Mod 1

Organization and information

systems
 Books to Read & Refer

Management Information Systems

by Waman Jawadekar, Tata McGraw Hill Publication

Management Information Systems: Managing a Digital firm

by Laudon & Laudon

Management Information Systems

by O’Brien & Marakas
Changing environment and its impact
on business

• Change is inevitable in all fields of our

lives.
• Globalization is a prominent affair and
everyone can feel the changes due to it.
• International dimensions have become
vital part of managing a business
enterprise in the internet worked global
economies and markets of today.
Attitude and change

“Every time the world discourages you, tell

the world, I’ll prove you wrong”
“Every time the world encourages you, tell
the world, I’ll prove you right”
If You Don’t Change,
You Can Become Extinct
“CHANGE IS UNIVERSAL…
CHANGE IS PERMANENT….
BE EVER WILLING TO
CHANGE…..
FOR, CHANGE ALONE
LEADS YOU TO SUCCESS
AND HAPPINESS!!!
A stepped approach to change
Success

A journey of a thousand
miles occurs one step at a
time.

X
Start
Need for change

• External factors
– Market place
– Govt laws and regulations
– Technology
– Fluctuations in labour market
– Economic changes
• Internal factors
– Org workforce
– Introduction to new equipment
– Redesign of new job or interaction patterns within their work
group
– Emp attitudes
Forces for change

• People
• Technology
• Information processing
• Communication
• Competition
• Social trends
Key components involved in business
change are:
• Customer and supplier, Economic conditions, Cultural and
Environmental factors political factors, Industry competitiveness, Technological
innovation

Management • Style , Systems, Measures , Risk propensity

People • Skills, Behavior , culture, values

processes • Inter- organizational, cross functional, intra functional

• Formal org, informal org, teams/ work groups,

Structure coordination/ control, jobs

Information and • Data and info, IT, decision, simulation and modeling
technology tools, production technology
IT and its influence

• Lower costs
• Differentiate
• Innovate
• Promote growth
• Develop alliances
• Improve quality and efficiency

11
The organization: structure, managers
and activities

• A number of researchers have identified

3 layers of activity that can benefit the
org.
• They are :
– Top management
– Middle management
– Operational or lower level management

12
 Organisation & Information:
DM Perspective
External Low
TOP
MGMT
[Strategic
Decisions]

Source of MIDDLE Structured

Information MGMT Information
[BUSINESS DECISIONS]

OPERATIONAL
MGMT
Internal [Operations Decisions] High
Organisation Vs Data to Information to
Knowledge to Business Intelligence

Possessed by expert
judgmental, not transferable
Intelligence
Less judgmental, contextual, and can
Tacit Knowledge be transferred through learning

Coded, contextual, easily

Explicit Knowledge transferable and can be shared

Processed data with context

Information, Information Sets and purpose. Transferable
and sharable

Data, Meta Data Facts and Figures

with no context

Fig. 7.4 Knowledge Hierarchy

Data Versus Information

• Data are raw facts about physical phenomena

or business transactions
• Information is data that has been converted
into meaningful and useful context for end
users
• Examples:
– Sales data is names, quantities, and dollar amounts
– Sales information is amount of sales by product
type, sales territory, or salesperson

1-15
 Data

Information

Knowledge

Business
Intelligence
 Business
Data Information Knowledge
Intelligence

DATA
No Character & No Value

INFORMATION
Has a character & Value

KNOWLEDGE
A information set built using principles, laws, experience
etc. It is an asset of high value.
Know how: Ability to apply knowledge in practice
Wisdom: Judicious Use of know how & knowledge

BUSINESS INTELLIGENCE
A set of Information & knowledge entities, backed by systems,
tools & technology, organized to provide insight in the
scenario.
 Business
Data Information Knowledge
Intelligence

Facts without context is ‘Data’

Data processed in context is ‘Information’
Information processed in context is ‘Knowledge’
Knowledge in context of application is ‘Know-How’
Know-how in context of right use is a ‘Wisdom’
Data/Information/ Knowledge/ Knowledge Assets
& supporting infrastructure of systems, and Tools
to use it is a ‘Business Intelligence’
 More on
Data / Information / Knowledge
Data: Data comes about through research, creation,
gathering, and discovery and through transaction
processing.
Census data, market research, Purchase sales transactions.

Information: Data, when processed with context, is an

Information. Data is turned into information by organizing
it so that we can easily draw conclusions. Data is also
turned into information by "presenting" it, such as making
it visual or auditory.
Census data on education processed with gender attribute gives
information on education divide.

Knowledge: Knowledge is built from scratch by the

learner through experience of application of information
or by its analysis. knowledge is dynamic as it lives within
us and changes with experience.
On analysis of this information, we come to know the reasons of
education divide between genders.
 Methods & Sources of
Data and Information
Collection

1. Observation
2. Experiment
3. Survey
4. Estimation
5. Processing of Data/Transactions/ Events
6. Purchase
7. Source from Publications: Govt & Private bodies
 Attributes of Information

1. Accuracy in representation
2. Complete in content
3. Form of presentation to grasp quickly
4. Frequency of generation & reporting
5. Scope of coverage/contents
6. Sources of input data
7. Time: Past, Current & Future
8. Relevance & utility for DM
9. Availability when needed
10. Accessibility to the user
The level of people and information
needs

• Information has become a strategic tool for org.

