Information Technology for Managers
- Four Types of Management Information Systems that are commonly used by business enterprise
- Executive Information System
- Expert System
- Decision support system
- Transaction Process system
Figure: 4 Types of MIS
An EIS is a customized information system used to assist high-level decision-making. An EIS does not only apply to the CEO, but to a senior management or manager who makes strategic choices to enhance the organization’s long-term success. EIS also called executive support systems or ESS.
Management is responsible for a range of responsibilities in the company, including creating a comprehensive vision, strategic planning, strategic organization and personnel management, strategic control and crisis management. The purpose of an EIS is to assist these different activities (Valacich, 2015).
EIS highlights graphical displays and user interfaces that are simple to use. They provide excellent reporting and downgrade skills. In general, EIS is a business wide DSS that helps senior executives evaluate, compare and point patterns in key variables so that performance monitoring and opportunities and issues may be identified. The EIS is converging on the market with data warehousing technologies.
EIS has lost popularity for business information (with the sub areas of reporting, analytics, and digital dashboards).
- Expert System
An expert system is the highest level of automation for the management office that enables communication and handling of documents. Decision support systems assist the resolution of problems by enabling data and modification of the model. Expert systems go beyond this type of traditional manipulation, since professionals may “train” computers about their areas, so that fewer expert decision-makers can further promote the system in the decision-making process.
Expert systems are one of the most advanced facts in IT. That’s to say that they assist individuals in some of the trickiest and least-understood activities for managing human information, such as decision-making, problem solving, diagnosis and learning. We accomplish it by keeping a lot of factual information about a topic and the logic used by human specialists in this area (Stair, 2015).
Decision support systems (DSS) can help the management level of the business. DSS helps managers to make distinctive, rapidly changing and unparalleled decisions. They address problems when the procedure cannot be fully pre-determined. While the DSS utilizes internal TPS and EIS information, information is typically generated from external sources, such as inventory prices or competing product pricing.
Clearly, DSS has more analytical capability by design than other systems. They use a variety of data analysis methods or compress large amounts of data into a form for decisionmakers to assess. The purpose of the DSS is to allow users to interact with them directly; they are easy-to-use systems. The DSS is interactive, and the user may change his or her assumptions, ask more questions and input new information.
The trip estimate system for a large US subsidiary for metals, which transports the bulk coal, oil, gold, and finished cargo, for the most part, is an intriguing and small, but powerful DSS. The company has many boats, charter and offers on the open market to carry general goods. The trip information is estimated using a travel estimating system. Financial calculations should incorporate ship/time expenses (fuel, labor, capital), freight and port charges for various cargo types. Many of the factors involve technical characteristics such as ship freight capacity, speeds, port distance, fuel and water usage and pricing patterns (location of cargo for different ports) (Rainer, 2015).
- Transaction Process system
Transaction processing (TPS) systems are the main corporate systems supporting the operational level of the business. A transaction processing system is a computerized system that routine transactions are conducted and recorded every day. Examples include placing orders, reservation systems, payroll, personal data upkeep and transport.
At operational level tasks, resources, and targets are defined and well structured. An inferior supervisor, for example, chooses to grant the customer credit on the basis of stated criteria. All we have to do is determine whether the customer complies.
A payroll TPS is the typical technique used by most businesses for accounting processing. A payroll system monitors employee money. The master file consists of separate data elements (e.g., name, address, or employee number). The system will enter data and update data components. In order to generate interest reports and to provide pay controls to personnel, the master file components are combined in several respects. These GSTs may generate additional components of current data. (Laudon, 2015).
- Main Features of AIS to assist the management
Today, accountants and other financial specialists utilize a variety of AISs. AIS should generally offer three main features:
- A method through which data from the operations and transactions of the organization is effectively collected and stored, including:
- Transaction data capturing.
- The recording, in the sequence chronologically required, of such data in appropriate systems, platforms or documents; and
- Type-based sorting of material uploaded from newspapers into books, according to the requirements of the organization.
- A decision-making support tool:
AIS should be able to display information as it is accessible in manual systems.
- An internal control management system:
The AIS should supply the system with accurate information. The AIS should be in a position to oversee reporting processes established by management to ensure that business operations are consistent with management targets and are accomplished quickly and effectively (Laudon, 2015).
- Roles of Accountants as designers, implementers, auditors as well as users
Accountants play the following roles in AIS, the industry they are into does not matter. What is important is the capacity of the accountants to provide when they are asked. Here it is:
Based on the architecture of an information system, accountants are important catalysts. They are the most appropriate and equipped experts in data measurement to build the information system. Insiders in every aspect of life are usually seen to be superior instruments of growth. This design role of AIS involves the design of the information management accounting system for decision-making aiding.
