This document provides an introduction to information systems and management information systems (MIS). It defines key concepts such as data, information, and MIS. It then describes various types of information systems that support decision making, transaction processing, and executive functions. The document also discusses how MIS is used in different functional areas like production, human resources, finance, and marketing. It provides examples of the types of reports and analysis generated by MIS in each of these areas.

1. INTRODUCTION TO INFORMATION SYSTEMS AND MIS
 Concepts of Data and Information
 Attributes of Information
 Introduction to MIS
 Decision Support System (DSS)
 Transaction Processing System (TPS)
 Executive Information System (EIS)
 Office Automation System (OAS)
 MIS in functional areas – Production, HR, Finance and
Marketing
 MIS in Web-environment
 MIS and E-Business
- Preeti Sontakke

2. INTRODUCTION TO IS & MIS
 Information System - Integration of 3 Elements
1. Procedure
2. Resources
3. People
It gathers the Information, Transforms and Distributes that
information to the organisation.
Components of Information System –
Example: Payroll Processing
Input of Data
Resources
Processing
Data into
Information
Output
Information
Products

3. NEED FOR INFORMATION SYSTEM
 Meeting Global Challenges.
 Capturing Opportunities in the Market Place.
 Supporting Corporate Strategy.
 Linking Department with different functions.
 Enhancing workers productivity.
 Increase quality of Goods and Services.

4. TYPES OF INFORMATION SYSTEM
InformationSystem
1. Management Information System
2. Decision Support System
3. Transaction Processing System
4. Executive / Expert Information System
5. Office Automation System
6. Information System Security

5. MANAGEMENT INFORMATION SYSTEM (MIS)
Definitions:
• Is a planned system of Collecting, Processing, Storing &
Disseminating data in the form of information needed to
carry out the functions of Management.
• MIS refers to the processing of information through
computers and other intelligent devices to Manage and
Support Managerial Decisions within an Organisation.
• MIS is a system for Producing and Delivering Timely
information that will support Management in
accomplishing its specific task in an Enterprise.

6. MIS: 3 BASIC LEVELS
 MIS primarily serves the functions of controlling and
decision making at the Managerial level.
 MIS has three basic levels:
 Operational
 Middle Management
 Top Management
Where the information is passed from bottom to top.

7. FUNCTIONS OF MIS
• First function of MIS is to
determine the information
needed to make decisions
and to organise it into a
database.
• Information available are:
personnel records,
accounting data, sales data
etc.
• A “Data Base” is an
Integrated Collection of data
stored in one place.
• Data can be obtain from
External and Internal
Sources.
Collect data
• Data generally stored on
Magnetic Tape or hard disk.
• Data must be stored and
Processed in a form useful to
Managers.
Store &
Process Data
• Last step is to
Present the
Information to
Managers for their
use.
Present
Information to
Managers

8. CHARACTERISTICS OF MIS
 MIS is Management Oriented.
 Integrated System- (Men, Money, Material, Machines and Methods) are
the basic resources of management information.
 Avoids Redundancy in Data Storage - (It avoids unnecessary)
 Common data flow – (it acts as a master that holds the functional
subsystem together)
 Flexibility and Ease of Use – (Easy to operate, flexible enough to
accommodate new requirements)
 Subsystem Concept – (gives provision for breaking into various
subsystems based on the activity as well as the functions of the organisation)

9. ADVANTAGES & DISADVANTAGES OF MIS
 Facilitates Planning
 Minimises the information
Overload
 MIS encourage
decentralisation
 Brings Coordination
 Makes control easier
 Highly Sensitive, requires
constant Monitoring
 Budgeting of MIS is
extremely difficult
 Quality of output depends
on quality of input
 Cannot update itself
 Effectiveness change due
to frequent change in Top
management
 Takes into account only
Qualitative factors.

