Techniques of information Reduction
As pioneering computer scientist Grace Hopper stressed throughout her career,
computers are indispensable, but they also pose the threat of producing too much
information (information overload) . To keep information from overwhelming people in an organization, it’ s important to control information . With an information system, the
following control methods are possible: Routing information so that it goes to only those people who really need to see the
information . Summarizing information so that decision-makers do not drown in the details . Enabling selectivity so that people with specific information needs can get that information
(and ignore the rest) . Eliminating unnecessary information ( exclusion) so that it doesn’ t take up time .
INFORMATION SYSTEMS IN ORGANIZATIONS To meet the information needs of an organization’s employees, many different
systems have been developed . In a very small business, a single computer might meet all of the business’ s information needs . Larger organizations supplement single-user systems
with minicomputers, mainframe computers, local area networks (LANs) , and wide area
networks ( WANs ) . Some of these larger systems are designed to assist workgroups
( teams of two or more people working on the same projects) ; others are enterprise-wide systems , available throughout an organization ( including all of the organization’ s branch
offices) .
Transaction Processing Systems (TPS)
A transaction processing system ( TPS) ( also called an operational system or a data processing system) handles an organization’s day-to-day accounting needs . It keeps a
careful, verifiable record of every transaction involving money, including purchases,
sales, and payroll payments . In businesses that sell products, a TPS is often linked with
an inventory control system so that sales personnel will know whether an item is in stock .
Transaction processing systems date to the earliest years of business computing, and the
cost savings they introduced helped create a huge market for business computers . A TPS
saves money by automating routine, labor-intensive record keeping .
Early transaction processing systems used batch processing, in which the data was
gathered and processed at periodic intervals, such as once per week . With the rise of
timesharing systems in the 1970s, online processing systems were developed . These
systems enabled operations personnel to enter transaction data and see totals and other
results immediately .
Transaction processing systems provide useful tools for employees, such as sales and human
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resource personnel, but they’ re useful for managers, too . A well-designed TPS can produce periodic
summary reports that provide managers with a quick overview of the organizations performance .
They can also provide exception reports that alert managers to unexpected developments (such as
high demand for a new product) .
Management Information Systems (MIS)
A management information system (MIS) is a computer-based system that supports
the information needs of different levels of management . This type of system is designed
to help management make informed decisions . Most management information systems are
designed to work with transaction processing systems . They produce reports that tell
middle managers how well they are meeting goals .