MIS 508: Management Information

System

Lecture 1
Business Enterprise

A business enterprise is a group of people

that are engaged in some form of purposeful
activity that extends over time, is aimed at
fulfilling corporate objective (s), and satisfies
legislative constraints.
Enterprise Components

 Objectives (corporate mission): what is to be

achieved

 Rules - how to achieve the objective:

– Activities – what to be done
– People – who will do whatever is to be done
– Information – how well the thing is done

 Environment – (legislation, regulators, partners

customers, suppliers)
Business Information System

 We have adopted the following definition:

“Business information systems refer to

those IT-enabled systems that provide
information to assist managers of a
business in making informed decisions.”
Business Information Systems: A
Definition

 The key themes involved in BIS definition are:

– the ability of systems to process data for generating

meaningful information
– to report such information in a digestible format,
– to assist managers (regardless of levels and functional
areas ) in making informed decisions
– In other words, managers no longer need to make decisions
based on their intuitions
What Is an Information System?

Data and Information

What Is an Information System?

INPUT PROCESS OUTPUT

FEEDBACK
What Is an Information System?
What Is an Information System?

ORGANIZATIONS TECHNOLOGY

INFORMATION
SYSTEMS

MANAGEMENT
 A Business Perspective on Information
Systems

 Information systems literacy: Broad-based

understanding of information systems that includes
behavioral knowledge about organizations and
individuals using information systems and technical
knowledge about computers.

 Computer literacy: Knowledge about information

technology, focusing on understanding how computer-
based technologies work
Major Business Functions

 Sales and marketing

 Manufacturing

 Finance

 Accounting

 Human resources
 Organizations

Key Elements:
 People: Managers, knowledge workers, data
workers, production or service workers

 Structure: Organization chart , groups of

specialists, products, geography
 Organizations

 Operatingprocedures: Standard operating

procedures (SOP, rules for action)

 Politics: Power to persuade, get things done

 Culture: Customs of behavior

Management

Levels:
 Senior managers: make long-range strategic
decisions about products and services

 Middle managers: Carry out the programs and

plans of senior management

 Operational managers: monitor the firm’s daily

activities
Computer Technology

Tools managers use to cope with change

 Hardware: Physical equipment

 Software: Detailed preprogrammed instructions

 Storage: Physical media for
storing data and the software
 Computer Technology

 Communications Technology: transfers data

from one physical location to another

 Networks: link computers to share data or

resources
CONTEMPORARY APPROACHES TO
INFORMATION SYSTEMS

Technical
Approaches
Computer Operations
Science Research

Management Sociology
Science

Psychology Economics
Behavioral
Approaches
The Interdependence Between Organizations and
Information Systems
The Widening Scope of Information Systems

 1950s: Technical changes

 1960s-70s: Managerial controls

 1980s-90s: Institutional core activities

 Today:Digital information webs extending

beyond the enterprise
The Widening Scope of Information Systems
Business Information Systems:
Taxonomies

A number of taxonomies exist for classifying

information systems found in business

– Based on the boundary of systems

– Based on user types
– Based on the ability of systems to determine
outputs precisely
– Traditional classification
Business Information Systems:
Taxonomies

 Based on the boundary of systems,

information systems can be categorized as:

– intra-organizational systems
– inter-organizational systems (IOS)
Examples of Intra-Organizational
Systems
Inter-organizational systems (IOS)

 These
systems span organizational
boundaries
– They link two or more organizations
– Naturally, they require greater collaboration
– External influence is likely to influence the way
system is designed and implemented
– Examples include EDI, e-procurement systems
Business Information Systems:
Taxonomies

 Basedon user type, two types of information

systems can be observed:
– End user applications
 Examples include spreadsheet applications for
developing financial models for SMEs

– Institutional applications
 Examples include large scale transaction processing
systems (TPS)
Business Information Systems:
Taxonomies

 Depending upon whether or not the outputs can be

determined precisely, two types of information systems
can be observed:
– Probabilistic (open) systems
 A flight reservation system is an example because the airline
operator cannot know for certain, in advance, how many
individuals will purchase tickets for a given flight.
– Deterministic (closed) systems
 For example, a clock manufacturer knows with certainty how
many gears, jewels, dials, bridges, or hands will be required to
assemble a fixed number of watches.
Business Information Systems:
Taxonomies