10. MIS IN FUNCTIONAL AREAS
Manufacturing / Production:
1. Resource planning
2. Execution System
3. Process Control
Human Resource MIS:
1. Requirement Forecasting
2. Training Need Analysis
3. Compensation Analysis
4. Performance Analysis etc.
Marketing MIS:
1. Customer relationship Management
2. Interactive Marketing
3. Sales Force Automation
4. Product, Place, Promotion, people
Management
Financial MIS:
1. Cash Management
2. Credit Management
3. Investment Management
4. Capital Budgeting
5. Financial Forecasting
Functional MIS

11. MIS IN HUMAN RESOURCE
 It is also called as HRIS i.e. Human Resource
Information System : refers to the systems and
processes at the intersection between HRM & IT.
 It deals with the flow of information about people
working in the organisation as well as about future
personnel needs.
 HRIS are the information systems that support HRM
activities such as Recruitment, Selection and Hiring,
Performance Appraisals, Training and Development,
Compensation etc.

12. RIGHT INFORMATION AT THE RIGHT TIME IN RIGHT
FORMAT WILL DECIDE THE MANAGEMENT’S HUMAN
RESOURCE DECISIONS.
Need for HRIS:
1. Large amount of data and information to be
processed.
2. Project based work environment.
3. Employee empowerment
4. Learning organisation
5. Paperless work
6. High performance Accuracy

13. SYSTEM & SUBSYSTEM OF HRIS
1. Staffing:
a) Personnel record keeping system
b) Employee skill inventory system
c) Forecasting personnel requirement system
2. Training & Development:
a) Training identification system
b) Performance appraisal Planning
3. Compensation:
a) Salary forecasting
b) Incentive Planning
4. Governmental reporting:
a) Statutory reports

14. DATA RESOURCES OF HRIS
 Personal Application Form
 Appointment letter
 Attendance and leave record
 Appraisal form
 Wage and salary agreement
 Record of sources of recruitment
Following output in terms of Reports:
1. Report on forecast on manpower requirement
2. Reports to government agencies like income tax office,
ESI authorities, PF report
3. Performance appraisal report
4. Report on T&D program conducted, their success and
failure.

15. ADVANTAGES & DISADVANTAGES OF HRIS
 Faster information
process
 High performance
accuracy
 Paperless
 Timesaving
 Improved planning &
program development
 Performance evaluation
and management
 Training and
development
 Recruitment and
selection
 Human error during Input
 Unavailability of HRIS
specialist
 Cost of hiring HRIS
specialist
 Cost of Application
 Level of Unemployment

16. MIS IN MARKETING
 Marketing Information System (MkIS) is a
computerised system that runs in association with
other functional information systems of the
Organisation.
 The main task of MkIS is to help the management
in solving problems associated with marketing of
the products of the firm.
 Main components – people, equipment's, methods
that are used in collecting, sorting, analysing,
evaluating and distributing error free and timely
information to marketing decision makers.

17. AIM OF MARKETING MANAGEMENT
 Identification of the need of customers
 Development of the product concept
 Product designing
 Product positioning in the market
 Appropriate pricing of the product
 Maintain proper channel of distribution
 Forecasting sales
 Evolving marketing strategies

18. MAIN STRUCTURE – 4 COMPONENTS
1. User interface: who will use the system and the interface
they need to effectively analyse & marketing information.
2. Application Software: these are the programs that
marketing decision makers use to collect, analyse and
manage data for the purpose of developing the information
necessary for marketing decisions.
3. Database Marketing: is a system in which marketing
data files are organised and stored.
4. System support: consists of a system managers who
manage and maintain the system assets including software
and hardware network, monitor its activities and ensure
with organisational policies.

19. Marketing
Environment
Markets
Channels
Competition
Political
Legal
Economy
Technology
Internal
Report
System
Marketing
Research
System
Marketing
Intelligence
System
Marketing
Models
Operational
Decisions
Control
Decisions
Strategic
Decisions
Marketing Decisions and Communications
Data Information

20. FEATURES OF MARKETING INFORMATION SYSTEM
 Continuous process
 Basic Objective – (to collect right information at the right time to
the right people to help them to take decisions)
 Computer based system – up to date and accurate
 Future oriented
 Used by all levels - top, middle and bottom
 Sources – collects information from both internal and
external sources
 Collects marketing information ( about competition,
consumer and marketing environment)
 Helps in decision making

