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MIS and Other Sub Systems

Using IT for Strategic Advantage & Strategic uses of IT


Management Information System

Perspective Foundation of Information System in Business:

System Concepts:
MIS and Other Sub Systems Using IT for Strategic Advantage & Strategic uses of IT

Management Information Systems

"An integrated user-machine system for providing information to support operations, management and decision making functions in an organization. The system utilizes computerized and manual procedures; models for analysis, planning, control and decision making; and a database." Based on: Davis, G.B. 1985. MIS: Conceptual Foundations. Structure and Development. 2nd ed. New York, NY: McGrawHill.

MIS principal concerns Facilitate decision making by supplying the information needed in an up-to-date and accurate form
to the people who need it on time in a usable form

Management information Systems (MIS), sometimes referred to as Information Management and Systems, is the discipline covering the application of people, technologies, and procedures collectively called information systems to solving business problems. Management Information Systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making, e.g. Decision Support Systems, Expert systems, and Executive information systems.
A management information system (MIS) is designed by an organization for its smooth functioning. The MIS, a decision-making instrument used by top management, comprises of a set of controls. These controls cover the basic spheres of the business: its people, technologies, policies and procedures. The MIS gathers information on all the important realms of the business, tabulates the information and provides meaningful reports.

Features - The management information system presents data such as the organization's processes, operating procedures, internal controls and audit preparation, which the management uses to make effective and efficient decisions. The internal controls for each department contain guidelines for operation. The flow of work assigned to employees, their responsibilities and duties, for example, are listed under internal controls. Benefits - An organization benefits immensely by using an MIS. This fully automated system enables the organization to record, process and tabulate all of its business dealings and transactions. Also, the information collected makes it possible to make necessary changes and improvements to the grey areas. For example, the organization can compare actual and projected sales and take steps to correct any deviations.


By using a good MIS, the top management of the organization is able to make informed decisions. The data present in the MIS is studied and analyzed objectively and the organization is able to choose the best trade-off for its operations, sales and other functions. Also they can judge whether their resources are being used correctly.
MIS facilitates a two-communication process in the organization. The top management communicates to its employees what is expected of them and how they must accomplish the tasks entrusted. The employees in turn freely discuss their problems and concerns.

Types - There are four types of MIS. The first one, TPS (Transaction Processing System), is the most elementary. This methodology processes routine, mundane and recurring business transactions. OIS (Operations Information Systems) gathers comprehensive data and tabulates it for operations managers to use and maximize their output and minimize losses. DSS (Decision Support Systems) and ES (Expert Systems) are the two types of MIS used by the top management to make informed and intelligent decisions. The two types make extensive use of databases and modeling techniques Limitations - MIS is heavily technology driven and therefore lacks a human element. The information represented by the MIS is often rich in nature. The expertise of humans is needed to analyze the information presented and to make decisions accordingly. Considerations - Developing an MIS costs money. Usually the organization requires the help of a consultant to develop the system, therefore all the organizational procedures and controls have to be carefully and elaborately spelled out to the consultants.


Characteristics of MIS

Management Oriented Oriented: The system is designed form the top to work downwards. It does not mean that the system is designed to provide information directly to the top management. Other levels of management are also provided with relevant information. Management Directed Directed: Management orientation of MIS, it is necessary that management should continuously make reviews. Integrated System System: 5M Man, Money, Materials, Machines & Methods. The word 'integration' means that system has to cover of all the functional areas of an organization so as to produce more meaningful management information, with a view to achieving the objectives of the organization. It has to consider various subSystems, their objectives, information needs, and recognize the independence, that these sub-systems have amongst themselves, so that common areas of information are identified and processed without repetition and overlapping. For example, in the
development of an effective production scheduling system, a proper balance amongst the following factors is desired:
i. Set up costs v. Inventory level ii. Overtime iii. Manpower vi. Money available iv. Production capacity vii. Customer service.

Characteristics of MIS

Avoid Redundancy in Data Storage Storage: : As MIS is an Integrated System, no un-necessary Duplication is there for Data Gathering or Storage. Common Data Flows Flows: The integration concept of MIS, common data flow concept avoids repetition and overlapping in data collection and storage, combining similar functions, and simplifying operations wherever possible. Heavy Planning Element Element: A management information system cannot be established overnight. It takes almost 2 to 4 years to establish it successfully in an organization. Hence, long-term planning is required for MIS development in order to fulfill the future needs and objectives of the organization. Sub Sub-System Concept Concept: MIS Provisions for breaking into various SubSystems, based on activity as well as functions. Common Database Database: It acts as a Master that holds the functional Sub-Systems Together. Flexibility and ease of use use: While building an MIS system all types of possible means, which may occur in future, are added to make it flexible. A feature that often goes with flexibility is the ease of use. Computerisation Computerisation: MIS can be computerised because of its nature as a comprehensive System for Optimisation, Speed, Accuracy, Diligence, and Consistency in Data Processing.

MIS and Other Sub Systems

Subsystems of an MIS Two approaches to define subsystem
o Organisational Function Subsystem: Supports the various functions of an Organisation. Ex. Marketing, Production, Personnel etc. o Activity Subsystem: Supports the activity for which they are used. Ex. Transactions, Operations etc.
Production Strategic Planning Management Control Operational Control Transaction Processing Marketing Logistics Personnel Finance Information Processing Top Management

Organisational Function Subsystems

Activities Subsystems

INFORMATION TECHNOLOGY Hardware Software Databases Networks Other related components

Payroll System

Inventory System are used to build


Customer Service System

Information Systems

Operations Support System

Management Support System

Transaction processing systems

Process control systems

Office automation systems

Management information systems

Decision support systems

Executive information systems

Expanding Roles of IS
1. 2. 3. 4. 5. Data Processing: 1950s-1960s Management Reporting: 1960s-1970s Decision support: 1970s-1980s Strategic and End User Support: 1980s-1990s Global Internetworking: 1990s-2000s

Types of Information Systems

Inter-organisational information systems (IOS) are information systems that connect two or more organizations and support inter-organisational operations such as supply chain management.
o Function: Manage flows of products, services and information among organizations. o Example: Pantaloon Retail Link System connecting suppliers to Pantaloon. o Supply chain describes the flow of materials, information, money and services from raw material suppliers through factories and warehouses to the end customers.

