MANAGEMENT INFORMATION SYSTEMS

INFORMATION SYSTEMS IN ORGANIZATIONS

Compiled by Dr. Jennifer W, PhD, PMP® for Online Training

 OVERVIEW OF INFORMATION SYSTEMS
Objectives
• Define Information systems and technology, and outline its respective
components.
• Briefly explain the different objectives of IT to organizations.
• Explain the environmental developments that call the need for information
systems.
• Discuss how information technology has transformed organizations.
• Explain challenges facing use of Information systems, and manager’s
areas of knowledge
 MANAGEMENT CHALLENGES
The following are management challenges related to Information
Systems that need to be addressed:
• Why information systems?
• Contemporary approaches to information systems
• Role of information systems
• Using information systems
 MANAGEMENT REALITIES
• Changing business environment
• Emergence of digital organizations
THE CHANGING BUSINESS ENVIRONMENT
Why Information Systems?
• EMERGENCY OF GLOBAL ECONOMY
• TRANSFORMATION OF INDUSTRIAL ECONOMIES
• TRANSFORMATION OF BUSINESS ORGANIZATIONS
• THE EMERGING DIGITAL FIRMS
THE CHANGING BUSINESS ENVIRONMENT
GLOBALIZATION
• Management and Control of global market
• Competition in world markets (Global village)
• Global Work groups
• Global Delivery Systems to reach global
networks
 THE CHANGING BUSINESS ENVIRONMENT
TRANSFORMATION OF INDUSTRIAL ECONOMIES
• Information and Knowledge-based economies
• New products & services
• Knowledge as an asset for productivity
• Time-based competition
• Shorter product life
• Turbulent environment
• Limited employee knowledge base
 THE CHANGING BUSINESS ENVIRONMENT
TRANSFORMATION OF BUSINESS ORGANIZATIONS
• Flattening
• Decentralization
• Flexibility
• Location independence (anywhere, anytime)
• Low transaction costs
• Empowerment
• Collaboration and Teamwork
 EMERGENCE OF DIGITAL ORGANIZATION/FIRM

Evidence of this:
• Digitally-enabled relationships with customers, suppliers, employees
• Core business processes accomplished via digital networks
• Digital management of key business assets
• Rapid sensing & responding to environmental change
• Digital organization use internet and networking technologies.
• The Digital Firm: E-commerce, E-business, and New Digital
Relationships
THE EMERGING DIGITAL FIRM
 CHALLENGE OF INFORMATION SYSTEMS
Issues faced by management:
• Strategic: Using IS to remain competitive & effective

• Globalization: Global requirements in different culture, language etc

• IS architecture: Design IS to support organizational goals

• Investment: Getting value of information Systems

• Responsibility & control: Understand IS as well as Dealing with

Technology issues like security and ethics
 SOME TERMINOLOGIES

• MANAGEMENT
• INFORMATION
• SYSTEMS
• INFORMATION SYSTEMS
• DATA
• ORGANIZATIONS
 WHAT IS MIS?
Management Information System:
– Its a computer based information system which is basically
concerned with processing data into information which is then
communicated to the various departments in an organization to
support the operations, the management and the decision making
function in the organization.

– Management Information system, or MIS, broadly refers to a

computer based system that provides managers with the tools to
organize, evaluate and efficiently manage departments within an
organization
 COMPONENTS OF MIS
MIS has three words:

MIS

Management Information System

 MANAGEMENT
MANAGEMENT:
• The effective utilization of human and material resources to achieve
organization objectives.
• Management is a process with five basic functions:
– Planning
– Organizing
– Staffing
– Directing
– Controlling
• Management is generally hierarchical: Top managers handle planning; Mid –
career managers oversee control; Junior managers- deals with administration.
 INFORMATION
INFORMATION:
• In MIS, it means the processed data that helps the management in planning,
controlling and operations in an organization.
• Data means unstructured raw facts, observations or unsorted messaged. Data
involves facts and figures. Information like a finished product.
• Processed data to support management functions
• Processing – record, summarize, store, and retrieve in required reporting format
 SYSTEM
A system is an orderly grouping of interdependent
components linked together according to a plan to achieve
as a specific objective.
• An input – processing - output and feedback matrix.
• Supports the processing of data into information.
 DATA & INFORMATION
• DATA:
– The values of the properties of the objects in the environment
– Streams of raw facts representing events such as business
transactions
• INFORMATION:
– Useful, processed data that increases knowledge
– Clusters of facts meaningful & useful to human beings in
processes such as making decisions
 DATA VS INFORMATION
• Data
– Raw facts representing events (text, image, audio, video), data cannot help in decision
Making
– The raw materials in the production of information
• Information
– Data that have meaning within a context
– Raw data or data that have been manipulated
– Organized and arranged in standard formats.
– Arranged to ease understanding and use.
– Helps the management in planning, controlling, operations as well as decision making
• Raw data
– Time-consuming to read
– Difficult to understand
• Manipulated Data
– Provides useful information
 INFORMATION SYSTEM
• An Information System is an organized combination of
people, hardware, software, communications network
and data resources that collects, transforms(Process)
and disseminates in an organization.
• Components of Information System: Input, Processor,
Output, People, Hardware(physical devices), Software
(information processing instructions), Data, Network
(communication channels)
 COMPONENTS OF INFORMATION SYSTEM
Components of Information System
• Input (capturing or gathering raw data)
• Processor(Converting or transforming data into useful outputs)
• Output (Production of useful information)
• Feedback (Making changed to input or processing activities)
• People (Users)
• Hardware (physical devices)
• Software (information processing instructions)
• Data Facts and figures)
• Procedures (How components are used)
• Network (communication channels)
COMPUTER-BASED INFORMATION SYSTEMS (CBIS)

