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CDSM3103
Introduction to Management
Information System
INTRODUCTION
CDSM3103 Introduction to Management Information System is one of the
courses offered by the Faculty of Information Technology and Multimedia
Communication at Open University Malaysia. This course is worth three credit
hours and should be covered over eight to 14 weeks.
COURSE AUDIENCE
This course is offered to all learners taking the Diploma in Information
Technology programme. The course provides learners with a firm foundation in
analysing a wide range of management information systems. This course guides
learners systematically in acquiring the analytical and design skills required in
grasping fundamental concepts of management information systems.
As an open and distance learner, you should be able to learn independently and
optimise the learning modes and environment available to you. Before you begin
this course, please ensure that you have the right course materials and
understand the course requirements as well as how the course is conducted.
STUDY SCHEDULE
It is a standard OUM practice that learners accumulate 40 study hours for every
credit hour. As such, for a three-credit hour course, you are expected to spend
120 study hours. Table 1 gives an estimation of how the 120 study hours can be
accumulated.
Study
Study Activities
Hours
Briefly go through the course content and participate in initial
3
discussions
Study the module 60
Attend 3 to 5 tutorial sessions 10
Online participation 12
Revision 15
Assignment(s), test(s) and examination(s) 20
TOTAL STUDY HOURS 120
COURSE OUTCOMES
By the end of this course, you should be able to:
1. Identify the functions, roles and types of system users;
2. Explain the different types of management levels and their functions;
3. Describe the types of management information systems;
4. Explain the concept of management through Exceptional and Critical
Success Factors;
5. Describe the definition of strategic management and the Porter value
model;
6. Explain the competitive force strategy and network economy;
7. Explain the concepts of Decision Support System (DSS), Executive
Information System (EIS) and Expert System (ES); and
8. Explain the concepts of Marketing Information System, Manufacturing
Information System and Human Resource Information System.
COURSE SYNOPSIS
This course is divided into eight topics. The synopsis for each topic is presented
below:
Topic 2 introduces types of models and system elements, such as the system
standard. Generally, the system standard is the performance level achieved by
the system output. Managers will ensure that the system standard is fulfilled, by
comparing the output system and the system standard. You will also be
introduced to two management strategies known as: management through
exception and critical success factors (CSF). The system approach will also be
introduced at the end of the topic.
Topic 5 introduces you to the Decision Support System (DSS). In this topic, we
will discuss the decision-making process and how DSS helps managers make
effective decisions. You will recognise DSS as a system that provides
communication facilities, which include information in helping consumers solve
problems. You will also learn the format or structured information that results
from DSS, such as special reports and periodic report formats.
anticipation, about the status and environment of the company, in supporting the
administrative tasks and decision-making process of executives. You will learn
how an EIS helps managers in their work and in the decision-making process.
Topic 7 addresses one of the branches of artificial intelligence, the expert system.
The expert system is also known as the knowledge-based system. An expert
system can be used to solve many problems that occur in an organisation,
including, complex decision-making. The expert system comprises of many types
of expert systems based on rules, frames or bases on fuzzy sets. In this topic, you
will be exposed to the most popular expert system, which is based on rules.
Learning Outcomes: This section refers to what you should achieve after you
have completely covered a topic. As you go through each topic, you should
frequently refer to these learning outcomes. By doing this, you can continuously
gauge your understanding of the topic.
Summary: You will find this component at the end of each topic. This component
helps you to recap the whole topic. By going through the summary, you should
be able to gauge your knowledge retention level. Should you find points in the
summary that you do not fully understand, it would be a good idea for you to
revisit the details in the module.
Key Terms: This component can be found at the end of each topic. You should go
through this component to remind yourself of important terms or jargon used
throughout the module. Should you find terms here that you are not able to
explain, you should look for the terms in the module.
PRIOR KNOWLEDGE
No prior knowledge is needed for this course.
ASSESSMENT METHOD
Please refer to myINSPIRE.
REFERENCES
Boddy, D., Boonstra, A., & Kennedy, G. (2005). Managing information systems:
An organisational perspective (2nd ed.). Harlow: Pearson.
Isenberg, D. J. (1984). How senior managers think. Harvard Business Review
Article.
Kotter, J. (1982). What effective general managers really do. Harvard Business
Review, 60 (2), 157-169.
Laudon, K. C., & Laudon, J. P. (2013). Management information systems:
Managing the digital firm (13th ed.). New Jersey: Pearson.
McLeod, R., & Schell, G. (2007). Management information systems (10th ed.).
New Jersey: Prentice Hall.
Stair, R., & Reynolds, G. (2005). Principles of information systems (7th ed.).
Thompson
Turban, E., Sharda, R., & Delen, D. (2010). Decision support systems and business
intelligence systems (9th ed.). New Jersey: Prentice Hall.
INTRODUCTION
Before we start, let us look at the following situation:
Can you think of a way to make your work easier? How can you compile all the
information provided by these shops? This is where information system comes
into the picture. Since you have all the information you need (such as sales
figures in an Excel sheet), all you need is a system to process these information,
instead of you having to process it manually. This system is what we call:
information system.
In this topic, we will discuss the differences between data, information and
knowledge, and the meaning of information technology and information system.
This topic will also elaborate on the importance of information management, the
types of users and their respective management, as well as the emerging trends
in information system. Let us get started!
Data and information are used together in any field. However, both have
different meanings.
Data is the basic fact or raw fact which consists of texts, diagrams, graphics,
images, audio and video clips, which are meaningless.
One example of data is the students' list which consists of name, matrix number,
sex, course and address. Can you name a few examples of data?
In simpler words, information is simply the data which has been processed in
order to be meaningful to the users. Process here means, the operation to change
the type and content of the data. Data in the studentsÊ list can be processed to be
generated as a report or graph that shows the percentage of female students, as
compared to male students, who are registered in the university; or the
percentage of students according to the courses offered by the university.
Other data processing operations are arithmetic operations, data summary, time
scheduling and so on. The information processor can be the computer
components, non-computer components or a combination of both, which can
convert data into information.
Now that you are clear about data and information, let us shift our discussion to
knowledge. What is knowledge? Look at the definition given in the following:
Knowledge consists of information that has been arranged and processed to,
convey understanding, experience, as well as expertise, which is to be used in
solving current business problems.
Let us look at Figure 1.1, which shows the relationship between data, information
and knowledge.
SELF-CHECK 1.1
1. In your own words, define data, information and knowledge.
2. Explain the relationship between data, information and knowledge
based on Figure 1.1.
We now know the meaning of system. What about information system? Well,
here it is:
Besides that, information system may also support managers and staff to analyse
problems, visualise complex subjects and new products and services.
In this age, the success of a business depends on the information system. Many
organisations today use information systems to offer services with greater
satisfaction to customers, to access a wider range of information, to handle
business changes at a greater speed and to increase the productivity of workers.
Based on a number of researches, an effective information system should be able
to exceed customer expectations and at the same time, fulfil business needs.
interconnected? Look at Figure 1.4, which illustrates the main activities that take
part in an information system. Can you name the three main activities?
(a) Input
Input gathers or captures raw and unprocessed data from within the
organisation or from its external sources.
(b) Processing
Processing converts this raw input into a meaningful form.
(c) Output
Output transfers the processed information to the organisationÊs managers
and staff, who will use it or to the functions for which it is used.
However, you must remember that an information system does not only contain
data and information. There are also other elements inside the system, which are
related and in support of one another. The presence of these related elements
makes information more useful, whereby it can be made available, processed,
distributed, manipulated, saved and so on. This combination gives rise to a
system, which is orderly and thus called an "Information System".
