Types of Information Systems

Summary

This 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

00:00

📊 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.

05:01

🛠️ 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.

10:03

💡 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.

15:03

🌐 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.

20:05

📈 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).

25:06

📊 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.

30:08

🔍 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.

35:09

🤖 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.

40:10

🏢 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.

Keywords

💡Information Systems

Information Systems refer to the combination of hardware and software used for the collection, storage, processing, and delivery of data within an organization. They are integral to the decision-making process, as they facilitate the analysis of information that can lead to better strategic choices. In the script, it is emphasized that these systems are vital for an organization's success, allowing for effective communication with customers, suppliers, and competitors, and aiding in understanding the commercial context of the business.

💡Decision-making

Decision-making is the process of selecting from among alternatives, based on information and analysis. It is a central theme in the video, as the script discusses how good information is crucial for facilitating good decision-making. The script also warns of the potential destructive impact of bad information on a company's commercial success, highlighting the importance of accurate and appropriate information in the decision-making process.

💡Transactional Processing Systems

Transactional Processing Systems are information systems that operate at the operational level of an organization, dealing with the daily activities and routine tasks such as sales orders, purchase orders, payroll, and stock records. They are highly structured and based on past experiences, providing raw data for management decisions. The script illustrates this with examples of how these systems record and process transactions, ensuring that the main activities of the business are accurately captured and used for future improvements.

💡Knowledge Work Systems

Knowledge Work Systems are concerned with creating and preserving new knowledge within an organization. They involve specialist computer applications and knowledge workers who process and disseminate information. The script explains that these systems can be expensive and are typically found in larger companies that require complex work patterns to be modeled and understood, contributing to the innovation and improvement of business processes.

💡Management Information Systems (MIS)

MIS are computer-based systems designed to support management activities by collecting and converting data into information from both internal and external sources. The script describes how MIS organizes and communicates information to management at all levels, enabling them to construct tasks effectively and efficiently. It also mentions that MIS includes components like decision support systems, expert systems, and executive information systems.

💡Decision Support Systems (DSS)

DSS are specialized computer applications designed to support management decision-making, particularly in situations involving risk and uncertainty. They are unique to each organization and take into account the specific processes and idiosyncrasies of the business. The script notes that DSS can be costly but are valuable in helping organizations make decisions based on current trends and past experiences.

💡Executive Information Systems (EIS)

EIS are a type of decision support system specifically designed for top-level management and executives. They gather and convert internal and external information to aid executives in making informed decisions. The script highlights features of EIS such as capturing summary-level data, providing graphical information and trend analysis, and enabling executives to drill down into detailed information for better decision-making.

💡Expert Systems

Expert Systems are applications that emulate the decision-making capabilities of a human expert or knowledge worker within an organization. They contain sets of rules, experiences, and scenarios for alternative decisions. The script explains that expert systems can diagnose problems and offer remedies, providing guidance on matters that would typically require expert consultation, such as legal advice or financial recommendations.

💡Data Analysis

Data Analysis is the process of examining and interpreting raw data to draw conclusions and make informed decisions. The script discusses the importance of data analysis in various information systems, such as MIS and DSS, where data from internal and external sources is converted into meaningful information that can be used by management for decision-making purposes.

💡Communication Systems

Communication Systems in the context of the video refer to the infrastructure that an organization uses to process information and ensure good contact and communication channels with customers. The script mentions that these systems help in maintaining consistency in the messages sent out by the organization and are crucial for effective communication with various stakeholders.

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