2

Foundational
Concepts of MIS
Outline
 Framework for IS Information Needs and Source of Manager

Foundation Concept
Information Need Information Source
Information Technology
Simple Need External
Internal
Business Application
Complex Need Government
Development Process Trade Financial
Grouping
Management Challenges Personnel
Trade
Purchasing
Grouping
Sales
Commercially
Provided Manufacturing
Research Administration
 Introduction: Why?

• Why we need to study IS

and IT?
 Introduction
• Information Systems become integrated
into our daily business activities such as
finance, marketing, OM, HRM, or
other functions.
• Information systems and technologies
are vital components of successful
businesses and organizations—some
would say they are business
imperatives.
• Managers, entrepreneurs, or business
professionals need to have a basic
understanding of IS.
 Introduction
• Information technologies, including Internet-
based information systems, are playing vital
and expanding roles in business.
• IT can help all kinds of businesses improve the
efficiency and effectiveness of their business
processes, managerial decision-making, and
workgroup collaboration,
• IT also strengthens their competitive positions
in rapidly changing marketplaces.
 Introduction
• Consider the lifespan of most
product has continued getting
shorter and shorter.
• The challenge to the manager is
to design product that will take a
longer shelf-life.
• To do this, manager must be able
to keep abreast of the factors that
influence the organization
product and service with the
helps of MIS.
 Introduction: The Real World of IS
• Although today’s information systems
are typically thought of as having
something to do with computers, we
have been using information systems
since the dawn of civilization.
• Even today we make regular use of
information systems that have nothing
to do with a computer.
 Introduction: The Real World of IS
• An information system may be
computerized or not.
For instance,
Smoke signals for
communication: were used as
early as recorded history and can
account for the human discovery
of fire. The pattern of smoke
transmitted valuable information to
others who were too far away to
see or hear the sender.
 Introduction: The Real World of IS
• Card catalogues in a library are
designed to store data about the
books in an organized manner that
allows readers to locate a particular
book by its title, author name,
subject, or a variety of other
approaches.
 Introduction: The Real World of IS
• Your book bag, day planner,
notebooks, and file folders are
all part of an information system
designed to help you organize the
inputs provided to you via
handouts, lectures, presentations,
and discussions.
• They also help you process these
inputs into useful outputs:
homework and good exam
grades.
Introduction: The Real World of IS