21. ADVANTAGES OF MKIS
 Market Monitoring
 Strategy Development
 Facilitates Marketing Planning and Control
 Quick Supply of Information
 Quality of Decision Making
 Tapping of Business Opportunities
 Provides Marketing Intelligence
 Help managers to recognise change
 Integration of Information and Functional Integration
 Strategy Implementation
 Builds relationship within the organisation
 Convenient Storage

22. MIS IN FINANCE
 Financial management system is a type of business
software used to input, accumulate and analyse
financial and accounting data.
 It produces reports such as accounting reports, cash
flow statements and financial statements. The output
produced helps in making good financial management
decisions thus helping the managers run the firm
effectively.
 FIS are not only used by the executives but also used
by the people who make daily decisions based on the
financial matters. The reports of the transaction can be
streamlined with the help of financial results..

23. TOOLS OF FINANCIAL MANAGEMENT
 Break even Analysis – A company has achieved breakeven when its total
sales or revenues equal to its total expenses.
 Cost Analysis- Cost benefit analysis sometimes called cost analysis, is a
systematic approach to estimating the strength and weaknesses of alternatives.
It is used to determine options that provide the best.
 Cash flow Projection – A cash flow forecast is an estimate of the amount of
money you expect to flow in and out of your business and includes all your
projected income and expenses.
 Ratio Analysis - is used to evaluate various aspects of a company’s operating
and financial performance such as its efficiency, liquidity, profitability and solvency.
 Capital Budgeting –also known as investment appraisal. It is the process by
which company determines whether projects are worth pursuing. A project is worth
pursuing if it increases the value of company
 Management Accounting- is the process of identifying, measuring, analysing,
interpreting and communicating information for the pursuit of an organisation’s goals.

24. INPUTS OF FINANCIAL IS
 Financial management accepts various forms and
documents as Inputs. Taking into consideration the
needs of the various organisation, the forms and
documents are designed in a specific format.
 Inputs are:
a) Payments
b) Receipts
c) Data from stock exchange

25. APPLICATIONS OF FINANCIAL IS
 Accounting:
1. Sales
2. Purchase
3. Inventory
4. Fixed deposits
5. Shareholders fund
6. Income Tax
7. Salary / Wages
8. Budgets
9. Fixed Assets
 Decision Analysis
1. Cash flow analysis
2. Debtors analysis
3. Creditors analysis
4. Sources and uses of
funds
5. Budget analysis
6. Capital Budgeting

26. APPLICATIONS OF FIS
 Query:
1. Main account
2. Subsidiary account
3. Location of factory, branch and
4. Documents such as bills, credit notes, receipt
 Control:
1. Selecting optional source of financing
2. Revising specific activities to reduce the expenses
3. Relocating resources
4. Revising schedules, plans and priorities.

27. MIS IN PRODUCTION / MANUFACTURING
 The production of making finished goods from raw
materials is the prime concern of Production
management.
 Various activities involved in this are:
1. Production Scheduling (decides which goods are
produced in a time limit and what is the lot size).
2. Physical Act of Producing
3. Determining inventory level

28. AIM OF MANUFACTURING IS:
 To deploy computer technology to improve the
efficiency and process of the manufacturing IS.
 It also ensures the better quality products and
lowers the cost of manufacturing products.
 “Manufacturing IS is a complete set of tools for
managing the flow of manufacturing production
data throughout the enterprise”.
 This IS was designed to provide tool for both IT and
Operations personnel who would deliver services to
anyone in the Plant.

