Transaction processing system

Section A – Information Technology

 

Download the study material from below link:

http://www.4shared.com/document/fzxMts4E/Transaction_processing_system.html

Data Communications (Section – A)

What is Data Communications?


The distance over which data moves within a computer may vary from a few thousandths of an inch, as is the case within a single IC chip, to as much as several feet along the backplane of the main circuit board. Over such small distances, digital data may be transmitted as direct, two-level electrical signals over simple copper conductors. Except for the fastest computers, circuit designers are not very concerned about the shape of the conductor or the analog characteristics of signal transmission.

Frequently, however, data must be sent beyond the local circuitry that constitutes a computer. In many cases, the distances involved may be enormous. Unfortunately, as the distance between the source of a message and its destination increases, accurate transmission becomes increasingly difficult. This results from the electrical distortion of signals traveling through long conductors, and from noise added to the signal as it propagates through a transmission medium. Although some precautions must be taken for data exchange within a computer, the biggest problems occur when data is transferred to devices outside the computer's circuitry. In this case, distortion and noise can become so severe that information is lost.

Data Communications concerns the transmission of digital messages to devices external to the message source. "External" devices are generally thought of as being independently powered circuitry that exists beyond the chassis of a computer or other digital message source. As a rule, the maximum permissible transmission rate of a message is directly proportional to signal power, and inversely proportional to channel noise. It is the aim of any communications system to provide the highest possible transmission rate at the lowest possible power and with the least possible noise.


Communications Channels

A communications channel is a pathway over which information can be conveyed. It may be defined by a physical wire that connects communicating devices, or by a radio, laser, or other radiated energy source that has no obvious physical presence. Information sent through a communications channel has a source from which the information originates, and a destination to which the information is delivered. Although information originates from a single source, there may be more than one destination, depending upon how many receive stations are linked to the channel and how much energy the transmitted signal possesses.

In a digital communications channel, the information is represented by individual data bits, which may be encapsulated into multibit message units. A byte, which consists of eight bits, is an example of a message unit that may be conveyed through a digital communications channel. A collection of bytes may itself be grouped into a frame or other higher-level message unit. Such multiple levels of encapsulation facilitate the handling of messages in a complex data communications network.

Any communications channel has a direction associated with it:

The message source is the transmitter, and the destination is the receiver. A channel whose direction of transmission is unchanging is referred to as a simplex channel. For example, a radio station is a simplex channel because it always transmits the signal to its listeners and never allows them to transmit back.

A half-duplex channel is a single physical channel in which the direction may be reversed. Messages may flow in two directions, but never at the same time, in a half-duplex system. In a telephone call, one party speaks while the other listens. After a pause, the other party speaks and the first party listens. Speaking simultaneously results in garbled sound that cannot be understood.

A full-duplex channel allows simultaneous message exchange in both directions. It really consists of two simplex channels, a forward channel and a reverse channel, linking the same points. The transmission rate of the reverse channel may be slower if it is used only for flow control of the forward channel.


Serial Communications


Most digital messages are vastly longer than just a few bits. Because it is neither practical nor economic to transfer all bits of a long message simultaneously, the message is broken into smaller parts and transmitted sequentially. Bit-serial transmission conveys a message one bit at a time through a channel. Each bit represents a part of the message. The individual bits are then reassembled at the destination to compose the message. In general, one channel will pass only one bit at a time. Thus, bit-serial transmission is necessary in data communications if only a single channel is available. Bit-serial transmission is normally just called serial transmission and is the chosen communications method in many computer peripherals.

Byte-serial transmission conveys eight bits at a time through eight parallel channels. Although the raw transfer rate is eight times faster than in bit-serial transmission, eight channels are needed, and the cost may be as much as eight times higher to transmit the message. When distances are short, it may nonetheless be both feasible and economic to use parallel channels in return for high data rates. The popular Centronics printer interface is a case where byte-serial transmission is used. As another example, it is common practice to use a 16-bit-wide data bus to transfer data between a microprocessor and memory chips; this provides the equivalent of 16 parallel channels. On the other hand, when communicating with a timesharing system over a modem, only a single channel is available, and bit-serial transmission is required. This figure illustrates these ideas:

The baud rate refers to the signalling rate at which data is sent through a channel and is measured in electrical transitions per second. In the EIA232 serial interface standard, one signal transition, at most, occurs per bit, and the baud rate and bit rate are identical. In this case, a rate of 9600 baud corresponds to a transfer of 9,600 data bits per second with a bit period of 104 microseconds (1/9600 sec.). If two electrical transitions were required for each bit, as is the case in non-return-to-zero coding, then at a rate of 9600 baud, only 4800 bits per second could be conveyed. The channel efficiency is the number of bits of useful information passed through the channel per second. It does not include framing, formatting, and error detecting bits that may be added to the information bits before a message is transmitted, and will always be less than one.

The data rate of a channel is often specified by its bit rate (often thought erroneously to be the same as baud rate). However, an equivalent measure channel capacity is bandwidth. In general, the maximum data rate a channel can support is directly proportional to the channel's bandwidth and inversely proportional to the channel's noise level.

