MIS and Other Sub SystemsMIS and Other Sub SystemsUsing IT for Strategic Advantage Using IT for Strategic Advantage

& Strategic uses of IT& Strategic uses of IT

B.B.MishraB.B.Mishra

Management Information SystemManagement Information System

Perspective Foundation of Information System in Perspective Foundation of Information System in

Business:Business:

System Concepts:System Concepts:

MIS and Other Sub SystemsMIS and Other Sub Systems

Using IT for Strategic Advantage &Using IT for Strategic Advantage &

Strategic uses of IT Strategic uses of IT

Management Information SystemsManagement Information Systems

Definition "An integrated user-machine system for providing information

to support operations, management and decision making

functions in an organization. The system utilizes computerized

and manual procedures; models for analysis, planning, control

and decision making; and a database."

Based on: Davis, G.B. 1985. MIS: Conceptual Foundations.Structure and Development. 2nd ed. New York, NY: McGraw-

Hill.

MIS principal concerns Facilitate decision making by supplying the

information needed in an up-to-date and accurate

form toto thethe peoplepeople whowho needneed itit onon timetime inin aa usableusable formform

A management information system (MIS) is designed by an organization forits smooth functioning. The MIS, a decision-making instrument used by topmanagement, comprises of a set of controls. These controls cover the basicspheres of the business: its people, technologies, policies and procedures. TheMIS gathers information on all the important realms of the business, tabulatesthe information and provides meaningful reports.

Management information Systems (MIS), sometimes

referred to as Information Management and Systems,

is the discipline covering the application of people,

technologies, and procedures collectively calledinformation systems to solving business problems.Management Information Systems are distinct from

regular information systems in that they are used to

analyze other information systems applied in

operational activities in the organization.

Academically, the term is commonly used to refer to

the group of information management methods tied to

the automation or support of human decision making,

e.g. Decision Support Systems, Expert systems, and

Executive information systems.

MIS

MIS

Features - The management information system presents data such as

the organization's processes, operating procedures, internal controls and

audit preparation, which the management uses to make effective and

efficient decisions. The internal controls for each department contain

guidelines for operation. The flow of work assigned to employees, their

responsibilities and duties, for example, are listed under internal controls.

Benefits - An organization benefits immensely by using an MIS. This fully

automated system enables the organization to record, process and

tabulate all of its business dealings and transactions. Also, the

information collected makes it possible to make necessary changes and

improvements to the grey areas. For example, the organization can

compare actual and projected sales and take steps to correct any

deviations.

By using a good MIS, the top management of the organization is able to

make informed decisions. The data present in the MIS is studied and

analyzed objectively and the organization is able to choose the best

trade-off for its operations, sales and other functions. Also they can

judge whether their resources are being used correctly.

MIS facilitates a two-communication process in the organization. The top

management communicates to its employees what is expected of them

and how they must accomplish the tasks entrusted. The employees in

turn freely discuss their problems and concerns.

Types - There are four types of MIS. The first one, TPS(Transaction Processing System), is the most elementary. Thismethodology processes routine, mundane and recurringbusiness transactions. OIS (Operations Information Systems)gathers comprehensive data and tabulates it for operationsmanagers to use and maximize their output and minimizelosses. DSS (Decision Support Systems) and ES (ExpertSystems) are the two types of MIS used by the topmanagement to make informed and intelligent decisions.The two types make extensive use of databases andmodeling techniques

Limitations - MIS is heavily technology driven and thereforelacks a human element. The information represented by theMIS is often rich in nature. The expertise of humans is neededto analyze the information presented and to make decisionsaccordingly.

Considerations - Developing an MIS costs money. Usually theorganization requires the help of a consultant to develop thesystem, therefore all the organizational procedures andcontrols have to be carefully and elaborately spelled out tothe consultants.

MIS

MIS

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ManagementManagement OrientedOriented: The system is designed form the top to

work downwards. It does not mean that the system is designed to

provide information directly to the top management. Other levels

of management are also provided with relevant information.

ManagementManagement DirectedDirected: Management orientation of MIS, it is

necessary that management should continuously make reviews.

IntegratedIntegrated SystemSystem: 5M Man, Money, Materials, Machines &

Methods. The word 'integration' means that system has to cover of

all the functional areas of an organization so as to produce more

meaningful management information, with a view to achieving

the objectives of the organization. It has to consider various sub-

Systems, their objectives, information needs, and recognize the

independence, that these sub-systems have amongst themselves,

so that common areas of information are identified and

processed without repetition and overlapping. For example, in the

development of an effective production scheduling system, a proper

balance amongst the following factors is desired:

ii. Set up costs. Set up costs ii. Overtimeii. Overtime iii. Manpoweriii. Manpower iv. Production capacity iv. Production capacity

v. Inventory levelv. Inventory level vi. Money availablevi. Money available vii. Customer service.vii. Customer service.

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MIS AvoidAvoid RedundancyRedundancy inin DataData StorageStorage:: As MIS is an IntegratedSystem, no un-necessary Duplication is there for Data Gathering or

Storage.

CommonCommon DataData FlowsFlows: The integration concept of MIS, commondata flow concept avoids repetition and overlapping in data

collection and storage, combining similar functions, and

simplifying operations wherever possible.

HeavyHeavy PlanningPlanning ElementElement: A management information systemcannot be established overnight. It takes almost 2 to 4 years to

establish it successfully in an organization. Hence, long-term

planning is required for MIS development in order to fulfill the

future needs and objectives of the organization.

SubSub--SystemSystem ConceptConcept: MIS Provisions for breaking into various Sub-Systems, based on activity as well as functions.

CommonCommon DatabaseDatabase: It acts as a Master that holds the functionalSub-Systems Together.

FlexibilityFlexibility andand easeease ofof useuse: While building an MIS system all types ofpossible means, which may occur in future, are added to make it

flexible. A feature that often goes with flexibility is the ease of use.

ComputerisationComputerisation: MIS can be computerised because of its natureas a comprehensive System for Optimisation, Speed, Accuracy,

Diligence, and Consistency in Data Processing.

MIS and Other Sub SystemsMIS and Other Sub Systems

Subsystems of an MIS

Two approaches to define subsystem

oo OrganisationalOrganisational Function SubsystemFunction Subsystem: Supports the

various functions of an Organisation. Ex. Marketing,

Production, Personnel etc.

oo Activity SubsystemActivity Subsystem: Supports the activity for which

they are used. Ex. Transactions, Operations etc.

ProductionProduction MarketingMarketing LogisticsLogistics PersonnelPersonnel FinanceFinance Information Information

ProcessingProcessing

Top ManagementTop Management

Strategic Strategic

PlanningPlanning

Management Management

ControlControl

Operational Operational

ControlControl

Transaction Transaction

ProcessingProcessing

OrganisationalOrganisational Function Function SubsystemsSubsystems

Activities SubsystemsActivities Subsystems

INFORMATION TECHNOLOGY

HardwareHardware

SoftwareSoftware

DatabasesDatabases

NetworksNetworks

Other related Other related componentscomponents

are used to buildare used to buildINFORMATIOINFORMATIO

N SYSTEMSN SYSTEMS

Payroll

System

Inventory Inventory SystemSystem

Marketing Marketing SystemSystem

Customer Customer Service Service SystemSystem

IS Vs. ITIS Vs. IT

Information SystemsInformation Systems

Operations Support

System

Management Management Support SystemSupport System

Transaction

processing

systems

Process

control

systems

Office

automation

systems

Management information systems

Decision

support

systems

Executive

information

systems

Expanding Roles of ISExpanding Roles of IS1. Data Processing: 1950s-1960s

2. Management Reporting: 1960s-1970s

3. Decision support: 1970s-1980s

4. Strategic and End User Support: 1980s-1990s

5. Global Internetworking: 1990s-2000s

Inter-organisational information systems (IOS) areinformation systems that connect two or moreorganizations and support inter-organisationaloperations such as supply chain management.o Function: Manage flows of products, services and information

among organizations.

o Example: Pantaloon Retail Link System connecting suppliers toPantaloon.

o Supply chain describes the flow of materials, information,money and services from raw material suppliers throughfactories and warehouses to the end customers.

