Core Concepts in Information

Systems
 Management Information System

 The three sub-components

 Management, Information and System
- together bring out the focus clearly & effectively.

System emphasizing a fair degree of integration and a holistic

view;

Information stressing on processed data in the context in

which it is used by end users;

Management focusing on the ultimate use of such information

systems for managerial decision making.
 System
 IT IS AN ORGANISED WHOLE ( A TOTALITY)
 AN ENTITY CONSISTING OF INTERDEPENDENT
COMPONENTS CALLED SUBSYSTEMS
 IT IS AN INTERLOCKING COMPLEX OF PROCESSES
CHARACTERISED BY PARALLEL CAUSE EFFECT
SEQUENCE( A CAUSE CREATING ONE EFFECT WHICH
IN TURN IS CAUSE OF OTHER EFFECT]
 EACH SUBSYSTEM MUST HAVE A FEEDBACK &
CONTROL MECHANISM TO ASSURE THAT THE SYSTEM
IS HEADING TOWARDS ATTAINMENT OF A COMMON
GOAL.
 System
Cont…
 THUS A SYSTEM CAN BE CONSIDERED AS A BUNDLE
OF COMPONENTS EACH HAVING ITS OWN SET OF
PROCEDURES, PROCESSES, METHODS ,
TECHNIQUES TO ACCOMPLISH SOME GOAL(S)
LEADING TO ACHIEVEMENT OF GOAL(S) OF THE
OVERALL SYSTEM OF THE ORGANISATION
 GOALS OF Education Institute :-IMPART QUALITY EDU.
TO PRODUCE BEST ENTERP. AND MANAGERS
 GOALS OF MBA Marketing
 GOALS OF MBA Finance
 System
Cont…
 ITMUST BE EMPHASISED THAT AS
SYSTEM IS MADE UP OF COMPONENTS IT
IS ALSO A PART OF A SUPER SYSTEM.
THIS COULD BE THE ENVIRONMENT IN
WHICH IT OPERATES
 Sub-Systems
 Factory System  Production Sub-system
 Production  Production Control
 Finance
 Material Control
 Quality Control
 Marketing

 Personnel
 Material Sub-sub-System
Etc. • Purchase
• Stores
• Trasportation
Keep on dividing till it is
logical to fragment the
subsystem
Subsytems and supersystems of IS

Business
Environment

Organization:
- business process
Information
I ITIT Information
IS

Technology - people
Systems
- data
- strategy
 What is MIS?
 An information system designed by an
organization to collect collect, manipulate,
and disseminate data or information on a
program
 Includes hardware, software, people,
communications systems, and data
 Allows managers to plan, monitor, and
evaluate operations and performance of an
activity
 Designed and used for administrative
purposes
 Role of MIS in business
 Roles:
- support of business operations
- support of managerial decision making
- support of strategic competitive
advantage
 ‘In an organization, information is the
blood and MIS is the heart’.
Figure 1-1 Five Components of an Information System

© 2007 Prentice Hall, Inc. 10

Figure 1-3 Characteristics of the Five Components

© 2007 Prentice Hall, Inc. 11

 5Cs of IS

TO ACHIEVE ORGANIZATIONAL OBJECTIVES

FIRMS UNDERTAKE ICT PROJECTS FOR ONE
OR MORE OF THE FOLLOWING REASONS
CLASSIFIED AS 5 Cs
 CAPABILITY
 CONTROL
 COMMUNICATION
 COST
 COMPETITIVE ADVANTAGE
One User’s Information Is Another User’s Data

13
 Business Processes and Information Systems

Business processes are at the heart of every business

• Business processes:
• Workflows of material, information, knowledge
• Sets of activities, steps (applying for a driving
license, Order a Burger)
• May be tied to functional area or be cross-
functional
• Businesses: Can be seen as collection of
business processes
• Business processes may be assets or liabilities
(Poorly Designed Processes become Liabilities)
Traditional View isolated IS
Non-integrated Functional IS
 Problems of Fragmented
Systems
If Systems are compartmentalized for Functional Areas and
not Integrated
Departments will fail to fully communicate with all the other
departments about every process that is taking place in a
company. Lack of integration will lead to problems in
coordination. For Example.
 Sales sends an order to Manufacturing with a shipment
date that can’t possibly be met.
 Accounting and Finance raise bills for supplies that
Production never order.
 Human Resources holds a training class that interferes
with a rush production job
 Functions of Enterprise