Electronic Commerce Systems

Function: Enable transactions among organisations and between organizations and customers. Business-to-Business (B2B) Business-to-Consumer (B2C) Example:

Other Categories
a) Expert systems

b) End user computing systems c) Business information systems d) Strategic information systems
a) Expert Systems are knowledge-based systems that provides expert advice and act as expert consultants to the users b) End user computing systems support the direct, hands on use of computers by end users for operational and managerial applications c) Business information systems support the operational and managerial applications of the basic business functions of a firm d) Strategic information systems provide a firm which strategic products, services, and capabilities for competitive advantage

Fundamental Components of Organisation

People Information Technology Business Processes Organizational Structure Each Impacts The Rest!

Decision Making Process

Intelligence: Search for needs, collect data Design: Generate alternatives, test feasibility Choice: Select from alternatives Persuasion: Influencing others to accept & follow chosen solution Implementation: Install solution on time, within budget Follow-up: Monitor, modify, refine Constant Feedback

Different Categories of Systems

Three main categories of information systems function at different organizational levels:
1. Operational - level systems: Support operational managers keep track of the elementary activities and transactions. Management-level systems: Serve the monitoring, controlling, decision-making, and administrative activities Strategic-level systems: Help senior management tackle and address strategic issues.
CEO Information

2. 3.

Additional Stores



Warehouse Inventory Management

POS Cash Registers Customers EDI Sales Reports


Process Control Central Computer

Inputs: High volume transaction level data Processing: Simple models Outputs: Summary reports Users: Middle managers Example: Annual budgeting

Levels of Management
Lower or Operational level Management -They make structured decisions (Operational decisions). Structured decision Its a predictable decision that can be made following a well defined set of routine procedures. Most decisions at this level require easily defined information that relates to the current status and activities within the basic business functions. Information is gained from detailed reports which contain information about routine activities. Detailed tasks defined by middle management are carried out by people at operational level. Middle or Tactical Management -Acquire and arrange the resources (Computers, people etc) to meet the goals of an organization. Define the detailed tasks to be carried out at the operational level. Information needed involves review, summarization and analysis of data to help plan and control operations and implement policy that has been formulated by upper management. Information is usually given to middle managers as summarized reports. Deals with semi structured decisions. (Tactical decisions) Semi structured decisions that must be made without a base of clearly defined informational procedures. In most cases a semi structured decision is complex, requiring detailed analysis and extensive computations. Upper or Top or Strategic Management -Decides on the broad objectives of an organization. Make unstructured decisions. (Strategic decision). Unstructured decisions are the most complex type of decisions and are rarely based on predetermined routine procedures. They involve subjective judgments of the decision maker.

Operations Support Systems

Transaction processing systems record and process data resulting for business transactions. Typically examples are information systems that process sales, purchases, and inventory changes. These can be processed and used by management information systems, decision support systems, and executive information systems. PROCESS CONTROL SYSTEMS Operation support systems also make routine decisions that control operational processes. Examples are automatic inventory reorder decisions and production control decisions. Enterprise collaboration systems are information systems that use a variety of information technologies to help people work together. Enterprise collaboration systems help us collaborate to communicate ides, share resources, and coordinate our cooperative work efforts as members of the many formal and informal process and project teams and other workgroups.

Management Support Systems

Question - Explain Subsystems of an MIS. Describe Briefly Types of Systems

Management information systems (MIS) are the most common form of management support systems. They provide managerial end users with information that support much of their day-to-day decision-making needs. MIS provide a variety of reports and displays to management. DECISION SUPPORT SYSTEMS: A natural progression from information reporting systems and transaction processing systems. Decision support systems are interactive, computer-based information systems that use decision models and specialized database to assist the decision making process of managerial end users. EXECUTIVE INFORMATION SYSTEMS: EIS are management information systems tailored to the strategic information needs of top management. Top executives get the information they need from many sources, including letters, memos, periodicals, and reports produced manually as well as by computer systems.

How Systems are Build From Subsystems

Decomposition - A complex system is very difficult to understand as a whole. Therefore, it is decomposed or divided into subsystems. The sum of subsystems constitutes the entire system. The process of decomposition is continued to with subsystems divided into smaller subsystems until the smallest subsystem are of manageable size. These subsystems generally form hierarchical structure.

example of Decomposition
Information system divided into subsystem such as:
o o o o o o o o o o o o o Sales & Order entry Inventory Production Personnel & Payroll Purchasing Accounting & Control Planning

Each subsystem is further divided into subsystems. Ex. Personnel & Payroll:
Personnel Reports Payroll data entry & validation Hourly Payroll processing Salaried payroll processing Payroll Report for management Payroll report for Government

The subsystems defined in (2) might be further subdivided into smaller subsystems or modules. For Example, the hourly payroll processing might be divided into modules for calculation of deductions & net pay, payroll register & audit controls preparations, register & controls outputs.

The process of decomposition could lead to a large number of subsystem interfaces to define. Each interconnection is a potential interface for communication among subsystems. Simplification is the process of organizing subsystems so as to reduce the number of interconnections. Methods of simplification are: Clusters & Decoupling


Cluster Method
Clusters of subsystems are established which interact with each other, then a single interface path is defined from the cluster to other subsystems or clusters of subsystems. For Example: A database assessed by many programs, but the interconnection is through a database management interface.

Decoupling Method

If two different subsystems are connected very tightly, very close coordination & timing between them is required. Because, they are somewhat independent, it is difficult to make them operate completely in synchronized fashion. The solution is to decouple or loosen the connection so that the two systems can operate in the short run with some measures of independence. Some means of decoupling are:
o Inventories, buffer or waiting line o Slack & flexible resources & o Standards

Means of Decoupling

Information and the MIS concept

Information is a set of classified and interpreted data used in decision making. It has also been defined as 'some tangible or intangible entity which serves to reduce uncertainty about future state or events' (Lucas, 1978). A management information system (MIS) is 'an integrated usermachine system for providing information to support operations, management and decision making functions in an organization. The system utilizes computers, manual procedures, models for analysis, planning, control and decision making, and a database' (Davis and Olson, 1984). MIS facilitates managerial functioning. Management information is an important input at every level in the organization for decision making, planning, organizing, implementing, and monitoring and controlling. MIS is valuable because of its content, form and timing of presentation. In the context of different levels of decision making, information can be described as:
source, data, inferences and predictions drawn from data, value and choices (evaluation of inferences with regard to the objectives and then choosing a course of action), and action which involves course of action.

