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MANAGEMENT INFORMATION SYSTEM

What IS a system? A group of interrelated or interacting elements forming a unified whole, OR A group of interrelated components working together toward a common goal by accepting inputs and producing outputs in an organized transformation process (dynamic system). Three basic interacting components: Input Processing (transformation process) Output

OTHER SYSTEM CHARACTERISTICS


A system

exists and functions in an environment

containing other systems.


Subsystem Systems

a component of a larger system.

that share the same environment may be

connected to one another through a shared boundary, or interface.


Open

versus closed system. system

Adaptive

COMPONENTS OF AN INFORMATION SYSTEM

COMPONENTS OF AN INFORMATION SYSTEM

People Resources End Users IS Specialists Hardware Resources Computer systems Peripherals Software Resources System software Application software Procedures

Data Resources Data versus Information Network Resources Communication media Network support

COMPONENTS OF AN INFORMATION SYSTEM

INFORMATION SYSTEMS FRAMEWORK

INFORMATION SYSTEMS CONCEPTS Foundation Concepts Fundamental concepts about the components and roles of information systems. Information Technologies Major concepts, developments, and management issues in information technology. Business Applications The major uses of information systems for operations, management, and competitive advantage. Development Processes How business professionals and information specialists plan, develop, and implement information systems.

Management Challenges The challenge of managing ethically and effectively.

ADD FEEDBACK AND CONTROL LOOPS..

MAJOR ROLES OF IS

Support Competitive Advantage

Support Business Decision Making

Support of Business Processes and Operations

Support business process: eg-computer based information system in retail stores helps them to record customer purchases, track of inventory, pay employees, buy new merchandise and evaluate sales trends. Support decision making: Helps store managers and other business professionals in the lines of merchandise to be added, kind of investment they require. Support competitive advantage: gaining strategic advantage over competitors. Eg- installing touch screen kiosks (a
small permanent or temporary structure on a sidewalk that sells items such as newspapers and candy) in the stores with links to their

e-commerce website for online shopping. Attract new customers, build customer loyalty.

TRENDS IN INFORMATION SYSTEMS

TYPES OF INFORMATION SYSTEMS

MANAGERIAL CHALLENGES OF INFORMATION TECHNOLOGY Information systems can be mismanaged and misapplied so that they create both technological and business failure.
Top Five Reasons for Success User involvement Executive management support
Clear statement of requirements Proper planning Realistic expectations

Top Five Reasons for Failure Lack of user input Incomplete requirements and specifications Changing requirements and specifications Lack of executive support
Technological incompetence

DEVELOPING IS SOLUTIONS TO BUSINESS CHALLENGES

ETHICAL CHALLENGES
Just because we can, should we? Where do we draw the line between customer privacy and collecting business information? Do we owe it to society to use this technology wisely and responsibly? Why? Isnt our job to make a profit?

IN SUMMARY, THE IS FUNCTION


Is a major functional area of business. Is an important contributor to operational efficiency, employee productivity and morale, and customer service & satisfaction. Is a major source of information and support for decision making. Provides a strategic advantage in developing competitive products & services.

SYSTEMS CONCEPTS
A

system is a set of inter-dependent components (some of which may be systems in their own right), which collectively accomplish certain objectives. Systems have characteristics such as boundaries, outputs and inputs, methods of converting inputs into outputs, and system interfaces. Systems are composed of interrelated and interdependent sub-systems. System Boundaries Systems and Sub-systems Outputs and Inputs Sub-system Interface Interface Problems System and its Environment System Feedback System Maintenance System Stress and Change

System Boundaries : Every system has a boundary that defines its scope of activities . Systems and Sub-systems : Systems may consist of numerous sub-systems, each of which has elements, interactions, and objectives. Sub-systems perform specialized tasks related to the overall objectives of the total system. Outputs and Inputs : The inner workings of a system or sub-system are organized to produce outputs from inputs. The outputs of one sub-system usually become inputs into the next.

