School of Informatics

Department of Information Technology

Course: Information System Management
Course Code: (MSIT 7103)
Degree Program: MSc IT Year 1 Sem II[Regular]

 Compiled by: Siraj Sebhatu (PhD)

 E-mail – siraj.sebhatu@wsu.edu.et
CHAPTER ONE

Introduction to Management Information

Systems
DEFINITION AND IMPORTANCE
OF MIS
 A computer system or related group
of systems which collects and
presents management information to
a business in order to facilitate its
control.' (CIMA: Computing
Terminology)
DEFINITION AND IMPORTANCE
OF MIS
 'A system to convert data from internal and
external sources into information and to
communicate that information, in an
appropriate form, to managers at all levels in
all functions to enable them to make timely
and effective decisions for planning, directing
and controlling the activities for which they are
responsible (Lucey: Management Information
systems).
DEFINITION AND IMPORTANCE
OF MIS
 Management information systems (MIS) is an
integrated, user-machine system for providing
information to support operations,
management, and decision-making functions in
an organization. The system utilizes computer
hardware and software; manual procedures;
models for analysis, planning, control and
decision-making; and a database (Davis and
Olson:1985).
Management information
system
 An integrated user-machine system (Some can
be performed using machine, other without
machines).
 For providing information;
 To support the operations, management,
analysis, and decision-making functions of an
organization.
 In an organization (an organization is a stable,
formal social structure that takes resources
from the environment and processes them to
produce outputs).
Importance of MIS
 Overall cost of information systems is growing
overtime and should be spent wisely. Well
managed IS can bring about
 Improves process;
 Improves products and services;
 Improves quality;
 Cuts costs;
 Improves management, problem solving and
decision making.
Scope of MIS
 What is common to these definitions is
that information is presented to
management. However, this is not the
only function of an organization's
information systems. A number of tasks
might be performed simultaneously:
A number of tasks
 initiating transactions (e.g. automatically
making a purchase order if stock levels are
below a specified amount);
 recording transactions as they occur (e.g., a
sale is input to the sales ledger system);
 processing data (as described in earlier
chapters);
 producing reports (e.g., summaries);
 Responding to enquiries.
Objectives of MIS
 The objective of an MIS is to provide
information for decision making on
planning, initiating, organizing, and
controlling the operations of the
subsystems of the firm and to provide a
synergistic organization in the process.
SUBSYSTEMS OF AN MIS
 MIS has been introduced as a broad
concept referring to a federation of
subsystems. Two approaches to defining
the subsystems of an MIS are according
to the organizational functions which
they support and according to
managerial activities for which they
are used.
ORGANIZATIONAL FUNCTION
SUBSYSTEMS
 Because organizational functions are
somewhat separable in terms of
activities and are defined managerially
as separate responsibilities,
 one for each major organizational function
such as production, marketing, finance, etc..
There may be common support systems used
by more than one subsystem, but each
functional system is unique in its procedures,
programs, models, etc.
tional activities

ACTIVITIES SUBSYSTEMS

Organizational activities
Activity subsystem Some typical uses
Transaction Processing of orders, shipments, and receipts.
processing
Operational control Scheduling of activities and performance reports.
Management Formulation of budgets and resource allocation.
control
Strategic planning Formulation of objectives and strategic plans.
CONTEMPORARY
APPROACHES TO MIS
 Multiple perspectives on management
information systems show that the
study of MIS is a multidisciplinary
field. No singe theory or perspective
dominates.
 Computer
Science

