UNIT 1

Introduction to Information Systems

Understanding Organization
MIS Model
Reports
Models
MIS and Human Factor Consideration
MIS and Problem Solving
IT infrastructure for Digital Firm

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Information System:
Introduction

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 A system either automated or manual that
comprises people , machines and methods to
collect , process and disseminate data that
represents information.

It is a mechanism to ensure that information

is made available to executives and managers
whenever they want it and in whichever form
they want it.
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 Should provide a basis to analyze warning
signals.(if something can go wrong)
Should automate routine operations to make
them more efficient and accurate
Should assist management in making decision
Should serve as a strategic weapon to gain
competitive advantage.
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 Based on the kind of information they
provide and also the organizational level they
serve
Executive Information System (EIS)
Management Information System (MIS)
Decision Support System (DSS)
Knowledge management System (KMS)
Transaction Processing System (TPS)
Etc.

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 It is designed to help senior management and
executives
Helps in making strategic decision
Uses external information used in business
Information in EIS is presented in forms of
charts and tables that shows trends ratios
and other statistical data.

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 To store all the necessary decision-making
data, EISs often use extremely large
databases, called data warehouses.
A data warehouse stores and manages the
data required to analyze historical and
current business circumstances.
For example
Should we adapt new technology for better
production?

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 Designed to help middle level management
and operational executives.
Mainly concerned with internal
organizational data management
Generates accurate, on time and organized
information so managers can make decisions,
solve problems, supervise activities, and track
progress.

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 a management information system
sometimes is called a management
reporting system (MRS) as it generates
regular reports
Usually takes data from transaction
processing system and summarize it into
report
Eg. transaction processing system process sales ,
update customers account balance. These
information are used by MIS
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 designed to help managers reach a decision
when a decision-making situation arises.
A decision support system uses data from
internal and/or external sources.
Internal sources of data might include sales,
manufacturing, inventory, or financial data from
an organizations database
external sources could include interest rates,
population trends, raw material pricing.

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 EIS is a special type of DSS, designed to
support the information needs of executive
management.
For example
by what percent production of an item should be
increased or decreased

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 Knowledge Information that is read, heard,
seen and understood.
Create and share information that further creates
commercial opportunities
It is an IT system that
stores and retrieves knowledge
locates knowledge sources
mines repositories for hidden knowledge
captures and uses knowledge

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 Purpose of having
Improved performance
Competitive advantage
Innovation

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 Are designed to capture and process data
generated from routine transactions and
operations

Used at the basic level of organization

Usually TPS computerize an existing manual

system to allow for faster processing, reduce
clerical costs and improved customer service.
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 Initially Batch processing scheme was used
by TPS i.e. , transaction data is collected over
a period of time and all transactions are
processed later in a group

With online transaction processing

(OLTP) the computer processes transactions
as they are entered and provide instant
processing
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 Examples
Attendance management
Payroll management
Bill settlements etc.

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Understanding
Organizations

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 Actually depends upon how you classify your
organization

Organization is divided into departments and

each of them have their own needs and
problems . And hence they need different IS
to fulfil their requirements

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 Most of the organizations are Hierarchal and
so are the information systems used.

?
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 The way systems are arranged mirrors the
nature of task performed at different level

Strategic
Planning
Management
Control
Operational Control
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 DSS & EIS
Strategic
Planning
MIS
Management
Control
TPS
Operational Control
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 Executives

Senior Management

Middle Management

Workers

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 EIS
Executives

Senior
DSS
Management
MIS
Middle Management
TPS
Workers

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MIS Model

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1) Capturing Data
2) Processing Data
3) Information Storage
4) Information Retrieval
5) Information Propagation

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 Data Capturing
How to capture different types of data from
various internal and external source of the
organization.

Processing Data
Calculate, sort, classify and summarize captured
data to get information

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 Information Storage
Storing processed data for future usage
Information Retrieval
System should be able to fetch information from
storage whenever and whichever format is
required
Information Propagation
Information should be circulated to its intended
users periodically using organizations network

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Is it possible
to achieve
all of it
without
computers??

