Information Systems in Organisation

Introduction
Pragati Insurance Limited is a leading private non-life insurance company of Bangladesh. The
company offers a complete range of general insurance products and services in motor, marine,
energy, property and casualty, health, accident and liability areas.

I am an intern in the IT department of Pragati Insurance Limited. The CEO has given me the
task to research about the information systems and how they can be used in his organisation.

This report contains the findings of my research. It contains information about the various
information systems. This will provide knowledge to Pragati Insurance LTD with an
understanding of how organisations use information systems to help them manage their
specific needs.

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LO2 - Be able to compare information systems

LO2.1 Describe different types of information systems

Information Systems
The collection, storage and processing of data which helps in providing information and
knowledge are the components of an Information system. The information gathered from this
system allows business firms and other organizations to carry out and manage their operations,
relate with their consumers and suppliers, and take part with other organisations in the
marketplace.

IS

OSS MSS

TPS ERP OAS MIS DSS EIS

Fig: Above diagram shows various parts that exist within an information system.

Operations Support System

This type of support system generally deals with the day to day activities within an organisation.

Transaction Processing System (TPS)

This system's work is to process data which are generated from business transactions. This
type of information system helps the organization to handle their tedious daily transactions
precisely and competently. Decisions can be taken based on these transactions.

Enterprise Resource Planning (ERP)

It is a package containing multiple software that helps in processing various functions of a
business. Manufacturing, Customer Relations, Supply Chain Management, Human Resource
and other such functions can be managed by the ERP.

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Office Automation System (OAS)

This system helps with the organisations office related works. This helps to computerise most of
the work done in an office that have been done traditionally using a manual paper filing system.
This refers to the varied computer machinery and software used to digitally create, collect, store,
manipulate, and relay office information needed for accomplishing basic tasks and goals.Raw
data storage, electronic transfer, and the management of electronic business information
comprise the basic activities of an office automation system. These are office functions,
including dictation, typing, filing, copying, fax, Telex, microfilm and records management,
telephone and telephone switchboard operations.

Fig: Six level pyramid model based on the processing requirement of levels in
organization

Management Support System (MSS)

This type of system helps with the organisation management by helping in forecasting and
carrying out queries and analysis of the data present within the organisation.

Management Information System (MIS)

This helps by providing the managers of an organisation with tools which are computer- based
to evaluate, organize and efficiently manage the various departments within an organisation. It

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supports the middle management and operational supervisors through a process of retrieving
data from transaction processing systems and review it into a series of management reports.

Decision Support System (DSS)

It is a computerised system that analyses data of the business and presents it so that managers
can make decision more easily. This type of information system is designed specifically to help
the management make decisions in a state that there is ambiguity about the probable effects of
those decisions Solution to problems that arise can be easily be decided by this system.

Executive information system (EIS)

This type of information system supports the senior management with various tools to make
strategic decisions by gathering, analysing and summarizing both the important internal and
external information of an organization and preparing reports i.e. billing, cost accounting,
scheduling, staffing, and etc. (Jim Riley, 2012)

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 Information Systems in Organisation

Information Systems Used In Pragati Insurance LTD

For Pragati Insurance Ltd I have chosen three Information Systems which are Transaction
Processing Systems, Management Information Systems and Office Automation Systems.

Transaction Processing System

TPS is used in the lowest level of management. It is an operational support system that deals
with the day to day transactional activities that occur within the business.
It works with the data generated from any transactions that occur within the business. It collects
data to be organized in files/database, processing the data that have been organised, generate
information reports from the data and process queries to be found from the data.

Components of TPS:
It first takes the inputs of data, then processes it and stores it in files/database and also helps
in providing outputs from the stored data.

The most important functions of a TPS are collection and storage of data. Pragati Insurance Ltd
is a large organization which performs huge amount of transactions on a daily basis. The
transaction processing systems handle the data in two ways. Firstly, it supports the daily routine
operations by being made accessible to those parts of the organization where they are needed.
And secondly, it feeds the management reporting system and produce performance reports
about the effectiveness and efficiency of the operations. It is very helpful of handling large
volume of data as historical references for forecasting, identifying trends and measuring
performance. A transaction processing system should be working satisfactorily and be very
affective in playing critical strategic role in the organization which is the interaction between the
organization and customers or suppliers otherwise the external relations can be damaged.

Features of TPS:
1. Fast response
In an organization all transactions need to be done in a rapid pace. Having clients
waiting on TPS to work will not be good for business. The transaction processing should
be less than few seconds after the input, so that the required output can be produced
rapidly.