ACTIVITY 1.1
SELF-CHECK 1.2
Resources are owned and prepared, so they can be used when needed. Normally,
the preparation processes involve the transformation of raw materials into usable
materials, for example, assembling a computer and training the workers. After
this process, managers will try to optimise the usage of the resources. They can
reduce the rest time of the resources to a minimum level, as well as, ensure the
resources are utilised at the most efficient level. Subsequently, the managers will
change the resources at a suitable time, before they become obsolete or
inefficient.
SELF-CHECK 1.3
How is information management important in a personÊs daily life?
Explain.
Users come from many categories and designations. They can either be from
inside or outside a firm. When the information system was first introduced, the
users were mainly clerks in accounts departments, whereby a computer was
used only for accounting applications such as payroll, inventory and billing.
Information generated by the accounting applications was then used by the
firm's manager.
SELF-CHECK 1.4
Table 1.1: Example of Job Scope for Various Management Levels of a Firm
Management
Job Scope Designation
Level
Top To prepare long-term plans (5-10-20 years). CEO,
President,
Vice President
Middle To prepare mid-term plans (1 month 1 year). Branch
To plan actions for the long term and to Manager,
ensure the firmÊs objectives are achieved. Director,
Division
Leader
Bottom To ensure the planning done by top and Head of
middle management levels are implemented. Department,
Supervisor,
Coordinator,
Project Leader
SELF-CHECK 1.5
ACTIVITY 1.2
Visit the following website: http://www.mampu.gov.my/pdf/flipbook
/ISPplan2011/
Briefly list the idea on ICT strategic planning carried out by MAMPU for
the Malaysian Public Sector. Discuss your findings with your
coursemates.
SELF-CHECK 1.6
Look at Figure 1.5 again. Briefly explain what you understand about
the need for information at every level of management, in decision
making.
Look at Figure 1.7, which shows the influence of the respective levels of
management in implementing management functions; management functions
can provide guidance in developing an information system.
Figure 1.7: The influence of the three management levels on implementing management
functions
Interpersonal The manager is seen as the leader and mediator of the workers.
Role The manager is the role model for the workers.
The manager monitors the activities and work done by the
workers and organisation, distributes the tasks and resources, as
well as is the spokesperson for the workers with external
Informational parties.
Role
For example, the manager will provide feedback from the upper
management or customers regarding the customer friendly
service that is provided by the workers.
The manager puts in a lot of effort, handles problems,
Decision-
distributes resources, as well as holds negotiations for the
making Role
workers and external parties.
Managers who intend to solve a problem must first go through the relevant
processes. These processes involve decision-making. Decision-making
refers to the selection of solution alternatives, which would have been
identified earlier. A decision is taken after the alternatives have been
evaluated. Usually, the solution alternatives for every problem are
identified in order to get a better solution.
ACTIVITY 1.3
ACTIVITY 1.4
Computer and information literacy do not depend on each other even though
they are related and do complement each other. Some managers are information
Bookstall Manaf
Sales according to products and districts of Johor in the year 2012
PRODUCT CODE PRODUCT NAME DISTRICT SALES
1110 Textbook Muar 7,224,600
Batu Pahat 6,340,000
Pontian 4,326,300
Johor Bharu 8,454,000
TOTAL 20,638,900
2110 Magazine Muar 8,900,400
Batu Pahat 6,500,000
Pontian 3,200,500
Johor Bharu 9,422,000
TOTAL 22,172,900
individual can handle all tasks related to the information system, while in a huge
firm, there might be many units in the IS department and many employees to
execute specific work for every unit. Figure 1.9 shows the general organisational
chart for an IS department.
SELF-CHECK 1.7
Information experts are members of the staff who are responsible for the
development and organisation of the firm's information system.
Basically, there are five categories of information experts, namely, the system
analyst, database administrator, network administrator, programmer and
operator.
(a) System analysts (SA) develop a new system or upgrade the current system.
System analysts will define a problem, document the analysis, create the
system design and develop the recommended system. Interaction and
cooperation from the user and the management is needed in developing a
system which fulfils the user's needs.
(b) Database administrators develop and maintain the database, which consists
of the required data for producing information for users.
(c) Network administrators develop and maintain data communication, which
connects and allows the sharing of computer resources. Internet
development has created new experts in this field, known as Web masters
or Web designers.
(d) Programmers write the programming codes in the programming language
based on the design documentation earlier written by the system analysts.
The programmers also test the written program to ensure it is bug-free from
any syntaxes and logical errors.
(e) Computer operators operate large-scale computers such as the main
framework and minicomputer. They operate the routine jobs, operate the
printers' data storage and help users troubleshoot their problems.
ACTIVITY 1.5
Are there any organisations that do not have any of the information
experts mentioned in Subtopic 1.5.1? List the effects or disadvantages of
such a situation.
(b) Used with network and Internet technology, especially in the process of
obtaining external sources or information.
For example, in strategic planning, the organisation can obtain information
about its competitors, from the Internet. The organisation can also look at
reports and the governmentsÊ mission.
(c) Allow the use of multimedia elements like text, graphics, audio, video and
animation. Furthermore, the addition of artificial intelligence elements can
expedite and facilitate the tasks of man.
For example, in the car design and production industry, the information
system is combined with multimedia technology and artificial intelligence.
ACTIVITY 1.6
SELF-CHECK 1.8
1. Define the following:
(a) Information expert
(b) End-user computing
Data is a raw fact which is meaningless, while information is the data that has
been processed into meaningful form. Knowledge is derived from
information in the same way information is derived from data.
Information technology and information system are major enabling tools for
organisations to develop new products and services, as well as creating new
business models.
The unit in a firm responsible for developing and maintaining the system is
known as the information system department. The department has
information experts, namely, the system analyst, database administrator,
network administrator, programmer and computer operator.
INTRODUCTION
In this topic, you will be introduced to system concept, which is important for
modelling and problem-solving. This topic will introduce models which can
assist managers in solving problems, namely, physical, narrative, graphic and
mathematical models. You will learn more on the details of the general system
model elements, which include the physical system and conceptual system. You
will also be introduced to another system element called, standard. Generally,
standard is the performance level achieved by the system output. Managers
ensure the system standard is fulfilled by comparing the output system and
standard. Actions can be taken if the output is more or less than the standard.
overall system or part of the system in detail, and its relationship with other parts
of the system. New systems are developed to solve problems which exist in the
current system. Let us look at the system concept in the context of the
management information systems.
To understand this better, let us look at a few examples. The human body has
several systems which possess control mechanisms. Note how our respiratory
systems make us sweat in the hot weather so that our skin becomes cooler, while
our hair rises to trap more heat in the cold weather. Have you ever experienced
food poisoning before? If yes, you will remember how frequently you had to go
to the toilet, or how you vomited all day, as your digestive system flushed out
the toxins in the body. The reaction occurs because the control mechanism in our
body system changes the normal transformation process.
Now, look back at Figure 2.1. In a system, the control mechanism is connected by
a feedback loop (in the arrow flow). The control mechanism monitors the
system's performance by comparing the feedback signal, with the systemÊs
objective. If the system output achieves the objective, then the system will be in a
stable condition. In the unlikely event that the system output does not meet the
system's objective, a signal is sent to the system input so that necessary action can
be taken to change the system operations.
Now that you understand what a system is and also the elements that make up
the system, let us look at the various types of system.
The closed-loop system has three control components, namely, the control
mechanism, feedback loop and objective, as illustrated in Figure 2.1. An
example of this system is the budgetary control system in an organisation
in which during the budget presentation, the issues are communicated
through the feedback system and each expenditure is compared with the
objectives through the control mechanism.
