SIMCA 2009 Lecture 11 Introduction Anil Tatti aniltatti [at] simca [dot] ac [dot] in Send mail – will reply within 24 hours Tue – 8.15 a.m. to 9.30

SIMCA 2009 Lecture 1 1

IntroductionIntroduction

Anil Tatti aniltatti [at] simca [dot] ac [dot] in Send mail – will reply within 24 hours Tue – 8.15 a.m. to 9.30 a.m. Thursday / Friday – 3.15 p.m. to 4.30 p.m. Walk In Any time – You are Welcome If holiday- make it up in next week / available time slot Exam 70 % Assignment / Homework every week -25 % Attendenance – 5 % Copy – Fail


Why Do People Need Information?

Individuals - Entertainment and enlightenment

Businesses - Decision making, problem solving and control

Information SystemsInformation Systems


Data, Information, and SystemsData, Information, and Systems

Data vs. Information

Data A “given,” or fact; a number, a statement, or a picture Represents something in the real world The raw materials in the production of information

Information Data that have meaning within a context Data in relationships Data after manipulation



Data Manipulation

Example: customer survey Reading through data collected from a customer survey with

questions in various categories would be time-consuming and not very helpful.

When manipulated, the surveys may provide useful information.



Generating Information Computer-based ISs take data as raw material, process it, and

produce information as output.

Figure 1.1 Input-process-output


Figure 1.2 Characteristics of useful information


Information in Context



What Is a System? System: A set of components that work together to achieve a

common goal

Subsystem: One part of a system where the products of more than one system are combined to reach an ultimate goal

Closed system: Stand-alone system that has no contact with other systems

Open system: System that interfaces with other systems



Figure 1.3 Several subsystems make up this corporate accounting system.



Information and Managers

Systems thinking Creates a framework for problem solving and decision

making. Keeps managers focused on overall goals and operations of

business.



Figure 1.5 Qualities of humans and computers that contribute to synergy



The Benefits of Human-Computer Synergy

Synergy When combined resources produce output that exceeds the

sum of the outputs of the same resources employed separately

Allows human thought to be translated into efficient processing of large amounts of data



Figure 1.6 Components of an information system



The Four Stages of Data Processing

Input: Data is collected and entered into computer.

Data processing: Data is manipulated into information using mathematical, statistical, and other tools.

Output: Information is displayed or presented.

Storage: Data and information are maintained for later use.


Why Study IS?Why Study IS?

Information Systems Careers Systems analyst, specialist in enterprise resource planning (ERP),

database administrator, telecommunications specialist, consulting, etc.

Knowledge Workers Managers and non-managers Employers seek computer-literate professionals who know how to use

information technology.

Computer Literacy Replacing Traditional Literacy Key to full participation in western society


Ethical and Societal IssuesEthical and Societal IssuesThe Not-So-Bright SideThe Not-So-Bright Side

Consumer Privacy Organizations collect (and sometimes sell) huge

amounts of data on individuals.

Employee Privacy IT supports remote monitoring of employees, violating

privacy and creating stress.


Ethical and Societal IssuesEthical and Societal IssuesThe Not-So-Bright SideThe Not-So-Bright Side

Freedom of Speech IT increases opportunities for pornography, hate speech, intellectual

property crime, an d other intrusions; prevention may abridge free speech.

IT Professionalism No mandatory or enforced code of ethics for IT professionals--unlike

other professions.

Social Inequality Less than 20% of the world’s population have ever used a PC; less than

3% have Internet access.


MIS ComponentsMIS Components

Backup dataRestart jobVirus scan

HardwareSoftware

People ProceduresData


Management Information – Related SubsystemsManagement Information – Related Subsystems

Information Technology (IT) is any computer based tool that people use to work with

information and support the information-processing needs of an organisation.

Includes Hardware, Software, Communications, networks, production automation, etc

Any ‘Kit’ concerned with the capture, storage, transmission, and presentation of information


Decision Support Systems (DSS) , Decision Support Systems (DSS) ,

Computer system designed to provide assistance in determining and evaluating alternative courses of action.

A DSS (1) acquires data from the mass of routine transactions of a firm, (2) analyzes it with advanced statistical techniques to extract

meaningful information, and (3) narrows down the range of choices by applying rules based on

decision theory. Its objective is facilitation of 'what if' analysis and not replacement of a manager's judgment.

