12/15/2011

MANAGEMENT
INFORMATION SYSTEMS
Dr. Vanita Ahuja
Assistant Professor
Gautam Buddha University

Introduction to the Computer-Based

Information System

12/15/2011

Information Management

Information:
The most valuable resource

Five Main Resources

Personnel
Material
Machines

Physical

(including facilities and energy)

Money
Information (and data)

Conceptual

12/15/2011

How Resources are Managed

Acquire
q
Assemble, or prepare
Maximize use
Replace

IT and IS
What is Information Technology?
Any form of technology used by people to
handle information.

What are Information Systems?

Integrated components processing, storing
and disseminating
g information in an
organisation.
Interdisciplinary study of systems that provide
information to users in organisations.

12/15/2011

Information and Data

Information
Clusters of facts meaningful and useful to
human beings in processes such as making
decisions

Data
Streams of raw facts representing
p
g events
such as business transactions meaningless
without structure

Management Information
Systems
MIS
The study of information systems focusing on
their use in business and management.

Approaches
Technical
Behavioural
Socio-technical

12/15/2011

Why is IS Important?
For an organisation to survive and prosper
More locations (networking, Internet)
New products and services
Improve jobs and work flows:
Efficiency
Cost
Ethical and social issues

Business Enterprise

Change from hierarchical organisations

Now flat, decentralised
Relies on instant information
Flexibility with customer focus, with
increasing importance

12/15/2011

Managers Can Be Found on All

Levels and in All Functional
Areas of the Firm
Strategic planning level

Management Control Level

Operational Control
Level
Finance
Function

Human
Resources
Function

Information
Services
Function

Manufacturing
Function

Marketing
Function

What Managers do
Strategic

Management

Operational

Planning Level

Control Level

Control Level

Plan
Direct

Organize
Control

Plan
C t l
Control

Staff
Organize

Direct

Staff

Control

Direct

Staff

Organize

Plan

12/15/2011

The Influence of Management

Level on Information Source
Strategic planning level

Environmental

Management control level

Internal

Operational control level

The Influence of Management

Level on Information Form
Strategic planning level

Summary

Management control level

Operational control level

Detail

12/15/2011

Open-Loop System

Input

Transformation

Output

Open versus Closed Systems

Open system
Connected to its environment by means of
resource flows

Closed system
Not connected to its environment

12/15/2011

Evolution of the CBIS

Data Processing (DP)
Management Information Systems (MIS)
1964
IBM promoted the concept as a means of
selling disk files and terminals

Decision Support Systems (DSS) 1971

Text books distinction:
MIS: Organizational/group - general
DSS: Individual - specific

Office Automation (OA) 1964

Artificial Intelligence (AI)/ Expert Systems
(ES) - 1990s
Heavy investment by businesses

Achieving the CBIS

12/15/2011

Reengineering the CBIS

Business Process Reengineering (BPR)
Reworking systems
Good system features retained
Becoming development methodology of
choice

Using Information Technology

for Competitive Advantage

10

12/15/2011

The Firms Environment

Society

Financial
C
Community
it

Suppliers

Government

Global
C
Community
it

The
Firm

Labor
unions

Customers

Competitors
Stockholders
or owners

Strategic Planning
Long-range planning
Intends to give firm most favorable position in
its environment
Specifies strategies for achieving objectives

Need for each business area to create its

own strategic
g p
plan

11

12/15/2011

The Functional Areas Should Cooperate

in Developing Their Strategic Plans
Strategic
planning for
information resources
Strategic
planning for
marketing
resources

Strategic
planning for
financial resources

Strategic
planning for
manufacturing
resources

Strategic
planning for
human
resources

Strategy Set Transformation

Organizational
strategy
gy set

MIS
strategy set

Mission

System
objectives

Objectives
System
constraints

Strategy
Other
strategic
organizational
attributes

MIS
strategic
planning
process

System
design
strategies

12

12/15/2011

Strategic Planning for

Information Resources

Influence on
Information
Resources

Business
strategy
Influence on
Business
Strategy

Information
resources
and
IS
strategy

The Database and Database

Management System

13

12/15/2011

Data Structure vs. Spreadsheet

Terminology
Spreadsheet
d h Term
Table
Column
R
Row

Data Structure Term

File
Field
R
Record
d

Database Structures
Database
All data stored on computer-based resources
of the organization

Database Management System (DBMS)

Software application that stores the structure
of the database, the data itself, relationships
p
among the data in the database, as well as
forms and reports pertaining to the database

14

12/15/2011

Database Structures (cont.)