They are:
• The are formal systems with hardware and software
• Have fixed definitions of data, procedures
• Are used in Collecting, storing, processing,
disseminating, using data
COMPUTER-BASED INFORMATION SYSTEMS
CBIS components:
• Hardware: Computer equipment used to perform input, processing, and output
activities
• Software: Computer programs that govern the operation of the computer
• Database: Organized collection of facts and information
• Telecommunications: Electronic transmission of signals for communications
• Networks: Connect computers and equipment in a building, around the
country, and around the world
• Internet: World’s largest computer network
• People: Manage, run, program, and maintain the system
• Procedures: Strategies, policies, methods, and rules for using a CBIS
 COMPUTER-BASED INFORMATION SYSTEMS
• CBIS: A Single set of hardware, software, databases, telecommunications,
people, and procedures configured to collect, manipulate, store, and process
data into information.
 MANAGEMENT INFORMATION SYSTEM
• A Management Information System is:
– An integrated user-machine system
– For providing information
– To support the operations, management, analysis, and decision
making functions in an organization
• The system utilizes
– Computer Hardware and Software
– Manual Procedures
– Models for analysis, planning, control and decision making
– A database
NEED FOR INFORMATION SYSTEMS
Why Do People Need Information?
• Individuals: Entertainment and enlightenment
• Businesses: Decision making, problem solving and control

– Gathering/Collecting, Storing, Manipulating/Processing, Disseminating

 DATA, INFORMATION AND SYSTEM
Raw data are processed in an IS to create final useful information
• Process: Manipulation of data
• Computer-based ISs: process data to produce information
CHARACTERISTICS OF VALUABLE INFORMATION

Information is useful if its:

• Relevant
• Complete
• Accurate
• Current
• Cost effective in business
• Secure
• Simple
• Accessible
• Flexible
• Reliable
• Timely
• Verifiable
FUNCTIONS OF AN INFORMATION SYSTEM

ENVIROMENT

The environment within which the organization operates in….feedback is

returned to various members to refine.
THE FOUR STAGES OF DATA PROCESSING

• Input: Data are collected and entered into computer

• Data processing: Data are manipulated into
information using mathematical, statistical, and
other tools
• Output: Information is displayed or presented
• Storage: Data and information are maintained for
later use
 DIMENSIONS OF INFORMATION SYSTEMS
To use Information Systems effectively: There is a need to understand organization,
management, and information technology shaping the systems.
Information System creates value and it’s a solution for the organizational and management
to overcome challenges posed by the environment.

Organisations: Co-ordinates work through structured hierarchy and business processes. Its
culture determines information systems they adopt and use.

People: Information systems require skilled people to build, maintain and use them.
Managers and employees attitudes towards the systems affect the ability to adopt and use
technology productively.

Technology: Helps improve production and profits, reduce costs, increase competitive
advantages and ensure the survival of a business in turbulent environment.

Why Projects fail: Inadequate resources, outdated business process, turbulent environment,
lack of Skilled employees, poor decisions, lack of knowledge, outdated technology, rapid
changing technology
 KEY ORGANIZATIONS ELEMENTS
• PEOPLE: Managers, knowledge workers, data workers, production or service workers

• STRUCTURE: Organization chart, groups of specialists, Authority(Senior, Middle,

operational management), products, geography.