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2. Availability
The TPS is one of the most important functions of many organisations. If the TPS
breakdown the business operations will be derailed and may also lead to complete stop
of the business. A successful TPS must have a low-rate of failure. If a TPS does fail, the
organisation should have effective backup and recovery system to ensure the
transactions don't come to a stop
3. Inflexibility
A TPS wants every transaction to be processed in the same way regardless of the user,
the customer or the time of day. If a TPS were flexible, there would be too many
opportunities for non-standard operations.
4. Controlled
All process of the TPS are done in a controlled way.

There are two types of TPS:

Batch processing This is the traditional processing system where transactions would
first be collected and then after certain period of time all data would be entered together
in the database. This type of processing ensures that it can be run regularly as a
scheduled event or when data has been collected. It also ensures that it can be run as a
fully automated process without needing a human operator.
Real-time processing Now due to the advancement of technology transaction are
being recorded as they occur. This allows the managers to generate reports as they are
required at any time. There are two concerns regarding this process which are
concurrency and atomicity. The concurrency ensures that no user can change the same
data at the same time. And the atomicity ensures that all of the steps involved in a
transaction is complete successfully as a group.

The transaction processing systems can play a vital role in the management, administration and
operations of Pragati Insurance Ltd through capturing valuable information, processing of those
stored data from the database, generating info reports and processing of queries on time.

Management Information System

This information system is used to handle the management level of an organization that helps in
managing the planning, controlling, and decision making functions through the routine summary
and exception reports that this information system generates.

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 Information Systems in Organisation

Like any other organization whether it is big or small Pragati Insurance Ltd requires huge
amount of time to collect, process and document data. Therefore the major percentage of the
expenditures goes into this kind of uncreative work in the organization. It is needless to say that
each and every individual seeks some form of information to carry out his/her duties and this
information depends on the nature of that very person. Human are prone to make mistakes or
errors and hence the difficulty arises in ensuring a hundred percent quality assurance of
information in terms of completeness, accuracy, validity, timeliness and meeting the decision
making needs.
So to get a good hold of the information processing activities it is crucial for Pragati Insurance
LTD to have a management information system which should take care of the following points:
Handling of a huge data
Confirmation of the validity of data and transaction
Complex processing of data an multidimensional analysis
Quick search and retrieval
Mass storage
Communication of the information systems to the user on time
Fulfilling the changing needs of the information

Characteristics of Management information Systems

MIS support structured decisions at the operational and management control levels.
However, they are also useful for planning purposes of senior management staff.
MIS are generally reporting and control oriented. They are designed to report on
existing operations and therefore to help provide day-to-day control of operations.
MIS rely on existing corporate data-and data flows.
MIS have little analytical capability.
MIS generally aid in decision making using past and present data.
MIS are relatively inflexible.
MIS have an internal rather than an external orientation.

The management information systems can be helpful for Pragati Insurance Ltd in a various
ways i.e.
It can be used to ensure proper data collection from several sources, processing and
sending to the required ends of the organization fulfilling the information needs of at any
levels.

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 Information Systems in Organisation

It can be used to ensure the satisfaction of Strategic Planning, Management Control,

Operational Control and Transaction Processing through a variety of systems such as
Query Systems, Analysis Systems, Modelling Systems and Decision Support Systems.
It can be used to help the middle and top managements to plan, set target, evolve the
business plans and control business functions through several management tools of
planning and control.

Thus management information systems can play a vital role in the management, administration
and operations of Pragati Insurance Ltd through information generation, communication,
problem identification and decision making processes.

Office Automation Systems (OAS)

It is a system of diverse computer equipment and software used to digitally generate,
accumulate, stock, control, and convey office data needed for achieving simple responsibilities
and objectives. Pragati Insurance Ltd is a large organization and there are many departments
within it. So it is necessary for the organization to manage the interrelation of these departments
in an effective manner.

Components of OAS
The major functional components of an office automation system include text processing,
electronic mail, information storage and retrieval, personal assistance features, and task
management.
In today's world more components have been added like computers, telephones, word
processing, desktop publishing, database management systems, on-line database services, and
voice recognition and synthesis.

