Management

Faculty Information
• Business and
economics System
Department
(MIS)
• Management
[email protected]
 Learning objectives
• Define MIS

• Discuss Importance of MIS

• Understand Subsystems Of MIS

• Discuss Contemporary Approaches To MIS

• Defining, What Is Information Technology?

• Discuss The Evolution And Characteristics Of The Information Age

 Preliminaries: group brainstorming

• Management

• Information; data; what is the relationship between data and information

• System

• Information system; does IS have to have a computer?

• MIS

• IT
 Data vs Information
Data
• Are Raw facts, such as an employee number, total hours worked in a week, inventory part
numbers, or sales orders

Information
• is a collection of facts organized and processed so that they have additional value beyond
the value of the individual facts

Characteristics of valuable information

• Accessible, accurate, flexible, complete, economical, reliable, timely etc.
 The concept of information
(The Process of Transforming Data into
Information/information generation)

The
transforming
process
(applying
knowledge by Decision
Data selecting,
Information
making
Action
organizing,
and
manipulating
data )

Menguzzato and Renau, 1991 5

 System and its components
• System: a set of elements or components that interact each other to accomplish
goals
Environment
• System boundary
• Types Organisation
• Simple vs complex
• Static vs dynamic
Input Processing Output
• Open vs closed
Feedback

Activities/components of an IS
 System Example

Elements
System Goal
Processing
Inputs Outputs
elements

Actors, director, Filming, Finished film Entertaining

staff, sets, equipment editing, special delivered to movie, film
Movie effects, movie studio awards, profits
distribution
 Information System
• An information system is a set of interrelated components that

• collect (retrieve),

• process,

• store, and

• distribute information

to support decision making and control in an organization (K. Laudon and J. Laudon, 2006).

• Examples: ATMs, airline reservation systems, course reservation systems, srs

 Types of IS

• Manual (paper-and-pencil) information systems

• Informal (word-of-mouth) information systems

• Formal (written procedures) information systems

• Computer-based information systems (CBIS)

• A computer-based information system (CBIS) is a single set of hardware,
software, databases, telecommunications, people, and procedures that are
configured to collect, manipulate, store, and process data into information
 Function of an information system
Environment
Customers
Suppliers
Organization

IS
Processing
V
Classifying
input Arrange output
Calculate
Feedback

Regulatory agencies Stockholders Competitors

 Chapter One

Introduction to MIS
 Introduction
• Introduced as field of study in 1970s
• Has been defined by different authors
• MIS is a system
• to convert data from internal and external sources into information and
• to communicate that information,
• in an appropriate form, to managers at all levels in all functions
• to enable them make timely and effective decisions for planning, directing and
controlling the activities for which they are responsible.
 MIS; definition

MIS is an integrated user-machine system for providing information to

support operations, management and decision-making functions in an

organization.

• The system utilizes computer hardware and software, manual procedures/

models for analysis, planning, control and decision-making and database

Davis and Olson
 MIS…
• MIS is an Information Management and Systems, is a discipline covering
the application of
• people,
• technologies, and
• procedures collectively called information systems,
• to solving business problems.

• 'MIS' is a planned system of

• collecting,
• storing and
• disseminating data in the form of information needed to carry out the functions
of management.
 MIS, Meaning
• MIS is the system, which makes available the right information to
the right person, at the right place, at the right time, in the right
form and at the right cost.

Data Information Communication Decision

 Importance of MIS in business

• The role of IS in an organization is like the

nervous system in the human body: it
connects all the organization's components
together and provides information for better
operation and survival in a competitive
environment.
 Cont’d….

