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
 P-2
TYPES AND
MODEL OF
INFORMATION
SYSTEM
 BASIC PYRAMID MODEL OF IS

Knowledge Management System (KMS) HIGHEST

Decision support system (DSS)
Management information system (MIS) MIDDLE
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
 DECISION TYPES

- UNSTRUCTURED

- SEMI - STRUCTURED

- STRUCTURED
SYSTEM TYPE DECISION TYPE LEVEL OF DECISION WHO DOES? EXAMPLES

TPS STRUCTURED OPERATIONAL Employees throughout How often should I

the organization communicate with 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 UNSTRUCTURED STRATEGIC Top Management Teams, Should we merge with another
CEOs, and Boards of company?
Directors Should we pursue a new
product line?
Should we downsize our
organization?
DECISION TYPES
 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.
 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.
SYSTEM TYPES
Office Information System or Office Automation
System (OAS/OIS)
● 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 activity.It 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. 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
ALSO READ :
(Information Technology and its Applications in Business by Reema
Thareja)
EXTRAS….
https://www.srcc.edu/sites/default/files/TYPES_OF_INFORMATION_SYSTE
MS.pdf
https://ecampusontario.pressbooks.pub/informationsystemscdn/chapter/1
2-4-decision-types/
https://www.guru99.com/mis-types-information-system.html
https://ecampusontario.pressbooks.pub/informationsystemscdn/chapter/1
2-4-decision-types/
https://www.includehelp.com/MIS/executive-information-system-eis.aspx
https://www.freshworks.com/freshdesk/knowledge-management-system/
https://monday.com/blog/project-management/knowledge-management-s
ystem/