mis- management information system lecture 1

MISManagement Information Systems

What you will learn in this module?

By the end of the lecture, you should be able to: define ‘data’ 'information', 'information technology' and 'information system‘ explain the relationship between data, information, knowledge and decisions understand quality of information understand and utilize different models of information systems (DIK, CARTA, onion-ring).

Data Versus Information

Data are the raw material from which information is generated.

Information is processed data that is useful to the decision maker.

Data are streams of raw facts. Information is data shaped into

meaningful form.

Data Versus Information

Data is a representation of a fact, a number, a word, an image, a picture or a sound. For example, the number 10 is data; it might represent image, a picture, or a sound.

Information is data that is meaningful or useful to someone. For example, the statement “ There are 10 books left in inventory”.

Data versus Information

1200100

WestCharles Mann

79154 TM Shoes

Monthly Sales Report for West Region

Sales Rep: Charles MannEmp No. 79154Item Qty Sold PriceTM Shoes 1200 $100

Data Vs. Information

Information for one person may be data for another.

Data for one person may be information for another.

Data Vs. Information

Data is raw, unprocessed information. Information is data that has been processed

to make it useful to its recipient. Knowledge is information that has been

assimilated into a coherent framework of understanding: usually within the human mind.

Data ‐> is processed into ‐> Information ‐> is assimilated into ‐> Knowledge

Relationship between data, information and knowledge

(DIK Model)

Characteristics/Quality of Information (CARTA Model)


Completeness: the degree to which all the information required is present. In an ideal world, people would have every scrap of information they needed to make a decision. In the real world, people never have all the information they need.

For example, take a town planner using a geographic information system to make decisions about where to permit new growth in a city. If some of the data layers were missing, or if some districts in the town had no submitted data, they would likely make a relatively poor decision. Ideally, they would have complete information on the city.


Accuracy: the level of errors/incorrect information within the overall information. If the information on which people are trying to base their decisions is inaccurate, they are less likely to make good decisions.

For example, if a personnel manager is trying to retrench staff on a 'last in, first out' basis, inaccurate information about staff dates of joining service will lead to misguided decisions. Whereas if they had more accurate information, that would lead to a better decision.


Relevance: the degree to which information is necessary in order to complete the task/decision at hand. Information is of little value if it is not relevant to the decision under consideration.

For example, imagine a customer trying to find details on your Web site about a particular service your organisation offers but all they find is stuff about your organisation's history, staffing, philosophy, etc. If you redesign the site to produce more relevant information, you'll support better decisions by your customers.


Timeliness: the degree to which information arrives within a required timeframe. All decisions and actions have to be taken by a certain time, and information is of little value if it arrives after a decision has been taken.

For example, if a manager is forecasting future sales, and one region's sales estimates arrive after the forecasts have been produced, that information is probably worthless.


Appropriateness of presentation: the degree to which information is accessible and intelligible to the recipient. Information is of little benefit if it cannot be accessed or understood by the decision maker.For example, if you show a farmer in a developing country a geographic information system of soil types or weather patterns but they have no understanding of maps so it does not make any sense to them, it will provide no benefit to their agricultural decision making.

System

System is a set of interrelated components that are working together to achieve common goal. It is a organized, purposeful structure regarded as a 'whole' consisting of interrelated and interdependent elements (components, entities, factors, members, parts etc.).

http://www.businessdictionary.com/definition/organized.html

http://www.businessdictionary.com/definition/structure.html

http://www.businessdictionary.com/definition/element.html

http://www.businessdictionary.com/definition/component.html

http://www.businessdictionary.com/definition/entity.html

http://www.businessdictionary.com/definition/factor.html

http://www.businessdictionary.com/definition/member.html

http://www.businessdictionary.com/definition/part.html

System

System is a group of interrelated components, with a clearly defined boundary, working together toward a common goal by accepting inputs and producing outputs in an organized transformation process.

What is a System?