Operations
Psychology
Research

MIS
Management
Sociology
Science

Economics
Cont..
 illustrates the major disciplines that
contribute problems, issues, and
solutions to the study of management
information systems.
Cont..
 In general, the field can be divided
into technical and behavioral
approaches. Information systems are
socio-technical systems.
Technical Approach
 The technical approach to MIS
emphasizes mathematically based
models to study information systems as
well as the physical technology and
formal capabilities of these systems.
 The disciplines that contribute to the
technical approach are computer
science, management science, and
operations research.
Behavioral Approach
 Behavioral Approach. An important part of the
information systems field is concerned with
behavioral issues that arise in the development
and long-term maintenance of information
systems.
 Issues such as strategic business integration,
design, implementation, utilization, and
management cannot be explored usefully with
the models used in the technical approach.
Sociotechnical Systems.
 Sociotechnical Systems. Adopting a
sociotechnical systems perspective helps
to avoid a purely technological approach
to information systems.
 For instance, the fact that information
technology is rapidly declining in cost
and growing in power does not
necessarily or easily translate into
productivity enhancement or bottom-
line profits.
Sociotechnical Systems
 Socio-technical theory has at its core the idea that the
design and performance of any organisational system
can only be understood and improved if both 'social' and
'technical' aspects are brought together and treated as
interdependent parts of a complex system.
 One that considers requirements spanning hardware,
software, personal, and community aspects. It applies an
understanding of the social structures, roles and rights
(the social sciences) to inform the design of systems that
involve communities of people and technology.
Introduction To Information
Systems
Contents of presentation
o Information systems and the
managerial End user
o Fundamental Information system
concepts
Introduction To Information
Systems…Cont’d
o Information systems and the
managerial End user
 Basic definitions
 Information systems and society
 Information systems and organizations
 What Managerial end users need to know
Information systems and the
managerial end user...Cont’d
I. Basic Definitions
 Information
 Is data that has been processed into a form
that is meaningful to the recipent and is of
real perceived value in current or prospective
decisions.
 This definition stresses the fact that data must
be processed in some way to produce
information.
 It also shows the distinction between data and
information.
Basic Definition…Cont’d
 Data is defined as raw facts or
observations, typically about physical
phenomena or business transactions.
 Information is data that has been put into a
menaningful and useful context for specific
end users. This gives the information value
for specific persons and meets their
particular information needs.
 Basic Definition…Cont’d
 Example

$ 35,000 35 units
$ 12,000 J. Jones sales person : J. Jones
Western Region Data Processing Sales Teritory: Western Region
$ 100,000 100 units Current sales:
12 units 147 units=$147,000

Data Information
Basic Definitions…Cont’d
 Information System
 An information system is a set of
people, procedures, and resources
that collects, transorms, and
disseminates information in an
organization.
 Today's organizations rely on many
types of information systems. They
include:
Basic Definitions…Cont’d
 Simple manual (Paper- and-
pencil) information systems
 informal information systems
(Word- of - mouth)
 Computer-based information
systems that use hardware,
software, and people resources to
transform data resources into
information products for end
users.
Basic Definitions…Cont’d
 Management Information System
 No consensus on the definition of the term
MIS.
 MIS is an integrated, user machine system
for providing information to support
operations, management, and decision
making functions in an organazation. The
system utilizes computer hardware and
software, manual procedures, models for
analysis, planning, control and decision
making, and a database.
Importance of MIS
 Overall cost of information systems is
growing overtime and should be spent
wisely. Well managed IS can bring
about
 Improves process;
 Improves products and services;
 Improves quality;
 Cuts costs;
 Improves management, problem solving
and decision making.
Basic Definitions…Cont’d
 End user
 An end user is any one who uses an
information system or the information it
produces.
 This usually applies to most people in an
organization as distinguished from the
smaller number of people who are
information specialists, such as system
analysts or programmers.
Basic Definitions…Cont’d
 Managerial End User
 A managerial end user is a manager,
entrepreneur, or managerial-level
professional who personally uses
information systems.
Information systems and the
managerial end user...Cont’d
II. Information Systems and Society
 Information is a basic resource that individuals
and organizations must have to survive and
succeed in today's society.
 We are living in an information society whose
economy is heavily dependent on the creation,
management, and distribution of information
resources. We no longer live in:
 An agricultural society composed primarily of
farmers or
 Industrial society where majority of the work
force consists factory workers.
Information Systems and
Society…Cont’d
 The workforce today consists mainly of
workers in service occupations or
knowledge workers, that is, people who
spend most of their workday creating,
using, and distributing information.
 The category of knowledge workers
includes:
 executives, managers, and supervisors;
 professionals such as accountants, engineers,
scientists, stockbrokers, and teachers, and
 staff personnel such as secretaries and clerical
office personnel.
Information Systems and
Society…Cont’d

 These people all make their living

using information systems to create,
distribute, manage, and use
information resources, which are then
used to help them manage the
human, financial, material, energy,
and other resources involved in their
work responsibilities.
Information Systems and
Society…Cont’d

