Chapter 10

Information Systems

INFO 101: Communication, Information and Society

 Chapter 10

Information Systems
 Learning Objectives
1. Explain the functional view of an organization and describe each
function.
2. Describe the management levels and the informational needs for
each level in an organization.
3. Describe how information flows within an organization.
4. Describe computer-based information systems.
5. Distinguish among a transaction processing system, a management
information system, a decision support system, and an executive
support system.
6. Distinguish between office automation systems and knowledge work
systems.
7. Explain the difference between data workers and knowledge workers.
8. Define expert systems and knowledge bases.

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 Introduction
• An information system is a
collection of people, procedures,
software, hardware, data, and
connectivity
• They all work together to
provide information essential
to running an organization.
• Computers are used in
organizations to keep records
of events and to help make
decisions.

• Competent end users need to

understand how the information
flows as it moves through an
organization

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 Organizational Information Flow
• Supports the vertical and horizontal flow of information
throughout an organization
• View from a functional perspective to examine an
organization’s structure
• Can study different functional areas and the different types of people within
these functional areas.

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 Functions

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Management Levels

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 Information Flow Levels
• Top Managerial-Level Information Flow
• Vertical, horizontal, and external.

• Middle Managerial-Level Information Flow

• Vertical and horizontal.

• Supervisory-Level Information Flow

• Primarily vertical.

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Information Flow Pattern

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 Summary of Computer Based Systems
Type Description

TP S Tracks routine operations and records events in databases, also known as data processing systems.

M IS Produces standardized reports (periodic, exception, and demand) using databases created by T PS.

DSS Analyzes unanticipated situations using data (internal and external) and decision models (strategic,
tactical, and operational).
ESS Presents summary information in a flexible, easy-to-use, graphical format designed for top executives.

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Computer Based Information Systems

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 Transaction Processing Systems (TPS)
• Helps organizations keep track of routine operations and records
these events in a database.
• Records day-to-day transactions in a database.
• Also called data processing systems (DPS).
• One of the most essential uses of a TPS is in Accounting.

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 TPS for Accounting
• Sales order • Purchasing
processing • Buying of materials and services.
• Records the customer
requests.
• Accounts Payable
• Money the company owes.

• Accounts receivable
• Records money • Payroll
received from or
owned. • Activity involving employer paychecks.

• Inventory • General Ledger

• Parts and finished • Keeps track of all summaries of all the
goods in stock. above referenced items.

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 Management Information Systems
• Computer-based information systems
that:
• Produces standardized reports to
support decision-making by middle
managers.
• Integrate data and summarizes details
from databases in a structured form.
• Produce predetermined reports.
• Periodic reports – produced at
regular intervals.
• Exception reports – call attention
to unusual events.
• Demand reports – produced on
request.

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 Decision Support Systems (DSS)
• Flexible tool for analyzing data for
decision-making purposes
• Enables managers to get answers to
unexpected and generally non-recurring
problems
• Reports do not have a fixed format.

• Consists of four parts:

• User – anyone who has to make
decisions.
• System software – operating system.
• Data - both internal and external.
• Decision models – analytical capabilities.
• 3 basic types.

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 Decision Models
• Give the DSS its analytical capabilities
• Three basic types of decision models
• Strategic models.
• Assists top level managers in long-range planning.

• Tactical models.
• Assists middle-managers control the work.
• Financial and sales promotion planning.

• Operational models.
• Assists lower-level managers accomplish the daily activities and objectives.

• GDSS – Group Decision Support Systems

• Support group meetings and collective work.
 Executive Support Systems
• Designed for top
management.
• Sophisticated software
for presenting,
summarizing, and
analyzing data, but
specifically designed to
be easy-to-use.
• Provides immediate
access to a company's
key performance
indicators.

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 Other Information Systems
• Information workers distribute, communicate, and create
information
• Data workers.
• Knowledge workers.

• Office automation systems (OASs) are designed primarily to

support data workers
• Project managers.
• Videoconferencing systems.

• Knowledge work systems (KWSs) create information in their

areas of expertise
• Knowledge workers use OAS systems.
• Use specialized systems, such as CAD/CAM.
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 Expert Systems
• Expert Systems aka Knowledge-Based Systems
• Type of artificial intelligence that uses a database to provide
assistance to users
• Knowledge Base is the database holding the data.
• Contains facts and rules to relate these facts distilled from a human expert.