The MIS concept comprises three interrelated and interdependent key elements: management, system and information (Murdick and Ross, 1975).

Management and the MIS process

An MIS is directed towards the managerial functions of planning, controlling and monitoring, and decision making. Planning Planning consists of five sequential and interactive steps (Kumar, 1989). These are:
selecting objectives; identification of the activities which are required to achieve the stipulated objectives; detailing the resources - including the various skills - required to undertake the activities; determining the duration of each activity to be performed; and defining the sequence of the activities.

The basic requirements during the planning process of most importance in designing and implementing an MIS for an organization are (Kumar, 1989):
providing the information required by the planner at each step of planning; establishing procedures for obtaining the information; arranging for storage of the approved plans, as these will provide the information requisite to monitoring and controlling; and evolving methods for communicating the plans to employees in the organization.

MIS Elements
Management functions
Planning Controlling Decision making Information system Management information

Steps in Planning
1. Selecting objectives 2. Identifying activities required to achieve the stipulated objectives 3. Describing the resources or skills, or both, necessary to perform the activities 4. Defining the duration of each activity to be undertaken 5. Determining the sequence of the activities

Requirements During The Planning Process

1. Supplying the information needed by the planner at each step 2. Establishing procedures for procuring the information at each step (including the means to view alternatives) 3. Arranging for storage of the approved plans as information for the control process 4. Devising an efficient method for communicating the plans to other members in the organization

Controlling involves 1. Establishing standards of performance in order to reach the objective 2. Measuring actual performance against the set standards 3. Correcting deviations to ensure that actions remain on course Requirements for Controlling 1. Defining expectations in terms of information attributes 2. Developing the logic for reporting deviations to all levels of management prior to the actual occurrence of the deviation

Monitoring and Controlling

Controlling 'compels events to conform to plans' (Murdick and Ross, 1975). It involves:
establishing standards of performance in order to reach the objective; measuring actual performance against the set standards; and keeping actions on course by correcting deviations as they appear (mid-course corrections).

The requirements for successful development of a control system are:

defining expectations in terms of information attributes; and developing the logic for reporting deviations to all levels of management prior to the actual occurrence of the deviation.

Decision Making
Levels of decision making Strategic Tactical Technical Elements of Decision Making Model Constraints Optimization

Decision Making
Decision making is the process of selecting the most desirable or optimum alternative to solve a problem or achieve an objective. The quality and soundness of managerial decisions is largely contingent upon the information available to the decision-maker. Gorry and Scott Morton (1971) classified decision making on three levels of a continuum:
Strategic decisions are future-oriented because of uncertainty. They are part of the planning activity. Tactical decision making combines planning activities with controlling. It is for short-term activities and associated allocation of resources to them to achieve the objectives. Technical decision making is a process of ensuring efficient and effective implementation of specific tasks.

Elements of Decision Making

The four components of the decision making process are (Burch and Strater, 1974):
Model A model is an abstract description of the decision problem. The model may be quantitative or qualitative. Criteria The criteria must state how goals or objectives of the decision problem can be achieved. When there is a conflict between different criteria, a choice has to be made through compromise. Constraints Constraints. Constraints are limiting factors which define outer limits and have to be respected while making a decision. For example, limited availability of funds is a constraint with which most decision makers have to live. Optimization Once the decision problem is fully described in a model, criteria for decision making stipulated and constraints identified, the decision-maker can select the best possible solution.

"A set of elements forming an activity or a procedure/scheme seeking a common goal or goals by operating on data and/or energy and/or matter in a time reference to yield information and/or energy and/or matter." Perceiving The System 1. 2. 3. 4. Some components, functions and processes performed by these various components Relationships among the components that uniquely bind them together into a conceptual assembly which is called a system An organizing principle which is an overall concept that gives it a purpose The fundamental approach of the system is the interrelationship of the sub-systems of the organization

Systems Approach
Modern management is based upon a systems approach to the organization. The systems approach views an organization as a set of interrelated sub-systems in which variables are mutually dependent. A system can be perceived as having:
some components, functions and the processes performed by these various components; relationships among the components that uniquely bind them together into a conceptual assembly which is called a system; and an organizing principle that gives it a purpose (Albrecht, 1983).

The organizing system has five basic parts, which are interdependent (Murdick and Ross, 1975). They are:
the individual; the formal and informal organization; patterns of behaviour arising out of role demands of the organization; the role perception of the individuals; and the physical environment in which individuals work.

The interrelationship of the sub-systems within an organization is fundamental to the systems approach. The different components of the organization have to operate in a coordinated manner to attain common organizational goals. This results in synergic effects. The term synergy means that when different sub-systems work together they tend to be more efficient than if they work in isolation (Murdick and Ross, 1975). Thus, the output of a system with well integrated sub-systems would be much more than the sum of the outputs of the independent sub-systems working in isolation. The systems approach provides a total view of the organization. It enables analysis of an organization in a scientific manner, so that operating management systems can be developed and an appropriate MIS designed (Murdick and Ross, 1975).

By providing the required information, an MIS can help interrelate, coordinate and integrate different sub-systems within an organization, thus facilitating and increasing coordinated working of the sub-systems, with consequent synergism. The interaction between different components of the organization depends upon integration, communication and decision making. Together they create a linking process in the organization. Integration ensures that different sub-systems work towards the common goal. Coordination and integration are useful controlling mechanisms which ensure smooth functioning in the organization, particularly as organizations become large and increasingly complex. As organizations face environmental complexity, diversity and change, they need more and more internal differentiation, and specialization becomes complex and diverse. The need for integration also increases as structural dimensions increase. Communication integrates different sub-systems (specialized units) at different levels in an organization. It is thus a basic element of the organizational structure necessary for achieving the organization's goals.

Basic Parts of the Organization

1. The individual 2. The formal and informal organization 3. Patterns of behaviour arising out of role demands of the organization 4. The role perception of the individual 5. The physical environment in which individuals work Why A Systems Approach Developing and managing operating systems (e.g., money flows, manpower systems) Designing an information system for decision making Systems approach and MIS MIS aims at interrelating, coordinating and integrating different sub-systems by providing information required to facilitate and enhance the working of the sub-systems and achieve synergistic effects

Organizational Structure and MIS

MIS has been described as a pyramidal structure, with four levels of information resources. The levels of information would depend upon the organizational structure. The top level supports strategic planning and policy making at the highest level of management. The second level of information resources aid tactical planning and decision making for management control. The third level supports day-to-day operations and control. The bottom level consists of information for transaction processing. It then follows that since decision making is specific to hierarchical levels in an organization, the information requirements at each level vary accordingly. Thus, MIS as a support system draws upon:
concepts of organization; organizational theories, principles, structure, behaviour communication, power and decision making; and motivation and leadership behaviour. and processes such as

Davis and Olson (1984) analysed the implications of different characteristics of the organizational structure on the design of information systems.