Example: Decision Explorer from Banxia Example: Analyitica from Lumina


Strategic Management Information Systems Strategic Management Information Systems (SMIS)(SMIS)

Systems considered critical to the current or future business competitiveness of an organisation

SMIS is a relative rather than an absolute term as one must assess the of a give organisation first before attaching the term SMIS to a technology

Example: A web service offering a product online could be considered strategic – i.e. Dell computers, Air online booking system.

Example: Business Process re-engineering modelling software


Geographic Information Systems (GIS)Geographic Information Systems (GIS)

Business information over layed on Geographical Maps Example: Google Earth shows Business locations, visitor

attractions, etc in particular areas


Management Information – Related Subsystems Management Information – Related Subsystems

Expert System (ES) Also called a knowledge based system – is an Artificial Intelligence

system that applies reasoning capabilities to reach a conclusion. Expert systems are software systems which capture the knowledge

and experience of “experts” in particular fields – Accounting, Medicine, Production Control, etc.

Expert Systems, through a series of carefully contrived questions to the user, can determine “What's wrong”, and “what to do”.

Example: Forensic accounting


Dashboard System (DS)(EIS)Dashboard System (DS)(EIS)

A dashboard is an Executive Information System user interface that (similar to an automobile’s dashboard) is designed to be easy to read. For example, a product might obtain information from the local operating system in a computer, from one or more applications that may be running, and from one or more remote sites on the Web and present it as though it all came from the same source.

Digital dashboards may be laid out to track the flows inherent in the business processes that they monitor. Graphically, users may see the high-level processes and then drill down into low level data.


Airline Dashboard SystemAirline Dashboard System


Traditional / Classical OrganisationTraditional / Classical Organisation

CEO

VPFinance

VPAccounting

VPHRM

VPMIS

Layers of middle managers

Customers

Commands

Analyze data

Condensed reports

Collectdata


Pioneers of Traditional / Scientific Management

5 Key Functions of Management

- To Plan- To Organise- To Command- To Co-ordinate- To Control

• Principles for Organisational Structure

- Unity of Command

- Small Spans of Control

- Line or Chain of Command

- Division of Work - specialism

- Delegate Authority & Retain Responsibility


Modern Criticisms of Classical ManagementModern Criticisms of Classical Management

Inhuman working conditions and poor industrial relations

Over-specialisation and restrictive work practices

Bureaucratic organisational structures – long chains of command

Inward- looking organisational structures

Closed Systems – run out of steam when not conscious of environmental influences


The Matrix ManagementThe Matrix Management

• Project Focussed• Multi-disciplinary teams• Team members have more than one

boss• Project team disbanded when

project completes• New project team for new project• Gives team members an insight into

the workings of other departments• Leadership training ground• Allows people with ideas to carry

them forward • May cause blurring of

communication lines


Modern Organisation structureModern Organisation structure

C.E.O.

Fin Prod HR Mkt IT

teams teams teams teams teams

Customer

Partner

Supplier

Partner

Contractor

Partner

Bank

Partner

Legal

Partner

Distribution

Partner


New structure - DecentralisedNew structure - Decentralised

Management Team

FinanceTeam

MarketingTeam

AccountingTeam

HRMTeam

SalesTeam

Franchise

Strategy

Methodology/Rules

Customers

CorporateDatabase

&Network

DirFin

DirMrkt

DirAcct

DirHRM

DirMIS


Business TrendsBusiness Trends

Changing business environment Specialization Management by Methodology and Franchises Mergers Decentralization and Small Business Temporary Workers Internationalization Service-Oriented Business Re-engineering Recession

Need for faster responses and flexibility

MIS reflecting these requirements -


Business Trends & ImplicationsBusiness Trends & Implications Specialisation

Increased demand for technical skills Specialized MIS tools Increased communication

Methodology & Franchises Reduction of middle management Increased data sharing Increased analysis by top management Computer support for rules Re-engineering

Mergers Larger companies Need for control and information Economies of scale

Decentralization & Small Business Communication needs Lower cost of management tasks Low maintenance technology


Business Trends & ImplicationsBusiness Trends & Implications

Temporary Workers Managing through rules Finding and evaluating workers Coordination and control Personal advancement through technology Security

Internationalization Communication Product design System development and programming Sales and marketing

Service Orientation Management jobs are information jobs Customer service requires better information Speed


•Management jobs are information jobs•Customer service requires better information•Speed

Service Orientation

•Communication•Product design•System development and programming•Sales and marketing

Internationalization

•Managing through rules•Finding and evaluating workers•Coordination and control•Personal advancement through technology•Security

Temporary Workers

•Communication needs•Lower cost of management tasks•Low maintenance technology

Decentralization & Small Business

•Four or five big firms dominate most industries•Need for communication•Strategic ties to customers and suppliers