 Information, then, is a valuable

commodity to knowledge workers,
their organization, and society. A
major challenge for the information
society is to manage its information
resources to benefit all members of
society.
Information systems and the
managerial end user...Cont’d
III. Information systems and organizations
 Information and information systems are also
valuable organizational resources that must be
properly managed for an organization to
succeed.
 For organizations information systems
represent:
 A major part of the resources of an
organization and its cost of doing business,
thus posing a major resource management
challenge.
Information systems and the
managerial end user...Cont’d
 An important factor affecting operational
efficiency, employee productivity and morale,
and customer service and satisfaction.
 A major source of information and support
needed to promote effective decision making by
managers.
 An important ingredient in developing
competitive products and services that give an
organization a strategic advantage in the
market place.
 A vital, dynamic, and challenging career
opportunity for millions of men and women.
Information systems and the
managerial end user...Cont’d

IV. What managerial end users need to

know
 The following framework outlines what
a managerial end user needs to know
about information systems.
 It emphasizes that you should
concentrate your efforts in five areas of
knowledge:
What managerial end users
need to know…Cont’d
 Foundation concepts
 Need to have knowledge of the generic
components and properties of
information systems,
 Generic components are intended as placeholders that are
easily replaced by a suitable component later in the design
process – they also can be considered as virtual or
parametric components.
 which requires an understanding of some
basic concepts in general systems theory
and information processing.
What managerial end users
need to know…Cont’d
 Development
 How should managerial end users or information
specialists develop information systems
solutions to business problems?
 should understand how methodologies such as
the systems approach, the systems
development life cycle, and prototyping can be
used to construct information systems
applications that successfully meet end user and
organizational needs.
What managerial end users
need to know…Cont’d
 Technology
 should have an understanding of major
concepts, developments, and
management issues in information
technology, i.e. Hardware, Software,
Telecommunications and Database
management .
What managerial end users
need to know…Cont’d
 Applications
 They should gain a basic understanding
of information systems concepts and
applications in areas such as end user
computing, office automation,
transaction processing, information
reporting, decision support, executive
support and artificial intelligence.
What managerial end users
need to know…Cont’d
 Management
 This area requires understanding the
major challenges and methods involved
in managing the resources, technologies,
and activities of information systems.
 More specifically, they should understand
concepts such as information resource
management and information systems
planning, implementation, and control.
Introduction To Information
Systems…Cont’d
o Fundamental Information system
concepts
 Meaning of a system
 Other system characteristics
 A business as a system
 Basic system concepts
Fundamental Information
system concepts…Cont’d
Knowledge of systems concepts is vital
to a proper understanding of the
development, technology,
applications, and management of
information systems.
Fundamental Information
system concepts…Cont’d
 What is a system?
 A system is a group of interrelated
components working together toward a
common goal by accepting inputs and
producing outputs in an organized
transformation process.
 Such a system has three basic
interacting components or functions:
input, processing, output.
What is a system?...Cont’d
 Diagrammatically,

Input Processing Output

What is a system?...Cont’d
 The systems concept can be made
even more useful by including two
additional components: feedback
and control.
 Such a system (a system with
feedback and control) is sometimes
called a cybernetic system, i.e. a
self-monitoring, self-regulating
system.
What is a system?...Cont’d
 Feedback is data about the performance of a
system.
 Control is a major system function that
monitors and evaluates feedback to
determine whether the system is moving
toward the achievement of its goal. It then
makes any necessary adjustments to the
input and processing components of the
system to ensure that proper output is
produced.
What is a system?...Cont’d
 The following figure illustrates a
generic concept of a system
incorporating feedback and control
components and exchanging inputs
and outputs with its environment.
What is a system?...Cont’d
Environment
Feedback Feedback
Signals signals
Control

