CBMS 4303

Management Information System

TOPIC 1 :
INFORMATI
ON SYSTEM
So…do you have any idea on what
IS is ALL about??
1.1 INFO SYSTEM IN BRIEF

IT vs IS
1.1.1 Data, Information and
Knowledge
Data
• Basic fact or raw fact (text, diagram, graphics,
images, audio, video – meaningless)
• Example – weight, prices, costs, numbers of items
sold, employee names, product names, addresses,
tax codes, registration marks etc. Images, sounds,
multimedia and animated data.
Information
• Organized and meaningful interpretation which is
useful about the data
SALES REPORT FOR COMPANY ABC
SOURCES OF AIR POLLUTION IN MALAYSIA
Knowledge
• Consist of information that has been arranged and
processed to convey understanding, experience as well as
expertise which is to be used in solving current business
problems.
 What should we do to reduce the pollution?
- Sue the industry who contributed to the most percentage on air pollution in
Malaysia
 Self-Check!

• Give other example of Data,

Information and Knowledge
based on your understanding.
1.1.2 Information Technology
• a concept of using a computing platform that
includes hardware, software and
telecommunications to transmit information or
facilitate information communications.
1.1.3 Information System (IS)
• An information system (IS) is a combination of hardware,
software and telecommunication system to collect, process,
store and distribute information, which can support
business operations to increase productivity and help
managers make decisions.
 1.2 INFORMATION
MANAGEMENT
is a group of activities which involves the process of
obtaining information, used effectively and deleted at an
appropriate time.
• Managers must organise a number of resources such as
personnel, material, machines (including facilities and
energy), money and information (including data), so that
they can be implemented efficiently.
• An organisation’s resources can be divided into two
categories, namely, physical and conceptual.
• The resources mentioned earlier are physical resources,
except information, which is a conceptual resource.
• Both categories of resources are equally important to
the organisation. Conceptual resources are used to
manage physical resources.
Self-Check!

List down physical resources from the previous slide.

List down conceptual resources from the previous slide.

• The next question we should be asking are:
• Why do we need IS in the organisation?
• Why do organisations need to invest in IS?
• Generally, organisations and their employees rely on
information to conduct business as well as achieve their
strategic business objectives.
• Based on Laudon and Laudon (2018), there is a growing
interdependence between an organisation’s ability to use IT
and its ability to implement corporate strategies and
achieving corporate goals.
• Changes in strategy, rules and business processes increasingly
require changes in hardware, software, databases and
telecommunications.
• Thus, managers must give priority to information systems due
to several factors as shown in the following Figure 1.5.
(a) Emergence of the Global Economy

The economic growth in developed countries such as the United States, Europe
and Asia is mainly due to imports and exports.

Today, the ability to run a business globally will determine the success and the
future of the organisation.

Globalisation in the world industrial economy has opened up new opportunities

to businesses and has increased the importance of information to the
organisation.
(b) Transformation of Industrial Economies

The main industrial giants such as the United This is because knowledge and information
States, Germany and Japan are undergoing play a key role in gaining profits in the new
transition from an industrial-based economy economic era. Meanwhile, the
to a service-based economy, which is mainly manufacturing economy is shifting to
based on knowledge and information. developing countries.

These workers provide services that involve the

The number of workers in the service application of technology and information systems
to create and spread information and knowledge.
sectors such as sales, education, health,
Information-based services such as Web portals
banking and legal firms is higher than that in (Yahoo, Google), databases (IEEE, Lexis) and e-
the agricultural and manufacturing sectors. commerce (Amazon.com) are growing rapidly and
these firms have millions of workers.
(c) The Emergence of Digital Firms

A digital firm is one in which nearly all of the organisation’s significant

business relationships with customers, suppliers and employees are
digitally enabled and mediated. The core business processes are
accomplished through digital networks spanning the entire organisation
or linking multiple organisations (Laudon & Laudon, 2018).

Digital firms have more flexibility when

dealing with any economic changes due to its
faster responses towards the environment.

With this ability, digital firms are

able to operate globally and
continuously in a 24/7 mode.

Employees in a digital firm can be

based anywhere globally to support
the business objectives.
(d) Improvement on Operation Efficiency and
Decision-making

A good management will always find ways to improve the

operational process in the organisation. Managers will need to
rely on IS and IT to increase business operations, productivity
and efficiency, as well as making decisions.

This is especially so when dealing with any

environmental and economic changes.

For example, a finance department received

almost 20 to 40 supplier invoices daily that need
to be processed within 14 days upon receipt.

Traditionally, this would be impossible due to the several standard procedures

and workflows that need to be followed manually. By implementing a financial
information system (FIS), once the invoices are received, it will be captured by
the system and will trigger the next process electronically.