Concept Hierarchy of authority Specialization Formalization Centralization Modification of basic model Information model of organization Organizational culture Organizational power

Organizational growth Goal displacement Organizational learning Project model of organizational change Case for stable system Systems that promote organizational change Organizations as sociotechnical systems

Implications for Information Systems A tall hierarchy with narrow span of control requires more formal control information at upper levels than a flat hierarchy with wide span of control. Information system applications have to fit the specialization of the organization. Information systems are a major method for increasing formalization. Information systems can be designed to suit any level of centralization. Information systems can be designed to support product or service organizations, project organizations, lateral relations and matrix organizations. Organizational mechanisms reduce the need for information processing and communication. Vertical information systems are an alternative to lateral relations. Information systems are used to coordinate lateral activities. Organizational culture affects information requirements and system acceptance. Organizational power affects organizational behaviour during information system planning, resource allocation and implementation. Computer systems can be an instrument of organizational power through access to information. The information system may need to change at different stages of growth. When identifying goals during requirements determination, care should be taken to avoid displaced goals. Suggests need for information system design for efficiency measures to promote single loop learning and effectiveness measures for double loop learning. Describes general concepts for managing change with information system projects. Establish control over frequency of information system changes. Reporting critical change variables, organizational change, or relationships, and use of multiple channels in a semi-confusing system may be useful for promoting responses to a changing environment. Provides approach to requirements determination and job design when both social and technical considerations are involved.

Source: Taken from Gordon and Olson, 1984: 358-359.

'A set of classified and interpreted data used in the decision making process" Information has also been defined as some tangible entity which serves to reduce uncertainty about future state or events In the context of different levels of decision making, information can be described as:
Source data inference and predictions drawn from the data value and choices (evaluation of inferences with regard to the objectives, and then choosing courses of action) action which involves a course of action

The value of management information lies in its content, form and timing of presentation

Information Requirements for MIS

Assessing information needs A first step in designing and developing an MIS is to assess the information needs for decision making of management at different hierarchical levels, so that the requisite information can be made available in both timely and usable form to the people who need it. Such assessment of information needs is usually based on personality, positions, levels and functions of management. These determine the various levels of information requirements.

Levels of Information Requirements

There are three levels of information requirements for designing an MIS (Davis and Olson 1984). They are:
At the organizational level level, information requirements define an overall structure for the information system and specific applications and database. Application level requirements include social or behavioural covering work organization objectives, individual roles and responsibility assumptions, and organizational policies - and technical, which are based on the information needed for the job to be performed. A significant part of the technical requirement is related to outputs, inputs, stored data, structure and format of data and information processes. At the user level level, database requirements can be classified as perceived by the user or as required for physical design of the database.

Strategies for determining information requirements

Gordon and Olson (1984) suggested six steps in selecting a strategy and method for determining information requirements.
1. Identify elements in the development process Utilizing systems Information system or application Users Analysis 2. Identify characteristics of the four elements (in 1, above) in the development process which could affect uncertainty in the information requirements. 3. Identify the process uncertainties Existence and availability of a set of usable requirements. Ability of users to specify requirements. Ability of the analyst to elicit and evaluate information requirements. Assess how the characteristics of the four elements in the development process (listed under 1, above) will affect the these process uncertainties. 4. Determine how the overall requirements uncertainties would be affected by the combined effects of the process uncertainties. 5. Considering the overall requirements uncertainty, choose a primary strategy for information requirements. If uncertainty is low, then the strategy should be to: Ask the users what their requirements are. This presupposes that the users are able to structure their requirements and express them objectively. Asking can be done through - questions, which may be closed or open, - brainstorming sessions, totally open or guided, and - group consensus as aimed at in Delphi methods and group norming. Wherever there are close similarities in the organization and easy replication is possible, information requirements can be derived from the existing system. Characteristics of the utilizing system should be analysed and synthesized. This is particularly useful if the utilizing system is undergoing change. If uncertainty is high, discover from experimentation by instituting an information system and learning through that the additional information requirements. This is 'prototyping' or 'heuristic development' of an information system. 6. Select an appropriate method.

Source: Davis and Olson, 1984: 488-493.

MIS as A Pyramidal Structure

Conceptual Basis of MIS 1. Concepts of organization 2. Organizational theories, principles, structure, behaviour and processes such as communication, power and decision making 3. Motivation and leadership behaviour

Implications of The Organizational Structure For MIS

Concepts: Hierarchy of authority Specialization Formalization Centralization Modification of the basic model Information model of organization Organizational culture Organizational power Organizational growth cycle Goal displacement Organizational learning Project model of organizational change Case for stable system Systems that promote organizational change Organizations as socio-technical systems

Information Requirements For MIS

1. Assessing information requirements 2. Levels of information requirements
Organizational level Application level Technical Database

Strategies For Determining Information Requirements

1. 2. 3. 4. Asking Deriving from an existing information system Synthesizing from characteristics of the utilizing system Discovering from experimentation with an involving information system

Strategy For Determining Data Requirements

1. Identify elements in the development process utilizing system: Information systems or applications Users Analysts 2. Identify process uncertainties: Existence and availability of a set of usable requirements Ability of users to specify requirements Ability of analysts to elicit and evaluate requirements 3. Evaluate the effects of elements in the development process over process uncertainties 4. Evaluate the combined effects of the process uncertainties on overall requirements uncertainty 5. Select a primary strategy for requirements determination based on the overall requirements uncertainty 6. Select one or more from the set of methods to implement the primary strategy Uncertainty level Strategy Low Asking or deriving from an existing system Synthesis from characteristics of utilizing systems High Discovering from experimentation

Types of MIS
1. 2. 3. 4. Databank information system Predictive information system Decision making information system Decision taking information system