Most of the systems that exist are open systems. An example is the election
voting system which counts voting input from voters around the country
and then declares the results back to them.
(c) Subsystem
A system has many stages. For instance, the human body has many systems
such as the respiratory system and the digestive system, which, in turn,
have many subsystems that can be further divided up to a single cell. For
example, a system in a clinic has many subsystems, which can be divided
into the simplest form. A system in a clinic may have the registration,
appointment and medical treatment subsystems. Figure 2.3 shows a system
that has many subsystems.
SELF-CHECK 2.1
2.2 MODEL
A model is a representation of things; like an object, a concept or a real activity
known as entity. The model is used to represent problems, which need to be solved
in a form that is easily understood. Types of models and their usages are as follows:
ACTIVITY 2.1
Visit the website http://en.wikipedia.org/wiki/Entity-relationship_model
and http://en.wikipedia.org/wiki/Data_flow_diagram. Based on the
website, discuss the details on how the Data Flow Diagram (DFD) and
Entity Relationship Diagram (ERD), are developed for an information
system.
ACTIVITY 2.2
Based on the four types of models, develop a diagram which links all
the models. Compare the diagram with your coursemates.
SELF-CHECK 2.2
If you are a manager, what is the use of a model to you?
In addition to the material flow as indicated in the example above, there are other
types of flow such as personnel flow, machinery flow and financial flow.
There are personnel who work until retirement, while others may resign
earlier. In both cases, the personnel will then return to their environment.
ACTIVITY 2.3
(i) Relevant
Information is relevant if the contents fulfil the requirement of the
problem faced. The manager can obtain the related information
without any support from other unrelated information.
(ii) Accurate
Information must be accurate and without errors. It is especially
important when it involves issues pertaining to salary, loans and
bills. The future forecast and performance report must also be
produced accurately by using accurate information.
(iii) On Time
Information must always be available when it is needed. A
combination of past and up-to-date information can help the
manager in making informed decisions.
(iv) Complete
Information must be comprehensive and complete but not excessive
to the point of being irrelevant to the problem being solved.
(b) Standards
Every system has at least one objective. Objectives are stated in general and
something more specific must be determined to measure whether the
system's objectives can be achieved.
graduates obtain first class degrees and 20 per cent of the graduates obtain
an A in their final project.
SELF-CHECK 2.3
2.3.3 Environment
In the general system model, resource flows into the firm from the environment
and will return to the environment after the transformation process. The
environment completes the general system model, as shown in Figure 2.9.
Physical resources enter the physical process and conceptual resources
(information and data) enter the information processor to be stored or used by
the manager. It can also flow to or from, the environment.
2.3.4 Problem-Solving
The manager will make several decisions when solving a problem. Decision-
making is an action taken following a decision or strategy that is considered to be
a better solution to the problem.
Term Explanation
An undesirable or complex situation which will lead to negative
Problem
consequences.
Problem- A process or an activity that is performed to overcome a problem, or to
Solving grab an opportunity so that the negative consequences can be avoided.
An outcome that has been agreed upon to plan the next step and
Decision
action.
Trouble or Sign The source of problems.
SELF-CHECK 2.4
In your opinion, why should the solution to a problem be planned
carefully and what are its components?
A problem will occur when the actual performance is either higher or lower
than the standard. Therefore, a problem can give an advantage or
disadvantage to the firm. It may be better to give a higher standard so as to
maintain good performance. On the other hand, if the firmÊs performance
cannot achieve the standard, we need to investigate the reasons behind the
problem.
For example, a doctor will study the symptoms to know the cause of a
disease. In the same vein, managers must study the symptom of any
For example, the equation „profit = sale-cost‰ can explain why the firm's
profits increase or decrease.
Some problems are not understood by the manager and they are known as
non-structured problems. The problem of human behaviour is an example
of this type of problem.
SELF-CHECK 2.5
How can a problem be identified in a firm? Discuss.
ACTIVITY 2.4
How does the system approach help in solving a problem? Discuss.
When the manager views his firm as a system that comprises of several
subsystems, he or she has understood the systemÊs concept and achieved the
objectives of the phase. At this stage, the manager is ready to use the system
approach in solving problems.
This phase consists of two main steps, which include continuing from the system
level to subsystem and analysis of parts of the system, according to certain
sequences.
Firstly, the manager studies the status of the firm in the perspective of its
relationship with the environment. Among the questions studied are:
(i) Whether the firm has a balanced relationship with its environment;
(ii) Whether the flow to and from the firmÊs environment occurs as it
should; and
(iii) Whether the system achieves its objective in producing products and
services for its environment.
Then, the manager analyses the system from the aspect of the subsystem.
Every subsystem will be studied, to see whether it functions together with
other subsystems, to achieve the systemÊs objective.
Briefly, this step aims to identify subsystems that are problematic, so that
the problem can be addressed.
What happens if your business is facing financial problems? What are some
alternative solutions? You can: (1) obtain a loan; (2) increase sales by
offering discounts and promotions; or (3) reduce manpower.
SELF-CHECK 2.6
SELF-CHECK 2.7
There are four types of models, namely, physical, narrative, graphic and
mathematical.
The model has a standard which determines the systemÊs performance that
needs to be achieved and information processor which produces information
for the actual performance of the firm.
Problems exist when there are differences between information from the
standard and information processor. The manager solves the problem, which
affects the firm either in a positive or negative manner.
The system approach can be used by the manager when solving problems.
The system approach consists of three phases, namely, the preparation,
definition and solution phases. Every phase has certain steps that can be used
as guidance.
INTRODUCTION
The development of information technology facilities is closely related to the
business objectives of an organisation. This is evident from research on the
requirements of information for enhancing organisational results. Therefore,
information technology facilities are very closely related to the organisational
structure and are based on the main functions of the organisation. This is further
extended to the support that information technology provides in fulfilling, as
well as, enhancing the organisational strategies.
In this topic, you will also be exposed to business strategy concepts such as
strategic management, the Porter value chain model, supply chain management,
industrial level strategy and how these concepts are related to information
system.
Look at Figure 3.1 carefully. Can you see, in general, the effects from this
relationship on the approach for constructing information architecture and the
usage of information technology in the organisation? Information technology
planning and information technology usage begin from the top. The use of
technology must begin with an analysis of the organisational needs, in the
context of the business the organisation is in. It must also support the
organisationÊs business planning and objectives. Therefore, the process of
designing information technology involves current and future users, as well as
the management and planning personnel in the organisation. It is not the work of
technologists alone.
Only at the end of the process of designing information architecture, would the
technology be chosen to support operational processes.
ACTIVITY 3.1
An organisation usually has a single head office that is the location for policy
making, strategic planning and company performance analysis. At the level
below that, this company may be divided into divisions that may be located at
different sites.
These divisions will then be divided further into units. In an organisation that
does not have many branches in many different places, the division may be
based on function, that is, a division or unit represents a certain function.
The smallest unit that performs the main functions of the organisation is called a
department. Normally, an organisation is divided into the following departments
(there could possibly be more departments):
(a) Accounts;
(b) Finance;
(c) Sales and marketing;
(d) Production and operation management;
(e) Human resource management; and
(f) Information systems.
SELF-CHECK 3.1
List the types of organisational structures and compare them from the
perspective of the most appropriate structure at a given time.
Level Characteristic
Departmental Level Collaboration of small programs developed by each
department to support other departmental functions. This
covers the human resource management information system
and accounts information system.
Plant Level Collaboration among departmental information systems. This
generally enables a connection among departments to be
performed, to enable employees to work together using a
computer system.
Divisional Level Collaboration of plant information systems.