Characteristics of OAS
Raw data loading, electrical transmission, and the organisation of electrical industry information
encompass the basic actions of an office automation system. These are office functions,
including transcription, typing, filing, copying, fax, Telex, microfilm and records administration,
telephone and telephone switchboard procedures. Office automation tools are incorporated into
an efficiently operational business system which can massively expand office output.
Inside each basic action of an office, hardware and software cartel to fulfill basic purposes that
are needed to be productive and achieve the goals for a precise business. The three basic
actions of an office automation system are:

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 Information Systems in Organisation

Storage of information: This would be the computer or a computer resembling system,

Data storage contains office records and other main office forms and papers, Data
presentations including the capture and editing of files, images, or spreadsheets. Text
management software and systems ensure the entire ground of word processing and
desktop publishing. Word processing, the utmost rudimentary and joint office automation
movement, is the recording (usually via keyboard) and running of text on a computer.
One significant features of word processing packages are their preformatted document
templates. Desktop publishing adds another height to text handling.
Data exchange: Whereas data storage and manipulation is one module of office
automation systems, interchange of that information is a vital module of office
movement. Electronic transmission is an overall submission range that highlights the
exchange of data among more than one user or contributor. Systems that permit prompt
or "real time" transmission of information (i.e. online discussions via computer or audio
exchange with video capture) are measured electronic distribution systems. Electronic
mail, voice mail, and facsimile are instances of electronic transfer applications. Other
examples would be a fax, phone, or some type of communication hardware. Office
automation systems that comprise the capability to automatically share information
amongst more than one users instantaneously are occasionally mentioned to as
groupware systems. One type of groupware is an electronic conference system.
Electronic conference systems let geologically detached contributors to discuss
information in real time.
Data management: Moreover office automation systems are frequently used to trail both
temporary and longstanding data in the dominions of financial plans, personnel
distribution plans, advertising expenses, catalogue acquisitions, and other features of
business. Task organization or forecast systems observe and regulate several projects
and activities within the office. Electronic administration systems observe and regulate
office actions and tasks over timelines, resource equalities, and electronic scheduling. A
calendar program allows to record events and activities on an electronic calendar.
Calendars allow scheduling, project management, and synchronisation among many
people, and may deliver maintenance for scheduling equipment as well. Distinctive
structures classify conflicts in schedules, nding meeting times that will work for
everyone, signal future events, and spontaneously ll in admissions for fixed events.

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 Information Systems in Organisation

If Pragati Insurance Ltd uses the above mentioned information systems then it will be very
beneficial for them to do better among their competitors. It is vital nowadays for an organization
to do better than their counterparts otherwise they will eventually meet their demise. And hence
office automation system can be of great use to them to rise in today's market

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LO2.2 Investigate the current trends in using information systems

applications to solve business problems

Management information systems

Nowadays, management information system is used in numerous environments and contains
but is not restricted to: decision support systems, project management, resource and people
management applications, and applications for data retrieval. Even though over the years the
restrictions have become vague, usually management information systems that are precarious
to the companys capability to endure which contains accounting and order entry and this fact
should not be overlooked by the top level management. Management information systems take
care of legacy software and hardware developed by the programmers who have already retired
and left no documentations behind for the systems. The enterprise promotes or renovates these
systems only with caution and with proper knowledge of risks involved within, So management
information systems and the people related to it who knows its coincidences remains a dynamic
if under-celebrated part of enterprise IT. There are so many management information systems
that are in use today i.e.
Software Trends
CRM(Customer Relationship Management) SaaS / Cloud computing - fully online
CRM software
Integration of CRM software with e-
commerce systems
Integration of multiple social media
products

HR(Human Resources) SaaS / Cloud HR software

ESS (Employee Self Service), MSS
(Manager Self Service), e-recruitment, e-
learning integrated within HR software
Workflow functionality integrated

Transaction processing systems

Nowadays transaction processing systems have many uses in organizations i.e. pay for
merchandise over the internet, processing payments of credit cards, processing transactions or
payments through smart phones any time anywhere and etc. It is basically a computer software

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that let the user whether individual or an organization to perform various transactions. It is a
system used to capture, enter, store, retrieve and process relevant details of business events
and to generate the information and documents necessary for running the business. It supports
the daily routine operations by being made accessible to those parts of the organization where
they are needed and feeds the management reporting system and produce performance reports
about the effectiveness and efficiency of the operations. It is very helpful of handling large
volume of data as historical references for forecasting, identifying trends and measuring
performance. A transaction processing system should be working satisfactorily and be very
affective in playing critical strategic role in the organization which is the interaction between the
organization and customers or suppliers otherwise the external relations can be damaged.
There are so many transaction processing systems that are in use today i.e.
Software Trends
Accounting Software Cloud computing / SaaS - wholly online
accounting software
e-procurement, e-commerce, e-expenses
systems and electronic payment
integrated within accounting software
Workflow functionality integrated within
accounting software

Payroll Software SaaS / Cloud computing - fully online

Payroll software
Electronic tax filing eg for payroll returns
e-payslips / pay stubs

