Management Information Systems

Prof. Surojit Mookherjee

VGSoM, IIT KHARAGPUR

Week 01: Introduction to MIS

Lecture 01 : Introduction – Part 1 of 2

1
 Learning Objectives

 How are information systems transforming business, and why are they so essential for
running and managing a business today?
 What is an information system? How does it work? What are its management,
organization, and technology components? Why are complementary assets essential
for ensuring that information systems provide genuine value for organizations?
 What academic disciplines are used to study information systems, and how does each
contribute to an understanding of information systems?

2
Goals of MIS

Wisdom

Knowledge
Information

Data

3
 What Is an Information System? (1 of 3)
Wisdom

• Information system Knowledge

• Set of interrelated components Information
• Collect, process, store, and distribute information Data
• Support decision making, coordination, and control
• Information vs. data
• Data are streams of raw facts
• Information is data shaped into meaningful form
• Information is an ordered set of data that you can understand
and act on.

4
Data – Information - Decision

Data Information
Region Sales in Rs. Sales is best in North region and worst in the South and East
North 50 lacs region, where the target of 40 lacs has been missed.
West 40 lacs
South 22 lacs
East 10 lacs Decision
1. Appoint more sales engineers in South and East region
2. Increase advertisement budget
3. Offer more discounts to dealers

5
What Is an Information System? (2 of 3)

• Three activities of information systems produce information

organizations need
• Input: Captures raw data from organization or external
environment
• Processing: Converts raw data into meaningful form
• Output: Transfers processed information to people or activities
that use it

6
 What Is an Information System? (3 of 3)

• Feedback
• Output is returned to appropriate members of organization to help
evaluate or correct input stage
• Computer/computer program vs. information system
• Computers and software are technical foundation and tools, similar
to the material and tools used to build a house , but are not
complete by
themselves.
• These are the foundation or the base for building any Information
system.

7
How Information Systems Are Transforming Business

• Global networking on real-time

• Mobile digital platform
• Systems used to improve customer experience, respond to customer demand,
reduce inventories, and more
• Growing online learning and readership
• Expanding e-Commerce and Internet advertising
• Banking , Finance and Stock Markets
• New federal security and accounting laws
( companies to store e-mails for 5 yrs )

8
Figure 1.1. Information Technology Capital Investment

9
What’s New In Management Information Systems (1 of 2)

• Technology
• Cloud computing
• Big Data and the Internet of Things (IoT)
• Mobile digital platform
• Management
• Online collaboration and social networking software
• Business intelligence
• Virtual meetings ( Post Covid-19 has become essential )

10
 What’s New In Management Information Systems (2 of 2)

• Organizations
• Globally connected enterprises
• Changing business models driven by new technology ( e.g Uber / Airbnb)
• Rapid change in technologies
• Time / Speed to market ( e.g Vaccines and drugs for Covid 19 )
• Social business ( education sector )

11
 The Emerging Digital Firm
• In a fully digital firm:
• Significant business relationships are digitally enabled and mediated
• Core business processes are accomplished through digital networks
• Key corporate assets are managed digitally
• Digital firms offer greater flexibility in organization and management
• Time shifting ( multiple time zones ),
• Space shifting ( multiple geo locations )

– Work from Home

12
Strategic Business Objectives of Information Systems (1 of 2)

• Growing interdependence between:

• Ability to use information technology and
• Ability to implement corporate strategies and achieve
corporate goals

Class Q - ( For instance, Speed to Market is very important to

firms introducing new products. How can IT help achieve that
objective? )

13
Strategic Business Objectives of Information Systems (2 of 2)

• Firms invest heavily in information systems to achieve six strategic

business objectives:
1. Operational excellence
2. New products, services, and business models
3. Customer and Supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Survival

14
The Interdependence Between Organizations and Information
Systems

Hardware

Business Strategic
Network –
Objectives / Business Software
Internet
Processes

Data
Organization Information System Management

15
REFERENCES

 The World is Flat : Thomas L Friedman

 Management Information Systems: Managing the Digital Firm - Kenneth C. Laudon & Jane
P. Laudon

16
17
Management Information Systems
Prof. Surojit Mookherjee
VGSoM, IIT KHARAGPUR

Week 01: Introduction to MIS

Lecture 02 : Introduction – Part 2 of 2

1
 Learning Objectives

 How are information systems transforming business, and why are they so essential for
running and managing a business today?
 What is an information system? How does it work? What are its management,
organization, and technology components? Why are complementary assets essential
for ensuring that information systems provide genuine value for organizations?
 What academic disciplines are used to study information systems, and how does each
contribute to an understanding of information systems?