Enterprise Level Collaboration of divisional information systems.
Organisational Level An information system that is larger and more complex, that
can provide a connection of information systems among
organisations. This system enables the same information to be
used among different organisations.
(b) Ensuring that technology can be adapted according to changes that occur
Change is inevitable for advancement. Hardware technology and computer
software change relatively quickly. This change will create problems for the
user, if proper management and planning are not performed. The question
that arises here is, how can a person manage the information technology
(c) Privatisation
Privatisation of information technology support services wholly to external
companies known as system integrators. These companies offer services in
several forms which are:
In the next subtopic, we will discuss the aspects of how information technology
can be used to support the organisationÊs business strategy.
SELF-CHECK 3.2
1. What are two main objectives of information technology
management?
2. Discuss three important aspects in information technology
management.
3. Explain four functions of an information technology organisation.
4. Differentiate between the following private information technology
support services:
(a) ASP (c) ISP
(b) BSP (d) WSP
We will now continue our discussion on the strategic management concept, the
Porter value chain model, supply chain management, industrial level strategy
and information system, which cover the competitive and network economy.
You must know that each information system discussed in this module is
integrated within one another. The information systems can solve organisational
problems. Effective strategic planning can integrate information systems in an
organisation.
SELF-CHECK 3.3
Imagine that you are working in a recruitment agency. In your
opinion, do you think support staff needs to know the strategic
direction of the organisation? Why?
ACTIVITY 3.2
In your opinion, how can support staff contribute ideas and expertise, to
make the organisation competitive in the market?
The value chain model can assist in increasing competitive forces by identifying
the focus point of the critical and specific influence, where information
technology can be used effectively to reinforce the position in the competition.
Now, are you able to understand the main idea behind the Porter value chain? By
looking at Figure 3.7, you may find that the activities can actually be categorised
as:
Businesses can develop new scopes for their markets by differentiating the focus,
that is, by identifying specific targets for each product and service, so that both
can deliver the best service. A firm can offer better products and services to a
specific target, compared to currently available products and services offered by
the competitors. Information systems can give a competitive advantage to firms,
by producing data to enhance sales and marketing techniques.
Data can be gathered from a huge group of information resources such as credit
card transactions, purchasing data from points of sale, and demographic data
from websites. Companies can collect data internally or purchase the data from
other organisations. Through pattern assessment of customer purchasing,
companies can define a detailed image on purchasing interest, develop a
relationship with customers and prepare specific products and services.
This partnership enables firms to get new customers, open new opportunities for
cross-selling and product targets, as depicted in Figure 3.9.
ACTIVITY 3.3
Do you think countries need partnership blocks, like the European
Union or East Asia Economic Cooperation? Discuss.
The use of the Internet in business has helped form millions of new businesses
that, operate at a minimal capital cost but, encompass the whole world. It also
helps the organisation to save cost on internal and external communication. How
can this happen? It is done through several forms of creative and productive
Internet usage. Figure 3.10 shows briefly the use of Internet in businesses.
remaining number of leave that has been taken or to apply for leave. The
company could also join the intranet with the Internet and this would make
it easier for workers or the management to obtain information about their
company, wherever they may be.
The need for information technology architecture has become the supporting
structure or platform, for the implementation of an information system.
Suppliers and customers need to closely communicate and perhaps share the
responsibility to fulfil demands.
INTRODUCTION
In order to achieve success, an organisation needs a detailed and effective
planning process. The management plays a very important role in this process.
Failure to formulate an effective strategic plan will cause the organisation to lag
behind its competitors in the market.
You will also learn about two important and popular information systems used
in organisations, namely, Management Information System (MIS) and
Transaction Processing System (TPS).
Before the planning of an information system can be done, several matters need
to be attended to, especially by the upper management. Some of them are:
(a) The upper management must accept information technology as an
important resource for overall organisational activities.
(b) The use of an information system in the organisation must be planned like
how other complex resources are planned. An information system
Once the management understands these points and agrees to the use of an
information system for the overall activities of the organisation, the planning of
the system development can commence.
There are several steps to ensure the success of the information system planning
process. Figure 4.1 shows the steps necessary in the planning of an information
system.
(g) Budget
Organisational activity planning that suits the financial resource.
SELF-CHECK 4.1
If this goal is not achieved, and the use of the information system adds to the
organisational burden, the management should perhaps think it over.
SELF-CHECK 4.2
ACTIVITY 4.1
Level of
Category Example
Management
Strategic SIS Strategic Information System
Strategic
Management
Management EIS Executive Information (Support) System
System
Tactical MIS Management Information System
Mid-level Management
DSS Decision Support System
Management Support
System OAS Office Automation System
ACTIVITY 4.2
Examples of the information systems that are involved are the Transaction
Processing System and Process Control System.
It gives focus to the preparation of information and the support for managers
to make effective decisions. It assists in decision-making at the highest level
of management, middle (tactical) and also at the operations levels.
The aim of MIS is to develop a viable system to maximise the effective use of
latest data approaches, to management practices. It is also aimed at assisting
higher management and managers of organisations, to construct timely and
accurate information not only to decide current and future operations, but also to
identify potential problems that need to be rectified.
With MIS, organisations save valuable time for their workforce and ultimately
save operational costs. Where in the past, business information had to be
manually processed for filing and analysis, it can now be entered immediately
and easily into a computer by a data processor, enabling faster decision-making
and quicker reflexes for the organisation as a whole. This has helped decisions
made in organisations, as effective decision-making demands accurate, timely
and relevant information. MIS cannot create business strategies by itself but it
can assist management in understanding the effects of their strategies and help
enable effective decision-making. MIS systems can be used to convert data into
information useful for decision-making.
ACTIVITY 4.3
Can you think of a system that you are using in your learning
institution (registration system, learner management system, etc)? Can
the system that you have identified be categorised as an MIS? Discuss
with your coursemates.
The input for MIS is information produced from internal data, which is obtained
from the results of the Transaction Processing System (TPS) and external data.
The output is a collection of reports that are distributed to the managers. These
reports are divided into three main categories, which are:
The system gathers all the departmental transactions into several batches,
prepares them for processing and then processes them at the end of each
operation day.
For instance, when you make a booking through a tax free channel, your
booking will be taken and entered into a computer. Even though the
booking has been entered into the computer, it may only be processed after
office hours or the following day.
ACTIVITY 4.4
State other examples of the three processing methods mentioned
earlier.
(iii) Examples:
The calculation of a studentÊs average marks in a semester will
take into account the total marks attained by the student, which is
then divided by the total credit hours taken.
A wage system that multiplies the number of working hours with
the wage per hour of each worker.
ACTIVITY 4.5
After learning about the characteristics and activities of the TPS in
general, can you think of examples of the TPS that are usually
performed?
(vii) Scheduling
Determining the best time and method of delivering the products
and services, so that they arrive on time and in good condition.
For example, for sending fresh vegetables from the farms to the city
centre, a system determines whether transport by train or lorry will
ensure that the vegetables arrive fresh at their destination.
(i) Inventory
Operating like the inventory system discussed previously.
(ii) Purchase Order Processing
Helping the purchasing department to complete the purchase
transaction more efficiently and effectively.
(iii) Receiving
Making a record of the receipt of the goods delivered.
Ensuring the goods delivered are checked by the buyer to
determine their quality and if they are in bad condition, they will
be returned to the supplier.
(iii) Salary
Relating to the salary payment transaction beginning with the
calculation, until the production of a report in the form of a payslip.