ManufacturingProcess

Input ofRaw Materials

Output ofFinished Products

Environment

Other Systems

Control byManagement

ControlSignals

ControlSignals

FeedbackSignals

FeedbackSignals

System Boundary

System Components

Input – capturing and assembling elements that enter the system to be processed

Processing – transformation steps that convert input into output

Output – transferring elements that have been produced by a transformation process to their ultimate destination

Information Systems

An Information System is a collection of components that work together to provide information to help in the operations and management of an organization.

Information systems is a set of interrelated components that collect, process, store, and distribute information that support decision making, coordination, and control.

Information System

Information system is any organized combination of people, hardware, software, communications networks, and data resources that stores, retrieves, transforms, and disseminates information in an organization.Information Systems (IS) – all components and resources necessary to deliver information and information processing functions to the organization

Information System

Information System (IS): a socio‐technical system of information, people, tasks and technology that accepts, processes, stores, and outputs information for decision‐making or learning. So the first part of the definition ("socio‐technical system of information, people, tasks and technology") represents what the information system is made up of; a structural definition. The second part ("that accepts, processes, stores, and outputs information") represents what the information system does; a process definition.

Information System

Information system: Set of interrelated components Collect, process, store, and distribute

information Support decision making, coordination,

and control

Onion-Ring Model

Information Technology

Information technology is the tools and techniques that support the design and development of information systems. It includes hardware, software, database, network.

The technology uses to generate information is called Information Technology ( IT).

Information Systems vs. Information Technology

Information Technology (IT) – various hardware components necessary for the system to operate.

Information Technology is the integration of computers, communications equipment, and other technology used in information systems.


Information Technology (IT): electronic means of handling digital data. So in this definition, information technology covers things like computers, mobile phones, the Internet, the Web, personal digital assistants (PDAs), software programs, and the like. We treat IT as meaning the same as ICT: information and communication technologies.


We wouldn't normally include radio and television since (at the time of writing) they still mainly handle "analogue" rather than digital data.

But . . . be careful: some people define IT (or ICT) to include things like radio and television; some define IT to include any technology that handles data including things like pencils, papers and the like.

Information Systems Are More Than Computers

Computers and software are technical foundation and tools, similar to the material and tools used to build a house.

Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems. An information system creates value for the firm as an organizational and management solution to challenges posed by the environment.

Information Systems Are More Than Computers

Organizational dimension of information systems

Organizational dimension of information systems Hierarchy of authority, responsibility

Senior management Middle management Operational management Knowledge workers Data workers Production or service workers

Organizational dimension of information systems

Organizational dimension of information systems (cont.) Separation of business functions

Sales and marketing Human resources Finance and accounting Manufacturing and production

Unique business processes Unique business culture Organizational politics

Management dimension of information systems

Management dimension of information systems Managers set organizational strategy for

responding to business challenges In addition, managers must act creatively:

Creation of new products and services Occasionally re-creating the

organization

Technology dimension of information systems

Technology dimension of information systems Computer hardware and software Data management technology Networking and telecommunications

technology Networks, the Internet, intranets and

extranets, World Wide Web IT infrastructure: provides platform that

system is built on

Components/Resources of an Information System?

Components Hardware - Equipment such as computers Software - Instructions for the equipment Data - Facts stored in the system People - People who operate the system Network – communication media and process Procedures for the people to follow

Components of an Information System?


Hardware: The first component of an information system is hardware, which consists of all physical devices and materials , the computers, communication equipment and other devices used in a system.

Software: Software consists of instructions that tell hardware what to do. Computers and computer controlled hardware, such as communications equipment, cannot function without software; they must have instructions to tell them what to do.


Data: The data component of an information system consists of all data that is kept in computers in the system and that is used by the software of the system.

People: An information system does not operate by itself; people are needed to make it run. People have to supply input to the system, receive output information from the system, operate the hardware in the system, and run the software that is part of the system. End users: End users are people who use an information systems or information it produces. IS specialists: IS specialists are people who develop and operate information systems.


Network – communication media and process. A computer network is a telecommunications network that allows computers to exchange data.

Procedures: The final components of an information systems consists of procedures, which are instructions that tell people how to use and operate the system.

http://en.wikipedia.org/wiki/Telecommunications_network

http://en.wikipedia.org/wiki/Telecommunications_network

http://en.wikipedia.org/wiki/Computers

Functions/Activities of an Information System?