The MIS Process

1. Understand the organization 2. Analyse the organization's information requirements 3. Plan overall strategy 4. Review 5. Preliminary analysis 6. Feasibility assessment 7. Detailed fact finding 8. Analysis 9. Design 10. Development 11. Cutover 12. Obtain conceptual schema 13. Recruit database administrator 14. Obtain logical schema 15. Create data dictionary 16. Obtain physical schema 17. Create database 18. Modify data dictionary 19. Develop sub-schemas 20. Modify database 21. Amend database

Types of MIS
MIS can be categorized (Mason, 1981) as follows: Databank information systems refer to creation of a database by classifying and storing data which might be potentially useful to the decision-maker. The information provided by the databank is merely suggestive. The decision-maker has to determine contextually the cause and effect relationships. MIS designs based on the databank information system are better suited for unstructured decisions. Predictive information systems provide source and data along with predictions and inferences. The decision-maker can also enquire as to 'what if a certain action is taken?' and whether the underlying assumptions are true. This type of MIS is useful for semi-structured decisions. Decision-making information systems provide expert advice to the decision-maker either in the form of a single recommended course of action or as criteria for choice, given the value system prevailing in the organization. The decision-maker has just to approve, disapprove or modify the recommendation. Decision-making information systems are suitable for structured decisions. Operations research and costeffectiveness studies are examples of decision-making information systems. Decision-taking information systems integrate predictive information and decision-making systems.

Process of MIS
The MIS implementation process (Table 3) involves a number of sequential steps (Murdick and Ross, 1975): 1. First establish management information needs and formulate broad systems objectives so as to delineate important decision areas (e.g., general management, financial management or human resources management). Within these decision areas there will be factors relevant to the management decision areas, e.g., general management will be concerned about its relationship with the managing board, institute-client relationships and information to be provided to the staff. This will then lead the design team to ask what information units will be needed to monitor the identified factors of concern. Positions or managers needing information for decision making will be identified. 2. Develop a general description of a possible MIS as a coarse design. This design will have to be further refined by more precise specifications. For efficient management of information processing, the MIS should be based on a few databases related to different sub-systems of the organization.

Process of MIS
1. Once the information units needed have been determined and a systems design developed, decide how information will be collected. Positions will be allocated responsibility for generating and packaging the information. 2. Develop a network showing information flows. 3. Test the system until it meets the operational requirements, considering the specifications stipulated for performance and the specified organizational constraints. 4. Re-check that all the critical data pertaining to various subsystems and for the organization as a whole are fully captured. Ensure that information is generated in a timely manner. 5. Monitor actual implementation of the MIS and its functioning from time to time.

1. Understand the organization 2. Analyse the information requirements of the organization 3. Plan overall strategy 4. Review 5. Preliminary analysis 6. Feasibility assessment 7. Detailed fact finding 8. Analysis 9. Design 10. Development 11. Cutover 12. Obtain conceptual schema 13. Recruit database administrator 14. Obtain logical schema 15. Create data dictionary 16. Obtain physical schema 17. Create database 18. Modify data dictionary 19. Develop sub-schemas 20. Modify database 21. Amend database

Relevance Management by exception Accuracy Adaptability

MIS Criteria

Strategies For Determining MIS Design Organization-chart approach Integrate-later approach Data-collection approach Database approach Top-down approach

Crowe and Avison (1982) suggested five criteria for an MIS:

Relevance Information should be relevant to the individual decision-makers at their level of management. Management by exception Managers should get precise information pertaining to factors critical to their decision making. Accuracy The database from which information is extracted should be up-to-date, contextually relevant and validated. Timeliness The information should be provided at the time required. Adaptability The information system should have an in-built capability for re-design so that it can suitably adapt to environmental changes and changing information requirements.

Criteria for MIS

Strategies for Determining MIS Design

MIS design should be specific to an organization, respecting its age, structure, and operations. Six strategies for determining MIS design have been suggested by Blumenthal (1969): o Organization Organization-chart approach Using this approach, the MIS is designed based on the traditional functional areas, such as finance, administration, production, R&D and extension. These functional areas define current organizational boundaries and structure. o Integrate Integrate-later approach Largely a laissez faire approach, it does not conform to any specified formats as part of an overall design. There is no notion of how the MIS will evolve in the organization. Such an MIS becomes difficult to integrate. In today's environment - where managers demand quick and repeated access to information from across sub-systems - the integrate-later approach is becoming less and less popular.

Strategies for Determining MIS Design

o DataData-collection approach This approach involves collection of all data which might be relevant to MIS design. The collected data are then classified. This classification influences the way the data can be exploited usefully at a later stage. The classification therefore needs to be done extremely carefully. o Database approach A large and detailed database is amassed, stored and maintained. The database approach is more and more accepted for two main reasons: first, because of data independence it allows for easier system development, even without attempting a complete MIS; and, second, it provides management with immediate access to information required. o Top Top-down approach The top-down approach involves defining the information needs for successive layers of management. If information required at the top remains relatively stable in terms of level of detail, content and frequency, the system could fulfil MIS requirements (Zani, 1970).

Strategies for Determining MIS Design

o The usefulness of this approach depends on the nature of the organization. It can be suitable for those organizations where there is a difference in the type of information required at the various levels. o Total-system approach In this approach the interrelationships of the basic information are defined prior to implementation. Data collection, storage and processing are designed and done within the framework of the total system. This approach can be successfully implemented in organizations which are developing.


Because there are different interest, specialties and levels in an organisation, organisation , there are different kinds of systems systems. . No single system can provide all the information an organisation needs needs. The diagram illustrates one way to depict the kinds of systems found in an organisation. In this illustration the organisation is divided into
a) Strategic b) Management c) Operational

This is further divided into functional areas as indicated in the figure hence this show that systems are built to serve different organisational interests.

Functional Areas of Management

a) Operational Level System - This supports operational managers by keeping track of the elementary activities and transactions of the organisation i.e. cash deposits, payroll, credit decisions sales, receipts etc. The principle purpose of systems at this level is to answer routine questions and track the flow of transactions through the organisation.(Example of Operational Level system is record bank deposits from ATM and One that tracks the number of hours worked each day by employees on a factory floor. b) Management level systems - This serves the monitoring, controlling, decisionmaking and administrative activities of middle managers. The principle question addressed by such systems is (Are things working well) Management level systems typically provide periodic reports rather than instant information on operations. Mostly this systems show wherever actual costs exceed budgets. Some management level systems support non-routine decision making. They tend to focus on less-structured decisions for which information requirements are not always clear. These systems often answer What-if questions thus answers to these questions frequently require new data from outside the organisation, as well as data from inside that cannot be easily drawn from existing operational level systems. c) Strategic Level Systems - This system helps senior management tackle and address strategic issues and long-term trends both in the firm and in the external environment. Their principle concern is matching changes in the external environment with existing organisational capability.

