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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS

COPY RIGHT © 2012 Institute of Interdisciplinary Business Research 377

NOVEMBER 2012

VOL 4, NO 7

CONCEPTUAL MODELING OF MANAGEMENT INFORMATION SYSTEMS AND

EXAMINES ITS IMPACT ON STRATEGIC DECISIONS OF SENIOR MANAGERS

CASE STUDY: RURAL WATER AND WASTEWATER (IRAN-MASHHSD)

DR. AMIR HOSSEIN AMIR KHANI22

DR. ALI ROSTAMI

ALI NASERI23

Abstract

The Theme of this paper is to Design a conceptual model for the Rural Water Management Information System

(Iran – Mashhad) and to examine its impact on strategic decisions of senior managers. Today, information is one of

the determinants of power and mastery of information resources in level of Global, national and organizational

represents the power of states, organizations and individuals. In today's world, the most important characteristic for

a strong community, it is the priority and rates the efficiency of data element. Therefore, to explain the information

items needed for the organization's senior managers, we attempted to document information systems Abfar, with

common tools such as, data flow diagrams (DFD) and workflow diagrams. And In the final section, with Critical

Look, Assessing the current and future trends (1to 3 year time horizon), managers to information items, Researcher

to explore in this context that which of the items in the design of management information systems (MIS) Has a

higher priority in strategic decision making (macro) corporate executives. We conclude with some practical

suggestions.

Keywords: System; Information System(IS); Management Information System(MIS);Strategic Information

System(SIS); decision making; Information items

1. Introduction

The new era this is known to Information age or Informatics, Promising a new world with new ways of applying IT.

Information systems are the foundation of doing business today. Most business Firm would not be able to operate

without their information system. In a similar way, nonprofit organizations, educational institutions, governments,

public administration and many other entities also rely on information system. (Kurbel, 2008, 28). Information

systems should be the awareness of managers, and do not provides fatigue and overload for them.

Senior executives do not require detailed accounting information. Therefore the design of information systems

should be as efficient that while covering all the required information items Managers For a comprehensive decision

support, In cases where Managers are attempting to make strategic decisions at the macro level, Do not drown them

in information overwhelming without scoring.

The lack of standardized methods for designing information systems , Inefficient and redundant data collection

methods, Along with the traditional architecture of the information referred to repeatedly in various organizations

have been seen, for designers of information systems is a constant concern. In the present study, Good

combination of theory and scientific principles to analyze and design management information systems has been

used.

Therefore in this article, after the statement of problem and the main objectives of this paper, we present the

conceptual model used in research and finally, we describe the information systems and management information

strategic and Looking for solutions to improve the organization's information system is attached.

1.1. Statement of Problem

The problem arises from the fact that managers are always looking for information and they make decisions based

on data related to the topic that will be influential in the development. Equip managers to a correct and reliable

information system that will assist management in making decisions, organizational planning and control, It is a

historical process, Regardless of the subject matter of historical trends Information Systems, Management

22 . PhD in Management (Human Resources)from Tehran University School of Management 23

. Student In Master of Science MBA from the Payam Noor University of Tehran (Damavand)

Corresponding author,

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NOVEMBER 2012

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information systems (MISs) are fundamental tools for problem solving and decision making, And the point that if

not used as a tool for decision will undermine the quality of decisions?

The study seeks to answer the following questions:

1) Generally, the organization now has a good management information system?

2) Is logically and Rational, Use the information items from senior managers in Corporate strategic decisions in

the current situation and a time horizon (1 to 3 years) in the future?

3) What is Priority or in other words, the ranking of information items required by senior managers in the strategic

decisions?

2. Literature (Theoretical):

2.1. The concept of Data and Information

Although Data and Information are used incorrectly instead of each other, but each have a special meaning.

The word information „can be defined as data that has been put into a meaningful and useful context and

communicated to a recipient who uses it to make decisions (Spiratava, 2001). Information is „live‟ and the same

has to be updated all the time and renewable. It is substitutable and can be made to travel. Fig below shows

various stages of information Cycle.

