Types of Information Systems
Summary
TLDRThis video script delves into the critical role of information systems in organizational decision-making. It emphasizes the necessity of accurate information for sound business choices and the destructive potential of bad data. The script outlines various types of information systems, including transactional processing, knowledge work, management information systems, decision support, executive information, and expert systems, highlighting their unique contributions to strategic and operational management. It underscores the importance of these systems in facilitating effective communication, understanding market dynamics, and driving organizational success.
Takeaways
- 📈 Organizations require good quality information to make appropriate decisions, as bad information can lead to poor decision-making and negatively impact business success.
- 🛠️ Information systems are crucial for processing and analyzing data, enabling organizations to build strategies based on the outcomes of that analysis.
- 🔄 Information systems consist of various components including hardware, software, data, people, and procedures, all contributing to the flow of information within an organization.
- 💼 Information systems facilitate effective communication with customers, suppliers, and competitors, and help in understanding the commercial context of the business.
- 🔍 Different types of information systems exist, such as transactional processing systems, knowledge work systems, management information systems, decision support systems, executive information systems, and expert systems, each serving specific organizational needs.
- 🔢 Transactional processing systems are structured for recording routine tasks and activities, providing raw data for management decisions and ensuring the accuracy and reliability of day-to-day operations.
- 💡 Knowledge work systems focus on creating and preserving new knowledge within an organization, often requiring specialized software and knowledge workers to innovate and improve business processes.
- 📊 Management information systems (MIS) support management activities by organizing and communicating information from both internal and external sources, aiding in the construction of tasks and decision-making at all levels.
- 📈 Decision support systems (DSS) are designed to assist in making decisions involving risk and uncertainty, using specialized software tailored to the business's unique processes and needs.
- 🌟 Executive information systems (EIS) provide top-level management with summarized data and trends, enabling them to make strategic decisions with access to a holistic view of the organization's current state.
- 🤖 Expert systems emulate the decision-making capabilities of a knowledgeable human, offering guidance and advice based on programmed rules and scenarios, and are increasingly utilized across various industries.
Q & A
Why is good information crucial for an organization's decision-making process?
-Good information is essential for organizations to facilitate good decision-making because it provides the necessary insights and data to make informed choices. Bad information can lead to destructive decisions that can damage the commercial success of a business.
What role do information systems play in an organization?
-Information systems are critical as they allow for the processing and analyzing of information. They help organizations acquire, process, and utilize information in a way that is useful for strategy building and decision-making.
Can you explain the concept of transactional processing systems in the context of an organization?
-Transactional processing systems are operational-level systems that are highly structured and deal with routine tasks such as sales orders, purchase orders, payroll, and stock records. They process daily activities and provide raw data for management decisions.
What are knowledge work systems and how do they differ from other information systems?
-Knowledge work systems are concerned with creating and preserving new knowledge within an organization. They require specialist computer applications and workers to process and organize information, often being used by larger companies for complex pattern analysis and innovation.
How do management information systems (MIS) support an organization's management activities?
-MIS are designed to collect and convert data into information from various sources, organizing and communicating this information to management at all levels. This allows managers to construct tasks effectively and make informed decisions.
What is the purpose of decision support systems (DSS) within an organization?
-Decision support systems (DSS) are computer applications designed to support management decision-making, particularly in situations involving risk and uncertainty. They analyze data and provide insights to help make informed decisions.
What is the primary function of executive information systems (EIS)?
-Executive information systems (EIS) are designed for top-level management and executives to gather and convert internal and external information for informed decision-making. They provide summarized data and graphical trend analysis features.
How do expert systems emulate the decision-making capabilities of human experts?
-Expert systems contain sets of rules, experiences, and scenarios based on the knowledge of human experts. They analyze data and offer solutions as if they were experts, providing guidance and suggestions for decision-makers.
What is the significance of information systems in improving an organization's efficiency and decision-making?
-Information systems are vital as they process facts, figures, observations, and feedback, enabling organizations to build strategies and make sense of commercial contexts. They also facilitate effective communication with customers, suppliers, and competitors.