A communications protocol is an agreed-upon convention that defines the order and meaning of bits in a serial transmission. It may also specify a procedure for exchanging messages. A protocol will define how many data bits compose a message unit, the framing and formatting bits, any error-detecting bits that may be added, and other information that governs control of the communications hardware. Channel efficiency is determined by the protocol design rather than by digital hardware considerations. Note that there is a tradeoff between channel efficiency and reliability - protocols that provide greater immunity to noise by adding error-detecting and -correcting codes must necessarily become less efficient.


Asynchronous vs. Synchronous Transmission


Serialized data is not generally sent at a uniform rate through a channel. Instead, there is usually a burst of regularly spaced binary data bits followed by a pause, after which the data flow resumes. Packets of binary data are sent in this manner, possibly with variable-length pauses between packets, until the message has been fully transmitted. In order for the receiving end to know the proper moment to read individual binary bits from the channel, it must know exactly when a packet begins and how much time elapses between bits. When this timing information is known, the receiver is said to be synchronized with the transmitter, and accurate data transfer becomes possible. Failure to remain synchronized throughout a transmission will cause data to be corrupted or lost.

Two basic techniques are employed to ensure correct synchronization. In synchronous systems, separate channels are used to transmit data and timing information. The timing channel transmits clock pulses to the receiver. Upon receipt of a clock pulse, the receiver reads the data channel and latches the bit value found on the channel at that moment. The data channel is not read again until the next clock pulse arrives. Because the transmitter originates both the data and the timing pulses, the receiver will read the data channel only when told to do so by the transmitter (via the clock pulse), and synchronization is guaranteed.

Techniques exist to merge the timing signal with the data so that only a single channel is required. This is especially useful when synchronous transmissions are to be sent through a modem. Two methods in which a data signal is self-timed are nonreturn-to-zero and biphase Manchester coding. These both refer to methods for encoding a data stream into an electrical waveform for transmission.

In asynchronous systems, a separate timing channel is not used. The transmitter and receiver must be preset in advance to an agreed-upon baud rate. A very accurate local oscillator within the receiver will then generate an internal clock signal that is equal to the transmitter's within a fraction of a percent. For the most common serial protocol, data is sent in small packets of 10 or 11 bits, eight of which constitute message information. When the channel is idle, the signal voltage corresponds to a continuous logic '1'. A data packet always begins with a logic '0' (the start bit) to signal the receiver that a transmission is starting. The start bit triggers an internal timer in the receiver that generates the needed clock pulses. Following the start bit, eight bits of message data are sent bit by bit at the agreed upon baud rate. The packet is concluded with a parity bit and stop bit. One complete packet is illustrated below:

The packet length is short in asynchronous systems to minimize the risk that the local oscillators in the receiver and transmitter will drift apart. When high-quality crystal oscillators are used, synchronization can be guaranteed over an 11-bit period. Every time a new packet is sent, the start bit resets the synchronization, so the pause between packets can be arbitrarily long. Note that the EIA232 standard defines electrical, timing, and mechanical characteristics of a serial interface. However, it does not include the asynchronous serial protocol shown in the previous figure, or the ASCII alphabet described next.


The ASCII Character Set


Characters sent through a serial interface generally follow the ASCII (American Standard Code for Information Interchange) character standard:

This standard relates binary codes to printable characters and control codes. Fully 25 percent of the ASCII character set represents nonprintable control codes, such as carriage return (CR) and line feed (LF). Most modern character-oriented peripheral equipment abides by the ASCII standard, and thus may be used interchangeably with different computers.


Parity and Checksums


Noise and momentary electrical disturbances may cause data to be changed as it passes through a communications channel. If the receiver fails to detect this, the received message will be incorrect, resulting in possibly serious consequences. As a first line of defense against data errors, they must be detected. If an error can be flagged, it might be possible to request that the faulty packet be resent, or to at least prevent the flawed data from being taken as correct. If sufficient redundant information is sent, one- or two-bit errors may be corrected by hardware within the receiver before the corrupted data ever reaches its destination.

A parity bit is added to a data packet for the purpose of error detection. In the even-parity convention, the value of the parity bit is chosen so that the total number of '1' digits in the combined data plus parity packet is an even number. Upon receipt of the packet, the parity needed for the data is recomputed by local hardware and compared to the parity bit received with the data. If any bit has changed state, the parity will not match, and an error will have been detected. In fact, if an odd number of bits (not just one) have been altered, the parity will not match. If an even number of bits have been reversed, the parity will match even though an error has occurred. However, a statistical analysis of data communication errors has shown that a single-bit error is much more probable than a multibit error in the presence of random noise. Thus, parity is a reliable method of error detection.

Another approach to error detection involves the computation of a checksum. In this case, the packets that constitute a message are added arithmetically. A checksum number is appended to the packet sequence so that the sum of data plus checksum is zero. When received, the packet sequence may be added, along with the checksum, by a local microprocessor. If the sum is nonzero, an error has occurred. As long as the sum is zero, it is highly unlikely (but not impossible) that any data has been corrupted during transmission.

Errors may not only be detected, but also corrected if additional code is added to a packet sequence. If the error probability is high or if it is not possible to request retransmission, this may be worth doing. However, including error-correcting code in a transmission lowers channel efficiency, and results in a noticeable drop in channel throughput.


