CSC573

Business Management
Information System
Lecture 1a, 2 ,3
Instructor Sana Nasir
Course Theme
◼ The importance of Information System
Management
◼ Leadership Issues (The Top is Job)
◼ Strategic Uses of information Technology
◼ Information System Planning
◼ Distributed Systems The Overall Architecture
◼ Managing Telecommunications
◼ Managing Information Resources
◼ Managing Operations
Course Theme
◼ Technologies for Developing Systems
◼ Management Issues in System
Development
◼ Supporting Decision Making
◼ Supporting Collaboration
◼ Supporting knowledge Work
◼ The Challenges Ahead
Introduction
◼ Information Technology (IT) -computers
and telecommunications - is having the
kind of revolutionary, restructuring impact
that has been expected and promised for
years
◼ Rapid advances in speed and capacity +
pervasiveness of Internet, wireless,
portable devices etc. = making major
changes in the way we live and work
◼ ‘Go Back’ – 5, 10, 15 years
Introduction cont…..
◼ Due to the growth and pervasiveness of IT,
organizations are operating in a different environment
from just a few years ago
◼ Themes this unit emphasizes:
 Globalization
◼ The world seems to be getting smaller
◼ Backlash – local needs Vs. ‘standard’
◼ Jobs to stay ‘local’
◼ IS executives need ‘balancing act’
 E-enablement
◼ Internet has become a hub for conducting business
◼ Interconnectivity plus!
 Knowledge Sharing and Knowledge Management
◼ Between people
◼ Out of people’s heads and into ‘lasting’ things e.g. systems, policies
and procedures etc.
Introduction cont…….
◼ Management of Information Systems
 3 Major Trends
1. Governance of IT = a collaborative effort from IS
executives and all other members of Senior
Management
2. Role of IS is shifting from application delivery to
system integration and infrastructure development
3. Outsourcing – total / selective
◼ Developing and managing contracts and relationships
Introduction cont.
◼ Historically, managing IT has been the job
of ‘technical managers’

◼ NOW = increasingly becoming an

important part of the responsibilities of:
 Seniorexecutives
 Line managers
 Employees at all levels of an organization
The ‘Key’ (What’s it all about?)
▪ Technology is configured into
systems that help manage
information to improve organizational
performance
 What is Information?
◼ Information is created by defining and
organizing relationships among data.
◼ Defining different relationships results in
different information.

Example: Different Designs of

wood depicting different shapes
of information!
What is Information?
cont…
◼ All individuals, companies and, in general, all
organizations are continuously capturing data, many
of which are of no significance to them at all.
However, other data are available that would afford
them a better understanding of their own
environment and of themselves. These data – what
we know as information – enable them to make
more accurate decisions. For this reason, the right
amount of information at the right time is a key
factor for every organization.
◼ Company managers take decisions, prepare plans and
control their company’s activities using information that
they can obtain either from formal sources or through
informal channels such as face-to-face conversations,
telephone calls, social contacts, etc.
◼ Managers are challenged by an increasingly complex
and uncertain environment. In these circumstances,
managers should theoretically be able to define and
obtain the type of information they require. However, this
is not what happens in practice;
◼ rather, the way managers perform their work depends
on the available information that they have access to.
Most decisions are therefore made in the absence of
absolute knowledge, either because the information is
not available or because access to it would be very
costly.
◼ Although the terms data and information are sometimes
used indiscriminately, they do have different meanings.
◼ Data are non-random symbols that represent the values
of attributes or events. Hence, data are facts, events and
transactions stored according to an agreed code.
◼ Data are facts obtained through reading, observation,
calculation, measurement, etc. The amounts and other
details on an organization's invoices, cheques or pay
slips, etc, are referred to as data, for example. Data are
obtained automatically, the result of a routine procedure
such as invoicing or measurement processes.
◼ Information is a set of data transformed in such a way
that it helps to reduce future uncertainty and, therefore,
contributes to the decision-making process.
◼ Information is data transformed in a way that makes
sense to the person who receives it;
◼ . Information, moreover, is data that have been
interpreted and understood by the recipient of the
message.
◼ The relationship between data and information is similar
to that of raw materials and the finished product.
◼ Information will be meaningful insofar as it provides
useful raw material for taking a specific decision.
Characteristics of a Valuable
information
◼ Good information provides value.
◼ Information should posses following characteristics,
 Accurate
 Complete
 Economical
 Flexible
 Reliable
 Relevant
Cont…..
 Simple
 Timely
 Verifiable
 Accessible
 Secure
 Punctuality
 Comprehension
Accurate
◼ Information must be sufficiently accurate for
managers’ purposes. No information is totally
accurate, and spending more on information in
pursuit of greater accuracy does not always
result in more valuable information.
◼ The degree of accuracy should be coherent with
the importance of the decision to be taken and
will vary according to the decision-maker’s level
in the hierarchy. The degree of information
accuracy required will depend on the
hierarchical level in question.
Complete
◼ In an ideal world, all the information
required to take a decision would be
available; however in reality this is not
possible.
◼ Information is considered to be completed
if it informs us on the key points of the
problem we are analyzing.
Economical