2
 Strategic Business Objectives - 1.Operational Intelligence (
Excellence )

• Improvement of efficiency to attain higher profitability

• Information Systems Technology is an important tool in achieving greater efficiency

and productivity

• Take a look at Amazon / Flipkart / Alibaba etc. from an Operational excellence

perspective.

3
 Strategic Business Objectives – 2.New Products, Services, and
Business Models

• Business model: describes how company produces, delivers, and sells product or
service to create wealth ( Uber / Airbnb / Amazon )
• Information systems and technology is a major enabling tool for new products,
services, business models
• Examples: Apple’s iPad, Google’s Android OS, and Netflix

Class Q - ( What is IT’s role in development of Electric / Hybrid cars / Green

technologies like Wind and Solar power generation ? )

4
 Strategic Business Objectives – 3.Customer and Supplier
Intimacy
• Serving customers well leads them to return, increasing revenue and profits
• Example: High-end hotels that use computers to track customer preferences and
then monitor and customize the environment
• Intimacy with suppliers allows them to provide vital inputs, which lowers costs

Class Q – ( Online sites achieving a high degree of Customer intimacy

– Amazon / Swiggy etc. How are they doing this ?)

5
Strategic Business Objectives 4.Improved Decision Making

• Without accurate information:

• Managers must use forecasts, best guesses, luck
• Results in:
• Overproduction, underproduction
• Misallocation of resources
• Poor response times
• Poor outcomes raise costs, lose customers

6
Strategic Business Objectives 5.Competitive Advantage

• Delivering better performance

• Charging less for superior products
• Responding to customers and suppliers in real time
• Examples: Apple, Walmart, UPS , Airbnb , Uber, OYO

7
Strategic Business Objectives - 6.Survival

• Information technologies as necessity of business

• Governmental regulations requiring record-keeping
Examples: Toxic Substances Control Act, Sarbanes-Oxley Act
Compliances – Financial , Statutory , Environmental , Income-Tax ,
GST records etc.
• Current Pandemic situations forcing Organizations to work
differently ( e.g Working from Home )

8
Information System and Organization Strategy

9
Information technology and Organizations influence one
another

Following are the major influencers in an Organization.

 Structure
 Business processes
 Politics
 Culture
 Environment, and
 Management decisions

10
Features of an Organization

• Use of hierarchical structure

• Accountability, authority in system of impartial decision making
• Adherence to principle of efficiency
• Decision making and business processes
• Organizational politics, culture and environment
• Ethical practices

11
Major economic impacts of Information Systems / Technology

• IT changes relative costs of capital and the costs of information

• Information systems technology is a factor of production, like capital and
labor
• IT affects the cost and quality of information and changes economics of
information
• Information technology helps firms contract in size because it can reduce
transaction costs (the cost of participating in markets)
• Outsourcing

12
Organizational and Behavioral impacts

• IT flattens organizations
 Decision making pushed to lower levels
 Fewer management levels / managers needed (IT
enables faster decision making and increases span of
control)
• To days organizations
 Organizations flatten because in post industrial
societies, authority increasingly relies on knowledge
and competence rather than formal positions

13
Organizational resistance to change…

 Information systems become bound up in organizational

politics because they influence access to a key resource
– information
 Information systems potentially change an
organization’s structure, culture, politics, and work
 Most common reason for failure of large projects is due
to organizational and political resistance to change

14
Organizational resistance to change…

TASK

TECHNOLOGY PEOPLE

PROCESS

15
Michael Porter’s Competitive Forces Model

Five competitive forces shape fate of firm

1. Traditional competitors
2. New market entrants
3. Substitute products and services
4. Customers
5. Suppliers

16
 IT enabled Strategies for managing competitive forces
Michael Porter’s Competitive Forces Model
1. Traditional competitors
 Low-cost leadership – e.g Walmart 2. New market entrants
 Product differentiation – e.g. Apple , Google 3. Substitute products and
services
 Focus on market niche – e.g. Uber , Airbnb 4. Customers
 Strengthen customer and supplier intimacy – 5. Suppliers

e.g. Netflix , Amazon

17
Internet’s impact on Competitive Advantage

 Transformation, destruction, threat to some industries - e.g. travel

agency, printed encyclopedia, newspaper
 Competitive forces still at work, but rivalry more intense – e.g.
Booking.com
 Universal standards allow new rivals, entrants to market - e.g. Amazon
competing with Microsoft & IBM with Cloud technology
 New opportunities for building brands and loyal customer bases – e.g.
Uber , Airbnb

