BA 4106

INFORMATION
MANAGEMENT

Dr.C.THIRUMAL AZHAGAN
ASSISTANT PROFESSOR
MANAGEMENT STUDIES
ANNA UNIVERSITY BIT CAMPUS
TIRUCHIRAPPALLI
DATA, INFORMATION AND SYSTEMS
DATA VS. INFORMATION
◦ DATA
 a “given,” or fact; a number, a statement, or a picture
 represents something in the real world
 the raw materials in the production of information

◦ INFORMATION
 data that have meaning within a context
 data in relationships
 data after manipulation
• DATA MANIPULATION

• EXAMPLE: CUSTOMER SURVEY

• reading through data collected from a customer survey with
questions in various categories would be time-consuming and not
very helpful.
• when manipulated, the surveys may provide useful information.
• GENERATING INFORMATION
• computer-based IS take data as raw material, process it,
and produce information as output.

Figure 1.1 Input-process-output

INFORMATION IN CONTEXT

Figure 1.2 Characteristics of useful information

WHAT IS A SYSTEM?

◦ System: A set of components that work together to achieve a common goal

◦ Subsystem: one part of a system where the products of more than one
system are combined to reach an ultimate goal

◦ Closed system: stand-alone system that has no contact with other systems

◦ Open system: system that interfaces with other systems

Figure 1.3 Several subsystems make up this corporate accounting system.
INFORMATION AND MANAGERS

• SYSTEMS THINKING
• Creates a framework for problem solving and decision making.
• Keeps managers focused on overall goals and operations of
business.
Figure 1.5 Qualities of humans and computers that contribute to synergy
• THE BENEFITS OF HUMAN-COMPUTER SYNERGY

• SYNERGY
• When combined resources produce output that exceeds the sum of the
outputs of the same resources employed separately

• Allows human thought to be translated into efficient processing

of large amounts of data
Figure 1.6 Components of an information system
THE FOUR STAGES OF DATA PROCESSING

◦ INPUT: data is collected and entered into computer.

◦ DATA PROCESSING: data is manipulated into information using

mathematical, statistical, and other tools.

◦ OUTPUT: Information is displayed or presented.

◦ STORAGE: data and information are maintained for later use.

 INFORMATION SYSTEM

• IS – A set of interrelated components working together to collect, retrieve,

process, store, and distribute information for the purpose of facilitating planning,
control, coordination, analysis, and decision making in business organizations
 EVOLUTION OF INFORMATION SYSTEM
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. 
1960-1970: MANAGEMENT INFORMATION SYSTEMS (MIS)
• It wasn’t 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. 
• 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. 
• 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. 
• 1980-1990: EXECUTIVE INFORMATION SYSTEMS (EIS)
• Executives, 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. 
• EXPERT SYSTEMS (ES)
• Give the computer the ability to make suggestions and act like an expert in a particular field
• Medical diagnoses
• Repair problems
• Credit evaluations
• Investment strategies
• Expert systems started to use artificial intelligence to provide advice and
solutions. Example: proposing faster delivery routes or assessing risk profiles for credit applications. 
• KNOWLEDGE MANAGEMENT SYSTEMS (KMS)
• A knowledge management system stores and extracts information to help users enhance their
knowledge and optimize collaboration efforts to complete tasks. Examples of documents found
in a knowledge management system include employee training materials, company policies, and
procedures, or answers to customer questions.