Copyright © Open University Malaysia (OUM)
98 TOPIC 4 INFORMATION SYSTEMS INTEGRATION IN THE ORGANISATION
Table 4.2: Some Subsystems that Support the Order Processing System, Purchasing
System and Accounting System
SELF-CHECK 4.3
What are the objectives of the Transaction Processing System?
The organisational changes may occur with the use of information systems
and this change is normally divided into four parts, which are automation,
rationale procedure, business process restructuring and paradigm shift.
INTRODUCTION
You have just learned several information system concepts, such as, the use of IT
in strategic planning and system concepts. The system is developed according to
information obtained from the end user. However, do you know that the
information obtained is insufficient to make decisions in solving certain specific
problems, especially problems encountered by strategic management? In this
topic, we are going to discuss the decision-making process and how the Decision
Support System (DSS) helps managers make effective decisions.
You will recognise DSS as a system that provides communication facilities which
include information in helping consumers solve problems. We will also learn
about the format or structured information that results from DSS, such as, special
reports and periodic report formats. These reports are generated from
managerial science and mathematical models.
5.1 DECISION-MAKING
ACTIVITY 5.1
Before discussing the decision support system, let us learn about the decision-
making process. Decisions are made to prevent problems. As a learner, decision-
making is vital. You need to decide on, for example, the courses that you need to
take this semester. From the moment you try to solve any problem, you will
encounter multiple decisions. How do you define decisions and decision-making?
Decisions are forms of actions taken to avoid or to reduce the negative effect,
or to take advantage of the situation.
require additional thinking processes that are unique and different, in order to
reach a decision.
Figure 5.1 shows the pyramid structure for decision-making for each of the three
levels of management:
(i) Made at the tactical management level like those made by the head of
department or divisional manager.
(ii) Has a guide for reference, in order to obtain a more detailed decision,
consistent with its authority that is less than the strategic management
level.
(iii) The managers are responsible for making short-term and mid-term
plans for the organisation. Some of the tasks of the managers are:
Scheduling or distribution of tasks.
Formulation of the budget.
Giving explanation of the policies, procedures and objectives of
the organisation, to the sub-units under their control.
Distributing the resources and controlling the execution of tasks
by each sub-unit in the organisation.
(iv) The types of problems that need to be addressed by the managers are
simpler than those to be addressed by strategic management, but
much more complex than the ones to be addressed by the operations
division.
(iv) The common problems encountered are structured problems that can
be solved based on specific procedures, like resolving the problem of
workers who always come in late to the office.
(v) Examples of information used by managers at the operations level are
the information related to the processing of wages, detailed
information about daily transactions and information on the process
of producing a product.
SELF-CHECK 5.1
Compare and contrast structured, semi-structured and unstructured
decisions. Give examples for each.
ACTIVITY 5.2
How can a manager prepare a report from all forms of reports, analyse
them and make a decision? Discuss.
DSS that you have learnt about is one of the components in the Management
Support System.
DSS is a system based on computer interactivity. DSS helps decision makers use
data and models to solve structured, semi-structured and unstructured
problems. Why do we need to know DSS? We need to do so because in decision-
making, the person responsible for making the decision needs correct, precise
and the most recent information, in order to make a quality and effective
decision.
Apart from that, DSS can be defined as a system that enables managers to solve
semi-structured and unstructured problems.
The interactivity of DSS, helps decision makers to use data and models to solve
semi-structured and unstructured problems.
DSS can help management analyse information from the level of lower
management onwards, including outside the organisation. It is used to manage
unstructured decisions such as "What will happen if⁄?". It can also use a
Database Management System (DBMS), question language, monetary model,
electronic spread sheets, statistical analysis, report generator or graphic software,
to provide information.
The three objectives above are related to the three basic concepts of DSS: problem
structure, support decision and the effectiveness of decision. Actually, it is
The second objective of the DSS clearly shows that a computerised system cannot
in many ways replace humans in decision-making. From this objective, we
understand that the DSS only helps decision makers handle part of the structured
problems, but some parts of unstructured problems still require human intuition
and consideration, for solutions.
The third objective states that efficiency and the speed of data and information
processing are not the main objectives of a DSS. The main advantage of using a
DSS is to utilise its ability to help users make good quality and effective
decisions. According to McLeod (2001), managers must not find the solutions to
their problems using output from a DSS, only because finding the solution or the
decision-making can be done using mathematical models. On the other hand,
managers have their intuition and judgement to fall back on, in selecting the
solutions for their problems.
SELF-CHECK 5.2
If, for instance, you are given a choice of going to Phuket Island or
Tioman Island for a holiday, what are the criteria that would help you
make your decision? In your opinion, does DSS help you if all the data
needed is entered into the system?
ACTIVITY 5.3
Observe point (g) of the DSS characteristics. Explain briefly this
characteristic by providing suitable examples. Compare your answer
with that of your friendsÊ.
(b) Awareness analysis: Often a variable is changed several times and the
resulting variable changes are observed. It is usually used when the
decision maker is not sure of how to approximate the value of the key
variables. For example, inventory must be reduced by 10% several times.
Then, we will be able to see the relation between the sales and marketing
department.
(c) Objective analysis: Changing the analysis direction from what-if analysis to
sensitivity analysis. Apart from observing how the changes in the variable
can affect other variables, it also sets one target value for the variable. Then,
it will change the other variables repeatedly, until the targeted value is
achieved. For instance, increasing the percentage of stock inventory until
sales and marketing reach a profit of RM1 million and a net profit of
RM850,000.
(d) Optimisation analysis: A process that is very complex, from information
analysis that not only sets one target but also finds the optimum value for
one or more targeted variables. Then, one or several variables are changed
based on constraints given, until the best value of the targeted variable is
achieved. For example, what is the best exposure for an advertisement, its
budget and the type of media available?
SELF-CHECK 5.3
What is the What-if analysis? What is the importance of this to a
managerÊs analysis?
Now, look at Figure 5.4. Based on Figure 5.4, the lowest support level in DSS type
1, is to enable managers to obtain specific information elements. One example is
getting the total sales of one department in Perak only. If the system helps to
analyse all the files, it is DSS type 2. A manager who wants to create a special
report using data from the entire inventory file is one example. The example only
involves one type of file, which is the inventory file.
Often, you have to obtain data and information from multiple sources, multiple
departments, and all kinds of files. In these cases, the degree of complexity and
support in problem solution is higher. Preparing reports from multiple types of
files is an example of DSS type 3. You should already be clear about the need for
taxonomy in understanding the DSS concept at this level.
The three types of DSS discussed earlier provide support in forming special
reports resulting from the query or questioning of a database. The other three
DSS types involve the use of a mathematical model or scientific management
model in supporting a manager in making decisions.
An example given by Alter (1976) for DSS type 4, is the DSS model used to
estimate the effect of a solution. For example, a manager wants to know the effect
of increasing or decreasing the price of products, on the monthly and yearly
profits of the company. The manager will input DSS, for example, RM25 per unit.
DSS will show the manager if the product is priced at RM25 per unit; this will
lead the organisation to obtain a profit of RM5,000 monthly.
However, you must understand that the model is not capable of explaining
whether the price of RM25 is the best option for the manager to retain. The
system can only explain what will happen to the profit if that decision is taken. In
order to provide additional support, you can add some DSS models that can
analyse risks, which can be used by the manager through estimation of analytical
probabilities.
The DSS type 5 suggests decisions. It gives more support to the decision maker
but the degree of complexity of the DSS increases, such as the DSS that uses the
linear algorithm model. A manager can input data about the structure of a
Copyright © Open University Malaysia (OUM)
112 TOPIC 5 DECISION SUPPORT SYSTEM
factory and its equipment, into this DSS model. This will enable the manager to
produce the most effective decision.
