Management Information System I

7/29/2019 Management Information System I

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Q.1 - Identify the various types of information systems used by

organizations across the world.

Answer: An information management system enables an organization to

perpetually store and receive data. These kinds of systems are used throughout a business to store, for example, customer information or product information.Some of these systems, because of the size of the business, are large and

hierarchical, while some are simple and exist just to make life easier for the

business. The following are a few of the typical management information

systems.

Customer Information System - Many businesses will want to keep

track of their customers. They might want to store email addresses, phone

numbers and mailing addresses because, for example, they want to tellcustomers about a new product or send them the annual catalog.

Product Information System - A business also may want to have a

product system in place to store and receive product information. With

product information, a business can keep track of the name of the item, its

size, its weight and its price. A business may also want to keep track of

items by using a product code or product number.

Employee Information System - Businesses will want to keep track of their employees names, addresses and phone numbers for general contact

information. They also need to keep track of employee wages and the

amount of hours employees have worked. For tax purposes they need to

keep track of exemptions claimed.

Transaction-Processing Systems - Transaction-processing systems are

designed to handle a large volume of routine, recurring transactions. They

were first introduced in the 1960s with the advent of mainframecomputers. Transaction-processing systems are used widely today. Banks

use them to record deposits and payments into accounts. Supermarkets

use them to record sales and track inventory. Managers often use these

systems to deal with such tasks as payroll, customer billing and payments

to suppliers.

Operations Information Systems - Operations information systemswere introduced after transaction-processing systems. An operations

information system gathers comprehensive data, organizes it andsummarizes it in a form that is useful for managers. These types of

systems access data from a transaction-processing system and organize it

into a usable form. Managers use operations information systems to

obtain sales, inventory, accounting and other performance-related

information.



Decision Support Systems (DSS) - A DSS is an interactive computer

system that can be used by managers without help from computer specialists. A DSS provides managers with the necessary information to

make informed decisions. A DSS has three fundamental components:

Database Management System (DBMS),

Model-Based Management System (MBMS)

Dialog Generation and Management System (DGMS)

Expert Systems and Artificial Intelligence - Expert systems and

artificial intelligence use human knowledge captured in a computer to

solve problems that ordinarily need human expertise. Mimicking human

expertise and intelligence requires the computer to do the following:

recognize, formulate and solve a problem; explain solutions; and learn

from experience. These systems explain the logic of their advice to the

user; hence, in addition to solving problems they also can serve as ateacher. They use flexible thinking processes and can accommodate new

knowledge.

Q.2 - What are the different types of information that a firm needs?

Answer: Every business needs information to help it succeed. A combination of

internal and external business information resources can provide the

background necessary to evaluate current performance and plan future progress.

Knowing the types of information resources that are most critical to businesscan help companies plan for capturing, analyzing and using that informationmost effectively.

Businesses need information to be successful, and that information can come

from a variety of sources, both internal and external. Understanding the various

sources of information and how to access them can help companies and their leaders stay on top of emerging trends and environmental factors that can affect

their success

InternalThe first source of information that businesses should turn to is the information

they already have. Every business will have the ability to gather informationabout employees, about sales and about customers. Setting up systems and

processes for gathering the right information can help business owners track,trend, analyze and act upon business that gives them clues into such issues as

what drives employee satisfaction, the products most demanded by customers,

areas of employee and customers satisfaction and dissatisfaction.

Industry Information

Every business can consider itself part of at least one industry, if not more. Andevery industry has an association connected with it that can serve as a rich



source of business information. Weddles.com is a site where businesses can go

to find out about the associations that serve their industry. Joining the

appropriate trade and professional associations can help businesses gather

information about industry trends, best practices and resources.

Competitive Information No business is without competition and gathering information aboutcompetitors is critical. Fortunately, this is easier than ever to do with the advent

of the Internet. Through search and through participation in social media--sites

including Twitter, Facebook and LinkedIn--businesses can gain competitive

intelligence about what others are doing.

GovernmentThe government provides an enormous amount of information of use to small

businesses, much of it available online. Keeping up with legal and regulatory

trends is a key area of business information need and one that can be managed

effectively by visiting sites that include OSHA.gov, EEOC.gov. Virtually every

government agency has a website.

