MANAGEMENT

INFORMATION
SYSTEM
By,

Ikhlaq
 History of IT in business
 Manual transactions
 MS-Office
 Business Software (Accounting)
 Computer Communications( WWW, Internet,
E-commerce etc
 Data, Information, Knowledge ,processes ,
organization. DSS, ES, KM, Data mining and
Data-warehousing, Business Intelligence.
 Future of IT
 Cont……
 IT related and managerial solutions and business
strategies are being used to make business more
effective , efficient and competitive.
 Typically a business has two resources
 1-Physical resources. (Personnel, Material,
Machines (including facilities and energy) and
Money.
 2- Virtual resources. (Information (including
data) also known as conceptual resources.
 Cont….
 Physical recourses and virtual recourses are used to
cope with business problems/pressures.
 Data and information is used to represent the physical
resources.
 Virtual systems to represent/control physical systems
 Computers are not being used merely to manage
physical firm (As virtual systems) but are also have a
big breakthrough in business applications.
 H/W and S/W are physical sources, also machines
,materials and human resources are physical resources.
 Chapter Preview
 Marketplace pressures faced by today’s businesses and
various tactical and strategic responses.
 The distinction between data, information, and
knowledge.
 The characteristics of high quality information.
 The components of an information system.
 The capabilities organizations aspect of information
systems.
 How computer technology is applied to business problems and
pressures.
 Business processes are required to be more effective and efficient
competitively.
 In which areas of businesses, an IS may have big impact.
 Opportunities to use information systems strategically.
 All about “Information Processing Life Cycle”
 Learning Objectives
Describe The characteristics of the digital
economy and e-business.
Discuss the relationships among business
pressures, organizational responses, and
information systems.
Describe strategic information system (SISs)
and how information technology helps
companies improve their competitive
positions.
 Digital Economy
 An economy based on electronic goods and
services produced by digital technologies,
electronic business and traded through
electronic commerce. That is, a business with
electronic production and management
processes and that interacts with its partners
and customers and conducts transactions
through Internet and Web technologies.
 Also sometimes called the Internet economy,
the new economy, or the Web economy .
 Infrastructure for e-business
e-business/ e-commerce the conducting of
business functions (e.g., buying and selling goods and
services, servicing customers, collaborating with
business partners) electronically, in order to enhance
an organization’s operations.
The infrastructure for e-business is network
computing, known as the internet, or to its
counter part within organizations, called an
intranet, many companies link their intranet to
those of their business partners over networks called
extranets.
 Today’s pressure on Business
Environment
 Pressure on business environment is
characterized by:
 Rapid Change and changing work force
 Global competition for trade and labor
 Business Complexity
 Global Economy “traditional barriers”
 Hyper-competition
 Customer orientation
 Information overload
 Innovative technologies
 Cont……
 Need for the real time operations (Information float)
High performance telecom services can reduce it.
 Technological innovation and obsolescence
(CAD/CAM)
 Social responsibility (Issue of regulation and
deregulation)
 Ethical issues
 Digital divide
 Market research
 Globalization/internationalization.
Traditional Management
CEO Condensed reports
Commands

Finance Marketing Accounting HRM MIS

Analyze data

Layers of middle managers

Collect
data
Customers
 Types of Business pressures
Market Pressure:
 The global economy and strong competition
 The changing nature of the workforce
 Market research
 Powerful customers/Customer orientation/Order fulfillment and customer services..
Technology Pressures:
 Technological Innovation and Obsolescence
 Information Overload.
 Need for real time operations
Societal Pressure:
 Social responsibility
 Government regulation and Deregulation
 De-Centralization
 Spending for social programs
 Protection Against Terrorist Attacks.
 Ethical Issues
 Labor pressures.
 Market Pressures
 The Global Economy and Hyper competition
 Developing Countries are preferred. Traditional barriers.
 Globalization and internationalization/International market place.

 The Changing Nature of the Workforce

 Diverse and versatile Workforces, Increasing no of females,
minorities, and physically challenged persons work in all types of the
positions.
 Changing Traditional Work Environment.

 Need for Real Time operations.

 Fast, accurate operations.