Can you provide an example of how an organization might use information systems to attract and retain customers?
-Organizations can use information systems to manage customer accounts, process orders, and analyze customer data to understand preferences and behaviors. This helps in tailoring services, offering personalized experiences, and using the internet and communication processes to attract and retain customers.
What are some of the components that make up an information system?
-An information system typically includes hardware, software, data, people, and procedures. These components work together to collect, store, process, and deliver data, ensuring the information is useful for the organization.
Outlines
📊 Importance of Information Systems in Decision Making
This paragraph discusses the critical role of information systems in enabling organizations to make informed decisions. It emphasizes the necessity of good information for successful business outcomes and the potential damage of bad information. Information systems are described as essential for processing, analyzing, and making sense of data, including facts, figures, observations, and feedback. They are composed of various elements such as software, hardware, data, people, and procedures, and are vital for communication with customers, suppliers, and competitors, as well as for understanding the business environment.
🛠️ Transactional Processing Systems and Their Role in Business
The second paragraph delves into transactional processing systems, which are structured at the operational level to record and store day-to-day activities of an organization. These systems are crucial for processing routine tasks such as sales orders, purchase orders, payroll, and stock records. They provide a historical benchmark for performance measurement and are designed to learn from past experiences, ensuring good practice in future operations. The paragraph also explains how these systems contribute raw data for management decisions, highlighting the importance of accurate record-keeping for effective business management.
💡 Knowledge Work Systems and Innovation in Organizations
This paragraph introduces knowledge work systems, which are focused on creating and preserving new knowledge within an organization. These systems involve specialist computer applications and knowledge workers who process and disseminate information to improve business operations. The text explains that knowledge work systems can be costly and are typically found in larger, more complex organizations. They are designed to drive innovation and efficiency by critically examining and enhancing business processes, making them a significant investment for forward-thinking companies.
🌐 Networking and the Integration of Information Systems
The fourth paragraph discusses the practical aspects of integrating information systems within an organization. It talks about the ease of sharing information between departments through well-established computer networks, which are common even in smaller companies. The paragraph highlights the benefits of organizing tasks efficiently and taking a holistic view of the organization. It also touches on the use of external knowledge, such as results from a PEST analysis, and how it feeds into the decision-making process alongside internal knowledge work systems.
📈 Management Information Systems: Supporting Managerial Activities
The fifth paragraph outlines the purpose and components of management information systems (MIS). These systems are designed to collect and convert data from internal and external sources into organized information for management at all levels. The paragraph explains that MIS aids in constructing tasks effectively and efficiently, consisting of hardware, software, data, procedures, and people. It also mentions the variety of information systems used to improve efficiency and decision-making, including decision support systems (DSS), expert systems, and executive information systems (EIS).
📊 Decision Support Systems for Risky Decisions
This paragraph explores decision support systems (DSS) as a part of management information systems. DSS are specialized computer applications designed to support management in making decisions, especially in situations involving risk and uncertainty. They are unique to each organization and take into account the business's specific processes and idiosyncrasies. The paragraph notes the high cost of developing such systems and their effectiveness in providing valuable insights for decision-making.
🔍 Executive Information Systems: Strategic-Level Insights
The seventh paragraph describes executive information systems (EIS) as a type of decision support system tailored for top-level management and executives. EIS gathers and converts internal and external information to aid executives in making strategic decisions. The paragraph details the features of EIS, such as capturing summary-level data, providing graphical information and trend analysis, and offering user-friendly access to vital business information. It emphasizes the system's role in helping executives identify anomalies and make informed decisions.
🤖 Expert Systems: Emulating Human Expertise in Decision Making
The eighth paragraph introduces expert systems as applications that mimic the decision-making abilities of human experts. These systems contain sets of rules, experiences, and scenarios to provide advice or solutions to complex problems. The paragraph explains that expert systems can diagnose issues and offer remedies based on pre-programmed knowledge, but ultimately, human decision-makers use the insights provided by these systems to make final judgments. It also discusses the potential applications of expert systems in various industries, such as law, finance, and banking.