Data Compression


If a typical message were statistically analyzed, it would be found that certain characters are used much more frequently than others. By analyzing a message before it is transmitted, short binary codes may be assigned to frequently used characters and longer codes to rarely used characters. In doing so, it is possible to reduce the total number of characters sent without altering the information in the message. Appropriate decoding at the receiver will restore the message to its original form. This procedure, known as data compression, may result in a 50 percent or greater savings in the amount of data transmitted. Even though time is necessary to analyze the message before it is transmitted, the savings may be great enough so that the total time for compression, transmission, and decompression will still be lower than it would be when sending an uncompressed message.

Some kinds of data will compress much more than others. Data that represents images, for example, will usually compress significantly, perhaps by as much as 80 percent over its original size. Data representing a computer program, on the other hand, may be reduced only by 15 or 20 percent.

A compression method called Huffman coding is frequently used in data communications, and particularly in fax transmission. Clearly, most of the image data for a typical business letter represents white paper, and only about 5 percent of the surface represents black ink. It is possible to send a single code that, for example, represents a consecutive string of 1000 white pixels rather than a separate code for each white pixel. Consequently, data compression will significantly reduce the total message length for a faxed business letter. Were the letter made up of randomly distributed black ink covering 50 percent of the white paper surface, data compression would hold no advantages.


Data Encryption

Privacy is a great concern in data communications. Faxed business letters can be intercepted at will through tapped phone lines or intercepted microwave transmissions without the knowledge of the sender or receiver. To increase the security of this and other data communications, including digitized telephone conversations, the binary codes representing data may be scrambled in such a way that unauthorized interception will produce an indecipherable sequence of characters. Authorized receive stations will be equipped with a decoder that enables the message to be restored. The process of scrambling, transmitting, and descrambling is known as encryption.

Custom integrated circuits have been designed to perform this task and are available at low cost. In some cases, they will be incorporated into the main circuitry of a data communications device and function without operator knowledge. In other cases, an external circuit is used so that the device, and its encrypting/decrypting technique, may be transported easily.


Data Storage Technology

Normally, we think of communications science as dealing with the contemporaneous exchange of information between distant parties. However, many of the same techniques employed in data communications are also applied to data storage to ensure that the retrieval of information from a storage medium is accurate. We find, for example, that similar kinds of error-correcting codes used to protect digital telephone transmissions from noise are also used to guarantee correct readback of digital data from compact audio disks, CD-ROMs, and tape backup systems.


Data Transfer in Digital Circuits

Data is typically grouped into packets that are either 8, 16, or 32 bits long, and passed between temporary holding units called registers. Data within a register is available in parallel because each bit exits the register on a separate conductor. To transfer data from one register to another, the output conductors of one register are switched onto a channel of parallel wires referred to as a bus. The input conductors of another register, which is also connected to the bus, capture the information:

Following a data transaction, the content of the source register is reproduced in the destination register. It is important to note that after any digital data transfer, the source and destination registers are equal; the source register is not erased when the data is sent.

The transmit and receive switches shown above are electronic and operate in response to commands from a central control unit. It is possible that two or more destination registers will be switched on to receive data from a single source. However, only one source may transmit data onto the bus at any time. If multiple sources were to attempt transmission simultaneously, an electrical conflict would occur when bits of opposite value are driven onto a single bus conductor. Such a condition is referred to as a bus contention. Not only will a bus contention result in the loss of information, but it also may damage the electronic circuitry. As long as all registers in a system are linked to one central control unit, bus contentions should never occur if the circuit has been designed properly. Note that the data buses within a typical microprocessor are funda-mentally half-duplex channels.


Transmission over Short Distances (< 2 feet)

When the source and destination registers are part of an integrated circuit (within a microprocessor chip, for example), they are extremely close (thousandths of an inch). Consequently, the bus signals are at very low power levels, may traverse a distance in very little time, and are not very susceptible to external noise and distortion. This is the ideal environment for digital communications. However, it is not yet possible to integrate all the necessary circuitry for a computer (i.e., CPU, memory, disk control, video and display drivers, etc.) on a single chip. When data is sent off-chip to another integrated circuit, the bus signals must be amplified and conductors extended out of the chip through external pins. Amplifiers may be added to the source register:

Bus signals that exit microprocessor chips and other VLSI circuitry are electrically capable of traversing about one foot of conductor on a printed circuit board, or less if many devices are connected to it. Special buffer circuits may be added to boost the bus signals sufficiently for transmission over several additional feet of conductor length, or for distribution to many other chips (such as memory chips).


Noise and Electrical Distortion

Because of the very high switching rate and relatively low signal strength found on data, address, and other buses within a computer, direct extension of the buses beyond the confines of the main circuit board or plug-in boards would pose serious problems. First, long runs of electrical conductors, either on printed circuit boards or through cables, act like receiving antennas for electrical noise radiated by motors, switches, and electronic circuits:

Such noise becomes progressively worse as the length increases, and may eventually impose an unacceptable error rate on the bus signals. Just a single bit error in transferring an instruction code from memory to a microprocessor chip may cause an invalid instruction to be introduced into the instruction stream, in turn causing the computer to totally cease operation.

A second problem involves the distortion of electrical signals as they pass through metallic conductors. Signals that start at the source as clean, rectangular pulses may be received as rounded pulses with ringing at the rising and falling edges:

These effects are properties of transmission through metallic conductors, and become more pronounced as the conductor length increases. To compensate for distortion, signal power must be increased or the transmission rate decreased.

