MANAGEMENT

INFORMATION
SYSTEMS (MIS)
Shailak Jani
Faculty of Management Studies
 INTRODUCTION
TO
ORGANIZATIONS
&
INFORMATION SYSTEMS
Understanding the foundational relationship between businesses and their information systems.
ORGANIZATIONS
• Definition: A group of people working together in a structured
and coordinated manner to achieve specific goals or objectives.
• Examples: Corporations, non-profits, government agencies.
INFORMATION SYSTEMS (IS)
• Definition: A set of interrelated components that collect, process, store, and distribute
information to support decision-making, coordination, control, analysis, and
visualization in an organization.
• Components of IS:
• Hardware: Physical devices (computers, servers, networking equipment).
• Software: Applications and operating systems that process data.
• Data: Raw facts and figures that are processed into meaningful information.
• People: Users who interact with the IS and derive value from it.
• Processes: Procedures and operations that manage and manipulate data.
IMPORTANCE OF INFORMATION
SYSTEMS IN ORGANIZATIONS
• Operational Efficiency: Automates routine tasks, streamlines operations, and reduces
manual effort.
• Decision Support: Provides accurate and timely information for informed decision-
making at all levels of the organization.
• Competitive Advantage: Enables innovation, improves customer service, and
optimizes business processes.
• Strategic Planning: Assists in long-term planning by providing insights and trend
analysis.
ROLE OF INFORMATION SYSTEMS
IN MODERN ORGANIZATIONS
• Data-Driven Decision-Making:
• IS enables organizations to base decisions on data analysis rather than intuition, leading to more
accurate and effective outcomes.
• Enhanced Communication:
• Facilitates communication and collaboration within the organization through email, instant messaging,
and collaborative platforms.
• Globalization:
• Allows businesses to operate and compete in a global marketplace by providing real-time information
and communication tools.
• Innovation and Growth:
• IS drives innovation by supporting research and development, enabling new business models, and
creating new opportunities for growth.
 Introduction

Building confidence

AGENDA Engaging the audience

Visual aids

Final tips & takeaways

OVERVIEW OF THE MODULE

Module 1: Organization and

Information Systems
Objective: To explore the relationship between organizations and information systems,
and how they adapt to a changing environment.
TOPICS
1. Changing Environment and Its Impact on Business;
2. The IT/IS and Its Influence on Business, Organizational Structure,
Managers, and Activities
3. Data, Information, and Its Attributes;
4. Levels of People and Their Information Needs;
5. Types of Decisions and Information;
6. Information System Categorization
THE CHANGING
ENVIRONMENT &
ITS IMPACT ON
BUSINESS
HOW EXTERNAL AND INTERNAL FACTORS DRIVE THE
NEED FOR INFORMATION SYSTEMS.
BUSINESS ENVIRONMENT
• Definition: The combination of internal and external factors
that influence a company's operating situation.

• Internal Factors: Organizational culture, management

structure, and internal processes.

• External Factors: Market trends, economic conditions,

technological advancements, legal regulations, and
competition.
DRIVERS OF CHANGE IN BUSINESS
ENVIRONMENT
Technological Advancements:

•Rapid pace of innovation in IT.

•Adoption of new technologies like AI, IoT, blockchain, and cloud computing.

Globalization:

•Expanding markets and competition.

•Need for global supply chains and distributed operations.

Regulatory Changes:

•Compliance with new laws and regulations (e.g., GDPR, cybersecurity laws).
•Impact of environmental regulations and corporate governance.
DRIVERS OF CHANGE IN BUSINESS
ENVIRONMENT
Customer Expectations:

•Demand for faster, personalized, and more efficient services.

•Influence of social media and online reviews.

Economic Fluctuations:

•Global recessions, inflation, and exchange rate fluctuations.

•Impact on business strategy and operations.
HOW BUSINESSES RESPOND TO
CHANGING ENVIRONMENTS
Adoption of Information Systems (IS):

•Integrating advanced IS to enhance adaptability and responsiveness.

•Examples: Use of ERP systems to streamline operations, CRM systems for better
customer engagement.

Restructuring Organizational Processes:

•Aligning internal processes with external demands.

