Strategic Information Systems

5 STRATEGIC INFORMATION SYSTEMS

Information systems can be implemented to support specific function or multiple functions performed in an organization.  When changes are in process, ensure you improve your services to the greater services. A system that supports typical functions of a department can be referred to as a functional system. Such a function has the following features:

·         It is made up of smaller information systems that support specific activities performed by each functional area

·         Specific applications in each functional area can be integrated or can be completely independent

·         These systems can interface with each other to form an organization wide information system

·         These systems can interact with the environment to form a collaborative system that integrates direct input from the environment e.g. systems that support customers and render data requests in order to enhance the organization’s responses

·         Functional information system applications support all the levels of an organizations’ activities i.e. the operational knowledge level, managerial level and the strategic level

An example of a functional information system can have the following at the strategic level, it can be composed of applications to perform tasks such as operation strategies capacity planning, facility planning and location, robotics and long term focusing.  At the managerial level the system can be made up of applications such as inventory management, maternal requirement planning, manufacturing resource planning, total quality management, computer aided manufacturing and short term forecasting.  At knowledge level, applications such as design and engineering, marketing and financial analysis, human resources management, manufacturing standards, quality control standards, time and motion standard, customer and vendor analysis can be implemented.  At the operational level, applications such as materials management, cost analysis, quality control, short term scheduling can be implemented.

5.1 TRANSACTION PROCESSING SYSTEM (TPS)

They work at the operational level where tasks, resources and goals are predefined and are highly structured.  They are the basic business systems and are often central to a business such that transaction processing system and are often central to a business such that TPS failure can lead to loss of data for other organizational levels.

A TPS can be defined as a computerized system that performs and records the daily routine transaction necessary to conduct business e.g. hotel reservation system, payroll, employee record keeping, sales order entry, airline booking system, etc.  Managers use TPS to monitor the status of internal operations and the firm’s relations with external environment.

The objective of TPS is to provide all information so that the business can run efficiently

·         TPS provide timely documents and reports

·         They increase the competitive advantage of an organization

·         TPS provide necessary data for tactical or strategic system e.g. MIS and DSS

·         TPS are the backbone of any organization and they monitor, collect, store, process and

·         disseminate information for all routine significant business applications

Functional information systems begin by the computerization of routine transaction processes.  The objective of transaction processing systems is to provide all information by law or organization policies to keep the business running efficiently.  Specifically the TPS provides timely documents and reports.  They increase the competitive advantage of an organization and provide necessary data for tactical or strategic systems such as MIS and DSS.  They also assure accuracy of data and information besides safeguarding assets and security of information.  These systems are the backbones of any organization.  They monitor, collect, store process and disseminate information for all routine significant business applications.

The major characteristics include:

·         Process large amounts of data

·         The sources of data that they process are internal and the output is mainly meant for internal audience

·         They process information regularly can be on hourly basis, weekly basis

·         Large storage capacity of data

·         Process data at high speed

·         Always process historical data

·         The input and output data are always structured

·         High level of details is always observed to ensure that input processing and output conforms to the existing structure

·         They have a low computation complexity i.e. involve simple mathematical and statistical operation

·         High level of accuracy data integrity and security is needed

·         High reliability is needed

·         They always support inquiry to the files and databases of the system online and ring time basis

TPS DATA PROCESSING

The Transaction processing systems processes data into two different ways:

BATCH PROCESSING

Involves collecting transactions as they occur, placing them in groups or batches and then repairing and processing batches periodically i.e. at the end of every day or when so many transactions have been aborted

ONLINE PROCESSING

It involves processing data as soon as a transaction occurs.  The system updates the database as soon as a transaction is done and this update is done on real time. Transaction processing systems can be Internet based where they can involve an organization dealing with its customers and vendors through the support of telecommunications.  This has leave to innovations such as Online Transaction Processing (OLTP). This system allow the user to capture data wherever it occurs at a faster rate and in a more economic order than if the user of the system was to feel physical forms or physical documents.

The system is also interactive and can allow the transfer of data in any form including multimedia, graphics and video.  Can also support fast response time and storage of large databases in real-time and at low costs.  However, it requires a client server system to implement. Additional benefits that an organization can have by using such an Internet based transaction system can include cost effectiveness, fast response time, effective storage of huge graphics and video databases, flexibility to accommodate unpredictable growth.

            -           Timely search and analysis of large databases

-           Interactive automatic billing that can enable a company to offer services to anyone not just subscribers

-           High data through puts to support enquiries regarding massive file size

-           Flexibility to accommodate unpredictable growth in processing demand and multimedia data such as pictures and sound are handled efficiently and effectively

·         Decision making process fall along a continuum that range from highly structured referred to as programmed to highly unstructured (non programmed) decisions

·         Structure process refer to routine and repetitive problems for which standard solutions exist in structured decisions all phases i.e. intelligence, design and choice are structured

·         Unstructured processes are fuzzy complex problems for which there are not cut and dried solutions.  None of the three phases; intelligence, design or choice is programmed.  Usually human intuition is usually the basis for decision-making.  Typical unstructured problems including planning new services to be offered, hiring an executive or choosing a set of research and development project for next year

·         In a structured problem, all phases are structured and the procedures for obtaining the best solution are known.  Whether the solution means finding an appropriate inventory level or deciding on an optimal investment strategy, the solutions’ criteria are clearly defined.  They are frequently cost minimization or profit minimization.  The manager can use computerized clerical assistance, data processing or management science models to support structured decisions.

·         Semi structured problem, in which only some of the phases are structured require a combination of standard solution procedures and individual judgment. E.g. trading bonds, setting marketing budgets for consumer products and performing capital acquisition analysis.  Here DSS is suitable.  It can improve the quality of information on which decision is based by providing range of alternatives.

·         Types of control are all managerial activities

-          Strategic planning: the long range goals and policies for resource allocation

-          Management control: the acquisition and efficient utilization of resources in the accomplishment of organization goals

-          Operational control: the efficient and effective execution of specific tasks