Sub-system Interface :

An interface is a connection at system or sub-system boundaries. An interface serves as a medium to convey the output from one system to the input of another system.
The output of one sub-system is not sufficient to accommodate the needs of the next sub-system . For example, the production sub-system may not be able to produce enough stock to meet sales demands during certain peak periods. One way of handling this interface problem is through the use of slack resources.

Interface Problems :

System and its Environment :


The system's environment consists of people, organizations, and other systems that supply data to or that receive data from the system.

System Feedback

A system needs feedback to do its job. Feedback is an indicator of current performance rates when compared to a set of standards. Systems can run down if they are not maintained. Systems entropy corresponds roughly to chaos or disorder - a state that occurs without maintenance

System Maintenance

System Stress and Change

Systems change over time. Some of these changes occur because of identified problems, new business opportunities, and new management directives. Systems may also change as a result of stresses.

ROLE OF INFORMATION SYSTEMS: Functional Areas in Business

Operational Excellence: New Products, Services and Business Models: A business model describes how a company produces, delivers, and sells a product or service to create wealth. Customer and Supplier Intimacy: Information systems can help a business know its customers and serves them well, the way they want to be served Improved Decision Making. Competitive Advantage: doing thins better than its competitors, charging less for superior products, and responding to customers and suppliers in real time. Survival: Firm turn to information systems and technologies to provide the capability to respond to these information retention and reporting requirements.

Most organizations maintain positions such as chief executive officer (CEO), chief financial officer (CFO), and chief operations officer (COO) at the strategic level. Recently there are more IT-related strategic positions such as chief information officer (CIO), chief technology officer (CTO), chief security officer (CSO), chief privacy officer (CPO), and chief knowledge officer (CKO). The CIO is responsible for overseeing all uses of information technology and ensuring the strategic alignment of IT with business goals and objectives.

Seven major factors that affect today's business environment

Growing interdependence between businesses and information systems

4 LEVELS OF INFORMATION SYSTEM

Operational-level Systems Support operational managers by keeping track of the elementary activities and transactions of the organization. The principle purpose of systems at this level is to

answer routine questions and track the flow of


transactions through the organization. Covers things such

as sales, receipts, cash deposits, payroll, credit decisions,


flow of materials.

Knowledge-level Systems

The purpose of these systems is to help the organisation discover, organise and integrate new and existing knowledge in to the business, and to help control the flow of paperwork.

These systems, specially in the form of collaboration


tools, workstations, and office systems, are the fastest

growing applications in business today.

Management-level Systems Designed to serve the monitoring, controlling, decisionmaking, and administrative activities of middle managers. These typically provide periodic reports rather than instant information on operations. Some of these systems support non-routine decisionmaking, focusing on less-structured decisions for which information requirements are not always clear. This will often require information from outside the organisation, as well as from normal operational-level data.

Strategic-level Systems
Help

senior management tackle and address strategic

issues and long-term trends, both within the organisation


and in the external environment.
Principal

concern is matching organisational capability to

changes, and opportunities, occurring in the medium to long term (i.e. 5 - 10 years) in the external environment.

OPERATIONAL-LEVEL SYSTEMS
TRANSACTION-PROCESSING SYSTEMS (TPS)
Basic

business systems daily routine transactions necessary for business

Perform

functions
At

the operational level, tasks, resources and goals are

predefined and highly structured


Generally,

five functional categories are identified, as

shown in the diagram.

KNOWLEDGE-LEVEL SYSTEMS
Targeted

OFFICE AUTOMATION SYSTEMS (OAS) at meeting the knowledge needs of data workers

within the organisation.


Data

workers tend to process rather than create

information. Primarily involved in information use, manipulation or dissemination.


Typical

OAS handle and manage documents, scheduling

and communication.

KNOWLEDGE WORK SYSTEMS (KWS)


Targeted

at meeting the knowledge needs of knowledge workers within the organisation


general, knowledge workers hold degree-level

In

professional qualifications (e.g. engineers, scientists, lawyers), their jobs consist primarily in creating new

information and knowledge


KWS,

such

as

scientific

or

engineering

design

workstations, promote the creation of new knowledge,


and its dissemination and integration throughout the organisation.