Hierarchical structure
Uses the parent / children concept
Limitation: Cannot handle ad hoc requests

Network structure
Allow given record to point back to any other
record in the database
Solves problem of having to backtrack through
d t
data

The Database Concept

Database concept
Logical
g
integration
g
of records in multiple
p
files

Data redundancy
Duplication of data

Data inconsistency
Data independence
Keep data specifications separate from
programs, in tables and indexes

15

12/15/2011

Salesperson
file

Sales
statistics
file

Customer
file

Accounts
receivable
file

Buyer
file

Inventory
file

Vendor
file

Accounts
payable
file

Purchase
order
file

General
ledger
file

A Database Consists of One or More Files

Schema
Data field name
Aliases (other names used for same data
field)
Type of data (numeric alphabetic)
Number of positions
Number of decimal positions
Various integrity rules

16

12/15/2011

Data
description
language
processor

A DBMS
Model

Database
description
(schema)

Database manager
Query
language

Data manipulation
language (DML)

Database

Performance
statistics

A li ti
Application
programs
Performance
statistics
processor

Transaction
log
Information

Performance
statistics

Information
requests
Backup/recovery
module

Knowledge Discovery in Databases

(KDD)
Data warehousing
refinement in the database concept to
make it
very large
very pure
very retrievable

Data mart
a more modest approach than data
warehousing, generally only one segment
of the firm

17

12/15/2011

Knowledge Discovery in Databases

(KDD) (cont.)
Data mining
the process of finding relationships in
data that are unknown to the user
may be for
verification
discovery
combination of verification and discovery

The Knowledge Discovery in

Database (KDD) Process
1. Define the data and the task
1
2. Acquire the data
3. Clean the data
4. Develop the hypothesis and search
model
5. Mine the data
6. Test and verify
7. Interpret and use

18

12/15/2011

DBMS Advantages
Reduce data redundancy
Achieve data independence
Enable integration of data from multiple
files
Retrieve data and information quickly
Improve security

Data Communications

19

12/15/2011

Types of Networks
LAN (local area network)

Limited area but could include 100 or so

micros
i
Facilitates office automation

MAN (metropolitan area networks)

spans one city/metropolitan area

WAN (wide area network)

Covers a large geographic area

Includes a wide variety of circuits
Usually includes host computers

Common LAN Topologies

Star

20

12/15/2011

Common LAN Topologies

Ring

Common LAN Topologies

Bus

21

12/15/2011

Wide Area
Network

Satellite

Users
modem
IXC circuit

Local
loop

Earth
station

(interexchange
(i
t
h
channel)

Earth
station
Telephone
company
central office

Microwave
tower IXC circuit

(interexchange
channel)

Telephone
company
central office
Telephone
company
central office

Microwave
tower

Local
loop

Telephone
company
central office

Users
modem

Types of Networks (cont.)

Internet
Collection of networks
Public

Intranet
Uses Internet network protocols
Limits accessibility
Firewall

Extranet
For trusted business partners and
customers

22

12/15/2011

Communications Hardware
Modem
Converts digital to analog and vice versa
Bits per second determines transmission speed
Local loop

Hub
Receives a data packet from a computer at one end
of one spoke of the star topography and copies its
contents to all other computers
Manageable hubs

Communications Connections
Private Lines
Circuit that is always open to communications
traffic
Also called leased line or dedicated line

23

12/15/2011

Communications Connections
(cont.)
Virtual Private Networks (VPNs)
Tunneling software makes Internet
connections more secure
Privacy through authentication
More cost effective than private lines

Network Management
Digital nervous systems of an organization
Network
N t
k planning
l
i
Anticipates firms network needs
Monitors performance

Network Control
Determines faults
Errors in data communication
Alerts to potential faults

24

12/15/2011

Network Management (cont.)

Network manager
Planning, implementing, operating, and controlling
a firms
firm s data communications network(s)

Staff

Network analysts (a type of systems analyst)

Software analysts
Data Communication Technicians (specialize in
hardware))
LAN managers

Wireless Networks
Cellular networks
Hand held telephones
Primarily for voice

Wireless LANs
Extensions of regular LANs

Wide-area
Wide area wireless networks
Nationwide

25

12/15/2011

Functional Information Systems

MIS tailored to meet users needs for
information concerning functional areas
Manufacturing
HRIS
Others

Executive information systems (EIS)

Enterprise information system
Pulls
P ll ffunctional
ti
l IS
ISs ttogether
th
Enterprise resource planning (ERP)

