MIS
MIS
Information System
An Information system is a set of people, procedures, and resources that collects, transforms, and disseminates information in an organization. An information system (IS) is typically considered to be a set of interrelated elements or components that collect (input), manipulate (processes), and Produce (output) data and information and provide a feedback mechanism to meet an objective.
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For example: Todays end users rely on many types of Information Systems (IS). Some are simple manual information systems, where people use tools such as pencils and paper, or machines such as calculators and typewriters. A computer based information system uses the resources of people (end users and IS specialists), hardware (machines and media), and software (programs and procedures), to perform input, processing, output, storage, and control activities that convert data resources into information products
Components of I S
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People Resources: Specialists systems analysts, programmers, and computer operators. End users anyone else who uses information systems. Hardware Resources: Machines computers, video monitors, magnetic disk drives, printers, and optical scanners. Software Resources: Programs operating system programs, spreadsheet programs, word processing programs, and payroll programs. Procedures data entry procedures, error correction procedures, and paycheck distribution procedures. Data Resources: Product descriptions, customer records, employee files, and inventory databases. Information Products: Management reports and business documents using text and graphics displays, audio responses, and paper forms.
I S Vs I T
A transaction processing system (TPS) collects, stores, modifies and retrieves the transactions of an organization. Examples of such systems are automatic telling machines (ATMs), electronic funds transfer at point of sale (EFTPOS also referred to as POS). There are two types of transaction of processing: Batch processing: where all of the transactions are collected and processed as one group or batch at a later stage.
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Transaction Processing System
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The term office automation refers to all tools and methods that are applied to office activities which make it possible to process written, visual, and sound data in a computer-aided manner.
An office automation system (OAS) facilitates everyday information processing tasks in offices and business organizations. These systems include a wide range of tools such as spreadsheets, word processors, and presentation packages. Office Automation Systems are software packages such as MS Office which include word processors, spreadsheets, databases, presentation software, email, internet, desktop publishing programs and project management software.
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A Continuum (scale) of Human Control and Automation
Management Information System (M.I.S.) is basically concerned with processing data into information, which is then communicated to the various Departments in an organization for appropriate decision-making.
Features of MIS
An MIS must have the following features: It must be capable of handling voluminous data. The data as well as transactions must be validated. It must be able to perform operations on the data irrespective of the complexity of the operations. Often time multi-dimensional analysis is required. An MIS should facilitate quick search and retrieval of information. An MIS must support mass storage of data and information. The information must be communicated to the recipient in time. Moreover, the communicated information must be relevant.
Need of MIS
To store and manage data Management and organizations facing constantly changing problems, diverse managerial styles, and ever present information needs offer a challenging context for developing computer based information systems. MIS uses computer technology to provide information and decision support to managers, helping them becomes more effective. Developments in the young computer industry are changing corporate management style. Managers at all levels use similar data. Operating managers require data which is timely, precise, detailed, internal and historical. Upper level managers need data which is aggregated, external as well as internal, future oriented as well as historical and covering a longer span time. An effective MIS cannot be built without viable data management tools. Such tools were not generally available previously. Moreover, most organizations did not effectively use DBMS technology until two decades before. An important key to a successful MIS is the effective management of an organization's data resources.
Objective of MIS
Reach an understanding of the relevant processes on the basis of the available historic information. This element forms the basis for the development of models, required for forecasting and simulation. Provide information on the current situation, especially for early warning purposes, for instance related to issues impacting on food security, water resources or pest and disease status. Forecast changes and impacts, either natural or man-made , as an element in vulnerability assessments. Forecast the consequences of policy decisions and measures before they are implemented in reality. This implies evaluating options for several given scenarios based on the possible results and predicted consequences, and selecting the most acceptable alternative
Operations Research
focuses on mathematical techniques for optimizing selected parameters of organizations.(inventory control, transaction costs).
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Competitors in market space continuously devise new products, new efficiencies, switching costs Some industries have low barriers to entry E.g. food industry vs. microchip industry Newer companies may have advantages Newer equipment, younger workforce, etc.
