Management Information System

Lecture Notes for BBA Sem V Jyoti K Arora

Differences between Data and Information

Data consists of facts and figures that are relatively meaningless to user. E.g. the number of hours worked for each employee in the company Information is processed data that are more meaningfully. E.g. the hours works for each employee multiplied by the hourly rate, the out put information is the gross earning

Transforming Data Into Information

Data Inputs External Internal Capture Data Data Decision Outcome Manipulation Expert-System Advice Storage Transaction Document Information Outputs Query Response

Provision of Access at User Location

Organization Environment Information System
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Report

Information System within an Organization

FUNCTIONS OF AN INFORMATION SYSTEM

ENVIRONMENT
Customers Suppliers

ORGANIZATION
INFORMATION SYSTEM
INPUT PROCESS OUTPUT

FEEDBACK

Regulatory Agencies

Stockholders
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Competitors 1.10

Functions of an Information System Input the collection of raw data for processing information system Processing the conversion of data into information for more meaningful Output the distribution of processed information Feedback output that is returned to help evaluate or correct input

Management hierarchy:

Robert Anthony 3 levels of business activities Strategic management (Top management)

Exploring different markets, formulating policies, plans and budgets Facilitator role; scheduling, monitoring

Management control (Middle management)

Operational control (Operating management)

Process and control the basic products and services Raw matl procurement, selling of products, physical recording and posting of cheques

Interaction amongst the 3 levels:

Policies, plans, objectives and budgets of Top management Passed to middle mngt as Revenue, cost, profit goals Review and agreement Middle mngt issues specific schedules and operating goals along with yardsticks of measurement Operating mngt produce goods and services to meet the revenue and profit goals
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Definitions of Management Information Systems

A. Management: What is management?

Planning Organizing Leading Controlling Communicating

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Management: What is management?

1.

Planning

Goal setting Environmental scanning Forecasting Data collection

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Management: What is management?

2.

Organizing

Staffing Coordinating Delegating Understanding Procedures/ Policies

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Management: What is management?

3.

Leading

Authority Motivating Directing: Delegation of responsibilities activating Supervising Negotiation Persuading

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Management: What is management?

4.

Controlling: Resources- Money (capital), manpower (people), materials, machines, movement (Distribution, flow), and Information
Measuring Evaluating Reporting corrective action feed back

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Management: What is management?

5.

Communicating: Goals/Objectives, standards of desirability

Informing Persuading Negotiation Corrective action Listening

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MIS Activities

MIS is activities to manage information for problem solving and decision making in an entity by managed the following activities:

Acquiring information by gathering data and processed the data to be the valuable information efficiently Using the information in the most effective way Discarding the information at the proper time

Skills required in MIS

1.

Computer literacy
understanding of computer terminology a recognition of the strength and weakness of the computer an ability to use the computer

2.

Information literacy
Understanding how to use information at each step of problem solving process Understanding where information can be obtained Understanding how to share information with other

Computer-based information Subsystem

Electronic data processing (EDP) produces some information as by product of the accounting process called Accounting Information System (AIS) Management information system (MIS) the computer application should be implemented for the primary purpose of producing management information.

Computer-based information Subsystem

Office automation (OA) facilities of computer and communication that increase productivities for manager and office worker in conducting their activities Expert System (ES) computer application that can be used by managers in problem solving and decision making

Functional Information Subsystem

Human Resources Information System Manufacturing Information System

Manufacturing Intelligence Subsystem Industrial Engineering Subsystem

Financial Information System Marketing Information System

Marketing Research Subsystem Marketing Intelligence Subsystem

Sales & Marketing Systems

Systems that help the firm identify customers for the firms products or services, develop products and services to meet customers needs, promote products and services, sell the products and services, and provide ongoing customer support.
EXAMPLES Description Enter, process, and track orders Identify customers and markets using data on demographics, markets, consumer behavior, and trends Determine prices for products and services Organizational Level Operational Knowledge

System Order processing Market analysis

Pricing analysis

Management

Manufacturing and Production Systems Systems that deal with the planning, development, and production of products and services and with controlling the flow of production.
Examples System Description Machine control Control the actions of machines and equipment Computer-aided design (CAD) Design new products using the computer Production planning Decide when and how many products should be produced Facilities location Decide where to locate new production facilities Organizational Level Operational Knowledge Management Strategic

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Finance and Accounting Systems

Systems that keep track of the firms financial assets and fund flows.

