Management Information

System
Session 1

What is in store in MIS Course?

THEMES

Information Technology
Enterprise Systems
E-Business
Business Process
Decision Making

Information Technology
Hardware and Software
Enabling the enterprise systems and
e-business applications of the
organization
Necessary for security, privacy and
internal control
Business professional need to be
aware of the latest available
technology to evaluate them.

Enterprise Systems
Sharing of data across the
organization
Functional Modules
Accounting
Manufacturing
Human Resources
Logistics

Integrated software packages

E-Business
Application of Electronic Networks to
undertake business processes.
Has created entirely new ways of
working within and across
organizations
Buying and selling of goods at virtual
market places

Business Process
Any process that makes the business
work.
Abusiness processis an activity or set of activities
that will accomplish a specific organizational goal.

Abusiness processis a collection of related,

structured activities ortasksthat produce a
specific service or product (serve a
particular goal) for a particular customer or
customers. It often can be visualized with
aflowchart.

What is in store today?

Concept of Data, Information
What is Information Systems? Purpose of
Information Systems
Decision Making - The Business Environment
Foundations of Information Systems in Business
Creating Information, Sources of Information
Organizations and IS
Role of IS in Business & Management
Managerial challenges of IT
Digital Enterprises, Web-Powered Enterprises
Information Systems in global business today

What is Information
System?

Lets watch a video

The Purpose of Information

Systems
Businesses use information systems
To make sound decisions
To solve problems

Problem is any undesirable situation

Decision arises when more than one
solution to problem exists

The Purpose of Information

Systems (continued)
Problem solving and decision making
require information
Keys to success in business are
Gathering correct information
Storing information
Using information

Generating Information

A process is manipulation of data

Process usually produces information
Process may produce more data
A piece of information in one context
may be considered data in another
context

Concept of Data
Data are raw facts or observations
that are considered to have little or
no value until they have been
processed and transformed into
information.
Examples??
- Todays Date
- Marks in a quiz
- Records of a business transactions

Information is Critical
The information we have is not what
we want
The information we want is not the
information we need
The information we need is not
available.

Information is a Resource

It is scarce
It has a cost
It has alternative uses
There is an opportunity cost factor
involved if one does not process
information

Data, Information and Systems

Generating Information
Computer-based ISs take data as raw material, process it,
and produce information as output.

Input-process-output
15

Why need Information?

To ensure effective and efficient
decision making leading to
prosperity of the Organization.

Data vs. Information

A house number
A bank statement
The number 3.142
A National Insurance number
A balance sheet
A bus timetable
A car registration plate
A student grade sheet
A temperature reading in the days
weather

Data vs. Information

A house number - Data

A bank statement Information
The number 3.142 Data
A National Insurance number Data
A balance sheet Information
A bus timetable Information
A car registration plate Data
A student grade sheet Information
A temperature reading in the days
weather - Data

Information Creation
Classifying
Categorizing Data

Rearranging / sorting
Group data in a particular order

Aggregating
Summarizing data. Average, subtotals, total

Performing Calculations
Employee pay slip

Selection
Choosing or discarding data on the basis of
a condition / criteria.

Scorecard / Dashboard

Decision Making
A step in problem solving
Intelligence gathering
Definition of problem
Data gathered on scope
Constraints identified

Design phase
Alternatives identified and assessed

Choice
Selection of an alternative

IS, IT in a Firm and

Business Environment
Business
Environment
Company

IS
IT

What is MIS?
Short for Management Information
System
MIS refers broadly to a
computer-based system that
provides managers with the
tools for organizing, evaluating
and efficiently running their
departments.
Currently also defined as

MIS Definition
System that provides information
support for decision-making in the
organization
Integrated system of people,
processes, hardware and software
(now Internet) to provide information
to support operations, the
management and the decisionmaking function in the organization.

Role of MIS in an
Organization
Appropriate data collected from various
sources, processed and sent further to the
needful destinations
Support business processes and operations

Helps in Strategic Planning, Management

Control, Operational Control, Transaction
Processing
Support strategies for competitive advantage

Information generation, communication,

problem identification, and aid decision making
Support decision making by employees and
managers

IS - First Order Effect

Outcomes that arises as a direct
consequences of the implementation
of an IS known as the first order
effect
Can be negative or positive

IS - Second Order Effect

Increased use of IS may lead to
further changes over a period of
time.
It may improved decision making,
processes are easier to manage,
customers have lesser complaints.
These may not be visible /
measurable immediately.

IS Third Order Effect

Large scale consequences of
implementation of IS.
Competitive pressure may force firms
to adapt a particular type of IS.

