Technical University of Mombasa

TOPIC TWO: INTRODUCTION TO MANAGEMENT INFORMATION

SYSTEMS

1. Session Objectives
By the end of this session, you should be able to:
 Understand how computing devices work and how data travels.
 Define Key terms; management, Information system.
 Understand the main activities within Management information system
 Explain the functions of a Management information system.
 Define the components of an information system.
 Explain the basic components of a computer system within an information
system.

2. COMPUTING BASICS AND NETWORKS

Binary code – The raw facts in the definition of data come in a specific form known
as binary code.

 Bi comes from latin word for two. In Binary code, the data can be presented in
two options (a 1 or a 0). They are stringed together in a particular order to
make words or letters e.g. order 01000001 represents character A
 0 or 1 is one bit. 8 bits (Binary digits) make up a byte.
 Bits are the smallest form of data storage.
 1024 bytes = 1 kilobyte,
 1024 kilobyte = 1Megabyte,
 1024 Megabyte = 1 gigabyte,
 1024gigabytes = 1 Terabytes
 1024 Terabytes = 1 Petabytes
 1024 Petabytes = 1 Extrabyte
 1024 Extrabyte, = 1 Zetabytes
 1024 Zetabytes = 1 Yottabyte

Computer representation of CELIA

C – 01000011
E - 01000101
L – 01001100
I - 01001001

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A – 01000001

HARDWARE
Something physical, you can touch and feel e.g. computer scanner. The main
components of a computer hardware include;
 Printed circuit board (PCB) or motherboard – a green board with circuitory
and extensions. This is the foundation of the computer where all connections
take place.
 Central Processing Unit (CPU) – Brain of the computer.
 RAM (Random Access Memory) – attached to motherboard where
applications such as word processing, spreadsheets run, where they are used
locally. Some RAM is temporary; data is erased when computer is turned off
 Hard drive – Part seated on an airtight metal container to protect any dirt of
other particles from entering and corrupting the data.
 Disk drive – Where local data is stored and retrieved.

- Disks are divided into sectors and tracks with OS (Operating System) keeping track
of which sector contains what data. Hard disk contains an area used for memory
known as Cache. This part works with RAM in storing and retrieving frequently
used data such as Web pages and files.

SOFTWARE
Software is the detailed instructions that control the operation of a computer system.
A software program is a series of statements/instructions to the computer. Process
of writing or coding programs is the Programming.
 Application software (Applications) are the program written for or by users to
apply a computer to a specific task.
 Off-the-shelf productivity software (Word processing, spreadsheet or specific
programs) written in languages such as Java, Python, C++, Pearl and Ruby
are examples of application software.
 Common (out of the box) application software include multimedia
presentation, content management, browsers, publishing e.t.c.
 Application protocol interfaces (API) allows software to communicate with
one another e.g. PMS and POS.
NETWORK
A Network is a transmission system that connects two or more applications running
on different computers.
 LAN (Local Area Network) – computer connectivity with other computer,
computer devices within an office or organization. This allows;
i) Allow resources to be shared e.g. sharing printers.
ii) Allows data and information to be shared. Managers can have access to
‘real time’ company information.

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  A port is the combination of a connector plug and internal electronics found
on the back of a computer. Ports include Serial, parallel and the newer more
interoperable United Serial Bus (USB). Ports are used mostly for local
communication with peripherals such as scanners.
 All stations on a network such as computer, printers, are known in
networking term as nodes. Network Inferface Card (NIC) is needed for nodes
to join together. NIC provide network access and addressing information.
 Data transfer rate (speed) is measured in bits per second (bps) while storage is
measured in bytes.
 When your network communicates with another network such as internet, a
router is used that routes the data.
MEDIUM
A) Twisted pair Copper wire – Telephone line contains two pairs of copper wires (4
wires in total) twisted together (RJ-11). Each pair represents a line.
 In many LANs, a larger form of twisted pair is used (RJ-45) known as
Ethernet.
B) Coaxial cable – Local medium used in Cable TV. Coaxial cable contains one
heavy copper wire that is heavily insulated by 3 different layers to prevent
interference.
C) Fiber Optics – Consists of very thin and expensive glass fiber covered by a
protective layer instead of electromagnetic signal, tubes of light are used. Fiber optic
technology is reliable and fast and is not susceptible to electromagnetic interferences
D) Wireless – Not a media but a broadcast technology. Wireless technology enables
users to operate digitally without being tied to a desk. Multiple access points which
transmit and receive data for the nodes on the network are used.
E) Other wireless technologies found at the local level include Bluetooth and near
field communication (NFC) used to sync your smartphone calendar with the one on
your computer.
 Network Operating System (NOS) is a system that routes communication on
the network and manages network resources. It resides on a server.
 Server – More expensive computer with lots of memory, hard disk space and
a fast CPU that provides shared resources to the network.
Types of server
File Server – A computer and a storage device dedicated to storing files. File server
contains commonly used templates and data for day to day activities.
Print Server – A computer that manages one or more printers

Database Server - A system that processes database queries.

