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
3

Report

Information System within an Organization

FUNCTIONS OF AN INFORMATION SYSTEM

ENVIRONMENT
Customers Suppliers

ORGANIZATION
INFORMATION SYSTEM
INPUT PROCESS OUTPUT

FEEDBACK

Regulatory Agencies

Stockholders
6

Competitors 1.10

7 .

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  .

formulating policies. selling of products. physical recording and posting of cheques . monitoring  Management control (Middle management)   Operational control (Operating management)   Process and control the basic products and services Raw matl procurement. plans and budgets Facilitator role.Management hierarchy:   Robert Anthony – 3 levels of business activities Strategic management (Top management)  Exploring different markets. scheduling.

Interaction amongst the 3 levels:      Policies. 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 10 . plans. objectives and budgets of Top management Passed to middle mngt as Revenue. cost.

AK ISMS SEM II 2005 11 .

Management: What is management?      Planning Organizing Leading Controlling Communicating 13 .Definitions of Management Information Systems  A.

 Planning Goal setting  Environmental scanning  Forecasting  Data collection 14 .Management: What is management?  1.

 Organizing Staffing  Coordinating  Delegating  Understanding  Procedures/ Policies 15 .Management: What is management?  2.

Management: What is management?  3.  Leading Authority  Motivating  Directing: Delegation of responsibilities activating  Supervising  Negotiation  Persuading 16 .

materials.Money (capital).Management: What is management?  4. Controlling: Resources. machines. flow). movement (Distribution. and Information Measuring  Evaluating  Reporting  corrective action  feed back  17 . manpower (people).

standards of desirability Informing  Persuading  Negotiation  Corrective action  Listening  18 .Management: What is management?  5. Communicating: Goals/Objectives.

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.  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 literacy understanding of computer terminology a recognition of the strength and weakness of the computer an ability to use the computer  2.

 .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 .

promote products and services. sell the products and services. markets. and provide ongoing customer support.Sales & Marketing Systems  Systems that help the firm identify customers for the firm’s products or services. and track orders Identify customers and markets using data on demographics. process. EXAMPLES Description Enter. develop products and services to meet customer’s needs. consumer behavior. and trends Determine prices for products and services Organizational Level Operational Knowledge System Order processing Market analysis Pricing analysis Management .

and production of products and services and with controlling the flow of production.Manufacturing and Production Systems  Systems that deal with the planning. 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 26 . development.

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 .Finance and Accounting Systems  Systems that keep track of the firm’s financial assets and fund flows.

And support planning for employee compensation and career development. and training.Human Resources Systems  Systems that maintain employee records. salaries. and performance appraisals Career pathing Design career paths for employees Compensation analysis Monitor the range and distribution ofemployee wages. and bene6cs Human resources planning Plan the long-term labor force needs of the organization . Organizational Level Operational Knowledge Management Strategic Examples System Description Training and development Track employae training. job performance. skills. Track employee skills.

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 AK ISMS SEM II 2005 30 .

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS AK ISMS SEM II 2005 31 .

MIS from TPS AK ISMS SEM II 2005 32 .

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     .

Example: Product Contract cost analysis Activity based costing ( ABC Costing ).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. Voyage estimation . Support staff Decision support system (DSS) – an information producing system aimed at a particular problem that a manager must solve and decision.  End Users : Middle Mangers .Professionals.

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 .

COO at all levels Very expensive to keep up     Extensive support staff . CIO . CMO. CFO.Executive support system (ESS)  Top level management Designed to the individual Links CEO.

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS AK ISMS SEM II 2005 40 .

Summarize the different types of system with level of management involved .

INTERRELATIONSHIPS AMONG SYSTEMS .

AK ISMS SEM II 2005 43 .

44 .

. that is.Management Information Systems  I.  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. they are using a management information system. 2. MIS as an evolving concept   1. MIS can provide managers with information in a usable from. in a useful from. MIS: Many companies are now using their computers to provide information for decision making.

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.  46 .MIS as an evolving concept  3.

integrated & contextual. Evolution MIS Organizational wisdom KBS DSS/ ESS MIS IS EDP Analytic Analytic . It must provide vertical level of integration & feedback & control. experienced based Analytic & integrated Repetitive AK ISMS SEM II 2005 47 .MIS defined : A system for transforming data in to information & knowledge needed to support managerial decision based on predictable patterns of activities.

Mail & messaging Internet WEB Based promotion Collaborative Engg ERP Supplier SCM Organization CRM Customer Intranet Business Intelligence tool DRP Work Flow system .Integrating Business Enterprise.

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 .

3 Process not scaled up /tunes to the need of the organization 4 Integration of system & subsystem for effective MIS . 2 Resistance in people to change with the new system. Challenges to MIS are : 1 System to keep pace with technology change resulting in high rate of technology obsolescence. process & technology resulting in lack of feedback & control.Building & maintaining Enterprise system .

Increasing Complexity of Business Activities influenced by: • • • • International economic Worldwide Competition Increasing complexity of Technology Shrinking time frames 2. Improving rapidly Computer Capabilities .Main Reason interest in MIS 1.

Management Information Systems MIS as a Discipline 54 .

55 .

56 .

VIRTUAL ORGANIZATION MANUFACTURING DESIGN COMPANY COMPANY SALES & MARKETING COMPANY CORE CO MPANY LOGISTICS COMPANY FINANCE COMPANY 57 .

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 .

monthly) Summarizes the previous day’s critical activities Typically available at the beginning of each day Gives certain information at a manager’s request Automatically produced when a situation is unusual or requires management action  Key-indicator report     Demand report  Exception report  . weekly. or on a schedule (daily.Outputs of a Management Information System  Scheduled reports  Produced periodically.

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 .

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