🏢 Applications of Expert Systems in Diverse Industries
The final paragraph discusses the practical applications of expert systems across different industries. It provides examples of how these systems can be used to provide consistent legal advice, financial recommendations, and assess credit worthiness in the banking sector. The paragraph highlights the growing integration of expert systems in business operations, emphasizing their potential to enhance decision-making processes by offering insights that might otherwise be overlooked.
Mindmap
Keywords
💡Information Systems
💡Decision-making
💡Transactional Processing Systems
💡Knowledge Work Systems
💡Management Information Systems (MIS)
💡Decision Support Systems (DSS)
💡Executive Information Systems (EIS)
💡Expert Systems
💡Data Analysis
💡Communication Systems
Highlights
Importance of good information for organizations to make appropriate decisions.
Destructive impact of bad information on company decision-making and commercial success.
Necessity of information systems for processing and analyzing information.
Information systems facilitating strategy building based on analysis outcomes.
Components of information systems including software, hardware, data, people, and procedures.
Information flow within an organization from customer contact to internal processes.
Information systems as a combination of hardware and software for data management.
Role of information systems in effective communication with customers, suppliers, and competitors.
Use of information systems for attracting and retaining customers, managing accounts, and HR.
Transactional processing systems for recording and storing day-to-day activities.
Knowledge work systems focused on creating and preserving new knowledge within an organization.
Expert systems emulating human decision-making with specific skills and expertise.
Management information systems (MIS) designed to support management activities with data conversion.
Decision support systems (DSS) designed for risky and uncertain decision-making scenarios.
Executive information systems (EIS) providing summarized data for top-level management decisions.
Expert systems offering knowledge guidance and decision-making support in various industries.
Different types of information systems aimed at various organizational levels and functions.
Practical applications of information systems in business for improved efficiency and decision-making.
Transcripts
this video is concerned with information
systems organizations require
information to determine appropriate
decision-making it's important for
organizations to have access to good
information in order to facilitate good
decision-making bad information if there
is such a thing because if it's bad
information it's not really information
at all but bad information if I may use
the term can be destructive to a company
it can lead to bad decision-making and
ultimately damage the commercial success
of the business so it's imperative that
businesses have access to good
information and information that's
appropriate to their requirements
organizations rely on information
systems which allow for the processing
and analyzing of information so
information systems must be in place
which enables them to acquire the
information and then process the
information in a way that makes it
useful for them so it it processes facts
and figures and it processes
observations and feedbacks and enables
the organization to build strategies
around the outcomes of that analysis so
information systems are very important
information systems can range from
software hardware data people procedures
they all add to information that the the
business can tap into and the
information is flowing all the time
within the organization from contact
with its customers contact with
suppliers with its own internal
processes production or processing
information
or whatever it does and all the time
there's information building up and it's
important that the the business is able
to tap into this information to use the
information and to understand the
information and to add it to their
collective experiences so that it
becomes useful in the future let's talk
about information systems more fully
yeah information systems are a
combination of hardware and software
used for the collection storing and
processing and delivery of data so
information systems by and large are
ways of collecting information and then
processing it now this may be making
some information electronically and
processing it using software software on
computers or it may be just making
observations and recording the
observations and then analyzing the
observations in some particular way
perhaps in terms of a focus group
getting colleagues sit down and discuss
what was observed and discuss what was
happening and try to understand it and
record it that way but an information
system means that there is an approach
to collecting the information to storing
the information and analyzing it and
making sense of it and making sure that
it adds to the knowledge base of the
business
so information systems are vital for an
organization it allows the organization
to effectively communicate with its
customers suppliers and competitors the
information system makes sense of the
commercial context the business has with
its customers and with its suppliers it
makes sense of it it understands
seasonality in terms of demand or of its
own production requirements it
understands the need for placing orders
in in a certain way because of
logistical concerns or it understands
the the outlets for its product and the
requirements of the outlets its
processing a lot of information but this
in turn enables it to understand its
customers and its suppliers and to
