MIS Q & A

Q1. Identify and describe the four levels of the organizational hierarchy. What types of information systems serve each level?

From lowest to highest, the four levels of the organizational hierarchy are operational, knowledge, management, and strategic. Types of information systems include transaction processing systems, office systems, knowledge work systems, decision-support systems, management information systems, and executive support systems.
Transaction processing systems, such as order tracking, payroll, machine control, and compensation, serve the operational level.
Engineering workstations, word processing, graphics workstations, managerial workstations, document imaging, and electronic calendars are examples of knowledge work systems and office systems that serve the knowledge level.
Sales region analysis, cost analysis, annual budgeting, and relocation analysis are examples of decision-support systems and management information systems.
Many of these systems are programs that students learn in their management science or quantitative methods courses. Some are based on database management systems. Examples of executive support systems that serve the strategic level are sales trend forecasting, operating plan development, budget forecasting, profit planning, and manpower planning.

Q2. List and briefly describe the major types of systems in organizations.

Transaction processing systems, office systems, knowledge work systems, decision-support systems, management information systems, and executive support systems are the major types of systems in organizations. Transaction processing systems function at the operational level of the organization. Examples of transaction processing systems include order tracking, order processing, machine control, plant scheduling, compensation, and securities trading.

Knowledge work systems help create and integrate new knowledge within the organization. Examples of knowledge work systems include engineering workstations, managerial workstations, and graphics workstations. Office systems help increase data worker productivity and include word processing document imaging, and electronic calendars.

Management information systems provide managers with reports based primarily on data pulled from transaction processing systems, have an internal orientation, and have limited flexibility. Examples of management information systems include sales management, inventory control, and capital investment analysis. Decision-support systems function at the management level and provide analytical models and data analysis tools to provide support for semi structured and unstructured decision-making activities. Examples of decision-support systems include sales region analysis, cost analysis, and contract cost analysis.

Executive support systems function at the strategic level, support unstructured decision making, and use advanced graphics and communications. Examples of executive support systems include sales trend forecasting, budget forecasting, and personnel planning.

The systems form a level of systems, with all types either formatting or processing the information from a lower level. For instance, the office systems provide reports or presentations on the information or data in transaction processing systems.
Decision-support and executive support systems often use office systems in presenting information extracted from transaction processing systems and management information system. Management information systems depend on data from transaction processing systems.
Some systems, including knowledge work systems, decision-support systems, and executive support systems may use external information, such as stock market information and design information from suppliers.

Q3. What are the five types of TPS in business organizations? What functions do they perform? Give examples of each.

The five types of transaction processing systems include

1. Sales/marketing systems,
2. Manufacturing/production systems,
3. Finance/accounting systems,
4. Human resources systems, and
5. Other types.

1. Sales/marketing systems provide sales management, market research, promotion, pricing, and new product functions. Examples include sales order information systems, market research systems, and sales commission systems.

2. Manufacturing/production systems provide scheduling, purchasing, shipping/receiving, engineering, and operations functions. Examples of manufacturing systems include machine control systems, purchase order systems, and quality control systems.

3. Finance/accounting systems provide budgeting, general ledger, billing, and cost accounting functions. Examples of finance/accounting systems include general ledger, accounts receivable/payable, and funds management systems.

4. Human resource systems provide personnel records, benefits, compensation, labor relations, training, and payroll functions. Examples include employee records, benefit systems, and career path systems.

5. Other types include admissions, grade records, course records, and alumni for a university. Examples of transaction processing systems for a university include a registration system, student transcript system, and an alumni benefactor system.

Q4. Describe the functions performed by knowledge work systems and office systems and some typical applications of each.

Knowledge work systems (KWS) aid knowledge work professionals to create new information and knowledge, and ensure that new knowledge and technical expertise are properly used in their corporations. Examples of knowledge workers (and some of their software) include engineers (graphics workstations), Wall Street traders, analysts, and arbitrageurs (financial and stock market workstations), research scientists, doctors, and designers (CAD systems).

Office systems provide support for data workers, including secretaries, accountants, filing clerks, and some managers. Software examples include word processing, desktop publishing, presentation programs, electronic calendars, and document imaging.