29. MANUFACTURING IS MODEL
Material
Equipment
Data
Management
IS Technology
Manufacturing
and Information
Processing
Final products
with better
quality and
lower costs
Input Process Output

30. FUNCTIONS OF MANUFACTURING IS
 It includes Tracking, Scheduling and Controlling
manufacturing processes.
 Full utilisation of manufacturing capacity.
 Minimal rejections
 Maximum uptime of plant and equipment (like
number of hours the machine is operating per
month and hours per day the machine is idle)
 Satisfying the delivery promises

31. INPUTS OF PRODUCTION IS
 Production Programme
 Production Schedule
 Process Planning Sheet
 Job Card
 Quality assurance rating form
 Material requirement
 Breakdown advice
 Material requisition
 Customer order

32. TYPES OF MANUFACTURING IS
 Automation Systems: it helps to speed up the manufacturing time
and reduce the cost of production.
 Logistics Systems: responsible for delivering the service at the right
time to the right customer.
 Material Requirement Planning: it helps the managers to take
various decisions like, “code of machines to use”, “code of items to
produce”, “code of shift”.
 Manufacturing Resource Planning: determine what resources will be
required to produce the product.
 Agile Manufacturing Environment: Competitive weapon and needs
of each customers are met.
 Enterprise Resource Planning: it is a software used to take care of
resources such as labour, money and raw materials. Which helps in
decision making for the managers.

33. MIS IN WEB – ENVIRONMENT
 Web – The web or World Wide Web (W3), is
basically a system of internet servers that support
specially formatted documents.
 The documents are formatted in mark up language
called HTML (HyperText Markup Language) that
supports link to other documents, as well as
graphics, audio and video files.
 By definition we can say – web means
interconnection of related links, information and
terms.

34. INTERNET:
 Network: it is defined as a group of two or more
computer systems linked together.
 Internet: When such sharing takes place at global level,
it is referred as internet.
 A global computer network providing a variety of
information and communication facilities, consisting of
interconnected networks using standardized
communication protocols (IP).
 Using “www” technology, internet constructs the
Information Systems, and this IS helps the organisation
to achieve the automation and standardization.

35. CHARACTERISTICS & FUNCTIONS OF INTERNET:
 Global Nature (www)
 Interactivity (E-mail)
 Long term Impact (information can be stored and
accessible when required)
 Multimedia (audio, video)
 File transfer protocol: is the tool used to copy files
from one computer to another.
 Internet Relay Chat(IRC) : is a service that allows
users to communicate in the real time by typing text
in a special window. (Facebook, twitter, WhatsApp)

36. WEB – ENABLED BUSINESS MANAGEMENT:
 In web environment, the business initiative is passed in the
hands of customer.
 Customer has access to information on sources of products
and services, their availability and price to pay.
 Traditional process of buying and selling has changed.
 Now the systems have become faster in response and
delivery.
 Due to internet and web technology the system scope has
wider applications.
 Web enabled system affects customer databases, vendor
dispatch schedules and bank balances simultaneously without
involvement of employees.

37. PRE-WEB & POST-WEB CONCEPT
System
Components
Pre – Web Post - Web
Inputs • Data from paper transactions.
• Error very high
• Transactions are processed
without waiting for
management process.
• Data from electronic
transactions.
• Error very low &
controlled
• Transaction is initiated
electronically.
Process • Human centric controls
• Mistaken due to isolated
information support and
mismatch among these sets.
• Check approvals built into
the system.
• No or less mistakes due
to information mismatch.
Output • Output of doubtful nature due
to low quality of information.
• Output of high precision
due to high quality of
information.
Feedback • Procedure is very slow • Fast procedure
Control • Based on human response • Control is build in the
process of application,
scope is very wide.

38. E-BUSINESS:
 Electronic business is popularly known as, e-business.
 When communication and information technologies are
used to support the various business activities then it is
known as e-business.
 E-Business includes any process that business
organisation conducts, business over a computer
mediated network.
 E-business consists of “E-Commerce”, “E-Marketing”,
and “E- Operations”.