•Examples: Automating routine tasks, reengineering business processes for
efficiency.
HOW BUSINESSES RESPOND TO
CHANGING ENVIRONMENTS
Innovation and Digital Transformation:

•Leveraging IS for innovation in products, services, and business models.

•Examples: Companies using AI for predictive analytics, adopting e-commerce
platforms to reach new markets.

Strategic Planning and Decision-Making:

•Using data analytics and business intelligence tools to forecast trends and make
informed decisions.
•Examples: Data-driven marketing strategies, financial forecasting using predictive
models.
NETFLIX'S DIGITAL TRANSFORMATION

Background: Originally a DVD rental service, Netflix transformed into a global streaming
service.
Impact of Technology:
• Leveraged data analytics to personalize content recommendations.
• Used cloud computing for scalability and global reach.
Adaptation to Changing Environment:
• Shifted from physical to digital distribution, staying ahead of competitors.
• Invested in original content to differentiate itself in a crowded market.
AMAZON'S RESPONSE TO EVOLVING
MARKET DYNAMICS:

Background: From an online bookstore to a global e-commerce giant.

Impact of Technology:
• Implementation of advanced logistics and supply chain management systems.
• Adoption of AI and machine learning for dynamic pricing and inventory management.
Adaptation to Changing Environment:
• Continuous innovation (e.g., Amazon Prime, AWS) to expand market reach.
• Focus on customer experience and service efficiency.
KEY TAKEAWAYS
• Businesses must continuously adapt to a dynamic environment.
• Information Systems play a crucial role in helping organizations respond to these
changes.
• Successful adaptation often involves strategic use of IS, innovation, and restructuring
processes.
THE ROLE OF
IT/IS IN BUSINESS
HOW INFORMATION TECHNOLOGY AND INFORMATION
SYSTEMS DRIVE BUSINESS SUCCESS.
INFORMATION TECHNOLOGY (IT)
VS. INFORMATION SYSTEMS (IS):

• IT: Refers to the hardware, software, networks, and other

infrastructure used to manage and communicate
information.

• IS: A broader concept that includes IT along with people,

processes, and data. IS is designed to support business
operations, decision-making, and competitive advantage.

• Interconnection: IT is a key component of IS, providing the

tools and infrastructure that IS utilizes to collect, process,
store, and distribute information.
IMPACT OF IT/IS ON BUSINESS PROCESSES

Streamlining Operations:
• Automation of routine tasks: Examples include automated billing, inventory
management, and payroll systems.
• Example: A manufacturing company using an ERP system to automate its supply chain
and production processes, leading to reduced errors and increased efficiency.
IMPACT OF IT/IS ON BUSINESS PROCESSES

Improving Communication and Collaboration:

• Internal: Intranet platforms, collaboration tools (e.g., Slack, Microsoft Teams) that
facilitate communication within the organization.
• External: CRM systems that enhance communication with customers, suppliers, and
other stakeholders.
• Example: A global company using video conferencing tools to connect teams across
different time zones, ensuring smooth collaboration.
IMPACT OF IT/IS ON BUSINESS PROCESSES

Enhancing Customer Experience:

• Personalization: Use of data analytics to tailor products and services to individual

customer preferences.
• Faster response times: Automated customer service systems (e.g., chatbots, AI-driven
customer support).
• Example: E-commerce platforms like Amazon that use recommendation engines to
suggest products based on customer behavior
STRATEGIC ROLE OF IT/IS
Competitive Advantage:
• Leveraging IT/IS for differentiation: Offering unique products, services, or experiences
that competitors cannot easily replicate.
• Example: Apple’s integration of hardware, software, and services to create a
seamless user experience across its product ecosystem.
STRATEGIC ROLE OF IT/IS
Supporting Innovation:
• Facilitating new business models: Examples include the rise of digital platforms, the
gig economy, and on-demand services.
• Example: Uber using a digital platform to connect drivers with passengers,
revolutionizing the transportation industry.
STRATEGIC ROLE OF IT/IS
Data-Driven Decision-Making:
• Business Intelligence (BI) tools: Analyzing data to gain insights into market trends,
customer behavior, and operational performance.
• Predictive analytics: Using historical data to forecast future trends and guide strategic
planning.
• Example: Retailers using BI tools to optimize inventory levels and anticipate demand
fluctuations.
EXAMPLES OF IT/IS IN ACTION
E-commerce Platforms:
• Role: Support online sales, inventory management, and customer service.
• Example: Shopify, enabling businesses to set up online stores, manage transactions,
and analyze sales data.
Automated Supply Chains:
• Role: Enhance efficiency by reducing manual intervention and optimizing logistics.
• Example: Walmart’s supply chain management system, which uses real-time data to
manage inventory levels and distribution.
ZARA’S FAST FASHION MODEL
Background: Zara’s ability to bring the latest fashion trends to market quickly and
efficiently.
Role of IT/IS:
• Use of real-time data from stores to adjust inventory and production rapidly.
• Integration of supply chain systems to reduce lead times and respond quickly to
market changes.
Outcome:
• Zara’s success in maintaining low inventory levels while offering new products
frequently, setting it apart from competitors.
AMAZON’S AI-POWERED RECOMMENDATIONS

