Business Systems

and
Applications
Subject Code: BCAMD201
 Features of Data
• Consists of raw facts or figures.
• Consists of unorganized and unprocessed facts.
• May be a simple statement.
• Can exist in any form, usable or not.
• Does not have any significance unless
processed to derive information.
• Is obtained from experiments or surveys.
 Features of Data
• Is used as a basis for making calculations or
drawing conclusions.
• Can exist as numbers, text, images, sounds, and
so on.
• An organization, sometimes, has to decide on
the nature and volume of data that is required for
deriving information.
 Features of Information
• Consists of processed data.
• May be the collected facts and data about a
particular subject.
• May be collected data, organized and presented in a
systematic fashion, to understand the underlying
meaning.
• Embodies the understanding of certain
relationships, possibly cause and effect.
 Features of Knowledge
• Comprises human understanding of a subject matter
that has been acquired through proper study
and experience.
• Is based on learning, thinking, and proper
understanding of the problem area.
• Makes the information more usable.
• Is a deterministic process
 Features of Knowledge
• Represents a pattern that connects the pieces of
information together.
• Provides a high level of predictability to explain what
happened in the past and what will happen next.
• Comprises all the data and information learned through
experience or study.
• Helps people draw meaningful conclusions. For example,
how to market the product, so that it sells more.
 DATA, INFORMATION AND
KNOWLEDGE- CONNECTION
 Characteristics of Information
CHARACTERISTIC UTILITY
Relevance Information must pertain to the problem at hand. It
should be applicable in that context

Complete Partial information is worse than no information

Accurate Erroneous information may result in wrong decisions

Current The information used must be recent and the latest.

Economical The cost of obtaining information should not be so

high that it cannot be justified
 BASIC PYRAMID MODEL OF IS

Knowledge Management System (KMS) HIGHEST

Decision support system (DSS)
Management information system (MIS)
Transaction processing system (TPS) LOWEST
Small businesses can have just three levels

Decision support system (DSS)

Management information system (MIS)

Transaction processing system (TPS)

 Large businesses with extra two levels

Large organizations can have two additional information

systems, namely office:

Office Automation/Information System

(OAS/OIS)
Executive Information System (EIS)
Pyramid model of information systems
SYSTEM DECISION LEVEL OF WHO
TYPE TYPE DECISION DOES? EXAMPLES

TPS UNSTRUCTURED OPERATIONAL Employees

throughout the
How often should I
communicate with
organization my new coworkers?
What should I say to
customers about our
new product?
How will I balance my
new work demands?

MIS SEMI-STRUCTURED MANAGERIAL Managers What should we do to

help facilitate
employees from the
two companies
working together?

DSS SEMI-STRUCTURED MANAGERIAL Managers How should we

market the new
product line?
Who should be let go
when we downsize?

KMS STRUCTURED STRATEGIC Top Management

Teams, CEOs, and
Should we merge
with another
Boards of Directors company?
DECISION TYPES
 DECISION TYPES

- UNSTRUCTURED

- SEMI - STRUCTURED

- STRUCTURED
 UNSTRUCTURED

An unstructured decision or non programmed decision involves a lot of unknowns.

They are generally based on criteria that are not well-defined, and information is
more likely to be ambiguous or incomplete. The decision maker may need to
exercise some thoughtful judgment and creative thinking to reach a good solution.
An information system can support these types of decisions by providing the
decision makers with information gathering tools and collaborative capabilities. An
example of an unstructured decision might be dealing with of setting policy for the
implementation of a new technology.
SYSTEM TYPES
 SEMI-STRUCTURED

A semi-structured decision is one in which most of the factors needed for making
the decision are known but human experience and other outside factors may still
impact the decision. A good example of a semi-structured decision is the hiring
process. Part of the decision is structured (years of experience, education, etc.) and
part of the decision is based on human experience (for example: social skills,
problem solving skills etc.) Take a look at how companies are trying to
program this decision and use algorithms. Semi-structured and unstructured
decisions are more challenging and systems may not be able to assist in the
process fully. However, advances in artificial intelligence are helping to change this.
 STRUCTURED

A structured decision is one that is made quite often, and one in which the decision
is based directly on the inputs. With structured decisions, once you know the
necessary information you also know the decision that needs to be made. For
example, inventory reorder levels can be structured decisions. Once your inventory
of widgets gets below a specific range, there is a need to order more. Processes like
this, based on structured decisions, are good candidates for automation. They can
also be referred to as programmed decisions.
Office Information System or Office Automation System
● Minimizing the manual work required to execute routine activities.
● Complete elimination of human and manual error.
● Reduced task completion processing time, resources and cost.
● Gaining a better understanding of process performance metrics.
● Optimized internal communication and better employee satisfaction
● Based on forecasted data, management can decide the best
outcome plan for business.
● Increased brand value, productivity and sales.
● Increased customer base, profit and less mental stress for
employees.
● Although it is meant to be used by clerks and officers working at the
lower level of the pyramid, all levels of users avail some benefit from
the OAS.
Office Information System or Office Automation System
 Transaction Processing System (TPS)

