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Introduction to Management Introduction to Management Information SystemsInformation Systems

Introduction to Management Introduction to Management Information SystemsInformation Systems

Thossaporn Thossansin, Thossaporn Thossansin, BS.c, MS.cBS.c, MS.c

ITE106: Management Information SystemsITE106: Management Information Systems

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Lecture: Wednesday09:00 PM - 11:45 PM

Thossaporn Thossansin, Bs.c, Ms.c

email: thossaporn.piu@gmail.com

ITE106: Management Information Systems

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ตำ��ร�หลั�ก :Laudon, Kenneth C, Jane Price, Essentials of Management Information Systems, January 2010 (ISBN: 978-0-136-11444-4)

ตำ��ร�ประกอบ :• Joseph Valacich / Christoph

Schneider, Information Systems Today: Managing the Digital World, April 2009 (ISBN: 978-0-13607-840-1)

• http://www.thaiall.com/mis/indexo.html

Course Books

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The grade received in the course will be based on:

•Participation/Homework (30%)•Mid-Term Exam (30%)•Final Exam (40%)

Grading

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Information Concepts: Data, Information, and Knowledge

• Data: raw facts– Alphanumeric, image, audio, and video

• Information: collection of facts organized in such a way that they have additional value beyond the value of the facts themselves– Value of Information is directly linked to how it helps

decision makers achieve their organization’s goals and can be measured• in time required to make a decision• Increased profits to the company

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Figure 1.2: The Process of Transforming Data into Information

Data, Information, and Knowledge

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The Characteristics of Valuable Information

Table 1.2: Characteristics of Valuable Information

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The Characteristics of Valuable Information (continued)

Table 1.2: Characteristics of Valuable Information (continued)

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What is an Information System?

Figure 1.3: The Components of any Information System

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Computer-Based Information Systems

• Computer-based information system (CBIS): single set of hardware, software, databases, telecommunications, people, and procedures configured to collect, manipulate, store, and process data into information

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Computer-Based Information Systems

• CBIS components– Hardware: computer equipment used to perform input,

processing, and output activities– Software: computer programs that govern the operation

of the computer– Database: organized collection of facts and information– Telecommunications: electronic transmission of signals

for communications– Networks: connect computers and equipment in a

building, around the country, and around the world

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Business Information Systems

• Most common types of information systems used in business organizations– Electronic and mobile commerce systems– Transaction processing systems– Management information systems– Decision support systems– Specialized business information systems

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Electronic and Mobile Commerce

• E-commerce: any business transaction executed electronically between parties– Companies (B2B)– Companies and consumers (B2C)– Consumers and other consumers (C2C)– Companies and the public sector– Consumers and the public sector

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Transaction Processing Systems

• Transaction: business-related exchange– Payments to employees– Sales to customers– Payments to suppliers

• Transaction processing system (TPS): organized collection of people, procedures, software, databases, and devices used to record completed business transactions

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Additional Business Information Systems

• Management Information Systems (MIS)

– provide routine information to managers and decision makers

• Knowledge Management Systems (KMS)

– create, store, share, and use the organization’s knowledge and experience

• Artificial intelligence (AI)

– field in which the computer system takes on the characteristics of human intelligence

• Decision support system (DSS)

– used to support problem-specific decision making

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• Information Data that has been put into a meaningful and

useful context. Usually to help make a decision.

• Management Information System A combination of computers and people that

is used to provide information to aid in making decisions and managing a firm.

• Information Technology (IT)

What is MIS?

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Why is MIS Important?

• MIS affects all areas of business– Manufacturing– Accounting & Finance– Human resources– Marketing– Top management

• Performance evaluations—expectations

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What are e-Commerce and e-Business?

• Business-to-Consumer (B2C)– Selling retail products to consumers

• Business-to-Business (B2B)– Selling at the wholesale level to other businesses

• E-Business– Using Internet technologies to conduct any level of

business– E-Commerce– Intranets– Most areas of MIS

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Several Terms

• E-World; Digital Age; Digital Firms

• Information Technology (IT)

• Information Systems (IS)

• Office Workers; Knowledge Workers; End-Users; End-User Managers

• E-Business; E-Commerce

• Business initiatives drive IT choices

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Managers and professionals spend considerable time in meetings. Providingsupport for teamwork and group decisions is an important issue in MIS.

