Types of Information Systems (TPS, MIS, and DSS)
Summary
TLDRThis video script explores the most common types of information systems in organizations: Transaction Processing Systems (TPS), Management Information Systems (MIS), Decision Support Systems (DSS), and Executive Support Systems (ESS). TPS records daily transactions, serving as the primary data source for other systems. MIS consolidates data for routine summary reports, aiding middle management in semi-structured decision-making. DSS and ESS support senior management in unstructured, long-term planning decisions, with DSS focusing on problem-specific solutions and ESS providing strategic forecasting.
Takeaways
- 💼 **Transaction Processing System (TPS)**: TPS is a system used for recording business transactions and is composed of people, procedures, software, databases, and devices.
- 🛒 **Definition of Transaction**: In TPS, a transaction is any business-related exchange of goods, services, or money, including employee payments, sales, supplier payments, and ATM withdrawals.
- 🏢 **Operational Level**: TPS serves the operational level of an organization, which includes employees at the bottom of the hierarchy, such as cashiers, bank tellers, and nurses.
- 📊 **TPS Functions**: TPS is responsible for data collection, sorting, updating, storing, modifying, and retrieving transaction-related information, as well as generating reports and summaries.
- 👥 **Examples of TPS**: Payroll systems and online reservation systems for airlines are examples of TPS, where the latter allows for real-time booking and transaction recording.
- 🔁 **Batch vs. Real-Time Processing**: TPS can operate in batch mode, processing transactions in groups with a delay, or in real-time, processing each transaction instantly with no delay.
- 📚 **Management Information System (MIS)**: MIS provides routine information to managers and decision-makers, typically used at the tactical level of an organization's management hierarchy.
- 📈 **MIS Importance**: MIS is crucial for operations management and decision-making, as it consolidates data from TPS to generate summary and exception reports.
- 🏛️ **MIS Example**: A university student management information system is an example of MIS, used to generate reports on student registration status for eligibility in exams.
- 🌐 **Enterprise Resource Planning (ERP)**: ERP systems integrate various business operations into a unified set of programs, overcoming information silos and enhancing data sharing across organizational units.
- 🛠️ **Decision Support System (DSS)**: DSS aids in problem-specific decision-making, using inputs from both internal (TPS and MIS) and external systems, and is commonly used by senior management for non-routine decisions.
- 🏦 **DSS Example**: A bank loan management system is an example of DSS, used to assess loan applicant creditworthiness and predict loan recovery likelihood.
- 📊 **DSS vs. MIS**: While MIS helps an organization do things right, DSS helps managers do the right thing, focusing on effective decision-making for long-term planning.
- 👨💼 **Executive Support Systems (ESS)**: ESS supports executives at the top management level, such as a sales forecasting system useful for the organization's top decision-makers.
Q & A
What are the three most common types of information systems mentioned in the video?
-The three most common types of information systems mentioned are Transaction Processing Systems (TPS), Management Information Systems (MIS), and Decision Support Systems (DSS).
What is a Transaction Processing System (TPS) and what does it include?
-A Transaction Processing System (TPS) is an organized collection of people, procedures, software, databases, and devices used to perform and record business transactions. It includes activities such as payments to employees, sales to customers, payments to suppliers, or cash withdrawals from an ATM.
Who primarily uses Transaction Processing Systems and why?
-Transaction Processing Systems are primarily used at the operational level of an organization by employees such as cashiers, bank tellers, nurses, and others who are involved in performing day-to-day business transactions.
Can you provide an example of a TPS and explain its function?
-An example of a TPS is a payroll system. It collects input data such as the number of employee hours worked and the pay rate, and its primary output consists of paychecks and related reports for the organization's management and required government documents.
What are the two types of transaction processing systems discussed in the video?
-The two types of transaction processing systems discussed are batch processing TPS and real-time processing TPS. Batch processing involves collecting and processing transactions in groups, often with a time delay, while real-time processing handles each transaction immediately.
How does a Management Information System (MIS) differ from a Transaction Processing System (TPS)?
-A Management Information System (MIS) differs from a TPS in that it consolidates data and information from the TPS to generate routine summary and exception reports, which are used by middle management for semi-structured decision making.
What is the purpose of a Decision Support System (DSS) and who typically uses it?
-A Decision Support System (DSS) is used to support problem-specific decision making and is commonly used by senior management to make non-routine decisions and provide solutions to unique and frequently changing problems.
Can you give an example of how a DSS is used in a business context?
-An example of DSS use in business is a bank loan management system, which verifies the credit of loan applicants and predicts the likelihood of loan recovery, aiding in effective decision making regarding loans.
What is the main issue that ERP systems aim to solve in organizations?
