Management Information System

Dynamic Business Environment

Blurring Business Boundary Cut-Throat Competition Demanding Customers Vigilant Government, Regulator and Judiciary Changing Role of Trade Partners Wider Choice with Employees

* No Space for Complacency

Management Information System

Management : Optimal Resource Utilisation Decision Making (Structured Vs. Unstructured) Information: Processed Data (Types) System: Composed of 4 Ms

Management Information System (contd..)

MIS is an integrated man/machine system for providing information to support operations, management and decision making function in an organisation. This system utilises computer hardware, software, manual procedures, management, decision models and a database.

The Interdependence between Organizations and Information Systems

MIS functioning

Data Collection Data Entry Data Transformation Information Dissemination

The Business Information Value Chain

E-Business

MIS Model
How ??
SDLC, Prototyping, CASE Tools P R O C E D U R E

Facilitates Strategic Decision Making Supports Management Control Supports Operational Control

Improves Product Quality

D H P S A AE RO O DF T P WT L A WA E RA ER E

What ??

Improves Product Delivery

Why ??

* Improvement in Efficiency, Effectiveness ?

Characteristics of MIS

Management Oriented Management Directed Common Database Common Dataflow Integrated Sub-System concept Heavy Planning element Flexibility Computerised

Pre-requisites of Effective MIS

Top Management Support Qualified systems Technology Oriented Staff Database Control of MIS Evaluation of MIS

Constraints in Implementing MIS

Lack of skilled professionals High Turnover of experts Lack of staff cooperation Large investment & huge time requirement Benefits not known to management

Limitations of MIS

Most suitable for structured decisions Lesser fit for qualitative data Not a substitute for effective management Rapidly changing environment requires rapid customisation in IS Quality of inputs determines quality of output

Types of Information Systems in the Enterprise

Types of Information Systems

Major Types of Information Systems

Transaction Processing Systems (TPS)

Basic business systems that serve the operational level A computerized system that performs and records the daily routine transactions necessary to the conduct of the business Includes set of procedures for handling transaction activities calculation, classification, sorting, storage, summarisation High volume but similar with few exceptions
What is Transaction? Examples

A Symbolic Representation for a Payroll TPS

Typical Applications of TPS

Types of TPS

Online (Real time) Vs. Offline (Batch Processing) System

Master Files Vs. Transaction Files

Management Information Systems (MIS)

Management level
Inputs: High volume transaction level data

Processing: Simple models

Outputs: Summary reports (Types)

Users: Middle managers for Structured & Semi-structured Decisions

Management Information Systems (MIS) (continued)

Decision-Support Systems (DSS)

Management level
Inputs: Transaction level data & MIS Reports Processing: Interactive Outputs: Decision analysis Users: Middle & Top-Level Managers

Decision Support System

Decision Support Systems

DSS is an interactive CBIS which help decision makers utilise data & models to solve unstructured problems
- Scott Morton

DSS is an interactive, flexible & adaptable CBIS that utilises decision rules, models and a modelbase coupled with a comprehensive database & the decision makers own insight.

Characteristics of DSS :
Ability to support solution of complex problems Designed to support semistructured and unstructured problems May be constructed to support one-time decision Typically designed for one decision-maker or a group of decision-makers Ability to quickly & objectively try different strategies under different configuration Greater emphasis on models, ad-hoc queries, display graphics Emphasizes change, flexibility, and a rapid response

Components of DSS
DSS database: A collection of current or historical data from a number of applications or groups DSS software system: Contains the software tools for data analysis, with models, data mining, and other analytical tools DSS user interface: Graphical, flexible interaction between users of the system and the DSS software tools

Components of DSS
Model: An abstract representation that illustrates the components or relationships of a phenomenon Statistical models Optimization models Forecasting models

Sensitivity analysis (what-if models)

A DSS for Customer Analysis and Segmentation

What is Data Visualisation? What is Geographic Information System ?

Group Decision-Support System

GDSS is an interactive computer-based system used to facilitate the solution of unstructured problems by a set of decision makers working together as a group.

Main Components of GDSS:

Hardware (conference facility, audiovisual equipment, etc.)
Software tools (Electronic questionnaires, brainstorming tools, voting tools, etc.) People (Participants, trained facilitator, support staff)

Overview of a GDSS Meeting

In a GDSS electronic meeting, each attendee has a workstation. The workstations are networked and are connected to the facilitators console, which serves as the facilitators workstation and control panel, and to the meetings file server.