Types of Information SystemsTypes of Information Systems

Electronic Commerce Systems

Function: Enable transactions among organisations and

between organizations and customers.

Business-to-Business (B2B)

Business-to-Consumer (B2C)

Example: www.dell.com

OtherOther CategoriesCategoriesa) Expert systems

b) End user computing systems

c) Business information systems

d) Strategic information systems

a) Expert Systems are knowledge-based systems that provides

expert advice and act as expert consultants to the users

b) End user computing systems support the direct, hands on use

of computers by end users for operational and managerial

applications

c) Business information systems support the operational and

managerial applications of the basic business functions of a

firm

d) Strategic information systems provide a firm which strategic

products, services, and capabilities for competitive

advantage

Fundamental Components of Fundamental Components of OrganisationOrganisation

People

Information Technology

Business Processes

Organizational Structure

Each Impacts The Rest!

Decision Making ProcessDecision Making Process Intelligence: Search for needs, collect data

Design: Generate alternatives, test feasibility

Choice: Select from alternatives

Persuasion: Influencing others to accept & follow chosen solution

Implementation: Install solution on time, within budget

Follow-up: Monitor, modify, refine

Constant Feedback

Central Computer

Sales ReportsPOSCashRegisters

Customers

EDI

Supplier

Bank

AdditionalStores Strategy

Tactics

Operations

WarehouseInventory

Management

CEO Information

Process Control

Different Categories of Systems

1. Operational - level systems:

Support operational managers keep track of the elementary activities and transactions.

2. Management-level systems:

Serve the monitoring, controlling, decision-making, and administrative activities

3. Strategic-level systems:

Help senior management tackle and address strategic issues.

Three main categories of information systems function at different organizational levels:

Inputs: High volume transaction level data

Processing: Simple models

Outputs: Summary reports

Users: Middle managers

Example: Annual budgeting

Levels of ManagementLevels of Management LowerLower oror OperationalOperational levellevel ManagementManagement -They make structured decisions

(Operational decisions). Structured decision Its a predictable decision thatcan be made following a well defined set of routine procedures. Most

decisions at this level require easily defined information that relates to the

current status and activities within the basic business functions. Information is

gained from detailed reports which contain information about routine

activities. Detailed tasks defined by middle management are carried out by

people at operational level.

MiddleMiddle oror TacticalTactical ManagementManagement --Acquire and arrange the resources(Computers, people etc) to meet the goals of an organization. Define the

detailed tasks to be carried out at the operational level. Information needed

involves review, summarization and analysis of data to help plan and control

operations and implement policy that has been formulated by upper

management. Information is usually given to middle managers as

summarized reports. Deals with semi structured decisions. (Tactical decisions)

Semi structured decisions that must be made without a base of clearly

defined informational procedures. In most cases a semi structured decision is

complex, requiring detailed analysis and extensive computations.

UpperUpper oror TopTop oror StrategicStrategic ManagementManagement -Decides on the broad objectives ofan organization. Make unstructured decisions. (Strategic decision).

Unstructured decisions are the most complex type of decisions and are rarely

based on predetermined routine procedures. They involve subjective

judgments of the decision maker.

Operations Support SystemsOperations Support Systems Transaction processing systems record and process data

resulting for business transactions. Typically examples areinformation systems that process sales, purchases, andinventory changes. These can be processed and used bymanagement information systems, decision supportsystems, and executive information systems.

PROCESS CONTROL SYSTEMS Operation support systemsalso make routine decisions that control operationalprocesses. Examples are automatic inventory reorderdecisions and production control decisions.

Enterprise collaboration systems are information systemsthat use a variety of information technologies to helppeople work together. Enterprise collaboration systemshelp us collaborate to communicate ides, share resources,and coordinate our cooperative work efforts as membersof the many formal and informal process and projectteams and other workgroups.

Management Support SystemsManagement Support Systems Management information systems (MIS) are the most

common form of management support systems. Theyprovide managerial end users with information thatsupport much of their day-to-day decision-making needs.MIS provide a variety of reports and displays tomanagement.

DECISION SUPPORT SYSTEMS: A natural progression frominformation reporting systems and transaction processingsystems. Decision support systems are interactive,computer-based information systems that use decisionmodels and specialized database to assist the decisionmaking process of managerial end users.

EXECUTIVE INFORMATION SYSTEMS: EIS are managementinformation systems tailored to the strategic informationneeds of top management. Top executives get theinformation they need from many sources, includingletters, memos, periodicals, and reports producedmanually as well as by computer systems.

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How Systems are Build From SubsystemsHow Systems are Build From Subsystems DecompositionDecomposition - A complex system is very difficult to

understand as a whole.

Therefore, it is decomposed or divided into subsystems. Thesum of subsystems constitutes the entire system.

The process of decomposition is continued to withsubsystems divided into smaller subsystems until the smallest

subsystem are of manageable size.

These subsystems generally form hierarchical structure.

example of Decompositionexample of Decomposition Information system divided into subsystem such as:

o Sales & Order entryo Inventoryo Productiono Personnel & Payrollo Purchasingo Accounting & Controlo Planning

Each subsystem is further divided into subsystems. Ex. Personnel &Payroll:o Personnel Reportso Payroll data entry & validationo Hourly Payroll processingo Salaried payroll processingo Payroll Report for managemento Payroll report for Government

The subsystems defined in (2) might be further subdivided intosmaller subsystems or modules. For Example, the hourly payrollprocessing might be divided into modules for calculation ofdeductions & net pay, payroll register & audit controls preparations,register & controls outputs.

SimplificationSimplification The process of decomposition could lead to a large

number of subsystem interfaces to define. Eachinterconnection is a potential interface forcommunication among subsystems. Simplification is theprocess of organizing subsystems so as to reduce thenumber of interconnections. Methods of simplificationare: Clusters & Decoupling

Cluster MethodCluster Method Clusters of subsystems are established which interact with

each other, then a single interface path is defined from thecluster to other subsystems or clusters of subsystems. ForExample: A database assessed by many programs, but theinterconnection is through a database managementinterface.