18
REFERENCES

 The World is Flat ( book ) : Thomas L Friedman

 Management Information Systems: Managing the Digital Firm - Kenneth C. Laudon & Jane
P. Laudon

19
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Management Information Systems
Prof. Surojit Mookherjee
VGSoM, IIT KHARAGPUR

Week 01: Introduction to MIS

Lecture 03 : Dimensions of Information System

1
 Learning Objectives

 How are information systems transforming business, and why are they so essential for
running and managing a business today?
 What is an information system? How does it work? What are its management,
organization, and technology components? Why are complementary assets essential
for ensuring that information systems provide genuine value for organizations?
 What academic disciplines are used to study information systems, and how does each
contribute to an understanding of information systems?

2
Information System – Eco System
Environment
Suppliers Customers

Organization
Information System
Processing
Input Arranging Output
Analysing

Regulatory Share Holders Competitors

Agencies

3
 Dimensions of Information Systems

• Organizations

• Management Organizations Management

• Technology Information
Systems
Not just Computers

Technology

4
Dimensions of Information Systems: Organizations (1 of 2)

Levels in a Firm
Senior
Management

Middle Management
( Knowledge Workers)

Operational Management
( Production and Service,
Data Workers)

5
Dimensions of Information Systems: Organizations (2 of 2)

• Separation of business functions

• Sales and Marketing
• Human resources
• Finance and Accounting
• Manufacturing and Production

“Every business is different.”

Class Exercise – Study the “Dabbawala “ business of food delivery systems in

Mumbai. What type of Information System is practiced for achieving ‘Zero’
defect service round the year.

6
Dimensions of Information Systems: Management
• Managers set Organizational Strategy for responding
to business challenges
• In addition, managers must act creatively
• Creation of new products and services
• Occasionally re-creating the organization ( e.g. Mergers ,
acquisitions , hiving-off , Joint Venture , Collaboration etc.)

Class Discussion – MIS issues related to the recent merger of

Public Sector Banks

7
Dimensions of Information Systems: Technology
• Computer hardware and software
• Data management technology
• Networking and Telecommunications technology
• Networks, the Internet, intranets and extranets, World
Wide Web
• IT infrastructure: provides the platform on which the system is
built on

Information technology is at the heart of information

systems.

8
The Business Information Value Chain
Ref:Management Information Systems - Kenneth C.
Laudon & Jane P. Laudon

9
Complementary Assets: Organizational Capital and the
Right Business Model (1 of 2)

• Assets required to derive value from a primary investment

• Firms supporting technology investments with investment
in complementary assets receive superior returns
• Example: Invest in technology and the people to make it
work properly

e.g – Petroleum Companies having Retail business in Petrol Pumps

10
Complementary Assets: Organizational Capital and the
Right Business Model (2 of 2)
• Complementary assets
• Examples of organizational assets
• Appropriate business model
• Efficient business processes
• Examples of managerial assets
• Incentives for management innovation
• Teamwork and collaborative work environments
• Examples of social assets
• The Internet and telecommunications infrastructure
• Technology standards

11
Contemporary Approaches to Information Systems

Technical Aspect

Computer Management Operations

Science Science Research

Management Information Systems

Psychology Social Science Economics

Behavioral Aspect

12
The Three Categories of IT
IT Category Examples
Spreadsheets, computer-aided design,
Functional IT and statistical software

Network IT E-mail, instant messaging, wikis, blogs

Software for Enterprise resource

Enterprise IT planning,
Customer resource management, and
Supply chain management

13
The IT Dialogue….

Functional IT
Will any of the new software on the market enable our
engineers, scientists, analysts, and other workers to do their
jobs more efficiently? Do we need to invest in software.

Are our function technologies outdated? If so, why? What has

changed?

14
 The IT Dialogue….
Network IT
 How do our people collaborate? Do we know what technologies
they’re using?
 If we wanted to get broad feedback on an important topic, how
would we do it?
 How do we know what our people are working on and what they
think the hot topics are?

