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CHAPTER 2: FOUNDATIONS OF MIS INFORMATION MANAGEMENT Five Main Resources: A manager is required to manage five main types of resources

effectively: Personnel Material Machines (including facilities and energy) Money Information (including data) Components of an information system

THE EVOLUTION OF COMPUTER BASED INFORMATION SYSTEMS Data Processing (DP) during the first half the twentieth century Management Information Systems (MIS) 1964

IBM promoted the concept as a means of selling disk files and terminals The MIS concept recognized that computer applications should be implemented for the primary purpose of producing management information.

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Decision Support Systems (DSS) 1971

A DSS is an information-producing system aimed at a particular problem that a manager must solve and at decisions that the manager must make. Notes distinction: MIS: Organizational/group general DSS: Individual specific Facilitates communication Increases productivity among managers and office workers through the use of electronic devices. Includes a variety of applications such as video conferencing, voice mail, electronic mail, desktop publishing...etc.

Office Automation (OA) 1964

Artificial Intelligence (AI)/ Expert Systems (ES) - 1990s

AI is an application that enables the computer system to perform some of the same logical reasoning tasks as humans. An expert system is a special subclass of AI that functions as a specialist in a certain field. For example, it can provide management consultancy. Limitation of ES: It doesnt improve its intelligence over time. One way to overcome this limitation is to use neural networks, electronic and mathematical analogs of the human brain.

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INTEREST IN INFORMATION MANAGEMENT Increasing complexity of business activity International economy Firms of all sizes are subject to economic influences that can originate anywhere in the world. Such influences can be seen in the relative values of the currencies of each nation, where purchases are made in those countries with the highest currency value. Worldwide competition Competition exists on a worldwide scale. Its effects can be seen in the imports from foreign countries. Increasing complexity of technology Technology is used everywhere in business. Examples are bar code scanners, computer based airline reservation systems, automated teller machines, factory robots..Etc. Shrinking time frames All phases of business operations are performed more rapidly than ever before. (Tele marketing, electronic sales orders, just in time delivery of raw materials ...etc) Social constraints Some products and services are found undesirable by society. Therefore, business decisions must be based on economic factors, but social costs and payoffs must be considered as well. Plant expansion, new products, new sales outlets and similar actions must all be weighed in terms of their environmental impact. WHO ARE THE INFORMATION USERS? Managers The idea of using the computer as a management information system was a breakthrough because it recognized managers need for problem solving information. Embracing the MIS concept made several firms develop applications specifically aimed at management support. Non-managers Non-manages and staff specialists also use the MIS output. Persons & organizations in the firms environment Users outside the company benefit from the MIS as well. They can be customers receiving invoices, stockholders getting dividend checks, and the federal government checking tax reports.
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Influence of Management Level on Information Source and Form When designing information systems, it is important to consider the managers level. Such levels can influence both the source of information and how it is presented. Managers on the strategic level place greater emphasis on environmental information than do managers on the lower levels. Managers on the operational control level regard internal information as vital. Management and Business Functions of MIS

Business Functions of MIS: Support the Business Process: Treats inputs as a request from the customer and outputs as services to customer. Supports current operations and use the system to influence further way of working. Support Operation of a Business Organization: MIS supports operations of a business organization by giving timely information, maintenance and enhancement which provides flexibility in the operation of organizations.
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To Support Decision Making: MIS supports the decision making by employee in their daily operations. MIS also supports managers in decision making to meet the goals and objectives of the organization. Different mathematical models and IT tools are used for the purpose evolving strategies to meet competitive needs. Strategies for an Organization: Today each business is running in a competitive market. MIS supports the organization to evolve appropriate strategies for the business to assent in a competitive environment.

Data, Information and Knowledge Data : Data is raw facts. Data is like raw material. Data does not interrelate and also it does not help in decision making. Data is defined as groups of nonrandom symbols in the form of text, images, voice representing quantities, action and objects. Information : Information is the product of data processing. Information is interrelated data. Information is equivalent to finished goods produced after processing the raw material. The information has a value in decision making. Information brings clarity and creates an intelligent human response in the mind.