Special amplifier circuits are designed for transmitting direct (unmodulated) digital signals through cables. For the relatively short distances between components on a printed circuit board or along a computer backplane, the amplifiers are in simple IC chips that operate from standard +5v power. The normal output voltage from the amplifier for logic '1' is slightly higher than the minimum needed to pass the logic '1' threshold. Correspondingly for logic '0', it is slightly lower. The difference between the actual output voltage and the threshold value is referred to as the noise margin, and represents the amount of noise voltage that can be added to the signal without creating an error:

Transmission over Medium Distances (< 20 feet)


Computer peripherals such as a printer or scanner generally include mechanisms that cannot be situated within the computer itself. Our first thought might be just to extend the computer's internal buses with a cable of sufficient length to reach the peripheral. Doing so, however, would expose all bus transactions to external noise and distortion even though only a very small percentage of these transactions concern the distant peripheral to which the bus is connected.

If a peripheral can be located within 20 feet of the computer, however, relatively simple electronics may be added to make data transfer through a cable efficient and reliable. To accomplish this, a bus interface circuit is installed in the computer:

It consists of a holding register for peripheral data, timing and formatting circuitry for external data transmission, and signal amplifiers to boost the signal sufficiently for transmission through a cable. When communication with the peripheral is necessary, data is first deposited in the holding register by the microprocessor. This data will then be reformatted, sent with error-detecting codes, and transmitted at a relatively slow rate by digital hardware in the bus interface circuit. In addition, the signal power is greatly boosted before transmission through the cable. These steps ensure that the data will not be corrupted by noise or distortion during its passage through the cable. In addition, because only data destined for the peripheral is sent, the party-line transactions taking place on the computer's buses are not unnecessarily exposed to noise.

Data sent in this manner may be transmitted in byte-serial format if the cable has eight parallel channels (at least 10 conductors for half-duplex operation), or in bit-serial format if only a single channel is available.


Transmission over Long Distances (< 4000 feet)

When relatively long distances are involved in reaching a peripheral device, driver circuits must be inserted after the bus interface unit to compensate for the electrical effects of long cables:

This is the only change needed if a single peripheral is used. However, if many peripherals are connected, or if other computer stations are to be linked, a local area network (LAN) is required, and it becomes necessary to drastically change both the electrical drivers and the protocol to send messages through the cable. Because multiconductor cable is expensive, bit-serial transmission is almost always used when the distance exceeds 20 feet.

In either a simple extension cable or a LAN, a balanced electrical system is used for transmitting digital data through the channel. This type of system involves at least two wires per channel, neither of which is a ground. Note that a common ground return cannot be shared by multiple channels in the same cable as would be possible in an unbalanced system.

The basic idea behind a balanced circuit is that a digital signal is sent on two wires simultaneously, one wire expressing a positive voltage image of the signal and the other a negative voltage image. When both wires reach the destination, the signals are subtracted by a summing amplifier, producing a signal swing of twice the value found on either incoming line. If the cable is exposed to radiated electrical noise, a small voltage of the same polarity is added to both wires in the cable. When the signals are subtracted by the summing amplifier, the noise cancels and the signal emerges from the cable without noise:

A great deal of technology has been developed for LAN systems to minimize the amount of cable required and maximize the throughput. The costs of a LAN have been concentrated in the electrical interface card that would be installed in PCs or peripherals to drive the cable, and in the communications software, not in the cable itself (whose cost has been minimized). Thus, the cost and complexity of a LAN are not particularly affected by the distance between stations.


Transmission over Very Long Distances (greater than 4000 feet)

Data communications through the telephone network can reach any point in the world. The volume of overseas fax transmissions is increasing constantly, and computer networks that link thousands of businesses, governments, and universities are pervasive. Transmissions over such distances are not generally accomplished with a direct-wire digital link, but rather with digitally-modulated analog carrier signals. This technique makes it possible to use existing analog telephone voice channels for digital data, although at considerably reduced data rates compared to a direct digital link.

Transmission of data from your personal computer to a timesharing service over phone lines requires that data signals be converted to audible tones by a modem. An audio sine wave carrier is used, and, depending on the baud rate and protocol, will encode data by varying the frequency, phase, or amplitude of the carrier. The receiver's modem accepts the modulated sine wave and extracts the digital data from it. Several modulation techniques typically used in encoding digital data for analog transmission are shown below:

Similar techniques may be used in digital storage devices such as hard disk drives to encode data for storage using an analog medium.

Management Information System (MIS) – Section A

MIS:

The meanings of the terms management information system (MIS) and information system (IS) are identical and interchangeable in an organizational context. They refer to the system providing technology-based information and communication services in an organization. They also refer to the organizational function that manages the system. The concept of a management information system enlarges the scope of information processing to encompass not only applications for transactions and operations, but also applications that support administrative and management functions, support organizational communications and coordination, and add value to products and services.

Historical Development of Management
Information Systems

When computers were first used in organizations in the mid-1950s, the applications were primarily the simple processing of transaction records and preparation of business documents and standard reports. This use was termed data processing (DP) or electronic data processing (EDP). The business function for developing and managing the processing systems was also termed data processing.

By the mid-1960s, many users and builders of information processing systems developed a more comprehensive vision of what computers could do for organizations. This vision was termed a management information system (MIS). It enlarged the scope of data processing to add systems for supporting management and administrative activities including planning, scheduling, analysis, and decision making. The business function to build and manage the management information system was often termed MIS.