All data that the attendees forward from their workstations to the group are collected and saved on the file server.
The facilitator is able to project computer images onto the projection screen at the front of the room.

Business Value of GDSS

GDSS allows a greater number of attendees. Enables collaborative atmosphere by guaranteeing contributors anonymity. Enables non-attendees to locate organized information after the meeting. Increases the number of ideas generated and the quality of decisions while producing the desired results in fewer meetings Can lead to more participative and democratic decision making

What is Customer Decision Support System ?

Stages in Decision Making

Decision Making in the Real World

In the real world, investments in decision-support systems do not always work because of
Information quality: Accuracy, integrity, consistency, completeness, validity, timeliness, accessibility Management filters: Biases and bad decisions of managers Organizational inertia: Strong forces within organization that resist change

Trends in Decision Support & Business Intelligence

The rise of client/server computing, the Internet, and Web technologies made a major impact on systems that support decision making.
Six Major Trends:

Detailed enterprise-wide data Broadening decision rights and responsibilities Intranets and portals Personalization and customization of information Extranets and collaborative commerce Team support tools

Executive Support Systems (ESS) / Strategic Information System (SIS)

Inputs: Aggregate data
Processing: Interactive

Outputs: Projections
Users: Senior managers

Example: 5 year operating plan

Objective of ESS/SIS

Involves a study of how the IS function can contribute to the achievement of goals contained in the strategic plan To improve firms performance & competitive position

What is Strategy?

Benefits of ESS/SIS

Pinpoints ways to achieve competitive advantage of using IS as a strategic weapon Stimulates creative use of IS technology & encourages innovations in applying it to organisational needs Redeploys resources to the important IS projects for business Encourages the integration of existing & future IS to eliminate redundancy, inconsistency & inefficiency Establishes priority & timeframe for development of IS in future

Office Automation System (OAS)

IS for making offices more efficient IS that collect, process, store & transmit e-messages, documents and other forms of communications among individuals, workgroups and organisations. Increases productivity of managers Reduction in time & efforts

Components of OAS

Office Publishing System: Word-processing, DTP Image Processing: Scanning, Interactive videos, Storage Electronic Communications: emailing, tele/Videoconferencing, Fax Support system : e-Calendar, Task Management System, Directory System, Work Schedule
Limitations: Compatibility, storage?

What are Functional Information system?

Sales and Marketing Systems

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

Order processing

Enter, process, and track orders

Operational

Pricing analysis

Determine prices for products and services

Management

Sales trend forecasting

Prepare 5-year sales forecasts

Strategic

Manufacturing and Production Systems

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

Machine control

Control the actions of machines and equipment

Operational

Production planning

Decide when and how many products should be produced

Management

Facilities location

Decide where to locate new production facilities

Strategic

Financing & Accounting Systems

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

Accounts receivable

Tracks money owed the firm

Operational

Budgeting

Prepares short-term budgets

Management

Profit planning

Plans long-term profits

Strategic

Human Resource Systems

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL Operational

Training and development

Tracks employee training, skills, and performance appraisals

Compensation analysis

Monitors the range and distribution of employee wages, salaries, and benefits Plans the long-term labor force needs of the organization

Management

Human resources planning

Strategic

Need for Enterprise Systems?

Enterprise Applications
Designed to support organization-wide process coordination and integration
Consist of : Enterprise systems Supply chain management systems Customer relationship management systems Knowledge management systems

Enterprise Systems
Also known as enterprise resource planning (ERP) Provides a single information system for organization-wide coordination and integration of key business processes.