◼ Information is considered to be
economical if it informs us on the key
points of the problem we are analyzing.
Flexible

◼ Ideal world requires that, all the

information to take a decision would be
flexible; however in reality this is not
possible. Information is considered to be
flexible if it informs us on the key points of
the problem we are analyzing.
Reliable

◼ All the provided information should be

reliable with respect to the other
information. In reality some type of
reliability about the information is gained.
Relevant

◼ All the provided information must be

relevant to the system information and
provide relevancy, to perform in the better
way. Must be relevant to the given
management information system.
Simple

◼ Good information must be simple in all the

aspect and should provide simple terms
and the conditions about the management
information system.
Timely
◼ All the information required to take a
decision would be timely manage;
however in reality this is not possible.
Information is considered to be Timely if it
informs us on the key points of the
problem we are analyzing.
Verifiable
◼ All the information required to take a
decision would be verified; however in
reality this is not possible. Information is
considered to be verifiable if it informs us
on the key points of the problem we are
analyzing.
Accessible

◼ All the information required to take a

decision would be accessible to all the
users ; however in reality this is not
possible. Information is considered to be
accessible if it informs us on the key points
of the problem we are analyzing.
Secure
◼ All the information required to take a
decision would be secured to all the users
; however in reality this is not possible.
Information is considered to be secured if
it informs us on the key points of the
problem we are analyzing.
Punctuality
◼ Good information is that which is delivered just when it is needed.
To a certain extent, the need to obtain information quickly can
jeopardize its accuracy, although today’s data processing methods
can produce accurate information very rapidly.
◼ Vital information for the company may become worthless if it takes
too long to obtain, or delays occur in processing and communicating
the information.
◼ Although the punctuality of regularly produced information is
important, how often information is produced should be related to
the type of decision or activity it is required for.
◼ Often, companies routinely produce reports at fairly arbitrary
intervals (daily, weekly or monthly) following traditions or calendar
conventions without taking into account the time cycle of the activity
involved.
Comprehension
▪ Comprehension is what transforms data
into information. If the information is not
understood it cannot be used and
therefore it cannot add value.
▪ Many factors intervene in understanding
information.
Cont…
▪ Comprehension is the result of memory in
association with the received message.
Environmental factors.
▪ Group pressure, available time and trust in
the information system all influence
comprehension.
▪ Language. Information is codified in signs
or messages.
▪ Previous knowledge. Comprehension is
the result of memory in association with
the received message.
What is an Information System?
◼ A set of interrelated elements or
components that collect (input),
manipulate and store (process),
disseminate (output) data and
information, and provide a feedback
mechanism to meet an objective.
◼ Computer based information system
Composed of hardware, software, data,
telecommunications, people, and
procedures to collect, manipulate, store,
and process data into information
Why Need an Information System?
Here are some reasons for the need of an information
system,
 Global Competition for Market and for Labor
 Need for Real-time Operations
 Managing Work Force
 Customer-Oriented Operations
 Technological Innovation and Obsolescence
 Information Overload
 Social Responsibility of Organizations
 Government Regulation and Deregulation
 Organizational Responses to Business Pressures in
the Information Age
Components of Information System as Defined by
Turban, McLean, Wetherbe (1996)
Henry C. Lucas (1997)
◼ Information systems may be described by five of
their key components:
 Decisions
 transactions and processing
 information and its flow
 individuals or functions involved
 communications and coordination
Where is the difference?
◼ Outcome of different definitions depicts
 Trend and technological effects at that time
 Information system definition evolved with
respect to time.
 People worked on data processing until they
realized the need of information systems.
Information Systems Today
◼ The early focus on IS was for the support
of operations, management, analysis and
decision-making in organizations.
Social Media Information System Today
Terminology
◼ In many textbooks and contexts, the terms Management
Information Systems (or MIS) and Information Systems
(IS) are used interchangeably.
◼ However, in other contexts, Management Information
Systems are considered as a subset of the more general
Information Systems.
◼ MIS are considered to be information systems which
provides information specifically for managing an
organization generally at a tactical or middle
management level. Information Systems would be a
more general term that can include other systems (e.g.
group communication systems). We will generally follow
this convention.
Types of Information Systems
◼ Transaction Processing Systems (TPS).
◼ Management Information Systems (MIS).
◼ Decision Support Systems (DSS).
◼ Expert Systems (ES).
◼ Executive Information Systems (EIS).
◼ Office Automation Systems (including document
management systems).
◼ GroupWare, Computer-Supported Cooperative
Work (CSCW), and other communication
systems.
◼ and much more ….
Types of Information Systems
Transaction Processing Systems (TPS)

