Major Types of Systems in Organizations

Three Main Categories of

Information Systems

1. Operational-level systems

2. Management-level systems

3. Strategic-level systems
 Four Major Types of Systems

1. Transaction Processing Systems (TPS)

2. Management Information Systems (MIS)

3. Decision-Support Systems (DSS)

4. Executive-Support Systems (ESS)

Major Types of Systems in Organizations
 Four Major Types of Systems

Transaction Processing Systems (TPS)

Basic business systems that serve the

organization’s operational level
Input: Transactions, events
Processing: Sorting, listing, merging, updating
Output: Detailed reports, lists, summaries
Users: Operations personnel, supervisors
 Four Major Types of Systems

Management Information Systems (MIS)

Serve management level; provide reports and

access to company data
Input: Summary transaction data, high-volume
data, simple models
Processing: Routine reports, simple models,
low-level analysis
Output: Summary and exception reports
Users: Middle managers
 Four Major Types of Systems

Decision-Support Systems (DSS)

Serve management level with data analysis for

making decisions
Input: Low-volume data or massive databases,
analytic models, and data analysis tools
Processing: Interactive, simulations, analysis
Output: Special reports, decision analyses,
responses to queries
Users: Professionals, staff managers
 Four Major Types of Systems

Executive Support Systems (ESS)

Provide communications and computing

environment that serves the organization’s
strategic level
Input: External and internal aggregate data
Processing: Graphics, simulations, interactive
Output: Projections, responses to queries
Users: Senior Managers
Model of a typical executive support system
 Finance and Accounting Systems

*Manage firm’s financial assets: cash,

stocks, bonds, etc.

*Manage capitalization of firm and

finding new financial assets

*Maintain and manage financial records

 Systems from a Functional Perspective

Examples of Finance and Accounting Information System

 PROFIT PLANNING
 
“Profit planning is the development of operating plan for the coming period.
plan is summarized in the form of an income statement that serves as sales and
profit objective and budget for cost.”
 

How to use

1- Evaluate the Operation

2-Determining the need for additional resources
such as facilities or personnel
3-Planning purchasing requirements
4-Anticipating any additional financing needs
 Advantages of Profit Planning

*Performance evaluation- 
*Awareness of responsibilities-
*Cost consciousness
*Disciplined approach to problem solving-
*Thinking about the future
*Financial planning- 
*Confidence of lenders and investors
 Limitations of Profit Planning

1-Profit plans are based upon estimation.

 
2-Many conditions expected when the plan was prepared will change.
 
3-In a year, any number of factors can change, many of them beyond the
control of the company.
 
4-Profit plan requires the support of all responsible parties. Sales quotas
must be agreed upon with those responsible for meeting them. Expense
budgets must be agreed upon with the people who must live with them.
 
5-No point in trying to operate a business according to a plan that is no
longer realistic because conditions have changed
 TOYOTA Profit Planning System
 
*Toyota Uses A3 profit Solution software

*Profit Center to integrate, automate, and centralize

corporate profit planning

*By exploiting the most recent advances in Web,

Excel, and OLAP technologies, A3 Profit Center will
bring new planning solutions and enable our strategic
management level to continue to realize a high
Return On Investment in their profit planning
efforts." 
 MODEL FOR
PROFIT
PLANNING
(Toyota Indus
Motors)