• A well managed IS can bring about

• Improves process

• Offer new/ Improves products and services

• Improves quality

• Cuts costs

• Improves management practice, problem solving and decision making

 Characteristics of MIS
• Systems Approach :The information system follows a systems approach

• Management Oriented :

• Need Based: should be designed as per the information needed at different level

• Exception Based: provide information in abnormal situation

• Long Term Planning:

• Sub System Concept : MIS must be broken down into different sub-systems

• Central database : In the MIS there should be common data base for whole system

• multidisciplinary field
 Scope of MIS

• Presenting information to management

• A number of tasks might be performed simultaneously:

• initiating transitions (i.e. automatic purchase order, tracking orders etc

• recording transactions as they occur (sales, financial reports);

• Processing data

• producing reports (e.g., summaries);

• Responding to enquires.
 Functions/Objectives of MIS :

 The objective of an MIS is to provide

Data capturing
information for decision making on
• Internal vs External
 Planning • Manual vs through computer
 Organizing Storage information
 Initiating and
 controlling the operations of the Retrieval of information
• Access as and when required
subsystems of the firm and
 to provide a synergistic
organization in the process Dissemination: information is a finished
product of MIS, is disseminated to users
 Component of MIS

• A combination of
• Hardware,

• Software,

• infrastructure and

• trained personnel

• Procedures

organized to facilitate management functions in an

organization.
 SUBSYSTEMS OF AN MIS

• MIS is federation/alliance of subsystems

• A subsystem is simply a system. This means that a system exist on

more than one level and can be composed of subsystems or elements

• Two approaches to defining the subsystems of an MIS are

according to the organizational functions, which they support, and

according to managerial activities for which they are used.

 Subsystems of an MIS
Major functional subsystem Some typical uses
Marketing Sales forecasting, sales planning, customer and sales analysis
Manufacturing Production planning and scheduling, cost control analysis
Logistics Planning and control of purchasing, inventories, distribution
Personnel Planning personnel requirements, analyzing performance,
salary administration
Finance & accounting Financial analysis, cost analysis, capital requirements planning
income measurement
Information processing Information system planning, cost effectiveness analysis
 Activities Subsystem
Activity subsystem Some typical uses

Transaction processing Processing of orders, shipments, and receipts

Operational control Scheduling of activities and performance reports

Management control Formulation of budgets and resource allocation

Strategic planning Formulation of objectives and strategic plans

 I-P-O of MIS @ all levels of
Management
INPUTS PROCESS OUTPUTS

Strategic Plans, competitor Summarize, Investigate, Key ratios, ad hoc market

Information, overall market Compare, Forecast analysis, strategic plans
information
Management/T Historical, and budget data Compare, Classify, Variance analysis,
actical Summarize. Exception report

Operational Customer orders, Update files, Output Updated files listings,

programmed stock control reports. invoices
levels, cash
Receipts/payments
 Contemporary approaches in MIS

• In contemporary systems there is a growing interdependence between

a firm’s information systems and its business capabilities.

• Changes in strategy, rules, and business processes increasingly require

changes in hardware, software, databases, and telecommunications.

• Often, what the organization would like to do, depends on what its
systems will permit it to do.

• MIS is multidisciplinary field

 Contemporary approach to MIS

Hardware

Business strategic
Objectives Software
business process Data
management

Business Firm Information system

Telecommuni
cations
 Contemporary approach to MIS

Operations
• Fields contributed to MIS research

• NB: two major fields had major Computer

Sociology
science
contribution for the growth of
MIS
MIS: technical and behavioral; as
are result Information systems are Management
Economics
science
socio-technical systems.
psychology
 Cont’d….

Technical approach Behavioural approach

• Emphasize on mathematical models • Deals with behavioural issues
and physical technology Contributors
Contributors: • Sociology: deals with how orgns.
• CS: concerned with computability, Shape the dev’t of system
data storage and access • Psychology: study how DMers
• MS: emphasize on development of perceive and use IS
models for DM • Economics: study that the impact
• OR: focused on Mathematical system have on control and cost
techniques for optimization structure within the firm & market
 SOCIOTECHNICAL PERSPECTIVE

OPTIMIZE SYSTEM PERFORMANCE:

TECHNOLOGY & ORGANIZATION MUTUALLY ADJUST TO
ONE ANOTHER
UNTIL FIT IS SATISFACTORY
*
 The Evolution and
Characteristics of the
Information Age
 The need of information and IT
• Organizations are transforming themselves from traditional to the
information based organization – which uses Information and IT.
• Organizations in the past - highly structured
future - flexible and changeable structure
Information link different individuals in an organization
• information technology (IT) provides
• effective customer service,
• analyze market opportunities, and
• manage production and manufacturing operations
 The Evolution of the Information Age

Agricultural age Industrial age Information age

Time period Pre 1800s 1800s-1957 1957-present
Majority of workers Farmers Factory workers Knowledge workers
Partnership People and land People and machines People and people
Principal tool Hand tools Machines IT
 Evolution of information Technology
• Industrial revolution leads to division of labour – fragmentation of
work i.e. marketing, manufacturing, accounting…performing
specialized tasks
• Modern organization – complexity increased
• World war II- change the market situation
• Starting from 1990s, customers have power over suppliers, this comes
from access to information.
• Now, Information technology makes it possible to do business 24hrs a
day
 Characteristics of Information age?

• An Information Society: informed society in all fields

• Dependence on Information Technology:

• Transformation of Work: enhance productivity and effectiveness

• IT Influences Successes: enable to deliver better value to customers

• Embedded IT: knowledge-based products are desirable ie.e convenience,

quality, reliable, novel etc
 What is IT?
IT Refers to whole variety of items (HW, SW, networking) and abilities used in the
creation, Storage and , dispersal of information.
• Or it is Any tool for manipulating data, information
e.g. computer software and hardware,
network,
telecommunication
 The primary components of IT
Information technology is divided into three primary
components:

• computers
• communications networks and
• know-how
 The primary components OF IT…
1. Computers: is any electronic system that can be instructed to
 Accept

 Process

 store and

 present data/information
 The primary components OF IT…
2 . communications networks: is the
interconnection of stations at different
locations through a medium that
enables people to

send and
 receive
data/information
 The primary components OF IT…

3. know-how :refers to the ability to do something well

It includes ;

Familiarity with the tools of IT

The skills needed to use these tools
Understanding when to use IT to solve a
problem or capitalize on an opportunity

40
 The Principles of IT
• The most important principle of information
technology describes the purpose of IT; i.e .
 to solve problems
 to unlock creativity and
 to make people more effective than they would be if
they did not involve IT in their activities
The Functions of Information
Technology
• Capture

• Processing

• Generation

• Transmission

• Storage and Retrieval

 The Benefits of Information Technology

• Speed

• Consistency
SCPR
• Precision

• Reliability
The Opportunities of Information Technology

• Helping People

• Solving Problems
 Role of Information Technology In Our
Lives

• Entertainment • Education/Training

• Shipping

• Paperwork • Health and Medicine

• Money and Investments • Manufacturing

• Agriculture • Shopping

• Taxation and Accounting • Sports

 Computer and Information Systems
Literacy

• Computer literacy: knowledge of computer systems and equipment and the ways
they function

• Information systems literacy: knowledge of how data and information are used.

• If you can combine information from internal sources and external environments,
if you can use data to help you make better decisions, if you can use information
to help you improve your organization, you can consider yourself ―information
literate.‖
 Discussion points

• Take the Registrar Office of Your University

• What are the elements `(Resources) of IS?

• What are the inputs, processing, output, storage and control activities of IS

• Break the system into main sub processes

The end
 Information System Resources

Hardware resources –
• physical devices and materials used in information processing.

• Computers and calculators, sheets of paper, magnetic disks., filing cabinets and paper trays.

Software resources –
• all sets of information processing instructions.

• Ex. Programs, which are the sets of operating instruction that direct & control computer
hardware; procedures: the sets of information processing instruction needed by people.

• Manuals, Instructions how to fill a certain application form or a material requisition form.
People resources –
• include specialists (people who develop and operate information systems)
• E.g. system analysts, programmers, computer operators; and end users; accountants,
salespersons, engineers, clerks, customers or managers or all who use information system or
the product of information system.

