Describe the relationship between TPS, MIS and ESS. Describe each with examples from a real Kenyan or African scenario.
Transaction Processing System (TPS)
TPS is a type of system which usually helps an organization to handle its daily business operations and transactions in an efficient and effective manner by processing and recording each operation. A transaction is an occurrence in which goods, services, or money are passed from one person, account, etc., to another. Such operations/transactions may include customer orders, purchase orders as well as handling of invoices.
TPS is therefore responsible for collecting, storing, modifying and retrieving data pertaining to the transactions that have taken place in an organization and finally generate reports which are used by other levels of management. The characteristics of a TPS include performance, reliability and consistency. Transaction Processing Systems are usually used at the operational level (by employees who are at the bottom level) of an organization’s hierarchy as shown on Figure 2 below. An example of a TSS is a point of sale in a supermarket such as Nakumatt which is used to record each sale transaction which takes place in the supermarket. At the end of the day, a record of all transactions can be generated from the TPS in order to view which products have been sold.
Management Information System (MIS)
MIS is a system which brings together people (the management), information as well as the systems (both hardware and software). This type of system is important in an organization as it provides information that is essential to operations, management and decision making functions. Some of these functions include planning, controlling, decision making, organizing, and staffing. Management Information Systems are usually used at the tactical level (by employees who are at the middle level) of the organization’s management hierarchy as shown on Figure 2 below. An example of an MIS is the University of Nairobi’s Student Management Information System (SMIS) which can be used to generate reports about the registration status of the students in order to determine who is eligible to sit for the end of semester examinations.
Executive Support System (ESS)
ESS is a system that is used in an organization to provide summarized information in form of graphs or charts that is tailored for the organization’s executives. They (executives) address non-routine and unstructured decisions which usually require judgment, evaluation and insight. Typical questions for ESSs are:
- In what business should we be?
- What are our competitors doing?
- What new acquisitions should we consider to increase market share?
The ESSs usually draw summarized information from other MISs at the lower level of management such as the Transaction Processing System. An example of an Executive Support System is an expert system or a knowledge based system which can be used for sales forecasting and perhaps lead to review of business strategy. Executive Support Systems are usually useful to the employees who are at the top-most (strategic) level of the organization’s management hierarchy such as senior managers as shown on Figure 2 below. An example of an ESS is the Softmar Chartering and VesselOps system in South Africa which is used to manage chartering and vessel operations. Some of the questions it helps answer include:
- Given customer delivery requirements and an offered freight rate, which vessel should be assigned at what rate to maximize profits?
- What is the optimal speed at which a particular vessel can optimize its profit and still meet its delivery schedule?
Management Information Systems Group2 