Trends in IS
1960s Electronic Data Processing
Predefined management reports

1970s Decision Support Systems

Ad-hoc interactive support for decision
making

1980s End-user Computing

Executive Information System

1990s Strategic Information System

ERPs

1990s onwards Web-enabled

enterprises

The information
pyramid
Strateg
ic

Tactical

Operational

MIS and the User

Operational Level
Transaction Processing System

Tactical Level
Management Information System / ESS

Strategic Level
Decision Support System / Strategic
Information System

The information
pyramid
Strateg
ic
Input

Tactical
Input
Operational

Stages of Decision
Making
Intelligence - the individual collects
information to identify problems
occurring
Design - the individual conceives of
possible alternative solutions to the
problem
Choice - the individual selects among
the various solution alternatives
Implementation - the individual puts
the decision into effect and reports
on the progress of the solution

Decision Types

Decision Types
Structured decisions
repetitive, routine, and involve a definite
procedure for handling

Semi-structured decisions
where only part of the problem has a
clear-cut answer provided by an
acceptable procedure

Unstructured decisions
non-routine decisions the decision maker
must provide judgment, evaluation, and
insights; no agreed-upon procedure for

Example of a Structured and

Semi-structured Problem
Structured problem:
How much will I earn after two years if I
invest $100,000 in municipal bonds that
pay 4 percent per annum tax free?

Semi-structured problem:
If I invest $100,000 in stock XYZ and sell
the stock in two years, how much money
will I make?

How are these problems different?

Examples of Structured and

semi-structured problems
Structured Problems

Semi-structured problems

How many workers are needed to

fully staff the production line?

What are benefits of merging with

XYZ Inc?

What is the optimal order quantity

for the raw material Z based on
the production?

Where should we deploy the next

five stores for our retail chain

How many turbines are needed to

supply power to the production
unit C?

How will the consumer react if we

vary the price of our product by
10%?

Which of the regions yield the

highest revenue per sales person?

What is the best advertisement

campaign to launch our new
financial service?

Which money market fund

currently yields the highest
returns?

What are the benefits of opening

an office in Paris, France?

How much would the

implementation of pollution
preventing devices cost us?

Which stock will yield the highest

return by the end-of the year?

Business Environment Decision Types

Structured Decisions: Operational
Planning

Semi-Structured Decisions: Tactical

Planning

Unstructured Decisions: Strategic

The IS pyramid A
revisit

Types of IS
Operations Support System
Transaction Processing Systems
Process Control Systems
Enterprise Collaboration Systems

Management Support Systems

MIS
DSS
EIS

Specialized processing Systems

ES
KMS
SIS

Qualities of Information
Time Dimension
Timeliness
Currency
Frequency
Content Dimension
Accuracy
Relevance
Completeness
Conciseness
Scope
Form Dimension
Clarity
Detail
Order
Presentation
Media

Business Information
System

Transaction Processing Systems

Elementary activities such as sales, receipts,
payroll, flow of materials etc
Routine, voluminous
Track flow of transactions in organizations
Management Information System
Name designated to a specific category of IS
Summarize and report
Monitor and control
Decision Support System
Non-routine decision
Input from TPS and MIS
Also referred to as Business Intelligence
Executive Information System

Organizational Level Decisions?

An exercise
What should we set our budget, for the next year?
Does this customer qualify for a discount on a large
order?
How should we deal with a take over bid?
Should we employ more staff to cope with an urgent
order?
Should we expand abroad?
Should we launch an advertising campaign?
Should use a Enterprise-wide software to solve our
departmental-sync problems?
Should we take a short-term loan to help our current
cash flow position?
What new markets should we move into?
What should we do about a faulty machine?

Business Environment
That influences the way in which the
organization operates.
Dynamic
External and internal
Other factors of IS
Purpose
Inputs
Outputs
Boundary

External Business Environment

The Internet Economy

Global Market place
Business Ecosystems
De-capitalization
Faster Business Cycles
Accountability and Transparency
Rising Societal risks of IT

Internal Organization
Environment

From Supply-Push to Demand-Pull

Self-service
Real-Time Working
Team-Based Working
Anytime, Anyplace information
Outsourcing and strategic alliances
Demise of Hierarchy

Business Drivers To IS Foundations

The Internet Economy
Global Market place

Business Ecosystems

New products, services, and business mode

Information systems and technologies
create opportunities for products, services, and
new ways to engage in business.

Customer and supplier intimacy: Improved

communication with and service to customers
raises revenues, and improved communication w
suppliers lowers costs

Real-Time Working
Team-Based Working
Operational excellence: Efficiency, productivity
Anytime, Anyplace information
and improved changes in business
Demise of Hierarchy
practices and management behavior

Competitive advantage: Implementing effective

Outsourcing and strategic alliances
efficient information systems can allow a company
Faster Business Cycles
to charge less for superior products, adding
up to higher sales and profits than their competito
Also for survival.

Foundations of IS in
Business

Amazon
Dell
IRCTC
e-Bay
HUL
HDFC, ICICI, SBI, Citibank et al

Goals of new work

environment
Leverage knowledge globally
Organize for complexity
Work electronically
Handle continuous and Discontinuous
Change

Managerial
Challenges
What Information Systems to build?
How much to spend on Information
systems?
What level of capabilities should be
created with Information Systems?
How centralized should the services
be?
What are the security levels are
required?