Foundations of Information Systems

IS101
Business
Processes

Types of IS – Business IS Role

Intelligence and Analytics enterprise
applications

By
Dr. Nora Shoaip
Lecture 3

Damanhour University
Faculty of Computers & Information Sciences
Department of Information Systems

2024 - 2025
 Learning Objectives
1. Define and describe business processes
2. Evaluate the role played by systems serving the various levels
of management

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 Business Processes
Business Processes: refer to the manner in which work is organized and
coordinated. It include:

• Collection of activities, steps, or tasks, required to produce a

product or service

• These activities are supported by flows of material, information,

knowledge among the participants in business processes

• To a large extent, the performance of a business firm depends on how well

its business processes are designed
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 Business Processes
• Examples of functional business processes
– Manufacturing and production
• Assembling the product
– Sales and marketing
• Identifying customers
– Finance and accounting
• Creating financial statements
– Human resources
• Hiring employees

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 Business Processes

For example, fulfilling a customer order involves a complex set of

steps that requires the close coordination of the sales, accounting, and
manufacturing functions.
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 Business Processes
In the order fulfillment,

• To efficiently perform all these steps requires a great deal of

information.

• The required information must flow rapidly both within the

firm from one decision maker to another; with business
partners, such as delivery firms; and with the customer.

• Computer-based information systems make this possible.

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Business Processes and Information Systems
Information technology enhances business processes by:

• Increasing efficiency of existing processes

- Automating steps that were manual
- e.g. checking a client’s credit, or generating an invoice and
shipping order

• Making it possible for many more people to access and share

information
• Replace sequential steps with parallel steps
• Eliminate delays in decision making
• Support new business models
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KIND OF SYSTEM GROUPS SERVED
STRATEGIC SENIOR
LEVEL MANAGERS

MANAGEMENT MIDDLE MANAGERS

LEVEL

KNOWLEDGE &
KNOWLEDGE DATA WORKERS
LEVEL

OPERATIONAL OPERATIONAL
LEVEL MANAGERS
SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN
MARKETING RESOURCES
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Systems for Different Management Groups
Management information systems (MISs) as the study of information
systems in business and management, two types:

• Transaction Processing Systems

• Business Intelligence Systems

• Management Information Systems

• Decision-support Systems

• Executive Support Systems

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Systems for Different Management Groups
• Transaction Processing Systems (TPS)

• Perform and record daily routine transactions necessary to

conduct business (e.g. sales, payroll, flow of materials in a
factory, shipping, number of parts in inventory, Ahmad’s
payment status, etc.)

• Serve operational managers and staff by monitoring the

status of internal operations

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Systems for Different Management Groups
Transaction Processing Systems (TPS)

• Major producer of information for other systems, (e.g. the payroll

system, along with other accounting TPS, supplies data to the company’s
general ledger system, which is responsible for maintaining records of
the firm’s income and expenses and for producing reports such as
income statements and balance sheets. It also supplies employee
payment history data for insurance, pension, etc.)

• Structured goals and decision making based on a predefined

criteria (e.g. assigning a credit to a customer follows a predefined
criteria)
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Systems for Different Management Groups
Transaction Processing Systems (TPS)
A TPS for payroll
processing captures
employee payment
transaction data (such
as a time card). System
outputs include online
and hard-copy reports
for management and
employee paychecks.

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Systems for Different Management Groups
Business intelligence
- Software for organizing and analyzing data
- Used to help managers and users make improved decisions

Business intelligence systems

- Management information systems
- Decision support systems
- Executive support systems

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Systems for Different Management Groups
Management Information Systems
- Designates a specific category of information systems serving middle
management.
- Provide reports on firm’s current performance. The basic transaction data from
TPS are compressed and usually presented in reports that are produced on a
regular schedule.
- Provide answers to routine questions that have been specified in advance
(summaries and comparisons)
- Typically have little analytic capability, (e.g. MIS reports might list the total pounds of
lettuce used this quarter by a fast-food chain or compare total annual sales figures for
specific products
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Systems for Different Management Groups

In the system illustrated by this diagram, three TPS supply summarized transaction data to the MIS
reporting system at the end of the time period. Managers gain access to the organizational data
through the MIS, which provides them with the 18 appropriate reports.
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Systems for Different Management Groups

This report, showing summarized annual sales data, was produced by the MIS
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Systems for Different Management Groups
Decision Support System (DSS)
- Serve middle management
- Support non-routine decision making
Example: What is the impact on production schedule if December
sales doubled, shipment is delayed, etc?
- Although DSS use internal information from TPS and MIS, they often bring
in information from external sources, such as current stock prices or
product prices of competitors, logistical issues such as checkpoints, political
situation, etc.
- They focus on problems that are unique
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Systems for Different Management Groups
Decision Support System (DSS)
- Serve middle management
- Support non-routine decision making
Example: What is the impact on production schedule if December
sales doubled, shipment is delayed, etc?
- Although DSS use internal information from TPS and MIS, they often bring
in information from external sources, such as current stock prices or
product prices of competitors, logistical issues such as checkpoints, political
situation, etc.
- They focus on problems that are unique
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Systems for Different Management Groups

Decision Support System (DSS)

- These systems use a variety of models to analyze the data and are designed
so that users can work with them directly
- Model driven DSS
e.g. Voyage-estimating systems
- Data driven DSS
e.g. Intrawest’s marketing analysis systems

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Systems for Different Management Groups
Decision Support Systems (DSS): Voyage-estimating systems

This DSS operates on a powerful PC. It is used daily by managers who must develop bids on
shipping contracts.
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Systems for Different Management Groups
Executive Support Systems (ESS)
- Support senior management
- Address non-routine decisions
Requiring judgment, evaluation, and insight
- Incorporate data about external events (e.g. or competitors) as
well as summarized information from internal MIS and DSS
- ESS present graphs and data from many sources through an interface
that is easy for senior managers to use.
- Answer Questions: What will employment levels be in five years?
What are the long-term industry cost trends? What
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 >> Management Information Systems,
Source Managing the Digital Firm, 13 Edition
(2014), Laudon and Laudon.

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