Management of Information Systems and Services

Chapter -1

Introduction to MIS and Global Concepts of

Electronic Business

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Contents
• Information systems overview
• Dimensions of Information Systems
• The role of information systems in business today
• Major Types of Information Systems:-TPS,MIS,DSS and ESS
• Information Systems relationship to one another
• The role of MIS in an organization
• E-business, E-commerce, and E-government
• Intranets and Extranets
• Impact of Internet on Competitive Forces
• Business Processes and Information Systems
• Enterprise Systems (ES): Benefits and Challenges
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Information systems overview
•Information system:
•Set of interrelated components
•Collect, process, store, and distribute information
•Support decision making, coordination, and
control.

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Information systems overview(cont.…)
• Three activities of information systems produce information organizations
need
1. Input: Captures raw data from organization or external environment
2. Processing: Converts raw data into meaningful form
3. Output: Transfers processed information to people or activities that use it
• Feedback:
• Output returned to appropriate members of organization to help evaluate or correct
input stage
• Computer/Computer program vs. information system
• Computers and software are technical foundation and tools, similar to the material and
tools used to build a house

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How Information Systems Are Transforming Business
• Information systems and technologies are transforming the
global business environment.
• In 2015, global firms and governments spent about €3.4 trillion
on information systems hardware, software, and
telecommunications equipment.
• If you make wise choices, your firm can outperform
competitors.
• If you make poor choices, you will be wasting valuable capital.
• Wise decisions about information technology and information
systems. 5
IT Vs IS
• What is Information Technology?
• Any form of technology used by people to handle
information.
• What are Information Systems?
• Integrated components processing, storing and disseminating
information in an organisation.
• Interdisciplinary study of systems that provide information to
users in organisations.

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Dimensions of Information Systems
• Using information systems effectively requires an
understanding of the organization, management, and
information technology shaping the systems.
•Understanding of the management and organizational
dimensions of systems as well as the technical dimensions
of systems, as information systems literacy.
• Computer literacy , in contrast, focuses primarily on
knowledge of information technology.
•Information Systems are more than Computers 7
Dimensions of Information Systems (Organizational dimension)
• Information systems are an integral part of organizations.
• Structure: different levels and specialties
oHierarchy of authority, responsibility: Senior, Middle, Operational
management, Knowledge service Data workers
• Business process: Organization coordinate its work through its hierarchy and
business process
• Culture : ways of doing things, part is embedded in IS.
• Senior management makes long-range strategic decisions.
• Middle management carries out the programs and plans of senior
management.
• Operational management is responsible for monitoring the daily
activities of the business.
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Dimensions of Information Systems(Management dimension)
• Make decisions, formulate
action plan and solve
organizational problem.
• Managers set organizational
strategy for responding to
business challenges.
• In addition, managers must
act creatively:
oCreation of new products
and services
oOccasionally re-creating the
organization 9
Dimensions of Information Systems (Technology dimension)
• IT :
oHardware: physical component
oSoftware: instruction control Hardware
oData management technology
oNetwork and telecommunications technology
oNetwork: Hardware + Software link computers
oInternet: Network to provide services
oWWW: service to store retrieve information
• IT infrastructure: platform that the firm can built on its IS
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Dimensions of Information Systems

Levels in a Firm
• Business organizations are
hierarchies consisting of three
principal levels: senior
management, middle
management, and operational
management.
• Information systems serve each
of these levels. Scientists and
knowledge workers often work
with middle management.
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The role of information systems in business today
• Operational excellence:
o Improvement of efficiency to attain higher profitability
• New products, services, and business models:
o Enabled by technology
• Customer and supplier intimacy:
o Serving customers raises revenues and profits
o Better communication with suppliers lowers costs
• Improved decision making
o More accurate data leads to better decisions
• Competitive advantage
o Delivering better performance

o Charging less for superior products

o Responding to customers and suppliers in real time
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Four Major Types of Information Systems
Major Types of Systems in Organizations

1. Transaction Processing Systems (TPS)

2. Management Information Systems (MIS)
3. Decision-Support Systems (DSS)
4. Executive-Support Systems (ESS)

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Types of Information Systems(TPS)
• Transaction processing systems
oPerform and record daily routine transactions necessary to
conduct business
➢Examples: sales order entry, payroll, shipping
• Allow managers to monitor status of operations and relations
with external environment
• Serve operational levels
• Serve predefined, structured goals and decision making

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How Management Information Systems obtain their data from the organization’s TPS

Major Types of Systems in Organizations

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Types of Information Systems(DSS)
• Decision-Support Systems
Major Types of (DSS)
Systems in Organizations
oServe management level with data analysis for making decisions
oInput: Low-volume data or massive databases, analytic models, and data
analysis tools
oProcessing: Interactive, simulations, analysis
oOutput: Special reports, decision analyses, responses to queries
oUsers: Professionals, staff managers
• MIS and the Role of DSS
oThe DSS could be an internal part of the MIS
oDSS can be embedded or kept out of the MIS:
oDSS embedded in MIS for internally sourced information.
oDSS kept out of MIS when information is sourced internally and externally.
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Types of Information Systems(ESS)
•Executive Support Systems (ESS)
Major Types of Systems in Organizations

oProvide communications and computing environment

that serves the organization’s strategic level
oInput: External and internal aggregate data
oProcessing: Graphics, simulations, interactive
oOutput: Projections, responses to queries
oUsers: Senior Managers

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Major Types of Information Systems relationship to one another

•TPS: Major source of data for other systems

•ESS: Recipient of data from lower-level systems
•Data may be exchanged between systems
•In reality, most businesses systems are only loosely
integrated (but they are getting better!)