15
 The IT Dialogue
Enterprise IT
•In what ways are our current processes not supporting the needs of
the business? Which ones need to be redesigned? Which ones should
be extended to our customers and suppliers?
•Are there important business activities, events, or trends that we

should monitor?
•Are the data unavailable or stored across so many systems that the

information is difficult to assemble?

16
REFERENCES

 The World is Flat ( book ) : Thomas L Friedman

 Management Information Systems - Kenneth C. Laudon & Jane P. Laudon

17
18
Management Information Systems
Prof. Surojit Mookherjee
VGSoM, IIT KHARAGPUR

Week 01: Introduction to MIS

Lecture 04 : Information Management in the Digital World

1
 Learning Objectives

 How are information systems transforming business, and why are they so essential for
running and managing a business today?
 What is an information system? How does it work? What are its management,
organization, and technology components? Why are complementary assets essential
for ensuring that information systems provide genuine value for organizations?
 What academic disciplines are used to study information systems, and how does each
contribute to an understanding of information systems?

2
CLOUD

3
Cloud computing: Four key service categories of Cloud offerings

Business Process As A Service Sales Force.com , Workday.com

Software As A Service MS Office , Google Docs

Amazon Web Service , Azure

Platform As A Service

Data Centers
Infrastructure As A Service

4
Cloud computing changes the way we think about security

Private cloud Hybrid IT Public cloud

Changes in
Security, Privacy, and Control

13-04-02

Data and Application

Identity Protection Threat Protection
Protection

5
ANALYTICS

6
 Organizations are thirsty, despite oceans and streams of data
Need for business analytics was never so much …
… They need deeper insights!
44x 2020 Business leaders frequently make
as much Data and Content
Over Coming Decade
35 zettabytes
1 in 3 decisions based on information they
don’t trust, or don’t have

1 in 2 Business leaders say they don’t

have access to the information they

80%
need to do their jobs

of CIOs cited “Business

Of world’s data
is unstructured 83% intelligence and analytics” as part
of their visionary plans
to enhance competitiveness
2009
800,000 petabytes
90%
Of world’s data has been
60%
of CEOs need to do a better job
capturing and understanding
information rapidly in order to
make swift business decisions
generated in the last TWO years

7
Analytics presents security risks and opportunities
Big data explosion Analytic insights for security
• Personally identifiable • Larger more diverse data sets
• Credit card data • Faster analysis
• Health data • Deeper insights
• Intellectual property • Predictive models
• Social media
• Sensor data

8
MOBILE

9
 As mobile grows, so do security threats

Mobile
malware is Mobile
growing. devices and
Malicious code the apps we
In 2014 the
is infecting rely on are
number of cell
Mobile more than under attack.
phones
(7.3 billion) downloads 11.6 million 90% of the
increase to mobile devices top mobile
will exceed the
at any given apps have
number of 108 billion in
people on the time. been hacked.
2017.
planet (7
billion).

10
Internet of Things
Industry 4.0

11
 People Connecting to Things

ECG sensor

Internet

Motion sensor

Motion sensor

Ref:www.kayarvizhy.com

12
Connecting information, people, and things is greatest resource ever
to drive insightful action

Internet Internet Internet

of of of
Content People Things

13
 Manufacturing domain Human Society’s Ecosystem

Responsive supply chains Predictive maintenance Connected home Connected cities

Connected asset Connected logistics Connected Connected

management car healthcare

IoT Everywhere
Connected Connected Factory
retail

14
 Industry 4.0

Industry 4.0 has been defined as “a name for

the current trend of automation and data
exchange in manufacturing technologies,
including cyber-physical systems, the
Internet of things, cloud computing and
cognitive computing and creating the smart
factory”.

15
 IoT and “Datafication”

In today’s world , we are seeing a rapid acceleration of Sensors ,

Actuators and Devices.

This will lead to a deluge of data being generated from all of these
connected devices. This is what is known a s “Datafication” of IoT.

This Datafication will have a similar effect of pervasiveness as that of

‘Electricity’ in the 20th Century and ‘availability of Data’ will be as taken
for granted as we do for Electricity.

16
 Key impacts of IoT on Industry

Automation: Connecting machines, sensors, and actuators to

computing systems enables a large degree of process automation.
E.g.- jet engines.

Integration: Integrating the data from a machine with data from

other sources,( e.g ERP, CRM systems ) greatly enhances the value
derived

“Servitization”: Combination of automation and integration help

organizations move from product-centered business models to
service-oriented business models .