-Enterprise Resource Planning (ERP) systems aim to solve the issue of information silos by providing a set of integrated programs that manage vital business operations, making it easier to use and more effective, and allowing for data sharing across all organizational units.
How does a DSS help in making decisions compared to an MIS?
-A DSS helps in making effective decisions by focusing on unstructured decision making that concerns long-term planning, while an MIS helps an organization do things right by providing structured decision support based on defined rules and guidelines.
What is the role of an Executive Support System (ESS) in an organization?
-An Executive Support System (ESS) supports executives, typically at the topmost level of the organization's management hierarchy, by providing tools for tasks such as sales forecasting, aiding in better decision making.
Outlines
💼 Overview of Information Systems in Organizations
This paragraph introduces the three main types of information systems used across different organizational levels: Transaction Processing Systems (TPS), Management Information Systems (MIS), and Decision Support Systems (DSS). It explains that although these systems are often discussed separately, they can be integrated into a single software package. The paragraph emphasizes the role of TPS in recording business transactions and its importance at the operational level, with examples like payroll systems and online reservation systems. It also distinguishes between batch processing and real-time processing TPS, providing examples for each.
📚 The Role of TPS, MIS, ERP, and DSS in Organizational Decision Making
The second paragraph delves into the specifics of TPS and MIS, highlighting their functions in recording transactions and generating reports, respectively. It discusses the issue of information silos and introduces Enterprise Resource Planning (ERP) systems as a solution to integrate various business operations. The paragraph also describes the function of Decision Support Systems (DSS) in aiding senior management with non-routine decision-making, using a bank loan management system as an example. It contrasts DSS with MIS, emphasizing that while MIS helps with operational efficiency, DSS focuses on strategic decision-making. The paragraph concludes by illustrating the importance of DSS in business through the example of Subway, a fast-food franchise, and mentions Executive Support Systems (ESS) as tools for top-level executives in an organization.
Mindmap
Keywords
💡Transaction Processing System (TPS)
💡Management Information System (MIS)
💡Decision Support System (DSS)
💡Enterprise Resource Planning (ERP)
💡Information Silo
💡Batch Processing
💡Real-Time Processing
💡Operational Level
💡Tactical Level
💡Strategic Level
💡Executive Support System (ESS)
Highlights
Introduction to the most common types of information systems used in organizations.
Definition and explanation of Transaction Processing Systems (TPS).
TPS as an organized collection of resources for performing and recording business transactions.
Examples of transactions in TPS, such as payments and sales.
TPS serving the operational level of an organization.
Examples of TPS users, including cashiers and bank tellers.
Functions of TPS in data management and reporting.
Payroll system as an example of TPS.
Online transaction processing systems in airlines and travel agencies.
Differentiation between batch processing and real-time processing TPS.
Examples of batch processing in payroll and real-time in hotel reservations.
Introduction to Management Information Systems (MIS).
MIS as a tool for managers and decision-makers at the tactical level.
MIS providing routine and exception reports from TPS data.
University student management information system as an MIS example.
Difference between TPS and MIS in library systems.
Challenge of information silos and the rise of Enterprise Resource Planning (ERP) systems.
ERP systems as integrated programs for business operations.
Decision Support Systems (DSS) for problem-specific decision making.
DSS used by senior management for non-routine decisions.
Bank loan management system as an example of DSS.
Importance of DSS in business initiatives like Subway's bundle meal offers.
Executive Support Systems (ESS) for top-level executives.
Summary of TPS, MIS, and DSS roles in structured, semi-structured, and unstructured decision making.