Hence, the approval process will be

handled automatically within a short time.
(e) Increasing Demand for New Products and
Services

Today’s business is totally different than those

from many years ago.

Customers are more demanding when it comes to meeting their needs

and satisfactions of products and services. Therefore, organisations
must be ready to create new products or services.

By doing so, they also need to create a new

business model that is relevant in the market.

Managers will need to use IS and IT as tools to

create new products or services.

With the information gathered from customer feedback, it will

be easier to provide a product that will satisfy the customers.

One of the most popular trend nowadays is creating

mobile applications to sell products or services.

Which one do you prefer, purchasing items from

your mobile phone or driving to the store?
1.3 INFORMATION SYSTEM (IS)
USER
An information system (IS) user is any individual who uses the IS
for a specific purpose, such as to access information, update
data, process information, conduct transactions and generate a
report.
1.3.1 Levels of Management
a) Level of Management
• Top Level Management
Also known as strategic management. Top-level
managers or top managers are also called senior
management or executives.
• Middle Level Management
Also known as control or tactical management.
• Bottom Level Management
Also known as operational management.
Table 1.2: Example of Job Scope for Various Management Levels of an Organisation
Strategic Planning (Top Level Management)

Strategic planning is a long-term plan

which defines the overall mission
and objectives of the organisation.

Strategic planning ensures that the long-term objectives

are met by analysing the strengths and weaknesses of
the organisation, forecasting future trends and predicting
new products or service development.

Strategic planning focuses on the issues

which will impact the expansion and the
position of the organisation in the future.

Top managers focus on the overall activities

of the business and use the IS to identify
the direction the organisation is taking.
Tactical Plan (Middle Level Management)

Tactical planning is short-term

planning, normally from one month
to one year.

This is an action framework

based on the strategic planning.

The middle manager will delegate power and

responsibility to the bottom level manager and
give instructions, resources and feedback on the
work.

Although the tasks are delegated, the middle

manager will definitely be involved in
monitoring, controlling, decision-making and
administrative activities.
Daily Plan (Bottom Level Management)

Daily planning is executed by the lower level

manager who leads the operation staff.

They will coordinate the operational tasks, solve problems

and guarantee the availability of important resources.

Every level of the management requires different types of information

systems which are based on their respective information needs.

Every level of management has different resources

and information providers, supported by the IS.

Environmental or external resources information is used more

by top management rather than lower level management.

Meanwhile, the lower level managers prefer to

obtain internal information.

This indicates that the top level manager prefers general information
compared to the lower level manager who prefers more detailed
information.
b) Functional Management

●
Managers also reside in a department in the organisation, which is known as unit or functional area.
●
In other words, every department in an organisation is managed by managers at the three levels of management.
●
Figure 1.7 shows the position of managers in the various levels of management and departments in the organisation.
●
An organisation has different combinations of departments but in general, the departments include finance and
accounting; sales and marketing; manufacturing and production; human resource and information service (also
known as IS, MIS and IT).
1.3.2 Functions of Managers

In 1914, Henri Fayol, a French theoretical management expert identified 5 main

functions of a manager:

●
Planning;
●
Organising;
●
Staffing;
●
Directing; and
●
Controlling the resources effectively.

Every manager at each level of management and department implements these

functions with a different focus, depending on the level of management.

Look at Figure 1.8, which shows the influence of the respective level of
management towards the focus on implementing management functions;
management functions can provide guidance in developing an IS.
1.3.3 Roles of Manager

In general, management means

the use of resources to achieve
goals effectively and efficiently.

In an organisation, managerial
roles are normally performed by
managers. What do you think is
the role of the manager?

Managerial roles can be

divided into three main
categories (refer to Figure 1.9).
1.3.4 Managerial Skills and Competencies

(a) Conceptual Skills

●
Conceptual skill refers to the ability of a manager to view the organisation as a whole, to recognise the
interactions among various subunits and to visualise how the organisation fits into its larger environment.
●
The need for conceptual skills becomes increasingly crucial when managers progress higher in the
management hierarchy.
●
This skills are useful in any problem-solving task by looking into the overall aspect of situations that can affect
the organisation.
1.3.4 Managerial Skills and Competencies
(cont.)

(b) Human (Interpersonal) Skills

●
Interpersonal or human skill is the ability to get along with others while getting the job done.
●
Interpersonal skills range from communication and listening skills to the attitude and the mannerism of the
individual.
●
Interpersonal skills are critical, regardless of the levels of management.
●
However, a lower-level manager will be more preoccupied with solving technical problems with his subordinates;
while a manager at the middle or top level will be more preoccupied with dealing directly with others.
1.3.4 Managerial Skills and Competencies
(cont.)