 Powerful Customers
 Knowledgeable Customers
 Technology Pressures

 Technological Innovation and Obsolescence

 Has huge impact ranging from genetic engineering to food processing.
 Need for the real time operations,Today's companies don’t have the luxury
of information float.
 Information float is the time between when a business event occurs and
when the info captured about the event reaches the necessary decision
makers.
 Information Overload
 Huge amount of information available to the consumers
 The amount of information doubles every year and most of it is free
 The information and knowledge generated and stored inside organization
are also increasing
 So every one feels the pressure of this huge knowledge ,which becomes
sometimes difficult to choose the best among so much knowledge
 Societal Pressures
 Social Responsibility
 Social Responsibility Act
 Government Regulation and Deregulation
 Deregulation intensifies competition.
 Issues of health, safety ,environment pollution and equal opportunity
,licensing, copyright.
 It is a matter of general public interest.
 Protection Against Terrorist Attacks
 Strong systems for security and attack pattern detection.
 Ethical Issues
 Are not cut and dried
 Email monitoring, Sharing Customer data, Revealing personal information
 Ethics is the business context refers to standards and values for judging
whether a particular conduct in the workplace is right or wrong
 These issues are very important because they can damage the reputation of
an organization as well as the persons.
 The situation is critical when it comes between the countries
 Cont…
 Labor pressures
 Labor costs differ from one country to another.
 In addition companies pay high fringe and environment
protection costs. So that they have difficulty in competing in
developed countries.
 For this it requires good communication ,between the languages
and cultural issues
 The issue becomes more complex when Govt.involves through
laws of taxes, subsidies, import/export policies.
 Decentralization
 A social process in which businesses and industry moves from
urban centers to outlying districts .It is spread of power away
from the center to local branches or governments .
 Digital Divide
 Hierarchical Organizational Structure
Headquarters

Division A Division B Division C

Administrative
Services
Plant 1 Plant 2 Plant 3

Top
managers Accounting Finance Marketing POM HRM CRM

Middle
managers
Supervisory
First line
managers
Operating
Employees
 Business Environment
 It refers to the combination of all societal, legal,
economic, physical and political factors that effect
business activities in any way.
 SOCIETY Government

Financial
Global
Community
Community

Suppliers THE FIRM

Customers

Labot
Unions Stakeholders Competitors
Owners
 BPR
 Business process reengineering/re-
design is to change the technological, human
,managerial and processing dimensions of a business.
Some restructuring of management realignments,
mergers, consolidations and operational integrations
take place.
 Knowledge Workers: Create information and
knowledge and integrate them into the businesses.
People in Organizations
Automated direction sys
Product or operation sys
 Business Strategic Plan
 Statement of the firms over all mission, the goals that
follow the mission and the broad steps necessary to reach
the mission ,for the business success and survival.
 It is a long range goals that describe the IT and IS
initiatives needed to achieve the goals of organization.
 A typical business strategic plan has following missions
• Efficiency
• Effectiveness
• Competitiveness.
 Examples of Business Processes
Functional Area Business Process
Manufacturing and production Assembling the product
Checking for quality
Producing bills of materials
Sales and marketing Identifying customers
Making customers aware of the product
Selling the product
Finance and accounting paying creditors
Creating financial statements
Managing cash accounts
Human resources Hiring employees
Evaluating employees' job performance
Enrolling employees in benefits plans
 Operations, Tactics, Strategy

Sector Operations Tactics Strategy

Production • Machine settings • Rearrange work area • New factory
• Worker schedules • Schedule new products • New products
• Maintenance sch. • Change inventory method • New industry
Accounting • Categorize assets • Inventory valuation • New GL system
• Assign expenses • Depreciation method • Debt vs. equity
• Produce reports • Finance short/long term • International taxes
Marketing • Reward salespeople • Determine pricing • Monitor competitors
• Survey customers • Promotional campaigns • New products
• Monitor promotions • Select marketing media • New markets
 Environmental Resource flow
 A firm is connected to its environmental elements by
environmental resource flow.
 Environmental resource flow is the flow of supply
chain.
 Common flow includes exchange of money flow to
stakeholders ,material flow to customer, information
flow from customer and raw material flow from
suppliers.
 Less common flow is money flow from the Gov,
material flow to suppliers and personal flow to
competitors.
 Supply chain
 Flow of materials, information, payments, and
services, from suppliers through factories and
warehouses, to end customers
 Includes all organizations and processes that create
and deliver products, information, and services to the
end customers
 It includes many tasks such as purchasing, payment flow,
material handling, production planning, logistics etc.
 Supply chain management - planning, organizing,
coordinating, and controlling all activities in the
supply chain
 Simplified Supply Chain

Internal Downstream
Upstream
ial
mater
Organization’s f or m ation Distributors
in
material production y
processes, including mone
information materials handling,
Suppliers
inventory
money
management,
manufacturing, Retailers
quality control

Customers
 Activities of SCM
 Forecasting the customer demand
 Scheduling the production
 Establishing transportation networks
 Ordering replenishments stock from the suppliers
 Receiving stock from suppliers
 Managing inventory (Raw material, work in process and
finished goods)
 Executing the products
 Transporting the resources to customers
 Tracking the flow of resources from suppliers, through the
firm and to the customers.
 ERP software like SAP/Oracle help flow of supply chain.
 Organizational Responses
 Pressures provoke proactive and reactive
organizational responses.
 Business responses to pressures may involve use
of Information Technology and Information
Systems, also some strategic business plans
 In some cases, IT is the only solution to business
pressures.
 Knowledge of IT capabilities is essential to
today’s business people.
 Directions of Organizational
Responses
Business Responses