An information system contains information about an organization and its surrounding environment. Three basic activities—input, processing, and output—produce the information organizations need. Feedback is output returned to appropriate people or activities in the organization to evaluate and refine the input. Environmental actors, such as customers, suppliers, competitors, stockholders, and regulatory agencies, interact with the organization and its information systems.


Three activities of information systems produce information organizations need Input: Captures raw data from organization

or external environment Processing: Converts raw data into

meaningful form Output: Transfers processed information to

people or activities that use it


Feedback: Output is returned to appropriate

members of organization to help evaluate or correct input stage.


Input Function accepts the input data from outside the system.

Storage Function retains input data and retrieves stored data.

Processing Function calculates and in other ways manipulates the input and stored data.

Output Function produces results of processing for use outside the system.

Feedback Function is the output that is returned to appropriate members of the organization to help them evaluate or correct the input state.

Figure 1.1 Input-process-output

CIPSODAR Model

Levels in a firm

Business organizations are hierarchies consisting of three principal levels: senior management, middle management, and operational management. Information systems serve each of these levels. Scientists and knowledge workers often work with middle management.

Levels in a firm

Business perspective on information systems

Business perspective on information systems: Information system is instrument for creating

value Investments in information technology will

result in superior returns: Productivity increases Revenue increases Superior long-term strategic positioning

Business information value chain

Business information value chain Raw data acquired and transformed through

stages that add value to that information Value of information system determined in part

by extent to which it leads to better decisions, greater efficiency, and higher profits

Business perspective: Calls attention to organizational and managerial

nature of information systems

The Business Information Value Chain

The Business Information Value Chain

From a business perspective, information systems are part of a series of value-adding activities for acquiring, transforming, and distributing information that managers can use to improve decision making, enhance organizational performance, and, ultimately, increase firm profitability.

Information Technology Investment

Investing in information technology does not guarantee good returns.

There is considerable variation in the returns firms receive from systems investments.

Factors: Adopting the right business model Investing in complementary assets

(organizational and management capital)

Information Technology Investment

Although, on average, investments in information technology produce returns far above those returned by other investments, there is considerable variation across firms.

Complementary assets

Complementary assets: Assets required to derive value from a

primary investment Firms supporting technology investments

with investment in complementary assets receive superior returns

Example: Invest in technology and the people to make it work properly

Complementary assets

Complementary assets include: Organizational assets, for example:

Appropriate business model Efficient business processes

Managerial assets, for example: Incentives for management innovation Teamwork and collaborative work environments

Social assets, for example: The Internet and telecommunications infrastructure Technology standards

Contemporary Approaches to Information Systems

The study of information systems deals with issues and insights contributed from technical and behavioral disciplines.


Technical approach Emphasizes mathematically based

models Computer science, management

science, operations research Behavioral approach

Behavioral issues (strategic business integration, implementation, etc.)

Psychology, economics, sociology


Management Information Systems Combines computer science, management

science, operations research, and practical orientation with behavioral issues

Four main actors Suppliers of hardware and software Business firms Managers and employees Firm’s environment (legal, social, cultural

context)

A Sociotechnical Perspective on Information Systems

Sociotechnical view Optimal organizational performance

achieved by jointly optimizing both social and technical systems used in production

Helps avoid purely technological approach

A Sociotechnical Perspective on Information Systems

In a sociotechnical perspective, the performance of a system is optimized when both the technology and the organization mutually adjust to each other until a satisfactory fit is obtained.

The Role of Information Systems in Business Today

How information systems are transforming business Emerging mobile digital platform Growing business use of “big data” Growth in cloud computing

Globalization opportunities Internet has drastically reduced costs of

operating on global scale Increases in foreign trade, outsourcing Presents both challenges and opportunities

How Information Systems Are Transforming Business

In 2014, American businesses have spent over $817 billion on information systems hardware, software, and telecommunications equipment. In addition, they will spend another $230 billion on business and management consulting and services—much of which involves redesigning firms’ business operations to take advantage of these new technologies.

IT Capital Investment

Information technology capital investment, defined as hardware, software, and communications equipment, grew from 14 percent to 33 percent of all invested capital between 1999 and 2013.


