LEARNING GOALS

INFORMATION FOR MANAGEMENT

1. Distinction between Data and Information
2. Description of types of Information: Tactical,
1.1 Data and Information, types of information : Operational, tactical, Operational, Strategic, Statutory.
strategic, Statutory 3. Division of Management into different hierarchical
1.2 Why do we need information systems, management structure,
requirements of information at different levels of management levels.
1.3 Functional allocation of management, requirements of information 4. Type of Information needed at different levels of
for various functions.
management.
5. Division of organizations into several functional
areas and their information requirements
6. Attributes of Information.

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Information Concepts Data, Information, and Knowledge

Data, information, and knowledge

Data: Raw facts

Information: Collection of facts organized in such a way

that they have additional value beyond the value of the
facts themselves
Process: Set of logically related tasks performed to
achieve a defined outcome
Knowledge: Awareness and understanding of a set of
information

3 Fundamentals of Information Systems, 4 Fundamentals of Information Systems,

Fifth Edition Fifth Edition

Data, Information, and Knowledge The Characteristics of Valuable Information

(continued)
If information is not accurate or complete
People can make poor decisions, costing thousands, or even
millions, of dollars
Information can be of little value to the organization
If information is not relevant, not delivered to decision makers
in a timely fashion, or too complex to understand

5 Fundamentals of Information Systems, 6 Fundamentals of Information Systems,

Fifth Edition Fifth Edition

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 The Value of Information What Is an Information System?

Valuable information Feedback mechanism

Can help people and their organizations perform tasks more The component that helps organizations achieve their goals,
efficiently and effectively such as increasing profits or improving customer service
Can help managers decide whether to invest in additional
information systems and technology

7 Fundamentals of Information Systems, 8 Fundamentals of Information Systems,

Fifth Edition Fifth Edition

What Is an Information System? Input, Processing, Output, Feedback

(continued)
Input
Gathering and capturing raw data

Processing
Converting or transforming data into useful outputs

Output
Production of useful information, usually in the form of
documents and reports
Feedback
Output that is used to make changes to input or processing
activities

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Fifth Edition Fifth Edition

DATA AND INFORMATION DATA AND INFORMATION

DATA : Raw Material INFORMATION : Processed data

Data collection costs money Data processed by machines giving information
Collect only necessary and sufficient data Information is used to run an organization efficiently
Data is generally used by machines Information used by managers to initiate actions
Data is useless unless it is processed to
create INFORMATION

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 EXAMPLE OF INFORMATION EXAMPLE OF INFORMATION NEEDED
NEEDED BY A SHOPKEEPER BY A SHOPKEEPER (CONTD)

Daily sales account

Slow or fast moving items
List of low stock items to be re-ordered
Reliable supplier of items
List of overstock items
Sales trends
Long overdue payments
Profit and loss account
Used to improve profitability of shop called
Tactical information
Used to streamline day to day operations called
Operational information

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EXAMPLE OF INFORMATION NEEDED EXAMPLE OF INFORMATION NEEDED

BY A SHOPKEEPER (CONTD) BY A SHOPKEEPER (CONTD)

Whether to stock different varieties of items

Whether to diversify Income tax account
Whether to start a new branch in a different Sales tax account
locality
Whether to start an e-shop Used to provide information to the government
Known as Statutory Information
Information to expand business and explore new
opportunities
Known as Strategic Information

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TYPES OF INFORMATION TYPES OF INFORMATION

STRATEGIC : Needed for long range OPERATIONAL : Needed for day to day operations

planning and directions. This is less structured. of the organization.

Eg: Daily Sales, Billing.

TACTICAL : Needed to take short range STATUTORY : Needed by law to sent to government
decisions to improve profitability and performance. authorities.
Eg: Sales tax return.

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 MANAGEMENT HIERARCHY AND
Class Activities INFORMATION NEEDS

Volume of Type of
Discuss that for the Cupcake Boss Bakery Shop, Information Information Strategic-
which of the following are their Strategic, tactical, Long range planning
Low
operational or Statutory information condensed
Unstructured Top
Managers
The number of foreign bakers hired by the shop Tactical
Medium Moderately Middle
Expand the business to nearby Malaysia towns, like Limbang, structured
Short range improvement
moderately Managers
Miri processed
It is Durian season, the bakers suggest that we can try durian Highly Line managers Operational
favor cupcake Large structured Day to day policies
Detailed Reports
The SKH shop has ordered 350 cupcakes to be sent everyday.
Raya theme decorated cupcake will sold during the whole
month of Ramadan.
Open a special training center to provide bakery course.

