MIS Part 2-1 PDF

# Chap 2: Information System Facilitating Organization Decision Making - Firms collect information from different sources, then from organize work activities or business processes, and then information systems make it possible for firms to manage all their information and make better decisions. - *...

# Chap 2: Information System Facilitating Organization Decision Making - Firms collect information from different sources, then from organize work activities or business processes, and then information systems make it possible for firms to manage all their information and make better decisions. - **Business Processes:** It refers to how work is organized and coordinated. It includes a collection of activities required to produce a product/service. These activities are supported by the flow of materials (physical, intellectual), information and knowledge among participants in business processes. Maybe identified to a functional area or cross-functional area. The performance of a business is based on how well its business processes are designed and coordinated. Business processes are assets when running smoothly and achieve their target goals and liabilities when not performing or not achieving goals. (Functional eg) - **Eg:** University BP = Hiring, admissions, test interviews etc. - **Eg:** Manufacturing/production BP = Assembling the product - Not all business processes are departmental, some are cross-functional - **Eg:** Fulfilling customer orders involves a set of steps which require close coordination of sales, accounting and manufacturing departments. ## For efficiently performing a required information must flow rapidly within the firm from one decision maker to another. ## Information technology enhances business processes by: - Increasing efficiency of existing processes such as automating steps that were manual. - Making it possible for many people to access and share information. - Replacing sequential steps with parallel steps. - Eliminating delays in decision-making. - Supporting new business models. - **Systems for Different Management Groups:** Different levels of management require different levels and systems of information to make decisions. These levels are operational, middle and senior management. - **Senior Management:** Requires general, broad scope, real-time, ad-hoc (uncertain, not planned, sudden come), external, internal, both information. This information is required by senior management. - **Middle Management:** Requires focused, specified, internal, real-time and scheduled information. - **Operational Management:** Requires specified, narrow, internal and detailed information. - **Types of Decisions:** - **Unstructured Decisions:** Non-routine decisions requiring judgement and insights such as approving capital budgets, which new product to launch, long-term loan decisions, etc. - **Semi-Structured:** Only part of the decision has clear-cut answers provided by accepted procedures. For example, allocating resources to managers to develop a marketing plan. - **Structured:** Routine decisions with definite procedures such as restocking inventory, shipment done/not etc. - **Types of Management Information Systems:** - **Transactional Processing Systems:** It performs and records daily routine transactions that are necessary to conduct business such as sales, payroll, payment, availability of stocks, etc. TPS is used by/serve operational managers/management. TPS is a major producer of information for other systems. It practices data validation and processing. TPS helps in structured goals and decision-making based on predefined criteria (such as assigning a loan to a customer who has predefined criteria). TPS is a producer of information. Than it is transferred to upper levels because it records daily info. TPS are the backbone for organizations because it provides internal info. It prevents losses for business. TPS data is often fed to other systems, as shown below: - **Barcode scanned --> TPS --> Database --> functional area IS, such as HR, marketing, business intelligence, etc. --> inter-organizational systems, expert systems --> other systems such as Dashboards, ERP--> don't do analysis, it only does record keeping** - **Business Intelligence and Decision System/Support:** Business intelligence is procedural and technical infrastructure that enables firms to organize and analyze data used by management to make decisions. They collect data from internal and external environments. Data visualization is done by reports or dashboards, and internal information is gathered by TPS. - **Systems for Decision Support:** - **Management information system (MIS):** It provides middle management with reports on the firm's current performance, summarizes and reports on basic operations in data from TPS. It provides answers to routine questions with pre-defined procedures for answering them to check performance. It can be done daily, weekly, monthly, annually. MIS is not very flexible; It has little or no analytic capability. - **Order file, Order processing system, MIS files (sales data, unit data, product data), Production file, Material planning system, MTS, Keep, Dashboard, Accounting files, General ledger system, Exp. data --> DS (How MIS obtains this data from TPS).