Mergers

•Reduction of middle management•Increased data sharing•Increased analysis by top management•Computer support for rules•Re-engineering

Methodology & Franchises

•Increased demand for technical skills•Specialized MIS tools•Increased communication

Specialization

Implications for TechnologyBusiness Trend


Management Information Systems (MIS)Management Information Systems (MIS)

Management information system (MIS) An MIS provides managers with information and support for

effective decision making, and provides feedback on daily operations Output, or reports, are usually generated through accumulation of

transaction processing data Each MIS is an integrated collection of subsystems, which are

typically organized along functional lines within an organization


Sources of Management InformationSources of Management Information

Schematic


Corporatedatabasesofinternaldata

Databasesofexternaldata

Databasesofvalidtransactions

Operationaldatabases

Transactionprocessingsystems

Managementinformationsystems

Decisionsupportsystems

Executivesupportsystems

Expertsystems

Businesstransactions

Input anderror list

Drill-down reports

Exception reports

Demand reports

Key-indicator reports

Scheduledreports

Employees

Corporateintranet

Applicationdatabases


Outputs of a Outputs of a Management Information SystemManagement Information System

Scheduled reports Produced periodically, or on a schedule (daily, weekly, monthly)

Key-indicator report Summarizes the previous day’s critical activities Typically available at the beginning of each day

Demand report Gives certain information at a manager’s request

Exception report Automatically produced when a situation is unusual or requires management

action


Scheduled Report ExampleScheduled Report Example

Daily Sales Detail Report

Prepared: 08/10/xx

Order#

CustomerID

Sales Rep ID

ShipDate Quantity Item # Amount

P12453 C89321 CAR 08/12/96 144 P1234 $3,214

P12453 C89321 CAR 08/12/96 288 P3214 $5,660

P12453 C03214 GWA 08/13/96 12 P4902 $1,224

P12455 C52313 SAK 08/12/96 24 P4012 $2,448

P12456 C34123 JMW 08J/13/96 144 P3214 $720


Key Indicator Report ExampleKey Indicator Report Example

Daily Sales Key Indicator Report

ThisMonth

LastMonth

LastYear

Total Orders Month to Date $1,808 $1,694 $1,014

Forecasted Sales for the Month $2,406 $2,224 $2,608


Demand Report ExampleDemand Report Example

Daily Sales by Sales Rep Summary Report

Prepared: 08/10/xx

Sales Rep ID Amount

CAR $42,345

GWA $38,950

SAK $22,100

JWN $12,350


Exception Report ExampleException Report Example

Daily Sales Exception Report – ORDERS OVER $10,000

Prepared: 08/10/xx

Order#

CustomerID

Sales Rep ID

ShipDate Quantity Item # Amount

P12453 C89321 CAR 08/12/96 144 P1234 $13,214

P12453 C89321 CAR 08/12/96 288 P3214 $15,660

P12453 C03214 GWA 08/13/96 12 P4902 $11,224

… … … … … … …

… … … … … … …


Outputs of a Management Outputs of a Management Information SystemInformation System

Earnings by Quarter (Millions)

Actual Forecast Variance

2ND Qtr 1999 $12.6 $11.8 6.8%

1st Qtr 1999 $10.8 $10.7 0.9%

4th Qtr 1998 $14.3 $14.5 -1.4%

3rd Qtr 1998 $12.8 $13.3 -3.0%

Etc. See Figure 9.2

Drill Down ReportsProvide detailed data about a situation.


Characteristics of a Management Characteristics of a Management Information SystemInformation System

Provides reports with fixed and standard formats Hard-copy and soft-copy reports

Uses internal data stored in the computer system End users can develop custom reports Requires formal requests from users


Management Information Systems for Management Information Systems for Competitive AdvantageCompetitive Advantage

Provides support to managers as they work to achieve corporate goals

Enables managers to compare results to established company goals and identify problem areas and opportunities for improvement


MIS and Web TechnologyMIS and Web Technology

Data may be made available from management information systems on a company’s intranet

Employees can use browsers and their PC to gain access to the data


Functional AspectsFunctional Aspects

MIS is an integrated collection of functional information systems, each supporting particular functional areas.

Schematic


An Organization’sMIS

FinancialMIS

MarketingMIS

HumanResources

MIS

Etc.

AccountingMIS

Drill down reports

Exception reports

Demand reports

Key-indicator reports

Scheduled reports

Databasesof

externaldata

Databasesof

validtransactions

Transactionprocessing

systems



ExtranetExtranet

InternetInternet

Figure 9.3

Etc.


