Management Information System (MIS) Basics PDF

1 MANAGEMENT INFORMATION SYSTEM  ▪ Why Information Systems ▪ Contemporary Approaches to Information System ▪ Toward the Digital Firm: The New Role of Information Managing the Systems in Organizations Digital Firm ▪ Learning to Use Infor...

1 MANAGEMENT INFORMATION SYSTEM  ▪ Why Information Systems ▪ Contemporary Approaches to Information System ▪ Toward the Digital Firm: The New Role of Information Managing the Systems in Organizations Digital Firm ▪ Learning to Use Information Systems: New Opportunities with Technology  Four powerful worldwide changes have altered the business environment： ▪ Emergence of the Global Economy Why Information Systems? ▪ Transformation of Industrial Economies ▪ Transformation of the Business Enterprise ▪ The Emerging Digital Firm  ▪ Globalization ▪ Management & control in a global marketplace Why Information Systems? ▪ Competition in world markets ▪ Global work groups ▪ Global delivery systems  Transformation of Industrial Economies ▪ Knowledge- and information-based economies ▪ New products and services ▪ Knowledge：A central productive and strategic asset Why Information Systems? ▪ Time-based competition ▪ Shorter product life ▪ Turbulent environment ▪ Limited employee knowledge base Why Information Systems? The growth of the information economy  Transformation of the Enterprise ▪ Flattening ▪ Decentralization ▪ Flexibility Why Information Systems? ▪ Location Independence ▪ Low Transaction & Coordination Costs ▪ Empowerment ▪ Collaborative work and teamwork  Emergence of the Digital Firm ▪ Digitally enabled relationships with customers, suppliers, and employees ▪ Core business processes accomplished via digital Why Information Systems? networks ▪ Digital management of key corporate assets ▪ Rapid sensing and responding to environmental changes  ▪ Emergence of the Global Economy ▪ Transformation of Industrial Economies Why Information Systems? ▪ Transformation of the Business Enterprise ▪ The Emerging Digital Firm  What is an Information Systems? Function of an information system ▪ An information system is an organized combination of people, hardware, software, communications Networks and data resources that collects, transforms, and disseminates information in an organization.  Using information system effectively requires an understanding of the Organization , Management , Information Technology Organization ▪ People ▪ Structure ▪ Operating procedures ▪ Politics ▪ Culture Major Organizational Functions ▪ Sales & Marketing ▪ Manufacturing ▪ Finance ▪ Accounting ▪ Human Resources Major Organizational Functions Management ▪ set the organizational strategy ▪ allocate the financial resources ▪ allocate the human resources ▪ coordinate the work ▪ leadership ▪ create new products or new services ▪ re-create organization from time to time  Technology ▪ tools to managers ▪ glue that holds the organization together ▪ Computer hardware ▪ Computer software ▪ Storage technology ▪ Telecommunications technology ▪ Information technology Infrastructure  Contemporary Approaches to Information Systems  Computer science ▪ Theories of computability ▪ Methods of computation ▪ Methods of efficient data storage and access Management science Technical approach ▪ Models for decision making ▪ Management practices Operations research ▪ Mathematical techniques for optimizing selected parameters of organizations, such as transportation, inventory control, etc.  Sociology ▪ Development of systems ▪ System affect individual, groups, and organization. Psychology ▪ How human decision makers perceive and use Behavioral Approach formal information. Economics ▪ Impacts to firm and within markets － on control － cost structures Socio-Technical Systems The widening scope of I.S. The interdependence between organizations and information systems The widening scope of I.S.  ▪ It affects the organization and its employees, and how they can make business more competitive and efficient. Information Systems ▪ It has become essential for creating competitive firms, managing global corporations, and providing useful products and services to customers.  What you can do on the internet? ▪ Communicate & collaborate ▪ Access information The network revolution and the internet ▪ Participate in discussions ▪ Supply information ▪ Find entertainment ▪ Exchange business transactions  INTERNET ▪ International network of networks that is a collection of hundreds of thousands of private and public networks. The network revolution and the internet World Wide Web (WWW) ◼ A system with universally accepted standards for storing, retrieving, formatting, and displaying information in a networked environment.  ▪ Flattening Organizations and the Changing New Options for Organizational Management Processes Design ▪ Separating Work from Location The Digital Firm and the Collaborative Enterprise ▪ Reorganizing Work Flows ▪ Increasing Flexibility of Organizations ▪ Redefining Organizational Boundaries New Options for Organizational Design Flattening Organizations Information Systems New Options for Organizational Design Redesigned Work Flow For Insurance Underwriting  Electronic market The Digital Firm ▪ A marketplace that is created by computer and E-commerce, E-business, communication technologies that link many buyers and New Digital and sellers. Relationships  Electronic Commerce The Digital Firm ▪ The process of buying and selling goods and services electronically involving transactions using the internet, networks, and other digital technologies. ◼ Internet Links Buyers, Sellers ◼ Lower Transaction Costs ◼ Goods & Services Advertised, Bought, Exchanged Worldwide ◼ Business-to-Business Transactions Increasing  Intranet ◼ An internal network based on Internet and World The Digital Firm Wide Web technology and standards. Electronic Business ▪ The use of the Internet and other digital technology for organizational communication and coordination and the management of the firm. The Digital Firm  Challenge of Information Systems: Key Management Issues ▪ Strategic: competitive & effective Learning to Use Information Systems: ▪ Globalization: multinational info New Opportunities with Technology ▪ Info architecture: support goals ▪ Investment: value of information ▪ Responsibility & control: ethics Information Architecture and Information Technology Infrastructure  Types of Information Systems  ◼ Operational-level systems ▪ Information systems that monitor the elementary activities and transactions of the organization. Different kinds of systems ◼ Knowledge-level systems ▪ Information systems that support knowledge and data workers in an organization.  ◼ Management-level systems ▪ Information systems that support the monitoring, controlling, decision making, and administrative activities of middle managers. Different kinds of systems ◼ Strategic-level systems ◼ Information systems that support the long-range planning activities of senior management.  6 Major Types of Systems 1. Executive Support Systems (ESS) 2. Decision Support Systems (DSS) These systems help mangers with the necessary information to make intelligent decisions. 3. Management Information Systems (MIS) 4. Knowledge Work Systems (KWS) They are meant to mimic humans in making decisions in a specific field. 5. Office Automation Systems (OAS) 6. Transaction Processing Systems (TPS) These systems process a large volume of routine, recurring transactions  1. TPS – Transaction Processing Systems ◼ Computerized systems that perform and record the daily routine transactions necessary to conduct the Six Major Types of Systems business; they serve the organization’s operational level. TYPICAL TPS APPLICATIONS Sales & Marketing Systems ◼ MAJOR FUNCTIONS OF SYSTEMS: ▪ Sales Management ; ▪ Market Research ; ▪ Promotion ; Pricing ; New Products ◼ MAJOR APPLICATION SYSTEMS: ▪ Sales Order Info System ; ▪ Market Research System ; ▪ Pricing System  ◼ Manufacturing ▪ Plant scheduling ▪ Material movement control ▪ Machine control ◼ Finance ▪ Securities trading ▪ Cash management TPS – Transaction Processing Systems ◼ Accounting ▪ Payroll ▪ Account payable ▪ Account receivable ◼ Human Resources ▪ Compensation ▪ Training & development ▪ Employee record keeping  Payroll TPS A symbolic representation for a payroll TPS.  2. KWS – knowledge Work Systems ◼ Information systems that aid knowledge workers in the creation and integration of new knowledge in Six Major Types of Systems the organization. Example: Engineering work station  3. OAS – office automation systems ◼ Computer systems, such as word processing, electronic mail systems, and scheduling systems, Six Major Types of Systems that are designed to increase the productivity of data workers in the office.  4. MIS – Management Information Systems ◼ Information systems at the management level of Six Major Types of Systems organization that serve the functions of planning, controlling, and decision making by providing routine summary and exception reports. Example: Annual budgeting Structured and semi-structured decisions Report control oriented Past and present data Internal orientation  TPS DATA FOR MISAPPLICATIONS How management information systems obtain their data the from the organization’s TPS.  5. DSS – Decision Support Systems A decision support system (DSS) is a computer-based information system that supports business or organizational decision-making activities. DSSs serve the management, Six Major Types of Systems operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance. Information systems at the management level of an organization that combine data and sophisticated analytical models to support non-routine decision making. Example: Contract cost analysis  Decision Support System (DSS) Voyage estimating decision-support system. MIS & DSS ◼ Finance ▪ Annual budgeting ▪ Cost analysis ◼ Accounting ▪ Capital investment analysis ▪ Pricing / profitability analysis ◼ Human Resource ▪ Relocation analysis ▪ Contract cost analysis ◼ Sales and marketing ▪ Sales management ▪ Sales region analysis ▪ Manufacturing ▪ Inventory control ▪ Production scheduling  6.ESS – Executive Support Systems ◼ Information system at the organization’s strategic level designed to address unstructured decision making through advanced graphics and Six Major Types of Systems communications. Example: 5-year operating plan Top level management Designed to the individual Ties CEO to all levels Very expensive to keep up Extensive support staff Executive Support System (ESS) Model of a typical executive support system.  ◼ Sales and marketing ▪ Sales trend forecasting ◼ Manufacturing ▪ Operating plan ESS ◼ Finance ▪ Budget forecasting ◼ Accounting ▪ Profit planning ◼ Human Resource ▪ Personnel planning  Characteristics of Different Types of Information Systems ◼ Information inputs ◼ Processing ◼ Information outputs ◼ Users See Table 2-1 ( p.41 ) Systems from a Functional Perspective Interrelationships among systems Systems from a Functional Perspective ◼ SALES & MARKETING SYSTEMS ◼ MANUFACTURING & PRODUCTION SYSTEMS ◼ FINANCE & ACCOUNTING SYSTEMS ◼ HUMAN RESOURCES SYSTEMS Systems from a Functional Perspective Sales and Marketing Systems Major functions of systems: ◼ Sales management, market research, promotion, pricing, new products Major application systems: ◼ Sales order info system, market research system, pricing system  60 Sales and Marketing Systems Systems from a Functional Perspective Manufacturing and Production Systems Major functions of systems: ◼ Scheduling, purchasing, shipping, receiving, engineering, operations Major application systems: ◼ Materials resource planning systems, purchase order control systems, engineering systems, quality control systems Manufacturing and Production Systems Systems from a Functional Perspective Financing and Accounting Systems Major functions