Accountants’ job is to make sure that the AIS is designed. Procedures are not enough, implementation and enforcement is extremely essential. While the accountant participates in the AIS installation process, the implementation issue may be detected, which non-accountants find difficult to communicate with the system designers.
Accountants audit the previously acknowledged AIS in order to guarantee effective follow-up to the measures allegedly taken. It is important to note that the purpose of auditors is not to hire thieves into a system; instead, the auditors should watch the process whether the rules they claim to be followed are backed up by documents, which cannot be documented.
Yes, accountants are AIS users, this is natural because they are the first ones to follow by example. Again, members of junior accountants who are not authorized to take over the creation of an accounting system simply perform the function of accounting information system users (Stair, 2015).
Reasons why Mathematical model is useful
For a variety of reasons, mathematical modelling is helpful. However, they are specially used to perform, are:
- To make understanding easier: To make a new system easier to understand, a basic model may be provided. Once this is done, the system is more sophisticated to represent the system in greater detail.
- To forecast results: Managers utilize excellent judgement and intuition, supported by solid decision-making knowledge. Mathematical models may quickly and correctly produce predictions for assessment of the potential result (output).
Different Categories of Mathematical model
Mathematic modelling as a field has to some degree parallels with topics in the arts and social sciences. It should be mentioned that in the field of mathematical modelling, there are no hard and fast rules. Overlaps and integration with other models may result in different models being produced. However, mathematical models may be classified into the following groups (Laudon, 2015), based on the applications used:
- Static Model: This model deals solely with a specific timespan and is not time sensitive. Examples: organizational structure and ratings for customer satisfaction between July and December 2016.
- Dynamics Model: It is a model that may represent the behavior of an object over a given length of time (what is modelled after). The model thus varies according to the variable (s) that influences its conduct. Examples: downtown traffic and weather patterns.
- Probabilistic Model: This model explains how all potential simulation results are distributed and how likely they are to happen. Example: “What will the football consumers look like when a new wing is opened?
- Deterministic Model: When sufficient inputs are provided, this kind of model produces one answer. Example: “How much do we have to sell to make a profit?
- Optimizing Model: This is a model in which the most appropriate solution is chosen from the probabilistic model.
- Suboptimizing Model: This approach, also known as the pleasing model, leaves the user (manager) with the job of generating the optimal results and, as such, makes no choices whatsoever.
Functions of an ES
The ES has the following functions in general:
- Interactivity: An ES should be an interactive, computer-based tool that enables users to request additional information and, if required, be requested or prompted by the system for problems to be resolved.
- Heuristics: An ES should utilize facts and divinations to solve an issue. In this procedure, the system approximates circumstances that either do not dispose of the information or take too long for it to be found. This allows the system to offer a solution even if it does not have full or correct data, but in an acceptable time period.
- Simulation: An ES’s response should be reliable or reliable enough for the user to interpret it as a computer simulation or a computerized expert representation(Laudon, 2015).
ES used areas
- Healthcare: We can make the data base and expert knowledge available to the patient to provide them with a specific treatment, using their previous medical record and making decisions based on it, and how and which decisions will affect the patient’ s ability to recover from the disease in a quick and best manner.
- Human Resources Management: We may use the expert system to match the staff with a particular job based on the abilities and qualifications of each post for which a requisite database is established by the expert system, and we can identify the best potential position for staff.
- Production: It allows us to utilize a system of experts in determining the rate of production and the item to be produced on the basis of their market demand and to improve product productivity and quality. We may predetermine or anticipate future demand using the expert system and be prepared for it.
- Accounting: In the audits, internal evaluation of quality and controls, we may utilize the expert system. it utilizes expert knowledge and expert knowledge by numerous human experts to assist and enhance the accounting quality and time reduction of its accounts (Stair, 2015).
Example of ES
ES is heuristically planned or scheduled to resolve issues. It would combine facts with heuristics-acquired knowledge to provide a result similar to the advice of an expert. The advent of the ES should lead to interesting applications in which systems are capable of interacting and answering human-like queries. For example, by asking questions or providing suggestions relevant to a given scenario, the ES might seek more information. Alternatively, the system might advise something that cannot be distinguished from the experts in the area.
