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Information System
Many organizations work with large amounts of data. Data are basic values or facts and are
organized in a database. Many people think of data as synonymous with information; however,
information actually consists of data that has been organized to help answers questions and to
solve problems. An information system is defined as the software that helps organize and
analyze data. So, the purpose of an information system is to turn raw data into useful information
that can be used for decision making in an organization.
In contrast, there are a number of specialized information systems that have been specifically
designed to support a particular process within an organization or to carry out very specific
analysis tasks. For example, enterprise resource planning (ERP) is an information system
used to integrate the management of all internal and external information across an entire
organization. Another example is a geographic information system (GIS), which is used to
manage and analyze all types of geographical data. Expert systems are another example of
information systems. An experts system is designed to solve complex problems by following the
reasoning of an expert.
2. Software: These are the programs used to organize, process and analyze data.
3. Databases: Information systems work with data, organized into tables and files.
5. Procedures: These describe how specific data are processed and analyzed in order to
get the answers for which the information system is designed.
The first four components are part of the general information technology (IT) of an
organization. Procedures, the fifth component, are very specific to the information needed to
answer a specific question.
Different Types
The many different types of information system can be divided into categories based on the
where they are used in the hierarchy of an organization.
Information systems are a special class of systems whose main objective is to store, retrieve
and process, communicate and secure data. Information systems which help management at
different levels to take suitable decisions are called management information systems.
Typically information systems are housed in a computerized environment/platform to
enable users to get faster and accurate information.
Management
Challenges
MANAGEMENT INFORMATION SYSTEMS
Information
Business Technologies
Applications Information
Systems
Development Foundation
Process Concepts
People Resources
Hardware Resources
People
Hardware
Software
Information
Systems
Resources
Data Networks
People Resources
Hardware Resources
Software Resources
MANAGEMENT INFORMATION SYSTEMS
Data Resources
Network Resources
Information Products
Right Information
To the right person
At the right place
At the right time
In the right form
At the right cost
1. Management oriented
2. Management directed
3. Integrated
4. Common data flows
5. Heavy element
6. Flexibility and ease of use
1. It facilitates planning
2. In Minimizes information overload
3. MIS Encourages Decentralization
4. It brings Co-ordination
5. It makes control easier
MANAGEMENT INFORMATION SYSTEMS
Functions of a MIS
MIS are built on the data provided by the TPS
Budgeting systems
Deals with the past and present rather than the future
Efficiency oriented?
Four level pyramid model based on the different levels of hierarchy in the
organization
Functions of a TPS
TPS are ultimately little more than simple data processing systems.
Validation
Sorting Lists
Transactions Listing Detail reports
Events Merging Action reports
Updating Summary reports?
Calculation
o Payroll systems
o Reservation systems
o Efficiency oriented
Functions of a MIS
MIS are built on the data provided by the TPS
o Budgeting systems
o Deals with the past and present rather than the future
o Efficiency oriented?
MANAGEMENT INFORMATION SYSTEMS
Functions of a DSS
DSS manipulate and build upon the information from a MIS and/or
TPS to generate insights and new information.
Modelling
Internal Transactions Summary reports
Simulation
Internal Files Forecasts
Analysis
External Information? Graphs / Plots
Summarizing
o Logistics systems
o Spreadsheet Models?
What is an EIS?
Executive Information Systems are strategic-level information
systems that are found at the top of the Pyramid. They help
executives and senior managers analyze the environment in which
the organization operates, to identify long-term trends, and to plan
appropriate courses of action. The information in such systems is
often weakly structured and comes from both internal and external
sources. Executive Information System are designed to be operated
directly by executives without the need for intermediaries and easily
tailored to the preferences of the individual using them.
Functions of an EIS
EIS organizes and presents data and information from both external
data sources and internal MIS or TPS in order to support and extend
the inherent capabilities of senior executives.
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People these are the users who use the information system to record the
day to day business transactions. The users are usually qualified
professionals such as accountants, human resource managers, etc. The ICT
department usually has the support staff who ensure that the system is
running properly.
Business Procedures these are agreed upon best practices that guide the
users and all other components on how to work efficiently. Business
procedures are developed by the people i.e. users, consultants, etc.
Data the recorded day to day business transactions. For a bank, data is
collected from activities such as deposits, withdrawals, etc.