The information cycle (Shajahan, 2004, 23)

2.2. Systems concept

(Shajahan, 2004, 45)

Input (data)

Data

(Captured)

Output

(information) Process

(models)

Recipient Database

Decision

Action Results

Environment

Control

Output Processing Input

Control signals

Feedback signals

Control signals

System boundary

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2.3. Define the system

A system consists of a number of interrelated components, only few of them can be seen easily. For

example , biological system of human body(natural system) , oil refinery system(technological system)

A system is defined as a group of interrelated components organized with a purpose. (Bagad,2008,3)

A System, is a group of elements that have been put together for a common desire to achieve a goal

(McLeod, 1998,12)

2.4. information systems(IS)

2.4.1. definitions

Information system is defined as group of elements organized with the purpose of supporting

management and operational decision making (Bagad, 2008, 1)

The term information system (IS) derives from the fact that such a system deals with information –

processing and producing information and making it available to people or other information system that

need the information to do their work.

An information system (IS) is a computer-based system that processes inputted information or data,

stores information, retrieves information, and produces new information to solve some task automatically

or to support human beings in the operation, control and decision making of an organization.(

Kurbel,2008)

Information system is a special type of system is working That uses information technology to

receive, transmit, store, retrieve, manipulate, or display information Which results in support of one or a

few other system is working(Sprague,2003)

2.4.2. Need of information system

For effective planning and controlling

Policy making and decision making

Problem solving

Planning and scheduling.

2.4.3. Functions of information system

As source of information to help in effective decision making by managers.

Acquisition of data from internal and external sources. (Minch,2004,17)

A contributor to productivity efficiency and customer satisfaction.

IS is useful to achieve success in various functions as finance, operations, marketing, human

resource, stores management.

To provide useful source of information in developing competitive products.

Information system is a dynamic, challenging career opportunity for people.

2.4.4. Fundamental Role of information system

Information systems perform three important functions in a business enterprise.

1- Support of business operations

2- Support of managerial decision making

3- Support of strategic competitive advantage

Fig below shows fundamental roles of IS in business

Strategic

advantage

Managerial decision making

Business operation

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2.5. Components of an Information system

An Information system has following components: (Bagad,2008,6)

1- Hardware(machines and media)

2- Software ( programs and procedures)

3- Data(data and knowledge)

4- Network(communication media)

5- People(end user and specialists)

All five of components are arranged and interrelated to perform input, process, output, feedback and control that

convert data resources into information. Fig 1.4 shows interrelation between these components. (Bagad, 2008, 3)

2.6. Management information system(MIS)

2.6.1. definition

A simple definition of Management information system(MIS) would then be: a computer-based

system that provides flexible and speedy access to accurate data .such a definition would suit any personal

, professional , organizational, national or global information system .Obviously , the organizational

information systems-those pertaining to the planning, operation and control of an enterprise –are the most

important amongst these.MIS refers primarily to such organizational information systems which are

generally large, sophisticated, structured ,dynamically evolving and of immense commercial value.

(Sadagopan,2004,1)

In our view, MIS involves all these perspectives and, in fact, much more, the three sub-components-

management, information, and systems- together bring to focus clearly and effectively:

(Sadagopan,2004,3)

1-Management emphasizing the ultimate use of such information systems for managerial decision

making rather than merely stressing on technology.

2-Information highlighting on processed data rather than raw data and in the context in which it is used

by managers and other end users.

3-Systems emphasizing a fair degree of integration and a holistic view

Data

storage

Data

Resources Process

Control

System

Performance

Computer

Information

product

People

Resources Network

Resources

Software

Resources Data

Resources

Hardware

Resources

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Organizational pyramid vs. information pyramid (Sadagopan, 2004.32)

2.6.2. Need for MIS

The MIS provides the information that is required by managers in the organization for effective

functioning. The main purpose of MIS is to provide the information support to the managerial functions

of an organization.MIS designed and implemented with a view(a)to provide the required information

support to undertake managerial activities such as planning ,staffing, coordination , control and decision

making activities;(b) to provide right type of information at the lowest cost and at the right time ;(c) to

ensure that managerial activities are provided adequate information support and (d) to avoid information

overload and also generating redundant information. (Shajahan,2004,24)

2.6.3. Limitations of MIS

MIS considers only quantitative factors

MIS is less useful for making non-programmed decision

MIS is less effective in organizations where information is not being shared with others

MIS is less effective due to frequent changes in top management, organizational structure and operational

staff.

The quality of MIS output is directly proportional to the quality of input data and processes.