Test Your Understanding 1

Say true or false
(i) Information system must be computer oriental.
(ii) Information systems is started during the
information age.
 Introduction: The Stages of IS
All IS operating in the same basic
fashion whether they include a
computer or not. However, the
computer provides a convenient
means to execute the main
operations of an IS:
• Input
• Processing
• Output
• Storage
• Feedback
Introduction: The Stages of IS
 Introduction: The Real World of IS
Test Your Understanding 2
A. Input B. Data-processing C. Output
D. Storage E. Feedback
Consider the following statement
(i) Selective attention and brainstorming.
(ii) Reinforces correct actions and shapes future
behaviour.
(iii) Visual, audio, or text (sensation)
(iv) The actual action taken as the result of decisions
made
(v) Sensory memory, short-term memory, or long-term
memory
 Introduction: The Real World of IS
Test Your Understanding 3 –Homework
A library makes an excellent information systems
model. It serves as a very large information storage
facility with text, audio, and video data archives. Look
up the definitions for each term listed below and briefly
explain a library’s equivalents.
a. Input
b. Processing
c. Output
d. Storage
e. Feedback
Introduction: Components of IS
Introduction: Components of IS
People Resources
IS Specialists Data Resources
Data – unorganized facts and
End Users figures
Hardware Resources Information – data organized so
Machines – the computing devices that it has value to the organization
themselves. Network Resources
Communications Media- the
Media – where data is stored.
physical pathways over which
Software Resources signals travel
Programs – instructions that tell the Network Infrastructure –
computer what to do hardware, software, and data
System Software – runs the computer technologies needed to support
Application Software – a particular use by end communications networks
users
Procedures – instructions on how to use the
system
 Introduction: The Real World of IS
Test Your Understanding 4 –
a. Peopel b. Hardware c. Software d.Network
e. Data
Required
i. Computers, disk drives, video monitors, and
printers are examples
ii. End users and information systems professionals.
 Introduction: The Real World of IS
Test Your Understanding 4 –Homework
Define and find their difference.
i. Internet
ii. Internet
iii. Extranet
Fundamental Role of IS in Business
The three vital roles that
information systems can perform
for a business enterprise:
Support of Business Processes
and Operations
Support of Business Decision-
Making
Support of Strategies for
Competitive Advantage
Fundamental Role of IS in Business
Support of Business Processes and
Operations. As a consumer, you
regularly encounter information
systems that support the business
processes and operations at the many
retail stores where you shop.
For example, most retail stores now use
computer-based information systems to help
their employees record customer purchases,
keep track of inventory, pay employees, buy
new merchandise, and evaluate sales trends.
Fundamental Role of IS in Business
Support of Business Decision
Making. IS also helps store managers
and other business professionals make
better decisions.
For example, decisions about what lines
of merchandise need to be added or
discontinued and what kind of
investments they require are typically
made after an analysis provided by
computer-based information systems.
Fundamental Role of IS in Business
Support of Strategies for Competitive
Advantage. Gaining a strategic advantage
over competitors requires the innovative
application of IT.
For example, store management might
decide to install touch-screen kiosks in all
stores, with links to the e-commerce Web site
for online shopping.
This offering might attract new customers
and build customer loyalty because of the
ease of shopping and buying merchandise
provided by such information systems.
Business and Management
function
Business function
Small business owners often make the mistake
of creating jobs for the people they have, rather
than putting employees into positions the
business needs.
To properly staff and run your business, create
an organization chart that includes the primary
business functions any company must have to
maximize its success.
You can call these departments by different
names and combine them, but your organization
should include administration, marketing,
finance, operations, human resources and IT.
Business function
Administration: The administration function
of a business is a macro function that
oversees all other functions.
The administrative staff usually includes the
board director, CEO, president, or
V/president.
This is the function through which corporate
strategy and long-term objectives are made
and communicated.
Business function
Marketing: The marketing function of a
business is the most important function that
creates a cash-inflow to the organization.
The product and services are delivered to the
customer through the marketing function.
Marketing tracks the customers and their
satisfaction with the product. Addressing the
needs and wants of customers.
Business function
Finance: The finance function is responsible
for recording the cash flow of organization.
They prepared income statements and
financial statements, payroll statements.
They collect information from different
functions of the organization.
Business function
Human Resource: The Human resource
function is to generate the right person at the
right position.
They are responsible for finding the best
candidate, offering training, following the
staff performance, promotion..etc.
Business function
• Information Technology: Even small
businesses need a dedicated IT person
these days, based on the amount of
technology in today’s offices.
• This person must be able to network the
company’s computers, keep them running
and safe and ensure employee email
functions smoothly.
Management function
Management functions represent
the activities that managers should
perform to achieve organizational
goals.
The various functions of
management constitute a unified
body and are commonly referred to
as a process of management.
The process of management is
circular in nature, as functions are
interrelated and performed one
after the other
Management function
Planning. It refers to deciding goals and
activities today to achieve them tomorrow.
It is the first and most function of
management, because all other functions
depend on planning.
Planning involves
• Setting Up Vision
• Determining Mission
• Objective
• Goal
• Strategy
• Tactics
• Operational Plan
Management function
Organizing involves
• Identifying tasks (what tasks are to be done) and
grouping of activities (how the tasks are to be
grouped)
• Determining authority-responsibility relationship
(who reports to whom)
• Determining degree of centralization (where
decisions are to be made) and
• Creating organizational structure
• Allocating Resources
Management function
Staffing function undertakes
• Manpower planning
• Recruitment and selection,
• Induction, Orientation and Positioning
• Training and development
• Remuneration and compensation
• Performance Evaluation
• Promotion, demotion, transfer, wage and
salary administration and industrial
relations.
Management function
Directing relies on
• Influencing employees to achieve
objectives
• Motivating followers
• Communication
Management function
Controlling continuously involves
• Setting the standards
• Measuring the actual performance,
• Finding variations (causes of variations),
and
• Taking corrective action
DIKW-Pyramid
Data is not information, information is not
knowledge, and knowledge is not wisdom.
Data must be extracted, sorted, and analyzed
to become information. Information must be
studied, organized, and learned to become
knowledge. Knowledge must be put into
action and be experienced to become wisdom.
Wisdom leads to the discovery of new or
amended data.
Each level adds more meaning and value to
the basic data so that when wisdom is
reached, the data has been converted into
decisions and actions.
DIKW-Pyramid
Data is the foundation of the
pyramid. Data is a collection of facts
and items, such as text, numbers,
video, audio, symbols, or any big
data.
For example, 12012012 is just a
sequence of numbers without
apparent importance.
But if we view it in the context of
‘this is a date’, we can easily
recognize the 12th of January, 2012.
By adding context and value to the
numbers, they now have more
meaning.
DIKW-Pyramid
Information is data that has been “cleaned” of
error and further processed in a way that makes
it easier to measure, visualize and analyze for
a specific purpose.
Data Mining turns raw data into useful
information. It involves various methods:
statistics, machine learning, and database
systems.