In the 1980s and 1990s, there was a merging of computer and communications technologies. The organizational use of information technology was extended to internal networks (intranets), local area networks (q.v.), external networks that connect an organization to its suppliers and customers (see NETWORKS, COMPUTER), and communications systems that enable employees to work alone or in groups with greater effectiveness and efficiency. Many organizations were able to achieve competitive advantage by the use of information and information technology in products, services, and business processes. Innovative applications of information technology created value by providing customized services at any time and at any location, and information systems began to prompt changes in organizational structures and processes.

Although the scope of systems providing information technology services has increased dramatically, the broad concept of MIS as a system that combines transaction and operational requirements with administrative and management support remains valid. The term MIS is still in common use despite a recent tendency to use the simpler term information system. The function that builds and manages the system is variously called information systems, information services or information management.

The information system (management information system) of an organization consists of the information technology infrastructure, application systems, and personnel that employ information technology to deliver information and communications services for transaction processing, operations, administration, and management of an organization. The system uses a blend of computer and communications hardware and software, automation (q.v.), human-machine interaction, and internal and external repositories of data.

Although one can have an information system without use of a computer and associated electronic communication, the modern concept of a management information system assumes the use of such technology. An automated information system allows tasks to be done faster and more efficiently, removes many of the constraints of manual methods, and promotes new ways of doing things.

The Purposes of an Organizational
Information System

An organizational information system exists because an organization exists. To achieve its purpose, an organization must (1) define the characteristics of goods and services to be provided, (2) deliver those goods and services to customers, and (3) manage, direct, coordinate, and control the organization and its resources. Information technology is pervasive in and vital to these three organizational objectives. The objectives for an information system follow naturally from the organizational purposes:

1. Add functionality and information value to products and sewices. Information and information processing are important to the products and services provided by an organization, either incorporated in their functionality or as value added through information processing. Examples are information and communication functions designed into products such as automobiles or cellular phones (see EMBEDDED SYSTEMS) and additional information provided to customers through online banking or investment services (see PERSONAL FINANCE).

2. Support transaction and operational processes. Information, information processing, and communications are integral parts of the processes by which goods and services are provided by an organization. Information technology is vital in achieving quality, short cycle time, and efficiency in transaction processing and operational processes.

3. Support administrative and management activities. Information, communications, and information processing are essential to administrative and management activities of coordination and control. They are also fundamental to management analysis, decision making, and strategy formulation.

In addition to its role in achieving organization purposes, information and information processing are significant factors in the design of organizational structures for both operations and management. Information technologies enable improvements and innovations in organization design.

The Structure of an Organizational
Information System

The structure of a management information system consists of a technical infrastructure, databases and other repositories, and a portfolio of application systems. The technical infrastructure provides information technology, databases and other repositories provide the data needed by the organization, and the application systems provide specific processing procedures and routines. The application systems can be classified logically (and sometimes physically) into transaction processing (q.v.), operations, and administrative and management support. The elements (technical infrastructure, repositories, transaction processing systems, operations systems, and administrative and management support systems) will be defined in this section; the administrative and management support systems will be described in more detail later in the article.

1. Technical infrastructure. This consists of computer and communications hardware, system software, and the repository management software. It provides processing, communications, and storage capabilities required by application software systems. It includes transaction networks, fax, telephony, and so forth. The infrastructure may contain a variety of technology configurations such as a centralized system, systems serving single locations or departments, and systems serving workgroups or single individuals.

2. Databases and other repositories. The repositories store data required for transactions, operations, analysis, decision making, explanations and justifications, and government/legal requirements. Repositories have varying scopes such as the entire enterprise, parts of the organization (divisions, offices, departments, etc.), groups, and individuals. The stores include data about entities relevant to the organization: text and multimedia (q.v.) stores of analyses, reports, documents, data search results, email, faxes, conversations, etc.; and stores of procedures and directions for performing organizational activities including models for analysis and decision making. The repositories are also termed databases, files, knowledge bases, and model bases.

3. Transaction processing systems. Transaction processing systems record and process business transactions such as accepting a customer order, placing an order with a vendor, making a payment, and so forth.

4. Operations systems. These applications schedule and direct the operations of the organization as products are produced and distributed and services are scheduled and performed.

5. Administrative and management support systems. These applications support knowledge workers (including managers) in performing tasks individually and collaboratively. They support management requirements for data, analysis, reports, and feedback for operational control, management control, and strategic planning. They support team work and other collaboration in analysis and management activities.

The MIS Related to the Functions
of an Organization

An organization is typically organized with specialized functions. Examples are marketing, production, logistics, human resources, finance and accounting, and information systems. These functions exist because of the efficiency and effectiveness of specialization. To illustrate, accounting reports and budgets may be widely used throughout the organization, but the preparation of reports to investors, governments, regulators, and so forth requires specialized knowledge and specialized systems. The charts of account must be developed and maintained by specialists to meet the needs of the entire organization; it would be chaos for each person to develop a chart of accounts. Similar logic applies to the other functions in an organization.

The application portfolio may be planned and organized around core transaction processes that yield databases of transactions plus specialized applications for the different functions. There is a set of applications supporting the marketing function, a set for human resources, etc. Many of the functional applications are used by only one function, but many are interrelated. For example, the production plans and production results are inputs to the budgeting and accounting system (for financial planning) and the human resources systems (for staffing, training, etc.).