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 Careers in IT
• Information systems managers
oversee the work of programmers,
computer specialist, systems
analysts, and other computer
professionals
• Employers look for individuals
with strong technical
backgrounds, with a Master’s
degree in business.
• Strong leadership and excellent
communications skills.
• Information systems managers
can expect to earn from $90,430
to $208,000 annually.

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 A Look to the Future
• IBM’s Watson
• IBM predicts Watson
could be the ultimate
researcher
• As information
amounts increase, it is
more difficult to keep
up.
• Deployed in the fields
of medical research,
finance, customer
service, and technical
support services.

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 Open Ended Questions
1. Name and discuss the five common functions of most
organizations.
2. Discuss the roles of the three kinds of management in a
corporation.
3. What are the four most common computer-based
information systems?
4. Describe the different reports and their roles in managerial
decision making.
5. What is the difference between an office automation
system and a knowledge work system?

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 Functions – Text Alternative
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• HealthWise has departments that cover the five basic functions of the
functional perspective.
1. Accounting: At HealthWise, this department records bills and other
financial transactions with sporting goods stores. It also produces
financial statements, including budgets and forecasts of financial
performance.
2. Marketing: At HealthWise, it even gets involved with creating a
customer newsletter that is distributed via the corporate web page.
3. Human resources: At HealthWise, this department is implementing a
new benefits package designed to attract new employees and retain
current employees.
4. Research: Employees at HealthWise explore new ideas from
exercise physiologists about muscle development. They use this
knowledge to design new physical fitness machines.
5. Production: It may be a manufacturing activity or, in the case of a
retail store, an operations activity. At HealthWise, this department
purchases steel and aluminum to be used in weight-lifting and exercise
machines.
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 Management Levels – Text Alternative
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• Supervisors are at the bottom of the pyramid. At

HealthWise, a production supervisor monitors the inventory
for parts and reorders when low.
Middle management is in the center of the pyramid. At
HealthWise, regional sales managers set sales goals,
monitor progress to meet goals, and initiate corrective
action as needed.
Top management is at the top of the pyramid. At
HealthWise, the vice president of marketing develops long-
term marketing strategies to introduce newly developed
products.

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 Information Flow Pattern – Text
Alternative
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• Supervisory-level information flow is at the bottom of the pyramid.

At HealthWise, production supervisors monitor worker activities
to ensure smooth production. They provide daily status reports to
middle-level production managers.
Middle managerial-level information flow is at the center of the
pyramid. At HealthWise, regional sales managers communicate
vertically, with district sales managers and the vice president of
marketing, and horizontally with other middle–level managers.
Top managerial-level information flow is at the top of the pyramid.
At HealthWise, the vice president of marketing communicates
vertically, with regional sales managers, horizontally, with other
vice presidents, and externally to obtain data to forecast sales.

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Computer Based Information Systems –
Text Alternative
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• Executive support systems (ESSs) use internal data from MIS and TPS and
external data to support top-level managers. At Health Wise, the marketing vice
president uses his ESS to view current marketing operations and to develop
long-term marketing strategies.
• Decision support systems (DSSs) use data from TPS and a set of flexible
analytical tools to support middle managers. At HealthWise, the regional sales
managers use the DSS to evaluate the impact of a recent national promotion
campaign on regional sales and corporate profit.
• Management information systems (MISS) use data from the TPS to support
middle-level managers. At HealthWise, regional sales managers use their MIS
reports to monitor weekly divisional sales and to compare actual sales to
established sales goals.
• Transaction processing systems (TPSs) record day-to-day transactions to
support supervisors. At HealthWise, production supervisors use their TPS to
record and to monitor current inventory levels and production line output.

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Transaction Processing Systems (TPS)
– Text Alternative
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• Accounting is linked to sales order processing, accounts

receivables, inventory and purchases, accounts payable,
and payroll. These are all linked to the general ledger.

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 Executive Support Systems – Text
Alternative 1

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• The summary includes these details:

1. Accounting: Past due accounts plus 3 percent
2. Marketing: total sales plus 5 percent
3. Production: on schedule
4. Human Resources: labor contract proceeding
5. Research: steel alby tested positive
User is instructed to enter an appropriate number to obtain
details.

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 Executive Support Systems – Text
Alternative 2
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• This shows a bar chart comparing days past due for 1 to 10

days, 11 to 20 days, 21 to 30 days, and over 30 days. Users
are instructed to enter “M” to obtain additional details or
enter “R” to return to the executive summary.

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Q&A Session
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