A KMS Is used by employees, customers, management, and other various stakeholders involved
with the organization. It ensures that technical abilities are integrated throughout the company
while providing visuals to help employees make sense of the data they see.
KNOWLEDGE-BASED SYSTEMS organize and disseminate business knowledge within an
organization. example: placing a best practices resource on the intranet.
• 5. 1990-INTRODUCTION OF ENTERPRISE RESOURCE PLANNING
SYSTEM (ERPS) Was introduced. This system integrates all facets of a firm,
including its planning, manufacturing, sales, resource management, customer
relations, inventory control, order tracking, human resources and marketing.
• ERPS System can interface with all computer- based organization functions and
their tight integration and data sharing needed for flexible strategic decision
making.
• 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. 
• Management information systems (MIS)
• Help managers monitor and control business by providing information
on firm’s performance and address structured problems.
• Management Information System (MIS) provides information for the
managerial activities in an organization.
• Typically produce fixed, regularly scheduled reports based on data
from TPS
• E.g. exception reports: Highlighting exceptional conditions, such as sales
quotas below anticipated level
• Examples include stock control systems, payroll systems, order processing
systems etc.
• E.g. California Pizza Kitchen MIS
• For each restaurant, compares amount of ingredients used per ordered menu
item to predefined portion measurements and identifies restaurants with out-of-
line portions
• Decision-support systems (DSS)
• Support unstructured and semi structured decisions
Model-driven DSS
• Earliest DSS were heavily model-driven
• E.g. voyage-estimating DSS
Data-driven DSS
• Some contemporary DSS are data-driven
• Use OLAP(Online Analytical Processing) and data mining to
analyze large pools of data
• E.g. business intelligence applications
• Components of DSS
• Hardware
• Software
• Database used for query and analysis
• Current or historical data from number of
applications or groups
• May be small database or large data warehouse
• User interface
• Often has Web interface
• Software system with models, data mining, and other
analytical tools
 Overview of a Decision-Support System

The main components of the DSS are the DSS database, the user interface, and the DSS
software system. The DSS database may be a small database residing on a PC or a large
data warehouse.
• Model:
• Abstract representation that illustrates components or
relationships of phenomenon; may be physical,
mathematical, or verbal model
• Statistical models
• Optimization models
• Forecasting models
• Sensitivity analysis models
• Microsoft Excel spreadsheet software
• Pivot table:
• Categorizes and summarizes data very quickly
• Displays two or more dimensions of data in a convenient
format
 The Excel PivotTable Wizard

The PivotTable Wizard in Excel makes it easy to analyze lists and

databases by simply dragging and dropping elements from the Field List
https://www.youtube.com/watch?v=C-j-hq3sykg&t=34s
• Business value of DSS
• MYCIN
• MYCIN was first introduced into the medical field in the 1970s and was a system that
aimed to diagnosis and give suggestions of treatment for patients who appeared to
have a blood/bacterial infection such as bacteremia and meningitis, and to
recommend antibiotics, with the dosage adjusted for patient's body weight.
• BRANDAID
• Marketing managers make decisions about price, advertising, promotion, and other
marketing variables on the basis of factual data, judgments, and assumptions about
how the market works. BRANDAID is a flexible, on-line model for assembling these
elements to describe the market and evaluate strategies.
•Burlington Coat Factory: DSS for pricing
• DSS manages pricing and inventory nationwide, considering
complex interdependencies between initial prices, promotions,
markdowns, cross-item pricing effects and item seasonality
•Syngenta: DSS for profitability analysis
• DSS determines if freight charges, employee sales commissions,
currency shifts, and other costs in proposed sale make that sale or
product unprofitable
•Compass Bank: DSS for customer relationship
management
• DSS analyzes relationship between checking and savings account
activity and default risk to help it minimize default risk in credit card
business
• Executive support systems (ESS)
• EIS Is a computer-based system that serves the Information needs
of top executives. It provides rapid access to timely information and
direct access to management report. It is user- friendly, supported
by graphics, and provides exceptions’ reporting and drill-down
capabilities.
• It is also easily connected with on-line information services and e-
mail.
• Integrate data from different functional systems for firm wide view
• Incorporate external data, e.g. stock market news, competitor information,
industry trends, legislative action
• Include tools for modeling and analysis
• Primarily for status, comparison information about performance
• Facilities for environmental scanning - detecting signals of problems, threats,
or strategic opportunities
• Able to drill down from summary information to lower levels of detail
• Business value of executive support systems
• Enables executive to review more data in less time with greater
clarity than paper-based systems
• Result: Needed actions identified and carried out earlier
• Improves management performance
• Increases upper management’s span of control
• Can enable decision making to be decentralized and take place at lower
operating levels
• Increases executives’ ability to monitor activities of lower units
reporting to them
• ESS Examples
• National Life: Markets life insurance, health insurance, and
retirement/investment products executive information system
• Executive information system:
• Allows senior managers to access corporate databases through Web interface
• Shows premium dollars by salesperson
• Authorized users can drill down into these data to see product, agent, and
client for each sale
• Data can be examined by region, by product, and by broker, and accessed
for monthly, quarterly, and annual time periods
• Bonita Bay Properties: Monitoring corporate
performance with digital dashboards
• Digital dashboard: Displays on single screen key performance
indicators as graphs and charts for executives
• Bonita Bay Properties Inc.: Develops planned communities
centered around golf courses and fitness centers
• Executive dashboard displays:
• Summaries from point-of-sale systems and general ledger
accounts
• Staffing levels
• Executives can drill down to performance of fitness centers,
activity on golf courses
• Pharmacia Corporation: Monitoring corporate performance
with balanced scorecard systems
• Balanced scorecard model: Supplements traditional financial metrics with
measurements from additional perspectives (customers, internal business
processes, etc.)
• Pharmacia Corporation: global pharmaceutical firm
• Balanced scorecard shows:
• Performance of U.S. or European clinical operations in relation to corporate
objectives
• Attrition rate of new compounds under study
• Number of patents in clinical trials
• How funds allocated for research are being spent
 EXPERT SYSTEM
• “An expert system is a computer system that emulates, or acts in all
respects, with the decision-making capabilities of a human expert.”
• Attempt to model expert decision making in a limited domain.
• Examples: medical diagnosis, computer configuration, machine fault
diagnosis
• Requires a willing expert
• Requires knowledge representable as rules
• Doesn’t work for chess
• Preponderance of evidence for decision, not proof. (Civil law suits)
 EXPERT SYSTEM

