Unit 1

Definitions
An organized approach to the study of the information needs of an organization's management at every level in making operational, tactical, and strategic decisions. Its objective is to design and implement procedures, processes, and routines that provide suitably detailed reports in an accurate, consistent, and timely manner. In a management information system, modern, computerized systems continuously gather relevant data, both from inside and outside an organization. This data is then processed, integrated, and stored in a centralized database or data !arehouse" !here it is constantly updated and made available to all !ho have the authority to access it, in a form that suits their purpose.# $I% management information systems" is a general term for the computer systems in an enterprise that provide information about its business operations. It's also used to refer to the people !ho manage these systems. Typically, in a large corporation, &$I%& or the &$I% department& refers to a central or centrally'coordinated system of computer e(pertise and management, often including mainframe systems but also including by e(tension the corporation's entire net!ork of computer resources.# %hort for management information system or management information services, and pronounced as separate letters, $I% refers broadly to a computer'based system that provides managers !ith the tools for organizing, evaluating and efficiently running their departments. In order to provide past, present and prediction information, an $I% can include soft!are that helps in decision making, data resources such as databases, the hard!are resources of a system, decision support systems, people management and project management applications, and any computerized processes that enable the department to run efficiently. )ithin companies and large organizations, the department responsible for computer systems is sometimes called the $I% department. *ther names for $I% include IS (Information %ervices) and IT Information Technology".# $anagement triangle consists of + segments of management are as follo!s, %cope features, functions, performance - .uality" /ost resources - budget" Time %chedule - 0roduction rate"

Information Needs: - Information need is an individual or group's desire to locate and obtain information to satisfy a conscious or unconscious need. The 1information2 and 1need2 in 1information need2 are inseparable interconnection. 3eeds and interests call forth information. The objectives of studying information needs are, 4. The e(planation of observed phenomena of information use or e(pressed need5 6. The prediction of instances of information uses5 +. The control and thereby improvement of the utilization of information manipulation of essentials conditions. Classification of Information: The type of decision needs different types of information. Information !hich is needed at different level of management can be, I. II. III. 1. *perational information Tactical information %trategic information

Operational information: *perational information2s are such information !hich refers to the everyday needs for control over business activities these is kno!n as routine activity or repetitive in nature. These activities are controlled at lo!er level managements. The information regarding the cash position or day' to'day basis is monitored and controlled at the lo!er levels of management. %imilarly, in marketing function, daily and !eekly sales information is used by lo!er level manager to monitor the performance of the sales force.

2.

Tactical information: Tactical information helps middle level managers allocating resources and establishing controls to implement the top level plans and policies of the organization. 7or e(ample 4" information regarding the alternative sources of funds and their uses in the short run, 6" opportunities for deployment of surplus funds in short term securities, etc. the tactical information is generally predictive, focusing on short'term trends of the business unit. It may be partly current and partly historical, and may come from internal as !ell as e(ternal source.

3.

Strategic information: *f course the operational information is needed to find out ho! the given activity can be performed better, strategic information is needed for making alternative choices among the business options. The strategic information helps in identifying and evaluating these options so that a manager makes informed choices !hich are different from the competitors and the limitations of !hat the rivals are doing or planning to do. %uch choices are made by managers to define goals and priorities, initiate ne! programs and develop plans and policies for ac.uisition

and use of firm2s resources such as information regarding the long'term needs of fund for on' going and future projects of the company may be used by top level managers in taking decision regarding going public or approaching financial institutions for long'terms loan. %trategic information is predictive in nature, relies heavily on e(ternal sources of data has a long'term perspective. It is believed that strategic information is basically information regarding the e(ternal environment. 8o!ever, it is no! !ell recognized that the internal factors are e.ually responsible for success or information is also re.uired for strategic decision'making.

C !SSI"IC!TION O" IN"O#$!TION The information can be classified in a number of !ays providing a better understanding. Information is classified in the follo!ing manner,' A/TI*3 9:;%<% 3*3'A/TI*3 I37*;$ATI*3 The information !hich includes action is called action information. The information !hich communicated only the status of a situation is non'action information. 13o stock2 reports calling a purchase action is action information but the stock ledger sho!ing the store transactions and the stock balances is non'action information. ;:/<;;I3= 9:;%<% 3*3';:/<;;I3= A/TI*3 The information generated at regular intervals is recurring information. The monthly sales reports, the stock statements, the trial balance, etc. are recurring information. The financial analysis or the report on the market research study is non'recurring information. I3T:;3A> 9:;%<% :?T:;3A> I37*;$ATI*3 The information generated through the internal sources of the organization is termed as internal information, !hile the information generated through the government reports, the industry surveys, etc. is termed as e(ternal information, as the sources of the data are outside the organization.

The action information, the recurring information and the internal information are the prime area for computerization and they contribute .ualitatively to the $I%. The timing and accuracy of the action information is usually important. The mi( of the internal and e(ternal information changes, depending on the level of the management decisions. At the top'level of the management, the stress is more on the e(ternal information and at the operational and the middle level. The stress is more on the internal information. 7igure sho!n belo! sho!s the source and kind of information re.uired by different levels of management in the organization.

