Management Information System

Definitions

• Data • Information• Systems• Information System• Management Information system• End user – Diff types.• Managerial end user.

Data

• Data: - are raw facts or observations, typically about physical phenomena or business transactions. More specifically, data are objective measurements of the attributes (characteristics) of entities, such as people, places, things, and events.

 

Information

• Information: - is processed data, which has been placed in a meaningful and useful context for an end user. Data is subjected to a “value-added” process (data processing or information processing) where:– Its form is aggregated, manipulated, and organized.– Its content is analyzed and evaluated– It is placed in a proper context for a human user

• Information is data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or prospective actions or decisions.

Data, Information, and Knowledge

• Data: raw facts• Information: collection of facts organized in

such a way that they have value beyond the facts themselves

• Knowledge: awareness and understanding of a set of information and ways that information can be made useful to support a specific task or reach a decision

Data, Information, and Knowledge (continued)

Types of Data

System

• A group of interrelated or interacting elements forming a unified whole.

• A group of interrelated components working together toward a common goal by accepting inputs and producing outputs in an organized transformation process (dynamic system).

Input Processing Output

Control

Environment

Other systems

System Boundary

Components of a Dynamic System

Feedback Signals

Control Signals

System ConceptsSystem Concepts

ManufacturingProcess

Input ofRaw Materials

Output ofFinished Products

Environment

Other Systems

Control byManagement

ControlSignals

ControlSignals

FeedbackSignals

FeedbackSignals

System Boundary

Components of System

• Input• Processing ( transformation )• Output• Feedback• Control• System boundary• Environment

System

• Open system• Closed system• Sub system• Adaptive system

Information system

• An information system (IS) can be any organized combination of people, hardware, software, communications networks, and data resources that collect, transforms, and disseminate information in an organization

Components of an INFORMATION System

Components of an Information System (Continued)

IS Resources and ProductsPeople Resources

– Specialists: system analysts, programmers, operators– End users : anyone else using the system

Hardware Resources– Machines: computers, video monitors, disks, printers, scanners– Media: floppies, tapes, disks, plastic cards, paper forms, ...

Software Resources system, application, procedures– Programs: OS , spreadsheet programs, payroll programs , ....– Procedures: data entry, error correction, paycheck distribution, ...

Data Resources database, model base, knowledge base– Product descriptions, customer records, inventory databases,...

Network resources– Communication media, network support, ...

A Business as a SystemThe community Competitors

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Financial Institutions Labor Unions

Management

Information Systems

Economic Resources:PeopleMoneyMaterialLandFacilitiesEnergyInformation

Organizational Processes:

ProductionMarketingFinance

PersonnelOther Processes

Goods and Services:ProductsServicesPaymentsContributionsInformationOther Effects

Control

Feedback

Input PROCESSING Output

Stakeholders in the Business Environment

Major Roles of IS

Support CompetitiveAdvantage

Support Business

Decision Making

Support of Business Processes and Operations

IS in the E-Business Enterprise

• Every business competes globally (whether they realize it or not)

• IS supports business operations through the use of:– Intranets– Extranets– Internet– Other information technologies

IS in the E-Business Enterprise (contn)

• Enterprise Collaboration Systems– Support communication, coordination, &

collaboration.• Virtual teams

• Electronic Commerce– Buying & selling, and marketing & servicing of

products, services, & information.

Managerial challenges of information technology

• Information systems can be mismanaged and misapplied so that they create both technological and business failure.

 Top Five Reasons for Success  Top Five Reasons for Failure

 User involvement  Lack of user input

 Executive management support  Incomplete requirements and specifications

Clear statement of requirements  Changing requirements and specifications

Proper planning  Lack of executive support

Realistic expectations  Technological incompetence

In Summary, the IS Function…

• Is a major functional area of business.• Is an important contributor to operational

efficiency, employee productivity and morale, and customer service & satisfaction.

• Is a major source of information and support for decision making.

• Provides a strategic advantage in developing competitive products & services.

Types of Information Systems

Types of Information Systems

• Operations Support Systems– Transaction processing systems

• Batch – transaction data accumulate over time, processed periodically.

• Real-time – data processed immediately after a transaction occurs.

– Process Control Systems – monitor & control physical processes.

– Enterprise Collaboration Systems

Types of Information Systems (continued)

• Management Support Systems

– Management Information Systems – pre-specified reports & displays to support decision-making.

– Decision Support Systems – provide interactive adhoc support.

– Executive Information Systems – critical information tailored to the information needs of executives.

Types of Information Systems

• Other Classifications– Expert systems – expert advice– Knowledge management systems – support the

creation, organization, & dissemination of business knowledge

– Functional business systems – support the basic business functions

– Strategic information systems – strategic advantage

Management Information systems

• Management information system (MIS): an organized collection of people, procedures, software, databases, and devices that provides routine information to managers and decision makers

• Primary focus of an MIS is operational efficiency

Management Information systems

• Is a integrated user-machine system for providing information to support the operations, management, analysis and decision-making functions in an organization.

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Management Information Systems (continued)

IS and MIS

When Information Systems are designed to provide accurate, timely and relevant information needed for effective decision making by managers, they are called Management Information System.

Objective of MIS

• Deliver the right information information to the right people, at the right time, with the right form.