• Info is now a days considered as a resource, more or
less like capital.
• Hence it is imperative to analyze and assess the
information requirements/ needs of business org on
the basis of:
– Functions
– Activity
– Level
– Org as whole

22
Types of management
Strategic or top level Tactical or middle level Operational or lower
level

Generally board of directors, Self directed teams, business Members of self directed
executives committee of the unit managers teams, operating managers.
CEO
Develop overall org goals, Develop short and medium Develop short range plans
strategies, policies. range plans, schedules, such as weekly production
budgets specify the policies, schedules.
procedures and business
objectives for their subunits of
the org
Monitor strategic performance Allocate resources and Direct the use of resources
of the org and its overall monitor the performance of and performance of tasks
directions in the political, their org sub units, including according to procedures and
economic and competitive departments, divisions, within budgets and schedules.
business environment. process teams, project teams They establish it for the teams
and other work groups. and other work groups of the
org.
23
Organisation Pyramid & Information
What is Information Management?

Information Management begins with

identification of information needs of the
organization & its users, and plans systems
for its generation, maintenance, &
dissemination ensuring quality & security
of the information.
Information systems resources

• IS activities can be generally grouped

into:
– Input
– Processing
– Output
– Storage
– control

26
Components of an IS

1-27
Input of data

• Data about business transactions is

captured and prepared for processing
by the input.
• Input can be computer key boards or
optical scanning devices.
Processing of data

• Processing activities:
-Calculating, sorting, comparing,
classifying and summarizing.
• The activities help in organizing,
analyzing, manipulate, data converting
then finally into information for end
users.
Output of information products

• End users get the information in various

forms in the o/p activity. These include:
– Messages
– Forms
– Reports
– Graphic images
• These are provided by video displays, audio
responses, paper documents and multimedia.
Storage of data resources

• Data are organized into fields, records, files and

databases.
– Field: is a group of character, each character is a byte.
1 Byte=8bits. E.g. RAMA
– Records: is a collection of interrelated fields. E.g. Rama’s
pay roll record consist of name, ID, Dept, shift, designation,
salary.
– File: is a collection of interrelated records. E.g. Pay roll file
records of all emp in a firm.
– Databases: it is an integrated collection of interrelated
records . E.g. personnel database might contain pay roll,
performance review, career development files.
Control of system performance

• An IS has to obtain a feedback about its

input, processing, output and storage
activities.
• The feedback is later monitored and
evaluated to determine whether the sys is
meeting its desired performance standards.
• Appropriate sys updation and control should
be done timely.
Why Information Management is important now?
Business is an Open System
 Strategy: Sense & Respond proactively
 Information of customer needs & the
competition is necessary for growth Information
Management
System

Mission Sense Build

Information
& Customer Flexible
Driven Participative
Goal Needs Structure
Management

Evaluate
Strategy

External Evaluate Information

Operational
Signals From Driven
Signals Achievements
Environment Strategy
Importance of Information Management

We need Information for:

Business Operations
Operations Control
Decision Making
Business Management: Strategy & Implementation
Performance Measure: Targets, Budgets, KPIs
Performance Control
Achieving Goals & Targets
Importance of Information Management

 Business & Industry is information driven

 Needs to know JIT status on chosen aspect,
 Needs to know instantaneous event occurrence.
 Needs to know Exceptions any where
 Needs prompts in terms of Alert, Attention, Action.
 Needs information support to DSSs, embedded or otherwise

Need a Information Management System to process

data, events, transactions producing the
information to achieve business goals &
performance targets.
IMS Model

Input
Data,
Standards, Information Output
Specifications Data Information,
Management Knowledge,
Information,
System (IMS) Decisions,
Knowledge,
Rules, Results,
Policies, Exceptions
Practices,
Strategy Output Display
Fundamental Roles of IS in Business

1-37
Trends in Information Systems

1-38
Information systems categories on the
basis of nature and characteristics

Information
systems

Operational Management
support support
systems systems

Transaction Process Enterprise Management Decision Executive

process control collaboration information support information
systems systems systems systems systems systems
TPS PCS ECS MIS DSS EIS
Process data Monitor Support team, Provide info in Provide Provide critical
resulting from and control workgroup and the form of pre interactive information from
transactions, industrial enterprises. specified adhoc support many sources
update process Communication and reports and for the tailored to the
operational collaboration displays to decision needs of executive
databases, support making
produce decision process of
business making managers and
documents other
business
professionals
E.G sales and Petroleum E-mail, chat , video Sales analysis, Product Systems for easy
inventory refining, conferencing, group production, pricing, access to analysis
processing, power ware systems performance profitability, of business
accounting generation, cost, trend forecasting, performance,
systems steel reporting syst risk analysis competitors
production, systems actions, economic
pharmaceu development to
ticals support strategic
planning
Other classification of information
systems

• Expert systems
• Knowledge management systems
• Strategic information systems
• Business information systems
• Integrated information systems
Expert system

• It is a computer based information system

uses its knowledge about a specific complex
application area to use it as an expert
consultant to users.
• The systems consists of a knowledge base
and software modules that perform
inferences on the knowledge and
communicate answers to a users question.
Knowledge management systems

• Is a computer based information system for

organizing and sharing the diverse forms of
business information created within an org.
• It includes managing project and enterprise
document libraries, discussion database,
hypermedia web site address, and other type
of knowledge bases.
Strategic information systems

• Is a computer based information system that

provide a firm in the competitive products and
services that give it a strategic advantage
over its competitors in the market place.
• It promotes business innovation, improved
operational efficiency, and build strategic
information resources for a firm.
Business information systems

• Is a computer based information system

within a business org that support one
of the traditional functions of business
such as marketing, finance or
production.
• This can be either operations or MIS.
Integrated information systems

• Is integrated combinations of several types of

information systems mentioned above.
• Conceptual classifications of ISs are
designed to emphasize the many different
roles of information systems.
• These roles are integrated into composite of
cross functional information systems that
provide a variety of functions.