Management information

systems

Unit 1
Basic concepts
Types and roles
Components
Dimensions
contemporary approaches
Digital firm
 APPLICATIONS OF MIS

Generating Bank Statements Aadhar card/Voters id card/Ration card

Online/Offline

Shopping with a Credit Card Paying Income Tax

Generating Utility bills Receiving Board Examination results

Withdrawing money from an ATM Purchasing Air/Rail/Bus ticket online

or offline
Surfing the Internet
Obtaining driving license
Using a mobile phone

Directly or indirectly every one uses MIS daily

Today MIS has become an important part of life and we can no longer survive
without MIS.
 APPLICATIONS OF MIS

GENERATING BANK STATEMENTS

QUESTIONS THAT A PERSONAL FINANCE MIS CAN ANSWER

HAVE I RECEIVED MY SALARY/ OTHER PAYMENTS?

HAS MY CHEQUE BEEN ENCASHED?

HOW MUCH DID I CHARGE TO MY CREDIT CARD

FOR EATING OUT?

WHAT IS THE INTEREST RATE ON MY FIXED DEPOSITS?

WHEN DID I TRANSFER MONEY TO PAY UTILITY BILLS?

WHAT IS MY MONTHLY EXPENSE?

 APPLICATIONS OF MIS

QUESTIONS THAT AN ORGANISATIONAL MIS CAN ANSWER

HOW MANY EMPLOYEES DO WE HAVE?

WHICH PRODUCTS HAVE SOLD POORLY THIS QUARTER?
WHAT ARE THE PROFIT MARGINS ON OUR PRODUCTS?
WHAT ARE THE REJECTION RATES OF MATERIALS IN OUR FACTORY?
WHAT ARE OUR ACTUAL SALES COMPARED TO PROJECTED SALES
FOR THE PAST 12 QUARTERS?
WHAT ARE OUR OPERATING EXPENSES OF THIS BRANCH OFFICE?
WHAT IS THE LOWEST PRICE AT WHICH WE CAN SELL A PRODUCT?
 APPLICATIONS OF MIS

EXAMPLES OF ORGANISATIONAL MIS

PATIENT MANAGEMENT SYSTEMS

AIRLINE RESERVATION AND TICKETING SYSTEMS
STORE PAYMENT AND CHECKOUT SYSTEMS
FACTORY INVENTORY MANAGEMENT SYSTEMS
FINANCIAL PLANNING SYSTEMS
HUMAN RESOURCE SYSTEMS
BILL PAYMENT SYSTEMS
COLLEGE STUDENT INFORMATION SYSTEMS
 DATA, INFORMATION AND KNOWLEDGE
Data
The raw facts - numbers, statements or pictures/figures.
Its the raw materials in the production of information.

Information
Processed data.
Data that have meaning within a context.
Data after manipulation.

For any functions of management to perform, at any levels of

management; Information is required to take different decisions.

Information is the basis of decision making and in fact the lifeblood of

management.
 DATA,INFORMATION AND KNOWLEDGE
Knowledge
Information is required to get knowledge.
Knowledge is refined Information.
Knowledge is the concise and appropriate collection of information in
a way that makes it useful.
Information deals with the way data is related while knowledge
examines patterns within a given set of information.
To get knowledge you need some cognitive and analytical ability while
for information you do not need cognitive ability.
Knowledge is Information and skills acquired through experience or
education; its the theoretical or practical understanding of a subject.
Wisdom
is applied knowledge i.e. knowledge along with common sense to
know when and how to use it. ("DIKW" hierarchy)
 SYSTEM BASIC FUNCTIONS
A system has 3 basic functions:

1) Input

2) Processing

3) Output
 SYSTEM

System:

A set of inter related components, with a clearly defined

boundary, working together to achieve a common set of
objectives by accepting inputs and producing outputs in an
organized transformation process. or sub systems that work
together to achieve a common goal.
Virtually everything one can think of is a system!!!
 TYPES OF SYSTEM

Closed system:

Stand alone system that has no contact with other systems or the
environment.

Eg: Corporate Instant Messaging System, secure intra-email

system, specific departments(R&D), production lines.

Open system :

System that interfaces and interacts with other systems and the
environment, by giving and receiving information.