Simulation
Use of a model is called simulation
Scenario
Conditions that influence the simulation
Scenario data elements

Decision variables
Input
Inp t values
al es

Output format varies

26

12/15/2011

Simulation (cont.)
Simulation Technique
Single scenario for optimi
optimizing
ing model
What-if game for sub-optimizing models
Change only single decision variable per run
Systematically discover answers to problems

Output format
Include both decision variables and outcomes
on same report

Graphical Output
Reports and model outputs can be
produced
d
d iin ttabular
b l or graphical
hi l fform
Spreadsheets have encouraged the use of
graphics
Can improve decision making capability

27

12/15/2011

Decision Support Systems

Group Decision Support Systems

Computer-based system that supports
groups of people engaged in a common
t k (or
task
( goal)
l) and
d th
thatt provides
id an
interface to a shared environment.
Used in problem solving
Related areas
Electronic meeting system (EMS)
Computer-supported cooperative work
(CSCW)
Group support system (GSS)
Groupware

28

12/15/2011

A DSS Model
Environment
Individual
problem
solvers

Other
group
members

Report
writing
software

GDSS
GDSS
software
software

Mathematical
Models

Database

Decision
support
system
Environment

Areas of Artificial Intelligence

Expert
systems

AI
hardware
Robotics

Natural
language

Learning

Neural
networks

Perceptive
systems
(vision,
hearing)

Artificial Intelligence

29

12/15/2011

Expert Systems
Computer program that codes the
knowledge of human experts in the form
of heuristics
Two distinctions from DSS
1. Has potential to extend managers
problem-solving ability
2. Ability to explain how solution was
reached

User

Instructions &
information

Solutions &
explanations

Knowledge

User
interface
te ace

Inference
engine

Expert
system

Development
engine

Knowledge
base

Problem
Domain

An Expert
System Model

Expert and
knowledge engineer

30

12/15/2011

Inference Engine
Performs reasoning by using the contents
off knowledge
k
l d b
base iin a particular
ti l
sequence
Two basic approaches to using rules
1. Forward reasoning (data driven)
2.
2 Reverse reasoning (goal driven)

Forward Versus Reverse Reasoning

Reverse reasoning is faster than forward
reasoning
i
Reverse reasoning works best under
certain conditions
Multiple goal variables
Many rules
All or most rules do not have to be examined
in the process of reaching a solution

31

12/15/2011

Expert System Disadvantages

Cant handle inconsistent knowledge

Cant apply judgment or intuition

Executive Information Systems

32

12/15/2011

The Executive Position

Unique demands of the executive
position
An executive is not just a
lower-level manager on a
higher level!

Executives require unique information

processing

A Firm Without
Environmental information and data
An EIS
Top-level
managers
g

Human
Marketing Manufacturing Financial
resource
information
information information information
system
system
system
system

Environmental information and data

33

12/15/2011

A Firm With
An EIS

Environmental Information and data

Executive
information
system

Marketing Manufacturing Financial

information information information
system
system
system

Human
resource
information
system

Environmental Information and data

An EIS Model
Executive workstation
Executive
database

Information
requests
Information
displays

To other
executive
workstation

To other
executive
workstation
Corporate
database
Electronic
mailboxes
Software
library

Make
corporate
information
available

Current news,
explanations
p

Corporate mainframe
External
data and
information

34

12/15/2011

The Virtual Office

The Virtual Office

Office work can be done at virtually any
geographic location
Must be linked by electronic communication
Impact
Emerged with the appearance of low cost
microprocessors
Teleprocessing
Telecommuting

35

12/15/2011

Virtual Organization
Extends idea of a virtual office to an entire
organization
i ti
No ties to physical location
Three I Economy
Information
Ideas
Intelligence

A Document Management System

Laser
Documents
printer
to be read

Workstation

OCR
Reader

Workstation

Network server

DBMS

Workstation

Laser
printer

Optical
disk
storage
unit

Workstation

36

12/15/2011

Financial Information Systems

Users of Financial Information

Internal users
Managers
Nonmanagers

Environmental users
Those with direct business relationships
Those with no direct relationships

37

12/15/2011

A Model of a Financial Information System

Output
subsystems

Input
subsystems

Data Information

Forecasting
subsystem

Accounting
information
system
Internal sources
Internal
audit
subsystem
Environmental
sources
Financial
intelligence
subsystem

Database

Funds
management
subsystem

Users

Control
subsystem

Manufacturing Information Systems

38

12/15/2011

Manufacturing Information System

Used to support efforts to produce
products
Evolution of computer use in
manufacturing
Systems keyed on reorder points
MRP
JIT