 Based on the nature of data processing and

type of users, information systems can be
grouped into four categories:
– Transaction processing systems (TPS)
– Management information systems (MIS)
– Decision support systems (DSS)
– Executive information systems (EIS) / ESS
 This is the most widely known taxonomy of
information systems
Traditional Perspective of Classifying
Information Systems in Business
Types of Information Systems
MAJOR TYPES OF SYSTEMS IN
ORGANIZATIONS

• Executive Support Systems (ESS)

• Decision Support Systems (DSS)
• Management Information Systems (MIS)
• Knowledge Work Systems (KWS)
• Office Systems
• Transaction Processing Systems (TPS)
MAJOR TYPES OF SYSTEMS IN
ORGANIZATIONS
Business Information Systems: TPS

 TPS represent those IT-enabled applications that

perform highly structured, routine, repetitive business
transactions
 A transaction is any business-related exchange of
value or movement of goods
 Payments to employees, sales to customers,
payments to suppliers, receipt of items are all
examples of transactions.
 Input data, processing logic and outputs are well-
defined
Business Information Systems: TPS

 A business usually has many TPS

 They capture a large number of transactions on a
daily basis
 A severe impact on the business if the TPS breaks
down.
 For example, retail banking operations will be
hampered if ATM systems fail
 Operational (clerical) staff are the intended users of
TPS
Why do organizations need TPS?

 TPS helps a business to improve efficiency

by:

– enhancing data accuracy

– reducing the errors caused by clerical staff
– speeding up processing of transactions
Examples of TPS

 Payrollsystem
 Accounts payable system
 Order entry systems
 Student registration system
 ATM transaction system
 Inventory system
Payroll TPS
Types of TPS Systems
Business Information Systems: MIS

 MIS are IT-enabled IS systems that are designed to

aid decision making of mid-level management of a
business

 MIS produce managerial reports which are in most

cases produced periodically: daily, weekly, monthly
or yearly

 Because these reports are generated at a

predetermined planned basis, they are called
scheduled reports.
Business Information Systems: MIS

 A number of functional
areas of a business
such as marketing,
finance, production are
supported by MIS.

 MIS provides reports

by drawing upon data
captured by many TPS
in an organization.
Business Information Systems: MIS

 The primary difference between the reports

generated by TPS and those produced by MIS is that
MIS reports support managerial decision making at a
higher level where the decisions themselves tend to
be less routine.

 An example of an MIS subsystem is a sales

monitoring system that alerts managers when sales
are either above or below expected levels
Management Information System (MIS)
Management Information System (MIS)

 Structured and semi-structured decisions

 Report control oriented

 Past and present data

 Internal orientation

 Lengthy design process

Business Information Systems: DSS

 DSS are developed to help business managers in

addressing semi-structured business problems.
 Information needed to solve semi structured
problems are often not available.
 Thus, uncertainty is involved and such problems
require managers’ subjective judgment.
 The essential elements of a DSS include a collection
of complex mathematical models which draws upon
to the data maintained within a business.
Example of DSS

 A DSS may be used by an automobile manufacturing

company to determine the best location to build a
new manufacturing facility.

 An oil company may want to use a DSS to discover

the best place to explore for oil.

 Traditional MIS or TPS cannot be used for

addressing the above mentioned semi-structured
type of problems.
Decision Support System (DSS)
Decision Support System (DSS)
Business Information Systems:
EIS/ESS

 EIS is a special MIS dedicated to high level

management.

 Such dedication is required because senior

managers require access to internal and external
data that are relevant to the critical success factors
affecting their business.

 These systems often present data in graphical

format
Executive Support System (ESS)
Executive Support System (ESS)

 Top level management

 Designed to the individual

 Ties CEO to all levels

 Very expensive to keep up

 Extensive support staff

 Different Kinds of Information Systems

TYPE OF
Organizational Level
DECISION OPERATIONAL KNOWLEDGE MANAGEMENT STRATEGIC

STRUCTURED ACCOUNTS
RECEIVABLE
ELECTRONIC PRODUCTION
SCHEDULING COST OVERRUNS
TPS
OAS MIS
SEMI- BUDGET
STRUCTURED PREPARATION

PROJECT
SCHEDULING DSS
FACILITY
KWS
LOCATION
ESS
UNSTRUCTURED PRODUCT DESIGN NEW PRODUCTS
NEW MARKETS
Life Cycle of an IS Project

 Stage 1: Determination of aims and scope

 Stage 2: Feasibility study
 Stage 3: Systems Analysis
 Stage 4: Systems design
 Stage 5: Detailed design
 Stage 6: Implementation
 Stage 7: Changeover
MIS 508: Management Information
Systems

End of Lecture 1.