Background: Amazon’s use of data analytics and AI to personalize the shopping

experience.
Role of IT/IS:
• Analysis of customer browsing and purchase history to provide personalized product
recommendations.
• Integration of these systems with the overall e-commerce platform to drive sales and
enhance customer satisfaction.
Outcome:
• Increased customer engagement and higher conversion rates, contributing to
Amazon’s dominance in e-commerce.
KEY TAKEAWAYS
• IT/IS plays a crucial role in optimizing business processes, enhancing customer
experiences, and providing strategic advantages.
• Successful businesses often leverage IT/IS to innovate and stay competitive in a
rapidly changing environment.
• Real-world examples demonstrate the transformative impact of IT/IS on business
operations and strategy.
THE ORGANIZATION:
STRUCTURE,
MANAGERS, &
ACTIVITIES
UNDERSTANDING HOW ORGANIZATIONAL STRUCTURE
INFLUENCES MANAGEMENT AND OPERATIONAL
ACTIVITIES.
ORGANIZATIONAL STRUCTURE
Definition: The formal arrangement of jobs within an organization, defining how tasks are divided,
grouped, and coordinated.
Types of Organizational Structures:
• Hierarchical (Traditional): A top-down structure with clear lines of authority and responsibility.
• Flat (Horizontal): Few or no levels of middle management, promoting employee involvement in
decision-making.
• Matrix: Combines functional and project-based structures, with dual reporting relationships.
• Network (Virtual): A more decentralized structure where functions are outsourced, and coordination is
done through a central hub.
Impact on Information Flow:
• Hierarchical structures tend to have formal, vertical information flows.
• Flat structures promote more horizontal communication and quicker decision-making.
LEVELS OF MANAGEMENT
Top-Level Management: Executives responsible for strategic decisions and setting
overall direction.
• Example: CEO, CFO, COO.
Middle-Level Management: Managers who oversee specific departments or business
units, translating top management’s strategies into actionable plans.
• Example: Department heads, division managers.
Lower-Level Management: Supervisors and team leaders who manage day-to-day
operations and ensure tasks are completed.
• Example: Supervisors, team leaders, foremen.
ROLE OF MANAGERS IN
ORGANIZATIONAL STRUCTURES
Managerial Roles (Mintzberg’s Managerial Roles)
• Interpersonal Roles: Figurehead, leader, and liaison roles that involve interactions
with employees and other stakeholders.
• Informational Roles: Monitor, disseminator, and spokesperson roles focused on
managing and sharing information.
• Decisional Roles: Entrepreneur, disturbance handler, resource allocator, and
negotiator roles, which involve making decisions and solving problems.
Example: A department head (middle management) acts as a liaison by coordinating
between top management and lower-level employees, and as a resource allocator by
distributing the department's budget.
ORGANIZATIONAL ACTIVITIES
Core Business Activities:
• Operations: Day-to-day activities that produce the organization’s goods or services. Example:
Manufacturing processes in a factory, order fulfillment in an e-commerce business.
• Marketing: Activities that promote and sell products or services, including market research,
advertising, and customer service. Example: A marketing department running digital ad
campaigns to increase product awareness.
• Finance and Accounting: Managing the organization’s financial resources, including
budgeting, accounting, and financial reporting. Example: The finance team preparing quarterly
financial statements.
• Human Resources: Activities related to managing the organization’s workforce, including
recruitment, training, and employee relations. Example: The HR department organizing a
training program for new hires.
ORGANIZATIONAL ACTIVITIES
Support Activities:
• IT and Information Systems: Supporting business operations through technology
infrastructure and software applications. Example: The IT department maintaining the
company’s ERP system.
• Procurement: Acquiring goods and services needed by the organization, such as raw
materials or office supplies. Example: The procurement team negotiating contracts
with suppliers.
• Research and Development (R&D): Innovating and developing new products or
services to maintain competitive advantage. Example: An R&D team working on the
next generation of smartphones.
INTERACTION BETWEEN STRUCTURE,
MANAGEMENT, AND ACTIVITIES
Influence of Structure on Management:
• A hierarchical structure may result in more centralized decision-making, with top
management making key decisions and lower levels executing them.
• In a flat structure, managers at all levels may be more involved in decision-making,
fostering innovation and quicker responses to market changes.
Impact on Organizational Activities:
• The structure determines how activities are coordinated and managed across the
organization.
• Example: In a matrix structure, a project manager may need to coordinate activities
across multiple departments, requiring effective communication and collaboration.
GOOGLE’S ORGANIZATIONAL STRUCTURE

