Management Information System

(MIS 501)

Week 03
Organizational dimension of information systems

Hierarchy of authority,
responsibility
Senior management
Middle management
Operational management
Knowledge workers
Data workers
Production or service workers
Types of Business Information Systems

Systems from a functional perspective

Sales and marketing systems
Manufacturing and production systems
Finance and accounting systems
Human resources systems
Types of Business Information Systems (cont.)

Sales and marketing Sales Information System

systems
Functional concerns include:
Sales management, customer
identification market research,
advertising and promotion, pricing,
new products
Types of Business Information Systems (cont.)

Manufacturing and Overview of an Inventory System

production systems
Functional concerns include:
Managing production facilities,
production goals, production
materials, and scheduling
Types of Business Information Systems (cont.)

Finance and accounting An Accounts Receivable System

systems
Functional concerns include:
Managing financial assets (cash,
stocks, etc.) and capitalization of
firm, and managing firms financial
records
Types of Business Information Systems (cont.)

Human resource systems

Functional concerns include:
Identifying potential employees,
maintaining employee records,
creating programs to develop
employee talent and skills
Management Information System
(MIS 501)

Week 03
Business Processes and Information Systems

Business processes:
Workflows of material, information, knowledge
Sets of activities, steps
May be tied to functional area or be cross-functional
Businesses: Can be seen as collection of business processes
Business processes may be assets or liabilities
Business Processes and Information Systems (cont.)

Examples of functional
business processes
Manufacturing and production
Assembling the product
Sales and marketing
Identifying customers
Finance and accounting
Creating financial statements
Human resources
Hiring employees
Business Processes and Information Systems (cont.)

Information technology enhances business processes in two

main ways:
Increasing efficiency of existing processes
Automating steps that were manual
Enabling entirely new processes that are capable of transforming the
businesses
Change flow of information
Replace sequential steps with parallel steps
Eliminate delays in decision making
Types of Business Information Systems

Systems from a constituency perspective

Transaction processing systems: supporting operational level
employees
Management information systems and decision-support systems:
supporting managers
Executive support systems: supporting executives
Types of Business Information Systems (cont.)

Transaction processing systems

Perform and record daily routine transactions necessary to conduct
business
E.g. sales order entry, payroll, shipping
Allow managers to monitor status of operations and relations with external
environment
Serve operational levels
Serve predefined, structured goals and decision making
Types of Business Information Systems (cont.)

Management information systems

Serve middle management
Provide reports on firms current performance, based on data from
TPS
Provide answers to routine questions with predefined procedure for
answering them
Typically have little analytic capability
Types of Business Information Systems (cont.)

How Management Information Systems obtain their data from

the Organizations TPS
Types of Business Information Systems (cont.)

Decision support systems

Serve middle management
Support nonroutine decision making
E.g. What is impact on production schedule if December sales doubled?
Often use external information as well from TPS and MIS
Model driven DSS
Voyage-estimating systems
Data driven DSS
Intrawests marketing analysis systems
Types of Business Information Systems (cont.)

Decision support systems

This DSS operates on a powerful PC. It is used daily by managers who must develop bids on shipping contracts.
Types of Business Information Systems (cont.)

Executive support systems

Support senior management
Address nonroutine decisions requiring judgment, evaluation, and insight
Incorporate data about external events (e.g. new tax laws or competitors)
as well as summarized information from internal MIS and DSS
E.g. ESS that provides minute-to-minute view of firms financial
performance as measured by working capital, accounts receivable,
accounts payable, cash flow, and inventory.
Types of Business Information Systems (cont.)

Executive support systems

This system pools data from diverse internal and external sources and makes them available to executives in an
easy-to-use form.
Types of Business Information Systems (cont.)

Interrelationships Among Systems

The various types of systems in the organization have interdependencies. TPS are major producers of information
that is required by many other systems in the firm, which, in turn, produce information for other systems. These
different types of systems are loosely coupled in most business firms, but increasingly firms are using new
technologies to integrate information that resides in many different systems.
Systems That Span the Enterprise (cont.)

