MANAGEMENT

INFORMATION SYSTEM

1
• Information meaningful data (facts)
• Societies mainly depend on the information
• Information support to achieve desired objectives
• Planning, organizing, decision making, …
• IS process (handle) the data to be useful information
• Through H/W, S/W, telecommunication, DB
• IS computer systems related to process data and provide
required information
• ATMs, airline reservation systems, course reservation systems

Data Process Information

Role of IS in business today

• IS transform (improve) business today. How?

1. Creating globalization opportunities: Internet reduced costs

of operating, on global scale for Customers and firms, Using
foreign markets, easily replicate service such as Google and
ebay
2. Helps the emerging digital firm: The business relationships
in digital firm are digitally enabled and mediated and It’s core
business processes are accomplished through digital networks.
Firms invest heavily in IS to achieve 6 strategic
business objectives
(why firms use IS?).

1.Operational excellence
2.New products, services, and business models
3.Customer and supplier understanding
4.Improved decision making
5.Competitive advantage
6.Survival
1. Operational excellence:

• IS Improvement of efficiency of operation to attain higher

profitability

• IT tool to achieve greater efficiency and productivity

2. New products, services, and business models

• Business model: describes how company produces, delivers,

and sells product or service to create wealth
• Information systems and technology a major enabling tool for
new products, services, business models
• E.g. Apple’s iPod, iTunes and Netflix’s Internet-based
DVD rentals
3. Customer and supplier understanding

• Serving customers well leads to customers returning, which

raises revenues and profits
• E.g. High-end hotels that use computers to track customer
preferences and use to monitor and customize environment
• Understanding with suppliers allows them to provide vital
inputs, which lowers costs
4. Improved decision-making
• Without accurate information:
• Managers must use forecasts, best guesses, luck
• Leads to:
• Overproduction, underproduction of goods and services
• Misallocation of resources
• Poor response times
• Poor outcomes raise costs, lose customers
• IS provide real-time data for making decisions
• E.g. Verizon’s Web-based digital dashboard to provide managers with real-time data on
customer complaints, network performance, line outages, etc.
5. Competitive advantage

• Achieve higher sales and profit through using IS by:

• Doing things better
• Charging less for superior products
• real time Responding
• Using the internet is competitive advantage
• E.g. Dell: Consistent profitability over 25 years; Dell remains one
of the most efficient producer of PCs in world.
• But Dell has lost some of its advantages to fast followers-- HP
6. Survival

• Information technologies are necessity of doing business

• May be:
• Industry-level changes, e.g. Citibank’s introduction of ATMs
• Governmental regulations requiring record-keeping
• E.g. Toxic Substances Control Act, Sarbannes-Oxley Act
IS, data, information
• IS
• Set of interrelated components
• Collect, process, store, and distribute information
• By computers and software as a tool
• Support decision making, coordination, control, problem
analysis and create new product
• Provide solutions to challenges in business Env.
• Information vs. data
• Data are streams of raw facts
• Information is data shaped into meaningful form
IS: input, process, output, feedback
• IS: activities produce required information
• Input: Captures raw data from organization or external
environment
• Processing: Converts data into meaningful form
• Output: Transfers processed information to people or activities
that use it
• Feedback: Output returned to appropriate members of
organization to help evaluate or correct input stage
Functions of an Information System

An information system contains information about an organization and its

surrounding environment. Three basic activities—input, processing, and
output—produce the information organizations need. Feedback is output
returned to appropriate people or activities in the organization to evaluate
and refine the input. Environmental actors, such as customers, suppliers,
competitors, stockholders, and regulatory agencies, interact with the
organization and its information systems.
Computer/Computer program vs. information
system

• Computers and software are technical foundation and tools to

store and process information
• similar to the material and tools used to build a house
• Cannot produce required information to a particular organization
Dimensions (boarders) of IS
• Understanding of IS dimensions is IS literacy
• Where computer literacy is focus on primarily on knowledge of
IT
• MIS try to achieve this boarders, deals with behavioral and
technical issues surrounding development, use and impact of IS
in the firm.
Organizational dimension of IS
• Structure: different levels and specialties
• hierarchy of authority, responsibility: Senior Middle
Operational management, Knowledge service Data workers
• Business process: Organization coordinate its work through its
hierarchy and business process
• Culture : ways of doing things, part is embedded in IS.
Levels in a Firm
Management dimension

• Make decisions, formulate action plan and solve organizational

problem
• Managers set organizational strategy for responding to business
challenges
• In addition, managers must act creatively:
• Creation of new products and services
• Occasionally re-creating the organization
Technology dimension
• IT is:
• Hardware: physical component
• Software: instruction control Hardware
• Data management technology
• Network and telecommunications technology
• Network: Hardware + Software link computers
• Internet: Network to provide services
• WWW: service to store retrieve information
• IT infrastructure: platform that the firm can built on its IS
Business perspective on IS:

• IS instrument for creating value to firms

• Investments in IS result in superior returns:
• Increases productivity and revenue
• IS provides information that helps managers making better
decisions and improve the execution of business process
• Value of IS
There variation in Returns on
Information Technology Investment
• Investing in information technology does not guarantee good returns

• Considerable variation in the returns firms receive from systems

investments

• Factors that case The variation in Returns :

• Adopting right business model according (suite) to new technology
• complementary investments (business processes, models,
management behavior and culture)
Modern Approaches to Information Systems
Technical approach:
• Emphasizes mathematically based models

• Computer science theories of commutation ,data storage

• Management science: models of DM and practices

• operations research: optimizing selected parameters of org.