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Interrelationships among Information systems
Major Types of Systems in Organizations

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Four Major Types of IS (cont…)
Major Types of Systems in Organizations

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Management Information Systems (MIS)
• Use of computer-based information systems in business firms
• Combines work of CS, management, and operating research toward
developing system solutions to real word problems
• Concerned with behavioral issues of development, use and impact of IS
• Main actors : Suppliers of hardware and software, Business firms,
Managers and employees, Firm’s environment (legal, social, cultural
context)
• Provide reports on firm’s current performance, based on data from TPS
• Provide answers to routine questions with predefined procedure for
answering them
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Management Information Systems (cont.…)
•These systems access, organize, summarize, and
display information for supporting routine decision
making in the functional areas.
•Characterized mainly by their ability to produce
periodic reports such as a daily list of employees and
the hours they work, or a monthly report of expenses
as compared to a budget.
•Primary purpose to process data into information.
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General Principles of MIS
• MIS supports Management with information for:
o Operations –
o Administration –
o Decision making –
• The foundation of MIS is databases.
• MIS is founded on databases.
• Today’s MIS is a computerized processing system.
• MIS differ from other ISs because:
o MIS is used to analyze information
o MIS also facilitates strategic and operational activities. 23
Primary Components of MIS
Primary Components of MIS
• The five primary components of MIS are:
1. Hardware
2. Software
3. Data (information for decision making),
4. Procedures (design, development and documentation),
5. People (individuals, groups, or organizations).

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The Modern Concept of MIS
The Modern Concept of MIS
o Handles the databases,
o Provides computing facilities to the end user,
o Gives decision making tools to the users,
o And connects firms to organizations.
• MIS is concerned with how to use information.

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History of MIS
• MIS growth agrees with growth of computing technology:
1. Mainframe and minicomputer computing;
2. Personal computers;
3. Client/server networks;
4. Enterprise computing;
5. And, Cloud computing.
Phase 1 - Mainframe and minicomputer computing
• Ruled by IBM and their mainframe computers.
• Mainframe computers were quite large.
• Required teams to run them.
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History of MIS (cont…)
Phase 2: Personal Computers
• Personal computers (PCs) became popular in 1965.
• Microprocessors replaced mainframes and minicomputers.
• This accelerated the decentralizing computing power.
• Large data centers were replaced with smaller offices.
• By late 1970s PCs make computing cheaper.
• Low cost computers became mass market commodities.
• More individuals were computing with PCs.

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History of MIS (cont…)
Phase 3: Client/Server
• Computers were linked to servers.
• Servers share information via a common network access.
• Data sets became accessible to many simultaneously.
Phase 4: Enterprise Computing
• High speed networks became popular.
• Firms could integrate all aspects of the activities.
• MIS linking all aspects of a firm’s activities was created.
• Using computers became an important skill for all persons.
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History of MIS (cont…)
Phase 5: Cloud Computing
• This (the latest) employs networking technology extensively.
• Applications and data storage are delivered to users.
• This is independent of configuration, location or hardware.
• High speed cell phone andWi-Fi networks are also delivered.
• Managers use the MIS remotely via any networked device.
• This has increased the possibility of having multiple jobs.

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The role of MIS in an organization
• MIS in an organization is akin to the heart in the body.
• The information is the blood and MIS is the heart.
Support to sub-systems
• MIS works through a variety of systems, such as;
• Query Systems,
• Analysis Systems,
• Modeling Systems,
• And, Decision Support Systems.
Support for Long term (Strategic) Planning
• MIS helps long term planning in several ways, including;
• Strategic Planning and Management Control,
• Operational Control and Transaction Processing. 30
How MIS helps in Business Organization
• Satisfies the diverse needs through variety of systems such as query system,
analysis system, modelling system and decision support system.
• Helps in strategic planning, management control, operational control and
transaction processing.
• Helps the middle management in short term planning, target setting and
controlling the business functions.
• Helps the top-level management in goal setting, strategic planning and
evolving the business plans and their implementation.
• Plays the role of information generation, communication, problem
identification and helps in the process of decision-making.
• MIS, therefore, plays a vital role in the management, administration and
operation of an organization.
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E-business, E-commerce, and E-government
• Electronic Business:
Toward the Digital Firm
oExecuting all the firm’s business processes with Internet technology
oUse of digital technology and Internet to drive major business processes.
• Electronic Commerce (e-commerce):
o buying and selling goods and services electronically
➢Subset of e-business
➢Buying and selling goods and services through Internet
➢E-commerce is changing how firms design, produce, and deliver their products and
services.
• Intranet: private, secure business network based on Internet technology
• Extranet: extension of intranet to authorized external users
• E-government:
oUsing Internet technology to deliver information and services to citizens, employees,
and businesses. 32
Intranets and Extranets
• Intranets
Electronic
o Internal Business
company and that
websites the Digital Firm only by employees.
are accessible
o Internal network, in contrast to the Internet, which is a public network linking organizations and
other external networks.
o Use the same technologies and techniques as the larger Internet.
o Private access area in a larger company website.
o Allows employees and colleagues to work together in a virtual space to communicate,
collaborate, and access documents and resources
• Extranets
o Provides controlled access to authorized customers, vendors, partners, or others outside the
company.
o A digital platform used for external communications.
o A private network where these individuals, like clients, vendors, suppliers, partners, etc., can
communicate with you and your employees in a closed digital workspace.
o supports private communication, collaboration, knowledge sharing, document sharing, and data
transfer between partners and organizations.
• Both: to improve how employees work with clients and each other.
• Sometimes they are combined in the same software, other times, separately. 33
Functional applications of intranets
Electronic Business and the Digital Firm