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 But with computers things would be a lot
easier
From IT point of view
MIS refers broadly to computer based
systems that provides managers with the
tools for organizing, evaluating and
efficiently running their departments

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 Database
Contains the data provided by the various
subsystems, which is used by another software

Report writing Software

Produces different types of reports using the data of
database

Mathematical Models
Generates different types of models that simulate
various aspects of firm
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 Output of MIS i.e. Reports , Information,
Models are used by managers and other
problem solving personnel

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REPORTS

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 Reports can be of narrative, tabular or
graphical form
There are two main types of report
Periodic
Special
Periodic Report
Provides routine reports on scheduled time like
weekly, monthly, annually. Like
Attendance Report
Monthly Course coverage report
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 Special Report
Also called as ad-hoc reports
Unscheduled report that may be requested by
managers
Mostly these reports are requested when
Organization has encountered an unexpected problem
or
Has unanticipated informational need
Ex: Working report of an employee (to give hike or
to fire him)
Sudden fall in the sale of a product
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 Apart from the two there are some other
reports which are nothing but the variations
in these two
Key Indication Report
Exception Report

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 Key Indication Reports
Variation of periodic report
These reports are requested when a manager
wish to monitor certain critical aspects of
operation at frequent level
Example : from past 10 days IT 7th sem students are
frequently bunking classes
now management may want a attendance report of the
class everyday or it may ask the information of only
those students who are bunking.
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 Exception Reports
Only those information items which will be of
particular interest to a manager are reported
Exceptions can also be added to normal reports
There are few ways of doing that
Prepare report only when exception occurs [employee
overtime]
Highlight the exception [while incorporating with normal
report]
Show variance from normal [actual activity is compared
with planned activity]
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 Ex.
Employee assessments, identify any event
related to the employee that falls outside the
scope of the basic expectations associated with
job position.
Inventory Reconciliation (Restoring), to find out
the differences between a physical inventory and
database inventory..if match is not fount in the
count of any particular item it is then added to
exception report.

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MODELS

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 Schematic description of a system, theory or
phenomenon and use it for further study of
its characteristics.

Models

Narrative Physical Graphical Mathematical

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 Narrative Model
Written or spoken description of something

Physical Model
Physically exists like 3d models

Graphical Model
A diagram usually 2 dimensional like graph, chart

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 Mathematical Model
It uses symbolic notations and mathematical
equations to represent a system. System
attributes are represented by mathematical
functions that interrelates the variables.

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 A mathematical model is represented by 3
dimensions

Influence of Degree of Ability to achieve

Time certainty optimization

Sub
Static Dynamic Probabilistic Deterministic Optimizing
Optimizing

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 Static or Dynamic Model
A Static model does not include time as a variable.
A Dynamic mathematical model allows the changes
of system attributes to be derived as a function of
time.
Probabilistic or Deterministic Model
When an event is not certain then the uncertainty is
measured in terms of probability
A model that includes probabilities is called a
probabilistic model. Otherwise it is Deterministic
model.
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 Optimizing or Sub optimizing Model
Optimization To make as perfect or effective as
possible
An Optimizing model is one that selects the best
solution among the alternatives. For a model to be
able to do this, the problem must be very well
structured.
A Sub-Optimizing model, permits the manager to
enter a set of decisions, once this step is completed
the model will project an outcome.
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 Advantages
Provides predictive power
Less expensive than trial-and-error method

Disadvantages
Difficult to model a business system
High degree of mathematical skills required

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HUMAN FACTOR
CONSIDERATION

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 Behavioural influences that can affect the
performance of employees as they perform
their computer related tasks are regarded as
human factors considerations.
Most Important factor is Fear
Replacement of people by computers
Supervisors and line workers are affected

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 How employees express their fears?
If employees are afraid of the computer, they may
react in various ways. The healthiest response is to
openly express their fears to management.
Management then has the opportunity to respond
and put the fears to rest.
How managers expressed their fears?
At times the managers in one functional area do not
want to share their information with others. They feel
that they have gathered the information and should
be able to control its use
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 Use computer as a means of achieving job
enhancement by giving redundant, boring work to
computer and challenging tasks to employees.