Organizations & Management

Why Information Systems? Ask managers to describe their most important resources and they'll list a) Money b) Equipment c) Materials d) People It's very unusual for managers to consider information an important resource and yet it is. Importance of Information Technology
o o o o 1) Capital Management 2) Foundation of Doing Business 3) Productivity 4) Strategic Opportunity and advantage

A combination of information technology innovations and a changing domestic and global environment makes the role of IT in business even more important than a few years year ago. There are five factors to consider when assessing the growing impact of IT in business organisations.
o o o o o a) Internet growth and technology convergence b) Transformation of the business enterprise c) Growth of a globally connected economy d) Growth of knowledge and information based economies e) Emergence of the digital firm

Business Perspective of information Systems Business firms invest in information technology and systems because they provide real economic value to the business. The decision to build /maintain an information system assumes that the returns on this investment will be superior to other investments in buildings, machines or other assets. These superior returns will be expressed as increase in productivity, increase in revenues or perhaps a superior long term strategic positioning of the firm in certain markets.

Dimensions of Information Systems There are three dimensions of information systems namely
a) Organisation b) Management c) Information technology

a) Organisation Information systems are an integral part of organisations. The key elements of an organisation are its :
(i) People (ii) Structure (iii) Business processes (iv) Politics (v) Culture

Organisations are composed of different levels and specialties. Their structures reveal a clear-cut division of labour. Experts are employed and trained for different functions. The major business functions or specialised tasks performed by business organisation consist of:
(i) Sales and marketing (ii) Manufacturing and production (iii) Finance and accounting (iv) Human resources

An organisation coordinates work through a structured hierarchy and through its business processes. The hierarchy arranges people in a pyramid structure of rising authority and responsibility. The upper levels of the hierarchy consist of
(i) Managerial (ii) Professionals (iii) Technical employees

Whereas these levels consist of

(i) Operational Personnel (ii) Management (iii) Technology

Levels of IT Infrastructure Firm infrastructure is organized at three major levels

a) Public unit b) Enterprise unit c) Business unit

IT infrastructure is composed of seven major components i.e.

o o o o o o o Databases Management and Storage Consultants and systems integrators Networking/Telecommunications Enterprise Software Applications Operating Systems Platforms Computer Hardware Platform Internet Platforms

The above mentioned components must be coordinated to provide the firm with a coherent IT infrastructure.


The collection of data and information is not an end in itself but is essential for informed decision-making. o It is therefore important for the management authority to ensure that the data collected are analysed correctly, disseminated to where they can best be used, and used appropriately in decision-making. Information is also needed to assure the public at large that resources are managed responsibly and that the objectives are being reached. It must be recognized that data and information are required at the three levels, policy formulation, formulation of management plans, and the determination of management actions to implement the policy and plans. o These will overlap considerably and each of the three steps will be influenced by what has happened or is happening at the other two levels. Nevertheless, the three processes are distinct, occur on different time scales and require different information to different levels of detail. Where necessary, differences in methods and approaches between, e.g., artisanal and commercial fisheries and at different time scales need to be emphasised.

General Considerations in the Collection and Provision of Data and Information

Data requirements for different management scales Verification or validation of data
o o o o o o o o o checking logbooks against landings data (e.g. sales notes); sampling catches for species composition; comparing landings statistics with certificates of origin, trade and commodity production statistics (e.g. processed fish) and similar sources of information; inspecting data collection methods by statistical staff; interviews with fishers; observer schemes; reporting from sea on retained catch on entering and leaving the fishing zones; developing and implementing the use of vessel monitoring systems such as transponders to monitor the position, catch and activities of vessels; and instituting airborne and shipboard surveillance, associated with the boarding of vessels.

Standardisation of data collection Timely distribution Confidentiality of data Costs of collection and collation of data Data Requirements and Use in the Formulation of Management Plans Monitoring, control and surveillance Data Requirements and Use in the Determination of Management Actions and Monitoring Performance

The Impact of IT on organisations

Information technology (IT) is dramatically changing the business landscape. Although organisation cultures and business strategies shape the use of IT in organisations, more often the influence is stronger the other way round. IT significantly affects strategic options and creates opportunities and issues that managers need to address in many aspects of their business. This slide outlines some of the key impacts of technology and the implications for management on: Business strategy - collapsing time and distance, enabling electronic commerce Organisation Culture - encouraging the free flow of information Organisation Structures - making networking and virtual corporations a reality Management Processes - providing support for complex decision making processes Work - dramatically changing the nature of professional, and now managerial work The workplace - allowing work from home and on the move, as in telework

the difference between MIS and IRM

The difference between the management information and information management management. The main difference is that in information system we only just collect the information but in information management system we have decide to which type of information is more relevant to an organisation. Knowledge management is the ability a person has to use information or data efficiently and honestly. Information system management is the capacity of a computer to connect a network of computers through a local or metropolitan area network or through the world wide web.


Most enterprises today are critically dependent upon automated information for both daily operation and management control. Today, information is the most important and highest-leveraged resource the business controls -- the means by which all other resources are managed. Yet, few businesses have begun to exploit the enormous strategic potential of a well-integrated information environment. Most enterprises function at a small fraction of their potential productivity with a set of terribly dis-integrated, inconsistent, and often redundant application systems, operating on an underlying redundant, inconsistent, and untimely data mess. The main obstacles to exploiting the information resource are internal to the enterprise, and can be easily overcome.

Information Resource Management (IRM)

Information-based organisations depend upon computer databases and information systems for their ongoing operation and management. Information Resource Management (IRM) is a program of activities directed at making effective use of information technology within an organisation. These activities range from global corporate information planning to application system development, operation, and maintenance and support of end-user computing. Numerous approaches to specific IRM activities have been proposed. They remain disjoint, however, and, hence globally ineffective. A significant reason for inability to integrate IRM activities is the failure to adequately define the information resource. What is it that must be effectively managed? This paper addresses this issue. It applies data modeling concepts to the problem of managing organisational information resources. A data model is developed to support and integrate the various IRM activities. This model formally defines the information resource and the data needed to manage it. It provides a basic ingredient for effective Information Resource Management.