◼ It is an information system designed to

process day-to-day business event data at
the operational level of the organization.
A transaction is an elementary activity conducted
during business operations (e.g. merchandise sale).
◼ Support the monitoring, collection, storage,
processing, and dissemination of the
organization’s basic business transactions.
◼ Provides backbone for many other applications
involving other support systems.
TPS Data Entry Screen
Types of Transaction Processing
Systems
◼ Batch processing
 Batch processing is a form of transaction processing.
 Batch processing involves processing several
transactions at the same time, and the results of each
transaction are not immediately available when the
transaction is being entered; there is a time delay.
◼ Online transaction processing is the form of
transaction processing that processes data as it
becomes available.
Management Information Systems
◼ A management information system (MIS) provides
information that is needed to manage organizations
efficiently and effectively.
◼ Management information systems involve three primary
resources:
 people,
 technology, and
 information or decision making.
Management Information System
◼ Management information systems are
distinct from other information systems in
that they are used to analyze operational
activities in the organization.
◼ Different applications of MIS are, Human
Resource Management System, Financial
Management System etc.
Financial Management Software Example
HR Management Software Example
Decision Support System
◼ A decision support system (DSS) is a
computer-based information system that
supports business or organizational
decision-making activities.
◼ DSSs serve the management, operations,
and planning levels of an organization and
help to make decisions, which may be
rapidly changing and not easily specified
in advance.
Decision Support Systems
◼ DSS include knowledge-based systems.
 Knowledge base is the set of rules that group
together to build knowledge.
◼ Fundamental components of DSS model are,
 The database (or Knowledge base)
 the model (i.e., the decision context and user criteria),
and
 The user interface
 The users themselves are also important components
of the architecture.
Decision Support System
Expert System
◼ An expert system is a computer system
that emulates the decision-making ability
of a human expert.
◼ Expert systems are designed to facilitate
tasks in the fields of accounting, medicine,
process control, financial service,
production, human resources, among
others.
Executive Information System
◼ They are intended to facilitate and support
the information and decision-making
needs of senior executives by providing
easy access to both internal and external
information relevant to meeting the
strategic goals of the organization.
◼ It is commonly considered as a specialized
form of decision support system (DSS)
Office Automation System
◼ Office automation systems helps in
optimizing or automating existing office
procedures.
◼ Office workflows of information and other
documentation procedures are automated
using office automation system.
Groupware information systems
◼ Collaborative software (or groupware) is
a type of information system, designed to
help people involved in a common task
achieve goals.
◼ One of the earliest definitions of
“collaborative software” is, "intentional
group processes plus software to support
them."
Information Systems vs. Computer Science
◼ Computer Science has its concentration in the
study of algorithms, computation, software, and
data structures.
◼ Information Systems is an extension of
management and organization theory that
applies technical capabilities and solutions
initially developed by computer science, to tasks
in organizations.
 For example, web development using HTML,
XML, scripting may be a computer scientist
job, but integrating all these to develop
business portal is an Information Systems job.
Information Technology
◼ Information Technology (IT) sometimes
refers to the technology component of an
information system.
◼ However, the concept is often used by
many to describe the collection of all
information systems in organization.
Putting Things in Context
◼ Information Technology - the hardware,
software, and networks that make
Information Systems possible.
◼ Information System - a system that uses
information technology to capture,
transmit, store, retrieve, manipulate, and
display information.
◼ Business process - a related group of
steps or activities that use people,
information, and other resources, to create
value for internal or external customers.
Putting Things in Context
◼ Firm (or organization) - consists of a large
number of interdependent business
processes that work together to generate
products of services in a business
environment.
◼ Business environment - includes the firm
and everything else that affects its
success, such as competitors, suppliers,
customers, regulatory agencies, and
demographic, social, and economic
conditions.
What goes wrong?
Capabilities of Information Systems
◼ Provide Fast and Accurate Transaction
◼ Provide Large Capacity, Fast Access
Storage
◼ Provide Fast Communications (machine
to machine, human to human)
◼ Reduce Information Overload
◼ Span Boundaries
◼ Provide Support for Decision Making
◼ Provide a Competitive Weapon
◼ General Technological Trends for IT
Summary

◼ What is information?
 System components and concepts
 Characteristics of information
 Management Information System
 Groupware information systems