EXPERT SYSTEMS – COMPONENTS OF EXPERT SYSTEMS

Building an expert system

KNOWLEDGE BASE is known as knowledge engineering and its
• CONTAINS ESSENTIAL INFORMATION ABOUT THE PROBLEM DOMAIN
practitioners are called knowledge engineers.
• OFTEN REPRESENTED AS FACTS AND RULES
Main Components
Knowledge base – ObtainableENGINE
INFERENCE from books, magazines, knowledgeable persons, etc.
Inference engine – Draws conclusions from
• MECHANISM the knowledge base
TO DERIVE NEW KNOWLEDGE FROM THE KNOWLEDGE
BASE AND THE INFORMATION PROVIDED BY THE USER
• OFTEN BASED ON THE USE OF RULES

USER INTERFACE
• INTERACTION WITH END USERS
• DEVELOPMENT AND MAINTENANCE OF THE KNOWLEDGE BASE
EXPERT SYSTEMS – COMPONENTS OF EXPERT SYSTEMS

KNOWLEDGE BASE
• Contains essential information about the problem domain
• Often represented as facts and rules

INFERENCE ENGINE
• Mechanism to derive new knowledge from the knowledge base and the information provided by the
user
• Often based on the use of rules

USER INTERFACE
• Interaction with end users
• Development and maintenance of the knowledge base
 HOW IT WORKS?
KNOWLEDGE ACQUISITION
• Transfer of knowledge from humans to computers
• Sometimes knowledge can be acquired directly from the environment
• Machine learning, neural networks

KNOWLEDGE REPRESENTATION
• Suitable for storing and processing knowledge in computers

INFERENCE
• Mechanism that allows the generation of new conclusions from existing knowledge in a
computer

EXPLANATION
• Illustrates to the user how and why a particular solution was generated
DENDRAL (1965)
• Deduce the likely molecular structure of organic chemical compounds
from known chemical analyses and mass spectrometry data
PROSPECTOR
• Analysis of geological data for minerals
• Discovered a mineral deposit worth $100 million
EXPERT SYSTEMS – ADVANTAGES

ECONOMICAL
• Lower cost per user
AVAILABILITY
• Accessible anytime, almost anywhere
RESPONSE TIME
• Often faster than human experts
RELIABILITY
• Can be greater than that of human experts
• No distraction, fatigue, emotional involvement, …
EXPLANATION
• Reasoning steps that lead to a particular conclusion
INTELLECTUAL PROPERTY
• Can’t walk out of the door
DISADVANTAGES
• Limited knowledge
• Mechanical reasoning
• Lack of trust