O#%!NISTION !ND IN"O#$!TION The information can also be classified as under, in terms of its application. A. &lanning information: /ertain standards, norms and specifications are used in the planning of any activity. 8ence, such information is called the planning information. The time standards, the operational standard, the design standards are the e(amples of the planning information. @. Control information: ;eporting the status of an activity through a feedback mechanism is called the control information. )hen such information sho!s a deviation from the goal or the objective, it !ill include a decision or an action leading to control. '! U( O" IN"O#$!TION The decision theory suggests the method of solving the problem of decision'making situation is of certainty !hen the decision maker has full kno!ledge about the alternatives and its outcomes. This is possible !hen the perfect information is available. Therefore, the information has a perceived value in terms of decision'making. The decision maker feels more secured !hen additional information is received in case of decision'making under an uncertainty or risk completely. 8o!ever, perfect information is a myth. The decision theory stipulates that the value of the additional information is the value of the change in the decision behavior resulted by the information, less the cost of obtaining the information. If the additional information does not cause any change in the decision behavior then the value of additional value of additional information is zero.

A manager is faced !ith the problem of decision'making under uncertainty or risk situations, if he does not kno! the perfect information about the decision situation. 7urther, his ability to generate decision alternatives o!ing to the imperfect information of the situation is limited. In decisions, a decision maker !ill select one on the basis of the available information. If the ne! information causes a change in the decision, then the value of the ne! information is the difference in the value bet!een the outcome of the old decision and that of ne! decision, less the cost of obtaining the ne! information. It may be noted that the information has a value only to those !ho have the capability to use it in a decision. The e(perienced manager generally uses the information most effectively but he may need less information as e(perienced has already reduced uncertainty for him !hen compared to a less e(perienced manager. In $I%, the concept of the value of information is used to find out the value is significantly high, the system should provide it. If the value is insignificant, it !ould not be !orth collecting the additional information. The decision at the operational and the middle management level are such that the value of the additional or ne! information is lo!, !hile at the higher levels of the management, the decision being mainly strategic and tactical in nature, the value of information is very high. Apart from the monetary value of information, it has a value !hich is to be measured as strength in promoting the functions of the management. %ome information has to think in the futuristic terms. %ome information has the strength of confirming the belief or understanding the business process. It also reinforces the right and !rong of a decision'making process that the manager is follo!ing. <nderstanding of information concept is very important and relevant to the system designer and the information user. The concepts of information are summarized as follo!s,' 7iltering, the system designer should provide appropriate filtering mechanism so that the information is not suppressed and related to the frame of reference of the user. /are should be taken in the process that certain valid information does not get blocked or over emphasized. A filtering process is used to select and suppress the information.

Unit-3
Categories of $IS A type of computer processing in !hich the computer responds immediately to user re.uests. :ach re.uest is considered to be a transaction. Automatic teller machines for banks are an e(ample of transaction processing. The opposite of transaction processing is batch processing, in !hich a batch of re.uests is stored and then e(ecuted all at one time. Transaction processing re.uires interaction !ith a user, !hereas batch processing can take place !ithout a user being present.

Information &rocessing S)stem An information processor or information processing s)stem, as its name suggests, is a system be it electrical, mechanical or biological" !hich takes information a se.uence of enumerated states" in one form and processes transforms" it into another form, e.g. to statistics, by an algorithmic process. An information processing system is made up of four basic parts, or sub'systems,

input processor storage output

An object may be considered an information processor if it receives information from another object and in some manner changes the information before transmitting it. This broadly defined term can be used to describe every change !hich occurs in the universe. As an e(ample, a falling rock could be considered an information processor due to the follo!ing observable facts, 7irst, information in the form of gravitational force from the earth serves as input to the system !e call a rock. At a particular instant the rock is a specific distance from the surface of the earth traveling at a specific speed. @oth the current distance and speed properties are also forms of information !hich for that instant only may be considered &stored& in the rock. In the ne(t instant, the distance of the rock from the earth has changed due to its motion under the influence of the :arth's gravity. Any time the properties of an object change a process has occurred meaning that a processor of some kind is at !ork. In addition, the rock's ne! position and increased speed is observed by us as it falls. These changing properties of the rock are its &output.& In this e(ample, both the rock and the earth are information processing systems, because both objects change the properties of the other over time. If change occurs, information is processed. Decision S*pport S)stem A decision s*pport s)stem DSS" is a computer'based information system that supports business or organizational decision'making activities. A%%s serve the management, operations,

and planning levels of an organization and help to make decisions, !hich may be rapidly changing and not easily specified in advance. A%%s include kno!ledge'based systems. A properly designed A%% is an interactive soft!are' based system intended to help decision makers compile useful information from a combination of ra! data, documents, and personal kno!ledge, or business models to identify and solve problems and make decisions. Typical information that a decision support application might gather and present includes,

inventories of information assets including legacy and relational data sources, cubes, data !arehouses, and data marts", comparative sales figures bet!een one period and the ne(t,

0rojected revenue figures based on product sales assumptions.

&rogrammed Decisions
0rogrammed decisions are those that a manager has encountered and made in the past. The decision the manager made !as correct because she used the assistance of company policies, computations or a set of decision'making guidelines. In addition to being !ell structured !ith predetermined rules regarding the decision'making process, programmed decisions may also be repetitive or routine as their outcome !as successful in the past. It generally does not take a manager as long to come to a conclusion !hen faced !ith a business'related programmed decision because the challenge faced is not ne!. As a result, programmed decisions allo! a manager to make streamlined and consistently effective choices.

(+amples of &rogrammed Decisions

Individuals naturally make programmed decisions on a daily basis. 7or e(ample, in an emergency, most people automatically decide to call B'4'4. 7rom a business perspective, a company may create a standard routine for handling technical issues, customer service problems

or disciplinary matters. An employee2s duties may become routine !ith repetition, like the process a mechanic uses to troubleshoot problems !ith a customer2s car.