39. E-COMMERCE, E-MARKETING & E-OPERATION
 E- Commerce: is the buying and selling of goods and
services, or transmitting of funds or data, over and
electronic network, primarily the internet.
 These business transactions occur either as B2B, B2C,
C2C & C2B.
 E-marketing: It is also known as digital marketing.
Internet marketing refers to the advertising & marketing
efforts that use web and email to drive direct sales via e-
commerce.
 E- operation: it refers to the administration of business
practices to create highest level of efficiency possible
with in an organisation.
 It is concerned with converting materials and labour into
goods & services as efficiently as possible to maximize
the profit of an organisation

40. MODELS OF E-BUSINESS
Business to Consumer: here
products & services are directly
sell to consumers
Business to Business: it
describes electronic
transactions between
businesses such as between
Manufacturer & wholesaler
Customer to Customer: it
facilitates the transaction of
products & services directly to other
customers using internet & web
technologies.
It entails lower cost to both buyer &
seller customers.
Example.. OLX
Consumer to Business: here
consumer sells products & services
to the businesses & organisation.
Here price & value for specific
products are created by individuals.
Ex. Customer review / feedback
Models of E-
Business

41. DECISION SUPPORT SYSTEM:
 DSS is a computer based information system that
supports business or organisational decision
making activities.
 DSS is a collection of integrated software
applications & hardware that form the backbone of
an organisations decision making process and help
to make decisions, which may be rapidly changing
and not easily specified in advance.

42. DECISION MAKING AS A COMPONENT OF
PROBLEM SOLVING
Intelligence
Design
Choice
Implementation
Monitoring

43. DSS COMPONENTS
 Inputs : Factors, Numbers and Characteristics to
analyse.
 User Knowledge & Expertise : Inputs requiring
manual analysis by the user.
 Outputs : Transformed data from which DSS
decisions are generated.
 Decisions : Results generated by the DSS based
on user criteria.

44. DSS REQUIREMENTS:
 Data Collection from Multiple sources (Sales data,
inventory data, supplier data, market research
data).
 Data formation & collation.
 A suitable database location and format builds for
decision support based reporting and analysis.
 Robust tools and applications to report, monitor and
analyse the data.

45. DSS OBJECTIVES
 Increase the effectiveness of managers decision
making process.
 Supports the manager in the decision making
process but does not replace it.
 Improves the directors effectiveness of decision
making.

46. DSS CHARACTERISTICS:
 Facilitation: DSS facilitates and supports specific decision
making activities.
 Interaction: it is computer based systems designed for
interactive, use by decision makers or staff who control the
sequence of interaction and the operation performed.
 Repeated Use: DSS are intended for repeated use. A specific
DSS may be used routinely or used as needed for ad hoc
decision support tasks.
 Identifiable: DSS is an independent systems that collect or
replicate data from other information sources.
 Task Oriented: It provides specific capabilities that support
one or more task related to decision making, including
intelligence & data analysis, identification & design of
alternatives.
 Decision Impact: DSS are intended to improve accuracy,
timeliness, quality and overall effectiveness of specific
decision or a set of related decisions.

47. (CONT….)
 Easy to Develop & Deploy: it delivers an interactive,
scalable platform for rapidly developing and deploying
projects. Multiple projects can be created within a single
shared metadata.
 Integrated Software: enables administrators and IT
professionals to develop data models, perform
sophisticated analysis, generate analytical reports and
delivers the report to end user via different channels.
(web, email, print)
 Flexibility: DSS features are flexible and can be altered
according to need providing a helping hand in the work
process.

48. DSS ADVANTAGES:
 Time Saving
 Enhance Effectiveness
 Improve interpersonal Communication
 Competitive advantage
 Cost reduction
 Increase decision makers satisfaction level
 Promote Learning
 Improve personal efficiency

49. DSS DISADVANTAGES:
 Monetary cost
 Overemphasize decision making
 Assumption of relevance
 Transfer of power
 Unanticipated effects
 False belief in objectivity
 Status reduction
 Information overload

50. GROUP DSS:
 An interactive computer based system to facilitate
the solution to a problem by a set of decision
makers working together as a group.
 Components:
1. Hardware – Conference facility, display boards,
audio visual aids, computer networking
equipment's etc.
2. Software – brainstorming tools, questionnaires,
idea organiser, setting priorities, stake holders
analysis & identification, group dictionaries.
3. People – Participants, facilitators etc.

51. FUNCTIONS OF GDSS APPLICATIONS:
 Predicting decision outcomes.
 Identifying factors and trends.
 Developing models of business processes.
 Computing optimum mixes.
 Facilitating group communication, collaboration, and team
work.
 Becoming familiar with a problem domain.
 Determining sensitivity of results to change in decision
variables.