MANAGEMENT-LEVEL SYSTEMS
MIS

MANAGEMENT INFORMATION SYSTEMS (MIS)

provide managers with reports and, in some cases,

on-line access to the organisations current performance and historical records.


Typically

these systems focus entirely on internal events,

providing the information for short-term planning and decision making.


MIS

summarise and report on the basic operations of the

organisation, dependent on the underlying TPS for their

data.

DECISION-SUPPORT SYSTEMS (DSS)


Focus

on helping managers make decisions that are semi-

structured, unique, or rapidly changing, and not easily specified in advance


Use

internal information from TPS and MIS, but also

information from external sources


Greater

analytical power than other systems, incorporate

modelling tools, aggregation and analysis tools, and support what-if scenarios.

Voyage-estimating Decision Support System

STRATEGIC-LEVEL SYSTEMS

EXECUTIVE SUPPORT/INFORMATION SYSTEMS (ESS/EIS)


ESS/EIS

address unstructured decisions and create a computing and communications

generalised

environment, rather than providing any fixed application

or specific capability.
These

systems are not designed to solve specific

problems, but to tackle a changing array of problems

ESS/EIS

are designed to incorporate data about external events, such as new tax laws or competitors, and also draw summarised information from internal MIS and DSS systems filter, compress, and track critical data, emphasising the reduction of time and effort required to obtain information useful to executive management employ advanced graphics software to provide highly visual and easy-to-use representations of complex information and current trends, but they tend not to provide analytical models

These

ESS/EIS

Inter-relationships and inter-dependencies between IS types

COMPONENTS OF INFORMATION SYSTEMS


Formal vs. Informal Specifications Components of Specifications In the development of information systems in business, informal specifications through graphical modeling have been used at least since late 70s. Formal specification languages (such as Larch, VDM, Z, FOOPS and OBJ) have been developed. (expected to play an important role in the future) These formal specification techniques attempt to mathematically specify structure, function, and behavior of information systems.

FORMAL VS. INFORMAL SPECIFICATIONS

COMPONENTS OF SPECIFICATIONS
Specifications of an information system is given by their: Structure: How it is organized. Function: What it does. Behaviour: How it responds to events and stimuli. Data: Its meaning and organization.

CLASSIFICATION OF INFORMATION SYSTEMS


CLASSIFICATION BY MODE OF DATA PROCESSING:

Batch Processing Systems: On-line Batch Systems: On-line Real-time Systems: Transaction Processing Systems (TPS) Process Control System (PCS) Decision Support Systems (DSS) Expert Systems Executive Information System (EIS) Business Information Systems (BIS)

CLASSIFICATION BY SYSTEM OBJECTIVES


CLASSIFICATION BASED ON THE NATURE OF INTERACTION WITH ENVIRONMENT

Transformational Systems: These are systems that transform inputs received from the environment in order to generate reports (output). Reactive Systems: These are systems characterized by being, to a large extent, event-driven, continuously having to react to external and internal stimuli.

ORGANISATION AS A SYSTEM

WHAT IS AN ORGANISATION?

An organization is very similar to the Information System. Both require inputs and some sort of processing, both have outputs, and both then depend on feedback for successful completion of the loop.

Information Systems use data as their main ingredient. Organizations rely on people. They are both a structured method of turning raw products (data/people) into useful entities (information/producers).

SALIENT FEATURES OF ORGANISATIONS

Clear Division of Labor

Hierarchy
Explicit rules and procedures Impartial judgments Technical Qualifications for Positions Maximum Organizational Efficiency

ORGANISATIONS AFFECT INFORMATION SYSTEMS


Change is the only constant in the relationship between information systems and organizations. You need to consider: How have organizations actually used information systems? How has the organizational role of information systems changed? Who operates information systems? Why do organizations adopt information systems in the first place?

WHY ORGANIZATIONS BUILD INFORMATION SYSTEMS