Reorder Point With No Safety Stock

and With a Safety Stock
Reorder point
Balance
on hand

A. No safety stock

Lead time

Time

Balance
on hand

Safety stock
B. Safety stock

39

12/15/2011

Receiving area

Location of
Data Collection Terminals

Receiving
inspection

Terminal

Raw-materials
R
Rawt i l
storeroom

Shop floor area

7
10

Finished-goods
Finishedstoreroom

11

Shipping area

12

Input to Supplier Records

Supplier
input

Financial strength, quality control

emphasis, past quality and delivery
performance, and so on

Quality
control input

Units rejected upon receipt, units

rejected during production,
reasons for rejection, and so on

Customer
service input

Supplier
file

Units replaced or repaired because

of defective parts, supplier spare
parts availability, and so on

40

12/15/2011

Human Resources
Information Systems

Primary HR Activities
Recruiting

Hiring

Education
& Training

Termination

Benefit
Administration

The Firm
Potential
Employees

Employees

Retired
Employees

Data Management

41

12/15/2011

HRIS Model

Output
subsystems

Input
subsystems

Work force
planning
subsystem

Accounting
information
system
Internal
sources
Human
resources
research
system
Environmental
sources

Data Information

Recruiting
subsystem

HRIS
Database

Work force
management
subsystem

Users

Compensation
Subsystem

Manufacturing
intelligence
subsystem

Benefits
subsystem
Environmental
reporting
subsystem

The HRIS Database

Type of data:
1. Employee
82.5% of the firms maintain only employee
data

2 Nonemployee
2.
8% of the firms
mainly organizations external to the firm

42

12/15/2011

Enterprise Information Systems

What is an Enterprise
Information System (EntIS)?
Computer-based system that can
perform
f
allll standard
t d d accounting
ti ttasks
k
for all of the organizational units in an
integrated and coordinated fashion
System purpose is to collect and
disseminate data to all processes of the
organization
i ti
Also called enterprise resource planning
(ERP)

43

12/15/2011

Planning and
Control

EIS Sitting Atop Business Area ISs

Aggregation
of Data

Systems

Manufacturing Informatioon
M

Systems

Financial Information

Information Systems

Information Resources

Marketing Informationn
Systems

EIS

EntIS
Transaction Recording

Data Details

Security Objectives
Confidentiality
Availability
Integrity

Current attention is focused on

malicious software such as
computer viruses.

44

12/15/2011

Users

User
Profiles

Identification
Authentication

Access
control
files

Authorization

Database

Software
library

Access Control Functions

Audit
log
Report
writer

Security
reports

Systems Development Life Cycle

(SDLC) Methodology

45

12/15/2011

Systems Analysis and Design

Information systems development must
address broader organizational issues:
What is the justification for the type of application
to be developed?
What actual or desired processes should the
application perform?
How will we verify that the application performs
as designed?
The Systems Development Lifecycle (SDLC) methodology allows
a project team to successfully build an application uniquely suited
to the organizations needs

Systems Development Lifecycle

Steps
The SDLC is generally presented as an iterative
sequence of five steps:
Systems Planning
Systems Analysis
Systems Design
Systems Implementation
Systems Operation and Support,
each culminating in a deliverable, either a written
d
document
or a piece
i
off software
f
(or
( both)
b h)
SDLC allows organizations to incorporate new requirements,
technology and human resources to IT development

46

12/15/2011

SDLC Details
Systems Planning

Project definition
Feasibility study/alternatives analysis
Project scope, deliverables
Standards, techniques, methods
Task assessment, skill assessment, preliminary time estimation
Yields Preliminary Investigation Report

Systems Analysis
Analysis of existing hardware/software
User requirements analysis
Logical systems design:
Conceptual data model (Entity-Relationship Diagram)
Conceptual process model (Data Flow Diagram)
Functional application description

Yields Systems Requirements Document

SDLC Details (contd)

Systems Design
Relational database model and data dictionary (sometimes
included in Systems Analysis phase)
Detailed description of application inputs and outputs
Detailed
D t il d conceptual
t ld
design
i off fforms, reports,
t application
li ti
programs and other application components
Yields System Design Specification

Systems Implementation
Application development and/or installation
Testing and Evaluation
Yields Functional Information System

Systems Operation and Support

Maintenance
Revisions
Yields Operating Information System

47

12/15/2011

QUESTIONS
AND
DISCUSSIONS

vanita_ahuja@yahoo.com

48