effectively communicate with them and to
understand their concerns also for
example organizations will use
information systems to attract and
retain customers with the use of the
internet and processes to manage
accounts and human resources so
organizations will use communication
systems to process information but also
to ensure good contacts good
communications channels with customers
and ensure that there is consistency in
the messages it's sending out and it's
doing appropriate analysis for the
information that it's taking in so an
information system is vital for the
success of the business and there are
many components to an information system
many many parts that may be considered
to be part of the information system for
example we could have knowledge of work
systems management information systems
decision supports
systems transactional processing systems
executive information systems and expert
systems and I suspect there are others
which could be added onto that diagram
what I'm going to do in the rest of this
session is to go through briefly to go
through these and discuss what's meant
by each of them and I'm going to start
by I'll just put the cursor on the
screen I'm going to start here with the
the bottom one the transactional
processing system so the transactional
processing system this is required at
the operational level it's highly
structured and it's structured in a
sense that the decisions have been
determined from past experience and past
processing of work of the processes of
in terms of work and what has been done
that past experience has been taken in
to the knowledge base of the business so
that now that there is a transactional
processing system they the transactions
can be processed and there is some
objective measure of what is good
performance and what is not so good
performance because there is past
experience with which comparisons can be
drawn but it's a highly structured
decision process transactional
processing systems are highly structured
it collects information on on the daily
activities of the business and it's
normally concerned with routine tasks
that must be recorded for example sales
orders purchase orders payroll stock
records so it deals with some of the
bigger areas sales orders purchase
orders payroll stock stock records and
so on it deals with these and it has a
methodology of dealing with them
appropriately appropriately in the
context of what was good practice from
the past it has learned from its
mistakes in the past and it is
constantly monitoring its own processes
to ensure that there is good practice
going into the future and it looks at
the transactions of the business and
ensures that the the main transactions
of the business in terms of what we've
just discussed here sales orders
purchase orders and so on that these are
accurately recorded and dealt with
so the transaction processing system is
responsible for providing raw data which
is then useful for making management
decisions the the raw data coming out of
the process looking at sales orders
looking at the time of year which sales
or orders increase or decrease and look
at purchase orders and looking at stock
levels and looking at this it's fed back
to management but for management to make
decisions is the business doing things
correctly or is it is the business being
driven by history by what happened in
the past
should it be modified in view of current
practice so the transactional processing
system provides information for
management to update its own decision
making processes
the rhenium of the transactional
processing system is to record and store
day-to-day activities of the
organization using systems helps the
organization add value to their products
and services so it records the
day-to-day activities of the business
and feeds that record of activities back
to management who can then make
decisions about how to improve
efficiency within the business how to
change the processes how to tweak what's
happening to lead to greater efficiency
and and to make decisions make
management decisions about the
day-to-day running of the business the
transactional processing system produces
accurate information which is error-free
and reliable generally speaking it takes
what actually happens so it's error-free
providing it's recorded accurately it's
error-free the sales book will tell what
sales took place the order book will
tell what orders were placed the stock
levels will reflect what's in stock and
hopefully that is error-free
and this information can then be used to
produce reports and the reports can be
used for decision-making for good
decision-making within the business
labor efficiency is increased as the
transaction processing system replaces
time-consuming administration tasks once
the business is running and once it's
got a routine established depending on
the nature of the product it makes or
the service it provides but once the
routines has been established then
administration is reduced people know
what's what's required of them the
workers know what's required the
managers the lighting managers know
what's required so the the processes are
automatically established and there is
no less need for administration now the
next type of information system we'll
look at is the knowledge work systems
knowledge work systems and in terms of
our original diagram if I just pop the
cursor on knowledge work systems are up
here which is another type of
information system that feeds into the
information systems
knowledge work system is concerned with
creating new knowledge and preserving
that knowledge or information within the
organization so knowledge work system is
it's concerned with creating new
knowledge it's looking critically at the