Managerial IT/MIS
-Business Strategic plans
-Data/Information/Knowledge management
-IT resources
 Business Pressures and
Organizational Responses
 Organizational responses
 Developing Business strategic plans (SBP) for
systems using IT and IS.
 Customer focused services and products and order
fulfillment.
 Continuous improvement efforts (JIT and TQM) E.g.
e-commerce, e -business, e-marketing.
 Business process reengineering BPR
 Empowering employees and fostering collaborative
work and KM.
 Global marketplace analysis
 Business alliances/Mergers
 Cont……
 Reviving up employees financial energies
(Motivational theories on customer and employee)
 Business alliances (Supply chain management SCM
 Using CBIS at different levels of business processes.
 E-commerce, Use of computing and communication
in business e.g. Internet ,WWW, E-commerce and
Expert systems, business intelligence, E-marketing,
E-banking, E-business etc.
 Use of CAD/CAM
 Data mining and data warehousing
 Critical mass /Mass customization.
 Cont…
 Make-to-Order is a strategy of producing customized
products and services
 Mass Customization
 In mass production they produce a large quantity of identical items
 In mass customization they produce a large quantity of items that fit
the desires of each customer.
 Business Alliances : Joining hands with the competitors
/companies to improve services.
 Electronic Business and E-Commerce is the newest and
most promising strategy.
 Business Process Re-Engineering: organization
fundamentally and radically re designs its business process.
Customer relation ship marketing in
action
 Make it easy for customers to do business with you
 Focus on end-customer for your products and services
 Redesign your customer –facing business processes form the
end customer’s view.
 Wire your company for the profit :design a comprehensive
,evolving electronic business architecture.
 Adopt a customers-focused approach and prevent losing
customers to competitors.
 To pay more attention to customers and their preferences
 Foster customer loyalty. In e-commerce, especially this is the
key to the profitability.
 Continuous improvement
 They also make continuous efforts to improve their
productivity and quality
 Productivity is the ratio of outputs to inputs.
 They improve this ratio by increasing outputs, reducing costs,
increasing output faster than cost or combination of both
 Just in time
 This is inventory approach, it attempts to reduce costs by
scheduling materials and parts to arrive at the workstation
exactly when they are required
 It minimizes the space and cost
TQM( Total Quality Management)

 It is organized effort to improve quality whenever

possible
 IT can enhance it by improving data monitoring,
collection, analysis, and reporting,
 Another expect is the decision making power to
select the best alternate course of action
 However this task is difficult in large
organizations, but there is always survival to the
fittest
 Empowering employees
 Giving employees the authority to act and
make decisions on their own is a strategy used
by many companies
 Managers delegate authority to self-directed
teams who can execute the work faster and
with fewer delays then were possible in the
traditional organizations.
 IT supports it but also supports the centralized
control
 Using IT Strategically
 Businesses today must understand how IT can
reshape and refine business strategy
 Porter’s Strategic Analysis Model
 Helps in understanding strategic forces affecting organizations in
particular industries
 IT can be applied to strengthen and support a specific business
strategy
 Value Chain
 Helps in identifying ways IT can improve the quality and
efficiency of organizational processes
 SIS
 A system that will provide strategic advantage in
meeting organizational objectives ,increasing market
shares, or preventing competitors from entering a
market and so will significantly impact an
organization’s operations, success and survival.
 Strategic Systems: enable organizations to
 increase market share and/or profits.
 To better negotiate with suppliers
 Prevent competitors from entering their territory, E.g.. Tracker Systems in
cars. Courier Services
 Organizations implement systems that will impact the operations,
success,survival.
 Competitive Advantage
 Firms strive to obtain an advantage over their
competitors.
 Firms achieve advantages by providing services
and products at a low price, providing high quality
products and providing customized services or
products.
 Firms also achieve competitive advantages by
using their virtual resources as well as using their
physical resources.
resources
 Porter’s Value chain
 Porter believes that firm achieves competitive advantages
by creating Value Chain.
 He illustrates that the primary and support activities can
contribute to the MARGIN.
 MARGEN is the value of the firm’s products and
services, as perceived by the firm’s customer, minus their
costs.
 An increased margin is the objective of the value chain.
 Firm creates value by performing Vale Chain activities.
 Porter’s Value Chain Model
 There are two types of value activities in Value Chain.
 1-Primary value chain activities that manage the flow of
physical resources through the firm that include
 Inbound logistics
 Operations
 Outbound logistics
 Marketing and sales operations
 Service activities.
 2-Support value chain activities that influence the primary
activities that include.
 Firm infrastructure
 HRM
 Technology development
 Procurements
Properties of Value Chain activities
 Each value activity whether primary or support
contains following three essential ingredients
 Purchased inputs
 Human resources
 Technology
 Similarly each activity uses and creates information
 For example information specialists in services unit
may combine purchased commercial database, leased
computing equipment and custom-developed
programs to produce decision support information for
the executives of the firm.
Strategic plan for business areas
 Fully committed executives in strategic plans
also see a need for developing respective
strategic plans for each business area.
 In this approach each area has its independent
plan which may have influence with the
strategic plans of other areas.
 However such approach do not ensure that
business areas will work together well.
 Strategic Planning for Information
Resources SPIR
 SPIR involves a concurrent/repetitive development
of strategic plans for information services and the
firm, so that the firm’s plan reflects the support to be
provided by the information services.
 IS plan reflects future demands for the systems
support.
 SPIR may be different for different organizations ,but
all SPIR have following two core elements.
 Objectives to be achieved by each category of system during the
time period covered by the plan.
 The information resources necessary to meet the objectives.
The following figure illustrates the manner in which each planning process
influences the other.
 EXPANDING VALUE CHAIN
 Management must alert to the additional advantages by
linkage of firm’s value chain to those of other organizations.
Such linkage results in IOS.
 Firm can also take advantage of its value chain by linking to
those of its suppliers by implementing systems that make input
resources available when needed e.g. JIT.
 A firm can also link its value chain with those of its
distribution channel members, creating a VALUE SYSTEM.
 When the buyers of a firm ‘s product are organizations, their
value chain can also be linked to those of the firm and its
channel members.
 Dimensions of Value Chain