All business organizations are open systems as it continuously

interacts with the environment. It affects the environment and is also
effected by the environment.
 SUB SYSTEM
Sub-system :

If a system is one of the components of a larger system, it is a

subsystem; and the larger system will be the environment of the
subsystem.
 INFORMATION SYSTEM

An organized combination of
People
Hardware and software
Communication networks
Data resources
Policies and procedures

This system
Stores, retrieves, transforms, and disseminates information in
an organization.
 MANAGEMENT INFORMATION SYSTEM
A manager makes decision all the time.
There is an overload of information.
All information are not useful.
Anything which helps manager to improve his decision making will
obviously lead to better results.

MIS is a system where data is the input, which is processed to

provide output in the form of information reports, summaries
etc, which aids the managers decision making process.

MIS is
1) Right Information
2) to the Right Person
3) at the Right Place
4) at the Right Time
5) in the Right Form
6) at the Right Cost.
A Business as a System
Fundamental Roles of IS in Business
TYPES OF INFORMATION SYSTEMS
(Conceptual Classification)
 OPERATIONS SUPPORT SYSTEMS

What do they do?

Efficiently process business transactions.

Control industrial processes.
Support communications and collaboration.
Update corporate databases.
 MANAGEMENT SUPPORT SYSTEMS

What do they do?

Provide information and support for

effective decision making by managers
TYPES OF INFORMATION SYSTEMS
(Conceptual Classification)
TYPES OF OPERATIONS SUPPORT SYSTEMS

1) Transaction Processing Systems

Record and process data resulting from business transactions.
Example: sales processing, inventory systems, accounting
systems.
2) Process Control Systems
Monitor and control physical processes.
Example: using sensors to monitor chemical processes in a
petroleum refinery.
3) Enterprise Collaboration Systems
Enhance team and workgroup communication.
Example: email, video conferencing.
 Two Ways to Process Transactions

1) Batch Processing
Transactions data are accumulated over a period of time and
processed periodically.
Eg: A bank processes all checks received in a batch at night.
Despatch and delivery of products through ecommerce.

2) Online Processing (Real Time Processing)

Data are processed immediately after transaction occurs.
Eg: A bank processes an ATM withdrawal immediately;
Credit card transactions.
 TYPES OF MANAGEMENT SUPPORT SYSTEMS
1) Management Information Systems (MIS)
Provide information in the form of reports and displays to managers; to
support business decision making.
Example: Daily Sales Analysis reports, production performance etc
2) Decision Support Systems (DSS)
Provide Interactive & ad-hoc support for decision making processes of
managers.
Example: a what-if analysis to determine where to spend advertising
dollars, Profitability forecasting, Product Pricing, Risk analysis, etc
3) Executive Information Systems (EIS)
Provide critical information from MIS, DSS and other internal as well as
external sources in easy-to-use displays for the use of Top Management
Executives.
Example: Overall business performance, Competitive performance,
Impact of external PESTEL Environments etc.
 OTHER INFORMATION SYSTEMS

1) Knowledge Management Systems

support the creation, organization, and dissemination of business
knowledge to employees within enterprise.
Example: Intranet access to best business practices, sales
proposal strategies, Customer problem resolution system.
2) Expert Systems

is a computer system that emulates the decision-making ability of a

human expert.
They are designed to solve complex problems by reasoning about
knowledge, represented primarily as ifthen rules rather than
through conventional procedural code.
Example: Diagnostic Maintenance System
 OTHER INFORMATION SYSTEMS Cond

3) Strategic Information Systems

apply information technology to a firms product, service or business
processes to help it gain a strategic advantage over its competitors.
Example: Shipment tracking, e-commerce Web systems
4) Functional Business Systems
focus on operational and managerial applications of basic business
functions.
Example: Systems that support applications in Accounting,
Finance, Marketing, Operations, HR etc
CROSS FUNCTIONAL INFORMATION SYSTEMS

All business applications of information systems in the real world

are typically integrated combinations of the several types of
information systems that we have mentioned already.
This is because conceptual classifications of IS are designed to
emphasize the many different roles of IS.
In practice; these roles are combined into Integrated Or
Cross Functional Information Systems that provide a
variety of functions.
Thus most IS is designed to produce information and support
decision making for various levels of management and business
functions, as well as perform transaction providing chores.
 TYPES OF INFORMATION SYSTEMS
(From two perspectives)

All information systems classified broadly from two different perspectives:

A. SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
B. SYSTEMS FROM A CONSTITUENCY PERSPECTIVE
 SYSTEMS FROM A
FUNCTIONAL PERSPECTIVE

Sales and marketing information systems

systems that help the firm identify customers for the firms products
or services, develop products and services to meet their needs,
promote these products and services, sell the products and services,
and provide ongoing customer support.
 SYSTEMS FROM A
FUNCTIONAL PERSPECTIVE