• Record information regarding a student during his registration,

an order placed by the customer,
payment details of a client, and the like.
• Confirm an action or send a response to inquiries, issue receipts
of payments, send a thank-you mail to customers, and so on.
• Collect customers’ feedback.
• Generate employees’ paycheck.
• Add, update, and delete existing data.
 Management Information System (MIS)

For better integration with business activities, MIS is integrated with

TPS, so that MIS can generate reports using the data collected by
TPS.
For example, while TPS records the daily sales, updates the
customer’s account balance, and makes a deduction from inventory.
MIS can use this information to produce reports that recap daily
sales activities, list customers with past due account balances
Identify slow or fast-selling products, and highlight inventory items
that need reordering.
CLASSIFICATION OF THE MIS REPORTS
CONTD…

Detailed report : This lists transaction processing activities.

For example, a detailed order report enlists all transactions
that involve ordering of items.
Summary report : This aggregates data so that managers
can get a quick overview of the business [Link]
synopsizes large amounts of information that contains
totals, tables, or graphs. For example, an inventory
summary report summarizes the items and the number of
units available.
CONTD….

Exception report :This filters data to identify information that is

beyond a normal condition (also called exception condition) and
notify business managers, so that corrective measures can be
instantly taken.
For example, an inventory exception report notifies the
purchasing department of items whose stock is less than the
specified normal stock. These items must be reordered at the
earliest. Exception reports enable managers to save their time, as
they no longer have to go through the detailed report to identify
exceptional conditions.
 Decision Support System (DSS)

• Refers to systems which support the process of decision-

making dealing with unstructured problems
• May be defined as the “what-if” approach that assists
management in formulating policies and projecting the likely
consequences of decisions
• Considered as an extension of MIS
• An effective blend of human intelligence, information
technology and software • Provides strategic information
COMPARISON BETWEEN MIS
AND DSS
 EXECUTIVE INFORMATION SYSTEM(EIS)

● EIS is also known as Executive Support System (ESS)

● EIS is a Computer-based-information system that serves the
information needs of top executives.
● EIS enables users to extract summary data and model complex
problems without the need to learn query languages statistical
formulas or high computing skills.
● EIS provides rapid access to timely information and direct
access to management reports.
● EIS can access both internal and external data.
● EIS provides extensive online analysis tool like trend analysis,
market conditions etc.
● EIS can easily be given as a DSS support for decision making
EIS
 KNOWLEDGE MANAGEMENT SYSTEM (KMS)
Tacit knowledge-This is knowledge coming from experience and typically requires a lot of context
and practice to acquire. t. Tacit knowledge is hard to gather because it is often specific and
requires individual testing. Start by getting specialists or senior members of your team together
to disseminate complex ideas and use that to build larger training content

Explicit knowledge -This is the knowledge that needs to be documented and is usually easy to
turn into an article. It is a description about, or a set of steps towards, achieving something.
Examples include clothing measurements and fabric information or where to change your login
information on a software application. Gather explicit knowledge through fact-finding with your
subject matter experts.

Implicit knowledge-This is information customers need to infer from explicit knowledge. It

requires customers to interpret existing pieces of explicit knowledge as described above, or
general knowledge to create desired outcomes. For example, how to combine software features to
achieve a business need or knowing a certain material is waterproof. Gather implicit knowledge
by documenting your customers' use cases and then explain how to combine other knowledge to
achieve them.
KNOWLEDGE MANAGEMENT SYSTEM (KMS)
 REQUIREMENTS OF KMS
Experiences : It collects information retrieved from people, who have already tackled a
problem and found a solution. Therefore, KMS stores information about successful
strategies, and also the best practices to solve a particular problem.
Expertise location : It stores a network map that informs the users about where to locate
for an expert or expert information.
Communities of practice : t enables groups of individuals to discuss their problems,
opportunities, lessons learned, and other information gained from users.
Feedback : An organization can collect feedback from customers and employees and
share it with their research and development (R&D) departments, so that an integrated
approach can be taken to understand the shared information and produce better
products and services.
Share project files : An employee team can work collaboratively on a project. They can
share their files and information to allow everyone in the team to upload and comment on
the work performed by others
What is the difference between a knowledge base and a
knowledge management system? *************
Knowledge management systems serve as a single source of truth for both
external and internal parties and enable organizations to segment information
based on different user groups.
Knowledge bases are self-serve platforms where customers can find
information.
A KMS helps you store and deliver information, streamline the capture,
categorization, and consumption of knowledge, and improve the overall
efficiency of the organization.
Following the support agent example from earlier:
A knowledge base allows the agent to browse through existing
documentation for a solution or direct the customer to the right document so
she can solve the problem herself.
A knowledge management system, on the other hand, requires a more
strategic approach to managing institutional knowledge.
 DO IT YOURSELF

DO LEARN BY YOURSELF THE

ADVANTAGE AND DISADVANTAGES
OF

TPS,MIS,DSS,KMS
EXTRAS….
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