Management

Information
System
By: Faraz Khan

Why Do People
Need Information?

o Individuals Entertainment and

enlightenment
o Businesses Decision making,

problem solving and control

Data vs. Information

o Data
A given, fact; a number, a statement, a picture . . .
Represents something in the real world . . .
Raw materials in the production of information . . .

o Information
Data that have meaning within a context . . .
Data in relationships . . .
Data after manipulation . . .

How do we generating Information?

Computer-based ISs take data as raw
material, process it, and produce information
as output.

Input-process-output

The Four Stages of Data Processing

o Input: Data is collected and entered into
computer.
o Data processing: Data is manipulated into
information using mathematical, statistical, and
other tools.
o Output: Information is displayed or presented.
o Storage: Data and information are maintained for
later use.

Information in Context . . .

Characteristics of useful information

What is a
System?

o System : A set of components that work together to

achieve a common goal.
o Sub system : One part of a system where the products
of more than one system are combined to reach an
ultimate goal.
o Closed system : Stand-alone system that has no
contact with other systems.
o Open system : System that interfaces with other
systems . . .

INFORMATION
Information system
(IS) is the study of
SYSTEM

complementary networks of hardware and software

that people and organizations use to collect, filter,
process, create, and distribute data.

INFORMATION SYSTEM

INFORMATION
SYSTEM

Several subsystems make up this corporate accounting system.

INFORMATION
SYSTEM
Non
Computer
Information System

Computer based Information Systems

INFORMATION
SYSTEM

Non Computer Information System

COMPUTER BASED
INFORMATION
SYSTEM
An
information
system (IS) is a combination

of ICT and people's activities that support

operations, management, and decision
making.

Interaction between people, processes, data,

and technology.

COMPUTER BASED

COMPONENTS OF CBIS
A computer-based information system (CBIS)
is an information system in which the computer
plays a major role. Such a system consists of the
following elements;
Hardware
Software
Data
Procedures
People

HARDWARE:
Computer equipments used to perform
input, processing and output activities.

SOFTWARE
Computer programs that governs and runs
the operations of the computer.

DATABASE:
A database is an ordered, organized collection of
information which allows individual items to be added
or amended without changing the overall design.
A database allows the
user to store, retrieve,
organize and compare
information with great
speed and efficiency.

PROCEDURE:
Includes strategies, policies, methods &
rules for using CBIS.

PEOPLE:
The most important element of CBIS.

TYPES OF INFORMATION
SYSTEM
Systems (OAS)
Office Automation

Transaction Processing Systems (TPS)

Decision Support Systems (DSS)
Management Information Systems (MIS)
Enterprise Resource Planning (ERP)

Information systems are constantly changing

and evolving as technology continues to grow.

OFFICE AUTOMATION SYSTEM

Office Automation Systems are systems that try to improve
the productivity of employees who need to process data and
information.
Perhaps the best example is the wide range of software systems
that exist to improve the productivity of employees working in an
office.
o Word
o Excel
o Power Point

TRANSACTION PROCESSING SYSTEM

Transaction Processing Systems ("TPS") are designed to
process routine transactions efficiently and accurately.

TRANSACTION PROCESSING SYSTEM

A business will have several (sometimes many)
TPS; for example:

Billing systems to send invoices to customers . . .

Systems to calculate the weekly and monthly payroll
and tax payments

Production and purchasing systems to calculate raw

material requirements . . .

Stock control systems to process all movements into,

within and out of the business . . .

DECISION SUPPORT SYSTEM

Decision-support
systems
("DSS")
are
specifically designed to help management make
decisions in situations where there is uncertainty
about the possible outcomes of those decisions.
DSS comprise tools and techniques to help
gather relevant information and analyze the
options and alternatives. DSS often involves use
of complex spreadsheet and databases to create
"what-if" models.

DECISION SUPPORT SYSTEM

MANAGEMENT INFORMATION SYSTEM

A management information system ("MIS") is
mainly concerned with internal sources of
information. MIS usually take data from the
transaction processing systems and summaries it
into a series of management reports.

MIS reports tend to be used by middle

management and operational supervisors.