An early example is Mycin, which was examined in 1970 at Stanford University in a medical diagnostic application. After a series of medical inputs, Mycin was utilized for identifying infectious bacteria and recommending antibiotics tailored for the body weight of the patient with AI. While the system was never really used owing to the computer systems’ limitations at that time, Mycin provided the foundations for the creation of ES and is considered the forerunner of ES. ES may be used in a number of areas beyond the medical profession. Even if your computer or your program develops a problem, the troubleshooting dialogue box appears on the screen to assist you with fixing the issue through a series of questions and clickable choices. You might use or encounter a rudimentary ES form (Laudon, 2015).
Typical Features available in an EIS
Some typical features in an EIS (Laudon, 2015) are described in the following:
- Available Databases: An EIS normally uses information from all the organization’s internal databases. It covers information on sellers, manufacturing, clients and associated financial information. EIS would also have access to externally accessible databases, especially those which offer managers with information linked to industry and, if needed, business news. In order to be relevant, EIS should be able to filter huge quantities of external data. The Dow Jones News Retrieval, for example, enables its members to select what their preferences are based on. There are other alternate ways to scan and examine documents before to the entry in the EIS, such as a specialized team of specialists from the public service.
- Multidimensional Databases: The EIS is made more effective by databases that may be organized and presented in different ways through multidimensional perspectives. For example, a sales database may offer information provided by customers, shipping regions or product segments in terms of groupages or categories. The databases below directly affect the kind and type of queries the EIS may perform. EIS must be built to operate on many operating systems and/or devices, such as personal computers, iPads and smartphones in the current corporate environment. Data from database systems that vary in technology or platform should be able to be recovered from various devices. This is due of the constant evolution of information systems nowadays. It has changed from a single supplier and closed systems to opening up various suppliers’ sources.
- Timeliness: The EIS is essential in terms of being able to show updated information in real-time. Indeed, up to the last minute, the finest systems will give information. However, this information needs time sensitivity and may vary case by instance. In many cases, it is necessary for most companies to extract data from a host database and then download it to a specific EIS database through an overnight batch platform. It should also be mentioned that it is essential that EIS provides online and interactive updates about the information while operational managers utilize real-time statistics. This would enable managers to utilize the information to intervene in the process as necessary.
- Soft Information: Soft information refers to imprecise information like estimations and approximations, and non-digit words such as “generally within expectations,” “fairly optimistic age,” or “a little low age.” There is a tendency to report any good or adverse consequences using non-financial or soft information in EIS. EIS also receives more soft input, which results in a favorable impression of the system’s worth in general. Most ISD developers are driven by this tendency to include soft information, including projections, predictions, estimations, and conjecture.
- Graphics: The easy-to-use interfaces were a key factor in early EIS success. With the inclusion of visuals, it was an enormous boost to improving text-based systems. Graphical and interface contexts are much more prevalent nowadays. The majority of EISs use a particular color scheme to show the status of certain data. It is quite usual to utilize visual displays and menus. You will see red to show hazards or warnings, whereas green is usually used to define acceptance. A consistent color palette can effectively dissipate user regions of concern.
- Language Natural: EIS usually uses natural language to communicate with the user, known as the fourth-generation language. In order to request or manipulate information, the user does not need to know or recall complicated or specialized computer instructions. Technical personnel also use natural language tools to input controls into the system to create executives’ mathematical or statistical functions.
- Communication: Easy-to-use The EIS message allows managers to interact with others in the system. The EIS interface allows managers to communicate text or visual communications rapidly and effectively by planning and strategizing. Some EIS may incorporate their messaging functions using frequently used external messaging instruments, such as e-mail and mobile applications. In addition, modern EIS-packed software provides workgroup-based platforms which allow executives to communicate directly with employees involved in group initiatives. The latest EIS envisages the use of voice and video communications via its interfaces.
- Drill Down: This is an analytical instrument that allows managers to start from a broad point of view or macro before zooming into the specifics. In figurative terms, it drills into the data levels to get more detailed analysis or to find the underlying information. Usual GUI or integration with common program such as a tablet will help to simplify the EIS analysis.
- Decision Support analysis: The EIS is capable of delivering this task for an analysis more complex than that pertaining to ordinary tablets by offering tools for time series analysis, linear programming optimization analysis, and statistical analysis at higher levels. Increasingly, EIS research is working towards making systems available for the discovery of information in their data sets. The boundary between EIS and expert systems is thus possibly blurring.
- Executive Information System Shells: Usually, EIS comes nowadays with a “shell claw.” It is a simpler tool for managers to create their own user interface, for example, for GUI components, window looks, user prompts, input boxes, and to define their own codes and instructions, menu or screen designs, and report formats. It is known as a shell because it is the external user layer which makes the EIS simple to use, while really concealing the true complexity of the system, to avoid becoming overwhelming(Rainer, 2015).