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3.5 Trends in Business Information Systems

Until the 1960s the most information systems played a minor role carrying out simple
transactions processing, record keeping, accounting and other data processing activities.
Transaction Processing Systems (TPS) are necessary for data processing activities that result
from business transactions. For example, to register customer orders, to produce payroll
checks and produce invoices.

Then another role was added as the concept of Management Information Systems (MIS). MIS provide reports and displays for specific time periods. These reports are designed for managers responsible for specific functions or processes in a firm. These reports enable managers to control their area of responsibility. MIS typically provide with standard reports generated daily with data and information from the TPS.

By the 1970s, it was evident that the pre-specified information products produced by such
management information systems were not adequately meeting many of the decision
making needs of management. So the concept of Decision Support Systems (DSS) was born.
A DSS goes beyond the traditional MIS and provide support for non-routine decisions or
problems. It analyses the information already captured by TPSs and MISs in order to support
unstructured and semi structured decision making at various levels. Such a system can help
you budget for your sales team over the next quarter, considering the current sales forecast.
In the 1980s, several new roles for information systems appeared.

Firstly, the rapid development of micro computer processing power, application software packages, and telecommunication networks gave birth to the phenomenon End User Computing. They are CBIS that directly support both the operational and managerial applications of end users.

Secondly, it became evident that most top corporate executives did not directly use either
the reports of management IS or analytical capabilities of DSS. Therefore, the concept of
Executive Information Systems (EIS) was developed. EIS provides support for the long term
strategic view that senior executives need to take of the business. These systems provide
easy access to summarized company data, taking into consideration the external
information such as competitor, industry and economy at large.

Thirdly, another breakthrough occurred in the development and application of artificial intelligence (AI) techniques to business information systems. AI’s are based on artificial intelligence and carries out functions normally associated with human intelligence, for example, reasoning, inference learning and problem solving. Robotics is an area of artificial intelligence in which machines take over complex, dangerous, routine or boring tasks, such as welding car frames or assembling computer systems and components.

Furthermore, Expert systems (ES) and other knowledge based systems form a new role for
information systems. ES provide expert advice and act as expert consultants to users.
Examples include credit application advisor and diagnostic maintenance system.

An important new role of information systems appeared in the 1980s and continued through the 1990s. This is the concept of a strategic role for information systems, sometimes called as Strategic Information Systems (SIS). SIS are Information systems that provide a firm with competitive products and services that give it a strategic advantage over its competitors in the market place. Also, IS promotes business innovation, improve business processes and build strategic information resources for a firm.

Finally, the rapid growth of the Internet in the 1990s and other interconnected global
networks, changed the capabilities of information systems in business at the beginning of
21st century. Internet based e-commerce and mobile commerce systems are becoming
common place in the operations and management of today’s business enterprise. Ecommerce
involves any business transaction executed electronically between parties such
as companies (business to business, B2B), consumers and other consumers (consumer to
consumer), companies and consumer(B2C), business and the public sector and consumers
and the public sector.

Although e-commerce is mostly associated with web shopping, major volume of ecommerce and its fastest growing segment is business to business (B2B) transactions that make purchasing easier for companies.

The trends discussed above are depicted in figure 1.1.

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