Meetings

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12 3

Making Decisions

• Methodology v. Ad Hoc Decisions

• Decision Process– Collect Data– Identify Problems & Opportunities– Make Choices

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Traditional Management

CEO

VPFinance

VPMarketing

VPAccounting

VPHRM

VPMIS

Layers of middle managers

Customers

Commands

Analyze data

Condensed reports

Collectdata

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Decentralization

Management TeamCEO

FinanceTeam

MarketingTeam

AccountingTeam

HRMTeam

SalesTeam

Franchise

Strategy

Methodology/Rules

Customers

CorporateDatabase

&Network

VPFin

VPMrkt

VPAcct

VPHRM

VPMIS

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Business Trends

• Changing business environment

– Specialization

– Management by Methodology and Franchises

– Mergers

– Decentralization and Small Business

– Temporary Workers

– Internationalization

– Service-Oriented Business

– Re-engineering

• Need for faster responses and flexibility

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Business Trend Summary

Business Trend Implications for Technology

Specialization 1.Increased demand for technical skills2.Specialized MIS tools3.Increased communication

Methodology & Franchises 1.Reduction of middle management2.Increased data sharing3.Increased analysis by top management4.Computer support for rules5.Re-engineering

Mergers 1.Four or five big firms dominate most industries2.Need for communication3.Strategic ties to customers and suppliers

Decentralization & Small Business 1.Communication needs2.Lower cost of management tasks3.Low maintenance technology

Temporary Workers 1.Managing through rules2.Finding and evaluating workers3.Coordination and control4.Personal advancement through technology5.Security

Internationalization 1.Communication2.Product design3.System development and programming4.Sales and marketing

Service Orientation 1.Management jobs are information jobs2.Customer service requires better information3.Speed

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US Employment Patterns

US Employment Patterns

0

20

40

60

80

100

120

140

160

1920 1930 1940 1950 1960 1970 1980 1990 2000

mill

ion

s o

f w

ork

ers

Service

Management

Manufacturing

Farm

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International Web Browsers

Web Users

English 35%

Chinese 13%Japanese 9%

Spanish 8%

German 7%

Europe-Other 4%

Korean 4%

French 3%

Portuguese 3%

Italian 3%

Russian 2%

Scandanavian 2%

Asia-Other 2%

Arabic 1%

Dutch 2%

Malay 2%

Source: http://www.glreach.com/globstats/

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MIS Organization

Business Operations

TacticalManagement

Strategic

Mgt.

EIS

ESD

SSTr

ansa

ctio

n

Proc

ess

Con

trol

ERP

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Operations, Tactics, Strategy

Sector Operations Tactics Strategy

Production • Machine settings• Worker schedules• Maintenance sch.

• Rearrange work area• Schedule new products• Change inventory method

• New factory• New products• New industry

Accounting • Categorize assets• Assign expenses• Produce reports

• Inventory valuation• Depreciation method• Finance short/long term

• New GL system• Debt vs. equity• International taxes

Marketing • Reward salespeople• Survey customers• Monitor promotions

• Determine pricing• Promotional campaigns• Select marketing media

• Monitor competitors• New products• New markets

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Decision Levels

Decision Level

Description Example Type of Information

Strategic Competitive advantage, become a market leader. Long-term outlook.

New product that will change the industry.

External events, rivals, sales, costs quality, trends.

Tactical Improving operations without restructuring the company.

New tools to cut costs or improve efficiency.

Expenses, schedules, sales, models, forecasts.

Operations Day-to-day actions to keep the company functioning.

Scheduling employees, ordering supplies.

Transactions, accounting, human resource management, inventory.

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Information Technology (IT)

• Computer Technology (Hardware and Software) Processing and Storing Information

• Communication Technology Transmitting information

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“Better” Tangible Outputs

• IT is used to make the process in producing a tangible output more efficient and more effective

• Implication Issues–whether or not to use IT–selecting the proper IT–employing correct procedures for the utilization of the IT

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Intangible Outputs

• A schematic view A schematic view - the information/decision level• MIS involves identifying the key decisions that are

related to reaching objectives, on determining the proper information needed to make these decisions, and on improving the decision processes employed to make the decisions.

• Implications: Activity at this level concentrates on developing tools and processes that allow better management decision making

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The MIS Concept Intangible Outputs (achieving desired objectives)

D ata

In fo rm ation D ec is ion P rocesses

D ec is ion s

G oa ls /O b jec tives

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System Concepts

• What is a system?–A set of components that interact to accomplish goals–Systems can be viewed as process models in terms of their

inputs, outputs, processing, and feedback/control mechanisms. Examples.