DecouplingDecoupling MethodMethod If two different subsystems are connected very tightly, very

close coordination & timing between them is required.Because, they are somewhat independent, it is difficult tomake them operate completely in synchronized fashion.The solution is to decouple or loosen the connection so thatthe two systems can operate in the short run with somemeasures of independence. Some means of decouplingare:o Inventories, buffer or waiting line

o Slack & flexible resources &

o Standards

Means of DecouplingMeans of Decoupling

Information and the MIS conceptInformation and the MIS concept Information is a set of classified and interpreted data used in decision

making. It has also been defined as 'some tangible or intangible entitywhich serves to reduce uncertainty about future state or events' (Lucas,1978). A management information system (MIS) is 'an integrated user-machine system for providing information to support operations,management and decision making functions in an organization. Thesystem utilizes computers, manual procedures, models for analysis,planning, control and decision making, and a database' (Davis andOlson, 1984). MIS facilitates managerial functioning. Managementinformation is an important input at every level in the organization fordecision making, planning, organizing, implementing, and monitoringand controlling. MIS is valuable because of its content, form and timingof presentation. In the context of different levels of decision making,information can be described as: source, data, inferences and predictions drawn from data, value and choices (evaluation of inferences with regard to the objectives and

then choosing a course of action), and action which involves course of action.

The MIS concept comprises three interrelated and interdependent keyelements: management, system and information (Murdick and Ross,1975).

Management and the MIS processManagement and the MIS process

An MIS is directed towards the managerial functions ofplanning, controlling and monitoring, and decision making.

Planning

Planning consists of five sequential and interactive steps(Kumar, 1989). These are: selecting objectives; identification of the activities which are required to achieve the stipulated

objectives;

detailing the resources - including the various skills - required to undertake theactivities;

determining the duration of each activity to be performed; and defining the sequence of the activities.

The basic requirements during the planning process ofmost importance in designing and implementing an MIS foran organization are (Kumar, 1989): providing the information required by the planner at each step of planning;

establishing procedures for obtaining the information;

arranging for storage of the approved plans, as these will provide the informationrequisite to monitoring and controlling; and

evolving methods for communicating the plans to employees in the organization.

MIS ElementsMIS ElementsManagement functionsManagement functions

PlanningPlanningControllingControlling

Decision makingDecision making

Information systemInformation system

Management informationManagement information

Steps in Planning1. Selecting objectives

2. Identifying activities required to achieve the stipulated objectives

3. Describing the resources or skills, or both, necessary to perform the activities

4. Defining the duration of each activity to be undertaken

5. Determining the sequence of the activities

Requirements During Requirements During The Planning ProcessThe Planning Process

1. Supplying the information needed by the

planner at each step

2. Establishing procedures for procuring the

information at each step (including the

means to view alternatives)

3. Arranging for storage of the approved

plans as information for the control

process

4. Devising an efficient method for

communicating the plans to other

members in the organization

ControllingControlling

Controlling involves

1. Establishing standards of performance in order toreach the objective

2. Measuring actual performance against the setstandards

3. Correcting deviations to ensure that actions remainon course

Requirements for Controlling

1. Defining expectations in terms of informationattributes

2. Developing the logic for reporting deviations to alllevels of management prior to the actual occurrenceof the deviation

Monitoring and ControllingMonitoring and Controlling

Controlling 'compels events to conform to

plans' (Murdick and Ross, 1975). It involves: establishing standards of performance in order to reach the

objective;

measuring actual performance against the set standards; and

keeping actions on course by correcting deviations as they appear(mid-course corrections).

The requirements for successful development of

a control system are: defining expectations in terms of information attributes; and

developing the logic for reporting deviations to all levels ofmanagement prior to the actual occurrence of the deviation.

Decision MakingDecision Making

Levels of decision making

Strategic

Tactical

Technical

Elements of Decision Making

Model

Constraints

Optimization

Decision MakingDecision Making Decision making is the process of selecting the most

desirable or optimum alternative to solve a problem

or achieve an objective. The quality and soundness

of managerial decisions is largely contingent upon

the information available to the decision-maker.

Gorry and Scott Morton (1971) classified decision

making on three levels of a continuum:

StrategicStrategic decisions are future-oriented because ofuncertainty. They are part of the planning activity.

TacticalTactical decision making combines planning activities withcontrolling. It is for short-term activities and associated

allocation of resources to them to achieve the objectives.

TechnicalTechnical decision making is a process of ensuring efficientand effective implementation of specific tasks.

Elements of Decision MakingElements of Decision Making The four components of the decision making

process are (Burch and Strater, 1974): ModelModel A model is an abstract description of the decision

problem. The model may be quantitative or qualitative. Criteria The criteria must state how goals or objectives of thedecision problem can be achieved. When there is a conflictbetween different criteria, a choice has to be made throughcompromise.

ConstraintsConstraints. Constraints are limiting factors which defineouter limits and have to be respected while making adecision. For example, limited availability of funds is aconstraint with which most decision makers have to live.

OptimizationOptimization Once the decision problem is fully described ina model, criteria for decision making stipulated andconstraints identified, the decision-maker can select the bestpossible solution.

SystemSystem "A set of elements forming an activity or a procedure/scheme

seeking a common goal or goals by operating on dataand/or energy and/or matter in a time reference to yieldinformation and/or energy and/or matter."

Perceiving The System

1. Some components, functions and processes performed bythese various components

2. Relationships among the components that uniquely bindthem together into a conceptual assembly which is called asystem

3. An organizing principle which is an overall concept thatgives it a purpose

4. The fundamental approach of the system is theinterrelationship of the sub-systems of the organization

Systems ApproachSystems ApproachModern management is based upon a systems approach tothe organization. The systems approach views anorganization as a set of interrelated sub-systems in whichvariables are mutually dependent. A system can beperceived as having:

some components, functions and the processes performed by these variouscomponents;

relationships among the components that uniquely bind them together into aconceptual assembly which is called a system; and

an organizing principle that gives it a purpose (Albrecht, 1983).

The organizing system has five basic parts, which areinterdependent (Murdick and Ross, 1975). They are:

the individual;

the formal and informal organization;

patterns of behaviour arising out of role demands of the organization;

the role perception of the individuals; and

the physical environment in which individuals work.

The interrelationship of the sub-systems within anorganization is fundamental to the systems approach.The different components of the organization have tooperate in a coordinated manner to attain commonorganizational goals. This results in synergic effects. Theterm synergy means that when different sub-systems worktogether they tend to be more efficient than if they workin isolation (Murdick and Ross, 1975). Thus, the output of asystem with well integrated sub-systems would be muchmore than the sum of the outputs of the independentsub-systems working in isolation.

The systems approach provides a total view of theorganization. It enables analysis of an organization in ascientific manner, so that operating managementsystems can be developed and an appropriate MISdesigned (Murdick and Ross, 1975).

By providing the required information, an MIS can help interrelate,coordinate and integrate different sub-systems within an

organization, thus facilitating and increasing coordinated workingof the sub-systems, with consequent synergism. The interaction

between different components of the organization depends upon

integration, communication and decision making. Together they

create a linking process in the organization.

Integration ensures that different sub-systems work towards thecommon goal. Coordination and integration are useful controlling

mechanisms which ensure smooth functioning in the organization,

particularly as organizations become large and increasingly

complex. As organizations face environmental complexity,

diversity and change, they need more and more internal

differentiation, and specialization becomes complex and diverse.

The need for integration also increases as structural dimensions

increase.

Communication integrates different sub-systems (specialized units)at different levels in an organization. It is thus a basic element of

the organizational structure necessary for achieving the

organization's goals.