The DSS type 6, offers the most support to its user although it is difficult and
complex to develop the solution to his/her problem. An example of the use of
DSS type 6, is when an insurance company sets insurance premiums. Many
company managers let this DSS make decisions for them because they are very
confident with its capability to make good decisions.
SELF-CHECK 5.4
Think of the objectives of DSS with regard to its important
characteristics. How far can DSS be used to provide the best
evaluation for a certain decision?
Although they have the same structure, the characteristics, concepts and
objectives of the three information systems are different from one another. As
indicated by Figure 5.5, data and information from the environment, are input
into the database. A DSS database might also receive similar data and
information from the Financial Information System and other systems and
subsystems. The content of the database will then be utilised by four subsystem
softwares consisting of:
(a) Report writing software;
(b) Mathematical model;
(c) Scientific management model; and
(d) Groupware.
Innovations in ICT have developed a new DSS concept, which is the Group
Decision Support System (GDSS). A team who cooperates to achieve a common
objective can use GDSS to improve communication between group members.
GDSS provides an environment conducive to and which supports the decision-
making process using a software called groupware.
You will agree that information and communication technology (ICT), has made
the world smaller, because it helps us to communicate better, even though our
friends are thousands of miles away. For example, specialist surgeons in Europe
need not be in Malaysia to perform surgery, as it can be done without moving
them here. Thus, the basic theory of the development of GDSS is to communicate
well to produce better decisions.
Figure 5.6: Group size and location that characterise the GDSS environment
For each type of GDSS environment, group members can meet at the same time
or at different times. If group members meet and discuss at the same time, as in a
meeting, this is called synchronous exchange. On the other hand, meetings can
also be held at different times, such as in communicating through e-mail. This is
called asynchronous exchange.
When you look at Figure 5.6, you must be wondering what is meant by decision
room, local decision network and so on. Now, let us see what they are.
The facilitator must make sure that the discussion stays on track. Have you
chatted on the Internet using Skype or Yahoo Messenger? If your answer is
yes, this communication takes place in a decision room, which is almost the
same, except that the text that is typed, is displayed on the big screen. Other
than that, any reference material for discussion can be displayed using
video, colour slides and transparencies.
There are two unique characteristics of GDSS in the decision room which
are: parallel communication and anonymity.
(i) Parallel communication occurs when all participants making
statements use the computer, at the same time.
(ii) Anonymity means that no participant knows who is making each
statement. Anonymity helps participants voice ideas and statements
without fear of being criticised by other participants. Thus, all ideas
and suggestions are evaluated based on meritocracy and not on who
suggests it.
However, you must realise that not all group software packages are suitable to be
used in a working group. Refer to the outline of time or place, in Figure 5.7 and
you will see the technological differences in supporting a working group
according to time and place.
Other than that, every group software package will use different technology,
based on one package that supports the purpose of the working group, such as
the type of group assignments.
Working software must have at least one of the abilities or components listed:
electronic advisor, conference or an electronic meeting room, group timetable,
calendar, planning, conflict resolution, model development, video conference,
document sharing (such as screen, whiteboard and live board), voting, etc.
Actually, there are thousands of group software packages that contain elements
of Web conferencing software and you can look for information on this on the
Web using a search engine.
ACTIVITY 5.4
SELF-CHECK 5.5
1. Give four phases in making decisions as stated by Simon.
The impetus for a Decision Support System (DSS) is to support the manager
in making decisions effectively. DSS provides the facilities to communicate,
which includes information that helps them to solve problems.
There are three main objectives in developing a DSS. The first objective is to
help and provide support to the manager in the decision-making process to
There are 14 characteristics and abilities of an ideal DSS, which are needed by
a support system.
There are four types of basic analytical modelling activities usually needed in
a DSS. These activities are the what-if analysis, awareness analysis,
information searching analysis and optimisation analysis.
GDSS supports a group of individuals that work together to achieve one aim,
by providing an interface to reach and use the shared environment.
Decision rooms provide characteristics that are very different from normal
meeting rooms because, they help the members communicate via technology,
and room design, including its equipment. Decision rooms provide
anonymity; participants do not know who is making each statement.
DSS and GDSS are a part of the Management Support System technology that
helps the manager make good quality decisions, but does not replace them in
making any decisions. This is because in the decision-making phase, humans
still rely on intuition or experience, to come up with good decisions.
DSS and GDSS are very useful and are helpful to companies in making right
decisions. Techno-savvy lifestyles like using laptops or handheld computers
make DSS and GDSS important, as computer mobility enables humans to use
computers anywhere, to help them in making decisions.
INTRODUCTION
In your opinion, what differentiates a manager of a department, from a chief
executive officer (CEO) of an organisation? You might think about the aspects of
their income, personality or maybe social status. However, Martineau's (1968)
experiment discovered otherwise. He found that the biggest differences between
the two were from the working perspective and how work was executed. Even
the type of information system a departmental manager used is different from
that used by a CEO.
A Senior Executive Officer usually uses the Executive Information System (EIS).
EIS is a system that provides the latest information, history and some
anticipation about the status and environment of the company, to support
administration tasks and the process of decision-making of executives. An EIS
usually uses qualitative graphic techniques, communication technology and the
latest processing, all types of input and output mechanisms, which include
storage media, to provide the facilities. EIS is also known as the Executive
Support System (ESS).
In this topic, you will learn how an EIS helps in the managerÊs work and in
making decisions.
Now by saying executives, we are not focusing on lower level executives, such as
sales executives or IT support executives who execute tasks given by the
supervisors, although their contributions are very much important to an
organisation. Our focus here is higher level executives, who are involved in
decision-making, such as a chief executive officer, chief financial officer and chief
information officer.
Other than that, executives are different from lower-level managers in terms of
attitude. Executives are organisation-oriented, while managers are unit- or
department-oriented. Let us take for example the Vice Chancellor of a university and
the dean of a faculty. The Vice Chancellor administrates and leads a university that
may contain 10 faculties, four centres, and six support units, whilst a dean focuses
more on their tasks of leading and planning the strategy for the faculty. We will
learn about the roles of an executive, after learning about the three studies done by
experts in management science Henri Fayol, Henry Mintzberg and John Kotter.
The studies done by The Centre for Information System Research (CISR) at MIT,
found that the main users of EIS are the Chief Executive Officer (CEO), Chief
Financial Officer (CFO) and Chief Operating Officer (COO).
SELF-CHECK 6.1
Who would you call an executive? Name one famous executive in
Malaysia.
SELF-CHECK 6.2
If EIS is not in place, then the CBIS (Computer-based Information System) will
look as shown in Figure 6.1. Figure 6.1 shows that executives receive all
information from the subsystem functions, like the Financial Information System
and Monetary Information System, which then needs to be processed. Executives
still need to analyse and change the data into more meaningful information. EIS,
as shown in Figure 6.2, helps executives analyse and change the data into
meaningful information. EIS will accept all data and information from the
subsystem function and its environment, then process and present it with a good
interface to the executives.
(a) Agendas
These are the objectives of the company that need to be achieved. There are
two types of agendas: long-term and short-term. For example, the long-
term agenda is the type, quantity and design of Proton cars that need to be
produced within five, ten or twenty years. The short-term agenda deals
with the size of passenger car market in Malaysia that needs to be
conquered by the new product, Proton Preve 1.6 CFE.
(b) Networking
Executives must build a network. This is not the same as computer
networking. Kotter thinks that executives need to build networks or
relationships between individuals inside and outside the organisation,
which can or will help in achieving the objectives above.
