Business Management 2

(B5-BM2-13)
INFORMATION MANAGEMENT
 Objectives
By the end of the session, students should
be able to:
• Define Information Management
• Discuss characteristics of useful
information
• Define an Information System
• Discuss the classification of Information
Systems.
 Information Management
Introduction

• An information system refers to a set of

interrelated components that collect, process,
store, and distribute information to support
decision making and control in an organization.
• Information systems contain information about
significant people, places, and things within the
organization or in the environment surrounding the
organization.
 Information
Management
DATA refers to raw, unanalysed numbers and facts
about events or conditions from which information is
drawn e.g. sales figures for Clover Botswana for 2018.

INFORMATION is processed data that is relevant to

a manager. Data can be processed into information
e.g. the Marketing Manager can calculate an increase
in sales for Clover Botswana for the past four years.
Example …Indian Car Sales Figures – December 2020
 Information Management
Characteristics of useful information

• Accurate: Information should be of high quality for it

to be accurate.
• Relevant
• Sufficient/completeness: Partial information may not
be relevant.
• Timeliness/current: Real time information
• Uniqueness: so that it adds value to the organisation.
 Information
Management
Importance of Information systems
1.Operational excellence: Businesses seek to improve
the efficiency of their operations and information
systems enhance the organization’s operations.
(Consider Walmart’s inventory monitoring system).
2. New Products, services: Information systems and
technologies are a major enabling tool for firms to
create new products and services.
3. Customer and supplier intimacy: When a business
really knows its customers and serves them well, the
 Information
Management
customers generally respond by returning and
purchasing more which raises the revenues and profits of
an organization.
4. Improved decision making: Managers in many
organizations do not have the right information at the
right time to make informed decisions. With the
availability of information, service delivery can be
enhanced and better decisions made.
5.Competitive advantage: When firms achieve one or
more objectives, for instance, new products, services,
operational excellence- they can have a competitive
 Information
Management
advantage.

6. Survival: Business firms invest in information

systems and technologies because they are the
necessities of doing business. For example, Citibank
was the first bank to introduce ATMs in the USA and
today virtually all banks globally have introduced
ATMs which is simply a requirement for survival in
the retail banking business.
 Information
Management
7) Organisational behaviour change:
information systems facilitates and transfers
the broadening and distribution of information
in empowering lower-level employees.
• It pushes the decision making rights to the
lower level in the organization as the lower
level employees receive the information they
need to make decisions, which motivates
them in the process.
 Information Management
Classification of Information Systems
1. Operations information systems: Purpose-
support business operations. Examples include
transaction processing systems(TPS) used to
record and process information such as sales and
purchases.
• Process control systems: for example Coca-Cola’s
automatic inventory reorder system. Physical
production process are automatically made by
computers.
 Information Management
• Office automation systems(OAS): transform
traditional manual office methods and paper
communications media, e.g electronic mail.

2. Management Information Systems (MIS)

• Provides information and support to managers
at all levels. At operational level: decisions are
mainly structured and MIS process transactions
as they occur in order to provide reports.
 Information Management

• At tactical level, decisions are semi-

structured and middle managers need
information on sales and problems with
suppliers.
• At strategic level, decisions are unstructured
and top managers need information on the
organization’s strengths, weaknesses as well
as opportunities and threats in the external
environment.
 Information Management
Types of MIS
a) Information reporting systems(IRS):
Provides managerial end users with the
information reports they need for making
decisions.(Lower management)
b) Decision Support Systems(DSS): These
are computer based information systems
that provide interactive information support
to managers during the decision making
process. A DSS produces sales forecasts
using both internal and external data on
customers, competitors and retailers.
 Information
Management
• DSS also focuses on problems that are
unique and rapidly changing, for which the
procedure for arriving at a solution may not
be fully predefined in advance.
• Although DSS use internal information from
TPS and MIS, they often bring in information
from external sources, such as product prices
for competitors.
 Information Management
c) Executive Information Systems(EIS): Support
senior management with easy access to information on
the organization’s critical success factors.(Top
management).
•Address non-routine decisions requiring judgment,
evaluation, and insight
•Incorporates data about external events (e.g. new tax
laws or competitors).
•EIS present graphs and data from many sources through
an interface that is easy for senior managers to use.
Information Management
Other classifications of information
systems
1. Expert Systems(ES): When organizations
are faced with complex problems they
normally engage the services of experts. For
instance, in cases of mergers, acquisitions
and takeovers.
• An ES is a decision-making and problem
solving package of computer hardware and
software in which the expertise is transferred
from the human being to the computer.
 Information Management
2. Business function information systems:
These information systems are required to
support all the functional areas of a business
which include human resources, marketing,
accounting and finance, production, sales and
marketing.

3. The Internet: This refers to a web of

thousands of educational, corporate and
research computer networks around the world.
Information transmitted through the internet is
 Information Management
to make use of electronic mail, file transfer
protocol(moving files and data from one computer to
the other) as well as world wide web which enables
users to send images.
4. The intranet: Internal networks built with same
tools and standards as Internet
• Used for internal distribution of information to
employees
• Typically utilize private portal providing single point
of access to several systems
• May connect to the company’s transaction systems.
 Information Management
5. The Extranet: Intranets extended to
authorized users outside the company
• Expedite flow of information between firm
and its suppliers and customers
• Can be used to allow different firms to
collaborate on product design, marketing,
and production.
 Information Management
Developing an Information System
1. Systems Investigation: Managers and other
technical staff need to make an analysis of the
specific information requirements of the organization.
The need for the information should be clearly spelt
out after which a feasibility study is carried out.
2. Systems Analysis: At this stage, the information
requirements of an organization and its users is
carried out. In addition, there is need to have an
understanding of the current system that needs to
 Information Management
be upgraded or replaced and to determine the
nature of the problem at hand.
• Lastly, there is need to investigate the end-
user’s specific information requirements.

3. Systems design: Systems design specifies

how the new system will meet the information
requirements of end-users, and this will be the
responsibility of a systems specialist.
Information Management
• Systems design involves the development of
logical and physical design activities. The
process of physical design may include the
design of layout reports and physical file
structures.

4. Systems implementation, maintenance

and security.
• Implementation involves the purchasing of
hardware, software, testing programs and
procedures, developing documentation and
undertaking installation activities.
 Information
Management
• Systems maintenance involves monitoring,
evaluating and modifying a system once it is
running. The system should be tested in order
to verify whether it meets user requirements.
• Systems security should be addressed during
the design and implementation phases. In
some firms, top management have access to
new product development since the
information will be confidential.
 Information
Management

Group Discussions: Explain the major

potential threats to computer systems.
How can such threats be
eliminated/minimized within the
organisation?
 Blackboard Questions
1) Discuss the importance of an information
system in today’s businesses.
2) Explain the characteristics of useful
information.
3) Identify and explain the major types of
management information systems.
4) Describe the stages involved in developing
an information system.
Thank you!