Basic Parts of the Basic Parts of the OrganizationOrganization

1. The individual

2. The formal and informal organization

3. Patterns of behaviour arising out of role demands of theorganization

4. The role perception of the individual

5. The physical environment in which individuals work

Why A Systems Approach

Developing and managing operating systems (e.g., moneyflows, manpower systems)

Designing an information system for decision making Systems approach and MIS MIS aims at interrelating, coordinating and integrating

different sub-systems by providing information required tofacilitate and enhance the working of the sub-systems andachieve synergistic effects

Organizational Structure and MISOrganizational Structure and MIS MIS has been described as a pyramidal structure, with four levels

of information resources. The levels of information would dependupon the organizational structure. The top level supportsstrategic planning and policy making at the highest level ofmanagement. The second level of information resources aidtactical planning and decision making for management control.The third level supports day-to-day operations and control. Thebottom level consists of information for transaction processing. Itthen follows that since decision making is specific to hierarchicallevels in an organization, the information requirements at eachlevel vary accordingly.

Thus, MIS as a support system draws upon: concepts of organization;

organizational theories, principles, structure, behaviour and processes such ascommunication, power and decision making; and

motivation and leadership behaviour.

Davis and Olson (1984) analysed the implications of differentcharacteristics of the organizational structure on the design ofinformation systems.

Concept Implications for Information Systems

Hierarchy of authority A tall hierarchy with narrow span of control requires more formal control information at upper levels than a flat hierarchy with wide span of control.

Specialization Information system applications have to fit the specialization of the organization.

Formalization Information systems are a major method for increasing formalization.

Centralization Information systems can be designed to suit any level of centralization.

Modification of basic model

Information systems can be designed to support product or service organizations, project organizations, lateral relations and matrix organizations.

Information model of organization

Organizational mechanisms reduce the need for information processing and communication. Vertical information systems are an alternative to lateral relations. Information systems are used to coordinate lateral activities.

Organizational culture Organizational culture affects information requirements and system acceptance.

Organizational power Organizational power affects organizational behaviour during information system planning, resource allocation and implementation. Computer systems can be an instrument of organizational power through access to information.

Organizational growth The information system may need to change at different stages of growth.

Goal displacement When identifying goals during requirements determination, care should be taken to avoid displaced goals.

Organizational learning Suggests need for information system design for efficiency measures to promote single loop learning and effectiveness measures for double loop learning.

Project model of organizational change

Describes general concepts for managing change with information system projects.

Case for stable system Establish control over frequency of information system changes.

Systems that promote organizational change

Reporting critical change variables, organizational change, or relationships, and use of multiple channels in a semi-confusing system may be useful for promoting responses to a changing environment.

Organizations as socio-technical systems

Provides approach to requirements determination and job design when both social and technical considerations are involved.

Source: Taken from Gordon and Olson, 1984: 358-359.

InformationInformation 'A set of classified and interpreted data used in the

decision making process"

Information has also been defined as sometangible entity which serves to reduce uncertaintyabout future state or events

In the context of different levels of decision making,information can be described as: Source

data

inference and predictions drawn from the data

value and choices (evaluation of inferences with regard to the objectives,and then choosing courses of action)

action which involves a course of action

The value of management information lies in itscontent, form and timing of presentation

Information Requirements for MISInformation Requirements for MIS

Assessing information needs

A first step in designing and developing anMIS is to assess the information needs for

decision making of management at different

hierarchical levels, so that the requisite

information can be made available in both

timely and usable form to the people who

need it. Such assessment of information

needs is usually based on personality,

positions, levels and functions of

management. These determine the various

levels of information requirements.

Levels of Information RequirementsLevels of Information Requirements

There are three levels of information requirements fordesigning an MIS (Davis and Olson 1984). They are:

At the organizationalorganizational levellevel, information requirements definean overall structure for the information system and specific

applications and database.

ApplicationApplication levellevel requirements include social or behavioural -covering work organization objectives, individual roles and

responsibility assumptions, and organizational policies - and

technical, which are based on the information needed for

the job to be performed. A significant part of the technical

requirement is related to outputs, inputs, stored data,

structure and format of data and information processes.

At the useruser levellevel, database requirements can be classified asperceived by the user or as required for physical design of

the database.

Strategies for determining information requirementsStrategies for determining information requirements Gordon and Olson (1984) suggested six steps in selecting a strategy

and method for determining information requirements.

1. Identify elements in the development process Utilizing systems Information system or application Users Analysis

2. Identify characteristics of the four elements (in 1, above) in the development process which could affect uncertainty in the information requirements.

3. Identify the process uncertainties Existence and availability of a set of usable requirements. Ability of users to specify requirements. Ability of the analyst to elicit and evaluate information requirements.Assess how the characteristics of the four elements in the development process (listed under 1, above) will affect the these process uncertainties.

4. Determine how the overall requirements uncertainties would be affected by the combined effects of the process uncertainties.

5. Considering the overall requirements uncertainty, choose a primary strategy for information requirements.If uncertainty is low, then the strategy should be to: Ask the users what their requirements are. This presupposes that the users are able to structure their requirements and express them objectively. Asking can be done through- questions, which may be closed or open,- brainstorming sessions, totally open or guided, and- group consensus as aimed at in Delphi methods and group norming. Wherever there are close similarities in the organization and easy replication is possible, information requirements can bederived from the existing system. Characteristics of the utilizing system should be analysed and synthesized. This is particularly useful if the utilizing system is undergoing change.If uncertainty is high, discover from experimentation by instituting an information system and learning through that the additional information requirements. This is 'prototyping' or 'heuristic development' of an information system.

6. Select an appropriate method.

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MIS as A Pyramidal MIS as A Pyramidal StructureStructure

Conceptual Basis of MIS

1. Concepts of organization

2. Organizational theories, principles, structure,

behaviour and processes such as communication,

power and decision making

3. Motivation and leadership behaviour

Implications of The Implications of The

Organizational Structure For MISOrganizational Structure For MIS

Concepts: Hierarchy of authority Specialization Formalization Centralization Modification of the basic model Information model of organization Organizational culture Organizational power Organizational growth cycle Goal displacement Organizational learning Project model of organizational change Case for stable system Systems that promote organizational

change Organizations as socio-technical systems

Information Requirements For MISInformation Requirements For MIS

1. Assessing information requirements

2. Levels of information requirements

Organizational level

Application level

Technical

Database

Strategies For Determining Information Requirements

1. Asking

2. Deriving from an existing information system

3. Synthesizing from characteristics of the utilizing system

4. Discovering from experimentation with an involving

information system

Strategy For Determining Data Strategy For Determining Data RequirementsRequirements

1. Identify elements in the development process utilizing system:

Information systems or applications Users Analysts

2. Identify process uncertainties:

Existence and availability of a set of usable requirements Ability of users to specify requirements Ability of analysts to elicit and evaluate requirements

3. Evaluate the effects of elements in the development process over process

uncertainties

4. Evaluate the combined effects of the process uncertainties on overall

requirements uncertainty5. Select a primary strategy for requirements determination based on the overall

requirements uncertainty

6. Select one or more from the set of methods to implement the primary strategy

Uncertainty level Strategy

Low

Asking or deriving from an existing system Synthesis from characteristics of utilizing systems

High

Discovering from experimentation

Types of MISTypes of MIS1. Databank information system

2. Predictive information system

3. Decision making information system

4. Decision taking information system

The MIS Process

1. Understand the organization2. Analyse the organization's information requirements3. Plan overall strategy4. Review5. Preliminary analysis6. Feasibility assessment7. Detailed fact finding8. Analysis9. Design10. Development

11. Cutover12. Obtain conceptual schema13. Recruit database administrator14. Obtain logical schema15. Create data dictionary16. Obtain physical schema17. Create database18. Modify data dictionary19. Develop sub-schemas20. Modify database21. Amend database

Types of MISTypes of MIS MIS can be categorized (Mason, 1981) as follows:

Databank information systems refer to creation of a database byclassifying and storing data which might be potentially useful to thedecision-maker. The information provided by the databank is merelysuggestive. The decision-maker has to determine contextually the causeand effect relationships. MIS designs based on the databank informationsystem are better suited for unstructured decisions. Predictiveinformation systems provide source and data along with predictions andinferences. The decision-maker can also enquire as to 'what if a certainaction is taken?' and whether the underlying assumptions are true. Thistype of MIS is useful for semi-structured decisions.