Information Resources Management

One of the dilemmas facing today's manager is that on the one hand they seem to be suffering from information overload, yet on other hand, they often they complain about shortage of information needed to make vital decisions. the crucial problem of exploiting an organisation's proprietary information as a strategic asset. these problems is that of having "the the right information, in the right place, in the right format, at the right time time".

Information Resources Management (IRM) is an emerging discipline that helps managers assess and exploit their information assets for business development. It draws on the techniques of information science (libraries) and information systems (IT related). It an important foundation for knowledge management, in that deals systematically with explicit knowledge. Knowledge centers often play an important part in introducing IRM into an organisation. The IRM Network has developed a model highlighting the five key activities for their effective IRM management:
Identification What information is there? How is it identified and coded? Ownership Who is responsible for different information entities and co-ordination? Cost and Value A basic model for making judgements on purchase and use Development Increasing its value or stimulating demand. Exploitation Proactive maximisation of value for money

Benefits of implementing an IRM Strategy

Few organisations have developed a comprehensive IRM strategy. Those that have started with some of its key processes of information audit, and information mapping cite the following benefits:
Identifies gaps and duplication of information Clarifies roles and responsibilities of owners and users of information Provide costs saving in the procurement and handling of information Identifies cost/benefits of different information resources Actively supports management decision processes with quality information

Some of the issues that it addresses are:

Strategic - the information needs to support the implementation of business strategies; also the way that information itself can be a key lever of strategy (in terms of new product and service opportunities) Organisational - ownership, evaluation, fragmentation, isolation from processes, the politics of information Structural Integrating external and internal information, its categorisation, refining it from data into classified actionable 'chunks'. Systems User accessibility, interface to sources, multiple databases, retrieval, usability Human Processing capability, overload, incentives to share.

How to Manage Information as a Strategic Asset

1. Understand the role of Information. Information can add value to your products and services. Improved information flows can improve the quality of decision making and internal operations. Yet many managers do not fully understand the real impact of information - the cost of a lost opportunity, of a poor product, of a strategic mistake - all risks that can be reduced by using the appropriate information. 2. Assign Responsibility for Leading your IRM Initiative. Developing value from information resources is often a responsibility that falls between the cracks of several departments - the user departments in different business units, and corporate planning, MIS units or librarians.. 3. Develop Clear Policies on Information Resources Policies for ascertaining information needs, acquiring and managing information throughout its life cycle. Pay particular attention to ownership, information integrity and sharing. Make the policies consistent with your organisational culture. 4. Conduct an Information Audit (Knowledge Inventory). Identify current knowledge and information resources (or entities), their users, usage and importance. Identify sources, cost and value. Classify information and knowledge by its key attributes. Develop knowledge maps. As knowledge management gains prominence, this is sometimes called a knowledge inventory "knowing what you know. 5. Link to Management Processes. Make sure that key decision and business process are supported with high leverage information. Assess each process for its information needs. 6. Systematic scanning. Systematically scan your business environment. This includes the wider environment - legal and regulatory, political, social, economic and technological - as well as the inner environment of your industry, markets, customers and competitors. Provide selective and tailored dissemination of vital signs to key executives. This goes beyond the daily abstracting service provided by many suppliers.

7. Mix hard/soft, internal/external. True patterns and insights emerge when internal and external data is juxtaposed, when hard data is evaluated against qualitative analysis. Tweak your MkIS system to do these comparisons. 8. Optimize your information purchases. You don't have to control purchasing, but most organisations do not know how much they are really spending on external information. By treating consultancy, market research, library expenses, report and databases as separate categories, many organisations are confusing media with content. 9. Introduce mining and refining processes. Good information management involves 'data mining', 'information refining' and 'knowledge editing'. You can use technology such as intelligent agents, to help, but ultimately subject matter experts are needed to repackage relevant material in a user friendly format. One useful technique is content analysis, whose methods have been developed by Trend Monitor International in their Information Refinery, and are used in our analysis services. The classifying, synthesising and refining of information combines the crafts of the information scientist, librarian, business analyst and market researcher/analyst. Yet many organisations do not integrate these disciplines. 10. Develop Appropriate Technological Systems Continual advances in technology increase the opportunities available for competitive advantage through effective information management. In particular, intranets, groupware and other collaborative technologies make it possible for more widespread sharing and collaborative use of information. Advances in text retrieval, document management and a host of other trends in knowledge management technologies have all created new opportunities for providers and users alike. 11. Exploit technology convergence. Telecommunications, office systems, publishing, documentation are converging. Exploit this convergence through open networking, using facilities such as the World Wide Web, not just for external information dissemination but for sharing information internally. 12. Encourage a Sharing Culture Information acquires value when turned into intelligence. Market Intelligence Systems (MkIS) are human expert-centred. Raw information needs interpretation, discussing and analysing teams of experts, offering different perspectives. This know-how sharing is a hall-mark of successful organisations.

How to Manage Information as a Strategic Asset

Information Resource (IRM) Concepts o Information Resource Management Defined o Managing Information as a Corporate Resource o Systems Systems-land vs. IRMIRM-land o The Problem - The "Disintegrated System Paradigm" Consequences of the "Dis-integrated System Paradigm" Trends in the Dis-Integrated Systems Environment Data Quality in Systemsland The Orthogonal Process/Data Conundrum o The IRM Goal Information Resource Categories and Management Objectives The Primacy of the Data Resource Trends in the IRM environment Data Quality in IRM-land o IRM Requires . . .

The Big Six Critical Success Factors for an IRM Environment o 1. Executive Leadership and Involvement Example CIO Charter Example Executive Information Steering Group Charter o 2. Formal IRM Infrastructure (Ground Rules/Controls) IR Framework IRM Policies IRM Standards IRM Method(s) IRM Tools


o 3. Living ConceptualConceptual-Level Enterprise Information Resource Models Enterprise Functional Model Enterprise Organisational Model Enterprise Geographic Business Location Model Enterprise Conceptual Data Model Enterprise Conceptual Transaction Model Enterprise Conceptual Distribution Model Enterprise Conceptual Technology Model o 4. The Master Implementation/Migration Plan o 5. Effective IRM Organisational Structure and Transition Plan o 6. Appropriate Skill Base How to Transition from "Disintegrated SystemsSystems-land" to "IRM"IRM-land" o Businesses Change When . . . o IRM Step-by-Step Transition Plan o Evolutionary, Not Revolutionary Transition


Building Strategic Advantage Through IT

Unlike what some commentators have said, information technology is not a commodity; nor is it an afterthought. IT is a strategic asset, when implemented and used appropriately. IT enables an organization and its people to be reliable, unified, agile, and responsive. This white paper describes for CIOs, CFOs, and other senior officials how IT can provide a return on knowledge that leads to a competitive edge.