In a fast changing and complex environment, MIS may not have enough flexibility to update itself

quickly. (Shajahan,2004,35)

2.6.4. Problem with MIS

There is abundant evidence from numerous surveys both in the UK and the USA that existing MISs , often using

advanced computer equipment , have had relatively little success in providing management with the information

they needed. The typical reasons discovered for this include the following :( Lucey, 2005, 2)

Lack of management involvement with the design of the MIS

Narrow and/or inappropriate emphasis of the computer system

Undue concentration on low- level data processing applications particularly in the accounting area

Lack of management knowledge of computers particularly in small and medium sized enterprises(SMEs)

Poor appreciation by information specialists of management‟s true information requirements and of

organizational problems

Lack of top management support.

2.7. Strategic Information System(SIS)

2.7.1. Definition

A strategic information system (SIS) may be defined as any information system which directly assists

on organization in achieving its organization strategy and are information system that impact on

competitive position of the organization. ( Bagad,2008,25)

2.7.2. Key features of the )sis)

Decision support systems that enable to develop a strategic approach to align Information Systems (IS) or

Information Technologies (IT) with an organization's business strategies

Primarily Enterprise resource planning solutions that integrate/link the business processes to meet the

enterprise objectives for the optimization of the enterprise resources

Environmental

Information

Internal

Information

Tactical

Decisions

Strategic

Decisions

Operational

Decisions

Top

Middle

Operational

Top

Middle

Operational

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NOVEMBER 2012

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Database systems with the "data mining" capabilities to make the best use of available corporate

information for marketing, production, promotion and innovation. The SIS systems also facilitate

identification of the data collection strategies to help optimize database marketing opportunities.

The real-time information Systems that intend to maintain a rapid-response and the quality indicators.

(Pressman,2005)

3. Research Methods

3.1. Research objectives

The Villages are the Target missions entrusted to the Rural Water and Wastewater Co. in each province, Due to

scattered rural residential areas and very hard going, Providing timely information and their processing for project

management for construction and cover and operation of the rural facilities faced with many problems and to spend

as much time to prepare and process the information Will cause loss of opportunity and resulting in increased costs

and its related social problems. Therefore, research objectives are:

1) Investigation and research on the organization's existing information systems

2) Smooth movement of information in organization

3) The proper definition than set of related information systems to improve decision-making process and the

planning system

4) Correctly identify the sources and uses of information items

Also, Necessity to Implementation of the study because some of the problems are the following:

There was no systematic relationship between the different sectors and has led to not be produced a

coherent and integrated information at the time needed

Most of the reports due to lack of data control, the resulting information and data related to incomplete, are

incorrect and repetitious and reliable.

Due to lack of appropriate information systems, efficient use of resources and investments are not possible

Most senior management time spent reviewing the solution and to fix problems that if there was a proper

information system, it could be busy for the cases with more importance.

3.2. Hypotheses

1. Using Simple Information items in the design of management information systems, has a higher priority in

the strategic decisions of managers

2. Using Status Information items in the design of management information systems, has a higher priority in

the strategic decisions of managers

3. Using Warning Information items in the design of management information systems, has a higher priority

in the strategic decisions of managers

4. Using Planning Information items in the design of management information systems, has a higher priority

in the strategic decisions of managers

5. Using Internal operation Information items in the design of management information systems, has a

higher priority in the strategic decisions of managers

6. Using External intelligence Information items in the design of management information systems, has a

higher priority in the strategic decisions of managers

7. Using externally distributed Information items in the design of management information systems, has a

higher priority in the strategic decisions of managers.

3.3. Type of Research

Descriptive research- Case study

Since the dominant mode of data collection in this type of research is often Questionnaire, in the study also, Have used questionnaires and (Library - field) Studies is used for data collection.

3.3.1. Statistical population

All senior managers of the organization according to organizational structure, that those activities are organized

in different deputy.

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NOVEMBER 2012

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3.3.2. Sampling method:

All senior managers in the organization being investigated, i.e. census was conducted.

3.3.3. Data collection tools:

Direct methods such as observation, interviews and questionnaires

Indirect methods such as use of documents

3.3.4. Scale and range of measurement tools:

With considering the hypotheses, in the first questionnaire, for each of information items required by managers,

in many information systems in organizations, questionnaire was designed with 5 options in Likert scale, That

the options were: very high, high, medium, low, very low.