Feedback
Signals

Signals
Control
Signals
Control

signals
Control

Input Processing Output

System Boundary

Other Systems
What is a system?...Cont’d
 Feedback is frequently included as
part of the concept of the control
function because of the essential role
feedback plays in control.
 Positive feedback- A system performing
properly generates positive feedback.
 Negative feedback- A system whose
performance is deteriorating or deviating
from the attainment of its goal.
Fundamental Information
system concepts…Cont’d
 Other system characteristics
 The figure above points out several other
characteristics important to understanding
information systems.
 A system does not exist in a vacuum; rather, it
exists and functions in an environment
containing other systems.
 If a system is one of the components of a larger
system, it is called a subsystem, and the
larger system is its environment.
 Also, a system is separated from its
environment and other systems by its system
boundary.
Other system
characteristics…Cont’d
 The interconnections and interactions
between the subsystems are termed
interfaces. Interfaces occur at the
boundary and take the form of inputs and
outputs.
 The figure also illustrates the concept of an
open system, which is a system that
exchanges information, material, energy
etc. with its environment.
 If a system has the ability to change itself
or its environment in order to survive, it is
known as an adaptive system.
Fundamental Information
system concepts…Cont’d
 A business as a system
 A business firm is an open, adaptive
organizational system operating in a
business environment.
 A business consists of the following
interrelated system components:
A business as a
system…Cont’d
 Input: Economic resources such as people, money,
material, machines, land, facilities, energy, and
information are acquired by a business from its
environment and used in its system activities.
 Processing: Organizational Processes such as
marketing, manufacturing, and finance transform
input into output.
 Output: goods and services, payments to employees
and suppliers, dividends, taxes, and information are
all outputs produced by a business and exchanged
with or transferred to its environment
A business as a
system…Cont’d
 Feedback: A primary role of information systems is
serving as the feedback component of an
organizational system. They provide information to
management concerning the performance of the
organization.
 Control: management is the control component of an
organizational system.
 Managers control the operations of a business so that
its performance meets organizational goals such as
profitability, market share, and social responsibility.
 Feedback about organizational performance is
compared to standards of performance established by
management. Management then makes decisions to
adjust performance to meet organizational goals.
Fundamental Information
system concepts…Cont’d
 Information system concepts
 In section 1, we said that an information system
is a set of people, procedures, and resources
that collects, transforms, and disseminates
information in an organization.
 In this section, we said that an information
system is a system that accepts data resources
as input, and processes them into information as
output.
 How does an information system accomplish
this? What system components and activities
are involved?
Information system
concepts…Cont’d
 An Information system model
 An information system uses:
 the resources of hardware (machines and
media), software (programs and
procedures), and people (specialists and
end users)
 to perform input, processing, output,
storage, and control activities that
convert data resources into information
products.
Information system
concepts…Cont’d
An Information System Model