17
 Business Needs of IoT -

Smart Appliances

Wearable Tech

Healthcare

18
Manufacturing Analytics- How it is integrated
Enterprise Systems

ERP – Enterprise PLM – Product SCM – Supply Chain

Resource Planning Lifecycle Planning Management

Manufacturing Systems Big- Data

Analytics Engine
Maintenance Production Quality Inventory
Operations Operations Feature Extraction

Anomaly Detection
Shop floor Systems
Fault Diagnosis
Data acquisition at Machine , Line and Factory level
Predictive Model
Sensors Actuators Valves

www.theiet.in/IoTPanel 19
Social

20
21
 You are what you share, the social transformation
30 billion pieces of More companies
content are shared on now use social
Facebook each internally
month than externally

Social technologies
66% of top financially raise the productivity
performing companies of interaction workers by
leverage social in their
business processes
20-25%

Security Implications
• Information is exposed in new ways that can pose security concerns
• Mixing of personal and corporate data on social platforms creates
risk. Your privacy is now limited.

22
REFERENCES

 The World is Flat ( book ) : Thomas L Friedman

 Management Information Systems - Kenneth C. Laudon & Jane P. Laudon

23
24
Management Information Systems
Prof. Surojit Mookherjee
VGSoM, IIT KHARAGPUR

Week 01: Introduction to MIS

Lecture 05 : Class Discussions and Conclusion
 Learning Objectives

 How are information systems transforming business, and why are they so essential for
running and managing a business today?
 What is an information system? How does it work? What are its management,
organization, and technology components? Why are complementary assets essential
for ensuring that information systems provide genuine value for organizations?
 What academic disciplines are used to study information systems, and how does each
contribute to an understanding of information systems?

2
 Enterprise Resource Planning
… extends to the complete value chain...

Vehicle OEM

Finance
Finance

Finance

Customer
Transport Fleet Operator
Component
Supplier

Slide 3
The beauty & power of MIS ( Enterprise Resource
Planning )…
Sales Enquiry
Material Management
Request from a
Finance Finance
Customer

Credit Management
Dynamic Availability Check
Cash Forecast

?
OK

Slide 4
Globalization Challenges and Opportunities: A Flattened World
Class Discussion :
• Internet has drastically reduced costs of operating on global
scale
• Increases in foreign trade, outsourcing
• Presents both challenges and opportunities

Class Q – Airbnb / Uber / Booking.com etc.

How are they managing their entire business only using
Internet and Information Systems ? They donot have any
other material assets.

5
 Customer and Supplier Intimacy
• Serving customers well leads them to return, increasing revenue and profits
• Example: High-end hotels that use computers to track customer
preferences and then monitor and customize the environment
• Intimacy with suppliers allows them to provide vital inputs, which lowers costs
Class Q – ( Online sites achieving a high degree of Customer intimacy
– Amazon / Swiggy etc. How are they doing this ?)
Pointers :
1. Return policy gives confidence to customers
2. Royalty bonus
3. Offers and Discounts
4. Are you aware that your data / browsing history / preferences are sold to
marketing agencies .
5. Your every click may mean revenue for someone else.

6
 7

Interactive Session: Management- The Mobile Pocket Office

• Class Discussion
• What kinds of businesses are most likely to benefit from
equipping their employees with mobile digital devices such as
iPhones and iPads?

e.g. – Point of Sales Order and Supply information at the Retailers

Customer satisfaction survey
Marketing data collection / questionnaire
Payment banks in rural areas.
 Conclusion… ( 1 of 2 )

• Management information systems

• Combines computer science, management science, operations research, and
practical orientation with behavioral issues
• Four main actors
• Suppliers of hardware and software
• Business firms
• Managers and employees
• Firm’s environment (Customer Satisfaction , legal, social
and cultural context)
 Conclusion ( 2 of 2 )
In a socio-technical perspective, the performance of a system is optimized when both the
technology and the organization mutually adjust ( mesh ) to one another until a
satisfactory fit is obtained

TECHNOLOGY ORGANIZATION

TECHNOLOGY
ORGANIZATION

It is extremely important for the business leaders ( specially the CIO ) to

understand which technology would be best suited for their organization.
Follow the Jones’s often can lead to wrong investments.
REFERENCES

 The World is Flat ( book ) : Thomas L Friedman

 Management Information Systems: Managing the Digital Firm - Kenneth C. Laudon & Jane
P. Laudon