• OPERATING PROCEDURES/PROCESSES: Standard Operating Procedures (SOP), rules

for action

• POLITICS: Power to persuade, influence, get things done

• CULTURE: Customs of behavior, Fundamental set of assumptions, Values and ways of

doing things.
 MAJOR BUSINESS FUNCTIONS
They work together to define the success of the organization
• Sales & marketing
• Manufacturing
• Finance
• Accounting
• Human resources
COMPONENTS OF INFORMATION SYSTEMS IN
ORGANIZATIONS
• Data
• Hardware
• Storage
• Software
• People
• Procedures
• Communications
• Networks
 THE BENEFITS OF HUMAN-COMPUTER
SYNERGY
• Synergy: combined resources produce output exceeding the sum of the outputs of the same
resources employed separately. (Human are Slow and make mistakes, computers cant make
decisions)
• Translates human thought into efficient processing of large amounts of data
 BUSINESS INFORMATION VALUE CHAIN
Every business has an information value chain in which raw data is systematically acquired, then
transformed through various stages that add value to that information. The value of an
information system to a business, the decision to invest in any information system is determined by
which the system will lead to better management decision, more efficient business process and
higher profitability.
 INTERDEPENDENCE BETWEEN ORGANIZATIONS AND
INFORMATION SYSTEMS
The Reality today for organizations:
• Changes in Business strategy, rules, and business processes increasingly require changes in hardware,
software, databases, and telecommunications (Information technology). Systems should permit the
organization to accomplish its objectives.
 INFORMATION SYSTEM TRENDS
• High computational power; low prices
• Increase in programming variety and ingenuity
• Internet access, available, faster and more reliable,
getting cheaper
• Internet growth resulting in opportunities
• Increasing ratio of computer-literate workforce
 INFORMATION SYSTEM TRENDS
• The Internet – opportunities/ possibilities
• Communicate
• Collaborate
• Access Information
• Discussion groups
• Obtain information
• Entertainment
• Transact Business
• Unethical/Antisocial use and practice
 ISS: FROM RECORDING TRANSACTIONS TO
PROVIDING EXPERTISE
• Transaction Processing Systems (TPS)
– Record data and perform basic processing
– Point-of-Sale Terminals, ATMs, Mobile phone call logs

• Management Information Systems (MIS)

– Recorded transactions and other data produce information for problem solving and
decision making
 TYPES OF MISS
• Decision Support Systems (DSS)
– Contain models, or formulas, that manipulate data into
information
– Often answer “what if?” questions
• Group Decision Support Systems (GDSS)
– Generate ideas, establish priorities, and reach decisions in
group environment
• Executive Information Systems (EIS)
– Can gather information from vast amounts of data for high-
level executives
– Highly useful in control and planning
 TYPES OF MISS
• Expert Systems (ES)
– Programmed with human expertise
– Can help solve problems of unstructured nature
• Geographic Information Systems (GIS)
– Represents local conditions or features
– Allows planning, decision-making, and monitoring of local
conditions or activities
• On-demand Output
– Managers can obtain reports tailored to their needs at any
time
 ISS IN FUNCTIONAL BUSINESS AREAS
• Accounting
– Record business transactions, produce periodic financial
statements, & create reports required by law
• Finance
– Organize budgets, manage the flow of cash, analyze investments,
and make decisions that could reduce interest payments and
increase revenues
• Marketing
– Analyze demand for various products in different regions and
population groups
• Human Resources
– Help with record keeping and employee evaluation
 ISS IN DIFFERENT BUSINESS SECTORS
• Manufacturing
– Allocate resources such as personnel, raw material, & time
– Control inventory, process customer orders, prepare production
schedules, perform quality assurance, and prepare shipping
documents
• Service
– ISs are often the backbone of service organizations
• Retail
– Some retail stores are now linked to communication networks by
satellite, wireless
– Management can determine which items move quickly and which
do not
 ISS IN DIFFERENT BUSINESS SECTORS
• New Businesses
– ISs have made new products and services possible,
such as credit reports and shipment tracking
• Government
– Tax authorities, national insurance and welfare
agencies, defense departments, economic
organizations, immigration authorities
 E-COMMERCE
• Business-to-business and business-to consumer
transactions done electronically via networks
• Database management on-line makes information
cheaper to distribute
• e-commerce is now synonymous with “doing business
on the Internet”
• Transactions increasing world wide
 NEW OPTIONS FOR ORGANIZATIONAL
DESIGN
Driving design:
• Flattening organizations
• Separating work from location
• Reorganizing workflows
• Increasing flexibility
• Redefining organizational boundaries
 Exercises
• Define the terms: data, information, system, information
system
• Describe the impact of current realities on organizations
• Describe the various types of information systems in
organizations
• Describe ICT trends
• Describe how systems depend on each other
• Discuss new options for organizational design