(c) Surroundings
Executives need to design a good surrounding or environment. The
surrounding is actually the emphasis on good moral values, that can help
networking members cooperate with each other, to achieve the agendas.
Researchers like Professor Daniel J. Isenberg (1984) from Harvard, stated that,
executives generally think about two classes of problems:
(a) First class: how to solve work problems.
(b) Second class: how to manage big issues or general aims of an organisation.
With regard to the first class, executives concentrate more on issues concerning
the organisation and subordinate individuals to solve problems rather than think
about ways to solve them.
IsenbergÊs observation shows that executives do not always follow the correct
steps in making decisions. For example, in handling a problem, executives
usually head straight for the execution of the solution and then backtrack to the
evaluation of alternatives, which is the step prior to execution. Executives make
rational decisions, but the decisions made do not mean that decisions coming
through are correct.
Isenberg believes that executives use their intuition in every aspect of the
decision-making process. Intuition plays a very important part in helping
executives make decisions. This is due to the nature of humans, where problems
endured by executives are unstructured, and this includes the executivesÊ
experience. This strongly affects the process of decision-making by executives.
ACTIVITY 6.1
Search for articles related to high-level executivesÊ roles in leading a
company. In your opinion, why do we need to learn and understand
how executives work?
What you must observe here is that, MintzbergÊs research has become the basis of
modern design information systems based on computers, in the context of EIS.
This role is important in mixing virtual office applications for an executive. In
simpler terms, when you want to develop EIS, you have to create the Mintzberg
research to finalise the types of related applications to be integrated in EIS. This
is because it will be used by executives with the information, who need
characteristics that are unique, compared to other end users.
SELF-CHECK 6.3
If this research was not available, could you identify the information
needs of executives based on your own observations?
(d) What are the Types of Media Used by Executives to Exchange Information
and to Communicate?
(i) Written medium: computer reports, memos, mails, journals and
others, constitute 61% of the transactions received.
(ii) 2% of the received information is during a function.
(iii) 21% is from using the telephone.
(iv) 5% is from scheduled meetings.
(v) 6% is from unscheduled meetings.
So, what does the information above indicate? How is EIS related to all of this?
What is the importance of the researches? There are three main findings that we
need to know:
(a) Most of the information received comes from the organisation's
environment, but a companyÊs internal information has higher value.
(b) Most of the information received by executives is in written form, but those
with the highest value are received orally.
(c) Executives receive little information from the computer.
SELF-CHECK 6.4
6.3.1 Definition
According to McLeod and Schell (2001), EIS is a system that provides
information to executives, concerning the organisation's progress as a whole. In
general, EIS is defined as:
ACTIVITY 6.2
Read the definition given in the book and compare with the definition
given in this module.
There are many EIS softwares and applications available in the market, provided
by commercial software vendors. Usually, these softwares comprise of: office
automation, e-mail, information management, information connection, and
information analysis.
The EIS data needed for input depends on the executive's needs as an end user.
Whatever information needed to make decisions, as well as information deemed
necessary by the executive, should be included in EIS. However, sorting the data
and the types of information that need to be processed by an EIS is difficult. This
is due to the development of EIS, which starts with several features that the
executives are interested in. Then, it is expanded according to the information
needed by the managers using it. Subsequently, the format and type of
information in EIS will become outdated and divert from strategic planning.
SELF-CHECK 6.5
Give examples of other systems that produce output, yet become the
input of EIS.
(e) Has a future-time orientation, because the decision made is for the long
term and can be used in the next few years.
(f) It is connected to the process of value added business, which is then
connected to the DSS, to increase the effectiveness and capabilities of the
system to make better decisions.
SELF-CHECK 6.6
1. Define the Executive Information System (EIS).
2. What is the output of EIS?
3. Sketch the EIS model, including its important components and the
data flow.
4. State the differences between an executive and a departmental
manager.
Research shows that the information needs for executives are more
organisation-oriented.
EIS is capable of creating a new information source, that can help the
company improve its performance and at the same time provide excellent
services to its employees and customers.
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Define an Expert System and its applications;
2. Explain the steps involved in producing rules and information
gathering;
3. Describe the architecture and development of an Expert System;
4. List the main characteristics of an Expert System; and
5. Identify the advantages and disadvantages of an Expert System.
INTRODUCTION
In this topic, you will learn about one of the branches of artificial intelligence, the
Expert System. The Expert System is also known as the knowledge-based system.
The Expert System comprises of many types of systems, based on rules, frames
and fuzzy sets. In this topic, you will also be exposed to the most popular Expert
System, the system based on rules. Ready? Let us get going.
An expert is a person that has the expertise and knowledge of his specialised
field.
According to Efraim Turban (2001), the Expert System (ES) comes from the
Knowledge-based Expert System terminology. A good ES is a system that can
copy the process of reasoning in a human.
Based on the definition given earlier, we can define Expert System as:
SELF-CHECK 7.1
Currently, the Expert System (ES) is a popular topic in Management
Information System. In your own words, explain what an Expert
System is.
Some of the reasons for the need of an Expert System to replace a human expert
are:
(a) To enable the use of expertise after working hours or at different locations;
(b) To automate a routine task that requires human expertise all the time
unattended, thus reducing operational costs;
(c) To replace a retiring or a leaving employee who is an expert; and
(d) To hire an expert is costly.
ACTIVITY 7.1
Has your car ever broken down? Think about how an Expert System
can help a car owner. Discuss this with your coursemates.
(ii) An Expert System that helps identify threats that may put security at
risk.
(iii) An Expert System that helps to form and produce small mechanical
items.
Problem-
solving Example of Expert System Application
Paradigm
Control Controlling the behaviour of the system according to specifications.
Design Aligning objects following limits.
Diagnosis Providing reasons for system malfunction, based on observation.
Instruction Diagnosing and improving behaviour of students.
Translation Providing reasons for situations, based on data given.
Assessment Comparing observation data with expectations.
Planning Designing a plan of action.
Prediction Providing reasons on the cause and effect of a certain decision, based
on the situation.
Selection Identifying the best selection from all alternatives and probabilities.
Prescription Suggesting a solution(s) to improve a malfunction system.
SELF-CHECK 7.2
Differentiate between human expertise and the Expert System. You may
use the following table:
SELF-CHECK 7.3
SELF-CHECK 7.4
From Figure 7.3, you may see the basic components of an Expert System, which are:
(a) Knowledge acquisition facility;
(b) Knowledge base;
(c) Inference engine; and
The expert information that has been acquired, will be used to develop and
expand the base knowledge. The source of knowledge stated here includes
experts, journals, the Internet, online databases or research reports and
experiments.
Rules Creation
Rules are divided into two operators:
(a) IF, called before (a premise or condition); and
(b) THEN, it is called effect (conclusions or actions).
In general, rules can have a few conditions, by relating each condition to the
keywords AND, OR or a combination of these (AND and OR). It is however
better to avoid combining both in one rule.
See the following example that shows how a few conditions are related to AND.
IF<condition 1>
AND<condition 2>
AND<condition n>
THEN<action>
The next example shows how a few conditions are related to AND and OR.
IF<condition 1>
AND<condition 2>
OR<condition 3>
THEN <action>
Representation Rules
Relationship IF the "tank" is empty
THEN the car cannot start
Suggestions IF it is monsoon season
AND there is a cloudy sky
AND the weather station predicted rain
THEN you are advised to bring an umbrella
Instructions IF the car cannot start
AND the "tank" is empty
THEN put petrol in the tank
Strategy IF the car cannot start
AND the "tank" is empty
THEN put petrol in the tank
Step 1 is done
IF Step 1 is done
AND the "tank" is full
THEN check the car battery
Step 2 is done
Heuristics IF a fluid spills
AND the pH of the spill is < 6
AND it smells acidic or sour
THEN the spilt fluid is an acetic acid
Copyright © Open University Malaysia (OUM)
TOPIC 7 EXPERT SYSTEM 145
Inference engine also provides a guideline on using the knowledge in the ES, by
developing an agenda that manages and controls the steps needed for solving a
problem, during the consultation process executed by the user.