Background: Google is known for its innovative and flexible structure.

Organizational Structure: Primarily a flat, decentralized structure with small, cross-
functional teams.
Impact on Activities:
• Encourages innovation and agility, allowing Google to quickly adapt to changes in the
tech industry.
• Managers have the autonomy to make decisions that best fit their teams, fostering a
culture of creativity and experimentation.
KEY TAKEAWAYS
• Organizational structure defines the hierarchy, roles, and responsibilities within a
company, influencing how managers and employees interact and carry out activities.
• Different structures offer different advantages and challenges, affecting
communication, decision-making, and overall business efficiency.
• Managers play a crucial role in coordinating activities and ensuring that the
organization’s structure supports its strategic objectives.
DATA, INFORMATION,
AND ITS ATTRIBUTES
UNDERSTANDING THE DISTINCTION BETWEEN DATA
AND INFORMATION, AND THEIR ESSENTIAL
ATTRIBUTES.
DATA
• Definition: Raw, unprocessed facts and figures without context. Data can be numbers,
text, images, or any other format that can be processed by computers.
• Examples: Numbers: 56, 2024, 3.14. Text: "John Doe," "123 Elm St.“ Images: A JPEG
file of a sunset.
Characteristics of Data:
• Unorganized: Data on its own lacks structure or meaning.
• Quantitative or Qualitative: Data can be numerical (quantitative) or descriptive
(qualitative).
INFORMATION
• Definition: Data that has been processed, organized, or structured in a way that adds
meaning and context, making it useful for decision-making.
• Examples: "Sales increased by 20% in Q1 2024 compared to Q1 2023.""The average
customer satisfaction score is 4.5 out of 5.“
Process of Transformation:
• Input (Data) → Process (Sorting, Analyzing) → Output (Information):
• Example: Customer data (names, purchases) processed into a report showing the top-
selling products.
DIFFERENCE BETWEEN DATA
AND INFORMATION
• Data: The raw input that, when processed, generates information.
• Information: The output that provides context and meaning, supporting decision-
making.
• Analogy: Data is like ingredients in a recipe; information is the final dish.
ATTRIBUTES OF INFORMATION
• Accuracy: The degree to which information is free from errors and accurately reflects
the data source. Ensures that decisions based on the information are sound.
• Example: A financial report that accurately represents the company’s revenue and
expenses.
• Timeliness: The relevance of information in relation to time. Information must be
available when needed to be effective. Delayed information can lead to missed
opportunities or poor decisions.
• Example: Real-time stock market data used for making trading decisions.
ATTRIBUTES OF INFORMATION
• Completeness: The extent to which information contains all the necessary data points
to support a decision. Incomplete information can lead to inaccurate conclusions.
• Example: A customer database that includes contact details, purchase history, and
preferences.
• Relevance: The degree to which information is pertinent to the specific needs of the
user. Irrelevant information can overwhelm users and obscure important insights.
• Example: A marketing report that focuses on the target demographic rather than the
general population.
ATTRIBUTES OF INFORMATION
• Consistency: The degree to which information is presented in the same format across
different datasets or reports. Ensures that comparisons and analyses are valid.
• Example: Financial figures reported in the same currency across all company
divisions.
• Accessibility: The ease with which authorized users can obtain information when
needed. Ensures that decision-makers have the information they need without
unnecessary delays.
• Example: A cloud-based dashboard that managers can access from anywhere to
monitor performance metrics.
INFORMATION QUALITY AND
DECISION-MAKING
Impact on Business Decisions:

• High-Quality Information: Leads to better decision-making, increased efficiency, and

competitive advantage.
• Poor-Quality Information: Can result in mistakes, increased costs, and lost
opportunities.
• Example: A company using inaccurate sales forecasts might overproduce or
underproduce, leading to financial losses.
INFORMATION LIFE CYCLE:
• Creation: Data is collected or generated.
• Storage: Data is stored in databases or other storage systems.
• Processing: Data is processed into information.
• Distribution: Information is distributed to users.
• Use: Information is used for decision-making.
• Archiving/Destruction: Information is archived for future reference or securely
destroyed if no longer needed.
• Example: Customer data collected during a sales transaction is stored, analyzed to
determine buying patterns, and used to target future marketing efforts.
NETFLIX’S USE OF DATA TO DRIVE
CONTENT DECISIONS
• Background: Netflix collects data on viewing habits, preferences, and ratings from its
users.
• Transformation of Data into Information: Data is analyzed to recommend content to
users and guide decisions on what new content to produce.
• Outcome: High levels of customer satisfaction and engagement, contributing to
Netflix’s success in the streaming industry.
KEY TAKEAWAYS:

• Data is raw and unorganized, while information is processed and contextualized,

making it useful for decision-making.
• High-quality information is accurate, timely, complete, relevant, consistent,
accessible, and secure.
• The ability to transform data into valuable information is critical for business success,
as demonstrated by real-world examples like Walmart and Netflix.
THE LEVELS OF
PEOPLE & THEIR
INFORMATION NEEDS
UNDERSTANDING HOW DIFFERENT ORGANIZATIONAL
LEVELS HAVE DISTINCT INFORMATION REQUIREMENTS
TOP-LEVEL MANAGEMENT
(STRATEGIC LEVEL)
Role: Executives responsible for long-term strategy, vision, and overall direction of the
organization.
Information Needs:
• Type: Strategic information focused on overall business performance, market trends, and
future planning.
• Examples:
✓ Financial forecasts, market analysis reports, competitive intelligence.
✓ Example: The CEO reviewing a report on emerging market opportunities to make decisions
about new product lines.
• Characteristics: Summarized, future-oriented, broad in scope.
• Frequency: Typically periodic (e.g., quarterly or annually).
MIDDLE-LEVEL MANAGEMENT
(TACTICAL LEVEL)
Role: Managers who translate the strategies from top management into specific goals and
actions for departments or business units.
Information Needs:
• Type: Tactical information to monitor and control business activities, ensuring alignment with
strategic goals.
• Examples:
✓ Departmental performance metrics, budget reports, production schedules.
✓ Example: A marketing manager analyzing the performance of different advertising campaigns
to adjust the marketing strategy.
• Characteristics: Detailed but not overly granular, focused on a shorter time horizon.
• Frequency: Often monthly or weekly.
OPERATIONAL-LEVEL MANAGEMENT
(OPERATIONAL LEVEL)
Role: Supervisors and team leaders responsible for day-to-day operations and ensuring that
tasks are completed efficiently.
Information Needs:
• Type: Operational information necessary for daily tasks and immediate decision-making.
• Examples:
✓ Daily sales figures, inventory levels, production line performance.
✓ Example: A factory supervisor tracking the output of a production line to ensure targets are
met.
• Characteristics: Highly detailed, real-time or near-real-time, focused on the immediate
present.
• Frequency: Typically daily or in real-time.
INTERACTION BETWEEN LEVELS
AND INFORMATION
Information Flow:
• Vertical Information Flow: Information moves up and down the hierarchy.
• Example: Performance reports move upward to inform higher-level decisions, while directives
and policies move downward to guide operations.
• Horizontal Information Flow: Information shared across departments or units at the same
level.
• Example: Collaboration between marketing and sales teams to align on a product launch
strategy.
Example: A sales report is generated at the operational level, summarized at the middle level,
and used to inform strategic decisions at the top level.