Examples System Description Accounts receivable Track money owed the firm Portfolio analysis Design the firm's portfolio of investments Budgeting Prepare short-term budgets Profit planning Plan long-term profits

Organizational Level Operational Knowledge Management Strategic

Human Resources Systems

Systems that maintain employee records; Track employee skills, job performance, and training; And support planning for employee compensation and career development.
Organizational Level Operational Knowledge Management Strategic

Examples System Description Training and development Track employae training, skills, and performance appraisals Career pathing Design career paths for employees Compensation analysis Monitor the range and distribution ofemployee wages, salaries, and bene6cs Human resources planning Plan the long-term labor force needs of the organization

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Transaction Processing Systems (TPS):

Basic business systems that serve the operational level A computerized system that performs and records the daily routine transactions necessary to the conduct of the business

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

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MIS from TPS

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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Knowledge Work Systems (KWS): Knowledge level Inputs: Design specs Processing: Modeling Outputs: Designs, graphics Users: Technical staff and professionals Example: Engineering work station

Management Information System (MIS): Management level Inputs: High-volume data Processing: Simple models Outputs: Summary reports Users: Middle managers Example: Annual budgeting

Management Information System (MIS)

Structured and semi-structured decisions Report control oriented Past and present data Internal orientation Lengthy design process

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Decision Support System (DSS):

Management level Inputs: Low-volume data : selected data for specific purpose Processing: Interactive & dependent on multiple variable Outputs : Decision analysis using advance software tools. End Users : Middle Mangers ,Professionals, Support staff Decision support system (DSS) an information producing system aimed at a particular problem that a manager must solve and decision. Example: Product Contract cost analysis Activity based costing ( ABC Costing ), Voyage estimation

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Executive Support System (ESS): Strategic level Inputs: Aggregate data Processing: Interactive Outputs: Projections Users: Senior managers

Example: Business plan >36 months

Executive support system (ESS)

Top level management Designed to the individual Links CEO, CFO, CMO, CIO ,COO at all levels Very expensive to keep up

Extensive support staff

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

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Summarize the different types of system with level of management involved

INTERRELATIONSHIPS AMONG SYSTEMS

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Management Information Systems

I. MIS as an evolving concept

1. MIS: Many companies are now using their computers to provide information for decision making; that is, they are using a management information system. 2. MIS can provide managers with information in a usable from. A MIS is a formal Inf network using computers to provide management information for decision making The goal of MIS is to provide the correct information to the appropriate manager at the 45 right, in a useful from.

MIS as an evolving concept

3. Successful MIS must provide inf that can be applied:

MIS should known who the users are MIS should provide the information the user needs MIS should provide the information in the format the user can understand.

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MIS defined : A system for transforming data in to information & knowledge needed to support managerial decision based on predictable patterns of activities. It must provide vertical level of integration & feedback & control.

Evolution MIS Organizational wisdom

KBS
DSS/ ESS MIS IS EDP Analytic Analytic , integrated & contextual, experienced based Analytic & integrated

Repetitive
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Integrating Business Enterprise.

Mail & messaging Internet WEB Based promotion

Collaborative Engg
ERP Supplier SCM Organization CRM Customer

Intranet

Business Intelligence tool

DRP Work Flow system

Information Specialists

System analyst is an expert who works with user in developing system at defining problems and in preparing written documentation of how the computer will assist in solving the problem. Database administrator works with user and system analyst in creating the data needed to produce the information needed by users

Information Specialists

Network specialist works with user and system analyst in establishing the data communication network that ties together widespread computing resources Programmers use the documentation prepared by the system analyst to create the software program that lead the computer to transform data into information needed by users Operators operates the computing equipment and using software program

Building & maintaining Enterprise system . Challenges to MIS are :

1 System to keep pace with technology change resulting in high rate of technology obsolescence.
2 Resistance in people to change with the new system, process & technology resulting in lack of feedback & control. 3 Process not scaled up /tunes to the need of the organization

4 Integration of system & subsystem for effective MIS

Main Reason interest in MIS

1.

Increasing Complexity of Business Activities influenced by:

International economic Worldwide Competition Increasing complexity of Technology Shrinking time frames

2.

Improving rapidly Computer Capabilities

Management Information Systems

MIS as a Discipline

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VIRTUAL ORGANIZATION
MANUFACTURING DESIGN

COMPANY

COMPANY

SALES & MARKETING COMPANY

CORE CO MPANY

LOGISTICS COMPANY

FINANCE COMPANY
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Sources of Management Information

Schematic

Employees Corporate databases of internal data Databases of external data Corporate intranet Decision support systems Executive support systems

Business transactions

Transaction processing systems

Databases of valid transactions

Management Management information information systems

Application databases

Operational databases

Drill-down reports Exception reports Demand reports Key-indicator reports

Expert systems

Input and error list

Scheduled reports

Outputs of a Management Information System

Scheduled reports

Produced periodically, or on a schedule (daily, weekly, monthly)

Summarizes the previous days critical activities Typically available at the beginning of each day Gives certain information at a managers request Automatically produced when a situation is unusual or requires management action

Key-indicator report

Demand report

Exception report

Management Information Systems for Competitive Advantage

Provides support to managers as they work to achieve corporate goals Enables managers to compare results to established company goals and identify problem areas and opportunities for improvement