Management Information Systems

Perspectives on Information Systems

• Information system:
• Set of interrelated components
• Collect, process, store, and distribute information
• Support decision making, coordination, and control
• Information vs. data
• Data are streams of raw facts.
• Information is data shaped into meaningful form.

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as the total unit sales of dish detergent or the
total sales revenue from dish detergent for a specific store or sales territory.
• Three activities of information systems produce information organizations
need
• Input: Captures raw data from organization or external environment
• Processing: Converts raw data into meaningful form
• Output: Transfers processed information to people or activities that
use it

Functions of an Information System

Levels in a Firm Organizational dimension of
information systems (cont.)
Separation of business functions
Sales and marketing
Human resources
Finance and accounting
Manufacturing and production

Technology dimension of information

systems
Computer hardware and software
Data management technology
Networking and telecommunications
technology
Networks, the Internet, intranets and
extranets, World Wide Web
IT infrastructure: provides platform that
system is built on

Fulfilling a customer order involves a complex set of steps that

requires the close coordination of the sales, accounting, and
manufacturing functions.
Business Processes and Information Systems
• Information technology enhances business processes by:
• Increasing efficiency of existing processes
• Automating steps that were manual
• Enabling entirely new processes
• Change flow of information
• Replace sequential steps with parallel steps
• Eliminate delays in decision making
• Support new business models
Types of Information Systems
Transaction processing systems
• Serve operational managers and staff
• Perform and record daily routine transactions necessary to conduct
business
• Examples: sales order entry, payroll, shipping
• Allow managers to monitor status of operations and relations with
external environment
• Serve predefined, structured goals and decision making
Batch Processing

Real time processing

Features of Transaction Processing Systems
•Rapid response
• Fast performance with a rapid response time is critical.
• Transaction processing systems are usually measured by the number of
transactions they can process in a given period of time.
•Continuous Availability
• The system must be available during the time period when the users are entering
transactions.
• Many organizations rely heavily on their TPS.
• A breakdown will disrupt operations or even stop the business.
• Data Integrity
• The system must be able to handle hardware or software problems without
corrupting data.
• Multiple users must be protected from attempting to change the same piece
of data at the same time.
• Example : 2 operators cannot sell the same seat on an airplane.
• Ease Of Use
• Often users of transaction processing systems are casual users.
• The system should be simple for them to understand, protect them from
data-entry errors as much as possible, and allow them to easily correct their
errors.
A Payroll TPS

Management information systems

Serves middle management
Provide reports on firm’s current performance, based on data from TPS
Provide answers to routine questions with predefined procedure for
answering them
Typically have little analytic capability
How MIS Obtain Their Data from the Organization’s TPS

In the system illustrated by this

diagram, three TPS supply
summarized transaction data to
the MIS reporting system at the
end of the time period. Managers
gain access to the organizational
data through the MIS, which
provides them with the
appropriate reports.

Sample MIS Report

Decision support systems
Serve middle management
Support non-routine decision making
Example: What is the impact on production schedule if December sales is
doubled?
May use external information as well TPS / MIS data
Model driven DSS
Voyage-estimating systems
Data driven DSS
Intrawest’s marketing analysis systems
Provides interactive support for the decision making process of managers and
other business professionals.
Assist managers, who make decisions that are unstructured or semi structured
decision.
The decision support systems support, but do not replace, judgments of
managers.
 Voyage-Estimating Decision Support System

This DSS operates on a

powerful PC.
It is used daily by managers
who must develop bids on
shipping contracts.

Relies on past experience

e.g. Mumbai Metro Rail
Project estimates were
based on Delhi Metro
Project.
New airport at Panvel
estimates based on T2
Executive support systems
• Support senior management
• Address non-routine decisions
• Requiring judgment, evaluation, and insight
• Incorporate data about external events (e.g. new tax laws or
competitors) as well as summarized information from internal MIS
and DSS
• Example: Digital dashboard with real-time view of firm’s financial
performance: working capital, accounts receivable, accounts payable,
cash flow, and inventory

Executive Information System or Strategic Information System

Top level management
Designed to the individual
(not for masses e.g. different for different people on the board of directors)

Very expensive to keep up

(data from internal / external sources)

Extensive support staff

external data keeps changing as updates (govt. policies, regulations) have to be made at regular
intervals unlike TPS which needs maintenance may be once a year