Data Resources –
data & information constitute valuable organizational resources.
For example: supplier’s name, the sales transaction (on account/on cash), customer’s name, total
sales, total expenditures, etc., are data resources.
 Contemporary approach to MIS

Hardware

Business strategic
Objectives Software
business process Data
management

Business Firm Information system

Telecommuni
cations
 Subsystems of MIS
• A subsystem is simply a system. This means that a system exist on more
than one level and can be composed of subsystems or elements
• Followings are the subsystems of MIS
• TPS (Transaction processing system)
• MRS (Management Reporting system)
• DSS (decision support system)
• OIS (office information system)
• E-commerce system
 TPS
• Transaction
• Any business-related exchange
• E.g., generating a weekly payroll, sales to customers
• Transaction processing system (TPS)
• An organized collection of people, procedures, software, databases, and
devices used to record completed for business related exchanges

• A type of information system that collects, stores, modifies and retrieves the data
transactions of an organization.
Payroll Example

Hours
worked
Payroll
Payroll
transaction
checks
processing
Pay
rate
 Types of TPS

On-line mode (real-time) transaction

• Each transaction is completely processes immediately upon entry
• More costly than batch processing
• Database is always up-to-date
Batch transaction
• Processing transactions in a group or batch
• Cheaper than on-line transaction
• Easier to control than on-line transaction
• Data base is constantly out-of-date
 Files used by TPS
• Master file:
• contains information about an organization’s business situation. Most transactions and
databases are stored in the master file

• Transaction file:
• it is collection of transaction records. Help to update the master file.

• Report file:
• contains data that has been formatted for presentation to a user

• Work file/temporary files

• Program file: contains instructions for processing of data
 MRS

• Is essentially a mechanism for monitoring the mission of an organization.

MRS reports
1. Periodic schedules reports
• Used for providing information to managers on a regular basis
• E.g. daily sales report
2. Exception report
• Not generated on regular basis, but occasionally
• E.g. reports who have taken an overdraft
3. Demand reports and responses
• Are ad hoc reports
• Generated as and when the manager requires them
 DSS
• Assist people to work alone or in a team, to gather intelligence, generate
alternatives, provide interactive information support and make choices.

• A DSS is collection of integrated software applications and hardware that

form the backbone of an organization decision making process

• A DSS is…
• An organized collection of people, procedures, software, databases, and devices used
to support problem-specific decision making

• A DSS helps a manger “do the right thing”

 Office information system

• Is an information system that uses

• HW, SW, and networks

• to enhance work flow and facilitate communications among employees.

• Provide accurate and timely information to enable effective

• planning ,

• operation and

• monitoring of services rendered

 E-Commerce System

• E-commerce
• Involves any business transaction executed electronically
• Conducting business on-line

For example, between…

• Companies
• Companies and consumers
• Business and the public sector
• Consumers and the public sector

• Example for placing a purchase order

Purchase Order - Traditional
Purchase Order – E-commerce
 Expert Systems

• An expert system is…

• A computer application that performs a task that would otherwise be performed by a
human expert
• gives the computer the ability to make suggestions and to act like an expert in a
particular field
• Examples: diagnose human illnesses, make financial forecasts, schedule routes for
delivery vehicles

• Expert systems typically include “artificial intelligence”

 Artificial Intelligence

• AI is…
• A branch of computer science concerned with making computers behave like
humans. E.g. Robot

• Term was coined in 1956 by John McCarthy at the Massachusetts Institute of

Technology

• Draws from many areas, including cognitive psychology

Example of a System with sub-
components

Customer Order Entry

Maintenance Component
Component
Customer Support System
Catalog Order Fulfillment
Maintenance
Component
Component
 A Business perspective on IS

• Management information systems (MIS) Organization

deals with behavioral issues as well as
technical issues surrounding the
development, use, and impact of IS
information systems used by managers
Management Technology
and employees in the firm. As such, MIS
is defined as the study of information
systems focusing on their use in business
and management.