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It is a most critical resource of the organization. Managing the information means managing future. Information is knowledge that one derives from facts placed in the right context with the purpose of reducing uncertainty. According to Davis and Olson : Information is a data that has been processed into a form that is meaningful to recipient and is of real or perceived value in the current or the prospective action or decision of recipient. Types of Information Classification of Information: The information can be classified in a number of ways provide to better understanding. Jhon Dearden of Harvard University classifies information in the following manner: (1) Action Verses No-Action Information: The information which induces action is called action Information. No stock report calling a purchase action is an action information. The information which communicates only the status is No-Action Information. The stock balance is no-action information. (2) Recurring Verses No-Recurring Information: The information generated at regular intervals is Recurring Information. The monthly sales reports, the stock statement, the trial balance, etc are recurring information. Financial analysis or the report on the market research study is no recurring information. (3) Internal and external information: The information generated through the internal sources of the organization is termed as Internal Information, while the information generated through the govt. reports, the industry survey etc., termed as External Information, as the sources of the data are outside the organization. The information can also be classified, in terms of its application:

Planning Information: Certain standard norms and specifications are used in planning of any activity. Hence such information is called the Planning Information. e. g. Time standard, Design standard. Control Information: Reporting the status of an activity through a feedback mechanism is called the Controlling Information. When such information shows a deviation from the goal or the objective, it will induce a decision or an action leading to control.

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Knowledge Information: A collection of information through the library records and the research studies to build up a knowledge base as information is known as Knowledge Information.

Organization Information: When the information is used by everybody in the organization, it is called Organization Information. Employee and payroll Information is used by a number of people in an organization.

Functional/ Operational Information: When the information is used in the operation of a business it is called Functional/Operational Information. Database Information: When the information has multiple use and application, it is called as database information. Material specification or supplier information is stored for multiple users.

Information needs and sources for Managers

Individual (Low Level): At the lowest level the personal information need of staff exists throughout the organization. Examples include correspondence, reports and spreadsheets. In most organizations, staff must struggle with using email to meet their information management needs. While staff generally recognizes the inadequacy of e-mail, they have few other approaches or technologies at their disposal. Managing the Levels: While managing the information at each of the three levels, consider aspects need consideration:
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An information management solution must be provided for staff at each of the three levels. If corporate solutions aren't provided, then staff will find their own solutions. This is the source of poor-quality intranet sub-sites, and other undesirable approaches. A clear policy must be developed, outlining when and how it will apply at all the three levels and how information should be managed at each level. Processes must be put in place to 'bubble up' or 'promote' information from lower levels to higher levels. For example, some team-generated information will be critical for the whole organization. As much as possible, a seamless information management environment should be delivered that covers all the three levels.

Sources of Information

Organizing and updating of huge amount of raw data of related and unrelated nature, derived from internal and external sources at different periods of time. The information processing and computer technology have been so advanced that managers are able to obtain real time information about ongoing activities and events without any waiting period.

The input data in computer can be converted into different output formats for a variety of purpose. The system is so organized that managers at different levels and in different activity units are in a position to obtain information in whatever form they want, provided that relevant programmes or instructions have been designed for the purpose.

Super-human memory, tremendous volume of data and information and the set of instructions can be stored in the computer and can be retrieved as and when needed. Management can get bit of stored information from the computer in seconds.

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Functional Framework for MIS

Business Systems - E-Business A more comprehensive definition of e-business is: The transformation of an organizations processes to deliver additional customer value through the application of technologies, philosophies and computing paradigm of the new economy. Three primary processes are enhanced in e-business: 1. Production processes Which include procurement, ordering and replenishment of stocks; processing of payments; electronic links with suppliers; and production control processes, among others;

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2. Customer-focused processes Which include promotional and marketing efforts, selling over the Internet, processing of customers purchase orders and payments, and customer support, among others; and 3. Internal management processes Which include employee services, training, internal information-sharing, videoconferencing, and recruitment. Electronic applications enhance information flow between production and sales forces to improve sales force productivity. Workgroup communications and electronic publishing of internal business information are likewise made more efficient.

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