TRANSACTION PROCESSING SYSTEM (TPS)
This is a system which collects and stores data about transaction occurring within an organization on a day to day basis. As the name implies, Transaction Processing Systems (“TPS”) are designed to process routine transactions efficiently and accurately. A business will have several (sometime many) TPS. A TPS represents the lowest of information system that are used within the organization. Data captured in TPS normally goes to a database and this can be used and shared by other systems such as decision support system, management system etc. They provide information required by operational level managers.
Examples of TPS includes: –
I. Billing systems to send invoices to customer
II. Systems to calculate the weekly and monthly payroll and tax payments
III. Production and purchasing systems to calculate raw material requirements
IV. Stock control systems to process all movements into, within and out of the business
V. Automated Teller Machine (ATM)
VI. Electronic Point of Sale (POS)
VII. Airline reservation Systems
Characteristics / Features of Transaction Processing System
i. Deals with detailed data
ii. Their Output is the input of MIS
iii. They are present oriented.
iv. They are internal oriented i.e. deals with internal activities of the organization.
v. Deal with structured decision / operational decision.
vi. Are found at the operational level of management
NB/ Each department in an organization has its own Transaction Processing System
MANAGEMENT INFORMATION SYSTEM / MANAGEMENT REPORTING SYSTEM
This system is designed to produce reports about the operations and finances of all level of management in a company. Management report system helps the manager of the company to compare the performance of the company with the past year’s performance and with the expected performance. In this way, the manager can evaluate their own performance and work on improving the performance of the company. This report is used by upper management to compare the financial output and its efficiency of operations with the set goals for the company. This is a framework of both computers and human based information systems that gathers processes and reports timely accurately and relevant, information for decision making at the various levels of management. It can also be defined as a set of formalized procedures designed to provide managers at all levels with appropriate information from internal and external sources to enable them make timely and effective decisions. Mainly, concerned with internal source of information and take data from the Transaction Processing System and summarized it into a series of management report. MIS reports tend to be used by middle management and operational supervisors.
Management information system Reports
a. Schedule/Periodic/Routine Reports – these are reports produced on regular basis e.g. annually, semiannually,
monthly etc. They are produced at predetermined intervals.
b. On Demand / Ad hoc Reports – these are reports produced on need or on request. They are normally produced to meet irregular needs of the organization e.g. before giving a loan a report on the customer’s account may be requested for.
c. Exceptional Reports – These are reports produced when certain unusual conditions occur. E.g. if the invention goes to the re-order point, it may trigger the system to produce a report to request for a new order.
d. Predictive Reports – These are reports that indicate what is to happen in future. They are normally useful for planning purposes e.g. budget and financial statements.
e. Summary Reports – These are reports that show totals and trends e.g. reports showing the total sales by office, products etc.
Examples of MIS includes: –
I. Process control systems
II. Human Resource Management systems
III. Sales Management Systems
IV. Inventory control Systems
V. Enterprise resource planning systems
VI. Management reporting systems
Characteristics of Management Information System
i. They have little analytical capability.
ii. They are report oriented.
iii. They handle more summarized information compared to the TPS.
iv. They have internal rather than external orientation.
v. Their input is output from TPS.
vi. They support structured and semi-structured decision both at operational level and at middle level.
vii. They are relevant at the strategic, tactical and operational levels.
Types of Management information system
• Strategic Business Unit (MIS) –this supports a single division of business unit which is strategic i.e. it is unit oriented
• Coordinating MIS – this is used by middle level management to coordinate strategic and operational activities.
• Policy / planning MIS – This is used by top level managers for planning purposes.