INTERACTION BETWEEN LEVELS
AND INFORMATION
Decision-Making Impact
Top-Level Management: Strategic Decisions: Information shapes long-term goals,
mergers, acquisitions, market entry, etc. Example: Deciding whether to enter a new
market based on comprehensive market research.
Middle-Level Management: Tactical Decisions: Information guides resource allocation,
project prioritization, and departmental objectives. Example: Adjusting a marketing
budget based on quarterly performance.
Operational-Level Management: Operational Decisions: Information is used for task
scheduling, quality control, and daily troubleshooting. Example: Reassigning tasks on
the factory floor based on the latest production data.
TYPES OF INFORMATION SYSTEMS
AT EACH LEVEL
• Top-Level Management: Executive Support Systems (ESS): Provide summarized
information from various sources to aid in strategic decision-making. Example: A
dashboard showing key performance indicators (KPIs) for the entire organization.
• Middle-Level Management: Management Information Systems (MIS): Provide reports
and summaries to help managers monitor and control operations. Example: A sales
manager’s dashboard that shows weekly sales performance across regions.
• Operational-Level Management: Transaction Processing Systems (TPS): Handle day-
to-day transactions and provide detailed data for operational decisions. Example: A
point-of-sale (POS) system recording daily sales transactions.
AMAZON’S USE OF INFORMATION
SYSTEMS AT DIFFERENT LEVELS
Top-Level Management:
• ESS Example: Amazon’s executive team uses an ESS to monitor global sales trends
and decide on new market entries.
Middle-Level Management:
• MIS Example: Regional managers use MIS reports to analyze the performance of
different product categories and adjust regional strategies.
Operational-Level Management:
• TPS Example: Warehouse supervisors use TPS to track inventory levels and ensure
timely order fulfillment.
STARBUCKS’ INFORMATION FLOW
Top-Level Management:
• Uses strategic reports to plan global expansion and product diversification.
Middle-Level Management:
• Analyzes monthly sales reports to tweak regional marketing campaigns.
Operational-Level Management:
• Monitors daily inventory data to manage stock levels and reduce waste.
KEY TAKEAWAYS:
• Different organizational levels have distinct information needs, ranging from strategic,
long-term information at the top to detailed, real-time data at the operational level.
• Information flow is crucial for decision-making, with both vertical and horizontal flows
playing essential roles in organizational effectiveness.
• The appropriate use of information systems at each level ensures that managers have
the information they need to make informed decisions.
TYPES OF DECISIONS
AND INFORMATION
EXPLORING THE TYPES OF DECISIONS IN
ORGANIZATIONS AND THE CORRESPONDING
INFORMATION REQUIRED FOR EACH.
DECISION-MAKING IN
ORGANIZATIONS
Definition: The process of choosing among alternatives
to achieve a specific objective.
Importance: Effective decision-making is critical for
achieving organizational goals and responding to
challenges.
Types of Decisions:
1. Structured Decisions (Operational Decisions):
2. Semi-Structured Decisions (Tactical Decisions):
3. Unstructured Decisions (Strategic Decisions):
STRUCTURED DECISIONS
(OPERATIONAL DECISIONS)
• Definition: Routine, repetitive decisions that follow established processes and rules.
These decisions are typically made at the operational level.
• Examples:
✓ Reordering inventory when stock levels fall below a threshold.

✓ Approving a loan application based on preset criteria.

• Information Required: Detailed, specific, and often real-time information (e.g.,

transaction records, inventory levels).
• Decision-Making Process: Highly structured with clear steps and decision criteria.
SEMI-STRUCTURED DECISIONS
(TACTICAL DECISIONS)
• Definition: Decisions that involve some degree of judgment and are made by middle
management. These decisions have both structured elements (e.g., standard operating
procedures) and unstructured elements requiring interpretation and analysis.
• Examples:
✓ Developing a marketing campaign based on customer feedback and market analysis.

✓ Allocating budgets to different departments.