Cell phones, BlackBerrys, iPhones, e-mail, and online conferencing over the Internet have all become essential tools of business.

Over 247 million Americans have mobile phones (67% of the population) and 167 million of these people access the Internet using smartphones and tablets.

Facebook attracted 150 million users in the United States. Businesses are starting to use social networking tools to connect their employees, customers, and managers worldwide. Many Fortune 500 companies now have Facebook pages.


By June 2014, more than 114 million businesses worldwide had dot-com Internet sites registered.

Today, 196 million Americans shop online, and 163 million have purchased online. Every day about 90 million Americans go online to research a product or service.

Baidu, the Chinese internet search engine provider, recorded a 78% growth in 2010, garnering ad revenue of $1.2 billion.


China’s online shopping market has reached 170.2 billion Yuan, which was a rise of over 76% on the year to year comparison. The single’s day (November 11, 2011) created history for China’s online business at Taobao Mall along with Taobao.com totaled a business of 8.56 billion Yuan with 10 million orders. Thailand online shopping trends shows a rise of nearly 60%.


As newspaper readership continues to decline, more than 168 million people receive their news online. About 83 million people watch a video online everyday, 66 million read a blog, and 25 million post to blogs, creating an explosion of new writers and new forms of customer feedback that did not exist five years ago.


New businesses and industries appear, old ones decline, and successful firms are those who learn how to use the new technologies.

What’s new in MIS?


In the emerging, fully digital firm: Significant business relationships are digitally

enabled and mediated. Core business processes are accomplished

through digital networks. Key corporate assets are managed digitally.

Digital firms offer greater flexibility in organization and management. Time shifting, space shifting

Digital firm

A digital firm is one in which nearly all of the organization’s significant business relationships with customers, suppliers, and employees are digitally enabled and mediated. Core business processes are accomplished through digital networks spanning the entire organization or linking multiple organizations.

Digital firm

Business processes refer to the set of logically related tasks and behaviors that organizations develop over time to produce specific business results and the unique manner in which these activities are organized and coordinated.

Key corporate assets—intellectual property, core competencies, and financial and human assets—are managed through digital means. In a digital firm, any piece of information required to support key business decisions is available at any time and anywhere in the firm.

Digital firm

Time shifting refers to business being conducted continuously, 24/7, rather than in narrow “work day” time bands of 9 A.M. to 5 P.M.

Space shifting means that work takes place in a global workshop, as well as within national boundaries. Work is accomplished physically wherever in the world it is best accomplished.

Digital firm

Many firms, such as Cicso systems, 3M and IBM are close to becoming digital firms, using the internet to drive every aspect of their business.

Most other are not fully digital, but they are moving toward close digital integration with suppliers, customers and employees.

Many firms are replacing traditional face-to-face meeting with virtual meetings using video-conferencing.

Virtual Company

A Virtual company (also called virtual corporation or virtual organization) is an organization that uses information technology to link people, organizations, assets, and ideas. It creates interenterprise information systems to link customers, suppliers, subcontractors and competitors.

Virtual Company Strategies

Share infrastructure and risk with alliance partners.

Link complementary core competencies.

Reduce concept-to-cash time through sharing.

Virtual Company Strategies

Increase facilities and market coverage.

Gain access to new markets and share market or customer loyalty.

Migrate from selling products to selling solutions.

Borderless

Technology

Excellence

Trust-Based

Adaptability

Opportunism

SixCharacteristics

of VirtualCompanies

Virtual Corporations


Growing interdependence between: Ability to use information technology

and Ability to implement corporate

strategies and achieve corporate goals


Firms invest heavily in information systems to achieve six strategic business objectives:1. Operational excellence2. New products, services, and business models3. Customer and supplier intimacy4. Improved decision making5. Competitive advantage6. Survival

The Interdependence Between Organizations and Information

Technology

In contemporary systems there is a growing interdependence between a firm’s information systems and its business capabilities. Changes in strategy, rules, and business processes increasingly require changes in hardware, software, databases, and telecommunications. Often, what the organization would like to do depends on what its systems will permit it to do.

