Management Information System

Trends in Business and Management Blurring of industry boundaries Deregulation of industries Faster pace of business Increasing foreign competition Global Business Community An Information Society Increasing complexity of management Interdependence of organization units Improvement in productivity Availability of computers of end users Recognition of information as a resource

Strategic Planning

Top Mgmt.

Mgmt. Control & Tactical Planning

Middle Mgmt.

Operational Planning & Control

Operational Mgmt.

Transaction ProcessingOperational Personnel

Well defined Structured Problems

Dat

a re

quire

men

t

Poorly defined or undefined

Kind of Problems

Unstructured

Management Hierarchy & Information Flow

Strategic Planning Goals, Policies, Guidelines, Objectives

Management Control & Tactical Planning

Acquisition of resources, tactics, Plant location, product Establishment & monitoring of budget.

Operational Planning & Control

Effective & Efficient use of existing facilities & resources

Important Activities in Business Problem Solving

Decision Making Methods of Decision Making

Matrix Pairs of conditions and actions

Decision Tables Section from set of actions conditions in the form of rule.

Flowchart Decision Tree Selection of Path Pseudo Code If-Then form

Some Optimization Techniques for Decision Making System of equation Linear programming Integer programming Dynamic programming Queuing models Inventory models Capital budgeting analysis Break-even analysis

Statistical Techniques

Sampling Probability distributors Regression and correlation analysis Testing of hypothesis

Components of Problem Solving Process

Gather intelligence

about Problem

Develop alternative

Select an alternative

Implement the solution

Monitor situation &

results

Decision Making Process

Choice Selection Process

Problem Solving Process

IS and Problem Solving Stages

Gather intelligence

about Problem

Develop alternative

Select an alternative

Implement the solution

Monitor situation &

results

Existing Information

System (TPS, MIS)

Expert Systems

Engineering Systems

Graphic Systems

Spread Sheet Programs

Statistical Packages

Financial Management

Packages

Project Management

Software

Personal Database

Application

Existing & New

Information System

Information System

An Information System is a set of people, data and procedures that work together to provide useful information.

Vision of Role of IS

Information Technology Vision Strategic Business Vision

BUSINESS VISION

Business Environment

Hardware Software DataData

Communication

Creating new businessopportunities;New ProductsNew Services

Enter New Industry

Improved performance in current industryInformation System

Capability enables Business Vision

Combined knowledge of Business Environment & Information System

Activities in Information System

Input of DataProcessing Procedures

Reports

DocumentDatabase

Sales AnalysisSales historyInventory ReportCustomer History

Sales DetailsPayment DetailsSales ReturnsAdjustments

Customer DataSales DataInventory Data

Information Systems should inform Managers not overwhelm them:

Seven types of Information for Top Managers (imp)

Comfort Information Achievement levels for Performance Measurement

Status Information or Progress Information

Current Problems, Crisis, Opportunities

Warning Information Signals of changes affecting firm

Planning information Description of major developments & programs due to being in future

Internal operation information

Key indicators of organizations & individuals performance

External Intelligence Competion & industry changes: Financial, Political, Economical shifts

Externally distributed information

Information chief executive wishes to review before its release to stockholders, news media etc.

Different Types of IS (studied fr

ERP notes only) Transaction Processing System

Process data about transaction. Management Information System

Provides information for decision support where information requirement can be identified in advance.

Decision Support System Assist managers with unique strategy decisions

that are relatively unstructured.

Different Types of IS

Executive Support System Assists Top-level executives in acquiring & using

information needed to run the organization. Work-group Support System

Assists and supports managers, staff and employees in carrying out day-to-day activities.

Expert System Use of computer programs to store facts & rules

to mimic the decision of human expert.

Benefits of IS (imp)

Gain in Productivity Increase in efficiency of the task. More work completed with same or fewer resources.

Improvement in Effectiveness Doing the right thing. Utilization of resources to produce desirable results of high

quality. Gain in Competitive Advantage

Selecting & implementing strategies that changes the way a firm competes.

Improved performance in comparison of market competitors using chosen criteria (e.g. market share, industry dominance, industry ranking, etc.).

Value Addition by IS (imp)

Facilitates Business Process

in Operations management &

Strategic Planning

Enhance Product characteristics & product delivery

Increasing Process Quality &

Product Quality though

improvement & innovation

QUALITY

PROCESS PRODUCT

Information System Application

ESS TPSES DSS

WGS MS

Information System environment

Information System Application

DATAH/W S/W

Communication

InformationSystem

Human Resources

Mgmt Organization Structure

Customer

Competition SuppliesRegulatory Agencies

Management Information Differ by Level in the Organization

Comfort Information Status Information Warning Information Planning Information Internal Operation Information

External Intelligence Externally Distributed Information

Factual Details Exception Reports Financial Accounting Information

Management Accounting Information

Internally Oriented Information

Proportion of Information Types Needed

Top Management& Executives

Operating &Lower LevelManagers

Common Type of MIS Output

Printed Output Visual Output Graphic Output Secondary Storage Output Microfilm Output Audio Response Output Plotter Output

Problems in Development of MIS Major Problems

Lack of Top Mgmt involvement in planning and Design phase.

Cost & Complexity of using a Database Management System.

