Managing Information and

Knowledge
Unity University
Department of MBA
Dr. Mesfin Abebe Haile (2017)
 Content

 What is information?
 What is Information System?
 Components of Information System
 Type of Information System
 Management Information System

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What is Information and Knowledge:

 Data, Information, Knowledge and Wisdom

 According to Russell Ackoff, the content of the human mind can

be classified into four categories:
 Data: is a raw fact (symbols).
 Information: data that are processed to be useful.
 Knowledge: application of data and information; answers "how“.
 Wisdom: appreciation of "why“ and evaluated understanding.

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 The following diagram represents the transitions from
data, to information, to knowledge, and finally to wisdom.

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What is Information and Knowledge :

 Data, information, knowledge and wisdom
 Data: it simply exists and has no significance beyond its
existence.
It can exist in any form, usable or not.
It does not have meaning of itself.
A spreadsheet generally starts out by holding data.

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What is Information and Knowledge :

 Data, information, knowledge and wisdom
 Information: the role of IS in satisfying the information needs of
managers.
Information is data that has been given meaning by way of
relational connection.
This "meaning" can be useful, but does not have to be.
A relational database makes information from the data stored
within it.

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What is Information and Knowledge :

 Data, information, knowledge and wisdom
 Knowledge: the influences of IS on any organization.
It is the appropriate collection of information, such that it's
intent is to be useful.
Knowledge is a deterministic process. 
Most of the applications we use (modeling, simulation, etc.)
exercise some type of stored knowledge.

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What is Information and Knowledge :

 Data, information, knowledge and wisdom
 Wisdom: is an extrapolative and non-deterministic, non
probabilistic process.
It calls upon all the previous levels of consciousness, and
specifically upon special types of human programming
(moral, ethical codes, etc.).
Most people believe that computers do not have, and will
never have the ability to posses wisdom.

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What is Information and Knowledge :

 The first three categories relate to the past.
 Only the fourth category, wisdom, deals with the future because
it incorporates vision and design.
 With wisdom, people can create the future rather than just grasp
the present and past.
 But achieving wisdom isn't easy.
 People must move successively through the other categories.
 The most important is, it is very hard to represent wisdom with a
computer system.
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Summary:

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What is Information System?

 “Information systems (IS) is the study of complementary
networks of hardware and software that people and
organizations use to collect, filter, process, create, and
distribute data.”

 “Information systems are combinations of hardware, software,

and telecommunications networks that people build and use to
collect, create, and distribute useful data, typically in
organizational settings”.

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What is Information System?

 “Information systems are interrelated components working
together to collect, process, store, and disseminate information
to support decision making, coordination, control, analysis, and
visualization in an organization”.

 The definitions focus on two different ways:

The components that make up an information system
The role that those components play in an organization

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An Information system can be:

 Manual:
Example: Developing patterns and trends on graph paper for
stock analysis.

 Computerized:
Example: Using program trading to track the market and trade
large blocks of stocks when discrepancies occur

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Functions of a computer-based information system:

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 The other way of defining computerized IS to students is
to tell them that it is made up of five components:
 Hardware: The technology category
 Software: The technology category
 Data: The technology category
 People: separate IS from technical fields like Computer
Science
 Process: Separate IS from technical fields
 Anyone must understand how all these components
work together to bring value to an organization.
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 Technology: the application of scientific knowledge for
particular purpose.
 Hardware: the part of the IS that you can touch (the
physical component)
 Computers, keyboards, diskdrives, iPads etc…

 Software : it is a set of instruction that tells the hardware

what to do. (it is not tangible)
 The two category are Operation system and Application
software.

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 Technology: the application of scientific knowledge for

particular purpose.
 Data : a collection of facts.
 Like software, data is also intangible.
 Organizations collect all kinds of data and use it to make
decisions.
 Database system, Data warehouse etc…
 People : there are different professionals that are part of IS.
 From the front-line help-desk workers, to systems analysts, to
programmers, all the way up to the chief information officer
(CIO)
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 Process : is a series of steps undertaken to achieve a desired
outcome or goal.
 IS bringing more productivity and better control to those
processes.
 “business process reengineering,” “business process
management,” and “enterprise resource planning” all have to
do with the continued improvement of these business
procedures and the integration of technology with them.

 Businesses hoping to gain an advantage over their competitors

are highly focused on this component of information systems.

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Type of Computerized Information System (CIS)?

 Transaction processing systems (TPS)
 Daily routine transactions
 Examples: flight reservation, bank accounts, stock control…
 Automate the handling of information about business
activities, often seen as discrete events.
 Used at the operational level for the hour-to-hour running of
the business
 Traditionally, an organization would have many TPS’s, e.g.
one for each department.
 Shared use for both read and write.
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Type of Computerized Information System?

 Information-Retrieval Systems (IR)
 Search large bodies of information which are not specifically
formatted as formal data bases.
 Web search engine
 Keyword search of a text base
 Typically read-only.

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Type of Computerized Information System?

 Knowledge-Base Systems (KBS / AI)
 Relatively small body of heterogeneous information.
 Significant deductive capability.
 Typical use: support of an intelligent application.
 Field in which the computer system takes on the
characteristics of human intelligence.
 Robotics, vision systems, and natural language processing

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Type of Computerized Information System?

 Office Automation Systems (OAS)
 Include Office tools, email, conferencing etc.
 Improving the productivity of employees who need to process
data and information.
 Supporting typical office work, e.g. letter writing, messages,
workflows for administrative routines.

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Type of Computerized Information System?

 Management information systems (MIS)
 Summary reports from TPS, for middle-level managers.
 Summarize data from TPS into reports.
 Mostly for middle-level managers
 Organization-internal data
 Types of reports:
 Summary
 Scheduled etc…

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Type of Computerized Information System?

 Decision-support systems (DSS)
 Making decisions from unstructured information
 Support for making decisions (unstructured and semi-
structured)
 Project future states of the world based on past data (from
databases of TPS and MIS)
 Using a model base to provide this analytical capability

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Type of Computerized Information System?

 Executive support systems (ESS, or EIS)
 Reports from TPS and external sources, for top-level
managers
 Also called Executive Information Systems (EIS)
 Like MIS: aggregating lower level data from DB’s into
summaries / reports
 Difference from MIS:
 Higher level of abstraction
 Higher tendency to combine internal and external data
 Better UI, more focus on graphics
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Type of Computerized Information System ?

 A CIS can be classified along several dimensions:
 Organizational level of use.
 Function (what does it do for the users?)
 System scope (personal, group, department, organization,
inter-organizational, global)
 Architecture (e.g., centralized vs. distributed)
 Other user characteristics (e.g., age, gender, handicaps,
technical skills)

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Type of Computerized Information System?

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Pyramid Structure of IS:

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Why do organizations have Information System?

 To make operations efficient,
 For effective management,
 To gain a competitive advantage,
 To support an organization's long-term goals.

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Two approaches of defining the subsystems of IS are:

 According to the organizational functions which they
support.
 According to managerial activities for which they are used.

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Organizational function subsystems of IS:

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Managerial activity subsystems of IS:

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 Question & Answer

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 Thank You Very Much !!!

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