Management Information System :

Management Information System : An integrated system for providing information used for
decision making, coordination, control and analysis of information in an organization.
Data: Data is a collection of facts or observations.
Information : Information is the result of processing data.
Information Technology : The use of all hardware and software that a firm needs to use in
order to achieve its business objectives.
Components of Information System :
 Input: The elements that enter the system for processing. (Materials, Human Resources,
Information)
 Processing : Processor is the element of a system that involves in actual transformation
of input into output. (Operational component)
 Output : Output is the outcome of processing.
 Feedback : Data about performance of a system.
 Control : Monitoring and evaluating the feedback.
 Environment : The suprasystem within which an organization operates.
Dimension of Information System :
 Organization (People, Structure, Business processes, Politics, Culture)
 Management (Leadership, strategy, management behavior)
 Technology (Hardware, Software, Internet).
Information System: A set of interrelated components that collect, process, store and exchange
information to help in decision making and control in an organization.
Elements of Environment: Vendors, Competitors, Suppliers, Customers.
Contemporary approaches to Information System:
 Technical Approach: Emphasizes mathematically based models to study information.
(Computer science, management science, operations research)
 Behavioral Approach: Focusing on design, implementation. management and business
impact of system. (Psychology, sociology, economics)
 Sociotechnical system: Both social and technical systems used in production.
Strategic Business Objectives of Information System:
 Operational excellence
 New products, services, and business models
 Customer and supplier intimacy Improved decision making
 Competitive advantage
  Survival
Complementary Assets: 1)Organizational assets, 2)Managerial assets, 3)Social assets.
Complementary asset includes new business processes and business models, supportive
organizational culture and management behavior.
Digital Firm: A digital firm is one in which nearly all of the organization's significant business
relationship with customers, suppliers and employees are digitally enabled.
Corporate Assets: Intellectual property, core competencies, financial and human assets.
Business Process: The manner in which work is organized, coordinated, and focused to produce
a valuable product or service.
4 functional area of business process:
 Manufacturing and production
 Sales and marketing
 Finance and accounting
 Human resources
3 levels of management :
 Strategic level system.
 Management level system.
 Operational level system.
4 major types of systems typically used to make an organization successful:
 Transaction Processing system (Lower level)
 Management Information system (Mid level)
 Decision-support system
 Executive support system (Very upper level)
4 major enterprise applications:
 Enterprise System / Enterprise Resource Planning System (used to remove
communication gap between all departments and all user of information within a
company)
 Supply chain management (help firms to manage relationship with their suppliers)
 Customer relationship management (help firms to manage relationship with their
customers)
 Knowledge management systems (enable organizations to better manage processes for
capturing and applying knowledge)
Collaboration: Working with others to achieve a goal, can be short term or long term, focuses
on particular task or mission.
Organization: A group of people which work together to achieve a set of goal.
Controls: Methods to ensure the safety of assets, reliability of records.
Security : The policies, procedures and technical measures used to prevent unauthorized access,
alteration, or damage to information system.
System vulnerabilities : Malicious software, Hackers and cybervandalism,Spoofing and
sniffing, Identity theft, Click fraud.
Malicious software : Computer virus, Worms, Trojan Horses.
Spoofing : A common way to steal financial information through fake websites.
Sniffer: A type of program that monitors information travelling over a network.
Denial of Service (DoS) attack : Hackers flood a network server or web server with many
thousands of false communications to crash the network.
Click fraud :A type of fraud that occurs on the internet in pay-per-click (PPC) online
advertising.
General Controls : Software controls, Hardware controls, Computer operations control, Data
security controls, Implementation controls, Administrative controls.
Technologies and tools for protecting Information Resources :Access control, Firewalls,
Antivirus software, Securing wireless networks.
Firewall : A combination of hardware and software that controls the flow of incoming and
outgoing network traffic.
Enterprise system : Also known as Enterprise Resource Planning (ERP),their main goal is to
bridge the communication gap among all departments and all information users within a
company.
Business value of Enterprise system :
 Management: Improved management decision making, with a comprehensive view of
performance across all functional areas.
 More efficient operations and customer-driven business processes: All functional
areas can focus more on the customer and respond to product demand more efficiently.
 A more uniform organization: A more disciplined approach to business throughout the
entire firm, regardless of physical location and/or organizational structure.
Enterprise Software : A computer software used to satisfy the needs of an organization rather
than individual users.
Supply Chain : Includes all of the internal functions of an organization, along with suppliers,
distributors, retailers, and customers.
3 distinct groups of supply chain:
 Upstream : Suppliers that deal directly with a manufacturer and their suppliers.
 Downstream : Distributors and those that deliver products to customers.
 Internally : The employees that transform materials, components and services into the
actual products.
Business value of supply chain management system :
 Match supply to demand
 Reduce inventory levels
 Improve delivery service
 Speed product time to market
 Use assets more effectively
 Reduce cost
 Increase sales.
Customer Relationship Management : Customer Relationship Management (CRM) is a
strategy for a business to manage its interactions with its customers.
Goals of CRM: To optimize customer satisfaction which in turn will maximize revenue and
profitability.
CRM software : A software used to manage data, automation, synchronize sales, marketing, and
customer service.
Business value of CRM system :
 Increased customer satisfaction
 Reduced marketing cost
 More effective marketing
 Increased sales revenue
 Better response to customer needs.
2 types of CRM systems :
1) Operational CRM: Operational CRM includes everything a company should provide
those employees who interface directly or indirectly with the customer.
2) Analytical CRM: The analytical CRM uses data from the operational CRM and
provides managers with the opportunity to target smaller, specific customer groups or
market segmentation.
Types of decision :
 Unstructured : Requires judgement, evaluation into non-routine situations. (Made at
Senior levels of management)
 Structured: Repetitive, routine, with definite procedures for making the decision.
(Made at Lowest organizational levels)
 Semistructured: Combination of two.(Made by Middle managers)
Steps/ process of decision making :
 Intelligence : Identifying and understanding problems
 Design : Identifying and exploring solutions to problems
 Choice : Choosing among solution alternatives
 Implementation : Making the chosen alternative work and monitoring how well the solution
is working.
Classical functions of managers: Planning, Organizing, Coordinating, Deciding, Controlling.
Behavioral functions of managers:
 Perform a great deal of work at an unrelenting pace
 Activities are fragmented
 Prefer current, specific, and ad hoc information
 Prefer oral communications rather than written documentation
 Maintain a diverse and complex web of contacts
3 managerial roles: (Mintzberg)
 Interpersonal : Figurehead, Leader,Liason.
 Informational : Nerve center, Disseminator, Spokesperson.
 Decisional: Entrepreneur, Disturbance handler, Resource allocator, Negotiator.
Business Intelligence : Describes how businesses collect, store, and clean useful information to
executives, managers and employees.
Business analytics : Tools and techniques businesses use to analyze and understand the data in a
meaningful way.
Group decision-support system (GDSS are best used for tasks involving:
 Idea generation
 Complex problems
 Large groups.