Inadequate pre-system planning. Recruiting qualified computer specialists. Inadequate strategy for extending MIS to other

part of the company.

Problems in Development of MIS Moderate Problems

Cost of proposed computed application outweigh their economic benefit.

Integrating the computer with the rest of the company. Availability of computer programs and operating

systems. Employee resistance towards the MIS Planning what job to automate; availability of

instructional material Proposed computer application are too time

consuming to automate Management resistance towards MIS

Problems in Development of MIS Minor Problems

Management acceptance of the computer Role of System Analysts/Designers not clearly

defined. Reliability of computers and related equipment. Management of computer and related equipment.

Guidelines for overcoming problems (try to give opposite statemnts of benefts) Ensure that MIS is truly modified to meet user

objectives, not just self serving interest of MIS staff. MIS staff should insist on the meaningful

involvement by management and corporate management as well.

Ensure that the user involvement in agreed upon before any work on MIS takes place.

Ensure that user both understands and accepts full responsibility & commitment towards the ultimate success of the MIS project.

Guidelines for overcoming problems Ensure that user involvement is active and not

passive, and maintained throughout the development of MIS

Ensure that schedules are realistic and accurately reflect not only the MIS staff ability, but also that of the user to participate in the development of MIS

Ensure that MIS staff understands the importance of observing commitments & maintaining quality.

Guidelines for overcoming problems Ensure that user management is constantly

informed about the MIS projects, that the communication channels are kept open at all the times.

Involve Top Management from an overall standpoint in the planning phase as well as succeeding phases of the MIS project.

Provide adequate pre-system planning that focuses on getting started on MIS project

Get appropriate functional managers & their personnel involved in the detailed aspects of the MIS project

Consideration of IS in Strategic PlanningInformation Systems

Capabilities, Applications, Personnel, Hardware,

Software, Data, Communication

No consideration of Strategic Impact:

IS & Plans are separate

Used to implement Strategic Plans:

Considered after plans are

formulated

Considered in formulation of

Strategic Plans:Considered before formulation of plan

is completed.

IS for Corporate Strategy

Determination of strategies by corporate executives

Need of Information System in identified

IS plan is formulated to assist in implementing the Organization Strategy.

IS for Corporate Strategy: Areas The industry in which the firm now competes

New Product or Service Improved Production economies Improved Delivery capabilities

New Markets the firm can enter Geographic expansion of market Expansion into new market segments

Industries in which the firm can begin competing Offer services & products in industry to which firm has been

supplier Create new industry

The elements with which firm interacts or that influence it Customers, Suppliers, Regulators, Competitors

Integrated Information System System that has module for each

functional subsystem of the enterprise & implement all the management activities within each module.

Integrated IS framework

Model Base

DBMSApplica

-tionSoftware

Private Data

Private Data

Private Data

DBMS

Subsystem Software Modules

Strategic Planning

Management Control

Operation Control

Transaction Control

Major Modules of a Information System Project Feasibility Study

Determines the appropriateness of making a system change Introductory investigation Structured analysis Structures System Design Equipment Selection

Major Modules of a Information System Project … System Implementation:

Provides the user with a fully operational system Training of Personnel Structured Programming & Compiling Structured Walkthroughs & Testing Parallel Operations for checking the new system Final Conversion to new system

Periodic Review: Ensures that the system continues to meet

users needs effectively.

Characteristics of a well designed MIS Acceptability

Relates to approval of MIS by personnel who will use it. To improve acceptability user should participate in the

development of MIS. Design Making ability

Refers to the capability of MIS to produce timely, pertinent information, facilitating the decision making process of organization personnel, at the lowest cost.

Economy Centers on keeping costs low by capturing control

information in the MIS as near to the source as possible.

Characteristics of a well designed MIS Flexibility

Focuses on the capability of MIS to adopt to changing environmental conditions likewise, organization personnel must be prepared to adjust their operations to changing conditions.

Reliability Refers to the consistency of MIS to control operations. A high degree of reliability can be designed into the system

by incorporating good control. Simplicity

Stresses the capability of the MIS to provide a straight-line flow from one operation to the next, thereby avoiding needless backtracking and duplication.

The System Life Cycle

Inception Preliminary Survey

Feasibility Study Existing Procedures Alternative System estimates

System Analysis Details of present procedures

The System Life Cycle

Requirement Analysis User Needs – Collection of Data on volumes,

input/outputs, files, boundary settings Design

Ideal System unconstrained revision to make ideal acceptable

Specifications Processing logic, File Design, Input/Output,

Programming requirement, Manual Procedures

The System Life Cycle

Programming & Testing Unit Tests, Combined Module Tests,

Acceptance Tests

Training, Conversion & Installation Operation Maintenance & Enhancements

Tools for a S/w Project

Data Collection Tools: Observation Interviews Questionnaires Comparisons Seminars Presentations

References

Information Systems for Modern Management – 3ed Robert G Murdic, Joel E Ross, James R Colggett – PHI

Management Information System Gerald V Post, David L Anderson – TMH

Management Information System Mc-Lead

Management Information System Kroonke – Macmillan Publishing

Management Information System Senn

Analysis & design of Information System Senn

Software Engineering – 3ed Pressman