Concept of Management Information Systems

Chapter 2
 Introduction

• Differentiate between data and information

1

• Understand information as a resource

2

• Understand the role of information in organisational functions

3

• An overview of types of MIS

4

• Understand decision-making with MIS

5

• Understand communication within organisations

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 CASE STUDY - IS IN INDIAN RAILWAYS

• PASSENGER RESERVATION SYSTEM –

1980’s

• PASSENGER RESERVATION SYSTEM -

INTERNET

• CREW MANAGEMENT SYSTEM

• INTEGRATED COACHING MANAGEMENT

SYSTEM

https://www.youtube.com/watch?v=XMWIfJlyOmw
https://www.youtube.com/watch?v=_5GUafrcTcM

3
Data and Information

Data is entered here.

Raw Facts are data

Processed data is
Information

4
 Measuring Data

BITS = Binary
Digits 0, 1

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 Information As a Resource

• In modern organisations, information, data and information systems are used extensively
within and across organisational functions, across hierarchies.

• Typical functions in an organisation include accounting and finance, marketing, operations,

human resource management and information systems management.
 Types of Information Technology

• Historically, information systems were designed for specific functions within organisations

• Modern information systems are designed largely to support individuals, groups or enterprise functions

• Functional IT is used by individuals for their own work, Network IT is used within functions to collaborate/
communicate within the group. Enterprise IT is designed for processes in the organisation and is very
efficient in moving data between different functions and to communicate with outside partners

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 Types of Information Technology

• Diagram – Components of modern information technology infrastructure in an organisation

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 Types of Information Systems: Transaction Processing system

• Transaction processing systems record all transactions as they happen, storing transaction data and preserving a digital
record of the functioning of the enterprise.

• They are designed to respond quickly to the user, through carefully designed interfaces that guide users through various
transactions.

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 Types of Information Systems: Management
Information Systems

• MIS process data generated by Transaction processing systems, by aggregating

data into reports to be used by the management, to sense and monitor the
organisation.

• Real-time monitoring involves presenting data as soon as it is created

• Batch mode monitoring aggregates data over a period of time, allowing drilling
down to details

• Specific reports are tailored for specific decisions and hence the need for MIS to
be designed to meet the specific requirements of managers

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 MIS at different levels

• Needs of managers at different levels are different

• Executives at the highest level require aggregated data – Executive Support

Systems (ESS) provide such reports which use graphs, charts and diagrams

• Managers who report to Executives use Decision Support Systems which use
scientific models of decision making on available data

• Knowledge workers use sophisticated models to analyse transaction data and

data related to the industry and economy

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A Screenshot of an ESS (simulated)

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 Decision making with MIS: Tactical Decisions

• Tactical decisions are those that have short-term impact and are taken by
workers and operators

• Examples: Nurse attending to a patient in a hospital ward

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 Decision making with MIS: Tactical Decisions

• Tactical decisions are those that have short-term impact and are taken by
workers and operators

• Examples: Shop Floor Assembly Line worker

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 Decision making with MIS: Operational Decisions

• Decisions that have a medium-term scope and are made by managers are
Operational decisions

• These are based on aggregate data and are often supported by decision support
systems

• Examples: (Operations Manager, Mktg Manager, Finance Manager, Software

Project Manager)

• Control and planning are important activities involving operational decisions

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 Decision making with MIS: Operational Decisions

• Decisions that have a medium-term scope and are made by managers are
Operational decisions

• These are based on aggregate data and are often supported by decision support
systems

• Examples: (Operations Manager, Mktg Manager, Finance Manager, Software

Project Manager)

• Control and planning are important activities involving operational decisions

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 Travelling Salesman problem

This is an example of an operational decision.

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 Strategic Decisions

• Decisions that are related to the vision & mission of the organisations with a
very long-term horizon in perspective.

• ESS is an example of a Strategic decision making tool.

– Pharma: Which markets to enter? (ESS→Industry data on competition)

– Govt (Indian Railways): How to plan for future capacity? (Long-term

infrastructure growth + Planning for future demand for services)

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 Control & Planning

Control implies monitoring of activities against given or stated objectives

Planning involves forecasting situations in the future & arranging for

activities that will address them

• Setting up of marketing incentive schemes to help boost slack in sales

• Redeploy sales personnel is specific regions
• Send personnel for training programs

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 Communication in organisations

• Communications occur through various forms within an organisation –

text messages, emails, documents and files

• As organisations grow their need for communication grows

• Communication is critical for transactions, decision making and

strategic collaborations.

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 Types of Communication

Digital networks allow -

• Synchronous communication – two or more

parties communicate at the same time. (e.g.
Phone conversations)

• Asynchronous communication – two or

more parties communicate but not
simultaneously (e.g. Email exchange, chat
messages, etc)

• Simplex communication – possible only in

one direction between two parties (e.g.
Radio receivers)

• Half-duplex communication – two parties

can communicate with each other, but not
at the same time. (Email communication)

• Duplex communication – Two parties

communicate with each other at the same
time (Phone networks are duplex in nature)

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 Examples of Communication in Organisations

• Sales

• Service

• Tracking

• Communication 'on the go’. The Internet presents many security

challenges

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 Decision making with Communication Technology

• Communications in organisations are from people to people, device to

device and devices to people.

• Such high levels of connectivity leads to information overload and

organisations face the challenge of minimising this to present only
relevant information

• RFID in Banking →

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 Questions !

Fill in the blanks

1. ESS stands for __________________________

True or False
1. When two or more parties communicate at the same time, it is referred to as Synchronous communication.
2. Nurse attending to a patient in a hospital ward is an example of Strategic decision.

Select the right option

1. Travelling salesman problem is an example of _________________ decision
a) Strategic
b) Operational
c) Both a and b
d) only b
 Answers

1. Executive Support Systems

2. True

3. False

4. D