 Strategic advantage
 It has a fundamental effect in shaping the firm’s operations. E.g. conversion
of existing data in to standard database and access via web applications, use of
custom tailored software instead of proprietary software.
 Tactical advantage
 When a firm implements a strategy in a perfect way than its competitors , it
achieves a tactical advantage. e.g. customer services can be extended to offer
customer direct access to the information resulting customer satisfaction.
 Operational advantage
 Operation advantage deals with every day transactions and processes. this is
where the IS interacts directly with the processes. eg a web browser is an IS
and it has Cookies in order to have direct interaction with the processes of
client.
Challenges from Global Competitors
and MNC
 MNC is a firm that operates across the products,
markets, nations and culture.
 It consists of a parent company having a group of its
subsidiaries ,which are geographically dispersed.
 It must not be confused with the limit of global
competitors.
 Developed countries like USA and China are
outsourcing some of their operations, India is major
destination.
 Cont….
 Special Need for Information Processing in an
MNC
 All firms need for information processing and
coordination, but it is crucial for MNC because MNC
is an open system that seeks to minimize its
uncertainty in its environment.
 Uncertainty is a difference between the amount of
information required to perform a task and the
information already processed by an organization.
Hence making good use of IT can cope uncertainty.
 Cont……
 The special Need for Coordination in an MNC.
 Coordination in a key to achieve competitive
advantage in global marketplace.
 How ever companies are unable to gain strategic
control of their world wide operations and manage
them in a globally coordinated manner will not succeed
in the international economy.
 So MNC faces grater restrictions than a national
company eg because of conflicting business practices,
cultural differences, governmental policies impositions
and currency differences.
 However developing a GIS is very effective in
competing global challenges.
 ADVENTAGES OF MNC
 There are many advantages of Coordination in
MNC
 Flexibility in responding to competitors in different
countries and markets.
 Ability to keep abreast of international market needs.
 Knowledge sharing across the globe.
 Reduced cost of operations.
 Increased efficiency and effectiveness
 Ability to achieve and maintain the diversity in the
firms products and in how products are produced and
distributed.
 WHAT IS A GIS
 MNC attempts GIS to overcome its problems
 Term coined are “Global Information System”
 A system that consists of network hat cross national boundaries.
 Constraints of GIS
 Politically Imposed Constraints
 IT infrastructure in owned by governmental authorities, Difference
between governmental national policies for data processing,
Crossing boundaries barriers for goods, product licensing , Taxes and
customs etc.
 Cultural and Communication Barriers
 Business practices, development of cross cultural products, Language
differences, value differences, Color differences, racial differences,
Various religious aspects.
 Restriction on hardware/Software purchase and Import
 In case of foreign import and equipment may cause problem of
interoperability / incompatibility.
 Cont….
 Restrictions on data Processing and communication
 Data and information dissemination across the world arises the issue of
IPR, Privacy and confidentiality, data protection and security issues etc.
Maintenance of TDF (Transborder data flow)
 Technological problems
 Poor Information technology infrastructure, software copy right and piracy
are used in certain countries.
 Lack of Support from Subsidiary Managers
 Managers of subsidiary think that they can run their offices on their own
without help of parent company, Similarly foreign office managers
consider that the GIS is surveillance. Middle managers are having fear to
be by –passed in they will be completely dependent on GIS.So they avoid
ant support and feed back to the parent company.

