MANEGEMENT INFORMATION SYSTEMS

MIS M I S

MANAGEMENT
WHAT IS MANAGEMENT? BASIC PILLERS/FUNCTIONS OF MANAGEMENT? LEVELS OF MANAGEMENT

MANAGEMENT-INFORMATION

Managerial functions like PODC can be discharged effectively and smoothly when necessary information is given to the managers, who can make timely and correct decision.

Information Systems

Why Do People Need Information?

Individuals - Entertainment and enlightenment
Businesses - Decision making, problem solving and control

Data, Information and Systems

Data vs. Information

Data A given, or fact; a number, a statement, or a picture Represents something in the real world The raw materials in the production of information

Information Data that have meaning within a context Data in relationships Data after manipulation

Data, Information and Systems

Data Processing
Example: customer survey Reading through data collected from a customer survey with questions in various categories would be time-consuming and not very helpful. When properly processed, the surveys may provide useful information.

Data, Information and Systems

Generating Information
Computer-based ISs take data as raw material, process it, and produce information as output.
Data, Information and Systems

Figure 1.1 Input-process-output

Information in Context
Relevant Complete Accurate Current Economical

Data, Information and Systems

What Is a System?
System: A set of components that are integrated to achieve a common objective. Subsystem: One part of a system where the products of more than one system are combined to reach an ultimate goal

Data, Information and Systems

Information and Managers

Systems thinking Creates a framework for problem solving and decision making. Keeps managers focused on overall goals and operations of business.

Data, Information and Systems

Figure 1.5 Qualities of humans and computers that contribute to synergy

Data, Information and Systems

The Benefits of Human-Computer Synergy

Synergy When combined resources produce output that exceeds the sum of the outputs of the same resources employed separately Allows human thought to be translated into efficient processing of large amounts of data

Data, Information and Systems

The Four Stages of Data Processing Input: Data is collected and entered into computer.
Data processing: Data is manipulated into information using mathematical, statistical, and other tools.

Output: Information is displayed or presented.

Storage: Data and information are maintained for later use.

Why Study IS?

Information Systems Careers

Systems analyst, specialist in enterprise resource planning (ERP), database administrator, telecommunications specialist, consulting, etc.

Knowledge Workers
Managers and non-managers

Employers seek computer-literate professionals who know how to use information technology.

Computer Literacy Replacing Traditional Literacy

Key to full participation in western society

Drawbacks (The Not-So-Bright Side)

Lack of privacy.
Consumer Privacy:-Organizations collect (and
sometimes sell) huge amounts of data on individuals.

Employee Privacy:-IT supports remote monitoring of

employees, violating privacy and creating stress.

Freedom of Speech
IT increases opportunities for many illegal and unsocial things.

No code of ethics: No mandatory or enforced code of ethics for IT professionals--unlike other professions.

Social Inequality: Less than 20% of the worlds population have ever used a PC; less than 3% have Internet access.

MIS can be defined as the system of providing needed information to the various persons/employees/manager at the right time , in the right form and relevant one which aids his understanding and stimulates his action.
Its designed to meet the goal of the organization.

Competitive analysis by M. Porter:

Analysis of the industry

Analysis of the organization

Choosing the strategy

Five force analysis

Entry and exit barriers

Generic strategies

Michel porter competitive force model

Threat of substitute products Competitive rivalry Threat of new entrants Bargaining powers of buyers

Bargaining powers of suppliers

Competitive Rivalry
The intensity of rivalry is influenced by the following industry characteristics:1. A larger number of firms increases rivalry because more firms must compete for the same customers and resources. The rivalry intensifies if the firms have similar market share, leading to a struggle for market leadership.

2. Slow market growth causes firms to fight for market share. In a growing market, firms are able to improve revenues simply because of the expanding market.

3.High fixed costs :-the firm must sell this large quantity of product, high levels of production lead to a fight for market share and results in increased rivalry.
Example : Airline industry v. medical store 4. High storage costs or highly perishable products cause a producer to sell goods as soon as possible. If other producers are attempting to unload at the same time, competition for customers intensifies.

5. Low switching costs increases rivalry. When a customer can freely switch from one product to another there is a greater struggle to capture customers. 6. Low levels of product differentiation is associated with higher levels of rivalry. Brand identification, on the other hand, tends to constrain rivalry.

7. Strategic stakes are high when a firm is losing market position or has potential for great gains. This intensifies rivalry. 8. High exit barriers :High exit barriers cause a firm to remain in an industry, even when the venture is not profitable.

9. Industry Shakeout:Turbulent position

Growing market or potential for high profits

Induces new firms to enter in market Existing firms to increase production.

A point is reached where the industry becomes crowded with competitors

creating a situation of excess capacity with too many goods chasing too few buyers

Intense competitio n, price wars, and company failures.

Threat Of Substitute products

SP are those products which appeared to be different but satisfy the same /similar needs of the customers.

Functional similarity

Better/similar quality @ low price

The competition by a Threat of Substitute comes from products outside the industry. For example:-The price of aluminum beverage cans is constrained by the price of glass bottles, steel cans, and plastic containers. These containers are substitutes, yet they are not rivals in the aluminum can industry.