Office automation systems

Nowadays office automation systems are being used in many organisations to boost up their
daily work. It is a system of diverse computer equipment and software used to digitally generate,
accumulate, stock, control, and convey office data needed for achieving simple responsibilities
and objectives. It is necessary for the organization to manage the interoperability of these
departments in an effective manner. There are a large number of office automation systems
which are now pragmatic to business and communication functions that have been manually
operated in several locations of an organization i.e. preparing written communications and
strategic planning.(Woratschek, 2002) Moreover, some functions which needed synchronising

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the external specialist in typesetting, printing or electronic recording are now available to
incorporate into daily routine organizational tasks which is both time and money saving. There
are so many functions that are incorporated with the help of a Local Area Network that serves
the user with transmission of data, voice, mail and images in any point throughout the network
with the help of a connecting network.(Woratschek, 2002) Types of functions integrated by
office automation systems which include the following:
Electronic publishing: This contains word processing and desktop publishing software.
Word processing software i.e. MS Word, Apple Pages, Corel Word-Perfect, Apptix
Word, Apache OpenOffice Writer, and etc. are used to generate, edit, review,
accumulate and print letters, memos, reports and manuscripts. Desktop publishing
software i.e. Adobe InDesign, Corel Draw, MS Publisher, etc. are used to incorporate
text, images, photographs and graphics to generate high quality printable output i.e.
newsletters, brochures, magazines, books, and etc. with a help of a microcomputer,
scanner and a printer.
Electronic communication: This contains e-mail, voice mail, facsimile/fax and
videoconferencing. E-mail or electronic mail is a software which is used to create, send
and receive messages and files from one place to another in any part of the world in a
matter of seconds. This innovation has outrun traditional paper mailing system. Some of
the popular e-mail software are MS Outlook, Apple mail, Acme mail, Citadel, Gmail, and
etc. Facsimile/fax is a transmission machine which is used to scan a document
containing either text or graphics or both together and send it over ordinary telephone
lines to a receiving fax machine on the other end where it generates the copy of the
very document. Video conferencing is a combination of hardware and software to help
users communicate over a network form any part of the world. Both the users are able
to see and talk to each other with the help of some tools such as a video camera,
speaker and a sound system. Some of the popular video conferencing providers are
Adobe Connect, BoostCam, Clearsea, GatherPlace, GoToMeeting, and etc.
Image Processing: This contains electronic document management, multimedia
systems, and presentation graphics. These are used to adapt text, drawings and
photographs in a digitized form that can be stored in a computer system and later can
be manipulated, printed or transferred to another computer system. (Woratschek, 2002)
Organizations use imaging systems i.e. scanners, digital cameras, video capture cards
or advanced graphic computers for purposes including insurance forms, medical
records, mortgage applications, and etc. Organizations also use presentation graphics

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systems i.e. MS PowerPoint, Prezi, ClearSlide, CustomShow, SlideShark, end etc. to

create and display presentations including charts, bullet lists, text, sound, photos,
animation and video clips.
Office management: This contains electronic office accessories, task management and
electronic scheduling to help the organization to establish their manpower, projects and
data in a tidy manner. With the help of office management systems the organization can
create, edit, store and recover its business dates, appointments, notes and client
contact information. It can also assign, segment and plan its projects either
independently or for an entire group. This way the organization can increase its
efficiency and increase internal collaboration.

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LO2.3 Evaluate the suitability of information systems for different

functional areas of an organization
Pragati Insurance LTD has the following functional areas such as:
Administration& ICT
Human Resources
Finance & Accounting
Marketing
Customer Service

The suitability of Management Information Systems, Transaction Processing Systems and

Office Automation Systems in the above functional areas are described below:

Management information systems

This information system can work with the finance and accounting, marketing and human
resources.
o Financial MIS: This system will deliver financial information to Pragati Insurance LTD
Ltds financial managers. It handles all the financial statements, fund management and
usage, and financial statistics controlling.
Inputs: Strategic plan or corporate policies covering key financial objectives and
financial needs. Collected information of important financial documents such as
payroll, inventory control, order processing, general ledger, and etc. Annual
reports and financial statements.
Outputs: Profit/loss and cost systems, auditing, internal auditing, external
auditing, fund management and usage.
o Marketing MIS: This system will deliver marketing information to Pragati Insurance
LTDs marketing managers which will help them in product development, distribution,
pricing decisions, and promotional effectiveness activities. It handles all the information
related to sales by customer, sales by salesperson, sales by product, pricing report, total
service calls, and customer satisfaction.
Inputs: Strategic plan and corporate policies, the competition and the market.
Outputs: Market research, product development, promotion and advertising and
product pricing.
o Human Resources MIS: This system will deliver marketing information to Pragati
Insurance LTDs human resources managers which will help them to perform activities

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related to both the organizations current and potential employees. It handles all the
information related to benefit reports, salary surveys, scheduling reports, training test
scores, job applicant profiles, and needs and planning reports.
Inputs: Strategic plan or corporate policies. Payroll data, order processing and
personnel data.
Outputs: Human resource planning, personnel selection and recruiting, training
and skills inventory, scheduling and job placement, wage and salary
administration.