 NOTE : However such problems can be minimized by

implementation of Good KM and SPIR (Making strategy for
enterprise)
 Some Key Definitions
 Data: raw facts; collected, not organized.
 Information: data organized in a meaningful way.
 Knowledge Consists of information that has been organized to
convey understanding, experience, accumulated learning, or
expertise as it applies to current business problems or
processes.
 Knowledge is used to generate new information required for a
business solution.
 Knowledge workers create information and knowledge and
integrate it into the businesses.
 Data and Information
 Data consists of facts and figures that are
relatively meaningless to user. E.g. the number
of hours worked for each employee in the
company
 Information is processed data that are more
meaningfully. E.g. the hours works for each
employee multiplied by the hourly rate, the out
put information is the gross earning
Data and information
Data, Information, and Knowledge
Data Vs Information Vs Knowledge
Data Knowledge Information
Simple observations Data with relevance Valuable information
of the world: and purpose: from the human mind:
•Easily captured •Requires unit of includes reflection,
•Easily structured analysis synthesis, context
•Easily transferred •Needs consensus on •Hard to capture
meaning electronically
•Compact,
quantifiable •Human mediation •Hard to structure
necessary •Often tacit
•Often garbled in •Hard to transfer
transmission •Highly personal to
the source
More human contribution
Greater value
 Knowledge
 Knowledge is information organized, processed and analyzed
to make derstandable and applicable to problem solving and
decision making.
 A knowledge consists of concepts, theories, heuristics,
methods, procedures and relationships that defines hoe the
information is used to solve a problem or make a decision..
 Knowledge consists of information that has been organized
and processed to convey understanding ,experiences,
accumulated learning or expertise as it applies to a current
business problem or a process.
 The information that is processes to extract critical
implications and to reflect past experiences and expertise
provides the solution to a business problem.
 Knowledge base contains knowledge for understanding
,formulating and solving a specific class of problems in
intelligent systems.
 Types of Knowledge
 Tacit knowledge is personal, context-specific and
hard to formalize and communicate
 A knowledge developed and internalized by the knower
over a long period of time . . . incorporates so much accrued
and embedded learning that its rules may be impossible to
separate from how an individual acts. ‘knowing how’
 Explicit knowledge can be easily collected, organized
and transferred through digital means.
 A theory of the world, conceived of as a set of all of the
conceptual entities describing classes of objects,
relationships, processes, and behavioral norms. Often
referred to as ‘knowing that’, or declarative knowledge.
What is Knowledge Management?

 Knowledge Management is process of

knowledge base and capturing, storing,
knowledge discovery, Facilitating the
knowledge sharing processing and
integrating for the purpose of problem
solving and decision-making in businesses.
 Knowledge Key Concepts
 Knowledge identification – what is important?
 Knowledge discovery and analysis – finding and organizing knowledge.
 Knowledge acquisition – going and getting needed knowledge by asking or
promoting idea generation
 Establishment of organizational knowledge bases – storing and
organization corporate knowledge
 Knowledge distribution and use – ensuring that those who need knowledge
can access it
 Knowledge assets - regarding markets, products, technologies,
and organizations that a business owns or needs to own
 Best practices - collection of the most successful solutions and
case studies
 Intellectual capital – Cumulative/Amassed collection of
knowledge by an organization over the years
 Knowledge system - collects knowledge, stores it in a database,
maintains the database, and disseminates the knowledge to
users
 Competitive intelligence - collection of competitive
information
 Implementing Knowledge
Management
 Reorganize as knowledge-based organizations
 Created a new position, chief knowledge officer
(CKO)
 creating knowledge management infrastructure
 building a knowledge culture
 making it pay off
 Facilitate organizational learning
 learn from their experiences in order to survive
 Other officers are CEO,CFO,COO,CIO,CTO
 Promoting Idea Generation
 Key source of knowledge is creative idea
generation by individuals or groups
 Software tools (GDSS) can promote
productive idea generation for groups
 Software tools also available for individuals
to help stimulate creative production of ideas
 What Makes Information Useful
(GIGO)?
 It is accurate
 Free of errors
 It is complete
 Includes everything needed
 It is flexible
 Can be viewed in various
ways
 It is reliable
 Results are always consistent
 it confirms validity
 It is relevant
 Applies to the issue under
study
 It is timely
 Available when needed
 It is verifiable
 Basis for results can be traced
 It is accessible
 All those who need the
information can get to it
 It is secure
 Free from contamination
(accidental or deliberate)
What can we do with the stored
data?
 Online analytical processing (OLAP)
 Analytical Processing - the activity of analyzing
accumulated/aggregated data.
 It involves the storage of the data in a
multidimensional form to facilitate the
presentation of an almost infinite number of
data views.
 Features of OLAP
 Analysis by end users from their desktop, online,
using tools like spreadsheets.
 Analyze the complex relationships between many
types of business elements (Large data sets)
 Compare aggregated data over hierarchical time
periods (monthly, quarterly, annually)
 Present data in different perspectives (Retrospective)
 Involve complex calculations between data elements.
 Respond quickly to users requests
What can we do with the stored
data?
 Data mining – intelligent search of data
stored in data marts or warehouses
 Find predictive information
 Discover unknown patterns

