MIS

CHAPTER 1

MANAGEMENT
INFORMATION SYSTEM
EVOLUATION
DR. ANIL KU TIWARI

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 A management information system (MIS) is the backbone
to a company’s operation either the small businesses or
large corporations,

Over the years, the role of MIS has emerged as technology

became more sophisticated.

Now we are fascinating the history of MIS and how it is

changing day by day.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

The Evolution of Management

Information Systems (MIS)

A management information system (MIS)

is a computer system that gathers data
from multiple business systems,
analyzes the information, and provides
reports that help guide management in
decision-making.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

• MIS started as a data capturing and

processing system and evolved into a
more complex and intelligent system.
Here’s how MIS evolved through the
years.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

1950-1960: Electronic Data Processing (EDP)

• Electronic Data Processing (EDP) systems, also
called Transaction Processing Systems (TPS),
were groundbreaking at the time. It was the first
large-scale computer information system to
centralize and process day-to-day transactions
and activities such as cash deposits, ATM
transactions, and payment orders. Shifting from
manual to electronic made transaction
processing and record-keeping a much faster
process.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

1960-1970: Management Information

•Systems
It wasn’t (MIS)
long before the EDP system was
upgraded to a Management Information System
(MIS) that was able to generate reports from the
data it collected. MIS pulled reports from
historical data to determine cost trends, do a
sales analysis, keep track of inventory, and
measure production performance.
• When managers evaluated the information in
these reports, they could see which areas of the
business were underperforming and adjust
decisions accordingly.
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

1970-1980: Decision Support Systems (DSS)

• Decision Support System (DSS) provided
historical and ad hoc reports on both internal
and external information. For example, internal
sales reports and external market pricing.
• This advancement brought a new level of
decision-making to businesses. Management
could more accurately forecast sales, perform a
risk analysis, and make bolder strategic
decisions.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

• It was during this era that personal computers

entered the workplace. PCs were connected to
the main server so information became
accessible to employees throughout the
company. This led to a significant boost in
productivity.
• With this came the need for expert skills to
manage these computer networks. Information
technology (IT) soon became a burgeoning
career and a degree in Management Information
Systems became sought after.
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

1980-1990: Executive Information Systems

(EIS)
• As PCs put power in the hands of executives,
they could purchase software tailored to their
department’s needs, such as accounting, project
management, and HR systems. It resulted in
multiple systems within an organization working
independently.
• This led to Executive Information Systems (EIS),
a more refined version of the DSS system. It
allowed executives to analyze their department’s
output and how it impacted the business’s
overall performance.
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

1990-2000: Enterprise Resource

Management
•
(ERP) Systems
Multiple information systems that were not
integrated resulted in employees wasting time
duplicating information across systems. MIS had
to become efficient.
• It did that by creating Enterprise Resource
Management (ERP) systems that integrated
knowledge management systems and expert
systems.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

• Knowledge-based systems organize and

disseminate business knowledge within an
organization. Example: placing a best practices
resource on the intranet.
• Expert systems started to use artificial
intelligence to provide advice and solutions.
Example: proposing faster delivery routes or
assessing risk profiles for credit applications.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

• For the first time, different systems were “talking”

to each other.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Recent trend in MIS

• MIS systems are becoming more intelligent.
Most of the trends below are not new but they
will continue to shape how management
information systems function in the future.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

• Automation and cross-functional integration

• Automation can be used for repetitive tasks and
to cross-populate data with other systems. This
frees up employees’ time to focus on higher-
value tasks. For example, automation can track
inventory and alert you when stocks are low or
automatically reorder stocks when needed
without human intervention.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

2. Big data analytics

• Worldwide, around 2.5 quintillion bytes of data
are being generated daily. From customers’
buying habits to social media interactions, data
is rolling in from everywhere.
• Management information systems not only have
to cope with the influx of data, but also analyze it.
The information gleaned can be used to make
operations more efficient, improve customer
service, and create personalized marketing
campaigns.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

3. Artificial intelligence (AI)

• Artificial intelligence is making waves across
almost every sector. AI has been the biggest
disruptor in business in recent years. From
chatbots to self-driving cars, AI is already a part
of our lives and will continue to become more
entrenched.
• AI technology is capable of learning patterns and
identifying anomalies when processing big data.
It can detect fraud and determine the risk profile
of applicants applying for credit.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

4. Cyber security
• Cybercrime is a threat every business faces.
Most cyber attacks are financially motivated.
• A cyber attack can be a fatal blow to a business.
Research by Fundera shows that 60% of small
businesses that experience a cyber attack go out
of business within six months. Companies now
invest heavily in protecting their data. As
cybercriminals become more sophisticated,
cyber security software will have to stay one step
ahead.

