS creates a generalized computing.
40 (a) Characteristics of EIS CBIS that serves the information need of top executives. Enables users to extract summary data and model complex, problems without the need to learn query languages statistical formulas or high computing skills. Provides rapid access to timely information and direct access to management reports.
41 (a) Characteristics of EIS Capable of accessing both internal and external data. Provides extensive online analysis tool like trend analysis, market conditions etc. EIS can easily be given a DSS support for decision making.
42 (b) Executive Decision-Making Environment Type of decisions are broad Decisions are based on a vision Reliance much more on own intuition Intuitive character of decision-making is reflected strongly in types of information found most useful
43 Characteristics of types of information used in EIS Lack of structure High degree of uncertainty Future orientation Informal Source Low level of detail
44 (c) Contents of EIS What data is appropriate for EIS: Whatever is interesting to executives EIS implementation begins with just few measures that are of interest of senior management and then expanded Over time, presentation of this information becomes stale and diverges from being of strategic interest. Selection of data for inclusion in EIS is difficult.
45 (c) Guidelines for designing measures and indicators for EIS Easy to understand and collect. Based on balanced view of organization s objective. Reflect everyone s contribution in a fair and consistent manner. Encourage management/staff to share ownership of orgn. s objective. Available to everyone in the organisation. Evolve to meet changing needs.
Difference between EIS and Traditional Information Systems 46
47 (iii) Office Automation Systems (OAS) Document Capture Recording Utilization of Resources Document Creation Calculations Receipts and Distribution Filling, Search, Retrieval and Follow up
48 (a) Benefits of Office Automation Systems Improves communication within an organization and between enterprises. Reduce cycle time between preparation of messages and receipt of messages at the recipients end. Reduce the costs of office communication both in terms of time spent by executives and cost of communication links. Ensure accuracy of information and smooth flow of communication.
49 (b) Computer based Office Automation Systems Text Processing Systems Electronic Document Management System Electronic Message Communication Systems
50 Categories of Computer based OAS Text Processors and related systems Electronic message communication systems Electronic document management systems Teleconferencing and video conferencing systems
51 Categories of Computer based OAS 1. Text Processing Systems Most commonly used components of the OAS Automate process of development of documents May be simple word processing systems or desktop publishing systems Supported by laser printers, inkjet printers, scanners and other such devices
52 Categories of Computer based OAS 2 Electronic Document Management Systems Capturing the information contained in documents Information is stored for future reference Communicate relevant parts to users as and when required System linked to other OAS - text processors, electronic message communication systems, etc Useful in remote access of documents Useful for internal communication Location of executive becomes irrelevant for access to documents
53 Categories of Computer based OAS 3. Electronic Message Communication Systems Used for finding and receiving messages Offer a lot of economy not only in terms of reduced time in sending or receiving the message but also in terms of reliability of the message and cost of communication. Three basic components based message communication systems - Electronic Mail, Facsimile (Fax) and Voice Mail.
54 Categories of Computer based OAS 4. Teleconferencing/Video-conferencing Systems Helps in reducing the time and cost of meeting as the participants do not have to travel. May be audio or video conferencing with or without use of computer systems. Computer based teleconferencing has the advantage of flexibility in terms of pre-recorded presentations and integration with other information systems.
55 Basic components based message communication systems Electronic Mail Facsimile (Fax) : Voice Maill
56 Features of E-Mail Electronic Transmission Electronic Online development and editing Broadcasting and Rerouting Integration with other Information systems Portability Economical
57 Other information Systems A. Expert Systems B. Knowledge Management Systems C. Functional Business Information Systems D. Strategic Information Systems E. Cross Functional Information Systems
58 Business applications of Expert Systems Accounting and Finance Marketing Manufacturing General Business Personnel
59 (a) Need for Expert Systems Expert labor is expensive and scarce Even Knowledgeable people can handle only a few factors at a time Human limitations and rushed pace at which business is conducted today put a practical limit on the quality of human decision making
60 Benefits of Expert Systems Preserve knowledge that might be lost through retirement, resignation or death of an acknowledged company expert. Put information into an active-form so it can be summoned almost as a real-life expert might be summoned. Assist novices in thinking the way experienced professional do. Not subjected to such human fallings as fatigue, being too busy, or being emotional. Effectively used as a strategic tool in the areas of marketing products, cutting costs and improving products.
61 Properties of an Expert System Availability Complexity Domain Expertise Structure
62 (B) Knowledge Management Systems Support Conception Association Propagation Propagation of business knowledge
63 (C) Functional Business Information Systems Supports Operational Managerial applications Basic enterprises of an industry
64 (D) Strategic Information Systems Provide industry strategic Products Services Capabilities for competitive advantage
65 (E) Cross Functional Information Systems or integrated IS Combines most of IS and designed Produce information Support decision making For different levels of Management and business functions.
66 Comparison of different IS MIS DSS KMS OAS
67 Management Information Systems Determine Information needs Gather & process data Evaluation, Indexing, Abstraction Disseminate/ store information Information Use
68 Transaction Processing Systems Capture data Process files / databases Generate reports Process queries
69 Knowledge Management System(KMS) Description: Help businesses in creation and sharing of information. Typically used in a business where employees create new knowledge and expertise. Shared by other people in the enterprise to create further commercial opportunities. Example: KMS are most effectively used in firms of: Lawyers Accountants and Management consultants
70 Knowledge Management System(KMS) Effective in systems which allow efficient: Categorization and Distribution of knowledge. Example: Knowledge discovery in database and Data mining tools can be used to extract the knowledge from: Word processing documents Spread sheets PowerPoint presentations Internet pages Databases Data warehouses.
71 Office Automation Systems (OAS) The application of computers to handle the office activities is also termed as office automation. Document Capture Document Creation Receipts & Distribution Recording Utilization of Resources Calculations Filling, Search, Retrieval & Follow up
72 Summary Operations Support Systems Management Support Systems Office Automation Systems
Thank You 73 Keep on Learning!