MANAGEMENT INFORMATION SYSTEM

ENTERPRISE RESOURCE PLANNING

Enterprise resource planning (ERP) systems integrate
internal and external management information across an
entire organization, embracing finance/accounting,
manufacturing, sales and service, customer relationship
management, etc.
ERP systems automate this activity with an integrated
software application. Their purpose is to facilitate the flow
of information between all business functions inside the
boundaries of the organization and manage the
connections to outside stakeholders.

ENTERPRISE RESOURCE PLANNING

INFORMATION SYSTEM FOR

COMPETITIVE ADVANTAGE

Providing support to complete a task faster, more

cheaply, and perhaps with greater accuracy and/or

consistency.

Providing support to improve day-to-day operations by

creating, acquiring, and transferring knowledge.

Providing support in a way that enables the firm to

gain or sustain competitive advantage over rivals.

INFORMATION SYSTEM FOR

COMPETITIVE ADVANTAGE
Businesses continually seek to establish

competitive advantage in the

marketplace.
There are eight principles:
The first three principles concern products.
The second three principles concern the

creation of barriers.
The last two principles concern establishing
alliances and reducing costs.

Principles of Competitive
Advantage

Information System that Creates

a Competitive Advantage
ABC invested heavily in information

technology.
ABC led the shipping industry in the

application of information systems for

competitive advantage.

How this System Creates a

ABC, Inc Competitive
Advantage
ABC information system provides the

following:
Enhances an existing product
Differentiates the ABC package delivery

product from competitors

Locks customers into the ABC system
Raises the barrier to market entry
Reduces costs

Information Systems for Problem

Solving
Information systems can be used to

solve problems.

Problem definition
A problem is a perceived difference between

what is and what is not.

A problem is a perception.
A good problem definition defines the
differences between what is and what ought
to be by describing both the current and
desired situations.

Information Systems for Problem

Solving
Problem definition (continued)
Different problem definitions require the

development of different information

systems.
All personnel in the organization must have

a clear understanding of which definition of

the problem the information system will
address.

A Customer Relationship Management

System
A Customer Relationship Management

(CRM) system is an information system

that maintains data about customers
and all of their interactions with the
system.
CRM systems vary in their size and

complexity.

Knowledge Management
System
A knowledge management system

(KMS) is an information system for

storing and retrieving organizational
knowledge.
This knowledge can be in the form of
data, documents, or employee knowhow.
KMS goal is to make the organization
knowledge available to
Employees
Vendors
Customers
Investors

Example Customer Relationship

Management (CRM) System

Customer Support Knowledge

Management System

A Manufacturing Quality-Control
Information System
Many organizations believe that the optimal way to

provide customer service is to eliminate the need for it.

One way to improve customer service is to improve

manufacturing quality.

The type of system to develop depends on the way the

organization defines the problem.

Before developing the system, the organization must

have a complete, accurate, and agreed-upon problem

definition.

Information Systems for

Decision Making
Developing an information system is to

facilitate decision making.

Decision making in organizations is

varied and complex.

Decision Level
Decisions occur at three levels in

organizations.
Operational decisions concern day-to-

day activities.
Information systems that support

operational decision making are called

transaction processing systems (TPS).

Decision Level (Continued)

Managerial decisions concern the

allocation and utilization of resources.

Information systems that support

managerial decision making are called

management information systems (MIS).

Strategic decision making concern

broader-scope organizational issues.

Information systems that support strategic

decision making are called executive

information systems (EIS).

Decision-Making Dimensions

The Decision Process

Two decision processes (method by

which a decision is to be made) are

structured and unstructured.
Structured decision process is one for which

there is an understood and accepted

method for making the decision.
Unstructured process is one for which there
is no agreed on decision making process.

The terms structured and unstructured

refers to the decision process-not the

underlying subject.

Relationship of Decision Level and Decision Type

Figure

Different Types of Information

Systems for Different Types of
Decisions
Automated information systems are

those by which the computer hardware

and program components do most of the
work.
Humans start the programs and use the

results.

Augmentation information systems are

those in which humans do the bulk of

the work.
These systems augment, support, or

Automated vs.
Augmentation IS

How Decision Level, Decision

Type and IS Type Are Related

Information Systems and

Decision Steps
A way to examine the relationship

between information systems and

decision making is to consider how an
information system is used during the
steps of the decision making process.

There are five steps

Intelligence gathering
Alternative formulation
Choice
Implementation
Review

Decision-Making Steps

FUTURE OF
INFORMATION SYSTEMS