Seamlessly flow of Information throughout the firm

Benefits of Enterprise Systems

Help to unify the firms structure and organization: One organization Management: Firm wide knowledge-based management processes Technology: Unified platform Business: More efficient operations & customer-driven business processes

Challenges of Enterprise Systems

Difficult to build: Require fundamental changes in the way the business operates Technology: Require complex pieces of software and large investments of time, money, and expertise Centralized organizational coordination and decision making: Not the best way for the firms to operate

Supply Chain
Network of organizations and business processes for procuring raw materials, transforming into products, and distributing them to customers SCM: Coordination of business processes to optimise information, product, and fund flows up and down a supply chain to reduce time, redundant effort, and inventory costs

Supply Chain

Supply Chain Management (SCM)

Network of organizations and business processes

Integrates supplier, manufacturer, distributor, and customer logistics time

Reduces time, redundant effort, and inventory costs Helps in procurement of materials, transformation of raw materials into intermediate and finished products Helps in distribution of the finished products to customers Includes reverse logistics - returned items flow in the reverse direction from the buyer back to the seller

Information & SCM

Decide when and what to produce, store, and move

Rapidly communicate orders

Track the status of orders & inventory levels Reduce inventory, transportation, and warehousing costs Track shipments Plan production based on actual customer demand

Rapidly communicate changes in product design

Information and Supply Chain Management

Inaccurate or untimely information causes inefficiencies in supply chain, such as shortages, excessive inventory Just-in-time strategy :
Scheduling system for minimizing inventory by having

components arrive exactly at the moment they are needed

and finished goods shipped as soon as they leave the assembly line

Customer Relationship Management (CRM)

Manages all ways used by firms to deal with existing and potential new customers Business and technology discipline Uses information system to coordinate entire business processes of a firm

Customer Relationship Management (CRM) (Continued)

Provides end- to- end customer care Provides a unified view of customer across the company Consolidates customer data from multiple sources and provides analytical tools for answering questions

Customer Relationship Management and Partner Relationship Management

CRM
Business and
technology discipline for managing customer

PRM
Automation of the firms
relationships with its selling partners using

relationships to optimize
revenue, profitability, customer satisfaction,

customer data and

analytical tools to improve coordination and customer sales

and customer retention

CRM Applications
Capture and integrate customer data from all over the organization Consolidate and analyze the data Distribute results to various systems and customer touch points across the enterprise

What is a touch point ?

Operational and Analytical CRM

O-CRM
Customer-facing applications, such as call center and customer service support, telemarketing and marketing automation

A-CRM
Applications that analyze customer data generated by O-CRM applications to provide information for improving business performance

What is Collaborative CRM?

Business Value of CRM

Increased customer satisfaction More effective marketing and reduced direct marketing costs Lower costs for customer acquisition and retention Increased revenue from identifying most profitable customers and segments for marketing, cross-selling, up-selling

Reduced customer churn

Knowledge Management Systems (KMS)

Collects relevant knowledge and make it available wherever and whenever it is needed Support business processes and management decisions Also link the firm to external sources of knowledge

Support processes for acquiring, storing, distributing, and applying knowledge

Knowledge Management Value Chain

Expert System

Term originated as it was aimed initially at replicating the abilities of human expertise A kind of KMS which employs human knowledge stored in computer to solve problems that originally require expertise

Can be used by non-experts to improve their problem solving abilities

Can function better than an expert specialised in narrow domain

Structure of ES

Development Environment: Used by ES builder to build the components & introduce experts knowledge into ES knowledge-base Consultation Environment: Used by a non-expert to obtain the expert knowledge & advise

Components of ES

Knowledge Acquisition Expert & Knowledge Engineer Knowledge Base Rules & Facts Inference Engine (Brain) Blackboard (Workplace) User Interface Natural Language Explanation (Justifier) Reasoning Capability Improvement Knowledge Refinement

The Systems Development Process

SYSTEMS DEVELOPMENT PROCESS

Systems analysis: The analysis of a problem that the organization will try to solve with an information system A detailed statement of the information needs that a new system must satisfy Identifies who needs what information, and when, where, and how the information is needed

Feasibility study: Process of determining whether the solution is achievable, given the organizations resources and constraints Technical/ Economic/ Behavioural Feasibility

SYSTEMS DEVELOPMENT PROCESS

Systems design:

Details how a system will meet the information requirements

Includes creating design specifications Programming: Translating the system specifications prepared

during the design stage into program code

Testing
The exhaustive testing to determine whether the system produces the desired results under known conditions Unit Testing: Testing each program separately in the system (program testing) System testing: Testing the information system as a whole to determine if discrete modules function together as planned Acceptance testing: Provides the final certification that the system is ready to be used in a production setting

Conversion
Process of changing from the old system to the new system Four main conversion strategies
1. Parallel strategy

2.
3. 4.