Sales Engineering
Design
Shop Floor
execution

Inventory Enterprise Production

Planning

Finance Controlling
Quality Maintenance
Procurement
 Integrating Functions and
Business Processes:
Cross-Functional Business Processes:

• Transcend boundary between sales, marketing, manufacturing, and

research and development

• Group of employees from different functional specialties to a complete

piece of work

Example: Order Fulfillment Process

Cross-Functional Nature of the Order Management
Process

Check
Quote Commit Produce Deliver Bill Collect
Credit

Sales & Distribution

Production
Planning

Financial

Materials
Mgmt

Accounting
 ENTERPRISE APPLICATIONS: INTERLINKAGES

Enterprise Systems Integration through Interlinkages of Processes and

coordination of Workflow with IS
• Data, Business Processes, and Information linkages

Outside
Outside Boundaries
Boundaries

Internal Systems
 An Example: Modular & Integration - Procurement Cycle

Purchasing Materials Sales

Management
Purchasing Sales

Supplier Goods Shipping

Warehouse Customer
Receipt

Invoice
Verification Billing

Accounting
Financial Accounting

Procure to Pay Cycle (if Purchase) or Order to Cash (if Sales)

 Cross-Functional Integrated
Subsystems
• The New Era of Cross-Functional Integrated Applications

Middleware Supply
Procurement Chain
Management Management
Enterprise
Resource Knowledge
Planning Management
Selling Customer
Chain Relationship
Management Management
Operations, Tactics,Strategy
 Progress in MIS

IN AT
Information can be created in multimedia
Information can be stored
Information can be retrieved VERY
REAL Information can be shared
Information can be distributed
LOW
Information can be processed
TIME Information can be transmitted
COST
 Enabling Role of Information
Technology
Old Business Rule Technology intervention New Business Rule
Information can appear Shared databases Information appears
only at one place simultaneously
Only experts can perform Expert Systems Generalists can act as
complex jobs experts.
Businesses must choose Telecommunication Centralization and
between centralization and networks decentralization
decentralization possible
Managers make all the Software tools Decision making is
decisions part of everyone’s job
 Enabling Role of Information Technology

Old Business Rule Technology intervention New Business Rule

Field persons need offices Wireless/internet/laptops Field offices can be

virtual
Personal contacts Internet / email Effective contacts

Find out the information Enterprise software Information comes to

you
Plans get revised On line computing Plans get revised
periodically instantly

* Reference : Reengineering the corporation by Michael Hammer & James Champy, 1993-94
Impact of MIS and IT on an Organization
•As transactional Information Systems:
- enables enterprise-wide shared and integrated
databases through :
i. improved decision making
ii. improved MIS reporting
- enables enterprise-wide cross functional work flow
automation through :
i. improving Intra-organizational transactions
ii. reducing in business processes lead times
iii. improved inventory and working capital management
iv. improved financial reconciliation
Impact of MIS on an organization

• Improves business process performance through:

- automation of business processes

- simplification of business processes

- elimination of non value adding business processes

- reengineering of business processes

 Impact of MIS on an organization

• MIS as a coordination and planning information

system results in:
- improved coordination among sales, production
stores, purchase, and accounts due to close loop
systems and online data
- dynamic scheduling of production and purchase-
based on feedback from sales and visa versa
 The competitive edge
• To be competitive today you need:
- the flexibility to take on new business opportunities as
they arise
- a business framework that lets you
i. optimize business processes
ii. cut costs
ii. improve customer service
iv. shorten your time to market
- comprehensive decision support tools to provide up-
to-date information on revenues, budget
performance, sales, and cash-flow
• E-business can help provide the competitive
edge you need