Financial MISFinancial MIS

Provides financial information to all financial managers within an organization.

Schematic


Financial statements

Uses and managementof funds

Financial statisticsfor control

Operationaldatabases

Databasesof valid

transactionsfor each

TPS


systems



Internet orExtranet

Internet orExtranet

Figure 9.3

FinancialMIS


Databases ofexternal data

Databases ofinternal data

FinancialDSS

FinancialES

Financialapplications

databases

Customers,Suppliers


Inputs to the Financial Information Inputs to the Financial Information SystemSystem

Strategic plan or corporate policies Contains major financial objectives and often projects financial needs.

Transaction processing system (TPS) Important financial information collected from almost every TPS -

payroll, inventory control, order processing, accounts payable, accounts receivable, general ledger.

External sources Annual reports and financial statements of competitors and general news

items.


Financial MIS Subsystems and Financial MIS Subsystems and OutputsOutputs

Financial subsystems Profit/loss and cost systems Auditing Internal auditing External auditing Uses and management of funds


Manufacturing MISManufacturing MIS

Schematic


Quality control reports

Process control reports

JIT reportsOperationaldatabases

Databasesof valid


TPS


systems



Internet orExtranet

Internet orExtranet

Figure 9.6

ManufacturingMIS




ManufacturingDSS

ManufacturingES

Manufacturingapplications

databases

Customers,Suppliers

MRP reports

Production schedule

CAD output


Inputs to the Manufacturing MISInputs to the Manufacturing MIS

Strategic plan or corporate policies. The TPS:

Order processing Inventory data Receiving and inspecting data Personnel data Production process

External sources


Manufacturing MIS Subsystems Manufacturing MIS Subsystems and Outputsand Outputs

Design and engineering Master production scheduling Inventory control Manufacturing resource planning Just-in-time inventory and manufacturing Process control Computer-integrated manufacturing (CIM) Quality control and testing


Marketing MISMarketing MIS

Supports managerial activities in product development, distribution, pricing decisions, and promotional effectiveness

Schematic


Sales by customer

Sales by salesperson

Sales by productOperationaldatabases

Databasesof valid


TPS


systems


Figure 9.9

MarketingMIS



ManufacturingDSS

ManufacturingES

Marketingapplications

databases

Pricing report

Total service calls

Customer satisfaction


Inputs to Marketing MISInputs to Marketing MIS

Strategic plan and corporate policies The TPS External sources:

The competition The market


Marketing MIS Subsystems and Marketing MIS Subsystems and OutputsOutputs

Marketing research Product development Promotion and advertising Product pricing


Human Resource MISHuman Resource MIS

Concerned with all of the activities related to employees and potential employees of the organization


Benefit reports

Salary surveys

Scheduling reportsOperationaldatabases

Databasesof valid


TPS


systems


Figure 9.12

HumanResource

MIS



ManufacturingDSS

ManufacturingES

Humanresource

applicationsdatabases

Training test scores

Job applicant profiles

Needs and planningreports


Inputs to the Human Resource MISInputs to the Human Resource MIS

Strategic plan or corporate policies The TPS:

Payroll data Order processing data Personnel data

External sources


Human Resource MIS Subsystems Human Resource MIS Subsystems and Outputsand Outputs

Human resource planning Personnel selection and recruiting Training and skills inventory Scheduling and job placement Wage and salary administration


Other MISOther MIS

Accounting MISs Provides aggregated information on accounts payable,

accounts receivable, payroll, and other applications.

Geographic information systems (GIS) Enables managers to pair pre-drawn maps or map outlines

with tabular data to describe aspects of a particular geographic region.


MIS & Related Organisational FunctionsMIS & Related Organisational Functions

Operational Mgmt

TacticalManagement

EIS

ESD

SSTr

ansa

ctio

n

Proc

ess

Con

trol

ERP

StrategicMgmt

Strategic Management:

Provides an organisation with overall direction and guidance – mission and vision

Tactical Management:

Develops the goals and strategies outlined by Strategic Management

Operational Management:

Manages and directs the day-to-day operations and implementations of the goals and strategies

Non – Management employees:

Producing goods and services – serving customers, order processing


Questions ?Questions ?

Next Lecture MIS

Need Purpose Advantages How to use it ?

Documents

SIMCA 2009 Lecture 11 Introduction Anil Tatti aniltatti [at] simca [dot] ac [dot] in Send mail – will reply within 24 hours Tue – 8.15 a.m. to 9.30