of systems: ◼ Budgeting, general ledger, billing, cost accounting Major application systems: ◼ General ledger, accounts receivable, accounts payable, budgeting, funds management systems  64 Financing and Accounting Systems Systems from a Functional Perspective Human Resource Systems Major functions of systems: ◼ Personnel records, benefits, compensation, labor relations, training Major application systems: ◼ Payroll, employee records, benefit systems, career path systems, personnel training systems Human Resource Systems Business Processes and Information Systems Business processes ◼ Manner in which work is organized, coordinated, and focused to produce a valuable product or service ◼ Concrete work flows of material, information, and knowledge—sets of activities ◼ Unique ways to coordinate work, information, and knowledge ◼ Ways in which management chooses to coordinate work Business Processes and Information Systems Examples of Business Processes ◼ Manufacturing and production: Assembling product, checking quality, producing bills of materials ◼ Sales and marketing: Identifying customers, creating customer awareness, selling  Business Processes and Information Systems Cross-Functional Business Processes The Order Fulfillment Process Business Processes and Information Systems Information systems help organizations ◼ Achieve great efficiencies by automating parts of processes ◼ Rethink and streamline processes  Business Processes and Information Systems Customer Relationship Management (CRM) ◼ Manages all ways used by firms to deal with existing and potential new customers ◼ Uses information system to coordinate entire business processes of a firm ◼ Provides end-to-end customer care ◼ Provides a unified view of customer across the company ◼ Consolidates customer data from multiple sources and provides analytical tools for answering questions Business Processes and Information Systems Customer Relationship Management (CRM) Business Processes and Information Systems Supply Chain Management (SCM) Close linkage and coordination of activities involved in buying, making, and moving a product Integrates supplier, manufacturer, distributor, and customer, logistics, time Reduces time, redundant effort, and inventory costs Network of organizations and business processes Helps in procurement of materials, transformation of raw materials into finished products Helps in distribution of the finished products to customers Includes reverse logistics - returned items flow in the everse direction from the buyer back to the seller Business Processes and Information Systems Supply Chain Management  How Information Systems Facilitate Supply Chain Management Decide when, what to produce, store, move Rapidly communicate orders Communicate orders, track order status Check inventory availability, monitor levels Track shipments Plan production based on actual demand Rapidly communicate product design change Provide product specifications Share information about defect rates, returns Collaborative Commerce Enterprise System 2Global System Configuration MANAGEMENT INFORMATION SYSTEM(MIS)  80 ▪ Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. MIS involve three primary resources: technology, information, and people. ▪ Management information systems are regarded to be a subset of the overall internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy. ▪ The role of MIS in an organization can be compared to Role the roleOf MISin the body. of heart ▪ The information is the blood and MIS is the heart. In the body the heart plays the role of supplying pure blood to all the elements of the body including the brain. ▪ 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 sent 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 the top management. ▪ The MIS satisfies the diverse needs through a variety of systems such as Query Systems, Analysis Systems, Modeling Systems and Decision Support Systems. ▪ The MIS helps in Strategic Planning, Management Control, Operational Control and Transaction Processing.  ▪ Management-oriented: The basic objective of MIS is to provide information support to the management in the organization for decision making. ▪ Management directed: When MIS is management-oriented, it should be directed by Characteristics the management because it is the management of MIS who tells their needs and requirements more effectively than anybody else. ▪ Integrated: It means a comprehensive or complete view of all the subsystems in the organization of a company. ▪ Common data flows: The integration of different subsystems will lead to a common data flow which will further help in avoiding duplicacy and redundancy in data collection, storage and processing. ▪ Heavy planning-element: The preparation of MIS is not a one or two day exercise. It usually takes 3 to 5 years and sometimes a much longer period. ▪ Subsystem concept: When a problem is seen in 2 sub parts, then the better solution to the problem is possible. ▪ Common database: This is the basic feature of MIS to achieve the objective of using MIS in business organizations. ▪ Computerized: MIS can be used without a computer. But the use of computers increases the effectiveness and the efficiency of the system. ▪ User friendly/Flexibility: An MIS should be flexible. ▪ Information as a resource: Information is the major ingredient of any MIS.  ▪ It improves personal efficiency. ▪ It expedites problem solving(speed up the progress of problems solving in an organization). ▪ It facilitates interpersonal communication ▪ It promotes learning or training. ▪ It increases organizational control. Benefits of MIS ▪ It generates new evidence in support of a decision. ▪ It creates a competitive advantage over competition. ▪ It encourages exploration and discovery on the part of the decision maker. ▪ It reveals new approaches to thinking about the problem space. ▪ It helps automate the Managerial processes