** - **Decision Support System (DSS):** It serves middle managers to support non-routine decision-making. It often uses external information from TPS and MTS. Because it also affects our decisions, it focuses directly on unique problems and has analytical capabilities. - **Model Driven DSS:** Voyage-estimating systems. It is based on what-if scenarios, mathematical, statistical data, not real data. It is used when business operate within a country only (not global), so less data. - **Data Driven DSS:** Marketing analysis systems. When data is increased, then it is used. - **Geographic information systems (GIS):** It is a special category of DSS that displays geographically referenced data in digitalized maps. - **Moreover, DSS support semi-structured and unstructed problems. It has greater emphasis on models, assumptions, ad-hoc queries and display graphics; Emphasizes change, flexibility and a rapid response.** - **The difference between MIS and DSS:** - **MIS** primarily addresses structured problems and provides typically fixed, scheduled reports based on routine flow of data and assists in general control of business. (Continued Model Driven DSS). - **IT** primarily stands alone systems and use a strong theory or model to perform what-if and similar analyses. (Continued Data Driven DSS) - **It** is integrated with large pools of data in major enterprise systems and web sites and supports decision-making by enabling users to extract useful information. - **Data mining:** an obtaining types of information such as: - **Associations:** Occurrence linked to a single event. - **Sequences:** Events that are linked overtime. - **Classification:** Classifying customers based on behavior. - **Clusters:** They work in a similar pattern of classification. Groups made but not a standard / classified. - **Forecasting:** Helps to identify/predict sales of the future - **Examples:** - We go to buy chips only, but also bought cola. - Wedding seasons bought furniture, clothes, mattresses. - Sim not-in use for a month so launch an offer if use, so get free internet/minutes. - Separating customers based on working and non-working. - **Components of DSS:** - **DSS Database** - **DSS software system** - **DSS user interface** - **TPS --> DSS system, OLAP and data mining tools --> Interface --> User --> Decision-Support-System.** - **Business value of DSS:** - It provides fine-grained information for decisions that enable the firm to coordinate both internal and external business processes much more precisely. It helps in data visualization, supply chain management and customer relationship management. - **What is a GDSS:** - Group Decision-Support System is an interactive computer-based system used to facilitate the solution of unstructured problems by a set of decision makers working together as a group. - **Components of GDSS:** - **Hardware:** (conference facility, audiovisual equipment) - **Software tools:** (Electronic questionnaires, voting tools, etc.) - **People** (Participants, trained facilitator, staff) - **Business value of GDSS:** - GDSS allows a greater number of attendees. It enables a collaborative atmosphere, enabling non-attendees to locate organized information after the meeting. It can increase the number of ideas generated and the quality of decisions as it is more participative and democratic - **Executive support system:** ESS can bring together data from all parts of the firm, enabling managers to select, access and tailor them as needed. It serves senior managers, addresses strategic issues and long-term trends, addresses non-routine decision making, requiring judgment, evaluation and insight. It provides generalized computing capacity that can be applied to changing problems. It can draw summaries from MIS, DSS, and external events. It uses portals, web interfaces and digital dashboards to present content. - **Business value of ESS:** It has the ability to analyze, compare, highlight trends, and Google interface enables users to review data more quickly. It increases management span of control, enables monitoring. It is based on enterprise-wide data. It can be used to decentralize decision-making or increase management centralization. ## Stages of decision making: - **Problem Discovery:** What is the problem? (Intelligence, system, MTS provide routine reports) - **Solution Discovery:** What are possible solutions? (DSS help to analyze data and design possible solutions) - **Choosing solution:** What is the best solution? (DSS helps identify the optimal solution, DSS choose the most widely acceptable/supported solution) - **Solution testing:** Is the solution working? Can we make it work better? (MTS give routine reports, implementation DSS use analytical models to correct solutions) # **Chap Linking Systems:** - **Knowledge Management Systems (KMS):** KMS improve CRM systems by identifying, storing and disseminating facts about how to perform tasks and collective knowledge. Knowledge is an asset that should be shared through organizations to generate business intelligence and maintain a competitive advantage in the marketplace. Knowledge is more than data and information, and it comes from different resources. - **Firms recognize the need to integrate both explicit and tacit knowledge into formal IS, which is KMS.