Use formal communications to keep employees aware

of firms intentions

Build a relationship of trust with employees

Align employees needs with firms objectives

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MIS & Problem
Solving

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 Problem here is considered as a condition that
has the potential to cause exceptional harm or
produce exceptional benefit.

Managers respond quickly to harmful influences,

as well as the things that are going wrong.

They also spot performance that is going

exceptionally well and act to make it even better
or to achieve the same good performance in
other areas.
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 Current State
What is the current achievement of system
Desired State
What should system be achieving
Problem
If the current state and the desired state are the
same, there is no problem and the manager takes no
action. If the two states are different, some problem
is the cause and must be solved.
The difference between two state represents
solution criterion
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 Solution
Based on solution criterion manager comes up with
solutions
Alternative Solutions
He also identifies alternative solutions. Information
system evaluates those solutions to select the optimized
solution.
Constraints
Environmental and organizational constraints must be
considered while evaluating the solutions
Problem Solver
Can be manager or computer or both
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 For example: if the standard is to sell a
minimum of 125 jackets a day and sales are
averaging 75 jackets.
Current state - ?
Desired State ?
Problem ?
Solution Criterion -
Solution ?

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 Current state - 75 jackets
Desired State 125 jackets
Problem current desired
Solution Criterion - 50 Jackets
Solution Increase the sell by 50 jackets, can be achieved
in many ways... Salesman should do overtime, different
area should be selected for sale etc.

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 Structured Problem
consists of elements and proper relationships
between elements , which are well understood by
problem solver
This type of problem can be solved by computer with
managers involvement.

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 Unstructured Problem
Contains no element or relationships between
elements that are understood by the problem
solver.
Manager has to do most of the work in solving
unstructured problem
Example: personnel problem that exist in a
department, where the employees cannot work as
a team because of behavioural differences.

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 Semi Structured Problem
contains some elements or relationships that are
understood by the problem solver.
The manager and the computer can jointly work
towards a solution.

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 MIS and its organizational subsystems
contribute to problem solving in two basic ways:
Organization wide information resources
Provides problems solving information
Sets stage for accomplishment in other areas such as DSS, and
knowledge-based
Problem identification and understanding
Main idea is to keep information flowing to the manager
Manager uses MIS to signal impending(upcoming) problems

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 A Systematic approach to Problem solving is called the
Systems Approach.
It consists of three phases:
Preparation Effort
View the firm as system, identify its environment and subsystems

Definition Effort
Where is problem and what is the cause
Does new data need to be gathered if yes then how and from where

Solution effort
Identify alternative solutions , evaluate them and select the best
one.
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 Projects may collapse
Would to be costlier
Unorganized working
No body would take responsibility
Leads to wrong estimation/solution

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IT Infrastructure for
Digital Firm

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 How are Information systems transforming
Organizations and Management?

How has internet and Internet Technology

transformed the business?

Major Management Challenges to build and

use Information Systems

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 Digitally enabled relationships with customers,
suppliers, and employees

Core business processes accomplished via digital

networks

Digital management of corporate assets

Rapid sensing and responding to environmental

changes

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 Environment

Organization
Information System

Processing
Classify
Input Output
Arrange
Calculate

Feedback

Stockholders
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 TECHNICAL APPROACHES

COMPUTER
OPERATIONS
SCIENCE
RESEARCH
MANAGEMENT
SCIENCE
MIS
SOCIOLOGY

PSYCHOLOGY POLITICAL SCIENCE

BEHAVIORAL APPROACHES
Figure 1-5
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Tools managers use to cope with change

Hardware: Physical equipment

Software: Detailed preprogrammed

instructions

Storage: Physical media for

storing data and the software

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 Communications Technology: transfers data
from one physical location to another

Networks: link computers to share data or

resources

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