PBX (Private Branch Exchange) – Directs incoming calls to the larger organizational
setting e.g. calls directed to specific locations such as guest rooms.

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LARGE NETWORKS
Telecommunication is long distance communications.
WAN (Wide Area Network) – Network of a larger geographical area than LAN
ranging from a few km to the entire world.
MAN (Metropolitan Area Network) – One metropolitan area or in and around a city
network. Hotel chain with multiple sites can have this for connectivity and
collaboration.
 Data transfer rate is dependent on bandwidth. Bandwidth is the difference
between the highest and lowest point of a signal. It is the area available
between where that data flows on a channel.
INTERNET
A Network that links multiple networks and users around the globe.
One accesses internet through an ISP (Internet Service Provider) which has its own
servers and IP (Internet Protocol) addresses. IP address provides the location of a
node or network e.g. 198.4.159.10 is the IP address of www.prenhall.com. ISP
through domain name server (DNS) assigns letters which are easier to remember.
The World Wide Web
Web is part of the internet. Uniform Resource Locator (URL) uses the DNS server to
point to web resources and addresses such as www.psu.edu . URL is a web address.
Larger wireless Networks
Cellular technology uses geographic areas that are divided into ‘cells’. Each cell has
an antenna or tower to receive a signal transmitted by a cell phone that passes it off
to an available channel in the next cell all the way to the end point.

3. Definition of Management Information Systems.

System – Describes a way of doing things e.g. welcoming guests by some sort of
entertainment upon arrival. Having your unique way of doing things.

Information Systems – A set of interrelated components that collects or retrieves,

process, stores and distributes information to support decision making and control
within an organization. Can also be simply defined as all components that work
together to process data and produce information. Information System is more
complex and can be viewed in terms of information technology and business. A
computer based information system is one that uses computer technology to
perform input, processing and output activities therefore computer based
information systems are simply referred to as information systems..

Information Technology consists of all the hardware and software that an

organization uses to meet its predetermined business objectives. The Hardware part
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may include; computer machines, Storage devices, handheld devices while the
Software may include; windows, linux operating systems and many programs.

A Management Information System is an information system that evaluates,

analyzes, and processes an organization's data to produce meaningful and useful
information based on which the management can take right decisions to ensure
future growth of the organization.

Data is streams of raw facts or materials in the production that represent events
occurring in an organization or in a working environment before they are organized
and arranged so that the end user can understand and use. It might take the form of
a number, picture or statement.

Information is a data that has been shaped into a form that is meaningful to the user.
They are facts or conclusions that have a meaning within a context.

Name
Arrival date
Departure date INFORMATION
No. of nights
INFORMATION Arrival list
Rate SYSTEM Departure list
Rate amount Guest inhouse list
Currency
Source of Business
Payment menthod

4. Five basic components of computer system within an information

system.
These are the basic components of computer system within an information system
that produce information that organization require to make decisions, control
operations, analyze problems and create new products and services;

a) Input devices introduce data into the Information System. They collect or capture
raw data from within or outside the organization (external environment)
b) The computer process data through the Information System. Converts the raw
data into a meaningful form.
c) Output devices display information. Transfer the processed information to the
people who will use it or to the activities for which it is used.
d) Storage devices store data and information.
e) Networking devices and telecommunication lines transfer data and information
over various distances.

NB: Environmental actors such as Government agencies, customers, suppliers,

competitors, stockholders interact with organization and its information systems.

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5. Main activities within a Management Information System.
 Capturing Data − Capturing contextual data, or operational information that
will contribute in decision making from various internal and external sources
of organization.
 Processing Data − The captured data is processed into information needed for
planning, organizing, coordinating, directing and controlling functionalities at
strategic, tactical and operational level. Processing data means −
o making calculations with the data
o sorting data
o classifying data and
o summarizing data
 Information Storage − Information or processed data need to be stored for
future use.
 Information Retrieval − the system should be able to retrieve this information
from the storage as and when required by various users.
 Information Propagation − Information or the finished product of the MIS
should be circulated to its users periodically using the organizational network.

6. Functions of a Management Information System

The functions of an information system can be generally classified into those

functions that involve
 Transaction processing
 Management reporting
 Decision support

A) Transaction processing
Major processing functions include:
i. Process transactions – Activities such as making a purchase or a sale or
manufacturing a product. It may be internal to the organisation or involve an
external entity. Performance of a transaction requires records to:
 Direct a transaction to take place
 Report, confirm or explain its performance
 Convey it to those needing a record for background information or reference.

ii. Maintain master files – Many processing activities require operation and
maintenance of a master file, which stores relatively permanent or historical data
about organizational entities. E.g. processing an employee paycheck needs data
items such as rate of pay, deductions etc. Transactions when processed update data
items in the master file to reflect the most current information.

iii. Produce reports – are significant products of an information system. Scheduled

reports are produced on a regular basis. An information system should also be able
to produce special reports quickly based on ad hoc or random requests.