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NEED FOR INFORMATION SYSTEMS MANAGEMENT STRUCTURE

Increasing size of organizations thus data volume Chief Executive (Strategical)

increases
Timely processing for fast action (Tactical)
Human
Better competitiveness with better information Production Marketing Materials Finance
Resource
manager manager manager manager
manager
. Increasing of complexity of organizations require
innovative processing
Distributed organizations (Operational)
Line managers
Same data can be processed in different ways

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MANAGEMENT STRUCTURE (CONTD) MANAGEMENT STRUCTURE (CONTD)

TOP MANAGEMENT MIDDLE MANAGEMENT

Chief Executive known as CEO General managers, divisional managers,Vice presidents etc

Executive Directors for each functional areas such as Each functional area may have 2 to 3 middle level
Production, Finance, HRD etc. managers reporting to top management

Take strategic decisions Take Tactical decisions

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 MANAGEMENT STRUCTURE (CONTD) MANAGEMENT STRUCTURE (CONTD)

LINE MANAGERS FUNCTIONAL AREAS

Group managers, Assistant Group managers, Assistant PRODUCTION
managers MARKETING
MATERIALS purchase, stores
Each functional area may have several line managers FINANCE Accounts
reporting to middle level managers. HUMAN RESOURCE DEVELOPMENT(HRD)
RESEARCH AND DEVELOPMENT (R&D)
Take Operational decisions

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INFORMATION FOR MANAGEMENT

MANAGEMENT STRUCTURE (CONTD)
Production Management

FUNCTIONAL AREAS Strategic Information

Yearly and monthly production quotas and alternate

All organizations need not have identical functional areas schedules
However some are common such as
- MARKETING Policies on machine replacement, augmentation,
- FINANCE and modernization.
- HUMAN RESOURCE DE VELOPMENT(HRD)
Identifying best product mix.

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INFORMATION FOR MANAGEMENT INFORMATION FOR MANAGEMENT

Production Management Production Management

Tactical Information Operational Information

Identifying and controlling areas of high cost.
Identifying critical bottlenecks in production.
Identifying alternate production schedules
based on tools, machines etc.
Performance measures of machines to decide
replacement.
Monitoring up to date production information
by examining assemblies, detecting likely
shortages and giving early warning.
Scheduling better production dynamically.
Preventive maintenance schedules.
Monitoring tool, machine and personnel
availability

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 INFORMATION FOR MANAGEMENT INFORMATION FOR MANAGEMENT
Marketing Management Marketing Management

Strategic Information Tactical Information

Search for new markets and marketing Advertising techniques and analysis of their
strategies. impact.
Customer preference surveys.
Analysis of competitors strategy.
Correlation of prices and sales.
Technology and demographic forecasts and Sales force deployment and targets.
product changes. Exploring alternate marketing channels.
Timing of special sales campaigns.

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INFORMATION FOR MANAGEMENT INFORMATION FOR MANAGEMENT

Marketing Management Material Management

Operational Information Strategic Information

Sales analysis by regions,customer class, sales Developing vendors for critical items.
person. Determining optimal levels of inventory
Sales target versus achievement.
Determining proportion of material needed
Market share and trends.
Seasonal variations. Reducing varieties of inventory.
Effect of model changes.
Performance of sales outlets
Costs of campaigns and benefit.

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INFORMATION FOR MANAGEMENT INFORMATION FOR MANAGEMENT

Material Management Material Management

Tactical Information Operational Information

Developing vendor performance measures. List of excess & deficient items received.
Determining optimal reorder levels. List of items rejected.
Determining issues of items to shops versus Critical items received.
standard needs. Stores in transit and in inspection.
Controlling high value of inventory. Value of inventory in hand.
Determining impact on material cost and Goods received, rejected and issued.
procurement with design changes and new
product introduction.

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 INFORMATION FOR MANAGEMENT INFORMATION FOR MANAGEMENT
Finance Management Finance Management

Strategic Information Tactical Information

Methods of financing. Variations between budget and expenses.

Large outstanding payments/Receipts.
Pricing policies. Credit and payment status.
Tax planning. Cost increases and pricing.
Impact of taxation on pricing

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INFORMATION FOR MANAGEMENT INFORMATION FOR MANAGEMENT

Finance Management Human Resource Management

Operational Information Strategic Information

Periodic financial report. Long range human resource requirements.

Budget status to all functional managers. at different levels.
Tax returns. Policies on human resource development and training
Share transfers.
Profit and loss account. Policies on personnel welfare and facilities
Payments and receipts.
Payroll,provident fund accounts.

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INFORMATION FOR MANAGEMENT INFORMATION FOR MANAGEMENT

Human Resource Management Human Resource Management

Tactical Information Operational Information

Performance appraisal. Routine assessment.

Demographic make-up of personnel and its
impact on retirement. Skills inventory.
Production incentives.
Morale of personnel. Loan/advances and recoveries.
Absentee reduction.
Leave and overtime policies. Leave record.
Personnel deployment policies.

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 INFORMATION FOR MANAGEMENT INFORMATION FOR MANAGEMENT
Research Design & development Management Research Design & development Management

Strategic Information Tactical Information

Which products are to be developed? Setting intermediate goals.

What types of improvements are required?
What long range research is more promising?
What technical collaboration would be appropriate?
Checking availability of equipment &
appropriate selection
Determining proportions of resources to be
allocated to different projects.
Deployment of personnel to projects.
Information on similar and related research
projects undertaken by other companies

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INFORMATION FOR MANAGEMENT

Research Design & development Management QUALITIES OF INFORMATION
Quality How to ensure quality
Operational Information
Accurate Ensure correct input and processing
rules.
Progress against goals.
Complete Include all data.
Timely Give at right time
Budgeted expenses versus actual expenses.
Trustworthy Do not hide unpleasant information.
Relevant Understand user needs.
Status of outstanding orders for equipment and
Brief Summarize relevant information.
components.
Up-to-date Include all data up to present time.
Significance Use attractive format & graphical
charts.

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