4.
Customers
5.
Suppliers
Product differentiation
Use information systems to enable new products and services, or greatly change the customer convenience in using your existing products and services E.g. Googles continuous innovations, Apples iPhone Use information systems to customize, personalize products to fit specifications of individual consumers
Dell Lands Ends mass customization
Figure 3-1
Strengthen customer and supplier intimacy Strong linkages to customers and suppliers increase switching costs and loyalty Chrysler: Uses IS to facilitate direct access from suppliers to
production schedules Permits suppliers to decide how and when to ship suppliers to Chrysler factories, allowing more lead time in producing goods.
Amazon: Keeps track of user preferences for purchases, and recommends titles purchased by others
Successfully using IS to achieve competitive advantage requires precise coordination of technology, organizations, and people
Read the Interactive Session and then discuss the following questions: What is strategic pricing? How does it work? What data are required?
What role do information systems play in strategic pricing? What role do people play in getting a strategic pricing system to work?
What kind of impact does strategic pricing have on a business such as Parker Hannifin? What other kinds of businesses could benefit from strategic pricing? How are value chain and competitive forces analysis related to Parker Hannifins strategic pricing?
New entrants: Reduces barriers to entry (e.g. need for sales force
declines), provides technology for driving business processes
Highlights specific activities in a business where competitive strategies can best be applied and where information systems are likely to have a strategic impact
Primary activities
Support activities
Benchmarking Best practices
A firms value chain is linked to the value chains of its suppliers, distributors, and customers A value web is a collection of independent firms that use information technology to coordinate their value chains to produce a product collectively Value webs are flexible and adapt to changes in supply and demand
The value web is a networked system that can synchronize the value chains of business partners within an industry to respond rapidly to changes in supply and demand.
Figure 3-3
DECISION-MAKING CONCEPT
A decision is choice out of several alternatives (options) made by the decision maker to achieve some objective s in a given situation. Business decisions are those, which are made in the process of conducting business to achieve its objective in a given environment. Managerial decisionmaking is a control point for every managerial activity may be planning, organizing, staffing, directing, controlling and communicating. Decisionmaking is the art of reasoned and judicious choice out of many alternatives. Once decision is taken, it implies commitment of resources. The business managers have to take variety of decision. Some are routine and others are long-term implementation decision. Thus managerial decisions are grouped as:
(a) Strategic decision (b) Tactical decision (c) Operation decision
DECISION-MAKING CONCEPT
Strategic Decision:
these are known as major decision influence whole or major part of the organization. Such decisions contribute directly to the achievement of common goals of the organization; have long range effect upon the organization. Generally, strategic decision is unstructured and thus, a manager has to apply his business judgment, evaluation and intuition into the definition of the problem. These decisions are based on partial knowledge of the environmental factors which are uncertain and dynamic, therefore such decision are taken at the higher level of management.
Tactical Decision:
tactical decision relate to the implementation of strategic decisions, directed towards developing divisional plans, structuring workflows, establishing distribution channels, acquisition of resources such as men, materials and money. These decisions are taken at the middle level of management.
Operational Decision:
operational decisions relate to day-to-day operations of the enterprise having a short-term horizon and are always repeated. These decisions are based on facts regarding the events and do not require much of business judgments. Operational decisions are taken at lower level of management.
In the intelligence phase, the MIS collects the data. The data is scanned, examined, checked and edited. Further, the data is sorted and merged with other data and computations are made, summarized and presented. In this process, the attention of the manager is drawn to all problem situations by highlighting the significant differences between the actual and the expected, the budgeted or the targeted. In the design phase, the manager develops a model of the problem situation on which he can generate and test the different decision alternatives, he then further moves into phase of selection called as choice. In the phase of choice, the manager evolves selection criteria such as maximum profit, least cost, minimum wastage, least time taken and highest utility. The criterion is applied to the various decision alternatives and the one which satisfies the most is selected.
Attributes of Information
Usability
Relevant Simple Flexible Economical
Quality
Accurate Verifiable Complete Reliable
Delivery
Timely Accessible Secure