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iv. Process inquiries – Other outputs of the information system are responses to
inquiries using the databases. These may be regular or ad hoc inquiries. Essentially
inquiry processing should make any record or item in the database easily accessible
to authorised personnel.

v. Process interactive support applications – The information system contains

applications to support systems for planning, analysis and decision making. The
mode of operation is interactive, with the user responding to questions, requesting
for data and receiving results immediately in order to alter inputs until a solution or
satisfactory result is achieved.

B) Management Reporting
This is the function involved in producing outputs for users. These outputs are
mainly reports to management for planning, control and monitoring purposes.
Major outputs of an information system include:
i. Transaction documents or screens
ii. Preplanned reports
iii. Preplanned inquiry responses
iv. “Ad hoc” reports and “ad hoc” inquiry responses
v. User-machine dialog results

C) Decision support
Types of decisions
a) Structured/programmable decisions
These decisions tend to be repetitive and well defined e.g. inventory replenishment
decisions. A standardized pre-planned or pre-specified approach is used to make the
decision and a specific methodology is applied routinely. Also the type of
information needed to make the decision is known precisely. They are
programmable in the sense that unambiguous rules or procedures can be specified in
advance. These may be a set of steps, flowchart, decision table or formula on how to
make the decision. The decision procedure specifies information to be obtained
before the decision rules are applied. They can be handled by low-level personnel
and may be completely automated. It is easy to provide information systems support
for these types of decisions. Many structured decisions can be made by the system
itself e.g. rejecting a customer order if the customer’s credit with the company is less
than the total payment for the order. Yet managers must be able to override these
systems’ decisions because managers have information that the system doesn’t have
e.g. the customer order is not rejected because alternative payment arrangements
have been made with the customer. In other cases the system may make only part of
the decision required for a particular activity e.g. it may determine the quantities of
each inventory item to be reordered, but the manager may select the most
appropriate vendor for the item on the basis of delivery lead time, quality and price.

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Examples of such decisions include: inventory reorder formulas and rules for
granting credit. Information systems requirements include:
 Clear and unambiguous procedures for data input
 Validation procedures to ensure correct and complete input
 Processing input using decision logic
 Presentation of output so as to facilitate action
b) Semi-structured/semi-programmable decisions
The information requirements and the methodology to be applied are often known,
but some aspects of the decision still rely on the manager; e.g. selecting the location
to build a new warehouse. Here the information requirements for the decision such
as land cost, shipping costs are known, but aspects such as local labour attitudes or
natural hazards still have to be judged and evaluated by the manager.

c) Unstructured/non-programmable decisions
These decisions tend to be unique e.g. policy formulation for the allocation of
resources. The information needed for decision-making is unpredictable and no
fixed methodology exists. Multiple alternatives are involved and the decision
variables as well as their relationships are too many and/or too complex to fully
specify. Therefore, the manager’s experience and intuition play a large part in
making the decision. In addition, there are no pre-established decision procedures
either because:

• The decision is too infrequent to justify organisational preparation cost of

procedure,
• The decision process is not understood well enough.
• The decision process is too dynamic to allow a stable pre-established decision
procedure. Information system requirements for support of such decisions are:
• Access to data and various analyses and decision procedures.
• Data retrieval must allow for ad hoc retrieval requests
• Interactive decision support systems with generalized inquiry and analysis
capabilities.

7. Components of Information Systems.

a) People resources – They use the system to fulfil their informational needs. They
include end users and operations personnel such as computer operators, systems
analysts, programmers, information systems management and data
administrators
b) Computer Hardware – Refers to physical computer equipment and devices,
which provide for five major functions.
 Input or data entry
 Output
 Secondary storage for data and programmes
 Central processor (computation, control)
 Communication

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c) Computer Software – Refers to the instructions that direct the operation of the
computer hardware. It is classified into;
i) Operating system (program which controls and supports the operations of
computer system) e.g. Windows 10,
ii) Application software. (programs that direct processing for a particular use
of computers by end users) e.g. Payroll

d) Telecommunication System/Communication network - Telecommunications

technologies and networks like the internet, intranets and extranets. Network
resources include:
i) Communications media includes twisted pairs wire, coaxial and fiber optic
cables and microwave, cellular and satellite wireless technologies.

ii) Network infrastructure this generic category emphasizes that many

hardware, software and data technologies are needed to support the
operation and use of a communication networks.

iii) Database Resources – Contains all data utilised by application software.

Database that hold processed and organised data. An individual set of
stored data is referred to as a file. Physical storage media evidences the
physical existence of stored data, that is: tapes, disk packs, cartridges and
diskettes.

iv) Procedures – Formal operating procedures are components because they

exist in physical forms as manuals or instruction booklets. Three major
types of procedures are required.
 User instructions – for application users to record data, to use a terminal for
data entry or retrieval, or use the result.
 Instructions for preparation of input by data preparation personnel.
 Operating instructions for computer operations personnel.

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