Introduction to Management Information Systems

(MIS)

Minder Chen, Ph.D.

Professor of Management Information SystemsMartin V. Smith School of Business and Economics

CSU Channel IslandsEmail: Minder.Chen@csuci.edu

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What is MIS? • M: Management

– Business Functions/Processes, Organizations, and Human Behaviors

• I: Information– Contents: Data, Information, Knowledge– Processes: Create, Gather/capture/elicit, Store, Organize,

Consolidate & Condense, Filter, Deliver, and Share • S: System (Information Systems/Information Technology)

– Input-Process-Output and Storage – General Systems Theory (GST)

• http://en.wikipedia.org/wiki/Management_information_system• http://en.wikipedia.org/wiki/Systems_thinking• http://en.wikipedia.org/wiki/Systems_theory

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A System View of an Information System

Input Process Output

Data storage

Procedure

Control

Environments

Data Sources/Businessevents

InformationDestinations

Information System Boundary

What are the hardware options or Inputs, Outputs, Processing, and Storages?

Data Providers

•Consumers•Users •organization units

Information System (Producer)

Secondary storage(database)

Main memory

Data Visualization

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Characteristics of Good Information• Accurate• Timely• Relevant (provide context) to decisions • Just sufficient• Worth its cost (to justify its benefits)

• Deliver just enough accurate, relevant, and timely information to the right persons to make better decisions.

• How much energy does a Google search consume? 0.0003 kWh of energy per search; a Google search uses just

about the same amount of energy that your body burns in ten seconds.

Information overloading

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Information Quality (IA) and Categories

Source: http://sloanreview.mit.edu/files/2008/12/3947-ex3-lo7.pnghttp://sloanreview.mit.edu/article/manage-your-information-as-a-product/

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Presentation of Information

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Another Version

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A Picture Is Worth a Thousand Words• 24 June – 14 December 1812

https://en.wikipedia.org/wiki/File:Napoleons_retreat_from_moscow.jpg

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Managing Information as a Resource• The resources of the industrial age were

tangible things (e.g., raw materials and human resources) and easily understood.

• In the emerging post-industrial society, there is little understanding of the characteristics of information – the basic yet abstract/intangible resource.

• Both physical resources and information could be mined, processed, bought, sold, and managed.Harland Cleveland, "Information as Resource," The Futurist, December 1982, 34-39.

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Information Life CycleD

ecision

Action

Dat

aInformation

• Intelligence• Design • Choice

http://faculty.csuci.edu/minder.chen/MIS310/Reading/20000905cleveland.pdf

Information is processed data that is organized, meaningful, and useful.

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Characteristic of Information• Expandable: Information explosion* Reduce information

overload to reduce uncertainty in decision making.• Compressible: Sorting, categorizing, filtering,

aggregating, summarizing**, and consolidating. • Substitutable: Substitute with other resources via

productivity improvement.• Transportable: Data communications and networking.• Diffusive: Spreading (sharing) and leaking (Security &

privacy)• Sharable: Sharing information is a shared transaction

instead of an exchange transaction. Digital Universe: The world’s information is doubling every two years. In 2011

the world will create a staggering 1.8 zettabytes.  ** Summly, a news-summarizing app acquired by Yahoo for $30 millions.

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Even the Caveman Needs Knowledge to Survive

The information-knowledge-wisdom hierarchy. The caveman has lots of information; he selects and organizes useful information into knowledge, but he does not achieve wisdom until he has integrated his knowledge into a whole that is more than useful than the sum of its parts. Source: Harlan Cleveland, "Information as a Resource," The Futurist, December 1982, 34-39.

MIS - 13 © Minder Chen, 1996-2013 ©Source: IBM Academic Program course materials

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The Knowledge Value Chain: Data

Source: IBM Academic Program course materials

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The Knowledge Value Chain: Information

Source: IBM Academic Program course materials

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The Knowledge Value Chain: Knowledge

Source: IBM Academic Program course materials

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Knowledge Is Not Enough

Source: IBM Academic Program course materials

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DIKW (Information) Hierarchy

Knowledge

Information

Event

Data

Learning: Derive rules/policies through experiences & patterns

Analyzing: To support decision making

Observing: Description of events

Wisdom Know why

Know how

Know what

Know nothing

Happening/Doing

Integrating: Connect the dots

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DIKW Hierarchy: version 2

• T: Tacit knowledge• E: Explicit knowledge

http://en.wikipedia.org/wiki/DIKW_Pyramidhttp://en.wikipedia.org/wiki/File:DIKW.png

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Moving Up the DIKW Hierarchy• Where is the Life we have lost in living?

• Where is the wisdom we have lost in knowledge?

• Where is the knowledge we have lost in information?

T.S. Eliot, Choruses from “The Rock”, 1934

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Information as Products/Services• CarFax: CARFAX - Vehicle History Reports and VIN number

check - http://www.carfax.com (1 CARFAX Report $39.99)

• Britannica*: http://www.britannica.com/ – Blown to Bits: How the New Economics of Information Transforms Strate

gy

– The printed version was blown away by three disruptive forces– A comeback act? (iPad app)– Why Britannica matter? No printed version, 2012.

• Information as services– Google: Searching for information (Google would provide “access

to the world's information in one click”)– Facebook: Social networking ("Facebook's mission is to give

people the power to share and make the world more open and connected." )*Source: Jorge Cauz, “Encyclopaedia Britannica's President on Killing Off a 244-Year-Old Product,” Harvard Business Review, Mar 01, 2013.

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CD-ROM based Encyclopedia• Encarta (1993), Grolier, and Compton, list for

$50 to $70; usually bundled with a new PC for free.

• Content quality and distribution channel• Cost:

– With a marginal manufacturing cost of $1.50 per copy, the CD-ROM as freebie makes good economic sense.

