MANAGEMENT

INFORMATION SYSTEMS
UNIT-1
INTRODUCTION
SYLLABUS: Definition of System–Information System –
Management Information System - characteristics and Role of
Management Information System - Information System Activities And
Resources – Types of Information Systems – Managerial
Challenges of Information Technology –Strategic Uses of Information
Technology.
 BASIC CONCEPTS
• Data: raw facts
– Alphanumeric, image, audio, and video
• Information: collection of facts organized in such a
way that they have additional value beyond the value
of the facts themselves
– Value of Information is directly linked to how it
helps decision makers achieve their organization’s
goals and can be measured
• in time required to make a decision
• Increased profits to the company
 BASIC CONCEPTS
• The process of transforming data into
information

• An information system:
 Understanding Management,
Information and System
What is Management?
• Planning, control, and administration of an organization.
• Management is generally hierarchical:
• Top managers handle planning;
• Mid – career managers control;
• And, junior managers administer.
What is Information?
• Processed data to support management functions
• Processing – record, summarize, store, and retrieve.
• Present in the required reporting format.
What is a System? (in the context of MIS)
• An inputs – processing - output and feedback matrix.
• Supports the processing of data into information.

Objectives of MIS
• MIS processes data to support the management functions.
• MIS manages information system (IS) productively:
• Competitive advantage created from using information
maximally:
• Capturing Data – collects the relevant data.
• Processing Data – transforms data into information.
• Information Storage – store the information securely.
• Information Retrieval – easy retrieval by authorized users.
• Information Propagation – nonstop access and updating.
Management Information System
 Information System
What is an Information System (IS)?
• A unified data and knowledge (soft) infrastructure.
• Collect/retrieve, process, store, and dispense
information.
• Supports decision making and control.

Uses of IS in the Organization

• Facilitates analysis of problems;
• Provides deep insight into complex subjects;
• Supports creation of new products.
 Book Structure

• Framework of major areas:

– Foundation Concepts – fundamental behavioral, technical, business,
and managerial concepts about information systems
– Information Technologies – major concepts, developments, and
management issues in IT
– Business Applications – major uses of IS for operations,
management, and competitive advantage
– Development Process – how an IS is planned, developed, and
implemented to meet business opportunities
– Management Challenges – effectively and ethically managing IT at
the end-user, enterprise, and global levels of a business
Computer-Based Information Systems
• Computer-based information system
(CBIS): single set of hardware, software,
databases, telecommunications, people, and
procedures configured to collect, manipulate,
store, and process data into information
 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
 What is MIS?
• Information
 Data that has been put into a meaningful and useful context.
Usually to help make a decision.
• Management Information System
 A combination of computers and people that is used to
provide information to aid in making decisions and managing
a firm.
• Information Technology (IT)
 Computer Technology (Hardware and Software)
 Processing and Storing Information
 Communication Technology
 Transmitting information
 Why is MIS Important?

• MIS affects all areas of business

– Manufacturing
– Accounting & Finance
– Human resources
– Marketing
– Top management
• Performance evaluations—expectations
 Example - A Manufacturing System
Environment

Feedback Feedback
Signals Signals
Control Control by Control
Signals Management Signals

Input of Manufacturing Output of

Raw Materials Process Finished Products

System Boundary
Other Systems
 History of the Role of IS
1950-1960 1960-1970 1970-1980 1980-1990 1990-2000

Data Management Decision Strategic & Electronic

Processing Reporting Support End User Commerce

Electronic
Data Management
Processing Information
- TPS Decision
Systems
Support
Systems End User
- Ad hoc Computing
Reports Exec Info Sys Electronic
Expert Systems Business &
SIS Commerce
-Internetworked
E-Business &
Commerce
 Trends in ISs

• Data Processing: 1950s

– Transaction processing, record keeping, traditional
accounting applications
• Management Reporting: 1960s
– MIS – predefined management reports for decision-making
purposes
• Decision Support: 1970s
– DSS – interactive ad hoc support of the managerial decision-
making process
• Strategic and End User Support: 1980s
– EUC, Executive Information Systems, Expert Systems,
Strategic Information Systems
• Electronic Business and E-Commerce: 1990s – 2000s
Trends in Information Systems
 The Electronic Business
The Internet
Suppliers and Other Business Partners Company
Boundary
Procurement, Distribution, and Logistics
Extranets

Manufacturing Accounting,
Engineering &
and Finance, and
Research
Production Management

Intranets

Advertising Sales Customer Service

Extranets

Consumer and Business Customers

 The Modern Concept of MIS
– Handles the databases,
– Provides computing facilities to the end
user,
– Gives decision making tools to the users,
– And connects firms to organizations.