Associations

There are literally thousands of associations that cover industries, trades and

professionals across the wide range of business interests. From personal

avocations to professional pursuits, business people can find associations that

provide access to information and resources for members--and sometimes for

non-members.

The Internet

The Internet is a significant source of information--both free and paid--to meetvirtually any business needs. From websites to blogs to social media channels,

businesses can find useful information and make connections.

Q.3 - Discuss Porter’s value chain model in detail.

Answer: According to Michael Porter value is the chain of activities for a

company that operates in a specific industry. For gaining the competitive

advantages, Porter suggested that going through the chain of organization

activities will add more value to the product and services than the sum of addedcost of these activities. And thus, the company will gain marginal value for that

product or service. If these activities run efficiently the company gains

competitive advantage on the product or service. For this case the customers

should transact the product or services willingly and provide return on value to

the organization.

Classification of Porter's value chain activities:

Porter classified the generic value added activities into two classes which are presented in Figure-1. These activities are: primary activities which are



classified as product and market related activities and support activities that are

related to infrastructure, technology, procurement, and human resource

management.

Figure-1: Porter’s Value Chain Activities

rimary activities can be classified into product related and market related

activities which are described below:

Product related activities: The activities that the organization performs to add

value to the products and services itself. The activities are classified as:

1. Inbound logistics: For the production and development activities,

organizations need inputs as goods which are received from the suppliers.

Inbound logistics refer to all the activities related to receive goods from

the suppliers, decision about the transportation scheduling, storing the

goods as inventory, managing the inventory, and make the inputs ready touse for the production of end products.

2. Operations: These include the production process, development

activities, testing, packaging, maintenance, and all other activities that

transform the inputs into finished product.

3. Services: Organization offers the services after the products and/or

services have been sold. These service activities enhance the product’svalue in the form of after sales guarantees, warranties, spare parts

management, repair services, installation, updating, trainings, etc.

4. Outbound Logistics: The finished products are developed using the product related activities. Now activities are required to transfer the



finished products to the customers via warehousing, order fulfillment,

transportation, and distribution management.

5. Marketing and Sales: These activities include the advertising, channel

selection, product promotion, selling, product pricing, retail management,

etc. The activities are performed to make sure that the products aretransferred to the targeted customer groups. Marketing mix can be aninstrument to take the competitive advantage to the target customers.

Q.4 - Explain the Herbert Simon Model in detail.

Answer: Herbert A. Simon developed a model of decision making. The model

consisted of three steps, intelligence, design, and choice. In the intelligence

phase, the problem is identified, and information is collected concerning the

problem. This can be a long process, as the decision to be made comes from the

information. The design phase develops several possible solutions for the

problem. Finally, the choice phase chooses the solution. The task of rational decision making is to select the alternative that results in the

more preferred set of all the possible consequences. This task can be divided

into three required steps:

1. the identification and listing of all the alternatives;

2. the determination of all the consequences resulting from each of the

alternatives; and3. the comparison of the accuracy and efficiency of each of these sets of

consequences

Simon's Model is based on premise that decision rash null. Decision making in

Simon's Model is characterized by limited information processing and use of

rules. Simmons decision-making model there are four phases

1) Intelligence phase

2) Design phase

3) Choice phase4) Implementation phase

The Intelligence Phase

The intelligence phase consists of finding, identifying, and formulating the

problem or situation that calls for a decision. This has been calleddeciding what

to decide. The intelligence stage may involve, for example, comparing thecurrent status of a project or process with its plan. The end result of the

intelligence phase is a decision statement.



The name of this phase, “intelligence,” can be confusing. Intelligence as we

usually use the term informally, is talking about decision making, it is what we

use after we know a decision must be made. Simon borrowed the term from its

military meaning, which involves the gathering of information without

necessarily knowing what it will lead to in terms of decisions to be made. In business decision making, we must often collect a great deal of information before we realize that a decision is called for.

The Design Phase

The design phase is where we develop alternatives. This phase may involve a

great deal of research into the available options. During the design phase weshould also state our objectives for the decision we are to make.