 End users perform mining tasks with very

powerful tools
 Mining tools apply advanced computing
techniques (learning, intelligence)
 Data warehousing
 BI
 Business intelligence refers to the analysis performed
by DSS, ES, EIS, data mining and intelligent systems.
 BI describes a verity of activities to pull together all
the data required to make a sound business decision,
regardless of where the data originate.
 One ultimate use of the data gathered and processed
in the data life cycle for business intelligence.
 An Intelligent system is an IS typically employing
AI, whose output resembles the human thought
process and is used to support decision making e.g.
neural computing, fuzzy logic, speech understanding,
robotics, sensory systems and case based reasoning.
 Data Mining and Analysis
Concerns
 Ethical Issues
 Valuable data-mined information may violate individual
privacy
 Who is accountable for incorrect decisions that are based
on DSS?
 Human judgment is fallible
 Job loss due to automated decision making?
 Legal Issues
 Discrimination based on data mining results
 Data security from external snooping or sabotage
 Data ownership of personal data
 Data Visualization
 Analyzed data can be even more useful if presented
using Data Visualization techniques
 Visual Interactive Modeling – graphic display of decision
consequences
 Visual Interactive Simulation – simulation model is
animated and can be viewed and modified by decision
maker
 Geographic Information Systems – display data related to
geographic location using digitized maps
 Global Information systems: A system that consists of a
networks that cross national boundaries.
 VR & AR
 Information Specialists
 Employee who are full time responsible for
developing and operating information systems.
 System analyst is an expert who works with
user in developing system at defining problems
and in preparing written documentation of how
the computer will assist in solving the problem.
 Database administrator works with user and
system analyst in creating the data needed to
produce the information needed by users
 Information Specialists
 Network specialist works with user and system
analyst in establishing the data communication
network that ties together widespread computing
resources
 Programmers use the documentation prepared by the
system analyst to create the software program that
lead the computer to transform data into information
needed by users
 Operators operates the computing equipment and
using software program
 Information Infrastructure
 Information Infrastructure:
 The physical facilities, services, and management
that support all organizational computing
resources.
 Computer hardware
 General-purpose software

 Networks and communications facilities

 Databases

 Information management personnel

 Cont…
 Information Infrastructure (continued)
 Defines integration, operation, documentation,
maintenance, and management of computing
resources.
 Defines how specific computing resources are
arranged, operated, and managed.
 Information Architecture
 High-level plan that details
 The organization’s information requirements
 The way these requirements are being satisfied.
 Blueprints for future directions
 Information architecture is different from computer
architecture which only describes the hardware needs of
computer system
 Computer architecture involves several processors,
whereas the information architecture is just like planning a
house.
 This architecture includes planning the drawing ,purpose,
and building constraints.
 It can be divided into 2 major parts
 Organizational objectives and problems
 Existing infrastructure
 What is Information processing
cycle
 Input
 Procedures/Processes
 Output
 Disseminate Results
 Major Capabilities of Information
System
 Perform high-speed, high-volume, numerical computation.
 Provide fast, accurate, and inexpensive communication within and between
organizations.
 Automate both semiautomatic business processes and manual tasks.
 Store huge amounts of information in an easy-to-access, yet small space.
 Allow quick and inexpensive access to vast amount of information,
worldwide.
 Facilitate the interpretation of vast amounts of data
 Enable communication and collaboration anywhere, any time.
 Increase the effectiveness and efficiency of people working in groups in
one place or in several locations, anywhere.
 Facilitate work in hazardous environment .
 Capabilities of Information Systems
 Fast, intelligent ,accurate processing of business
transactions.
 Large capacity storage, retrieval, analysis, and data
and fast access to data
 Increase communication Computer to Computer or
human to human.
 Reduce information overload
 Span organizational boundaries
 Support and improve decision making.
 Span boundaries in-side organization
 Distinctive capabilities for providing competitive
advantage. e.g. airlines, online banking
What is an Information System?
 A system that collects, analyzes processes, stores,, and
disseminates information for a specific purpose..

Data Calculations
Process
Collect Produce
And
Instructions Inputs Outputs
Transform Reports

Store
 Information system
An IS Collects, processes, stores, analyses and
disseminates information for a specific purpose.
It includes inputs, outputs, mechanism, to control these
Also includes the feedback to control all these
A set of interrelated components that collect(or retrieve),
process, store, and distribute information to support
decision making and control in an organization
 What is a system: A set of components which
systematically interact with each other and have same
objective.
 Function of IS
 Input – the collection of raw data for
processing information system
 Processing – the conversion of data into
information for more meaningful
 Output – the distribution of processed
information
 Feedback – output that is returned to help
evaluate or correct input
Information systems are more than
computers
Functions of an information system
 IS Terms
 Open system: Connected to its environment by means of
resource flows.
 An open system interacts with its environment by means of its
physical recourses flows.
 Closed system: Not connected to its environment. They
usually exist in tightly controlled laboratory systems.
 A closed system does not interact with customers, managers or
any one else.
 Information system is a virtual/conceptual system as well as
an open system.
 A physical system is also an open system.
 Cont…

 Open and closed loop systems

 Not all systems are able to control their own
operations. A system without the control
mechanism, feedback loop, and objective
elements is called an open loop system.
 A system with the three control elements is
called a closed loop system.
An Open loop System
A Closed Loop System
 What is a subsystem & Super
Sys?
 A subsystem is simply a system within a
system. This means that systems exist on more
than one level and can be composed of
subsystems or elemental parts.
 What is a Super System? (not frequently
used)
 When a system is part of a larger system, the
larger system is the super system.
Fig
 What is Meant by a (CBIS)