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The Internet and Organizations
•The Internet is capable of dramatically reducing
The Changing Role of Information Systems in Organizations

transaction and agency costs

•Businesses are rapidly rebuilding some key
business processes based on Internet
technology
•Internet technology becoming a key
component of IT infrastructure.
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Fig. Businesses today depend on the Internet, intranets, and extranets to
implement and manage innovative e-business applications. 36
Business Processes and Information Systems
• Business processes:
oWorkflows of material, information, knowledge
oSets of activities, steps
oMay 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
• Examples of functional business processes(Major Business Functions)
oManufacturing and production
• Assembling the product
oSales and marketing
• Identifying customers
oFinance and accounting
• Creating financial statements
oHuman resources
• Hiring employees
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Business Processes and Information Systems(cont.…)
Problem:
oDifferent kinds if IS in a firm work together
oThe challenge to get them all work together as one corporate
system(information integration )
oSolution: applications (systems) that span functional areas, focus on:
oExecute, coordinate business process
oIntegrate group of process
oFocus on management of resources and customer service
• Solution: Enterprise applications
o Include all levels of management
o Execute business processes across firm
o Span functional areas
Enterprise Applications
Enterprise Systems (ES)
• ES are packaged enterprise application software (PEAS) systems.
• The distinction between ES and IS:
o ES refers to software, whereas an IS a social system that uses IT.
o An IS includes people and IT.
• Enterprise Applications
o Enterprise resource planning (ERP);
o Customer Relationship Management (CRM),
o Supply Chain Management (SCM)
o Knowledge Management Systems (KMS)
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Enterprise Applications(cont…)
Supply chain management (SCM)
• The management of a network of interconnected businesses.
• Network involved in the provision of products and services.
• The end-points of SCM are the end-customers.
• SCM spans all movement and storage of the following:
• Raw materials,
• work-in-process inventory,
• and finished goods
• The supply chain is from the origin to point of consumption.
• More firms now need supply chains to connect global markets. 40
Enterprise Applications(cont.…)
Customer relationship management systems
Enterprise Applications

• Manages ways used to deal with existing and potential

customers
• Both a business and technology discipline
• Uses information systems to coordinate all customer
interaction processes in sales, marketing, and service.
• Track all customer interactions
• Analyze data to optimize revenue, profitability, customer
satisfaction, customer retention
Enterprise Applications(cont.…)
Knowledge Management
Enterprise Applications Systems (KMS)
• Collect relevant knowledge and experience in firm to support
business processes and management decisions
• Manage and distribute documents and other digital knowledge
objects
• Role of Knowledge Management Systems
oAcquire knowledge
oStore knowledge
oDistribute knowledge
oApply knowledge
How enterprise systems work

•Enterprise systems
feature a set of
integrated software
modules and a central
database that enables
data to be shared by
many different
business processes and
functional areas
throughout the
enterprise.

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Benefits of Enterprise Systems
• Help to unify the firm's structure & organization: One organization

• Management: Firm wide knowledge-based management processes

• Technology: Unified platform

• Business: More efficient operations & customer-driven business processes

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Enterprise Application Architecture

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Challenges of Enterprise Systems
• Difficult to build: Require fundamental changes in the way the
business operates

• Technology: Require complex pieces of software and large

investments of time, money, and expertise

• Centralized organizational coordination and decision-making:

Not the best way for the firms to operate
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Enterprise Collaboration Systems
• Cross-functional information systems that enhance communication,
coordination, and collaboration among the members of business teams and
workgroups.
• Information technology, especially Internet technol-ogies, provides tools to
help us collaborate.
• The goal of enterprise collaboration systems is to enable us to work
together more easily and effectively by helping us to:
oCommunicate: Share information with each other.
oCoordinate: Organize our individual work efforts and use of resources.
oCollaborate: Work together cooperatively on joint projects and
assignments.

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Tools for Enterprise Collaboration

Fig. Electronic communications, conferencing, and collaborative work software tools enhance
enterprise collaboration. 48