The Choice Phase

In the choice phase, we evaluate the alternatives that we developed in the design

phase and choose one of them. The end product of this phase is a decision thatwe can carry out.

Extensions to Simon's

Model

Implementation

The decision that is

ultimately carried out.

Q.5 - How has the trend of increased customer focus changed the mannerof doing business?

Answer: Economies where it is easy for firms to do business often have

advanced-government initiatives. E-government kicked off in the 1980s, andeconomies with well-developed systems continue to improve them. Hong Kong

SAR (China) and Singapore turned their one-stop shops for building permits

into online systems in 2008. Denmark just introduced a new computerized land

registration system. The United Kingdom recently introduced online filing at

commercial court.

http://upload.wikimedia.org/wikipedia/commons/1/1a/Simons_3_stages_in_Decision_Making.gif



WAYS OF TRACKING CHANGE IN BUSINESS REGULATIONSeveral trade-related documents, such as the bill of lading, can now be

submitted online, and customs declarations can be sent in before the cargo

arrives. Modernization efforts, already under way for several years, also include

a risk management system to control goods crossing the national border and amodern inspection system (TC-SCAN) at the border crossing point shared withChina. As a result, the time to export fell by 8 days, the time to import by 9 days

and the number of documents required for trade by 1. Kazakhstan also increased

the legal requirements for disclosure in related-party transactions. Thanks to the

amendments to its company law, companies must describe transactions

involving conflicts of interest in their annual report.

Try to identify the major management challenges to building and using

information systems.

Many factors are influencing the direction of information technology in the 21st

century. Computing devices continue to shrink and grow more powerful.

Economic difficulties increase the pressures to deliver a greater breadth of

technologies while reducing costs. Hardware and software advances continue.

These influences require information technology professionals to adapt and

embrace change.

Information systems have revolutionized the way business is conducted. You'd

be hard pressed nowadays to find too many companies that do not rely on

computers in some shape or form.

Management information systems provide many tangible and significant

benefits to businesses which can increase productivity, efficiency and,

ultimately, profitability. While the benefits are vast, it is important companies

also understand the challenges and responsibility that come with using

information systems. While technology enhances and increases capabilities of

business, there are other factors to consider as well.

Q.6 – Try to identify the major management challenges to building and

using information systems.

Answer: Challenges of Management Information SystemManagement Information Systems rely on information, people and technology.

The use of Management Information Systems (MIS) has gone from competitive

advantage for few to business necessity for all. The true advantages of information technology (IT) come in the forms of efficiency and effectiveness



of the gathered information. According to Haag and Cummings, "Management

Information Systems (MIS) deals with the planning for, development,

management, and use of information technology tools to help people perform all

tasks related to information processing and management."

Other People Are Reading Challenges in Information Technology Management

Challenges in Knowledge Management Systems

1. The Information: Information is the starting point for MIS, which is the

analysis of collected raw data such as pricing, demographics or

temperatures. As defined by Haag and Cummings, "Information is data

that have a particular meaning within a specific context." The current

price of airfare becomes information if you are deciding which airline to

fly with. Businesses constantly collect information on their customers,vendors and competitors to build strategies and make managerial

decisions. The information used to do this is called business intelligence.

Business intelligence relies heavily on the information's quality. The four

main elements that measure its quality are timeliness, accessibility, formand validity.

2. Managerial Literacy: Though technology receives most of the credit,

managers play an intricate role when dealing with MIS. Their literacy in

both technology and information determine how effective strategies will

be when implemented. A technology-literate manager will know how andwhen to apply technology, meaning that she will know what to purchase

to execute certain processes and the most appropriate time to make the

purchase. An information-literate manager is able to define what

information is needed and how to access it, can convert it from

information to business intelligence, and can make the best decision

based on the information.

3. The Information Technology (IT) Element: The technology portion of

the MIS equation consists of acquiring the necessary hardware and

software to help managers gather, analyze, and access information. A

business using a poor combination of IT can hinder the execution of strategies, as its hardware and software may be unable to complete thetasks the manager intends it to do. o determine what IT is necessary,

managers need to assess the business's needs, understand the industry's

environment and design the best strategies to meet objectives. The IT

needs to support the strategies, not vice versa.

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Management Information System I