Information technology becomes a strategic asset when it makes the entire business adaptive and ready for change.

Strategic Advantage Through IT

Information technology becomes a strategic asset when it makes the entire business adaptive and ready for change. The economics of the Knowledge Age have not caught up with innovation. How an organization defines value is a key component of how it realizes value. For IT that means aligning investments with strategy. Flexible IT adapts to change without requiring constant changes to the deep rules and schemas that reflect current realities. Project managers need to distinguish between false metrics and real business metrics. The ideal IT model pushes out most capabilities to business users by giving them easy ways to customize their information environment and modify processes as their needs and roles evolve. Today, every worker needs a flexible, powerful, and connected information work platform and the skills to use it in a variety of contexts and business scenarios. Infrastructure matters because it supports the delivery of value. What makes IT matter is often as much about how the business speaks of technology internally as it is what technology does for the business. If the business wants to innovate on multiple levels, it must carefully listen to what IT has to offer. Organizations can get more from their IT investment by adopting a layered approach, where each new development effort extends the underlying platform of capabilities. When IT systems need professional development services or support, customers need to know where to turn. From applications to infrastructure, you must understand the value of data and tie it to the IT investment. IT departments that want their value recognized need to monitor the projects return on investment.

Across industries, IT budgets as a percentage of sales hover just below 4 percent. Information technology expenditures are a significant cost for most organizations. But many still struggle to effectively account for their return on IT investments, either in reduced costs or in differentiated value to their customers. One of the biggest problems in justifying IT budgets is the growth of the knowledge economy: Our economics remain rooted in Industrial Age terms. When the only framework is industrial economics, everything looks like a production line. The most common strategies for understanding and accepting IT investments include the competitive cost of doing business argument, followed quicklyand not surprisingly, given the previously stated positionby the attachment of technology to a process. There is nothing wrong with either approach, but neither helps IT managers connect spending to a business outcome in a tangible way. Information technology becomes a strategic asset when it makes the entire business adaptive and ready for change by connecting people, process, and information to drive results. How an organization measures the results of its technology investments is important, because the continuous improvement of any function requires a clear way to measure performance against goals. The strategic value of IT, therefore, becomes clearer when executives move away from Industrial Age metrics and toward a more holistic assessment of return on knowledge. In fact, better measurement of the return on IT investments can yield strong overall financial returns. Companies that excel at managing the value of their IT investments outpace their peers in overall financial performance, according to research by The Hackett Group. Essentially, Hackett says, companies that better manage the business value of ITincluding governance, portfolio management, and other IT management tacticshave 49 percent higher net profitability than their peer group. In addition, their return on equity and return on assets are higher

Eight Ways To Achieve More Strategic IT

1. 2. Connect information to the business functions it supports supports. . From applications to infrastructure, you must understand the value of data and tie it to the IT investment. It is much harder to justify infrastructure or other IT investments in the abstract. Understand the business and speak the language of business business. . IT is too often enamored with acronyms and abbreviations. Businesses have those, too. You must make business models and business language as innate in IT as the departments own models and slang. And always communicate to the business in business language. Build business expertise expertise. . Although the IT department is expected to be a group of generalists supporting multiple business functions, it is just as important to segment customers and understand where IT needs to invest in expertise, customer support, and so on. Hiring business people within IT who can drive the strategic conversation may be a better investment than switching transaction monitors in terms of adding value. Tie the IT investment to competitive differentiation differentiation. . IT is an extensionand a toolof the businesss strategy. Investments in information technology can only realize value when they deliver on a strategic metric. Create a dialogue with business business. . The dialogue between business and IT is crucial as a way to facilitate shared learning. It is also about offering a point of view or marketing an idea. Businesses can invest in many areas. If IT truly believes that technology is a viable and more effective use of capital than another area, the group needs to not only talk about it, but sell it to business leaders. Capture value value. . A major problem with ROI calculations is that they are done before a project and often abandoned soon after the project is funded. IT departments that want their value recognized need to monitor the projects return on investment, continue to align and adjust the project, and be honest with the business about the outcomes of technology investments. Create a learning environment environment. . As with capturing value, capturing knowledge is important. Initial designs for new systems, practices, and policies may look good on paper, but they may not perform or deliver as expected. By creating a learning environment where IT and business partner to provide feedback and action plans based on that feedback, businesses have a better opportunity to cut losses and fail-fast and to improve their chances of identifying true innovations that may lead to strategic breakthroughs. Think about the business implications of systems systems. . Realizing value does not stop when an application icon shows up on a computers desktop. Value is created by using technology in the execution of a process or other type of work. People must understand how a new tool fits into their work model. And if it does not fit the model, they need help understanding how the tool can fit. That will empower users to push back and become a part of the feedback system that adjusts tools to better meet real-world business needs.


4. 5.





History of Strategic Uses of IT

Mid 1980s: End-user computing o Working inward (adoption of PCs and software)

Late 1980s: Transactional efficiency

o Working outward (gain competitive advantage)
Merrill Lynchs CMA system, which combined stock account with savings and checking accounts

1990s: Re-engineering
o Working inward (business process reengineering)

Strategic Uses of Information Systems

History of Strategic Uses of IT contd

Mid to late 1990s: Internet
o Integration of Internet into e-business models o Dotcom downward spiral began in 1999 o E-business skepticism

Early 2000s: Back to business basics

o Leverage traditional operations by using Internet to work more closely with others (working across)

2005 onwards:
o Working inwards, outwards and across to achieve competitive advantage o 2008: Putting IT in the forefront of business strategy

Many best practices evolved over the years, with respect to strategic use of IT
o Each required right resources and skills

Intranets and Web portals are ways to bring cohesion within flatter organizations Customer-centric business strategy leads to use of IT across organizational boundaries (supply chain) As IT continues to evolve, so does its strategic uses