processes it's looking at how the
business runs what it does and tries to
find innovative new cost-saving more
productive ways of performing the tasks
so it's a constant drive to improve the
business by creating new knowledge and
preserving that knowledge keeping that
knowledge so that it can be used in the
future knowledge work systems require
specialist computer applications
generally speaking to have knowledge
workers knowledge workers workers
prepare whose primary function is to
obtain process and disseminate
information
these are knowledge workers and to
prioritize and organize the information
so knowledge work systems by and large
can be expensive they may require
specialist computer applications
specialist software and they need
specialist workers to use the software
to collect data input the data so
knowledge work systems tends to be for
the larger companies tends to be
furthermore the wealthier the stronger
and the bigger companies who are working
on perhaps a very complex pour patterns
and who need computer applications to
model the work patterns and to make
sense of it and they have knowledge
workers workers whose function is to use
the software to
process the sir at the information
that's coming back the practical
information that's flowing back
inputting it processing it through the
application the computer application to
make sense of it and to organize the
information for management tasks can be
effectively organized and completed with
efficiency information can be easily
shared between departments managers
employees networks computer networks are
well established and in many companies
mostly the larger companies but
medium-sized companies even smaller
companies nowadays will have some sort
of computer networking system so that
information is easily passed around
between the managers the managers can
review the current state of thinking
regarding cost efficiencies productivity
look at look at the organization in in
more detail not just look at their own
department but look at take a more
holistic view of the organization and
are able to press make recommendations
and suggestions which will feed into the
management decision process and help
refine the decision making process so
what we've got is we've got external
knowledge external knowledge coming from
outside the business the perhaps the
product of detailed pest analysis
political economic social and
technological analysis of what's
happening outside but also external
knowledge in the sense that it may be
peripheral within the business
particular departments who perhaps are
not mainstream but how we'll have a an
input into the decision making process
and then we've got hardware at the very
bottom which our knowledge works this
systems
knowledge workstations systems including
engineering workstations manager
managers networks within their
departments which are linked in graphics
workstations depends on the nature of
the business depends on the complexity
of the business but both the external
base and the hardware will feed into the
software and the software can be
extremely sophisticated I office of
office automation systems I should say
groupware intranets extranets
computer-aided design CAD CED virtual
reality expert systems so depending on
the nature of the business there can be
very sophisticated knowledge work
systems in place which will help
management make decisions and help to
understand the business and clearly with
bigger organizations it's important to
be able to extract information quickly
and to understand what is the knowledge
base of the business so that decisions
future decisions can be made more
effectively
now the next one we're going to look at
is the management information systems
Mis management information systems
management information systems with the
cursor on the screen is this one over
here which again featured into the
information systems management
information system which feeds in here
the M is the management information
system computer-aided systems that
support management activities Mis are
designed to collect and convert data
into information from internal and
external sources so there is a flow of
data coming in from the outside
regarding customer requirements surveys
of customer attitudes customer
experiences feedback from customers and
also information coming from the
external sources regarding suppliers and
what our suppliers think and what
suppliers want and their suppliers plans
for for the future so there's a lot of
information flowing into the
organization which needs to be analyzed
it needs to be converted into data and
it's converted into data through
analysis so it's using the management
information systems so the aim of Mis is
to organize and communicate information
to management at all levels this
information allows managers to construct
tasks effectively and efficiently so the
MIS is to organize and communicate
information to management at all levels
it it analyzes data it makes sense of
data and when when the data has been
analyzed and it's in a format that's
easily understood and it's Bakkerud it's
passed on to management who can then
make decisions and who can then
understand what's happening within the
business
generally speaking it consists of
computer systems that entail the
following components hardware software
data procedures and people so the MIS
mental information system is generally
speaking computer-based systems it takes
the data coming in the data from
customers customer surveys supplier
information government announcements
whatever it is is taking data it feeds
it into the system they perhaps the
computer system and it does some
analysis and then it it passes that
information on to the managers
organizations use a variety of
information systems to improve