Transcripts
in this video we are going to learn the
most common types of information systems
used in different levels of an
organization they are the transaction
processing system or tps management
information system or mis and decision
support system or dss
although these systems are commonly
discussed separately they are often
integrated in one product and delivered
by the same software package
let's begin discussing tps it is an
organized collection of people
procedures software databases and
devices used to perform and record
business transactions the term
transaction in tps is defined as any
business related exchange of goods
services or money such as payments to
employees sales to customers payments to
suppliers or cash withdrawn from an atm
these systems serve the organization's
operational level this level is composed
of employees who are at the bottom level
of the organization's hierarchy examples
of users at this level include cashiers
at a point of sale bank tellers nurses
in a hospital and other positions
concerned with performing day-to-day
business transactions of an organization
a tps collects input data from
transactions and events which are
recorded by operational level employees
it is responsible for sorting listing
merging updating storing modifying and
retrieving data pertaining to the
transactions that have taken place in an
organization and finally generate
detailed reports lists and summaries
which are used by other levels of
management
an example of tps is a payroll system
the primary inputs for a payroll tps are
the number of employee hours worked
during the week and the pay rate the
primary output consists of paychecks
payroll systems produce employee
paychecks and related reports for the
organization's management and documents
required by government agencies
another example is an online transaction
processing reservation systems used by
airlines and travel agencies these
systems enable travelers to select and
book their own flights through the
systems passengers can choose their
destinations and flight dates compare
costs on alternate flight dates book
their seats and generate electronic
tickets
the system is used to record each sale
transaction which takes place on the
website at the end of the day it can
generate a report of all transactions in
order to view which seats have been sold
there are basically two types of
transaction processing systems first is
the batch processing tps here the
processing of transactions takes place
over batches which means transactions
are collected combined and grouped in
batches it generally follows the first
in first out method and there is usually
a time delay in this type of processing
the second is called real-time
processing tps under real-time
processing every single transaction is
processed with immediate effect and
provides instant verification of it
there is no time delay and systems can
be accessed remotely and over the cloud
let's have an example for each type of
processing it is batch processing when a
company processes the payroll of its
employees in bi-weekly manner that
processes batches of employee salaries
over a span of two weeks in a hotel
reservation it is extremely useful for
customers to have an instant
verification of the request therefore
this is an example of real-time
processing our next type of system to
discuss is called management information
system or mis
it is an organized collection of people
procedures software databases and
devices that provides routine
information to managers and decision
makers management information systems
are usually used at the tactical level
this level includes employees who are at
the middle of the organization's
management hierarchy
it typically collects data and
information generated from the tps to
provide routine summary and exception
reports
this type of system is important in an
organization as it provides information
that is essential to operations
management and decision making functions
an example of an mis is a university
student management information system
which can be used to generate reports
about the registration status of the
students in order to determine who's
eligible to sit for the end of semester
examinations we now know that a tps
records data and generates detailed
reports while an mis can consolidate
those data and information to generate
routine summary and exemption reports
let's use modern library systems as an
example to show the difference between
these two in terms of their functions
the tps in library systems is used by
library patrons to locate books used by
librarians to manage transactions as
books are checked in and out
on the other hand the mis in library
system is used by librarians to request
and analyze reports such as summary
reports that indicate how many books are
checked out and exception reports that
list long overdue books
tps and mis are still being used today
but increasingly companies are
experiencing information silos an
isolated information system that is not
easily capable of exchanging information
with other information systems is called
information silo the silo mentality is a
way of thinking that occurs when groups
of people do not share information goals
tools priorities and processes with
other departments with this more
organizations have begun turning to
enterprise resource planning or erp
systems an enterprise resource planning
system is a set of integrated programs
that manages the vital business
operations for an entire organization it
can replace many applications with one
unified set of programs making the
system easier to use and more effective
it is used to support organizations
routine business processes maintain
records about those processes and
provide extensive reporting and data
analysis capabilities
these systems use a database of key
operational and planning data that can
be shared by all employees across all
organizational units and when
appropriate with customers and suppliers
last but definitely not the least type
of information system that we will talk
about is called decision support system
or dss it is an organized collection of
people procedures software databases and
devices that support problem specific
decision making decision support systems
use input from internal systems which
are the tps and mis and external systems
they are commonly used by senior
management to make non-routine decisions
and to provide solutions to problems
that are unique and change frequently
an example of dss is a bank loan
management system it is used to verify
the credit of the loan applicant and
predict the likelihood of the loan being
recovered the focus of a dss is on
making effective decisions to
differentiate it from mis remember that
mis helps an organization do things
right while a dss helps a manager do the
right thing
let's use subway an american fast food
restaurant franchise that primarily
sells sub-burning sandwiches salads and
beverages to see the importance of dss
in a business subway uses a dss to
evaluate various initiatives such as
implementing bundle meal offers and
price promotions the dss is able to
predict what impact the initiative will
have on revenues profits and market
share it can also help to design a roll
out program that maximize returns
in addition to dss for managers other
systems use the same approach to support
executives which is called executive
support systems or ess an example of an
ess is a system which can be used for
sales forecasting that is useful to
people who are at the topmost level of
the organization's management hierarchy
to make better decisions
this level is composed of the firm's
president vice presidents and members of
the board of directors
to summarize the tps records daily
routine transactions in an organization
with this it becomes the major source of
data for other systems in an
organization since they record every
transaction it aids in monitoring the
status of the operations and therefore
helps in structured decision making this
means that they have defined rules that
guide them while making decisions
usually receive and utilize the data
they get from the tps the reports
generated in the system is used by
middle level managers to make
semi-structured decisions which are
partly based on set guidelines and
judgmental calls
dss is a major recipient of data from
the lower level systems which is mainly
used by senior managers in unstructured
decision making that concerns with a
long-term planning of the organization
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