Decision-making information systems provide expert advice to thedecision-maker either in the form of a single recommended course ofaction or as criteria for choice, given the value system prevailing in theorganization. The decision-maker has just to approve, disapprove ormodify the recommendation. Decision-making information systems aresuitable for structured decisions. Operations research and cost-effectiveness studies are examples of decision-making informationsystems.

Decision-taking information systems integrate predictive information anddecision-making systems.

Process of MISProcess of MIS The MIS implementation process (Table 3) involves a number of

sequential steps (Murdick and Ross, 1975):

1. First establish management information needs and formulatebroad systems objectives so as to delineate important decisionareas (e.g., general management, financial management orhuman resources management). Within these decision areasthere will be factors relevant to the management decisionareas, e.g., general management will be concerned about itsrelationship with the managing board, institute-clientrelationships and information to be provided to the staff. This willthen lead the design team to ask what information units will beneeded to monitor the identified factors of concern. Positions ormanagers needing information for decision making will beidentified.

2. Develop a general description of a possible MIS as a coarsedesign. This design will have to be further refined by moreprecise specifications. For efficient management of informationprocessing, the MIS should be based on a few databasesrelated to different sub-systems of the organization.

Process of MISProcess of MIS

1. Once the information units needed have been determined

and a systems design developed, decide how information will

be collected. Positions will be allocated responsibility for

generating and packaging the information.

2. Develop a network showing information flows.

3. Test the system until it meets the operational requirements,

considering the specifications stipulated for performance and

the specified organizational constraints.

4. Re-check that all the critical data pertaining to various sub-

systems and for the organization as a whole are fully

captured. Ensure that information is generated in a timely

manner.

5. Monitor actual implementation of the MIS and its functioning

from time to time.

1. Understand the organization

2. Analyse the information requirements of the organization

3. Plan overall strategy

4. Review

5. Preliminary analysis

6. Feasibility assessment

7. Detailed fact finding

8. Analysis

9. Design

10. Development

11. Cutover

12. Obtain conceptual schema

13. Recruit database administrator

14. Obtain logical schema

15. Create data dictionary

16. Obtain physical schema

17. Create database

18. Modify data dictionary

19. Develop sub-schemas

20. Modify database

21. Amend database

MIS CriteriaMIS Criteria Relevance

Management by exception

Accuracy

Adaptability

Strategies For Determining MIS Design

Organization-chart approach

Integrate-later approach

Data-collection approach

Database approach

Top-down approach

Criteria for MISCriteria for MISCrowe and Avison (1982) suggested five

criteria for an MIS: RelevanceRelevance Information should be relevant to the individual

decision-makers at their level of management. ManagementManagement

byby exceptionexception Managers should get precise information

pertaining to factors critical to their decision making.

AccuracyAccuracy The database from which information is extractedshould be up-to-date, contextually relevant and validated.

TimelinessTimeliness The information should be provided at the timerequired.

AdaptabilityAdaptability The information system should have an in-builtcapability for re-design so that it can suitably adapt to

environmental changes and changing information

requirements.

Strategies for Determining MIS DesignStrategies for Determining MIS Design

MIS design should be specific to an organization, respectingits age, structure, and operations.

Six strategies for determining MIS design have beensuggested by Blumenthal (1969):

oo OrganizationOrganization--chartchart approachapproach Using this approach, theMIS is designed based on the traditional functional areas,such as finance, administration, production, R&D andextension. These functional areas define currentorganizational boundaries and structure.

oo IntegrateIntegrate--laterlater approachapproach Largely a laissez faire approach,it does not conform to any specified formats as part of anoverall design. There is no notion of how the MIS willevolve in the organization. Such an MIS becomes difficultto integrate. In today's environment - where managersdemand quick and repeated access to information fromacross sub-systems - the integrate-later approach isbecoming less and less popular.

Strategies for Determining MIS DesignStrategies for Determining MIS Design

oo DataData--collectioncollection approachapproach This approach involves collection of

all data which might be relevant to MIS design. The collected

data are then classified. This classification influences the way

the data can be exploited usefully at a later stage. The

classification therefore needs to be done extremely carefully.

oo DatabaseDatabase approachapproach A large and detailed database is

amassed, stored and maintained. The database approach is

more and more accepted for two main reasons: first, because

of data independence it allows for easier system

development, even without attempting a complete MIS; and,second, it provides management with immediate access to

information required.

oo TopTop--downdown approachapproach The top-down approach involves

defining the information needs for successive layers of

management. If information required at the top remains

relatively stable in terms of level of detail, content and

frequency, the system could fulfil MIS requirements (Zani, 1970).

Strategies for Determining MIS DesignStrategies for Determining MIS Design

o The usefulnessusefulness of this approach depends on the

nature of the organization. It can be suitable for

those organizations where there is a difference in

the type of information required at the various

levels.

o Total-system approach In this approach the

interrelationships of the basic information are

defined prior to implementation. Data collection,

storage and processing are designed and done

within the framework of the total system. This

approach can be successfully implemented in

organizations which are developing.

MANAGEMENT INFORMATION SYSTEMSMANAGEMENT INFORMATION SYSTEMS

The diagram illustrates oneway to depict the kinds ofsystems found in anorganisation.

In this illustration theorganisation is divided into a) Strategic b) Management c) Operational

This is further divided intofunctional areas asindicated in the figurehence this show thatsystems are built to servedifferent organisationalinterests.

BecauseBecause therethere areare differentdifferent interest,interest, specialtiesspecialties andand levelslevels inin anan

organisationorganisation,, therethere areare differentdifferent kindskinds ofof systemssystems.. NoNo singlesingle systemsystem

cancan provideprovide allall thethe informationinformation anan organisationorganisation needsneeds.

Functional Areas of ManagementFunctional Areas of Managementa) Operational Level System - This supports operational managers by keeping track

of the elementary activities and transactions of the organisation i.e. cash deposits,

payroll, credit decisions sales, receipts etc.

The principle purpose of systems at this level is to answer routine questions andtrack the flow of transactions through the organisation.(Example of Operational

Level system is record bank deposits from ATM and One that tracks the number of

hours worked each day by employees on a factory floor.

b) Management level systems - This serves the monitoring, controlling, decision-making and administrative activities of middle managers. The principle question

addressed by such systems is (Are things working well) Management level systems

typically provide periodic reports rather than instant information on operations.

Mostly this systems show wherever actual costs exceed budgets.