Most organizations employ a similar set of basic applications for business functions. Planning and implementing a comprehensive set of basic applications is frequently termed ERP (Enterprise Resources Planning). Vendors of enterprise software provide these basic applications as packages. The enterprise package has facilities for tailoring them to individual organizations. Organizations can extend these basic enterprise systems with applications that provide improved functionality or unique capabilities. In other words, enterprise systems provide the basic application building blocks for the information system of an organization, but innovative organizations have applications for different functions and administrative and management support that extend beyond these core functions, analyses, and reports.

MIS Applications to Support Levels of
Management Activities

The use of information technology for administrative and management support extends the nature of the information system from a transaction and simple reporting system to one that supports the higher-level administrative and managerial activities of the organization. The administrative and management support can be classified both according to support for levels of management activities and also in terms of support for knowledge work.

The levels of management activity define the three control objectives to be achieved and the time horizons for each. Operational management achieves short-term operational control in delivering goods and services, mid-term management control is directed at meeting market and financial objectives, and long-term strategic direction seeks to adapt to changing conditions and new opportunities. As illustrated in Fig. 1, the information system support for management activities is often defined as a pyramid with more structure and programmed decisions at the lower levels and less structure and nonprogrammed decisions at the higher levels.

OPERATIONAL CONTROL

Operational control is the management process of insuring that operational activities associated with delivery of goods and services and internal administrative procedures are carried out effectively and efficiently. Operational control makes use of fairly stable pre-established procedures, communication, and decision rules. The decisions, communications, and actions cover relatively short time periods (a day, a week, or a month depending on the cycle of activities being controlled). The information system support for operational control consists of access to transaction records, operational reports, communications, and inquiry processing in support of operational analysis and decision making. Data used in reports and analyses is primarily from internal transactions. Some examples of information processing in support of operational decision making are the following:

♦ When an item is withdrawn from inventory for sale or use in production, the information system application not only records the transaction and produces a transaction document if required, but also, using pre-established algorithms, examines the balance on hand to evaluate the need for replenishment. If replenishment is indicated, an action document is produced for review by an analyst before an order is placed. The system can reduce the order placement time by communicating with the vendor's scheduling system and placing the order using organization-to-organization communications and order document protocols.

♦ An analysis of replenishment orders not received within the standard times for the items ordered is produced for administrative follow-up. When an analyst reviews an order, the system allows a lookup of all current orders with that vendor, a lookup of where the items are used (to evaluate the impact of the delay), and similar information useful in deciding how to deal with the delay.

MANAGEMENT CONTROL

Management control information is needed by managers of organizational units such as divisions, factories, departments, profit centers, etc. The information is needed to measure performance, decide on control actions, formulate new decision rules, and allocate resources. Management actions based on control information have a time horizon longer than operational control: a month, quarter, or year. Management control reports typically compare results to some standard of performance in order to calculate variances from expected results and to analyze the causes. Analyses and reports use transaction data and plans/ budgets from the organization and also some external data relative to the environment, competitive products and services, competitor costs and pricing, and so forth. Management control applications support planning and budgeting, variance analysis, problem analysis, inquiry capabilities to "drill down" from high-level reports to detailed analyses and explore alternative explanations and solutions, and current market and competitor information. Decisions about pricing, promotion, product mix, and so forth depend on both reports applying traditional costing techniques and analyses exploring cost behaviors (fixed costs, joint costs, marginal costs) with different decision scenarios. Fig. 2 illustrates a typical management control report for a sales manager.

STRATEGIC PLANNING

Strategic planning develops the strategy an organization will follow to achieve its objectives of profitability, quality, and service. Strategic planning assists decisions about fundamental issues of what business to be in and how to conduct it. Examples are adding, changing, or dropping products, product lines, and channels of distribution. It may include sales, mergers, or acquisitions that change where and how business is conducted. The time horizon for decision making is several years. Data requirements include internal data and significant external data. Projections of competition, technology, capital requirements, regulations, and shifts in demand are critical. Strategic planning is part of the responsibility of the management of the business functions as well as top management, and often involves specialists who organize and interpret competitive intelligence and market trends. The information system provides certain structured strategic planning applications and access to internal and external data for analysis, projection, simulations, etc. Fig. 3 illustrates a strategic planning report showing comparison of company sales and market share with those of major competitors.

MIS Support for Knowledge Work

Early concepts of a management information system incorporated support for analysis and decision making, applications called decision support systems. Such support was originally intended for individual decision making but was later extended to decision making by groups. Communications applications were developed to improve collaborative work of all types. Personal computers and workstations (q.v.) have provided significant processing and communications capabilities for every worker. These developments may be described as the use of information technology in support of "knowledge work." As defined in Davis and Naumann (1997), "knowledge work is human mental work performed to generate useful information. In doing it, knowledge workers access data, use knowledge, employ mental models, and apply significant concentration and attention."

Examples of knowledge workers include financial analysts, systems analysts (q.v.), managers, accountants, and designers. Valued for their knowledge and expertise, they either have the knowledge required for their work or know where to find it. The activities of knowledge workers receive significant benefits from information technology. Some examples of knowledge work are scanning and monitoring information sources, searching for information, formulating plans and making decisions, assigning responsibilities, organizing events, scheduling activities and resource use, authoring, performing evaluations, decision making, persuading others to adopt a plan or decision, and motivating behavioral changes.