Operational excellence

Operational excellence: Improvement of efficiency to attain higher

profitability Information systems, technology an

important tool in achieving greater efficiency and productivity

Walmart’s Retail Link system links suppliers to stores for superior replenishment system

New products, services, and business models

New products, services, and business models: Business model: describes how company

produces, delivers, and sells product or service to create wealth

Information systems and technology a major enabling tool for new products, services, business models Examples: Apple’s iPad, Google’s

Android OS, and Netflix

Customer and supplier intimacy

Customer and supplier intimacy: Serving customers well leads to customers

returning, which raises revenues and profits. Example: High-end hotels that use computers to

track customer preferences and used to monitor and customize environment

Intimacy with suppliers allows them to provide vital inputs, which lowers costs. Example: JCPenney’s information system which

links sales records to contract manufacturer

Improved decision making

Improved decision making Without accurate information:

Managers must use forecasts, best guesses, luck Results in:

Overproduction, underproduction Misallocation of resources Poor response times

Poor outcomes raise costs, lose customers Example: Verizon’s Web-based digital dashboard

to provide managers with real-time data on customer complaints, network performance, line outages, and so on

Competitive advantage

Competitive advantage Delivering better performance Charging less for superior products Responding to customers and

suppliers in real time Examples: Apple, Walmart, UPS

Survival

Survival Information technologies as necessity of

business Industry-level changes

Example: Citibank’s introduction of ATMs Governmental regulations requiring record-

keeping Examples: Toxic Substances Control Act,

Sarbanes-Oxley Act Dodd-Frank Act

History of the role of Information Systems

Data Processing

ManagementReporting

DecisionSupport

Strategic &End User

Electronic Commerce

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

ElectronicData Processing- TPS

ManagementInformationSystems Decision

SupportSystems- Ad hoc Reports

End UserComputingExec Info SysExpert SystemsSIS

ElectronicBusiness & Commerce-InternetworkedE-Business &Commerce

Benefits of Information Systems

1. Better information2. Improved service3. Increase productivity4. Competitive advantage

Benefits of Information Systems

1. IS can perform calculations or process paperwork much faster than people.

2. IS can help companies learn more about the purchase patterns and preferences of their customers.

3. IS provide new efficiencies through services such as ATMs, IP telephony, Computer controlled Airplanes and Air Terminals

4.IS have made possible new medical advances in surgery, radiology and patient monitoring.

5. The internet distributes information instantly to millions of people across the world.

Pitfalls of Information Systems

1. By automating activities that were previously performed by people, IS may eliminate job.

2. IS may allow organization to collect personal information about people that violate their privacy.

3. IS are used in so may aspects of everyday life that system outages can cause shutdown of businesses or transportation services, paralyzing communities.

4. Heavy users of IS may suffer repetitive stress injury, technostress and other health problems.

5. The internet can be used to distribute illegal copies of software, books, articles, and other intellectual property.

Benefits & Pitfalls of Information SystemsBenefits Pitfalls

1. IS can perform calculations or process paperwork much faster than people.

1. By automating activities that were previously performed by people, IS may eliminate job.

2. IS can help companies learn more about the purchase patterns and preferences of their customers.

2. IS may allow organization to collect personal information about people that violate their privacy.

3. IS provide new efficiencies through services such as ATMs, IP telephony, Computer controlled Airplanes and Air Terminals

3. IS are used in so may aspects of everyday life that system outages can cause shutdown of businesses or transportation services, paralyzing communities.

4. IS have made possible new medical advances in surgery, radiology and patient monitoring.

4. Heavy users of IS may suffer repetitive stress injury, technostress and other health problems.

5. The internet distributes information instantly to millions of people across the world.

5. The internet can be used to distribute illegal copies of software, books, articles, and other intellectual property.

Information Systems Career

System Analyst Database Aalyst

Chief Information Officer Software Quality Evaluator Telecommunications Specialist

Database Administrator Business Application Cosultant

Network Administrator Network Manager

IS Auditor Office Automation Specialist

Project Manager User Interface Specialist

Technical Analyst

System Consultant

ThankYou

mis- management information system lecture 1

Engineering