efficiency and decision making it
doesn't have to be computer-based it
could be management use focus groups
they could use surveys and presentations
that can use a variety of techniques and
the whole idea is to try and improve
efficiency and improve decision-making
so Mis management information systems
include decision support systems DSS
decision support systems expert systems
and executive information systems so
these are part of the management
information system now on our diagram
the one we're using we have an de
marketed and as subsets of Mis we've put
them in in terms of mainstream
information systems but there could be
seen as a part of the management
information system the decision support
system expert systems and executive
information systems
now the misr systems that support
management in decisions involving sales
turnover marketing accounts supplier
information I put in a comma I should
have put in a comma dot dot because it
includes HR it includes long-term
planning it includes outsourcing it
includes globalization includes many
aspects some coming from strategic
management some coming from more routine
day-to-day processes but management
information system in effect looks at
the whole system takes the the flow of
data around the system and that's coming
in from the outside and turns it into
information which can be used by
management for decision making purposes
so it could be product information and
detailed information about products or
services offered so the management
information system may be concerned with
the product product information and how
precise the products that's produced
match customer expectations and customer
requirements they could relate the sales
information about turnover sales payment
records and the management information
system can provide updated information
to the management about the current
situation could be marketing looking at
customer satisfaction or compliance
records of market research such as
questionnaires and focus groups
what's marketing what are they finding
out and what are their reporting back
and making it accessible to management
again for decision making purposes
looking at suppliers information
regarding the list of suppliers and
their costs
accounting information concerning
transactions financial information and
reports from previous years and
estimates for the current year and
looking at budgets and looking at
overspend and under spend and looking at
the the budgetary system all part of the
management information system so it runs
really on on three levels operational
small scale operations such as recording
daily transactions and updating files
operational just taking in the
information and adding it to the system
then we've got tactical systems are
required to convert detailed information
for example exception reporting what
what happened and how can be explained
in formal systems interpretation of data
required at the operational level and
external data analysis so the tactical
is looking at the data in much more
detailed and it's it requires more
detailed information because it's it's
looking at exceptional reporting it's
it's looking at what went wrong or what
was unusual or what surprises were there
in the activities of the business it's
looking at the informal systems it's
looking at the relationships with
customers and with suppliers that's
difficult to quantify it's looking at
the interpretation of data and looking
at how the data is required at the
operational level and how the data can
be further improved to send on to
strategic the strategic level to help in
setting more macro
strategies for the organization the
strategic level information systems are
informal in nature for example not
possible to quantify some information
this is summary level information human
judgment at this level is valued so at
the strategic level all the information
has come up it's been summarized from
the operational through the tactical up
to the the senior management at the
strategic level but they've got to make
decisions about the direction of the
business which products to make which
markets to enter and this is really
entrepreneurship this is trying to look
into the future it's trying to see what
is the best way forward it's going to
use the manner at the strategic level
it's going to use the information that's
come up that's been processed but it's
also reliant upon judgment from
experience of the managers of what they
feel is a good way of forward so it's
it's using the management information
system but it's not entirely based on it
let's look at the decision support
systems the DSS
decision support system is over here
it's really a part of the management
information system as I said earlier but
I've just added it in here as a direct
because it is an information system so
it's it comes off here
the decision support system our systems
our information systems computer
applications specifically designed to
support management decision-making so
these could be computer applications
that are specifically written for the
business to help the business in making
decisions and they are peculiar to that
business they are written with that
business entirely in mind they look at
all of the idiosyncratic parts of the
business and processes of the business
and accommodate those into the program
so specialist software houses perhaps
will have developed the software further
business of course this is a very
expensive undertaking and it really
depends on the size of the business and
the possible returns in using such
software
these information systems are highly
effective in decisions that are risky
and cause high levels of uncertainty so
when businesses are faced with very
risky decisions to try to use everything