One of the well developed areas of information system support for knowledge work is decision making. In planning and designing decision support applications, MIS developers have applied the Simon framework for decision making. This consists of three phases: intelligence, design, and choice. The intelligence phase is discovering problems and opportunities. The MIS support for this phase requires access to external data in order to scan the external environment plus database access to search internal data. The search processes can be both structured using predefined search and analysis processes or unstructured scanning and unique analyses. Adaptive analysis through use of neural networks (q.v.) may aid in identifying shifts in demands and other key factors affecting an organization. The decision design phase-for generation of alternatives- involves inventing, developing, and analyzing possible courses of action. The MIS support for decision design consists of statistical, analytical, and model-building software. The final step in the Simon model is choice. The MIS support for choice consists of various decision models, sensitivity analysis, and choice procedures. Expert systems (q.v.) may be useful in some applications. Fig. 4 gives examples of MIS support for two examples of decision making.

The Organization Function for MIS

The management information systems or information management function is a specialized organization function with responsibility to plan, design, build, maintain, operate, and manage the information infrastructure and applications. This includes acquisition and management of both internal staff and external resources. It also includes technical, advisory, and educational support to aid users in applying appropriate technology to their tasks.

The major activities of the MIS function are:

♦ Provide input to development of organizational strategy and plans for use of information technology to achieve competitive goals and to support organization objectives.

♦ Development and maintenance of the MIS plan and budget for the organization.

♦ Design, development, operation, and maintenance of infrastructures and support systems that enable organizational use of information technology.

♦ Set standards and quality control for desktop information technology and end-user systems acquisition, operation, and use.

♦ Development and operation of organizational databases.

♦ Acquisition or development and operation of a portfolio of applications for the organization.

♦ Provide information technology expertise and education for users in the organization.

The information management function may include both a separate organization function and personnel assigned to organization functions that use the technology. In other words, a central group may plan and implement the organizational infrastructure, etc., while information system personnel in marketing, human resources, etc. provide direct support for the information technology use within the functions.

A combination of technical expertise and organization function expertise is required for many projects such as developing applications. Team members include technical specialists in information technology and users whose knowledge and experience are in the function being supported and the tasks being performed. Simple applications may be developed by users themselves (with or without assistance), but these often lack robust features and controls that allow broader use.

Sources of Information on MIS

Major international professional societies for information system practitioners are the Society for Information Management (SIM) and the Association for Information Technology Professionals (AITP). SIM is primarily for MIS executives. It holds conferences and has local chapters. AITP is a broad-based organization oriented to information processing in organizations. It has local chapters and holds annual conferences. Special interest groups of larger organizations focus on information systems. SIGMIS (Special Interest Group on MIS) is part of the Association for Computing Machinery (ACM-q.v.). It publishes a quarterly journal, Database. INFORMS has an information systems group, the College on Information Systems. The International Federation for Information Processing (IFIP-- q.v.) is organized as a federation of societies from different countries. Its technical activities are performed by technical committees (TC). The technical committee for information systems is TC8 (Information Systems). It has nine working groups on various issues in information systems. They hold working conferences and produce conference reports. Information on IFIP and TC8 can be obtained from the IFIP Website: http:// www.ifip.or.at. In addition to international organizations, there are professional organizations and special interest groups in many countries.

The information system academic community is international. Although each country and/or area has an organization for information system academics, there is strong participation in international academic conferences and local and area conferences often attract faculty from other countries. The main international academic conference is the International Conference on Information Systems (ICIS), begun in 1979. The main international academic organization is the Association for Information Systems (AIS). It publishes two electronic journals: Communications of the AIS and Jouvnal of the AIS. It is a sponsor of ICIS and has affiliation with major regional conferences: Americas Conference on Information Systems (AMCIS), European Conference on Information Systems (ECIS), and the Pacific Asia Conference on Information Systems (PACIS). AIS provides information not only on its conferences but also affiliated conferences (http:// www.aisnet.org). AIS manages ISWorld Net, a comprehensive source of information on the academic field (http://www.isworld.org). AIS, ACM, and AITP have cooperated on model curricula for information systems.

The general computing and management science journals often contain articles on MIS topics. The most significant sources are Communications of the ACM and Management Science. The most widely read academic journals devoted to MIS are the MIS Quarterly and Information Systems Research. General management journals such as the Haravard Business Review and Sloan Management Review regularly have MIS articles. Computing Reviews of the ACM reviews MIS articles. There are a significant number of other general and specialized MIS journals published in North America and Europe.

The Future of MIS

The 1960s MIS concept of an organizational information system supporting not only routine transactions and routine reports but also organizational communications and management activities has been achieved. The original MIS concept has been extended to include applications that add value to products and services and that support a broad range of administrative and management functions. With the merging of computer and communications technologies the organizational use of information technology has been extended to internal and external networks, systems that connect an organization to its suppliers and customers, and systems that enable persons in organizations to perform work alone or in groups with greater effectiveness and efficiency. Many organizations have been able to achieve competitive advantage by the use of information and information technology in products, services, and business processes. Information technology-based systems have been employed to change organization structures and processes.