 Behavioral approach

Behavioral issues such strategic business integration,

implementation...

• Psychology: how decision makers use formal information

• Economics: how IS change the control and cost structures

• Sociology: how system affect individuals and groups

Meaning Of Information
Systems
• An information system is an organized combination of people,
hardware, software, communications Networks and data
resources that collects, transforms, and disseminates information
in an organization.

25
Types Of Information System

26
MANAGEMENT INFORMATION SYSTEM(MIS)

• The MIS is defined as a system based on the database that is

evolved for the purpose of providing information to the people in
the organization.

27
• Management information systems are distinct from regular
information systems in that they are used to analyze other
information systems applied in operational activities in the
organization. MIS involve three primary resources: technology,
information, and people.
• Management information systems are regarded to be a subset of
the overall internal controls procedures in a business, which cover
the application of people, documents, technologies, and
procedures used by management accountants to solve business
problems such as costing a product, service or a business-wide
strategy.

28
Role Of MIS
• The role of MIS in an organization can be compared to the role of heart
in the body. The information is the blood and MIS is the heart. In the
body the heart plays the role of supplying pure blood to all the elements
of the body including the brain.
• The system ensures that an appropriate data is collected from the
various sources, processed, and sent further to all the needy destinations.
• The system is expected to fulfill the information needs of an individual,
a group of individuals, the management functionaries: the managers and
the top management.
• The MIS satisfies the diverse needs through a variety of systems such as
Query Systems, Analysis Systems, Modeling Systems and Decision
Support Systems.
• The MIS helps in Strategic Planning, Management Control, Operational
Control and Transaction Processing.

29
Characteristics
of MIS
• Management-oriented: The basic objective of MIS is to provide
information support to the management in the organization for
decision making.
• Management directed: When MIS is management-oriented, it
should be directed by the management because it is the management
who tells their needs and requirements more effectively than
anybody else.
• Integrated: It means a comprehensive or complete view of all the
subsystems in the organization of a company.
• Common data flows: The integration of different subsystems will
lead to a common data flow which will further help in avoiding
duplicacy and redundancy in data collection, storage and processing.

30
• Heavy planning-element: The preparation of MIS is not a one or
two day exercise. It usually takes 3 to 5 years and sometimes a
much longer period.
• Subsystem concept: When a problem is seen in 2 sub parts, then
the better solution to the problem is possible.
• Common database: This is the basic feature of MIS to achieve the
objective of using MIS in business organizations.
• Computerized: MIS can be used without a computer. But the use
of computers increases the effectiveness and the efficiency of the
system.
• User friendly/Flexibility: An MIS should be flexible.
• Information as a resource: Information is the major ingredient of
any MIS.

31
Features of MIS

• Timeliness
• Accuracy
• Consistency
• Completeness
• Relevance

32
Components of MIS
1) Marketing Research System (MRS)
Marketing research can be seen as the systematic and objective
search for and analysis of data and information relevant to the
identification and solution of any problem in the field of marketing.

2) Marketing Intelligence System (MIS)

The process of acquiring and analyzing information in order to
understand the market (both existing and potential customers); to
determine the current and future needs and preferences, attitudes and
behavior of the market; and to assess changes in the business
environment that may affect the size and nature of the market in the
future.

33
3) Internal Record System (IRS)
Marketing managers rely on internal reports on orders, sales,
prices, costs, inventory levels, receivables, payables, and so on. By
analyzing this information, they can spot important opportunities
and problems.

4) Decision Support System(DSS)

A decision support system (DSS) is a computer-based information
system that supports business or organizational decision-making
activities. DSSs serve the management, operations, and planning
levels of an organization and help to make decisions, which may
be rapidly changing and not easily specified in advance.

34
Aim of Management Information
System
• The main aim of MIS is to inform management and help
them make informed decisions about management and the
way the business is run.

35
Types Of MIS
• Transaction processing systems: These systems process a large
volume of routine, recurring transactions.
• Operations information systems: These systems gather
comprehensive data, organize it and summarize it in a form that
is useful for managers.
• Decision support systems: These systems help mangers with
the necessary information to make intelligent decisions.
• Expert systems: They are meant to mimic humans in making
decisions in a specific field.

36
Elements of MIS
1. Hardware
2. Software
3. Databases and application programs
4. People
5. Telecommunications and Networks
6. Business Procedures

37
Outputs Of a MIS
• Scheduled reports which are produced periodically, or on a
Schedule (daily, weekly, monthly).
• Key-indicator report which summarizes the previous day’s critical
activities and also it is typically available at the beginning of each
day.
• Demand report which gives certain information at a manager’s
request.
• Exception report which is automatically produced when a situation
is unusual or requires management action.

38
Benefits of MIS
• It improves personal efficiency.
• It expedites problem solving(speed up the progress of problems
solving in an organization).
• It facilitates interpersonal communication
• It promotes learning or training.
• It increases organizational control.
• It generates new evidence in support of a decision.
• It creates a competitive advantage over competition.
• It encourages exploration and discovery on the part of the decision
maker.
• It reveals new approaches to thinking about the problem space.
• It helps automate the Managerial processes.

39