at their disposal try to look at the
problem from all angles and using
decision support systems is as valuable
but as I said it's costly specialist
software is expensive so it depends on
the returns it depends on whether it's
worth buying that software and engaging
in this type of decision making process
DSS is a skillfully designed software
unique to each organization these
systems allows strategic management to
make decisions based on the
organization's current trends so it
looks at the organization's current
trends and tries to extrapolate those
trends to see what was likely to happen
into the future and based on that it can
make some sort of decision but as I said
the software is expensive
it brings together DSS the decision
support system brings together a variety
of information such as weekly
transactions and sales figures via will
be part of the system trends and
forecasts of projected future revenue
perhaps using regression analysis or
using some sort of statistical analysis
to try and estimate what's likely to
happen in the immediate future perhaps
ending in the intermediate future
perhaps in a a year two years time and
in the long term perhaps five years
obviously the further you go into the
future the more risky it becomes but but
they use trends to to try and help make
decisions it may also look at the likely
course if things go wrong and look at
past decisions and look at past trends
and how the trends moved and how they
changed what caused the trends to change
the aim of the decision support system
is to ensure that appropriate data and
information is readily available for the
purpose of the decision so it's trying
to help the organization make a decision
now let's look at executive information
systems it's over here executive
information systems this one here which
again feeds into the information systems
of the business so executive information
systems
this is a decision support system so the
EIS is DSS an executive support system
is part of the decision support system
this system is specifically designed for
top-level management and executives this
is moving towards the strategic end of
decision-making the executive support
system is an infrastructure that gathers
and converts internal and external
information for use by executives to
make informed decisions and information
concerning organizational goals so it it
picks up the information from the
business and tries to make decisions
based on the information that's coming
up
through the business executive
information system packages enables
management to access information such as
financial information work-in-progress
forum process stock levels inventory
market share trends and suggest
suggestions for improvements so it it
feeds up into the executive level a lot
of the current state of the business in
terms of its activities what are its
current stock levels and what's its
inventory what's what's its market share
and what products is it making and and
so on so it's feeding up to the
executives a lot of information which
will help them to make more informed
decisions
so EAS contains the following features
it captures summary level data which
reflects on other systems used by the
organization so it taps into other
systems and takes the output of the
other systems perhaps or some of the raw
material or the raw data of the other
systems and processes takes it in and
summarizes it for the executives to try
and make decisions it gives them the
important information about production
orders sales marketing information
suppliers customers whatever it feeds
all of that information in and makes
sense of it and enables the executives
to make informed decisions
the drilling down and summarizing of
information to provide detail detail to
support management decisions so drilling
down means to investigate more deeply
data so when when the information is
passed up to the executive information
systems they can spot anomalies or can
spot problems perhaps or question why is
it that inventory has increased when
sales are going down so the management
are able to spot issues in terms of
taking a more holistic picture of the
organization taking a footer picker
picture of the organization that they're
able to spot anomalies spot perhaps
issues or problems and be able to drill
down and find out why this is happening
try to find solutions to why it's
happening
generally speaking can provide graphical
information and trend analysis features
so this helps in decision-making
graphical analysis is as good looking at
the picture instead of getting caught up
in a lot of numbers and tables and and
facts and formulas looking at the
picture and looking at simply what's
happening in terms of inventory sales
likely orders in the future looking at
it in graphical terms may be more useful
for executives because it gives them a
quicker picture of what's happening by
and large the system is user-friendly by
and large the information is able to be
produced quite quickly it's highly
summarized information but it's possible
to get the more detailed information if
required to drilling down exercise I
talked about in number two but by and
large it just simply presents graphical
information straightforward information
which will help the executives to make
the the wider and bigger decisions
now the next one is expert systems and
if we go back to our earlier diagram we
have experts yeah here expert systems
it's up here which feeds into
information systems so we'll have a look
at expert systems very briefly expert
systems are applications that emulate
decision making capabilities of humans
or a knowledge worker who holds specific
skills and expertise within an
organization so an expert system it it
works out what experts would do under