** - **KMS** ensures that necessary information is available on demand, eliminating the need to rediscover knowledge. - **Types of Knowledge:** - **Explicit:** Articulated, generalized knowledge. Explicit knowledge has been codified (documented) in a form that can be distributed to others or transformed into a processor strategy without requiring interpersonal interaction. Explicit knowledge deals with objective, rational, and technical knowledge; such as data, policies, procedures, software, documents, products, strategies goals, mission, core competencies, etc. The more that knowledge is made explicit, the more economically it can be transferred. - **Tacit:** Knowledge is rooted in actions, experience and involvement into a specific context. **Cognitive tacit**(mental models), **Technical tacit** (surgery skills). Tacit is a domain of subjective, cognitive, and experiential learning. It is highly personal and difficult to formalize; It is also referred to as embedded knowledge since it is localized within the brain of an individual or embedded group interactions within departments. Tacit knowledge is a cumulative store of corporate experiences, mental maps, insights, acumen, expertise, know-how, trade secrets, skill sets, learning of an organization and organizational culture. Tacit knowledge is generally slow and costly to transfer and can be plagued by ambiguity. It is called sticky knowledge, such as how to drive, this can’t be learned by a manual, someone has to teach us. - **Tacit knowledge is transferred through associations, apprenticeships, conversations, social and interpersonal interactions, or even through simulations.** - **Nonaka and Takeuchi Model:** Ikujiro Nonaka and Hirotaka Takeuchi were Japanese business experts. This model represents how knowledge is created, stored and disseminated in organizations. - **Knowledge Creation:** Knowledge creation or knowledge acquisition is the generation of new ideas, insights or routine. During this step, organizations identify and document any existing or new knowledge that they want to circulate across the company. - **SCEI Process/Model:** - **Socialization Mode:** Refers to the conversion of tacit knowledge to new tacit knowledge through social interactions and shared experiences. (Creating tacit to tacit knowledge) - **Combination Mode:** Refers to the creation of new explicit knowledge by merging, categorizing, reclassifying, and synthesizing existing explicit knowledge. (Explicit to explicit knowledge, such as modifications in documents) - **Externalization:** Refers to converting tacit knowledge to new explicit knowledge (such as someone sharing experience and you write it) - **Internalization:** Refers to the creation of new tacit knowledge from explicit knowledge (You read some document). - **Knowledge Storage and Sharing:** - **Knowledge storage:** During this stage, an IT system is used to host organizational knowledge for distribution. Information needs to be formatted in a particular way to meet the requirements of the repository. - **Knowledge Sharing:** Exchange of ideas, insights, solutions and experiences with another individual via knowledge transfer, computer systems, or other non-IS methods. The rate at which information spreads will vary depending on organizational culture. Companies that encourage and reward this behavior will have a competitive advantage over other. - **Types of IS**: - **Intranet:** An internal company website accessible to employees only. It is used to increase integration and expedite flow of information. - **Extranet:** Company websites accessible externally only to vendors and suppliers. Often used to coordinate supply chain. - **System for Collaboration and Social Business:** - **Collaboration:** Working with others to achieve shared and explicit goals. It can be short-lived or long-term, formal or informal. - **Importance of Collaboration:** - **Changing nature of work:** (First sequential work done now parallel) - **Growth of professional work:** (Interaction jobs such as sales) - **Changing organization of firm:** (Previously organizations work on hierarchy, now informal structure. ) - **Changing scope of the firm:** (Going service) - **Emphasis on innovation:** (More people, more ideas) - **Changing culture of work** (Diverse people working together) - **System for Collaboration and Teamwork:** - **Collaboration Capacity** - **Open Culture:** (Everyone shares ideas) - **Decentralized structure:** (Allows participation in decision making ) - **Breadth of collaboration:** (How much diversity in terms of skills and area) - **Collaboration Technology:** - **Use of collaboration technology for implementation and operations.** (How much is the organization ready to invest in tech) - **Use of collaborative technology for strategic planning.** (How much it helps in planning) - **Requirements for Collaboration:** Successful collaboration requires an appropriate organizational structure, along with appropriate collaboration technology. - **Social Business:** It means the use of social networking platforms, internal and external, to engage employees, customers, and suppliers. The goal is to deepen interactions and expertise. - **Information sharing and conversations require information transparency.