There are two strategies used by the inference engine when making decisions or
conclusions. These strategies are forward and backward chaining.
The strategy of forward chaining can obtain a decision and produce more
information with fewer questions, compared to backward chaining. Thus, it is
always used for large scale and complex ES. However, the weakness in this
approach is the long duration taken for processing. Certain ES developed,
Copyright © Open University Malaysia (OUM)
146 TOPIC 7 EXPERT SYSTEM
ACTIVITY 7.2
SELF-CHECK 7.5
Is the inference engine reasoning process, the same as your reasoning
process? Which will you use to solve a problem? Can both processes
be used? Discuss.
For example,
An expert will act based on what he or she can conclude from the answers,
whereas ES responds to the question of WHY by displaying the rules it is
executing.
As an example:
User of ES : HOW?
The ES responds by stepping back to the rules that the system uses to
achieve the decision. Stepping back to the rules is how the Expert System
does the reasoning.
SELF-CHECK 7.6
In your opinion, what are the differences between a user interface in
an Expert System and in other information systems like MIS?
SELF-CHECK 7.7
Compare and contrast strategic forward chaining and strategic
backward chaining.
(f) Flexible
Due to the large amount of knowledge possessed by an ES, it is important
for the ES to have an efficient mechanism to administer the compilation of
its existing knowledge.
For example,
Table 7.4 shows the difference between the conventional system and ES.
Table 7.4: The Differences between the Conventional System and the Expert System
SELF-CHECK 7.8
List and describe the three main characteristics of an Expert System.
Even though an Expert System usually models the expertise of either one or
more experts, an ES also models expertise based on other alternative
sources, such as printed material (books, manuals, journals and others). The
prerequisites to be a domain expert are that he must:
(i) Be knowledgeable in a particular field;
(ii) Have skills in solving problems;
(iii) Be competent in presenting knowledge;
(iv) Have time management skills; and
(v) Be cooperative.
(c) User
The user is one who uses the Expert System when it has been fully
developed. He or she will help during the knowledge acquiring process by
explaining the problems to the knowledge engineer.
(i) LISP
All ES developed in the early days used LISP, or tools written using
the LISP language.
(ii) PROLOG
The ongoing research of artificial intelligence has given birth to the
programming language PROLOG. PROLOG is the acronym for
„Programming in Logic‰. A program using PROLOG can be assumed
to be a knowledge database that stores facts and rules.
SELF-CHECK 7.9
In your opinion, can the methodology used in developing a
conventional system be applied in developing an Expert System ?
(a) Consistency
One of the advantages of an ES is that the results given are consistent. This
might be due to the fact that there are no elements such as, exhaustion and
emotions, as experienced by humans.
SELF-CHECK 7.10
The Expert System also has weaknesses and flaws. In your opinion, do
these weaknesses influence the quality of an Expert System?
SELF-CHECK 7.11
An Expert System (ES) is a system that mimics the human capability to think
and reason, for decision-making.
INTRODUCTION
In the beginning, Functional Information Systems were developed specifically for
carrying out precise functions such as, a system for the accounts, marketing and
finance departments. These systems were not related to one another. Thus,
information management was not effective in some cases that required a solution
from several system functions.
Characteristics of Functional
Examples
Information Systems
It consists of several subsystems of An attendance system can store and trace
an information system that supports attendance records and working hours of
specific functions or activities. workers.
Even though this system focuses on
An accounting information system can be
certain activities, it can be integrated
integrated with the marketing information
with other functional information
system, to facilitate transactions and the tasks
systems to form a single system that
between the two departments.
is useful for the organisation.
Functional information systems can
Attendance records, overtime claim records and
interface with others to form a
salary records from different subsystems can be
complete information system for the
integrated to calculate the amount to be paid to
organisation. This is the result of the
employees for the previous month.
integration of the subsystems.
The marketing information system can obtain
This information system can also feedback from the user or the client, through
interface with the surroundings. online feedback facilities (like feedback forms on
websites).
As can be seen from Figure 8.1, there are five core functions, namely, finance,
accounting, marketing, manufacturing (production) and human resource in an
organisation. Some of the finance and accounting functions have already been
discussed in Transaction Processing System (TPS) earlier; as such, this topic will
focus on marketing, manufacturing and human resource related information
systems.
Sales managers must plan, monitor and help increase the performance of sales
staff who market the organisation's products. That is why most organisations
have computer-based Accounting Information Systems to generate sales analysis
reports that analyse sales by products, customers, types of customers, sales
person, sales area and others. These reports help the marketing manager monitor
the sales performance of products and sales staff. At the same time, it helps
marketing managers prepare programs that would improve sales for the
organisation.
SELF-CHECK 8.1
In 1966, Professor Philip Kotler (Mcleod, 1998) identified three types of marketing
information related to the collection and processing of marketing information. The
three types of marketing information are displayed in Figure 8.2.
The output subsystem will use the stored data to produce information related to
product marketing, promotion, venue and product pricing. The output
subsystem consists of the product subsystem, venue subsystem, promotional
subsystem, pricing subsystem and mixed-integration subsystem. All these
subsystems will be discussed in the following sections. Data stored in the
database can be shared by other functional fields and is not limited to the
marketing unit only. The Marketing Information System model is shown in
Figure 8.3.
ACTIVITY 8.1
(a) The Production Scheduling System needs four files to prepare the Master
Production Schedule the CustomerÊs Order File, Sales Forecast File,
Finished Product Inventory File, and Production Capacity File. The main
production schedule plans the future production by, considering the lead-
time factor and the production time.
(d) Order Production System uses the order schedule that has been planned as
input and prints the order production report, of which a copy is given to
the procurement department and the shop floor manager.
ACTIVITY 8.2
The components or items are pulled back to the next production process as soon
as it is ready. The raw material inventory arrives just-in-time to be used by the
factory, whereas the process inventory is completed by a process as soon as it
needs to be used by the next process.
This approach has less or no stored stocks. The JIT system minimises the
inventory cost by producing items in small quantities. The suitable lot size for a
JIT system is 1. This lot size is the number of items to be produced at one time. It
needs good time planning and cooperation from the suppliers.
In forwarding one item to the next production process, when a worker is ready to
receive the next item, he will signal the worker before him to send the item.
Kanban (in Japanese) is like a card or light. The JIT approach does not stress on
the use of computers.
SELF-CHECK 8.2
You have already been exposed to the Reordering Point, Material
Requirement Planning and Manufacturing Material Resource
Planning. In your opinion, what is the importance of Just-in-Time?
The main activity of the human resource management is shown in Figure 8.7,
which describes staff resource flow in an organisation.
SELF-CHECK 8.3
Why do we need to train the staff of an organisation?
The database for the Human Resource Information System consists of staff data
and non-staff data. Staff data refers to the storing of data on the organisation's
staff. Non-staff data is the storage of data obtained from the organisation's
environment such as the government, labour union, recruitment agencies and
others.
ACTIVITY 8.3
SELF-CHECK 8.4
SELF-CHECK 8.5
SELF-CHECK 8.6
What is the difference between human resource research and human
resource intelligence?
ACTIVITY 8.4
ACTIVITY 8.5
SELF-CHECK 8.7
OR
Thank you.