Some management level systems support non-routine decision making. They tendto focus on less-structured decisions for which information requirements are not

always clear. These systems often answer What-if questions thus answers tothese questions frequently require new data from outside the organisation, as well

as data from inside that cannot be easily drawn from existing operational level

systems.

c) Strategic Level Systems - This system helps senior management tackle and

address strategic issues and long-term trends both in the firm and in the external

environment. Their principle concern is matching changes in the external

environment with existing organisational capability.

Organizations & Management Organizations & Management Why Information Systems? Ask managers to describe their most important resources and they'll

list

a) Money b) Equipment c) Materials d) People

It's very unusual for managers to consider information an important resource and yet it is.

Importance of Information Technology

o 1) Capital Management

o 2) Foundation of Doing Business

o 3) Productivity

o 4) Strategic Opportunity and advantage

A combination of information technology innovations and a changing domestic and globalenvironment makes the role of IT in business even more important than a few years year ago.

There are five factors to consider when assessing the growing impact of IT in businessorganisations.

o a) Internet growth and technology convergence

o b) Transformation of the business enterprise

o c) Growth of a globally connected economy

o d) Growth of knowledge and information based economies

o e) Emergence of the digital firm

Business Perspective of information Systems

Business firms invest in information technology and systems because they provide realeconomic value to the business. The decision to build /maintain an information system assumes

that the returns on this investment will be superior to other investments in buildings, machines or

other assets. These superior returns will be expressed as increase in productivity, increase in

revenues or perhaps a superior long term strategic positioning of the firm in certain markets.

Dimensions of Information Systems There are three dimensions of information systems namely

a) Organisation

b) Management

c) Information technology

a) Organisation Information systems are an integral part of organisations. The key

elements of an organisation are its :(i) People

(ii) Structure

(iii) Business processes

(iv) Politics

(v) Culture

Organisations are composed of different levels and specialties.Their structures reveal a clear-cut division of labour. Experts are

employed and trained for different functions. The major business

functions or specialised tasks performed by business

organisation consist of:(i) Sales and marketing

(ii) Manufacturing and production

(iii) Finance and accounting

(iv) Human resources

An organisation coordinates work through a structured hierarchy and throughits business processes. The hierarchy arranges people in a pyramid structure ofrising authority and responsibility. The upper levels of the hierarchy consist of

(i) Managerial(ii) Professionals(iii) Technical employees

Whereas these levels consist of(i) Operational Personnel

(ii) Management

(iii) Technology

Levels of IT Infrastructure

Firm infrastructure is organized at three major levelsa) Public unit

b) Enterprise unit

c) Business unit

IT infrastructure is composed of seven major components i.e.o Databases Management and Storage

o Consultants and systems integrators

o Networking/Telecommunications

o Enterprise Software Applications

o Operating Systems Platforms

o Computer Hardware Platform

o Internet Platforms

The above mentioned components must be coordinated to provide the firmwith a coherent IT infrastructure.

MANAGEMENT DATA & INFORMATION MANAGEMENT DATA & INFORMATION

REQUIREMENTS AND ITS USAGEREQUIREMENTS AND ITS USAGE

The collection of data and information is not an end in itself but isessential for informed decision-making.

o It is therefore important for the management authority to ensure that

the data collected are analysed correctly, disseminated to where

they can best be used, and used appropriately in decision-making.

Information is also needed to assure the public at large that resources

are managed responsibly and that the objectives are being reached.

It must be recognized that data and information are required at thethree levels, policy formulation, formulation of management plans, and

the determination of management actions to implement the policy and

plans.

o These will overlap considerably and each of the three steps will be

influenced by what has happened or is happening at the other two

levels. Nevertheless, the three processes are distinct, occur on

different time scales and require different information to different

levels of detail. Where necessary, differences in methods and

approaches between, e.g., artisanal and commercial fisheries and at

different time scales need to be emphasised.

General Considerations in the Collection and General Considerations in the Collection and

Provision of Data and InformationProvision of Data and Information

Data requirements for different management scales Verification or validation of data

o checking logbooks against landings data (e.g. sales notes);

o sampling catches for species composition;

o comparing landings statistics with certificates of origin, trade and commodity production

statistics (e.g. processed fish) and similar sources of information;

o inspecting data collection methods by statistical staff;

o interviews with fishers;

o observer schemes;

o reporting from sea on retained catch on entering and leaving the fishing zones;

o developing and implementing the use of vessel monitoring systems such as transponders

to monitor the position, catch and activities of vessels; and

o instituting airborne and shipboard surveillance, associated with the boarding of vessels.

Standardisation of data collection Timely distribution Confidentiality of data Costs of collection and collation of data Data Requirements and Use in the Formulation of Management Plans Monitoring, control and surveillance Data Requirements and Use in the Determination of Management Actions and

Monitoring Performance

The Impact of IT on The Impact of IT on organisationsorganisations Information technology (IT) is dramatically changing the business

landscape. Although organisation cultures and business strategies

shape the use of IT in organisations, more often the influence is

stronger the other way round. IT significantly affects strategic options

and creates opportunities and issues that managers need to address

in many aspects of their business. This slide outlines some of the key

impacts of technology and the implications for management on:

BusinessBusiness strategystrategy - collapsing time and distance, enablingelectronic commerce

OrganisationOrganisation CultureCulture - encouraging the free flow of information

OrganisationOrganisation StructuresStructures - making networking and virtualcorporations a reality

ManagementManagement ProcessesProcesses - providing support for complex decisionmaking processes

WorkWork - dramatically changing the nature of professional, and nowmanagerial work

TheThe workplaceworkplace - allowing work from home and on the move, as intelework

the difference between the difference between MIS and IRMMIS and IRM

The difference between thethe managementmanagement informationinformationandand informationinformation managementmanagement.

The main difference is that in information system weonly just collect the information but in information

management system we have decide to which type

of information is more relevant to an organisation.

Knowledge management is the ability a person has touse information or data efficiently and honestly.

Information system management is the capacity of acomputer to connect a network of computers through

a local or metropolitan area network or through the

world wide web.

CONCEPTS OF INFORMATION CONCEPTS OF INFORMATION

RESOURCE MANAGEMENT (IRM)RESOURCE MANAGEMENT (IRM)

Most enterprises today are critically dependent uponautomated information for both daily operation andmanagement control. Today, information is the mostimportant and highest-leveraged resource the businesscontrols -- the means by which all other resources aremanaged.

Yet, few businesses have begun to exploit the enormousstrategic potential of a well-integrated informationenvironment.

Most enterprises function at a small fraction of their potentialproductivity with a set of terribly dis-integrated, inconsistent,and often redundant application systems, operating on anunderlying redundant, inconsistent, and untimely data mess.

The main obstacles to exploiting the information resourceare internal to the enterprise, and can be easily overcome.

Information Resource Information Resource Management (IRM)Management (IRM)

Information-based organisations depend upon computer databasesand information systems for their ongoing operation and

management. Information Resource Management (IRM) is a program

of activities directed at making effective use of information

technology within an organisation. These activities range from global

corporate information planning to application system development,

operation, and maintenance and support of end-user computing.

Numerous approaches to specific IRM activities have been proposed.

They remain disjoint, however, and, hence globally ineffective. A

significant reason for inability to integrate IRM activities is the failure to

adequately define the information resource. What is it that must be

effectively managed? This paper addresses this issue. It applies data

modeling concepts to the problem of managing organisational

information resources. A data model is developed to support and

integrate the various IRM activities. This model formally defines the

information resource and the data needed to manage it. It provides abasic ingredient for effective Information Resource Management.