– The marginal cost of Britannica, in contrast, is about $250 for production plus about $500 to $600 for the salesperson’s commission.

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Britannica Sales

Source: http://hbr.org/2013/03/encyclopaedia-britannicas-president-on-killing-off-a-244-year-old-product/ar/1

Netscape 1995

Google IPO, 2004

Google Inc. incorporated,

1999

WWW invented

1990

Encarta discontinue

d 2008

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The Rise of Wikipedia

Disruptive fo

rce

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Britannica vs. Wikipedia

Characteristic Britannica WikipediaPrice

Content generation/EditorialUpdate frequency

Revenue stream

Quality of the content

Wiki is an open source content management system (CMS). Wikipedia uses wiki as a development tool.

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Information Systems Components

Source: adapted from Using MIS 3e

Manual Procedures and Business Process

Individuals, Groups, Departments, Enterprise-wide, Customers, Trading partners

Data, Information, Knowledge

System SW, Application SW

Computers•Server•PC•MobileNetworking

Information

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People

Processes Things

Man: Human Resource, EmployeesMarket: Customers

Machine: Property, Facility,

TechnologyMaterial:

Raw material, Product

Method: Technique, Process,

Project, Task

Money: Accounting, Finance, Investment

$$$ Message: Information

huMan, Market, Money, Method, Machine, Material, Message

Business environments • Market demands• Technology development• Social trends• Locations/Localization

How, When? What?

Who?

Vision Why?Goals/Objectives/Performance measures

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Organizational Hierarchy and Information

Planning

Control

Operation

External

Internalso

urce

Aggregated

Detail

Leve

l of D

etai

l

OLAP

OLTP

Proc

essi

ng

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Information Systems Triangle Operational

DatabaseData WarehouseData Mart

EnterpriseWorkflow

OLTPOnline Transaction

Processing

BIDSSEIS

Data Information

Knowledge

Messaging Systems

Workflow, Collaboration, Groupware

BusinessProcessWorkflow

OLAPOnline Analytical Processing

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Classification of Information Systems• Transaction Processing System

– Online transaction processing system (OLTP)– Batch, Online, real-time

• Management support system – Decision support system (DSS), Executive information system

(EIS), and Digital Dashboard– Data warehouse, Business intelligence (BI), and Online Analytical

Processing (OLAP)• Units involved

– Individual, group, and departmental, enterprise-wide, inter-organizational, and social networking systems

• Strategic Information Systems• Based on IT Platforms

– Traditional desktop/client-server applications– Web-based applications (e.g., Electronic Commerce)– Mobile applications

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The Extended Enterprise

E-Business: Virtual and Dynamic Enterprise

SuppliersBackOffice

FrontOffice Customers

Buy Make/Add Value Sell

Supply Chain Back Office Integration Demand Chain

ManufacturingFinance/Accounting

EngineeringHR

MarketingSales

Support/Service

Supply Chain Management Customer Relationship Management Enterprise Resource Planning

WarehousingLogistic/Transportation

Order Fulfillment

B2B

E-C

omm

erce

B2C

or B2B

E-C

omm

erce

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MIS• Management BY Information Systems• Management OF Information Systems

Information

Other Resources: HR, Money,

Material, etc.

Manages

Resources

Information Systems

• Managing Information as a Resource (i.e., Inventory Info. System) • Selling Information as Products (i.e., CarFax)• Offering Information/IS as Services (i.e., Facebook, Google)

As Products or Services

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Summary• What information does one may need to obtain to

do his/her works?• What kinds of information systems/technologies

may be the best to manage such information?• Be sensitive to the information, IS, and IT.• Know how to apply conceptual frameworks

introduced this module in understanding information needs, but start with the analysis of decisions and/or business processes.

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IT, IS and IM

Source: Competing with Information: A Manager's Guide to Creating Business Value with Information Content 

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Key Frameworks

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Information Systems Applications in a Firm

Customer Relationship Management (CRM)

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Information as: Product vs. By-Product

http://sloanreview.mit.edu/article/manage-your-information-as-a-product/http://sloanreview.mit.edu/files/2008/12/3947-ex1-lo7.png

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COBIT’s Information Criteria (I)• EffectivenessEffectiveness deals with information being

relevant and pertinent to the business process as well as being delivered in a timely, correct, consistent and usable manner.

• Efficiency Efficiency concerns the provision of information through the optimal (most productive and economical) use of resources.

• Confidentiality Confidentiality concerns the protection of sensitive information from unauthorized disclosure. (Sony PlayStation Network hacked)

• Integrity Integrity relates to the accuracy and completeness of information as well as to its validity in accordance with business values and expectations.

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COBIT’s Information Criteria (II)

• AvailabilityAvailability relates to information being available when required by the business process now and in the future. It also concerns the safeguarding of necessary resources and associated capabilities.

• Compliance Compliance deals with complying with the laws, regulations and contractual arrangements to which the business process is subject, i.e., externally imposed business criteria as well as internal policies. (Sarbanes–Oxley Act)

• ReliabilityReliability relates to the provision of appropriate information for management to operate the entity and exercise its fiduciary and governance responsibilities.

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Exercise – 20-minute break and 5-minute presentation

• Describe your background and experiences– Company name and the industry it belongs to – Position and general responsibility– Three major decisions

• Pick the most important decision involved in this position and find out the following:

– Characteristic of the decision: Operational vs. Strategic; Structured vs. Unstructured; Routine vs. Non-routine

– What information is current used to support the decision – What kind of source data should be collected to generate the

information needed– Under which task is this decision performed – What is the broader business process that this task belongs.

• What additional improvements can be made from the perspectives of information systems and decision making

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Information System Applications

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Extracting Extracting Value from Value from Information Information ChaosChaos(link)(link)