(c) Technical Skills

●
Technical skill is the ability to apply procedures, techniques and specialised knowledge to relevant tasks.
For example, the manager of data analysts needs to understand not only how to analyse data but how
to store it, code it as well as retrieve it because data analysts are engaged in all of these tasks.
●
Technical skills tend to be more important for lower-level managers. This is because lower-level managers
usually manage employees who use tools and techniques to produce the organisation’s products and
services.
1.3.5 Manager’s Knowledge
• Besides the basic skills, managers need to be both
information and computer literate, which are
important skills when utilising computers.
(a) Computer Literacy

Computer literacy refers to the basic

knowledge that must be possessed
by computer users so that they can
operate the computer efficiently.

The basic knowledge is the brief understanding of

computer technology such as the functions of a
mouse, monitor and CPU, knowing the advantages
and disadvantages of computers and the ability to
use a computer (not necessarily being able to write
computer programs).

On top of that, the users should

also be up-to-date with the
latest technology.
(b) Information Literacy

Apart from computer literacy,

managers need to possess
information literacy.

Information literacy refers to the

understanding of the use of
information at every level of the
problem-solving process and knowing
how to search for information
resources and how this information
can be shared for mutual benefit.
Computer and information literacy do not depend on
each other, even though they are related and
complement each other. Some managers are
information literate
but lack computer literacy. However, it would be ideal
if managers acquire both skills.
1.4 TYPES OF INFORMATION
SYSTEMS
 Introduction
• Information systems are developed based on the
functional activities at the organisational functional level.
• Examples of information systems are:
• Accounting Information System (AIS)
• Transaction Processing System (TPS)
• Management Information System (MIS)
• Office Automation System (OAS)
• Decision Support System (DSS)
• Executive Information System (EIS)
• Expert System (ES).
Table 1.3: Six Types of Information Systems
Table 1.3: Six Types of Information Systems
(cont.)
 Let us now look into how the different types of information
systems integrate with each other to create a complete IS
solution for the organization. Based on Laudon and Laudon,
Figure 1.11 shows how a typical MIS transforms transaction-
level data from inventory, production and accounting into MIS
files that are used to provide managers with comprehensive
reports.
The three TPS supply summarised
transaction data to the MIS reporting
system at the end of the time period.
Managers gain access to the
organisational data through the MIS,
which provides them with the appropriate
reports.
 1.5 INFORMATION SYSTEM (IS)
DEPARTMENT
The IS department develops and maintains the organisation’s
IS. The department is also known as the information service
department, IT department or MIS department. The structure
and department name might be different depending on the
organisation. In a small organisation, a multi-tasking
individual can handle all tasks related to the IS while in a huge
organisation, there might be many units in the IS department
and many employees to execute specific work for every unit.
Figure 1.12 shows the general organisational chart for an IS
department.
1.5.1 Information Expert
• Information experts are members of the staff who
are responsible for the development and
organisation of the firm’s IS.
Basically, there are 5 categories
of information experts, namely:
(a) System analysts (SA)
• Develop a new system or upgrade the current
system.
• System analysts will define a problem, document
the analysis, create the system design and develop
the recommended system.
• Interaction and cooperation from the user and the
management is needed in developing a system
which fulfils the user’s needs.
(b) Database administrators
• Develop and maintain the database, which consists
of the required data for producing information for
users.
(c) Network administrators
• Develop and maintain data communications which
connects and allows the sharing of computer
resources.
• Internet development has created new experts in
this field, known as Web masters or Web designers.
(d) Programmers
• Write the programming codes using the
programming language based on the design
documentation, earlier written by the system
analysts.
• The programmers also test the written program to
ensure it is bugfree from any syntaxes and logical
errors.
(e) Computer operators
• Operate large-scale computers such as the main
framework and minicomputer.
• They operate the routine jobs, operate the printers’
data storage and help users troubleshoot.
 1.6 CHANGES AND IMPACT ON
MANAGEMENT INFORMATION SYSTEM
(MIS)
With the emergence of new technology in the IT world, MIS has
become more relevant as a competitive advantage for any
business or organisation. As a customer, we will always look
for the best services and value provided by these businesses or
organisations at a reasonable cost. How can these businesses
and organisations sustain their offerings to the customers?
Nevertheless, the answer is by ensuring their MIS are equipped
with the latest trends and technology available. Let’s look
further on the latest trends and technologies that have a
significant impact on MIS and the businesses (see Table 1.4).
 Table 1.4: Major New Trends in
Business Uses of Information Systems
Table 1.4: Major New Trends in Business
Uses of Information Systems (cont.)
Table 1.4: Major New Trends in Business
Uses of Information Systems (cont.)