Information Resources Information Resources ManagementManagement

One of the dilemmas facing today's manager is thaton the one hand they seem to be suffering from

information overload, yet on other hand, they often

they complain about shortage of information needed

to make vital decisions.

the crucial problem of exploiting an organisation'sproprietary information as a strategic asset.

these problems is that of having "thethe rightright information,information,inin thethe rightright place,place, inin thethe rightright format,format, atat thethe rightright timetime".

Information Resources Management (IRM) is an emergingdiscipline that helps managers assess and exploit their

information assets for business development. It draws on the

techniques of information science (libraries) and information

systems (IT related). It an important foundation for

knowledge management, in that deals systematically with

explicit knowledge. Knowledge centers often play an

important part in introducing IRM into an organisation.

The IRM Network has developed a model highlighting thefive key activities for their effective IRM management: Identification What information is there? How is it identified and coded?

Ownership Who is responsible for different information entities and co-ordination?

Cost and Value A basic model for making judgements on purchase and use

Development Increasing its value or stimulating demand.

Exploitation Proactive maximisation of value for money

Benefits of implementing Benefits of implementing an IRM Strategyan IRM Strategy

Few organisations have developed a comprehensive IRMstrategy. Those that have started with some of its keyprocesses of information audit, and information mappingcite the following benefits: Identifies gaps and duplication of information Clarifies roles and responsibilities of owners and users of information Provide costs saving in the procurement and handling of information Identifies cost/benefits of different information resources Actively supports management decision processes with quality information

Some of the issues that it addresses are: Strategic - the information needs to support the implementation of business

strategies; also the way that information itself can be a key lever of strategy (interms of new product and service opportunities)

Organisational - ownership, evaluation, fragmentation, isolation from processes, thepolitics of information

Structural Integrating external and internal information, its categorisation, refining itfrom data into classified actionable 'chunks'.

Systems User accessibility, interface to sources, multiple databases, retrieval,usability

Human Processing capability, overload, incentives to share.

How to Manage Information How to Manage Information as a Strategic Assetas a Strategic Asset

1. Understand the role of Information. Information can add value to your products and services.Improved information flows can improve the quality of decision making and internal operations.Yet many managers do not fully understand the real impact of information - the cost of a lostopportunity, of a poor product, of a strategic mistake - all risks that can be reduced by usingthe appropriate information.

2. Assign Responsibility for Leading your IRM Initiative. Developing value from information resourcesis often a responsibility that falls between the cracks of several departments - the userdepartments in different business units, and corporate planning, MIS units or librarians..

3. Develop Clear Policies on Information Resources Policies for ascertaining information needs,acquiring and managing information throughout its life cycle. Pay particular attention toownership, information integrity and sharing. Make the policies consistent with yourorganisational culture.

4. Conduct an Information Audit (Knowledge Inventory). Identify current knowledge andinformation resources (or entities), their users, usage and importance. Identify sources, cost andvalue. Classify information and knowledge by its key attributes. Develop knowledge maps. Asknowledge management gains prominence, this is sometimes called a knowledge inventory"knowing what you know.

5. Link to Management Processes. Make sure that key decision and business process are supportedwith high leverage information. Assess each process for its information needs.

6. Systematic scanning. Systematically scan your business environment. This includes the widerenvironment - legal and regulatory, political, social, economic and technological - as well asthe inner environment of your industry, markets, customers and competitors. Provide selectiveand tailored dissemination of vital signs to key executives. This goes beyond the dailyabstracting service provided by many suppliers.

How to Manage Information as a How to Manage Information as a Strategic AssetStrategic Asset

7. Mix hard/soft, internal/external. True patterns and insights emerge when internal and external data isjuxtaposed, when hard data is evaluated against qualitative analysis. Tweak your MkIS system to do

these comparisons.

8. Optimize your information purchases. You don't have to control purchasing, but most organisations

do not know how much they are really spending on external information. By treating consultancy,

market research, library expenses, report and databases as separate categories, many organisations

are confusing media with content.

9. Introduce mining and refining processes. Good information management involves 'data mining',

'information refining' and 'knowledge editing'. You can use technology such as intelligent agents, to

help, but ultimately subject matter experts are needed to repackage relevant material in a user

friendly format. One useful technique is content analysis, whose methods have been developed by

Trend Monitor International in their Information Refinery, and are used in our analysis services. The

classifying, synthesising and refining of information combines the crafts of the information scientist,

librarian, business analyst and market researcher/analyst. Yet many organisations do not integrate

these disciplines.

10. Develop Appropriate Technological Systems Continual advances in technology increase the

opportunities available for competitive advantage through effective information management. In

particular, intranets, groupware and other collaborative technologies make it possible for more

widespread sharing and collaborative use of information. Advances in text retrieval, document

management and a host of other trends in knowledge management technologies have all created

new opportunities for providers and users alike.

11. Exploit technology convergence. Telecommunications, office systems, publishing, documentation

are converging. Exploit this convergence through open networking, using facilities such as the World

Wide Web, not just for external information dissemination but for sharing information internally.

12. Encourage a Sharing Culture Information acquires value when turned into intelligence. Market

Intelligence Systems (MkIS) are human expert-centred. Raw information needs interpretation,

discussing and analysing teams of experts, offering different perspectives. This know-how sharing is a

hall-mark of successful organisations.

IRM OUTLINE:IRM OUTLINE: Information Resource (IRM) Concepts Information Resource (IRM) Concepts

oo Information Resource Management Defined Information Resource Management Defined oo Managing Information as a Corporate Resource Managing Information as a Corporate Resource oo SystemsSystems--land vs. IRMland vs. IRM--land land oo The Problem The Problem -- The "Disintegrated System Paradigm"The "Disintegrated System Paradigm"

Consequences of the "Dis-integrated System Paradigm" Trends in the Dis-Integrated Systems Environment Data Quality in Systemsland The Orthogonal Process/Data Conundrum

oo The IRM Goal The IRM Goal Information Resource Categories and Management

Objectives The Primacy of the Data Resource Trends in the IRM environment Data Quality in IRM-land

oo IRM Requires . . . IRM Requires . . .

IRM OUTLINE:IRM OUTLINE: The Big Six Critical Success Factors for an IRM Environment The Big Six Critical Success Factors for an IRM Environment

o 1. Executive Leadership and Involvement Executive Leadership and Involvement

Example CIO Charter

Example Executive Information Steering Group Charter

o 2. Formal IRM Infrastructure (Ground Rules/Controls) Formal IRM Infrastructure (Ground Rules/Controls)

IR Framework

IRM Policies

IRM Standards

IRM Method(s)

IRM Tools

IRM OUTLINE:IRM OUTLINE:o 3. Living ConceptualLiving Conceptual--Level Enterprise Information Resource Models Level Enterprise Information Resource Models

Enterprise Functional Model Enterprise Organisational Model Enterprise Geographic Business Location Model Enterprise Conceptual Data Model Enterprise Conceptual Transaction Model Enterprise Conceptual Distribution Model Enterprise Conceptual Technology Model

o 4. The Master Implementation/Migration Plan The Master Implementation/Migration Plan o 5. Effective IRM Effective IRM OrganisationalOrganisational Structure and Transition Plan Structure and Transition Plan o 6. Appropriate Skill Base Appropriate Skill Base

How to Transition from "Disintegrated SystemsHow to Transition from "Disintegrated Systems--land" to "IRMland" to "IRM--land"land"o Businesses Change When . . . o IRM Step-by-Step Transition Plan o Evolutionary, Not Revolutionary Transition

Building Strategic Building Strategic Advantage Through IT Advantage Through IT

Unlike what some commentators have said,information technology is not a commodity; noris it an afterthought. IT is a strategic asset, whenimplemented and used appropriately. ITenables an organization and its people to bereliable, unified, agile, and responsive. Thiswhite paper describes for CIOs, CFOs, andother senior officials how IT can provide a returnon knowledge that leads to a competitiveedge.