In the second questionnaire, to evaluate the degree of importance and priority ranking of information items was

designed, Group AHP24

method was used to determine the priority information items as follows:

Externally

Distributed External

Intelligence Internal

Operation Planning Warning Status SIMPLE

1 SIMPLE

1 Status

1 Warning

1 Planning

1 Internal

Operation

1 External

Intelligence 1 Externally

Distributed Second questionnaire

EXTREME 8 V.STRONG 6 STRONG 4 MODERATE 2 EQUAL Degree of

importance 9 8 7 6 5 4 3 2 1 Value

Paired comparisons table

3.3.5. Reliability and validity of measurement tools

Validity of the questionnaire should be noted that in addition to peers the researcher on the subject of study and use

a comprehensive questionnaire, to further reinforces these tools, questions and set the stage was designed under the

guidance of industrial and academic experts.

Cronbach's Coefficient Alpha was used to evaluate the reliability of the questionnaires. That the following results

were obtained:

k

i

issk

kα

1

22t

11

1

Cronbach's Coefficient Alpha Questionnaire 0.83 Simple information questionnaire

0.87 Status information questionnaire 0.85 Warning information questionnaire 0.84 Planning information questionnaire 0.88 Internal Operation information questionnaire 0.82 External Intelligence information questionnaire 0.91 Externally Distributed information questionnaire

3.3.6. Research Variables

Dependent Variable (DV): 7 types of information items required by senior managers

Independent Variable (IV): Strategic decisions of managers

24

. Analytic Hierarchy Process

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3.3.7. Statistical techniques and software used for analyzing

The following software was used to analyze the data: SPSS (V.19) –EXCEL (V.2007) – EXPERT CHOICE

(V.2000) 4. Analysis Result

Organizational structure of rural water and wastewater) Abfar)

Encoding the information systems

Customer Service

Administration

Area Manager

IT Administration Protection

Administration

Contract

Administration

General Assembly

Controller

Chairman and CEO

Financial

Administration

Human

resources ad

Support and

administrative

services ad

Office of Public

Relations

The city's water and

wastewater

Administration

Deputy

supervising the

operation

Deputy Research

and

Development

Deputy of support

Human Resources

Maintenance and

operation of the

facility ad

Water without

income and

consumption

management ad

Quality control and laboratory

issues ad

Monitoring water and

wastewater projects ad

Technical reviews

and studies ad

Projects and

programs ad

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Regarding the Abfar'25

Organizational structure, and In order to separate modeling of each of the existing

information systems, to encode the information systems were as follows:

Row information system code

1 Identification villages Information systems S010

2 Contractors Information Systems S020

3 consultants Information systems S030

… ………………………

31 Management and reduce water consumption without revenue Information systems S170

In order to model the existing information systems, such as the common tools, data flow diagrams (DFD) and work

flow charts were used. For example, on information systems consultants:

DFD diagram

25

. Abfar = Rural Water and Wastewater

Encoding Information Forms

Form code Form Type Rows

F[1]S030 Contract Agreement and General Conditions of Contract Services 1

Head of contracts

Contract

Administration

Expert Contracts

Deputy Research

and

development

Technical and

Research

Committee

Set of tender

documents The tender

Consultant

Consultant

Done in

consultation

Review ongoing projects

Send documents

Consultant Selection - F[1]S030

Sen

d to

requ

est

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Questionnaire 1 (Assess Current and Future trends of information items)

Note1: Table Guide

Questionnaire 2 (paired comparison table)

Info

rmatio

n

system

s (cod

es) Items of information required by senior managers

Externally

Distributed External


Operation Planning Warning Status SIMPLE

DIF DCI DIF DCI DIF DCI DIF DCI DIF DCI DIF DCI DIF DCI

1-5 1-5 1-5 1-5 1-5 1-5 1-5 1-5 1-5 1-5 1-5 1-5 1-5 1-5

S010

S020

S030

…

…

S170

63 NR= 73 NR= 60 NR= 75 NR= 87 NR= 70 NR= 62 NR =

S2 S1 S2 S1 S2 S1 S2 S1 S2 S1 S2 S1 S2 S1

264 240 297 243 269 240 334 293 373 340 279 253 240 213

Abbreviation Description

DCI Degree of current importance

DIF Degree of importance in the future

NR Number of Responses

S1 current score

S2 future score

Information

items

Description

SIMPLE Notify managers of the organization's current situation

Status Inform managers of progress made and

Also exploit important opportunities and enterprise opportunities

Warning Signs and symptoms of risk within the organization

Planning Critical information to predict and explain the organization's vision

Internal

Operation

Information about how the organization and its sub-units

External

Intelligence

Information about Interpretation of The environmental factors from the experts

Externally

Distributed

Information that is distributed outside the organization (to provide shareholders

and the news media)