• What is an IS?–A set of interrelated components that collect input, process, and

output data and information and provide a feedback/control mechanism

• What is a CBIS? (Computer-Based Information System )–An IS that uses IT.–Components: hardware, software, databases, networks, people,

procedure

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System Examples

• University – an example

– Inputs: students, faculty, textbooks

– Processing mechanisms: teaching, research, service

– Output: graduates

– Goal: acquisition of knowledge

• The Manufacturing System

• Other example

• Subsystem, interface,

open, adaptive

Boundary Feedback

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ManufacturingProcess

Input ofRaw Materials

Output ofFinished Products

Environment

Other Systems

Control byManagement

ControlSignals

ControlSignals

FeedbackSignals

FeedbackSignals

System Boundary

A Manufacturing System: Generic Components

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Systems: Some Examples

• University– Inputs: Students, Faculty,

Textbooks– Processes:

Education/Courses– Output: graduates– Feedback: surveys, grades

• Toyota Plant– Inputs: raw materials,

components– Processes: assembly line– Output: mini-vans– Feedback: customer surveys,

quality reports

• Fast Food IS– Inputs: consumer orders– Processes: processing

software– Output: receipts, cook’s order

list– Feedback: invalid entry

message• Video Store IS

– Inputs: rentals, returns– Processes: processing

software– Output: reports, rental

agreement– Feedback: error repots

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System Classifications and Characteristics

SubsystemSystem BoundaryInterfaceOpen, Adaptive Systems

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Input, Processing, Output, Feedback/Control

INPUTSGathering and capturing raw data

INPUTSGathering and capturing raw data

PROCESSINGConverting or transforming data into useful outputs

PROCESSINGConverting or transforming data into useful outputs

OUTPUTSProducing useful information, usually in the form of documents.

OUTPUTSProducing useful information, usually in the form of documents.

Output that is used to make changes to input or processing activities

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Procedures

• Procedures - set of instructions used by people to complete a task

• Procedures include the strategies, policies, methods, and rules for using the CBIS.

• Examples: procedures describe– When each program is to be run– Who can have access to database– What is to be done in case of a disaster

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System Performance Standards:Efficiency and Effectiveness

Efficiency: a measure of what is produced divided by what is consumed

• an improved product

• the same level product produced cheaper or faster

• the improvement in the product exceeds the increased cost

Effectiveness: a measure of the extent to which a system achieves its goals.

• Goal: to reduce damaged parts by 100 units

• Q: Actual reduction in damaged parts using a control system is only 85 units. Effectiveness?

• A: The effectiveness of the control system is 85 percent

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What You Need to Know

• Foundation Concepts: Fundamental concepts about the components and roles of IS

• IT: Major concepts, developments, and management issues in information technologies

• Business Applications: The major uses of IS for the operations, management, and competitive advantage

• Development Processes: How end users or information specialists develop and implement IS

• The challenges of effectively and ethically managing information technologies, strategies, and security at the end user, enterprise, and global levels of a business

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Major Roles of Information Systems

Support of Strategic

Advantage

Support of Managerial

Decision Making

Support of Business Operations

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History of the Role of IS

Data Processing

ManagementReporting

DecisionSupport

Strategic &End User

Electronic Commerce

1950-1960 1960-1970 1970-1980 1980-1990 1990-2000

ElectronicData Processing- TPS

ManagementInformationSystems

DecisionSupportSystems- Ad hoc Reports

End UserComputingExec Info SysExpert SystemsSIS

ElectronicBusiness & Commerce-InternetworkedE-Business &Commerce

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Trends in ISs

• Data Processing: 1950s -– Transaction processing, record keeping, traditional

accounting applications• Management Reporting: 1960s -

– MIS – predefined management reports for decision-making purposes

• Decision Support: 1970s -– DSS – interactive ad hoc support of the managerial decision-

making process• Strategic and End User Support: 1980s -

– EUC, Executive Information Systems, Expert Systems, Strategic Information Systems

• Electronic Business and E-Commerce: 1990s -

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Manufacturingand

Production

Engineering &Research

Accounting,Finance, andManagement

Suppliers and Other Business Partners

Procurement, Distribution, and Logistics

Advertising Sales Customer Service

Consumer and Business Customers

Company

Boundary

Intranets

The Internet

Extranets

Ext

ran

ets

The Electronic Business

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• What uses of IT might be considered improper, irresponsible, or harmful to other individuals or to society?

• What is the proper use of an organization’s information resources?

• What does it take to be a responsible end user of IT?• How can you protect yourself from computer crime

and other risks of IT?

Ethical Dimensions of IT