 Computer-based Information Systems

 An information system using computer and
telecommunications technology to perform its
intended tasks.
 Use computer hardware and software to process
and disseminate information
 Fixed definitions of data and procedures for
collecting, storing, processing, disseminating, and
using these data
 Can be computer-based or manual
 MIS is a first information oriented system.
CBIS MODEL
 The Components of CBIS are as
follows
 Hardware
 Set of devices such as processor, monitors, keyboards, printers that will accept
the data process them and displays them
 Software
 Set of computer programs, that enables the hardware to function to
process data
 Data bases
 An organized collection of related files or records that stores data and the
associations among them
 Network
 A connecting system that permits the sharing or resources among different
computers
 Procedures
 The strategies, policies, methods and rules for using the information system
 People
 The most important element in information systems, including who work for it
or uses it
Components of CBIS

Backup data
Restart job
Virus scan
 Components of IS
 Hardware, Input and output devices
 Software, A set of computer programs that
enables to process data.
 Database, Organized collection of files or
records that stores and associate the data.
 Network, Connecting systems to share
resources among different computers.
 Procedures, strategies, methods and rules for
using IS
 People. Who work with IS or use outputs of IS
 Types of CBIS
 MIS: Management Information System
 TPS: Transaction Processing Systems (Priory known as EDP and
accounting information system and then AIS accounting information
system)
 EIS: Executive information system
 Enterprise-wide system (A network of different information systems)
 DSS: Decision Support System
 GSS: Group support system
 ES
 OAS: Office automation system
 GIS
 ERP
 IOS: Inter-organizational information system.
 Connect two or more organizations having a common interest or business need.
 Important in facilitating e-commerce.
 Intelligent systems/Intelligent agents
 SIS: Strategic information system.
 Cont….
 HRIS: Human resource information system
 MKIS; Manufacturing information system
 FIS: Financial information system.
 ESS: Executive support system.
 AIS: Accounts Information system
IS Support Overview
 Moore’s Law
 The term moor’s Law was coined by one of
the founder of Intel in 1960.
 It states the power of computer doubles about
every year with the same cost ,which was
increased to 18 months latter on.
 18 months =1.5 years
 15 years=15/1.5=10
 210=1024
 Moor’s Law Application
 By same law after 30 years Comparison of salaries
the power of computer
purchased will be 30/1.5=20 Year Friend You
 220=1024*1024=1048576 1 $40,000 $5000
with same cost and so on… 3 $57,600 $20,000
 Your friend hired at $40,000 6 $99,533 $80,000
with 20% increase every 9 $171,993 $320,000
year 12 $297,203 $1280,000
 You hired at $5000 with 15 $513,567 $5120,000

double salary every 1.5

years.
 The General System Model Of The
Firm
 The figure shows the flow of resources from the environment
,through the firm and back to the environment.
 It involves the flow of physical resources and virtual resources
for all types of organizational structures.
 The physical flow include flow of personal ,material ,machine
and money.
 Virtual flow involves flow of data, information and decisions.
 Firm control mechanism contribute the firm to control its own
operations including performance standards to meet its
objectives, the firms, management and information processing
the transform data into information.
 The feed back loop is composed of virtual resources .Data are
gathered from the firm and the environment and entered in to
the firm processor, which is transformed into the information
,eventually information is provided to managers to make
decisions to effect necessary changes in the physical system.
 Environment

Standards

Info &
Information
Decisions Data
Information
Management
Process
Data
Physical Physical
Resources Resources

Input Transformation Output

Resources Process Resources
 Management Levels
 High level (strategic)
 Long-range view
 Planning
 Middle level (tactical)
 Carry out the plan
 Assemble the material
 Hire the resources
 Organize and staff
 Low level (operational)
 Supervisor
 Directing and controlling
 Management Levels
 Strategic Planning Level
 The strategic planning level involves mangers at the top of the
organizational
 hierarchy. The term strategic indicates the long-term impact of top
managers decisions on the entire organization. The term executive
is often used to describe a manager on the strategic planning level.
 Top level managers eg president, vice president chief executives,
MD ,CIO,CKO,MEMBERS OF CORPORATE EXECUTIVE
COMMITTEE, IS STEERING COMMITTEE etc.
 Management Control Level
 These managers include middle managers, regional managers,
product directors, and divisional heads. Their level is called
“management control level” due to their responsibility of putting
plans into action and ensuring the accomplishment of goals.
 Cont…
 Control level managers/Tactical level managers
 They are responsible to put strategic plans in to actions
and ensure the goals are met..
 Operational Control Level or Lower-level
 Lower level managers are persons responsible for carrying
out the plans specified by managers on upper levels. Their
level is called the “operational control level” because this
is where the firm’s operations occur.
 These are departmental heads, supervisors and project
leaders. they are responsible for plan accomplishment
,specified by managers on upper level
Management Levels