Software these are programs that run on the hardware. The software is
broken down into two major categories namely system software and
applications software. System software refers to the operating system i.e.
Windows, Mac OS, and Ubuntu, etc. Applications software refers to
MANAGEMENT INFORMATION SYSTEMS
The MIS plays exactly the same role in the organization. The system ensures that an appropriate data
is collected from the various sources, processed and send further to all the needy destinations. The
system is expected to fulfill the information needs of an individual, a group of individuals, the
management functionaries: the managers and top management.
Here are some of the important roles of the MIS:
i) The MIS satisfies the diverse needs through variety of systems such as query system, analysis
system, modeling system and decision support system.
ii) The MIS helps in strategic planning, management control, operational control and transaction
processing. The MIS helps in the clerical personal in the transaction processing and answers the
queries on the data pertaining to the transaction, the status of a particular record and reference on a
variety of documents.
iii) The MIS helps the junior management personnel by providing the operational data for planning,
scheduling and control , and helps them further in decision-making at the operation level to correct an
out of control situation.
iv) The MIS helps the middle management in short term planning, target setting and controlling the
business functions. It is supported by the use of the management tools of planning and control.
v) The MIS helps the top level management in goal setting, strategic planning and evolving the
business plans and their implementation.
vi) The MIS plays the role of information generation, communication, problem identification and helps
in the process of decision-making. The MIS, therefore, plays a vital role in the management,
administration and operation of an organization.
Trends in MIS
ERP and Networking.
As of 2015, some of the new trends in management information systems include increased
focus on areas such as data mining, cloud computing, networking and digital preservation.
The fields of analytic and mobile computing have also gained increased significance.
A key emerging trend is the emphasis of cloud computing. It allows computers to cut down
on the amount of storage infrastructure, enables easy maintenance and promotes a more
centralized management structure. Mobile computing is also a key trend. The ability to
create special applications designed to run on smartphones and tablets, provides companies
with a greater degree of flexibility. It allows for communication with employees and
customers, beyond the workplace.
However, perhaps the biggest trend is the increased reliance on analytics. Companies turn
to data analytic solutions to better access their overall performance. Managers are also able
to plan better strategies based on the records of existing market trends.
MANAGEMENT INFORMATION SYSTEMS
Business Process
Management Information Systems (MIS) not only include software systems, but the entire set of
business processes and resources that are used to pull together information from functional or tactical
systems. Data is then presented in a user-friendly and timely manner so that mid and upper-level
managers can use it to take the right actions. The entire system is designed so that the company will
meet its strategic and tactical goals.
Functional perspective
1. 3. Types of Systems from a Functional Perspective 1. Sales and Marketing Systems 2.
Manufacturing and Production System 3. Finance and Accounting Systems 4. Human
Resources Systems
2. 4. 1. Sales and Marketing Systems The sales and marketing function is responsible for
selling the organizations product or service. Marketing is concerned with identifying
the customers for the firms products or services, determining what they need or want,
planning and developing products and services to meet their needs and wants.
Systems that help the firm identify customers for the firms products or services, develop
products and services to meet customers needs and wants.
3. 5. Information systems are used in sales and marketing in a number of ways.
STRATEGIC LEVEL : Sales and marketing systems monitor trends affecting new
products and sales opportunities, support planning for new products and services, and
monitor the performance of competitors. MANAGEMENT LEVEL : sales and marketing
systems support market research, advertising and promotional campaigns, and pricing
decisions. They analyze sales performance and the performance of the sales staff.
4. 6. KNOWLEDGE-LEVEL : At this, sales and marketing systems support marketing
analysis workstations. OPERATIONAL LEVEL : Sales and marketing systems assist in
locating and contacting prospective customers, tracking sales, processing orders, and
providing customer service support.
5. 7. 2. Manufacturing and Production Systems The manufacturing and production
function is responsible for actually producing the firms goods and services.
Manufacturing and production systems deal with the planning, development, and
maintenance of production facilities Systems that deal with the planning, development,
and production of products and services, and with controlling the flow of production
6. 8. STRATEGIC-LEVEL : manufacturing systems deal with the firms long-term
manufacturing goals, such as where to locate new plants or whether to invest in new
manufacturing technology MANAGEMENT LEVEL : manufacturing and production
systems analyze and monitor manufacturing and production costs and resources.