MIS is concerned with how to use information.

 The Modern Concept of MIS
• Information is generated through data analysis.
• Data analyses relies on many academic disciplines.
– Management, Psychology, Human Behavior, Engineering etc.
• Thus making MIS more effective and useful.
• MIS is founded on the systems theory.
• Offers solutions input - output flow challenges.
• Using theories of communication.
• An input – Process – Output systems without noise.
• Ensures flow of information from a source to a
destination.
• A blend of Management, Information and IT System.
 THE ROLE OF MIS IN AN
ORGANIZATION
• MIS in an organization is similar 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.
 THE ROLE OF MIS IN AN
ORGANIZATION
Support for Transaction Processing
• Answers queries on the data relating to transactions;
• the status of a particular record,
• and, references on a variety of documents.
• Helps the junior management personnel by;
• providing the operational data for planning,
• scheduling and control,
• supports decision making at the operations level,
• and, corrects an out of control situation.
 THE ROLE OF MIS IN AN
ORGANIZATION
Support for Short Term Planning
• Helps the mid career managers in the following;
• short them planning,
• target setting and
• and, controlling the business functions.
• Helps the top managers in the following;
• goal setting,
• strategic planning and
• evolving the business plans
• and, the business plan implementation.
• Supports information generation and communication.
• Aids problem identification and sound decision making.
 THE ROLE OF MIS IN AN
ORGANIZATION
MIS in Public Sector Organizations (PSOs)
• PSOs are increasingly inundated with data and information.
• PSOs need IS to support its various activities.

Centralized Vs. Decentralized PISs

• PISs need to cover eight main areas of responsibility:
• information systems planning;
• organizational structures and staffing;
• data management;
• computing and data management architecture;
• information systems development;
• information technology acquisition;
• training, and technical support.
 THE ROLE OF MIS IN AN
ORGANIZATION
Centralized Vs. Decentralized PISs
• A centralized PIS may be efficiency, but difficult to
manage.
• A decentralized PIS spreads the tasks, but may be wasteful.
• A mix of central and local action is considered most
effective.

MIS and Public Sector Accountability

• The broad set of accountabilities in PSOs include:
• Managerial accountability;
• Political accountability;
• And, Financial accountability
Major Roles of Information Systems

Support of
Strategic
Advantage

Support of
Managerial
Decision Making

Support of
Business Operations
 Types of Information
There are four main types of information,
namely;
• Descriptive information,
• diagnostic information,
• predictive information, and
• prescriptive information.
 Descriptive information
• It tries to answer the question, what is
happening?
• It covers such information as:
• Financial results and maintenance records;
• And, Production records, product marketing, and
test results.
• Can help to secure other needed types of
information.
• Not enough for identifying and solving
management problems.
 Diagnostic information
• Seeks to answer the question - what is wrong?
• Can be used to define problems that develop
in the business.
• Can find an how to solve the problem
(including doing nothing).
• “What is” and “what ought to be” should be
viewed together.
 Predictive information
• Seeks to answer the question - what would happen if..
• Generated from an analysis of possible future events.
• Is exceedingly valuable with “desirable” outcomes.
• Manager use predictive information to reduce risk and
uncertainty.
• Predictive models include;
• budgeting techniques,
• simulation models,
• and other tools that measure expected changes in the
business.
 Prescriptive information
• Seeks to answer the question- What should be
done?
• Not adequate for decision making.
• Used with the goals and values of the manger
for decision making.
 Classes of Information
Organizational information
• Information required sub-units of an organization.
• The same information may serve different uses.
• Often stored in database for the users.

Functional information
• Used by the functional heads for administrative
functioning.
• Often function-specific, each unit can have its own.
• Largely factual, statically focusing on specific task details.
• Assessable by unit objectives, work design and
responsibility.
 Classes of Information
Knowledge information
• Compels the manager to think, decide and act.
• Highlights the deviation norms and abnormal variations.
• Supports the function of middle and top management.
• Often presented graphically for quick grasp, E.g.:
• Students population may be declining;
• Or, market demand is falling.

Decision-support information
• Justifies a change or amendment of the existing decisions.
• E.g., inspection report, demand forecast, etc.
• Can be sourced internally and externally
 Classes of Information
Operational information
• Required by operators and Junior managers.
• Helps decisions that affect operations.
• Determined internally, through the transaction processing.
• Largely of short time span and focuses on the current
status.