Manufacturing and production information systems

systems that deal with the planning, development, production and
controlling the flow of production of products.
 SYSTEMS FROM A
FUNCTIONAL PERSPECTIVE

Finance and accounting information systems

systems used to keep track of the firms financial assets and fund
flows.
 SYSTEMS FROM A
FUNCTIONAL PERSPECTIVE
Human resources information systems
systems that maintain employee records, track employee skills, job
performance, and training; and support planning for employee
compensation and career development.
 SYSTEMS FROM A
CONSTITUENCY PERSPECTIVE

Transaction Processing System

Management Information System
Decision Support System
Executive Support System
 MEASURING Information System SUCCESS

A. Efficiency
Minimize cost, time, and use of information resources.

B. Effectiveness
Supports business strategies.
Enable business processes.
Enhance organizational structure and culture.
Increase customer and business value.
Developing Information System Solutions
 Components of an Information System

Page 41 45; MIS 10th Edition James A O Brien, McGraw Hill

 Dimensions of an Information System

Page 19 27; MIS 12th Edition Laudon and Laudon; Pearson

Contemporary approaches to Information System

The study of information systems is a multidisciplinary field. No single

theory or perspective dominates.

The major disciplines that contribute problems, issues, and solutions
in the study of information systems are illustrated below:

The study of information systems deals with issues and insights

contributed from technical and behavioral disciplines.
 Technical approach to Information System

Considers all business information systems as part of :

Computer Science -
Knowledge of subjects like Data structures and algorithms, Database
Management Systems, Computer Networking, Theory of computing,
Business data processing, Programming languages, System Analysis and
design etc; is essential for designing any business information system.
Management science
Theories like motivation as well as leadership theories and models had
their impact on the information system.
Operation Research Techniques
such as Linear Programming, Game theory, Transportation Problem,
Fuzzy logic, PERT etc helped to enhance capabilities of information
systems.
 Behavioral approach to Information System
Considers all business information systems as part of :
Sociology
Business Organizations are social economic groups wherein
individuals work together with common motive. Every individual
possesses certain values, beliefs and assumptions and have specific
mind set. Therefore every individual have their influence on shaping
up the information system. This social aspect influenced
development of every information system and people in the world
along with time.
Psychology -
This refers to cognitive capability of human beings. The individual as
well as group psychology has its own influence on the information
system. People are still scared of e-Transactions like e-Payments.
 Behavioral approach to Information System

Economy -
Study of economics plays vital role in planning and while designing of
any information system. We can find out the ways for profit, growth
and sales maximization as economics includes the study of labour,
land, and investments, of money, income, and production and of taxes
and government expenditures.

By analyzing each of these disciplines one can optimize the

information system performance by adopting Socio-Technical
approach.
 Socio Technical approach to Information System

In a Socio Technical perspective, the performance of a system is optimized

when both the technology and the behavioural approach of organization
mutually adjust to one another until a satisfactory fit is obtained.
 MIS for a Digital Firm
The term "Digital Firm" originated, as a concept in a series
of Management Information Systems (MIS) books authored
by Kenneth C. Laudon.
Digital Firm is a general term for organizations that have enabled core
business relationships with employees, customers, suppliers, and other
external partners through digital networks.
Digital firms operate differently than the traditional brick and
mortar business by emphasizing on the digitization of business processes
& services through sophisticated technology & information systems.
These information systems create opportunities for digital firms to
decentralize operations, accelerate market readiness and responsiveness,
enhance customer interactions, as well as increase efficiencies across a
variety of business functions.
 MIS for a Digital Firm

These digital networks are supported by enterprise class technology

platforms such as :
Customer Relationship Management (CRM)
Supply Chain Management (SCM)
Warehouse Management System
Enterprise Resource Planning
Knowledge Management System
Enterprise Content Management
The purpose of these technology platforms is to digitally enable
seamless integration and information exchange within the
organization to employees and outside the organization to
customers, suppliers, and other business partners.
 MIS for a Digital Firm - Advantages

Through digital networks and information systems, the digital firm is

able to operate core business services and functions continuously and
more efficiently; allowing productive management of an organization.
Digital enablement of core business functions and services provides
an organization with opportunities to:
Operate business continuously ("Time Shifting")
Operate business in a global workplace ("Space Shifting")
Adapt business strategies to meet market demands
Create business value from technology investments.
Drive efficiency improvements in inventory and supply chain.
Enhance the management of customer relationships.
Improve organizational productivity.