Four major applications: Enterprise Application Architecture

Enterprise systems
Supply chain management systems
Customer relationship management
systems
Knowledge management systems
Systems That Span the Enterprise (cont.)
Customer relationship
management systems:
Provide information to coordinate all
of the business processes that deal
with customers in sales, marketing,
and service to optimize revenue,
customer satisfaction, and customer
retention
Integrate firms customer-related
processes and consolidate
customer information from multiple
communication channels
Knowledge management
systems
Support processes for acquiring,
creating, storing, distributing,
applying, integrating knowledge
Collect internal knowledge and link
to external knowledge
Include enterprise-wide systems for:
Managing documents, graphics and
other digital knowledge objects
Directories of employees with
expertise
Systems That Span the Enterprise (cont.)
Intranets:
Internal networks built with same
tools and standards as Internet
Used for internal distribution of
information to employees
Typically utilize private portal
providing single point of access
to several systems
May connect to companys
transaction systems
Extranets:
Intranets extended to authorized
users outside the company
Expedite flow of information
between firm and its suppliers
and customers
Can be used to allow different
firms to collaborate on product
design, marketing, and
production
Systems That Span the Enterprise (cont.)

Collaboration and communication systems

Interaction jobs a major part of global economy
Methods include:
Internet-based collaboration environments
E-mail and instant messaging (IM)
Cell phones and smartphones
Social networking
Wikis
Virtual worlds
Management Information System
(MIS 501)

Week 03
Quiz

Date: 16th June

Syllabus: Chapters 1, 2 & 3
Question type:
MCQ & T/F
Short Question
Management Information System
(MIS 501)

Week 03
Organizations and Information Systems

Information technology and organizations influence one

another
Complex relationship influenced by organizations structure,
business processes, politics, culture, environment, and management
decisions
Two-Way Relationship Between Organizations and IT

This complex two-way relationship is mediated by many factors, not the least of which are the
decisions madeor not madeby managers. Other factors mediating the relationship include
the organizational culture, structure, politics, business processes, and environment.
What is an organization?

Technical definition:
Stable, formal social structure that takes resources from environment
and processes them to produce outputs
A formal legal entity with internal rules and procedures, as well as a
social structure
Behavioral definition:
A collection of rights, privileges, obligations, and responsibilities that
is delicately balanced over a period of time through conflict and
conflict resolution
What is an organization? (cont.)
The Technical
Microeconomic
Definition of the
Organization

The Behavioral View

of Organizations
Organizations and Information Systems

Routines and business processes

Routines (standard operating procedures)
Precise rules, procedures, and practices developed to cope with virtually all
expected situations
Business processes: Collections of routines
Business firm: Collection of business processes
Routines, Business Processes, and the Firms

All organizations are composed of

individual routines and behaviors, a
collection of which make up a business
process. A collection of business
processes make up the business firm.
New information system applications
require that individual routines and
business processes change to achieve
high levels of organizational
performance.
Organizational culture & politics
Organizational culture
Encompasses set of assumptions
that define goal and product
What products the organization should
produce
How and where it should be produced
For whom the products should be
produced
May be powerful unifying force as
well as restraint on change
Organizational politics
Divergent viewpoints lead to political
struggle, competition, and conflict
Political resistance greatly hampers
organizational change
Organizational environments:
Organizations and environments
have a reciprocal relationship
Organizations are open to, and
dependent on, the social and
physical environment
Organizations can influence their
environments
Environments generally change
faster than organizations
Information systems can be
instrument of environmental
scanning, act as a lens
Environments and Organizations
have a reciprocal relationship

Environments shape what organizations can do, but organizations can influence their
environments and decide to change environments altogether. Information technology plays a
critical role in helping organizations perceive environmental change and in helping
organizations act on their environment.
Disruptive technologies

Technology that brings about sweeping change to

businesses, industries, markets
Examples: personal computers, word processing software,
the Internet, the PageRank algorithm
First movers and fast followers
First movers inventors of disruptive technologies
Fast followers firms with the size and resources to capitalize on
that technology
Organizational structure

Five basic kinds of structure

Entrepreneurial: Small start-up business
Machine bureaucracy: Midsize manufacturing firm
Divisionalized bureaucracy: MNCs & Conglomerates
Professional bureaucracy: Law firms, school systems, hospitals
Adhocracy: Consulting firms
Other Organizational Features

Goals
Constituencies
Leadership styles
Tasks
Surrounding environments