certain situations and the information
of the experts has been fed into the
computer and modeled by the computer so
the computer holds the decision-making
process of the experts and the computer
is able to analyze the data as if it
were experts if it was a panel of
experts making the decision now of
course that sounds like computers have
taken over from people
well expert systems in a sense is moving
in that direction
but it still perhaps early days but it's
also seen as as one tool and ultimately
the decision that'll be taken by people
ultimately humans will take the decision
and not the computers at least that's
the seems to be the current thinking
it's sometimes referred to as artificial
intelligence as these systems can reason
well perhaps reason is a strong word
they can diagnose problems and offer
remedies computers don't reason like
human beings that follow algorithms to
follow computer routines they are
pre-programmed they can vary situations
according to random numbers within
limits which could be pre-programmed and
they can find possible scenarios and
what's the likely outcome under
different situations which will save
people trying to work out what could
happen there what if questions what
could happen in different situations but
they are still quite limited and the way
they can make decisions so it still
falls to humans to make entrepreneurial
decisions it still falls to humans to
make executive decisions but artificial
intelligence can alert decision makers
to different possibilities
perhaps ones that could have been
overlooked and by running artificial
intelligent routines decision makers are
more aware of what's required under
different situations generally speaking
expert systems contain sets of rules
experiences individual knowledge and
scenarios for alternative decisions in
order or in other words I suppose
consulting services
they they can update themselves they
input the more data they hold the better
of the decisions that tend to emerge but
the way they make decisions will have to
be programmed
they'll have to be instructed about how
to make the decisions and the data
entering could be within ranges rather
than as a fixed figure so different
outcomes can arise the real use of
expert system seems to be as a need for
executives in making decisions the
expert systems suggest that the
following could happen and this may
refine the decision-making of the
executives it may influence it or appear
simply make the executives more aware of
possible outcomes as I said earlier
possible outcomes that they could have
overlooked
there's a little diagram from Steve
Copley here's the expert standing on the
right the expert feeds in to a knowledge
base held on the computer talking about
how to to do certain things and that
knowledge has been programmed has been
extracted from the person put into the
system there is some sort of analysis
that is undertaken within the system the
inference engine it's called
just looking at how the computer
processes the knowledge base then there
is a human interface the expert the
non-expert users sits down and
interrogate the program and asks various
questions and gets various answers
depending on how the program is computed
sorry how the computer is programmed I
should say and what knowledge has gone
in so the the non expert user queries it
and takes the advice then to perhaps the
executives the top management at the
strategic level who will perhaps take
this into account and looking at their
own processes and their own
decision-making process
now finally let's look at the expert
systems and how they're used within
organizations
well they provide knowledge and guidance
on a matter of law instead of consulting
a solicitor so expert systems could be
used in very rigid decision-making
systems for example within the legal
system if someone breaks a contract then
what are the rules for breaking the
contract these may be programmed in
together with the important cases that
need to be considered and then the facts
of the case could be typed in and the
likely decision will emerge what's
because the there is consistency or
there should be consistency in the legal
system and if the facts of a particular
case fit a case that was issued by a
higher court earlier than the the law of
precedent will take place and the the
ruling of the higher court will apply
today through this particular case and
so it could be captured with them on a
computer possible
financial advice based on past and
present information that could be fit
into a system looking at the wide range
of financial instruments that are
available and the returns on them and
the the risk factor associated with each
of them could be or programmed in and
some advice be given based on experts
and what experts say is the the balance
between risk and return the banking
industry could use expert systems to
judge credibility or credit worthiness
of applicants look at the applicants
income look at their contractual
outgoings their lifestyle their their
bills and so on and try to decide if
they can reasonably give a loan to that
person perhaps perhaps the person cannot
service the loan they don't have enough
resources left over at the end of the
month so expert systems are creeping in
to different industries and in different
ways these are some of our topics on
information systems used in business
information systems are extremely
important and there are different types
as we've seen aimed at different parts
of the organization and with different
attributes that's where I got the little
cartoon earlier on expert systems and
that's all I'm going to do on this topic
so we're going to leave it at that and
say thank you for watching
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