Management Information

Systems (MIS)

Module 1
 What is a system?

A group of interrelated components working

together towards a common goal, by accepting
inputs and producing outputs in an organized
transformation process (dynamic system)
 Concepts related to Information Systems (IS)

Data: stream of raw facts representing events (occurring in an
organization) on the physical environment before being
structured so the people can understand and use them

Information: data which is meaningful and useful to human
beings

Computer based information systems: information systems that
rely on computer hardware and software for processing and
disseminating information

Organization: a formal collection of people and various other
resources established to accomplish a set of goals
 IS Definition
•
IS collects, stores, and disseminates information from an
organization’s environment and internal operations to
support organizational functions and decision making,
communication, coordination, control, analysis, and
visualization.

•
IS provides a solution to a problem or challenge facing a
firm and provides real economic value to the business.
 Information can be:

Resource (input to the production of output)


Asset (contributing to the production of
output)


Commodity (can be sold)
 Typical Components of IS
 Hardware. Computer hardware, such as processors,
monitors, keyboard, and printers, but also sensors, tracking
devices etc.
 Software. These are the programs used to organize, process
and analyze data.
 Databases or related. Information systems work with data,
organized into tables/files/repositories.
 Network. Different elements need to be connected to each
other, especially if many different people in an organization
use the same information system.
 Procedures. These describe how specific data are processed
and analyzed in order to get the answers for which the
information system is designed.
 Functions of IS
•
Data capture and collection
•
Storage
•
Information processing
•
Distribution or dissemination of information
Why IS are so essential in business today?

Business today use IS to achieve 6 major objectives:
• operational excellence
• new products, services, and business models
• customer/supplier intimacy
• improved decision making
• competitive advantage
• day-to-day survival

IS have become essential for helping organizations
operate in a global economy.

All core business processes are digitally enabled.
 Types of IS

Transaction processing systems:

Keep track of basic activities and transactions of organization

(e.g., sales, receipts, cash deposits, payroll, credit decisions, flow
of materials in a factory).

Management information systems and decision-support
systems:

Help with monitoring, controlling, decision making, and

administrative activities.

Executive support systems:

Help address strategic issues and long-term trends, both in firm

and in external environment.
 Business Intelligence and
Business Intelligence Systems
•
Business intelligence
• Data and software tools for organizing and analyzing data
• Used to help managers and users make improved decisions

•
Business intelligence systems
• Management information systems
• Decision support systems
• Executive support systems
 IS Advantages
Increase worker productivity
Enhance decision making
Improve team collaboration
Create business partnerships and alliances
Enhance global competitiveness
Support corporate strategy
Improve quality of goods and services
Rapidly changing technology
 IS Challenges
Workforce downsizing
Information overload
Employee mistrust
Difficult to build
Security breaches
Rapidly changing technology
 The digital firm
• How information systems are transforming
business
• Increase in wireless technology use, Web sites
• Shifts in media and advertising
• New security and accounting laws
• Globalization opportunities
• Internet has drastically reduced costs of operating on
global scale
• Presents both challenges and opportunities
 The digital firm

 In the emerging, fully digital firm

– Significant business relationships are digitally enabled and
mediated
– Core business processes are accomplished through digital
networks
– Key corporate assets are managed digitally

 Digital firms offer greater flexibility in organization

and management
– Time shifting, space shifting
 The digital firm
 Growing interdependence between ability to use
information technology and ability to implement
corporate strategies and achieve corporate goals

 Business firms invest heavily in information systems

to achieve six strategic business objectives:

– Operational excellence
– New products, services, and business models
– Customer and supplier intimacy
– Improved decision making
– Competitive advantage
– Survival
 The digital firm

 Operational excellence:
– Improvement of efficiency to attain higher profitability
– Information systems, technology an important tool in
achieving greater efficiency and productivity
– Wal-Mart’s RetailLink system links suppliers to stores for
superior replenishment system
 The digital firm
 Customer and supplier intimacy:
– Serving customers well leads to customers
returning, which raises revenues and profits
 Example: High-end hotels that use computers to track
customer preferences and use to monitor and
customize environment

– Intimacy with suppliers allows them to provide

vital inputs, which lowers costs
 Example: Airline ticketing
 The digital firm
 Improved decision making
– Without accurate information:
 Managers must use forecasts, best guesses, luck
 Leads to:
– Overproduction, underproduction of goods and services
– Misallocation of resources
– Poor response times
 Poor outcomes raise costs, lose customers
 Competitive advantage
– Delivering better performance
– Charging less for superior products
– Responding to customers and suppliers in real
time
 The digital firm
The Interdependence Between Organizations and Information
Technology
What is Electronic Commerce?

 Use of electronic networked computer-based

technology to:
– Bring new products, services, or ideas to market
– Support and enhance business operations (including sales of
products/services over the Web)
E-Business x E-Commerce

E-commerce describes the process of buying, selling, transferring, or

exchanging products, services, and/or information via computer networks,
including the Internet.

E-business refers to a broader definition of e-commerce, not just the

buying and selling of goods and services, but also servicing customers,
collaborating with business partners, conducting e-learning, and
processing electronic transactions.

 Electronic commerce can take several forms depending on the degree of

digitization (the transformation from physical to digital).
 The degree of digitization relates to:
– the product (service) sold
– the process
– the delivery agent (or intermediary).
 E-Commerce Benefits
• Easy comparison shopping
• Reduced costs and increased competition
• Convenience
• 24 × 7 × 365 operation
• Global access
• Lower entry barriers
• Increased market (customer) knowledge
 E-Commerce Disadvantages
• Hidden costs
• Vulnerability to technical failure
• Cost of staying in business
• Lack of security
• Invasion of privacy
• Low service levels
• Legal issues