• Information Required: Combination of internal data (e.g., past performance metrics) and
external data (e.g., market trends, competitor analysis).
• Decision-Making Process: Requires analysis and interpretation of information, often with
support from decision support systems (DSS).
UNSTRUCTURED DECISIONS
(STRATEGIC DECISIONS):
• Definition: Complex, non-routine decisions made by top management. These decisions
have no clear procedures or rules and involve a high degree of uncertainty.
• Examples:
✓ Deciding to enter a new market or launch a new product.
✓ Mergers and acquisitions, long-term investment decisions.
• Information Required: Broad, strategic information, often external (e.g., economic
forecasts, industry trends) and internal (e.g., financial health, organizational
capabilities).
• Decision-Making Process: Relies on experience, intuition, and judgment, supported by
strategic information systems like Executive Support Systems (ESS).
INFORMATION REQUIREMENTS BY
DECISION TYPE
1. Structured Decisions:
• Example: Replenishing inventory.
• Information Required: Real-time data on stock levels, sales forecasts.
• System Support: Transaction Processing Systems (TPS).
INFORMATION REQUIREMENTS BY
DECISION TYPE
2. Semi-Structured Decisions:
• Example: Developing a departmental budget.
• Information Required: Historical financial data, projected revenues, market conditions.
• System Support: Management Information Systems (MIS), Decision Support Systems
(DSS).
INFORMATION REQUIREMENTS BY
DECISION TYPE
3. Unstructured Decisions:
• Example: Deciding on a new corporate strategy.
• Information Required: Economic trends, competitive landscape, internal organizational
strengths and weaknesses.
• System Support: Executive Support Systems (ESS), external consultancy reports.
APPLE’S DECISION-MAKING
PROCESS
Structured Decision:
• Example: Deciding on the quantity of iPhones to produce based on sales forecasts and
inventory levels.
• Information Required: Detailed sales data, production capacity, supply chain data.
Semi-Structured Decision:
• Example: Allocating R&D budget across different product lines.
• Information Required: Past R&D performance, market trends, competitor activity.
Unstructured Decision:
• Example: Entering a new market or launching a new product category.
• Information Required: Broad industry analysis, economic forecasts, consumer behavior
insights.
KEY TAKEAWAYS:
• Different types of decisions—structured, semi-structured, and unstructured—require
different types of information and decision-making processes.
• Structured decisions rely on routine data and predefined processes, semi-structured
decisions require a mix of data analysis and judgment, and unstructured decisions
depend on broad, strategic information and managerial intuition.
• Understanding the decision-making process and the information required at each level
is crucial for effective management and organizational success.
INFORMATION SYSTEM
CATEGORIZATION
EXPLORING HOW INFORMATION SYSTEMS CAN BE
CATEGORIZED BASED ON THEIR NATURE AND SPECIFIC
CHARACTERISTICS.
CATEGORIZATION OF
INFORMATION SYSTEMS:
Information systems (IS) can be categorized based
on the nature of the information they process and
the characteristics they exhibit.
Importance: Categorizing information systems
helps organizations to better understand, manage,
and leverage their IS for different business needs.
CATEGORIZATION OF INFORMATION SYSTEMS

• Categorization by Nature: • Categorization by Characteristics:

I. Operational Information Systems I. Transaction-Oriented Systems

II. Management Information Systems II. Analytical Systems
(MIS) III. Collaborative Systems
III. Strategic Information Systems (SIS) IV. Knowledge Management Systems
(KMS)
OPERATIONAL INFORMATION
SYSTEMS
• Description: Systems designed to handle day-to-day operations, processing routine
transactions and providing detailed, real-time information.
• Examples: Transaction Processing Systems (TPS) like point-of-sale (POS) systems,
payroll systems, and inventory management systems.
• Characteristics: Highly structured, routine, focused on accuracy and efficiency, real-
time or near-real-time processing.
• Purpose: Ensure smooth daily operations by managing transactions and basic data
entry.
• Example: A retail store’s POS system processes customer purchases and updates
inventory levels instantly.
MANAGEMENT INFORMATION
SYSTEMS (MIS)
• Description: Systems that support middle management by providing summarized information
and reports for monitoring, controlling, and decision-making at the tactical level.
• Examples: Sales management systems, human resources management systems, financial
reporting systems.
• Characteristics: Aggregates data from operational systems, provides periodic reports,
supports decision-making at the department or business unit level.
• Purpose: Facilitate tactical decisions by providing relevant information in a structured format.
• Example: A sales MIS generates weekly sales reports for a regional manager to track
performance.
STRATEGIC INFORMATION
SYSTEMS (SIS)
• Description: Systems designed to support long-term planning and decision-making at the top
management level, providing insights into market trends, competitive analysis, and strategic
opportunities.
• Examples: Executive Support Systems (ESS), Business Intelligence (BI) tools, Strategic
Planning Systems.
• Characteristics: Focuses on external and internal data, offers predictive analysis, supports
high-level strategic decisions.
• Purpose: Help executives align business strategies with market opportunities and
organizational capabilities.
• Example: A BI tool analyzes market trends and customer behavior to inform corporate
strategy.
TRANSACTION-ORIENTED
SYSTEMS
• Description: Focuses on processing and recording transactions efficiently and
accurately.
• Examples: Transaction Processing Systems (TPS), such as banking systems, billing
systems, reservation systems.
• Characteristics: High volume, low complexity, structured, often real-time.
• Purpose: Record and process business transactions to ensure accurate data capture.
• Example: A bank’s TPS processes thousands of ATM withdrawals and deposits daily.
ANALYTICAL SYSTEMS
• Description: Designed for analyzing large volumes of data to identify trends, patterns,
and insights.
• Examples: Decision Support Systems (DSS), Business Intelligence (BI) systems, Data
Warehouses.
• Characteristics: Data-intensive, often involves complex queries and modeling,
supports decision-making.
• Purpose: Provide insights for tactical and strategic decisions through data analysis.
• Example: A retail DSS analyzes sales data to identify which products are most
popular in different regions.
COLLABORATIVE SYSTEMS:
• Description: Facilitate communication and collaboration among team members and
departments.
• Examples: Group Decision Support Systems (GDSS), project management tools,
intranet-based collaboration platforms.
• Characteristics: Supports teamwork, information sharing, real-time collaboration,
often includes communication tools.
• Purpose: Enhance productivity and decision-making through collaboration.
• Example: A GDSS that allows a project team to brainstorm and vote on ideas in real-
time during meetings.
KNOWLEDGE MANAGEMENT
SYSTEMS (KMS)
• Description: Systems that capture, store, and disseminate organizational knowledge
and expertise.
• Examples: Corporate intranets, expert systems, knowledge repositories.
• Characteristics: Stores both explicit (documents, procedures) and tacit (expert
insights) knowledge, searchable, often integrates with other systems.
• Purpose: Preserve and leverage organizational knowledge to enhance decision-making
and innovation.
• Example: A knowledge repository that stores best practices, allowing employees to
learn from previous projects.
WALMART’S USE OF INFORMATION
SYSTEMS
• Operational Systems: Walmart uses TPS to manage inventory levels, track sales, and
automate reordering processes.
• Management Information Systems (MIS): The company uses MIS to monitor regional
sales performance and optimize supply chain operations.
• Strategic Information Systems (SIS): Walmart leverages BI tools to analyze market
trends and consumer behavior, informing its global expansion strategy.
BOEING’S INFORMATION SYSTEMS
• Transaction-Oriented System: Boeing’s TPS manages complex orders and logistics for
aircraft production.
• Analytical System: The company uses DSS to analyze manufacturing data and
optimize production processes.
• Collaborative System: Boeing employs GDSS and collaborative tools to coordinate
engineering teams across different locations.
• Knowledge Management System (KMS): Boeing’s KMS stores detailed
documentation and best practices, enabling knowledge sharing across engineering
teams.
KEY TAKEAWAYS
• Information systems can be categorized based on their nature (operational,
management, strategic) and their characteristics (transaction-oriented, analytical,
collaborative, knowledge management).
• Understanding these categories helps organizations to effectively deploy and manage
their IS to meet specific business needs.
• Different types of systems serve different purposes within the organization, from
handling daily operations to supporting long-term strategic decisions.
END OF MODULE 1
END OF SLIDES
THANK YOU
Shailak Jani
ResearchGate
Shailak.jani36092@paruluniversity.ac.in