Chapter 1 A Managers View of Information Systems

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Managers View
Managers

use information to enable them to reallocate resources to achieve objectives. This chapter focuses on the use of information systems at three levels: operational, tactical, and strategic. IS development is evolutionary and relies on managerial planning.

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The Functions of Management

Planning

- deciding what to do - evaluate use of resources - set organizational goals - determine tactical direction. Organizing - structuring the firm, establishing communications networks, etc.. Leading - directing and motivating people. Controlling - determine is the firms performance is on target.
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Levels of Management
Strategic

- top level. Establish organizational goals and work with the internal environment. Tactical - middle level. Allocate resources to meet objectives of top management. Operational - first level. Supervise day-to-day operations like order entry, credit checking, and inventory control.

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A framework for IS
IS of an any business must have several components at each level of management: - Operational systems - Tactical systems - Strategic planning systems

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Operational Systems
Collect,

validate, and record data about business transactions that affect corporate resources. Repetitive types of transactions. Systems produce periodic reports: daily, weekly, monthly. Information in the reports is fairly predictable.

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Operational Systems
Systems

that displays information about past activities of the firm. Very detailed reports. Data in the system is internally generated. The form of the data used as input is usually very structured. Data are very accurate.

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Tactical Systems - Characteristics

Provide

information for monitoring and controlling operations/resource allocations. Data are summarized: summary reports, exception reports, ad hoc reports. Periodic reports, e.g.. dollar amounts over due by 30-, 60-, and 90-days. Unexpected findings may be provided by these systems.
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Tactical Systems - Characteristics (continued)

Reports

can be used to compare one period to another period. Information is not detailed, but is summarized. Information comes from both internal and external sources. Supports ad hoc reporting.

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Strategic Planning Systems

Support

long range planning. Sometimes there is not a clear delineation between Tactical and Strategic systems. Information may be produced ad hoc or on a periodic basis (e.g.. income statement). Information provided may give unexpected results.

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Strategic Planning Systems

Information

is used to try to predict the future to guide planning. Reports are typically very summarized. Much of the data provided comes from external sources. Unstructured format to reports. Report data may be subjective

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Sequence of Development of Management Information Systems

Operational

systems must be in place before tactical information systems can be built.

of the information for tactical systems are produced by operational systems.

Much

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The Stage Evolution of Data Processing - Richard Nolan

A

six-stage theory of data processing growth that describes the organizational learning curve with regard to adopting and using information technology. stage has specific growth characteristics.

Each

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Stage 1 - Initiation
Cost-effective

transaction processing systems like accounts receivable and payroll are introduced. Few controls over data processing expenditures. Computer resources are controlled by the computer professionals.

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Stage 2 - Contagion
Caused

by the initial success with computerization. Applications proliferate. Controls on computer hardware, software, and personnel are very low. Expenditures for computer processing skyrockets.

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Stage 3 - Control
A

management steering committee is organized to control computer expenditures. The MIS Department becomes a formal organizational function. Project planning and system controls are implemented. At the end of stage 3, management now focuses on managing data instead of the computer as a resource.
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Stage 4 - Integration
Existing

systems begin to be integrated through

use of:
database management systems telecommunications technologies.

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Stage 5 - Data Administration

The

firm continues to shift to the use of database management systems. The firm moves away from developing systems with third generation programming languages. Databases support multiple applications across business functional areas.

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Stage 6 - Maturity
Managers

recognize the importance of the MIS area and of data as a resource. Formal planning ensures that MIS plans support corporate plans. Priority setting for the use of MIS resources are set jointly by top management and MIS management.

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