Transaction processing systems

This information system can work with the finance and accounting, human resources and
administration areas of Pragati Insurance LTD.
o Financial TPS: This is an information system to trail financial procedures and review
financial data. Basically it denotes the usage of information communication technology
for the financial set-ups to backing management and budgeting verdicts and to formulate
financial reports and statements. This systems can create, store and gives the managers
access to the financial information in an effortless manner. Moreover it can store
approved budgets for every year, all the cash flows and expenditures, and the financial
assets. To summarize the financial TPS can do the following:
Keeping track of earning
Keeping track of costing
Keeping track of profit and loss
Making assumptions for future products
o HR TPS:. The personnel management information system delivers the flow of
information about people within the organization as well as future personnel needs. This
is a part of a 5 basic subsystems which are recruiting, placement, training, compensation
and maintenance. To summarize the HR TPS can do the following:
Controlling the HRM department
Add and update personnel data which is a big security issue
Keeping track of employee activities
o Administration TPS: This is an information system that can deliver the organizations
administration managers with monitoring, collection, storage, processing and
dissemination needs and manage their transaction systems. It basically helps the
administration managers to communicate with the users of the system, data handling

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and conversion, routing data to the exact point.To summarize the Administration TPS
can do the following:
Keeping log of HRM
Keeping track of company policies
Keeping track of resources
Controlling the backup systems

Office automation systems

This information system mainly works with administrative function of the organisation and helps
to communicate with the other functional areas of Pragati Insurance LTD.

Administration OAS: With the advancement of technologies the communication has

been much easier nowadays and hence the administrative communications in economic
institutions and organizations has changed generally and the hectic processes are long
gone. Nowadays office automation systems have been in use in many organization to
boost up their daily work. It is necessary for the organization to manage the
interoperability of these departments in an effective manner.(Mortezaei, 2012) Some of
the main features that makes the office automation systems suitable for any organization
are:
o It defines the organizational arrangement and situations
o It defines and classifies the public files and subject or letters and archive
o Helps record incoming postal mail, fax and imaging of letters
o Helps letter distribution through dashboards within organization
o Helps share personal files
o Sending messages to individuals, groups and organizational units through e-mail

It can be seen that mostly the office automation system is used for communication sector. Office
transactions and administrative correspondence make the most areas of communication in
organizations. Using office automation system, all administrative and official correspondence
necessary are covered. It appears that this system has solutions for most organizational fields
that someway are related to communications and hence it can be said that its significance on
the organizational communications is inevitable.

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Conclusion
In this assignment I have tried to do research and gather materials to make a report on the
Information Systems available nowadays and have chosen three Information Systems for
Pragati Insurance Ltd. Then I have tried to find out the current trends of the selected Information
Systems and explained the suitability of the three chosen Information Systems in Pragati
Insurance Ltds functional areas. Then I have created an annual sales report for Pragati
Insurance Ltd and also a spreadsheet for its annual sales report as an alternative solution. I
hope this report will prove beneficial to the CEO of Pragati Insurance Ltd.

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Bibliography
1. Jim Riley (2012). ICT: types of information | Business | tutor2u. [online] Available at:
http://www.tutor2u.net/business/reference/ict-types-of-information [Accessed 1 Jun.
2016].
2. Axia-consulting.co.uk. (2016). Current Systems Trends - Accounting, CRM, Payroll & HR
Systems. [online] Available at: http://www.axia-consulting.co.uk/html/trends.html
[Accessed 6 Jun. 2016].
3. Woratschek (2002). Office Automation Systems FREE Office Automation Systems
information | Encyclopedia.com: Find Office Automation Systems research. [online]
Available at: http://www.encyclopedia.com/doc/1G2-3401200109.html [Accessed 3 Jun.
2016].
4. Fatemeh Mortezaei (2012). The Role Of The Information Systems (Office Automation) In
Improving Managerial Decisions, [online] Available at:
http://www.arabianjbmr.com/pdfs/OM_VOL_2_(5)/15.pdf (Accessed: 6 June 2016).

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