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Computers and Information Systems in

Daily
•
Life
Computers and information systems are all
around you
– Online classes
– Grading
– Grocery and retail
– PDA and smartphones
– Internet
• “Information systems” versus “information
technology”

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

A New Era of Marketing: YouTube

YouTube is a popular video sharing service that
can be used as a marketing tool. The following are
examples of corporations that are using YouTube
to promote their products and services:
•Quiksilver
•Ford Models
•University of Phoenix Online
•The Home Depot
•Nikefootball

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Computer Literacy and Information Literacy

• Computer literacy
– Having skills in using productivity software
• Information literacy
– Understanding the role of information in generating
and using business intelligence
• Business intelligence (BI)
– Provides historical, current, and predictive views of
business operations and environments
– Gives organizations a competitive advantage in the
marketplace

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Social Networking and the Vulnerability of

Personal Information
To reduce risk and improve the privacy of your
personal information, consider the following:
•Always use the privacy controls offered by the
social networking sites
•Use long passwords
•Do not post a phone number or a full address
•Do not post children’s names
•Do not be specific when posting information
about vacations or business trips
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

The Beginning: Transaction Processing

Systems
• Transaction processing systems (TPSs)
– Focus on data collection and processing
– Cost reduction
– Operations repetitive
– Human involvement minimal

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Management Information Systems

• Management information system (MIS)
– Organized integration of hardware and software
technologies, data, processes, and human elements
– Designed to produce timely, integrated, relevant,
accurate, and useful information
• For decision-making purposes
• Include:
– Hardware components
– MIS software
– Processes

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

UNIT V Major Components of an

Information System
• Data
• Database
• Process
• Information

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
Exhibit 1.3 Major Components of an Information System

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Data
• Data
– Input to the system
• Sources of data
– External
– Internal
• Time orientation
• Can be collected in different forms
– Aggregated
– Disaggregated

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Database
• Database
– Heart of an information system
– Collection of all relevant data organized in a series of
integrated files
• Essential for the success of any information
system
• Managed with database management system
(DBMS): e.g., Oracle
• Reduces personnel time needed to gather,
process, and interpret data manually
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Process
• Process
– Generates the most useful type of information for
decision making
• Generally includes transaction-processing
reports and models for decision analysis
• Includes a wide range of models to support all
levels of decision making

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Information
• Information
– Output of an information system
– Facts that have been analyzed by the process
component
• Quality of information
– Timeliness
– Integration with other data and information
– Consistency and accuracy
– Relevance

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Information (cont’d.)
• User interface
– Must be flexible and easy to use
– Graphical user interfaces (GUIs)
• Ultimate goal of an information system
– Generate business intelligence (BI)

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Examples of Information Systems

• Example 1: a university
– State university stores all student data in a database
– Built-in query capability
– Other types of analysis can be done
• Example 2: Teletech
– International textile company
– Database stores data on products, suppliers, sales
personnel, costs
– Process components
– Forecasting models

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Using Information Systems and Information

Technologies
• Information technologies
– Achieve goals of information systems
• Examples
– Internet
– Databases
– POS Systems
– RFID tags

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Information Technologies at Home Depot

• POS system
– Fast customer service
– Improved inventory management
• Wireless network
– Efficient in-store communication
• Web site
– Communicate with customers
– Increase sales with online orders
• RFID tags
– Better manage inventory
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

The Importance of Information Systems

• Information
– Second most important resource in any organization
• Four Ms of resources:
– Manpower
– Machinery
– Materials
– Money

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

The Importance of Information Systems

(cont’d.)
• Personnel information system (PIS) or human
resource information system (HRIS)
– Designed to provide information that helps decision
makers in personnel carry out their tasks more
effectively
– Use Web technologies
• Main difference between an intranet and the
Internet
– Intranets are private and the Internet is public

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Wal-Mart Stores, Inc.

• Wal-Mart Satellite Network
– Largest private satellite communication system in the
United States
– Links branch stores with the home office in
Bentonville, Arkansas
• POS systems
• RetailLink
• Electronic data interchange
• RFID technologies

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Using Information Technologies for a

Competitive Advantage
• Michael Porter
– Professor at Harvard Business School
– Identified three strategies for competing in the
marketplace successfully
• Overall cost leadership
• Differentiation
• Focus

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Using Information Technologies for a

Competitive Advantage (cont’d.)
• Information systems
– Help organizations reduce the cost of products and
services
– Assist with differentiation and focus strategies
– Can help bottom-line and top-line strategies
• Enterprise systems
– Supply chain management (SCM)
– Customer relationship management (CRM)
– Enterprise resource planning (ERP)
– Collaboration software
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Using Information Technologies for a

Competitive Advantage (cont'd.)
• Differentiation strategies
– Make products and services different from
competitors
– Examples: Apple, Amazon.com

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Using Information Technologies for a

Competitive Advantage (cont'd.)
• Focus strategies
– Concentrate on a specific market segment
– Attempt to achieve a cost or differentiation
advantage
– Examples: Apple, Abercrombie & Fitch, Nordstrom

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 Chapter 1 Information Systems: An Overview

Porter’s Five Forces Model: Understanding

the Business Environment
• Five Forces Model
– Michael Porter
– For analyzing an organization, its position in the
marketplace, and how information systems could be
used to make it more competitive
– Buyer power
– Supplier power
– Threat of substitute products or services
– Threat of new entrants
– Rivalry among existing competitors
MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
Exhibit 1.4 The Five Forces Model

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning
 THANK YOU

MIS, Chapter 1
©2011 Course Technology, a part of Cengage Learning