** - **Business Benefit of Collaboration and Teamwork:** Investing in collaboration technology can bring organizations improvements, returning high ROI. Its benefits are productivity, quality, innovation, customer service and financial performance. - **Building Collaborative Culture and Business Processes** - **Command and control organization:** No value in teamwork, or lower level participation in decisions. - **Collaborative Business Culture:** Senior managers rely on teams, policies, products, designs, processes and systems rely on teams. The manager's purpose is to build teams. - **Dimensions of Collaboration Technologies:** - **Space** (for location) = Remote or co-located - **Time** = Synchronous or Asynchronous - **Time/Space Collaboration and Social Tool Matrix:** - **Colocated:** - **Same time (synchronous)** - **Face to face interaction** (decision rooms, shared tables, groupware) - **Continuous task** (Team rooms shift work, group ware) - **Remote ** - **Same time (synchronous)** - **Video conferencing** - **Shared screens** - **Different time (asynchronous)** - **Communication + coordination** (Emails, wikis) - **Collaboration Technologies Classified.** - **Tools for Collaborating and Teamwork:** - **Emails** and **instant messaging** - **Wikis** - **Collaboration** and **social business platforms** which include virtual meeting systems, cloud collaboration services (Google tools), IBM Notes, Microsoft sharepoint, Enterprise social networking tools. - **IT Infrastructure:** A set of physical devices and software required to run/operate an enterprise. It is a set of firm-wide services, including computing platforms, telecommunication services, data management services, application services, IT management, education and other services. - **Only deploying or installing IT infrastructure is not enough; management consultation, education and training is also required** - **How a firm gives a customer service and manages things depend on the type of IT strategy, business strategy, and information technology itself. BS, IS (services and infrastructure), Customer services supplier services, Enterprise services.** - **Components of IT Structure:** - **Computer Hardware Platform:** (Physical devices) - **Operating System Platforms:** (to run physical devices) - **Enterprise software application** - **Data management** and **storage** (to store analyzed data) - **Networking/telecommunication platforms** - **Internet platforms** *(to provide over the net services)* - **Consulting systems** *(integration services (for implementing IT structure)) - **Examples:** - **Dell, IBM, Sun, HP, Apple, Linux machines** - **Microsoft, Unix, Linux, Mac OS X (iPhone, Android, IOS)** - **SAP, Oracle, IBM, Microsoft** - **Microsoft Windows Server, Linux, Novell, Cisco, Alcatel-Lucent, Nortel, AT&T, Verizon** - **IBM, HP, Accenture** - **Apache, Microsoft IIS, Net, Unix, Cisco, Java** - **IBM DB2, Oracle, SQL Server, Sybase MySQL, EMC** - **Apache Hadoop** - **Cloud Computing:** Computing services obtained over a network. It allows companies to minimize IT investments. It draws bricks are concerns of security and reliability. - **In cloud computing hardware/software capabilities are pooled of virtualized resources provided over a network; often the internet. Business and employees have access to application and IT infrastructure anywhere anytime and on any device.** - **Characteristics of Cloud Computing:** - **They** are given by US NIST (National Institute of Standard and Technology). - **On-demand self service:** Customize by customers according to their needs. - **Universal network access** (an access from anywhere on internet) - **Ubiquitous network access:** (can access from anywhere on the internet). - **Location-independent resource pooling:** (Serve to multiple users) - **Rapid Elasticity:** (Provision anytime increase or decrease storage) - **Measured service:** (The more you use, the more you pay) - **Services of cloud computing:** - **Infrastructure as a Service (IaaS):** Include computing resource management, network management, and storage management. Such as Amazon gives S3 simple storage service to store customer data and EC2 elastic compute cloud to run apps. - **Software as a Service (SaaS):** Include content management enterprise software, collaboration environments, process management such as Google apps. - **Platform as a Service (PaaS):** Include block storage communication network, identity management, content services. It provides programs, tools to develop, run and test apps, such as IBM provides Bluemix service, and another is Salesforce. - **Types of Clouds:** - **Public Cloud:** Managed by third-party service providers. Companies without major privacy concerns, seeking pay-as-you-use IT services, lacking IT resources and expertise, use public clouds. - **Private Cloud:** Managed by third party or in-house IT. Companies with strict privacy/security requirements use it. - **Hybrid:** Managed by in-house IT, or companies use public host, or third-party service providers. Used by companies requiring in-house control of IT are also willing to assign part of their IT structure to public cloud. ## Management And Governance Issues: - Answering questions like who controls IT infrastructure, how should the IT department be organized?: Centralized or decentralized? How are costs allocated between departments? - **Factors:** Factors help to answer how much a firm should spend on IT infrastructure: - **External factors:** Market demand of your firm's customer services; supplier services; enterprise services - **Internal factors:** Firm's Business Strategy (5 Years), IT Strategy, Infrastructure (costs), Information Technology (new technology, what!), Competitor Firms IT Infrastructure and investment, Competitor Firms IT Services.