Determining Information Requirement

• Asking & interviewing – using mainly closed ended
questions.
• Using expert testimonies
• Experiences from past decisions and problem solving.
Classification of Information Systems in Business
Classification of Information Systems in Business

• Operation Support Systems – help run the

daily business, but do not provide much
information for managerial decision-
making
– Transaction Processing Systems – record &
process daily transactions
– Process Control Systems - monitor and control
physical processes
– Enterprise Collaboration Systems (Office
Automation Systems) – enhance team and
workgroup communications and productivity
Classification of Information Systems in Business

• Management Support Systems

– Management Information Systems –
reports and displays for managers to help
them make better business decisions
– Decision Support Systems – direct
computer support for decision-making
– Executive Information Systems – critical
information specifically for executives to
make better decisions; not just a better MIS
Classification of Information Systems in Business

• Other Categories of Information

Systems
– Expert Systems – expert advice for operational
decisions
– Knowledge Management Systems – support
creation, organization, and dissemination of
business knowledge
– Strategic Information Systems – apply IT to
products, services, and processes for strategic
advantage
– Functional Business Systems – support basic
business functions
– Cross-Functional Systems – integrate various roles
and outputs into a variety of functions
Managerial Challenges of Information Technology

• Challenges and Opportunities

– Business/IT Challenges
– Business/IT Developments
– Business/IT Goals

• Success and Failure with IT

– Effectiveness – does it work?
– Efficiency – how well does it work?
 Managerial Challenges of Information Technology

• Developing IS Solutions – an Information Systems is a

Solution to a Business Problem
– Investigate (Plan) – recognize the problem exists
– Analyze – investigate the current system
– Design – designing the new system
– Implement – put the new system into effect
– Maintain (Use) – use, monitor, and maintain the new system
 Managerial Challenges of Information Technology

• Challenges and Ethics of IT – what is

improper, irresponsible, or harmful?
The Foundation for Business Processes
I. System Concepts: The Foundation for Business
Processes
 Other System Characteristics
 Environment and Subsystems
 Interface – a shared boundary between systems
 Open (and Closed) Systems – open systems interact
with other systems (closed systems do not interact
with other systems)
 Adaptive Systems – have the ability to change
themselves or their environment
II. Components of Information Systems
 III. Information System Resources

People Resources
IS Specialists
End Users

Hardware Resources
Machines – the computing devices themselves
Media – where data is stored
 III. Information System Resources

Software Resources
Programs – instructions that tell the computer
what to do
System Software – runs the computer
Application Software – a particular use by end users

Procedures – instructions on how to use the

system
 III. Information System Resources

Data Resources
Data – unorganized facts and figures
Information – data organized so that it has
value to the organization

Network Resources
Communications Media- the physical pathways
over which signals travel
Network Infrastructure – hardware, software,
and data technologies needed to support
communications networks
 IV. Information System Activities

 Input of Data Resources

 Processing of Data into Information – organize,
analyze, and manipulate data
 Output of Information Products – dissemination of
information products to appropriate end users
 Storage of Data Resources
 Control of System Resources – monitoring feedback to
assure the system meets its performance standards
 V. Recognizing Information Systems

People, Hardware, Software, Data, and

Network Resources

Types of Information Products Used

Performance of Input, Processing, Output,

Storage and Control Activities
Strategic Uses of IT
 Strategic Uses of IT
• Organizations are now investing heavily in information systems and
information technology.
• However, there is a general dissatisfaction with the benefits that accrue
from this investment.
• Argues that information systems and technology can be centrally
instrumental in achieving corporate goals but only where the organization
has a clearly defined corporate and competitive strategy, and understands
the information needs that underpin these strategies.
• It demonstrates the interrelationships between strategy and information
systems.
• An effective strategy is not necessarily one that promises maximum
efficiency or least total cost, but rather one that fits the needs of the
organization and strives for consistency between the organization’s
capabilities and the competitive advantage being sought by the
organization.
• The successful application of strategy in the contemporary global
environment requires an organization to have an effective strategic
management process.
• In turn, an effective strategic management process increasingly depends on
the effective application of advances in information technology.
 Strategic Uses of IT
• Firm-Level Strategy and Information
Technology
• Whatever its main product or service is, that’s its
core competency decides its survival.
• Successful companies use information technology
to improve their core competencies by sharing
information across business units.
• They also use technology to expand their core
competencies by using knowledge stored in their
information systems.
 Strategic Uses of IT
• Industry-Level Strategy and Information Systems
This is based on:
– Competitive Forces and Network Economics
– Information Partnerships

IS Techniques to Gain Competitive Advantage

• Competitive advantage may be achieved with many
techniques in business.
• Information technology is one area that may provide
several opportunities.
Other Strategic uses of IT