Information technology becomes astrategic asset when it makes the entirebusiness adaptive and ready for change.

Strategic Advantage Through IT Strategic Advantage Through IT Information technology becomes a strategic asset when it makes the entire business

adaptive and ready for change.

The economics of the Knowledge Age have not caught up with innovation. How an organization defines value is a key component of how it realizes value. For IT that

means aligning investments with strategy.

Flexible IT adapts to change without requiring constant changes to the deep rules andschemas that reflect current realities.

Project managers need to distinguish between false metrics and real business metrics. The ideal IT model pushes out most capabilities to business users by giving them easy ways to

customize their information environment and modify processes as their needs and roles

evolve.

Today, every worker needs a flexible, powerful, and connected information work platformand the skills to use it in a variety of contexts and business scenarios.

Infrastructure matters because it supports the delivery of value. What makes IT matter is often as much about how the business speaks of technology

internally as it is what technology does for the business.

If the business wants to innovate on multiple levels, it must carefully listen to what IT has tooffer.

Organizations can get more from their IT investment by adopting a layered approach,where each new development effort extends the underlying platform of capabilities.

When IT systems need professional development services or support, customers need toknow where to turn.

From applications to infrastructure, you must understand the value of data and tie it to the ITinvestment.

IT departments that want their value recognized need to monitor the projects return oninvestment.

Across industries, IT budgets as a percentage of sales hover just below 4 percent. Informationtechnology expenditures are a significant cost for most organizations. But many still struggle

to effectively account for their return on IT investments, either in reduced costs or in

differentiated value to their customers. One of the biggest problems in justifying IT budgets is

the growth of the knowledge economy: Our economics remain rooted in Industrial Age

terms. When the only framework is industrial economics, everything looks like a production

line.

The most common strategies for understanding and accepting IT investments include thecompetitive cost of doing business argument, followed quicklyand not surprisingly, giventhe previously stated positionby the attachment of technology to a process. There isnothing wrong with either approach, but neither helps IT managers connect spending to a

business outcome in a tangible way. Information technology becomes a strategic asset

when it makes the entire business adaptive and ready for change by connecting people,

process, and information to drive results. How an organization measures the results of its

technology investments is important, because the continuous improvement of any function

requires a clear way to measure performance against goals. The strategic value of IT,

therefore, becomes clearer when executives move away from Industrial Age metrics and

toward a more holistic assessment of return on knowledge.

In fact, better measurement of the return on IT investments can yield strong overall financialreturns. Companies that excel at managing the value of their IT investments outpace their

peers in overall financial performance, according to research by The Hackett Group.

Essentially, Hackett says, companies that better manage the business value of ITincludinggovernance, portfolio management, and other IT management tacticshave 49 percenthigher net profitability than their peer group. In addition, their return on equity and return on

assets are higher

Eight Ways To Achieve More Strategic ITEight Ways To Achieve More Strategic IT1.1. ConnectConnect informationinformation toto thethe businessbusiness functionsfunctions itit supportssupports.. From applications to infrastructure, you must

understand the value of data and tie it to the IT investment. It is much harder to justify infrastructure or other IT

investments in the abstract.

2.2. UnderstandUnderstand thethe businessbusiness andand speakspeak thethe languagelanguage ofof businessbusiness.. IT is too often enamored with acronyms and

abbreviations. Businesses have those, too. You must make business models and business language as innate in

IT as the departments own models and slang. And always communicate to the business in businesslanguage.

3.3. BuildBuild businessbusiness expertiseexpertise.. Although the IT department is expected to be a group of generalists supporting

multiple business functions, it is just as important to segment customers and understand where IT needs to

invest in expertise, customer support, and so on. Hiring business people within IT who can drive the strategic

conversation may be a better investment than switching transaction monitors in terms of adding value.

4.4. TieTie thethe ITIT investmentinvestment toto competitivecompetitive differentiationdifferentiation.. IT is an extensionand a toolof the businesss strategy.Investments in information technology can only realize value when they deliver on a strategic metric.

5.5. CreateCreate aa dialoguedialogue withwith businessbusiness.. The dialogue between business and IT is crucial as a way to facilitate shared

learning. It is also about offering a point of view or marketing an idea. Businesses can invest in many areas. If IT

truly believes that technology is a viable and more effective use of capital than another area, the group

needs to not only talk about it, but sell it to business leaders.

6.6. CaptureCapture valuevalue.. A major problem with ROI calculations is that they are done before a project and often

abandoned soon after the project is funded. IT departments that want their value recognized need to

monitor the projects return on investment, continue to align and adjust the project, and be honest with thebusiness about the outcomes of technology investments.

7.7. CreateCreate aa learninglearning environmentenvironment.. As with capturing value, capturing knowledge is important. Initial designs for

new systems, practices, and policies may look good on paper, but they may not perform or deliver as

expected. By creating a learning environment where IT and business partner to provide feedback and action

plans based on that feedback, businesses have a better opportunity to cut losses and fail-fast and to improve

their chances of identifying true innovations that may lead to strategic breakthroughs.

8.8. ThinkThink aboutabout thethe businessbusiness implicationsimplications ofof systemssystems.. Realizing value does not stop when an application icon

shows up on a computers desktop. Value is created by using technology in the execution of a process orother type of work. People must understand how a new tool fits into their work model. And if it does not fit the

model, they need help understanding how the tool can fit. That will empower users to push back and

become a part of the feedback system that adjusts tools to better meet real-world business needs.

THE STRATEGIC USE OF ITTHE STRATEGIC USE OF IT

History of Strategic Uses History of Strategic Uses of ITof IT

Mid 1980s: End-user computing

o Working inward (adoption of PCs and software)

Late 1980s: Transactional efficiencyo Working outward (gain competitive

advantage) Merrill Lynchs CMA system, which combined stock

account with savings and checking accounts

1990s: Re-engineeringo Working inward (business process re-

engineering)

Strategic Uses of Strategic Uses of Information SystemsInformation Systems

History of Strategic Uses History of Strategic Uses of IT contdof IT contd

Mid to late 1990s: Interneto Integration of Internet into e-business models

o Dotcom downward spiral began in 1999

o E-business skepticism

Early 2000s: Back to business basicso Leverage traditional operations by using Internet to

work more closely with others (working across)

2005 onwards:o Working inwards, outwards and across to achieve

competitive advantage

o 2008: Putting IT in the forefront of business strategy

ConclusionConclusion Many best practices evolved over the years,

with respect to strategic use of IT

o Each required right resources and skills

Intranets and Web portals are ways to bringcohesion within flatter organizations

Customer-centric business strategy leads to useof IT across organizational boundaries (supply

chain)

As IT continues to evolve, so does its strategicuses