Q5. What are the characteristics of MIS? How do MIS differ from TPS and DSS?

MIS supports the management level by providing routine summary reports and exception reports for various purposes, including planning, controlling, and decision making. Examples include sales and profit per customer and per region, relocation summary and analysis, inventory control, capital investment analysis, and even a report on students who were here in the autumn but did not to return in the spring.

MIS differs from TPS in that MIS deals with summarized and compressed data from the TPS and sometimes analysis of that summarized data.

Decision-support systems provide material for analysis for the solution of semi-structured problems, which often are unique or rapidly changing. Typically, they provide the ability to do “what if” analysis. While MIS have an internal orientation, DSS will often use data from external sources, as well as data from TPS and MIS. DSS supports “right now” analysis rather than the long-term structured analysis of MIS. MIS are generally not flexible and provide little analytical capabilities. In contrast, DSS are designed for analytical purposes and are flexible.

Q6. What are the characteristics of DSS? How do they differ from those of ESS?

DSS provide sophisticated analytical models and data analysis tools to support semistructured and unstructured decision-making activities. DSS use data from TPS, MIS, and external sources, provide more analytical power than other systems, combine data, and are interactive. ESS support senior managers with unstructured strategic-level decision making. They may be less analytical than DSS with less use of models such as linear programming or forecasting. However, they often rely on external data and rely heavily on graphics.

Q7. Describe the relationship between TPS, office systems, KWS, MIS, DSS, and ESS.

The various types of systems in the organization exchange data with one another. TPS are a major source of data for other systems, especially MIS and DSS. TPS are operational-level systems that collect transaction data. Examples of these are payroll or order processing that track the flow of the daily routine transactions that are necessary to conduct business. TPS provide data that are required by office systems, KWS, MIS and DSS, although these systems may also use other data. KWS and office systems not only use data from TPS but also from MIS. DSS not only use data from TPS but also from KWS, office systems, and MIS. MIS rely heavily on data from TPS but also use data from KWS and office systems. ESS obtain most of their internal data from MIS and DSS.

Q8. List and describe the information systems serving each of the major functional areas of a business.

Sales and marketing information systems help the firm identify customers for the organization's products and services. These systems help develop, promote, sell, and provide ongoing customer support for the firm's products and services. Specific sales and marketing information systems include order processing, market analysis, pricing analysis, and sales trend forecasting.

Manufacturing and production information systems provide information for planning, product development, production or service scheduling, and controlling the flow of products and services. Specific manufacturing and production information systems include machine control, CAD, production planning, and facilities location.

Finance and accounting information systems track the organization's financial assets and fund flows. Financial and accounting systems include accounts receivable, portfolio analysis, budgeting, and profit planning.
Human resources information systems maintain employee records; track employee skills, job performance, and training; and support planning for employee compensation, including pensions and benefits, legal and regulatory requirements, and career development. Systems include training and development, career path, compensation analysis, and human resources planning.

Q9. What is a business process? Give two examples of processes for functional areas of the business and one example of a cross-functional process.

Business processes are the ways in which organizations coordinate and organize work activities, information, and knowledge to produce their valuable products or services. Business processes for the manufacturing and production area include product assembling, quality checking, and producing bills of materials. For the sales and marketing area, business processes include identifying customers, making customers aware of the product, and selling the product. For finance and accounting, business processes includes paying creditors, creating financial statements, and managing cash accounts. For human resources, business processes include hiring employees, evaluating job performance of employees, and enrolling employees in benefits plans.
The order fulfillment process is an example of a cross-functional process.

Q10. Why are organizations trying to integrate their business processes? What are the four key enterprise applications for organization-wide process integration?

An organization operates in an ever-increasing competitive, global environment. Operating in a global environment requires an organization to focus on the efficient execution of its processes, customer service, and speed to market. To accomplish these goals, the organization must exchange valuable information across different functions, levels, and business units. By integrating its processes, the organization can more efficiently exchange information among its functional areas, business units, suppliers, and customers. The four key enterprise applications are enterprise systems, supply chain management systems, customer relationship management systems, and knowledge management systems.