The future direction of MIS is likely to involve further improvements in areas that have already been changed and more support for knowledge work productivity. Advances in information technology such as voice recognition and higher transmission bandwidth (q. v.) will make possible improvements in transaction processing, further reductions in cycle times, and more customized products and services. Information technology has been associated with remarkable improvements in production productivity and clerical productivity, but there has been less impact on knowledge work productivity. Although information technology has been made available to all knowledge workers and information access has multiplied, the increased functionality and data access does not automatically result in improved productivity. One of the frontiers in organizational information systems is the structuring of systems, computer and communications technology, and data access, so that knowledge work productivity is enhanced.

 

Question papers

Section-B August 2009 question paper link

 

http://www.4shared.com/document/MInwLZAZ/Section-B_August_2009_question.html

Transaction processing system:

Transaction processing system:
A transaction processing system is a set of information which process the data transaction in database system that monitors by transaction programs (a special kind of program).The essence of a transaction program is that it manages data that must be left in reliable state.
Example: If an electronic payment is made, the amount must be withdrawn from one account and added to the other or none at all. In a case of a failure transaction, the partially executed transaction must be rolled back by the TPS.
Characteristics of TPS:
Rapid response: Fast performance with a rapid response time is critical for business
Reliability: A breakdown will disturb the operations or even stop the business.
Inflexibility: Every transaction is processed in the same way regardless of the user.
Controlled processing: The processing in a TPS must support an organization’s operations.
Types of TPS:
1. Batch Processing:
Batch transaction processing collects the transaction data as a batch and processes it later. Its keep for processing at a convenient time.
Features:
• Processing large volume of similar data at lower costs.
• Processing a batch may take several minutes, hours or days
• Used when a time delay will not decrease the usefulness of the results
• Involves a large batch of an identical data type.
Disadvantages:
• The processing schedule is predetermined.
• It will halt immediately if an error occurs in any one if the tasks.
• Errors cannot be corrected during processing. If an error occurs during a batch process, then the error must be corrected and the batch process restarted from the beginning.
• It must have exclusive access and control over its data files.
• Sorting the transaction data is expensive and time consuming.
• Does not provide data that are fully current.


2. Real Time Processing:
Real time transaction processing is the immediate processing of data. It provided instant confirmation of a transaction.
Features:
• Involves using a terminal to enter data and display results.
• Computer network links terminals to mainframe.
• Involves large number of users performing transactions simultaneously
• It also called as online transaction processing.
Concerns:
Concurrency ensures that two users cannot change the same data at the same time.
Atomicity ensures that all of the steps involved in a transaction are completed successfully. if any step fails the systems ceases.
Batch Processing Vs Real time Processing:
Batch Processing Real time Processing
• The database is not accessible at the time of processing

• The data is organized and stored before the master file is updated

• Errors can occur during these steps • Each transaction is unique. It is not part of a group of transactions.

• Requires the master file to be available more often for updating and reference.

• Has fewer errors as transaction data is validated and entered immediately

• More computer operators are required, as the operations are not centralized.

• More difficult to maintain.

ACID properties of Transaction:
Atomicity:
A transaction’s changes to the state are atomic: either all happen or none happen. These changes include database changes, messages, and actions on transducers.
Consistency:
A transaction is a correct transformation of the state. The actions taken as a group do not violate any of the integrity constraints associated with the state. This requires that the transaction be a correct program.
Isolation:
Even though transactions execute concurrently, it appears to each transaction T, that others executed either before T or after T, but not both.
Durability:
Once a transaction completes successfully (commits), its changes to the state survive failures.

Principles of Management by F.W.Taylor

Principles of management are flexible, not absolute, and must be usable regardless of changing and special conditions, Fayol listed fourteen, based on his experience. They are summarized in the perspective.




1.Division of work. This is the specialization that economists consider necessary for efficiency in the use of labor. Fayol applies the principle to all kinds of work, managerial as well as technical.




2.Authority & responsibility. Here Fayol finds authority and responsibility to be related, with the latter arising from the former. He sees authority as a combination of official factors, deriving from the manager’ position and personal factors.




3.Discipline. Seeing discipline as “respect for agreements which are directed at achieving obedience, application, energy, and the outward marks of respect. Fayol declares that discipline requires good superiors at all levels.




4.Unity of command. This means that employees should receive orders from one superior only.




5.Unity of direction. According to this principle, each group of actives with the same objective must have one head and one plan.

6.Subordination of individual to general interest. This is self explanatory when the two are found to differ, management must reconcile them.




7.Remuneration. Remuneration and methods of payment should be fair and afford the maximum possible satisfaction to employees and employer.




8.Centralization. Without using the term “Centralization of authority.” Fayol refers to the extent to which authority is concentrated or dispersed. Individual circumstances will determine the degree that will give the best overall yield.




9.Scalar chain. Fayol thinks of this as a chain of superiors from the highest to the lowest ranks, which, while not to be departed from needlessly, should be short circuited when to follow it scrupulously would be detrimental.




10.Order. Breaking this into material and social order, Fayol follows the simple adage of a place for everything and everything in its place.




11.Equity. Loyalty and devotion should be elicited from personnel by a combination of kindliness and justice on the part of managers when dealing with subordinators.




12.Stability of tenure. Finding unnecessary turnover to be both the cause and the effect of bad management, Fayol points out its dangers and costs.




13.Initiative. Initiative is conceived of as the thinking out and execution of a plan. Since it is one of the keenest satisfactions for an intelligent man to experience.




14.Esprit de corps. This is principle that “in union there is strength” as well as an extension of the principle of unity of command, emphasizing the need for teamwork and the importance of communication in obtaining it.