S
EI
Strategic

ES P
ER
Mgt.

an DSS
on
Tactical

ct i

l
tro
Management

sa

on
sC
Tr
es
oc
Business Operations

Pr
 IMPLEMENTATION LEVELS OF IS
KIND OF SYSTEM GROUPS SERVED

STRATEGIC LEVEL SENIOR MANAGERS

MANAGEMENT LEVEL MIDDLE MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE &

DATA WORKERS

OPERATIONAL OPERATIONAL
LEVEL MANAGERS

SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN

MARKETING & ENGINEERING RESOURCES
113
All managers perform these functions, however with
varying emphasis as shown below.
 Where managers are found
 Managers on the strategic level place greater
emphasis on environmental information than
do managers on the lower levels. Managers on
the operational control level regard internal
information as vital.
 The second figure shows that strategic
planning-level managers prefer information in
a summary format, whereas operational
control-level managers prefer detail.
Management level fig 2.1

Environment information

Internal Information
Management level fig 2.2

Summary Information
 Role of information in problem
solving and decision making
 Problem solving
 Decision making
 Note :Corporate executive committee is
responsible for strategic business planning and
its responses. It also provides the top –level
oversight of information recourses to the firm.
 It guides the IS steering committee, usually
chaired by the CIO.
 What managers Do
 They plan, What they are to do
 They organize to meet the plan
 They staff their organization with the
necessary resources. e.g. IT/IS and managerial
resources.
 After having the resources they direct the
resources to execute the plan.
 Finally they control the resources.
 Problem solving
 A problem is a condition or an event that is
harmful or potentially harmful to a firm or that is
beneficial or potentially beneficial for the firm.
 Problem solving
 A process of problem identification and causes
and then repetitively analyzing and choosing
different alternatives and finally to make some
decision to solve the problem.
 Classification of problems
 A structured problem is a problem if it consists of
elements and relationships among the elements
which are understood by the problem solver.
 A Semi-structured problem is a problem if it consists
some of its elements and relation ships among the
elements which are understood by the problem solver
and some that are not understood by the problem
solver.
 An un-structured problem is a problem if it consists
of elements and relation ships among the elements
which are not understood by the problem solver.
 Solving Structured and
Unstructured problems
 Structured problems lend themselves to
programmed decisions
 Unstructured problems require un-
programmed decisions
 Problem solving Activities
 Identification of problem (where is problem ,what is problem, Definition
of problem, Data gathered on scope, Constraints identified.
 1-Internal constraints eg limited resources
 2-Environmental constraints eg pressures to restrict resource flow
 Classification of problem into a standard category
 Causes evaluation
 Intelligence activity (brain storming, critical thinking, creative, thinking,
reasoning, argumentation, logic, analysis, forecasting and judgments)
 Design Activity Invent ,develop a most plausible course of action towards
problem solving). Construct a standard mathematical model eg selecting
a model
 Choice activity (Involves the selection of best alternative that actually
solves the faced problem. Find potential solutions
 Reviewing the selected choice for further refinement and recommendation
of the solution.
 States of problem
 Process of problem solving
Internal
Constraints

Current State Desired State

Environmental
Constraints
Elements of Problem Solving Process

PROBLEM

Desired Alternative
STANDARDS State Solutions
Problem
Solver

INFORMATION Constraints
Current
State

Solution
 Problem
Identify

Information
Intelligence

Design Information

Choice
Information

Solution

Review Information
 Thinking about decisions…
 A Framework for Computerized Decision Support
 Problem Structure
 Decision making processes fall along a continuum that ranges
from highly structured to highly unstructured decisions
 Nature of Decisions
 Strategic planning decisions - the long-range goals and policies
for resource allocation
 Management control decisions - the acquisition and efficient
utilization of resources in the accomplishment of organizational
goals
 Operational control decisions - the efficient and effective
execution of specific tasks
Decision Support Framework
 Thinking about decisions…
 Structured decisions have long been
supported by computers
 Classes of structured decisions have been
addressed mathematically with Management
Science models
 Types of decisions
 Programmed decisions: Usually repetitive and routine
decisions,also can be automated
 Non-Programmed Decisions :Are novel and unstructured,
unusually consequential.
 Decision Levels
Decision Description Example Type of Information
Level
Strategic Competitive New product External events,
advantage, become a that will rivals, sales, costs
market leader. Long- change the quality, trends.
term outlook. industry.
Tactical Improving operations New tools to Expenses,
without restructuring cut costs or schedules, sales,
the company. improve models, forecasts.
efficiency.
Operation Day-to-day actions to Scheduling Transactions,
s keep the company employees, accounting, human
functioning. ordering resource
supplies. management,
inventory.
 Decision Making Process
REALITY
Examination
 Validation of
Intelligence
Intelligence Phase
Phase
the Model
Design
Design Phase
Phase

Verification, Testing of

 Proposed Solution
Choice
Choice Phase
Phase
SUCCESS Implementation
Implementation
of
of Solution
Solution

FAILURE 
Thank You