Software Resources: Programs and procedures

Hardware Resources: Machines & Media

People Resources: End users and IS specalists

Control of system performance

Input of Processing Output of

Data Of data Data
Resources resources Resources

Storage of Data Resources

Data Resources: Data, Model, Knowlege Bases
Information system
concepts…Cont’d
 This model provides a conceptual framework that
emphasizes three major concepts that can be applied
to all types of information systems.
 People, hardware, software, and data are the four
basic resources of information systems.
 People resources include end users and IS specialists.
 Hardware resources include machines and media.
 Software resources include both programs and
procedures.
 Data resources include Data, model, and knowledge
bases.
Information system
concepts…Cont’d
 Data resources are transformed by
information processing activities into a
variety of information products for end
users.
 Information processing consists of input,
processing, output, storage, and control
activities.
Fundamental Information
system concepts…Cont’d
 Information system activities
 The basic information processing activities that
occur in information systems include:
 Input of data resources
 Data about business transactions and other events
must be captured and prepared for processing by
the basic data entry activities of recording and
editing.
 End users typically record data about transactions
on some type of physical medium such as paper
form or enter it directly into a computer system.
 This usually includes a variety of editing activities to
assure they have recorded data correctly.
Information system activities
 Processing of data into information
 Data is manipulated by such activities as
calculating, comparing, sorting, classifying, and
summarizing. These activities organize, and
manipulate data, thus converting it into
information for end users.
 The quality of any data stored in an information
system must also be maintained by a continual
process of correcting and updating activities.
Information system activities
 Output of information products
 Information in various forms is transmitted to end
users and made available to them in the output
activity.
 Common information products are video displays,
paper documents, audio responses that provide us
with messages, forms, reports, listings, etc.
 Storage of data resources
 storage is a basic system component of information
systems
 storage is an IS activity in which data and
information are retained in an organized manner for
later use.
 Stored data is commonly organized into fields,
records, files, and databases.
Information system activities
 Control of system performance
 An information system should produce
feedback about its input, processing,
output, and storage activities.
 This feedback must be monitored and
evaluated to determine if the system is
meeting established performance
standards.
 Then appropriate system activities must
be adjusted so that proper information
products are produced for end users.
Fundamental Information
system concepts…Cont’d
 Information System Resources
 An information system consists four
major resources:
 Hardware Resources
 The concept of hardware resources
includes all physical devices and
materials used in information
processing.
 It includes machines and media
Fundamental Information
system concepts…Cont’d
 Examples
 large mainframe computers,
minicomputers microcomputers
 Telecommunication networks.
 Computer peripherals
Information System
Resources…Cont’d
 Software Resources
 Include all sets of information processing
instructions.
 Programs - operating instructions which direct
and control hardware
 Procedures -information processing
instructions needed by people.
 Examples of software
 System software, such as an operating system
program, which manages the operations of a
computer system.
 Application software, which are programs that
direct processing for a particular use of
computers by end users.
 Procedures - operating instructions for people.
Information System
Resources…Cont’d
 People Resources
 People are required for the operation of all
information system. These resources include:
 Specialists- people who develop and operate
information systems. They include system
analysts, programmers, computer operators,
other managerial, technical, and clerical
personnel.
 End users- can be accountants, sales
persons, engineers, customers, or managers.
Information System
Resources…Cont’d
 Data Resources
 The data resources of information systems are
typically organized into:
 Databases - which holds, processed and
organized data.
 Model bases - which hold conceptual,
mathematical, and logical models that
express business relationships,
computational routines, or analytical
techniques
 Knowledge bases - which hold
knowledge in a variety of forms such as
facts about a specific subject area and
rules of inference about various subjects.
Data Resources…Cont’d
 Data can take many forms:
 Alphanumeric data- composed of numbers and
alphabetical and special characters that describe
business transactions and other events and entities.
 Text data - consisting of sentences and paragraphs
used in written communication.
 Image - graphic shapes and figures
 Video data - data presented for viewing by a variety
of video display devices.
 Audio data - the human voice and other sounds.
 Tactile data - generated by touch - sensitive
materials
 Sensor data - provided by a variety of sensors used
in the control of physical processes.
Data Resources…Cont’d
 Data resources are typically recorded
and stored on several types of data
media.
 Examples:
 paper documents
 magnetic disks
 magnetic tape
 optical disks
 microfilms
 electronic circuit chips
 What Is Information Systems And its
Importance?
What Is Information Systems
And its Importance?
 An information system is a group of data sets
that ensures that business operates smoothly,
embracing change, and helping companies
achieve their goal.
 Information system as a computer system or
set of components for collecting, creating,
storing, processing and distributing
information. The information system is
incomplete without the support of information
technology (IT) systems.
Six Types Of Information
Systems And Their Application
 Although many information systems offer
various benefits,
 It will induce innovation in business activities
through its research and development.
 It will enable automation, reducing steps
undertaken to complete a task.
 It helps keep the hardware, software, data
storage, and networking system safe and up to
date.
 Now that you know the changes information
systems can bring about the power to change
the business process- types of information
systems.
 What Are The Types Of Information
Systems?
What Are The Types Of Information
Systems?

 Knowledge Work System

 Management Information System
 Decision Support System
 Office Automation System
 Transaction Processing System
 Executive Support System
Knowledge Work System
 There are different knowledge management
systems that an organization implements to
ensure a continuous flow of new and updated
knowledge into the company and its processes.
 A knowledge work system (KWS) is one of the
knowledge management systems that ease the
integration of new information or knowledge
into the business process.
 KWS also offers support and resources to
various knowledge creation techniques,
artificial intelligence applications, and group
collaboration systems for knowledge sharing,
among others.
Management Information
System
 The management information system provides
aid to managers by automating different
processes that were initially done manually.
 Business activities like business performance
tracking and analysis, making business
decisions, making a business plan, and defining
workflow.
 What are the advantages of the
information system?
Some of the advantages of the
information system:
 It enhances the efficiency and productivity of
the company
 It provides a clear picture of the organization’s
performance
 It adds value to the existing products,
introduces innovation and improves product
development
 It assists in communication and planning for
business processes
 It helps the organization provide a competitive
advantage
Decision Support System
 A decision support system is an information
system that analyses business data and other
information related to the enterprise to offer
automation in decision-making or problem-
solving.
 A manager uses it in times of adversities
arising during the operation of the business.
Office Automation System
 An office automation system is an
information system that automates
different administrative processes like
documenting, recording data, and
office transactions, among others.
Transaction Processing
System
 The transaction processing system automates
the transaction collection, modification, and
retrieval process.
 The peculiar characteristic of this type of
information system is that it increases the
performance, reliability and consistency of
business transactions.
 It helps businesses perform daily operations
smoothly without hassle.
Executive Support System
 An Executive Support System or ESS helps
top-level executives to plan and control
workflow and make business decisions. It is
very similar to Management Information
System or MIS.
 It provides great telecommunication, better
computing capabilities, and effective display
options to executives.
 It helps monitor performances, track
competitors’ strategies, and forecast future
trends, among others.