52. EXECUTIVE INFORMATION SYSTEM (EIS /
ESS)
 It is a type of management information system intended to
facilitate and support the information & decision making
needs of senior executives by providing easy access to both
internal and external information to relevant to meeting
strategic goals of the organisation.
 The Role of ESS in organisation: As technology advances,
ESS are able to link data from various sources both from
external & internal to provide the amount and kind of
information executives find useful.
 They are commonly integrated with operational systems,
giving managers to drill down to find out further information
on a problem.

53. ESS COMPONENTS:
 Hardware: when talking about hardware of ESS
environment, we should focus on the part that meet
executives needs.
1. Input data entry devices. These devices allows the
executive to enter, verify and update data
immediately.
2. The central processing unit (CPU), vital part as it
controls the other computer system components.
3. Data Storage Files, the executive can use this part
to save useful business information, this part also
help the executive to search historical business
information easily.

54. CONTI….
 Software: choosing the appropriate software is vital
to design an effective EIS. Basic software includes
four components:
1. Text base software: the most common form of text
is documents.
2. Database: heterogeneous databases residing on
a range of vendor specific and open computer
platform to help executives access both the data
sources.
3. Graphic base: it can turn volume of text &
statistics into visual information for executives. Eg.
Bar charts
4. Model base: it contains routine & special
statistical, financial and other quantitative
analysis.

55. CONTI….
 Interface: An EIS needs to be efficient to retrieve
relevant data from decision makers, so the interface
is very important. Several types of interfaces can be
available to the EIS structure such as menu driven,
command language, scheduled reports etc.
 Telecommunication: as decentralising is
becoming the current trend in companies,
telecommunication will play a pivotal role in
networked information systems. Transmitting data
from one place to another has become crucial for a
reliable network.

56. BENEFITS / ADVANTAGES OF ESS
 Executives use the information along with their experience,
knowledge, education and understanding of the corporate
and the business environment as a whole to make decisions.
 Executives are more inclined to want summarised data rather
than detailed data. ESS relay on graphic presentation of
information because it is much quicker way for busy
executives to grasp summarised information.
1. It provides timely delivery of company summery
information.
2. Better understanding of information
3. It provides system for improvement in information tracking.
4. It offers efficiency to decision makers.

57. LIMITATIONS/ DISADVANTAGES OF ESS:
1. Functions are limited, cannot perform complex
calculations.
2. Hard to quantify benefits and to justify
implementation of an EIS.
3. Executives may encounter information overload.
4. System may become slow & hard to manage.
5. Small companies may encounter excessive cost
for implementation.
6. Insecure data.

58. OFFICE AUTOMATION SYSTEM(OAS):
Automation:
Refers to a method of using a wide range of computers &
machine aided task to help improve productivity & create
easier ways to do business.
Office Automation:
Refers to the varied computer machinery & software used
to digitally create, collect, store, manipulate and relay
office information needed for accomplishing basic task.
Raw data storage, electronic transfer & management of
information system comprise the basic activities of an
office automation system. OAS helps in optimizing or
automating existing office procedures.

59. ADVANTAGES:
 Replacing human operators in tasks that involve hard
physical or monotonous work.
 Replacing humans in task done in dangerous
environments (i.e. fire, space, nuclear facilities,
underwater etc.)
 Performing tasks that are beyond human capabilities e.g.
speed of generating reports.
 Economy improvement: Automation may improve in
economy of enterprises, society or most of humanity.
 Reduces operation time & work handling time
significantly.
 Frees up workers to take other roles.

60. DISADVANTAGES OF OAS
Expensive first time
More Technical
Resist to change
Training cost and time
No use while electricity is
cut off

61. TYPES OF FUNCTIONS INTEGRATED BY OAS:
 Electronic Publishing
 Electronic Communication
 Electronic Collaboration
 Image Processing
 Office Management

62. ELECTRONIC PUBLISHING:
It include word processing and desktop publishing. Word processing
software, (e.g. Microsoft word) allows user to create, edit, revise, store
and print documents such as letters, reports, scripts etc.
ELECTRONIC COMMUNICATION:
It includes electronic mail (e-mail), voice mail, facsimile (fax) and
desktop videoconferencing.
ELECTRONIC COLLABORATION:
It is possible through electronic meeting and teleconferencing.
Electronic meeting & collaborative work systems allow teams of co-
workers to use networks of micro computers to share information,
update schedules & plans.