For example, we can organize our data in a

way that exposes relationships between various
seemingly disparate and disconnected data
points
DIKW-Pyramid
Knowledge How” is the information,
derived from the collected data, relevant to
our goals?
“How” are the pieces of this information
connected to other pieces to add more
meaning and value? And, maybe most
importantly, “how” can we apply the
information to achieve our goal?

When we don’t just view information as a

description of collected facts, but also
understand how to apply it to achieve our
goals, we turn it into knowledge
DIKW-Pyramid
Wisdom (ጥበብ) or (‫)حكمه‬But only when we
use the knowledge and insights gained from
the information to take proactive
decisions, we can say that we have reached
the final – ‘wisdom’
Wisdom is at the top of the DIKW hierarchy
and to get there, we must answer questions
such as ‘Why do something’
In other words, wisdom is knowledge
applied in action; applying knowledge to
books, systems, beliefs, traditions,
philosophies, principles and truths
DIKW-Pyramid
Level Understanding Relate to Example
Data Know Nothing Past It is raining
Information Know What, who, Past The temperature dropped by 15 degrees
where, when and then it started raining.

Knowledge Know How Past to If the humidity is very high and the
present temperature drops, then the atmosphere is
unlikely to hold moisture, so it rains.
Wisdom Know Why Future Encompass understanding of all
interactions between rain, evaporation,
air current, temperature gradient and
change
DIKW-Pyramid
Bellinger et al (2004) suggest
that understanding occurs
between each level. (1) moving
from data to information
involves understanding
relations, (2) from information
to knowledge requires
understanding patterns and
(3) from knowledge to wisdom
requires understanding
principles.
 Information Needs of
Managers and Information
Sources of Managers
 Information Needs of Managers
include…….
• International corporation needs
information to coordinate and control
their diverse businesses.
• People require information for
many reasons and in varied ways. For
instance, you probably seek
information for entertainment and
enlightenment
• In business people and
organizations seek and use
information mainly to make sound
decisions and to solve problems-
require information
 Information Needs of Managers
include…….
• A problem is any undesirable
situation.
• Simple needs are routine, based on
clearly structured questions leading to
routine actions or simple decisions
• Complex needs are much less of a
routine nature; they are often based on
vaguely structured questions
• Urgency: One extremity is an
emergency that needs quick yet well-
grounded decisions in a fast-
changing environment
 Information Needs of Managers
include…….
• Coverage: On one hand, there are
situations with a wide scope,
affecting the whole organization; on
the other hand – a narrow yet
complicated problem area.
• Required precision: In some cases,
a rough estimate of a situation is
sufficient; in other cases, exact or
near-exact results are required
• Heterogeneity: defined by many or
few information sources,
procedures, or participants.
 Information Needs of Managers
include…….
• Structured ness: Although
complex information needs by
their nature are on the
unstructured side
• Associated risks: defined by
size and probability of
possible loss if incorrectly
assessed
 Information Sources of Managers
• Internal Sources of Information: The sources
of information that you use in your business can
be primary information or information that you
obtain yourself inside your own company.
• Financial Information
• Personnel Information
• Marketing Information
• Purchasing Information
• Manufacturing information
• Administration Information
 Information Sources of Managers
• External Sources of Information: Companies can also
use external sources to help them make the correct
business decisions.
• Government
• Trade Groupings
• Commercially Provided
• Databases & Research
Information Systems
Framework
Information Systems Concepts (Continued)

• Foundation Concepts
• Fundamental concepts about the components and roles of information
systems.
• Information Technologies
• Major concepts, developments, and management issues in information
technology.
Information Systems Concepts (Continued)

• Business Applications
• The major uses of information systems for operations,
management, and competitive advantage.
• Development Processes
• How business professionals and information specialists plan,
develop, and implement information systems.
• Management Challenges
• The challenge of managing ethically and effectively.