• MIS should improve the workers’ productivity.• Who has what information about whom and

when, where, and how will all be decided in the process of building an information system.

Characteristics of MIS• Comprehensive• Integrated• Coordinated• Transformation of data into information• Relevant information • Conformation with managers’ styles and

characteristics• Selective sharing of data• Feedback- Cost/benefit, supply of relevant and

timely information and systemic failure

Misconceptions

• MIS is a computerized information system• More data lead to effective decision making• Managers know their all information needs• Managers do not have to understand how MIS

works

Need for MIS

• Decision making• Strategic planning• Management control• Operational planning and control• Provide managers with information• Regular, routine operations• Control, organize and plan better

Decision Support Systems

• Decision support system (DSS): an organized collection of people, procedures, software, databases, and devices used to support problem-specific decision making

• Focus of a DSS is on decision-making effectiveness

Specialized Business Information Systems

• Knowledge management systems (KMSs): an organized collection of people, procedures, software, databases, and devices to create, store, share, and use the organization’s knowledge and experience

• Artificial intelligence (AI): field in which the computer system takes on the characteristics of human intelligence

Information Management vs. Knowledge Management

• Information management can be described as “delivering  the  right  information  to  the  right people at the right time with the right form.”

• Knowledge management can be illustrated as “getting  the  right  people  to  have  the  right conversation at the right time.”

Expert Systems

• Give the computer the ability to make suggestions and act like an expert in a particular field

• Allow organizations to capture and use the wisdom of experts and specialists

• The knowledge base contains the collection of data, rules, procedures, and relationships that must be followed to achieve value or the proper outcome

Trends In Information system

Expanding Roles of Information Systems

1950s-1960s: Data Processing– electronic data processing systems

Purpose: transaction processing, record keeping, traditional accounting

1960s-1970s: Management reporting– Management Information Systems

Purpose:mgt. reports for pre-specified information to support decision making

1970s-1980s: Decision Support– Decision Support Systems

Purpose: Interactive ad hoc support of the managerial decision processImproving and customising decision making

Expanding Roles of Information Systems (cont)

• 1980s-1990s: Strategic and End User Support– End User Computing Systems: direct productivity support– Executive Information Systems:Critical Information – Expert Systems: Knowledge based expert advise for end users– Strategic Information Systems: for competitive advantagePurpose; Promoting survival and prosperity of organisation

• 1990s – 2000s : Global internetworking– Internetworked information systems– for end-user, enterprise, and inter-organizational computing,

collaboration, including global operations and management on the internet and other interconnected enterprise and global networks.

O’Brien p 31

INFORMATION SYSTEMS ( IS / MIS) INFORMATION SYSTEMS ( IS / MIS)

ORGANIZATIONSORGANIZATIONS TECHNOLOGYTECHNOLOGY

MANAGEMENTMANAGEMENT

INFORMATIONINFORMATION

SYSTEMSSYSTEMS

FUNCTIONS OF AN INFORMATION SYSTEM FUNCTIONS OF AN INFORMATION SYSTEM (General Systems Model)(General Systems Model)

INPUT OUTPUTPROCESS

FEEDBACK

INFORMATION SYSTEMINFORMATION SYSTEM

ENVIRONMENTENVIRONMENT

Customers Suppliers Customers Suppliers

Regulatory Regulatory Stockholders CompetitorsStockholders CompetitorsAgenciesAgencies

ORGANIZATIONORGANIZATION

Dr. Chen, Information AgeDr. Chen, Information Age TM -TM -4242

Information Systems in the Functional Areas of Business

• Finance and accounting• Sales and marketing• Manufacturing• Human resource management• Legal information systems

Functional Perspectives of MIS

• Financial MIS– Will integrate information from multiple

sources– Functions

• Costing• P&L reporting• Auditing• Funds management

Functional Perspectives of MIS

• Manufacturing– Design and Engineering– Master Production Scheduling– Inventory Control– Materials Planning– Manufacturing and Process Control– Quality Control

Functional Perspectives of MIS

• Marketing– Market research

• Web-based market research

– Pricing

Functional Perspectives of MIS

• Transportation and Logistics– Route and schedule optimization

• Human Resources• Accounting

Information Systems in Industry

• Airline industry• Investment firms• Banks• Transportation industry• Publishing companies• Healthcare organizations• Retail companies• Power management and utility companies• Professional services

Information systems in the Company

Marketing Production Finances Personel

sales production planning

budgetting human resources

marketing purchasing general ledger payroll

promotion distribution billing cost estimations

price setting engineering analytical bookkeeping

applications

new products operations financial operations

contracts

orders stock management

A/C payable training

quality control A/C receivable

Global Challenges in Information Systems

• Cultural challenges• Language challenges• Time and distance challenges• Infrastructure challenges• Currency challenges• Product and service challenges• Technology transfer issues• State, regional, and national laws• Trade agreements

Electronic Banking

• account status• exchange rates• economic information• bank transfers• order checks • reports• batch payments

Security via magnetic cards, password , control totals

Hospital Information Systems• patient registration• laboratory management• radiology• medical files• pharmacy• stock management and purchasing• human resources and scheduling• billing and A/C receivable• book keeping• operation theater

Other Applications• Transport

– just in time– routing– shipping

• Insurance

• Tourism

• Department stores