INFORMATION SYSTEMS

OUTCOME 1
INFORMATION NEEDS WITHIN DIFFERENT FUNCTIONAL AREAS
1.1 INFORMATION NEEDS 1.2 FUNCTIONAL AREAS OF AN ORGANIZATION

Data
Data are facts, events, transactions and so on which have been recorded. They are the input raw materials from which information is produced.

Information
Information is data that has been processed in such a way as to be meaningful to the person who receives it. Note the two words highlighted - "processed" and "meaningful". Aids in decision making Reducing uncertainty and increasing the knowledge level of the decision-maker

Information
Relevant information is information which: Increase knowledge Reduces uncertainty Is usable for the intended purpose The type of information required is depend on many factors including The level of management The task in hand Confidentiality Urgency

Information Classification
By sources e.g internal, external, primary, secondary By nature e.g quantitative, qualitative, formal, informal By level e.g strategic, tactical, operational By time e.g historical, present, future By frequency e.g hourly, daily, monthly, annually By use e.g planning, control, decision making By form e.g written, aural, visual By type e.g detailed, summarised, aggregated, abstracted

Characteristic of Good Information

1. 2. 3. 4. 5. 6. 7. 8. 9. relevant for its purpose sufficiently accurate for its purpose complete enough for the problem from a source in which the user has confidence communicated to the right person communicated in time for its purpose that which contains the right level of detail communicated by an appropriate channel of communication that which is understandable by the user

Sources of Information
If the information is collected by the organization itself internally then the information is called INTERNAL INFORMATION. If the information required for decision making is taken from outside then it is called EXTERNAL INFORMATION.

Internal Information
Companies collect information in the everyday course of conducting business. Orders are received and filed Costs are recorded Sales peoples reports are submitted, Engineering reports are made Sales reports by region Sales by customer Sales by product Market prospects and reports Customer complaints Marketing research reports All these are but a few o f the many sources of information, collected by companies for other purposes, that they are useful for the managers. These are the internal secondary sources of information.

Internal Information
Accounts department
Procedures manual Management accounts balance sheets Financial data Accounting policies Tax details Working capital

Internal Information
Production and operations
Operations data Efficiency and capacity details Process flow charts Detailed product costing Input prices Supply chain

Internal Information
Human resources
Number of employees Employees personal information Recruitment procedures Training programs Details of pay

External Information
mainly concerned with the non-controllable aspects of the decision making problem. Example in marketing:
Total market size Market characteristics Competitors products Competitors prices Competitors promotional efforts Consumer buying behavior

External Information
The major sources of external secondary information are
Governmental Labor Union Working period, welfare, (SOCSO , EPF) Industrial Policy Taxation Budget Regulation Commercial services Bank - Rate of Financing Political Leadership changes Economic Budget Inflation Recession Technology

Information Strategy
What internal and external factors will effect the future success of the organization?
Examples: interest rates, labor costs, raw material prices, government regulation, consumer trends.

What sources of information are available to monitor these factors?

Examples: Newspapers, trade journals, government studies, private research.

Information Strategy
How often should each of these factors be monitored?
Daily, weekly, monthly, quarterly, annually

What form should reports on these factors take?

Written, oral, statistical, graphic, on-site visits

Who should receive these reports?

Information Processing Cycle

INPUT

PROCESS

OUTPUT

FEEDBACK

Information Processing Cycle

Figure 1.1 Input-Process-Output

Management Level

Management Level
Strategic Planning Level
The strategic planning level involves mangers at the top of the organizational hierarchy. The term strategic indicates the long-term impact of top managers decisions on the entire organization. The term executive is often used to describe a manager on the strategic planning level. Senior managers: make long-range strategic decisions about products and services

Management Level
Management Control Level
Middle-level managers include regional managers, product directors, and division heads. Their level is called management control level due to their responsibility of putting plans into action and ensuring the accomplishment of goals. Middle managers: Carry out the programs and plans of senior management

Management Level
Operational Control Level
Lower level managers are persons responsible for carrying out the plans specified by managers on upper levels. Their level is called the operational control level because this is where the firms operations occur. Operational managers: monitor the firms daily activities

Management Level

Mgt and Decision Making

Management mainly comprises: Planning it is deciding when, what, where, how to do Organizing- the process of dividing work into different task and coordinating the task to achieve one or more objectives Coordinating- implies relating ones job with the other job properly and connecting them to in proper way achieve goals. Directing- is the leadership of an org through communication, inspiration and motivation of organizational personnel. Control- enable the manager to determine if the org. performance is on target

Planning
Strategic Level planning
Requires considerable amount of environmental information like shifting market, changing technology as well as internal information like core competitive strength of the organization.

Tactical Planning
Activities such as vendor development, make-or-buy decision would call for cost and availability information pertaining to materials and production capacities which are internal as well external to the organization.

Planning
Operational Planning
Like staff scheduling requires large amount of internal information, e.g., schedules, attendance, up times of equipment.

Organizing
Strategic organizing
Needs external and internal data to decide on restructuring as well as to forge strategic partnerships.

Tactical organizing
Requires changing wage-level data of the organization as well as that of competitors.

Operational organizing
Needs data relating to skills and training requirements of the operational staff.

Coordinating
Strategic coordination
Calls for industry-wide data corresponding to technology availability.

Tactical coordination
Calls for plant-wide and supplier-wise bottleneck data that reflect deficiencies both inside and outside the organization.

Operational coordination
Requires itemized breakup of plant and machinery performances, failures, etc

Directing
Strategic directing
Functions such as introduction of office automation requires detailed cost-benefit analysis of new technologies.

Tactical directing
E.g. innovative marketing strategy, needs detailed market and production data.

Operational directing
Function requires detailed data pertaining to the individual managers skills.

Control
Strategic control
Decision like total quality mgt needs detailed performances data and bench marking data from outside the organization.

Tactical control
Decisions like maintaining steady market share in the medium run would necessitate continuous monitoring of plant data.

Control
Operational control
May call for techniques of statistical process control which involves the collection of substantial sampling information that must be collected and processed continuously during the entire production period.

Level of Involvement

Level of Involvement

Functional Areas in Business

Functional Areas in Business

The purpose
o to

ensure that all important business activities are carried out efficiently o specific areas will be responsibility for supporting specific types of aims and objectives, for example:
sales and marketing will be involved in achieving targets linked to developing new markets or increasing sales human resources will be involved in arranging staff training activities and supporting the continuous professional development of all staff

Functional Areas in Business Function

o

finance will be expected to monitor and support aims and objectives linked to keeping costs low to improve profitability production will be set targets relating to quality or meeting planned production schedules.

Functional areas vary between organizations, depending upon the type of work carried out. For example :
o retailers

do not need a production function.

Functional Areas In Business

Functional Areas In Business

Functional Areas In Business

Functional Areas In Business

Functional Areas In Business

Functional Areas In Business

Functional Areas In Business

Functional Areas In Business

Functional Areas In Business

Functional Areas In Business

Relationships Between Different Functional Areas

Relationships Between Different Functional Areas

Relationships Between Different Functional Areas