Management Information System

05MBA15

Text Books:
► MIS: Kenneth J Laudon 2003 ed.
► MIS: James A O’Brien 2004 ed.
► MIS : W.S. Jawadekar 2004 ed
► Principles of Information Systems: Ralph M Stair
 Module 1
Introduction to Information Systems

 Management
 Information and Data
 Systems : Open and Closed
 MIS Definition: An integrated system of man and machine for
providing the information to support the operations and
management during decision making
 Also called as CBIS (computer based information system)
 Explanation about Pyramid structure of MIS with transactional,
operational, tactical and Strategic levels
 Why do we need a Computer-Based Information
Systems?

 The size of organizations is becoming larger( True in India due to

increase in population and rapid rate of industrial development)
 Computer based processing enables the same data to be processed
in many ways based on needs
 Organizations are now distributed with many branches
 Markets are becoming competitive
 Government regulations have become complex and organizations
have to interact more with outside
 Environment demands more up to date and accurate information
 Design of an Information System

1. Requirements determination: determine requirements to be met

by system with priorities
2. Requirements specification: detailed specifications of
information, revised user requirements
3. Feasibility analysis: availability of resources such as human,
computer, time and money
4. System design: logical design of programs, DBs, tests,
implementation plans
5. System implementation: training users and installation
6. System evaluation: find out from users if system meets their
needs
7. System modification: adding/deleting features to satisfy user
 Importance of MIS

 A simple definition of MIS :a computer – based system that

provides flexible and speedy access to accurate data
 Management emphasizing the ultimate use of such ISs for
managerial decision making rather than only stressing on
technology
 Information highlighting on processed data than raw data and
used by managers and other users
 Systems emphasizing a fair degree of integration and holistic
view
 MIS is important to both computer science and management
 MIS provides information for following applications
 Importance of MIS

 Oil and space exploration

 Weather forecasting, market analysis
 Financial planning, production planning
 HRM , Transportation
 Communications, heavy industry
 Chemicals
 Small scale industry
 Health care
 tourism
 Hospitality industry
 Education and research
 Evolution of MIS

 Computers were started to use from 1954 in America

 EDP included activities of data processing such as wage
calculation, material accounting, invoicing and billing
 1970 digital computers with COBOL programming languages
 1980 PCs revolution provided direct user involvement, steady
performance, user friendly and GUIs etc.,
 Direct support of decision making with what-if leads to DSS
 Replacement of managers by computers lead to KBSs such as
Expert systems and Artificial Intelligence (ES & AI)
 EDP-- MIS--DSS-ESs--AI
 Why Information Systems?

The competitive business environment

 The emergence and strengthening of the global economy
 Competition in world market
 Global work groups and delivery systems
 Transformation of industrial economies and societies into
Knowledge Based Systems (KBSs)
 New products and services
 Time based competition
 Shorter PLC, limited employee KB, leadership
 Transformation of business enterprise
 Collaborative work and team work
 Decentralization, low transaction costs
 Location independence, flexibility
 What is an Information System?

The information system: interrelated components working

together to collect, process, store information to support
decision making, coordination, control, analysis, and
visualization in an organization
Input: the collection of raw data from within the organization or
from its external environment
Processing: the conversion, manipulation and analysis of raw input
into a form more meaningful to humans
Output: the distribution of processed information to the people
where it will be used
Feedback: output that is returned to the appropriate members of the
organization to help them to correct input
 A business perspective on information systems

From the business perspective, an information system is an

organizational and management solution, based on
information technology, to a challenge posed by the
environment
 Organizations consists of standard operating procedures,
knowledge workers, data workers
 Major organizational functions include
 Sales and marketing: selling organization’s products, service
 Manufacturing: producing products and services
 Finance: managing organization’s assets (cash,stocks,bonds)
 Accounting: maintaining financial records
 Human resources: recruiting, developing and maintaining labor
force and records
 Information Systems Technology

Information Systems Technology is one of many tools available

to managers for coping with change
 It utilizes computer hardware, software, storage, and
telecommunication technologies
 Computer Hardware: physical equipment used for input,
processing and output activities in an information system
 Computer Software: preprogrammed instructions that control
and coordinate work of computer hardware
 Storage Technology: physical media governing the storage
and organization of data
 Telecommunication technology: physical device and software
that link various computer hardware components and transfer
data from one physical location to another
 Key System Applications in the Organization

The organization is divided into

 strategic,
 management,
 Knowledge, and
 operational levels
Further divided into functional areas such as
• sales and marketing
• Manufacturing
• Finance
• Accounting
• Human resources
 Different kinds of Systems

Operational level systems:

 Support operational managers by keeping track of elementary
activities and transactions such as sales, receipts, cash deposits,
payroll, flow of materials
Knowledge level systems:
 Help the business firm integrate new knowledge into the
business and control the flow of paper work
Management level systems:
 Designed to serve the monitoring, controlling, decision-
making, and administrative activities of the middle level
managers
Strategic level systems:
 Support long range planning activities of senior management
 Six major types of Systems

Transaction processing systems (TPS):

 Computerized systems that perform and record the daily
routine transactions necessary to conduct the business
 They serve the operational level of the organization
Knowledge work systems (KWS):
 Aid the knowledge workers in the creation and integration of
new knowledge in the organization
Office Automation systems (OAS):
 Computer systems such as word processing, e-mail, and
scheduling systems that are designed to increase the
productivity of data workers in the office
 Contd…
 Six major types of Systems

Management Information systems (MIS):

 Serve the functions of planning, controlling and decision
making by providing routine summary and exception reports
Decision Support Systems (DSS):
 They combine data and sophisticated analytical models to
support semi-structured and un structured decision making
Executive Support Systems (ESS):
 At the strategic level of the organization designed to address
unstructured decision making through advanced graphics and
communications
 Refer pp 29 fig 1.14 MIS, Laudon text
 The challenge of Information Systems: Key
Management issues

 The strategic business challenge: how can business

use IT to design organizations that are competitive
and effective?
 Redesigning
 Simplify communication and coordination
 Eliminate unnecessary work
 Eliminate inefficiencies in organizational structures
 Rethinking of way of designing, production,
delivering, maintain goods and services
 The challenge of Information Systems: Key
Management issues

 The globalization challenge: how can firms

understand the business and system requirements of a
global economic environment
 Global hardware
 Global software
 Global communication standards
 Cross cultural accounting and reporting
 The challenge of Information Systems: Key
Management issues

 The information Architecture challenge: how can

organizations develop an information architecture
that supports their business goals?
 Supporting new way of doing business
The information systems investment challenge: how can
organizations determine the business value of
information systems?
 Powerful inexpensive computers
 ROI
 Should competitors get more?