63. IMAGE PROCESSING:
It includes electronic document management, presentation
graphics & multimedia system. Imaging systems convert
text, drawings & photographs into digital form that can
stored in a computer system. This digital form can be
manipulated, stored, printed or sent via modem to another
computer.
OFFICE MANAGEMENT:
It includes electronic office accessories, electronic
scheduling & task management. This means of
organising people, projects and data. Business dates,
appointments, notes and client contact information can
be created, edited, stored, retrieved. Projects and tasks
can be allocated, subdivided and planned. All of these
actions can either be done individually or for an entire
group.

64. TRANSACTION PROCESSING SYSTEM (TPS):
 A TPS is a type of information system that collects,
stores, modifies & retrieves the data transaction of an
enterprise.
 The success of commercial enterprises depends on the
reliable processing of transactions to ensure that
customer orders are met on time.
 The field of transaction processing, therefore, has
become a vital part of effective business management.
 A transaction occurs when goods & services are
exchanged for some form of payment.

65. EXAMPLE:
 Airline reservation systems, electronic transfer of
funds, bank account processing systems.
 TPS is designed to process routine business
transactions.
 Seeks time & cost efficiency by automating
repetitive operations in large volumes.

66. WHAT IS TRANSACTION?
 A business activity between seller and buyer exchange
an asset for payments.
 Basic business operations such as customer orders,
purchase orders, receipts, invoices and payroll checks
in an organisation.
 TYPES OF TRANSACTIONS:
 Internal Transaction: activities done with in an
organisation. E.g. recruitment policy, production policy.
 External Transaction: activities done outside the
organisation with external sources. E.g. sales and
purchase.

67. FEATURES OF TPS:
 Rapid response – fast performance with rapid results.
Transaction processing systems are usually are
measured by the number of transactions they can
process in a given time period.
 Continuous Availability – The systems must be
available during the time period when the users are
entering transactions. Many organisations relay heavily
on their TPS. A breakdown will disrupt operations or
even stop the business.

68. CONTI…
 Data Integrity – The system must be able to handle
hardware or software problems without corrupting data.
Multiple users must be protected from attempting to
change the same piece of data at the same time.
 E.g. two operators cannot sell the same seat on an
airplane.
 Ease of Use – Often users of TPS are casual users.
The system should be simple for them to understand,
protect them from data entry errors as much as possible
and also allow them to easily correct them the errors.

69. TYPES OF TPS:
Batch Processing System
Batch processing is
where the information is
collected and stored as a
batch but cannot
processed immediately.
Batch processing is
useful for enterprise that
need to process large
amounts of data using
limited resources.
Example: Payment by
cheque.
Credit card transaction.
Online Processing System
A system whereby each
transaction is processed
immediately.
Example: Online
Shopping,
ATM’s

70. DATA PROCESSING CYCLE:
Data Entry
Transaction
Processing :
Batch or
Online
Database
Maintenance
Document and
Report
Generation
Enquiry
Processing
1 2
3
4
5

71. 1. DATA ENTRY:
 Collecting & capturing transactions.
 No longer manual:
 Old technologies – Bar codes
 New Technologies – Smart cards
2. DATABASE MAINTENANCE:
 TPS helps ensure the databases are up-to date and
correct.
 Multiple Databases (External or Internal)

72. 3. DOCUMENT OR REPORT GENERATION:
 Examples –
 Purchase order
 Sales Receipts
 Invoices
 Bank statements
4. ENQUIRY PROCESSING:
 Examples –
 When was a purchase made
 Does a customer have any credits on their account
 Was an item scheduled for delivery

73. ANY QUESTIONS?
THANK YOU….