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NOVEMBER 2012

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Externally

Distributed

External

Intelligence

Internal

Operation

Planning Warning Status SIMPLE

(5.2) (4.6) (3.5) (4.3) (4.1) (3.5) 1 SIMPLE

(4.2) (3.1) (3.2) (3.3) (3.8) 1 Status

(3.2) 3.1 3.1 3.3 1 Warning

(3.3) 3.2 3.1 1 Planning

(4.1) 2.8 1 Internal

Operation

(5.1) 1 External

Intelligence

1 Externally

Distributed

Overall Inconsistency Index = 0.1

Note2: The numbers in Table 2(Group AHP) the final values are that obtained through geometric mean

judgments. And the numbers in parentheses is meant to change the preference in the paired comparison

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5. Conclusion

In response to questions raised, Should be acknowledged that the current structure of the organization and the

relevant units and relationship between them shows that the units are acting as an individual which is barrier for

Systems Thinking.

Features of the current information system had a higher proportion with Transaction Processing System (TPS),

which is based solely on internal operations and data processing! Note here that address the components and units,

has caused people and group acts as an island, although this action may improve the performance of some units, but

it hurts the overall performance of the organization. On The other hand, the results obtained from EXCEL and EC

tables confirm that the organization needs special attention to acquired information from internal environment. And

this factor as a key factor in the design of current information systems has been considered by experts. The results of

Table 2 (Future trends), also represent another point of view for managers, Future environment of the organization

and function calls, Continue to have information regarding the internal environment. However, the study of

theoretical principles in design Strategic Information System (SIS) And also examine the Abfar' organizational

environment Shows this trend cannot be Underlie the organization's success in the coming years. In other words, this

thinking and trend, does not seem rational and logical. In fact, despite claims that since the organization, is nonprofit

and In the current environment that is totally monopoly, Provides services to customers and Naturally, due to being

a nonprofit and seeks to provide services until profitability, This mentality comes the Is not required for strategic

planning and Strategic information systems design?! While the According to researcher since the goal is to provide

services and create value for our customers; provide effective services, Requires permanent explore the environment

and correct interpretation of the developments since and Identify strengths and weaknesses and environmental

opportunities and threats(SWOT) And the result is consistent with environmental conditions. Note that this is relied

on to only minor revisions, Eliminates the possibility of understanding the patterns that govern the phenomenon and

system. It is also in Abfar Organization.

7 6 5 4 3 2 1 Priority

SIMPLE Status External


Operation Planning Warning Externally

Distributed Information

items

0.032 0.053 0.079 0.104 0.155 0.222 0.356 Weight

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Managers to make Strategic and targeted decisions in Macro-organizational level, Information and information

systems are needed that In addition to covering the intra-organizational factors, External factors (the opinions of

experts and opportunities and threats resulting from environmental conditions) also noted both placed themselves.

It seems that) Hirschheim and others, 1988) about the evolution of information systems is also confirmed, that

expressed the three periods can be specified with the following titles:

First period

Emphasizing efficiency of operations / data processing

Second period

Effectiveness of management / management information systems

Third period

Business advantage / strategic information systems

In other words, considering today's environment, the use of strategic information systems in organizations, including

in Abfar Organization seems necessary.

6. Suggestions

Organize a workshop for 2 hours once every 2 months to:

To familiarize managers with the information items and application of each

The necessity to distinguish between items of information from managers

Managers need to justify the importance of information in decision making

Establish the system thinking in the organization

To familiarize managers with Types of information system and application of each

To familiarize Senior managers with Management concepts: strategic planning, strategic thinking

2000 1990 1980 1970 1960 1950

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References

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Edition, 2008, Available at: http://library.nu/

Best, John W, Kahn, James V., "Research in education ", 8th ed, 1998. Available at: http://library.nu/

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issue and an evolutionary model". IFIP TC-8 Open conference,Singapore,March

Kurbel , Karl E, " the making information system", 2008, Available at: http://library.nu/

Lucey , Terry , " Management information sysytem",9th

Edition, 2005, Available at: http://library.nu/

McLeod, Raymand.1998.Management information systems. Seventh ed. Newjersy: prentise Hall.

Minch, R. P. (2004), “Computerized Information Systems Supporting Multi criteria Decision Making”.

Decision Science, Vol. 17

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Sprague, R. H. (2003), “A Framework for the Development of Decision Support”. MIS, Quarterly,

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