Threat of new entrants:-

1.Economies of scale:2.Brand name:-umbrella branding: for example: Maggie catch-up

3. Access of Distribution channels:

Bargaining powers of the buyers:

Customers compels the industry to lower down the price of products.

For example In handicraft industry: give discount otherwise consumers will move out. Alternate options are available Low switching cost

Bargaining powers of the suppliers:

When industry forces customers to pay higher price:

Monopoly High switch cost

Entry and exit barriers..

Easy to enter
Common technology Ease in brand switching Access to distribution channels Quick to achieve BEP.

Difficult to enter
Patented technology Difficulty in brand switching Restricted access to distribution channels Takes long to achieve BEP.

Easy to exit
Sellable assets Independent business

Difficult to exit
Specialized assets Interdependent business

Cost leadership strategy

Risks involved in low cost

Differentiation strategy.

Focus strategy

Focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. Needs of the group can be better serviced by focusing entirely on it.

For exampleTelecom industry..

The value chain analysis..

Value chain activities..

Primary activities:

Inbound

Operations
Out bound

Marketing and sales

Services Procurement*

Secondary activities:

Technology development
HRM

Finance, legal, quality managementetc

*Procurement:-Almost all purchasing decisions include factors such as delivery and handling, marginal benefit, and price fluctuations. Procurement generally involves making buying decisions .

Primary activities.

Role of MIS in Strategic Management

Innovative applications:
For example, Federal Express was the first company in its industry to use IT for tracking the location of every package in its system. Next, FedEx was the first company to make this database accessible to its customers over the Internet. FedEx has gone on to provide e-fulfillment solutions based on IT and is even writing software for this purpose

Competitive weapons:

Michael Dell, founder of Dell Computer, puts it bluntly: The Internet is like a weapon sitting on the table, ready to be picked up by either you or your competitors

Change in process:

IT supports changes in business processes that translate to strategic advantage. IT can change business processes include better control over remote stores or offices by providing speedy communication tools, streamlined product design time with computer-aided engineering tools, and better decision-making processes by providing managers with timely information reports

Links with business partners Cost reductions Relationship with suppliers and customers

New products Competitive intelligence:

IT provides competitive (business) intelligence by collecting and analyzing information about products, markets, competitors, and environmental changes.

For example:if a company knows something important before its competitors, or if it can make the correct interpretation of information before its competitors, then it can act first, gaining strategic advantage through first-mover advantage

Strategies for competitive advantages

Cost leadership strategy

A firm achieves cost leadership in its industry by thrifty buying practices, efficient business processes, forcing up the prices paid by competitors, and helping customers or suppliers reduce their costs. A cost leadership example is the Wal-Mart automatic inventory replenishment system. This system enables Wal-Mart to reduce storage requirements so that Wal-Mart stores have one of the highest ratios of sales floor space in the industry. Essentially WalMart is using floor space to sell products, not store them, and it does not have to tie up capital in inventory. Savings from this system and others allows Wal-Mart to provide low-priced products to its customers and still earn high profits.

Differentiation strategy:
Offer different products, services, or product features by offering different, better products companies can charge higher prices, sell more products, or both. Southwest Airlines has differentiated itself as a low-cost, short-haul, express airline, and that has proven to be a winning strategy for competing in the highly competitive airline industry. Dell has differentiated itself in the personal computer market through its mass-customization strategy.

Niche strategy:
Select a narrow-scope segment (niche market) and be the best in quality, speed, or cost in that market. For example, several computer-chip manufacturers make customized chips for specific industries or companies.
Some of the best-selling products on the Internet are niche products. For example, dogtoys.com and cattoys.com offer a large variety of pet toys that no other pet toy retailer offers.

Growth strategy:

Increase market share, acquire more customers, or sell more products. Such a strategy strengthens a company and increases profitability in the long run.

Web-based selling can facilitate growth by creating new marketing channels, such as electronic auctions. An example is Dell Computer (dellauction.com), which auctions both new and used computers mainly to individuals and small businesses.

Operational effectiveness strategy:

Improve the manner in which internal business processes are executed so that a firm performs similar activities better than rivals (Porter, 1996).

Such improvements increase employee and customer satisfaction, quality, and productivity while decreasing time to market. Improved decision making and management activities also contribute to improved efficiency.

Customer-orientation strategy:

Concentrate on making customers happy, as is the case with RadioShack Online. Strong competition and the realization that the customer is king (queen) is the basis of this strategy. Web-based systems that support customer relationship management are especially effective in this area because they can provide a personalized, one-to-one relationship with each customer.

Information

Data is like raw material while information is finished goods produced after processing of raw material.

Classification of information.

Action v non action information:

No stock purchase calling is action information while stock ledger showing a store transaction and stock balance is non action information.

Recurring v non recurring information:

Monthly reports and stock statements is recurring information while annual report is non recurring information.

Internal v external information

Information generated through internal or external sources.

Planning information Control information Knowledge information:

Research studies, library reports

Methods of data collection

Observation Experiment Survey Subjective estimation Purchased from outside Publications Government agencies