KNOWLEDGE LEVEL : manufacturing and production systems create and distribute
design knowledge or expertise to drive the production process, OPERATIONAL
LEVEL : manufacturing and production systems deal with the status of production tasks.
7. 9. 3. Finance and Accounting Systems The finance function is responsible for
managing the firms financial assets, such as cash, stocks, bonds, and other investments
in order to maximize the return on these financial assets. The accounting function is
responsible for maintaining and managing the firms financial records receipts,
disbursements, depreciation, payrollto account for the flow of funds in a firm The
accounting function is responsible for maintaining and managing the firms financial
MANAGEMENT INFORMATION SYSTEMS
records receipts, disbursements, depreciation, payrollto account for the flow of funds
in a firm
8. 10. STRATEGIC-LEVEL : Systems for the finance and accounting function establish
long-term investment goals for the firm MANAGEMENT LEVEL : Information systems
help managers oversee and control the firms financial resource KNOWLEDGE LEVEL
: Systems support finance and accounting by providing analytical tools and workstations
for designing the right mix of investments to maximize returns for the firm.
OPERATIONAL LEVEL : Systems in finance and accounting track the flow of funds in the
firm through transactions such as paycheques, payments to vendors, securities reports,
and receipts.
9. 11. 4. Human Resources Systems The human resources function is responsible for
attracting, developing, and maintaining the firms work force. Human resources
information systems support activities such as identifying potential employees,
maintaining complete records on existing employees, and creating programs to develop
employees talents and skills. Systems that maintain employee records; track
employee skills, job performance, and training; and support planning for employee
compensation and career development.
10. 12. STRATEGIC-LEVEL : Human resources systems identify the manpower
requirements (skills, educational level, types of positions, number of positions, and cost)
for meeting the firms long-term business plans MANAGEMENT LEVEL : Human
resources systems help managers monitor and analyze the recruitment, allocation, and
compensation of employees. KNOWLEDGE LEVEL : Systems for human resources
support analysis activities related to job design, training, and the modelling of employee
career paths and reporting relationships. OPERATIONAL LEVEL : The recruitment
and placement of the firms employees.
Primary activities:
Inbound logistics, operations, outbound logistics, marketing, etc.
Strategic Usage of IT
Information technology plays an important role in delivering value for a business and supporting
organizational transformation. To achieve that, chief information officers have become key members
of board teams developing and delivering strategic solutions for the business. The aim is to make an
organization more competitive by aligning business strategy with IT strategy.
Support Innovation
Organizations that want to improve their innovation capabilities and develop new
products or services for the market can use cloud computing to speed up the process.
Cloud computing enables organizations to rent additional IT resources during the
development project on a pay-as-you-go basis, rather than investing in fixed resources.
Organizations can use the additional resources to run pilot programs or speed up
development. This provides an important strategic advantage by enabling the
organization to get new products to market quickly, ahead of the competition.
Improve Responsiveness
Increase Collaboration
Collecting and analyzing data to gain greater insight into customers needs and
preferences provides a strategic advantage. By using powerful analytics software,
organizations can develop customized offers and personalized communications that help
to increase customer satisfaction and foster loyalty.
MANAGEMENT INFORMATION SYSTEMS
Organizations can use IT to make strategic changes to their business models. A company
that traditionally sold products through retail outlets might use IT to develop an e-
commerce model that enables it to reach a wider market, reduce its distribution costs
and offer a more convenient service to customers.
Whatever your companys destination, well-designed business processes are the key to
driving organizational strategy and achieving business goals during an ERP implementation.
If ERP success and improved organizational performance is your desired destination, then
business process reengineering is the path to take. Business process reengineering involves
translating business goals and strategies into tangible processes and value-driven process
improvements. Your organizations chosen ERP system should accommodate these future
state business processes and bring your organization closer to achieving its goals.
These improvement targets then guide the definition of future state business processes.
During this stage, the implementation team should work with employees and executives to
redesign processes that have the highest impact on business goals. Bringing the right mix of
resources to the process definition team ensures that process changes are not only driven
by business goals but also based on end-users experiential knowledge of what works and
what doesnt.