Direct cutover strategy

Pilot study strategy Phased approach strategy

Production
Post-implementation Audit & Review by users and technical specialists to determine how well it has met its original goals

Maintenance:
Changes in hardware, software, documentation, or procedures to a production system to correct errors, meet new requirements, or improve processing efficiency
Limitation of SDLC Approach?

Prototyping
Building an experimental system quickly and inexpensively for demonstration and evaluation and used as a template for the final system Iterative & interactive process that combines steps of traditional SDLC

Prototype is modified several times before end-users find it acceptable

Hastily constructed systems, however, may not accommodate large quantities of data or numbers of users.

The Prototyping Process

Computer-Aided Software Engineering

Software tools to automate development and modeling methodologies Enforce a standard development methodology and design discipline Organize and correlate design components and provide rapid access to them using a design repository Automate tedious and error-prone portions of analysis and design Automate code generation and testing and control rollout

Management of Data

File Organization
Bit: Smallest unit of data; binary digit (0,1) Byte: Group of bits that represents a single character Field: Group of words or a complete number Record: Group of related fields File: Group of records of same type

File Organization
Database: Group of related files Entity: Person, place, thing, event about which information is maintained Attribute: Description of a particular entity Key field: Identifier field used to retrieve, update, sort a record

Entities and Attributes

Database Management System (DBMS)

Software for creating and maintaining databases Acts as interface between application programs and data files Separates logical and design views of data

Components of DBMS:
Data definition language: Specifies content and structure of database and defines each data element Data manipulation language: Used to process data in a database Data control language: Used to control data in a database Data dictionary: Stores definitions of data elements and data characteristics

Types of Databases
Hierarchical and network DBMS Relational DBMS Object-oriented databases

Hierarchical and Network DBMS

Hierarchical DBMS:
Organizes data in a tree-like structure Supports one-to-many parent-child relationships

Prevalent in large legacy systems

Hierarchical Database for Human Resources System

Network DBMS:
Depicts data logically as many-to-many relationships

Relational DBMS:
Represents data as two-dimensional tables called relations Relates data across tables based on common data element Concept of Primary, Foreign, Candidate, Alternate, Composite Key (s)

Examples: DB2, Oracle, MS SQL Server

The Relational Data Model

Object-Oriented Databases:

Object-oriented DBMS: Stores data and procedures as objects that can be retrieved and shared automatically Object-relational DBMS: Provides capabilities of both object-oriented and relational DBMS

Designing Databases:
Identification of Entities Data Attributes/ Fields Data Type Data Size Constraints Establishing Relationship Normalisation

Centralised Vs. Decentralised

Database

Ensuring Data Quality:

Accuracy
Completeness Relevance Timeliness

What is Data Quality Audit, Data Cleansing?

Multidimensional Data Analysis

Online Analytical Processing (OLAP):
Multidimensional data analysis Supports manipulation and analysis of large volumes of data from multiple dimensions/perspectives

Data Warehousing
Stores current and historical data
Supports reporting and query tools Consolidates data for management analysis and decision making

What is Data Mart/ Data Mining ?

DATABASE TRENDS

Database Presence on Web

Hypermedia Database

Application of Information system

E-Commerce E-Banking E-Governance E-Learning

Trends in Information Technology

Grid Computing:
Involves connecting geographically remote computers into a single network capable of working in parallel on business problems that require short-term access to large computational capacity

Rather than purchase huge mainframes or super computers, firms can chain together thousands of smaller desktop clients into a single computing grid. Saves infrastructure spending, increases speed of computing, and increases the agility of firms.

What is Virtualisation, Green Computing?

On-Demand (Utility) Computing

Firms off-loading peak demand for computing power to remote, large-scale data processing centers

Developed by IBM, SUN, and HP

Firms pay only for the computing power they use, as with an electrical utility. Excellent for firms with spiked demand curves caused by seasonal variations in consumer demand, e.g. holiday shopping Saves firms from purchasing excessive levels of infrastructure

What is Software As A Service (SAAS)?

Autonomic Computing
Computer systems (both hardware and software) have become so complex that the cost of managing them has risen.

Thirty to fifty percent of a companys IT budget is spent preventing or recovering from system crashes.
Operator error is the most common cause of crashes.

Autonomic computing is an industry-wide effort to develop systems that can: Configure, optimize, and tune themselves Heal themselves when broken Protect themselves from outside intruders and selfdestruction

Edge Computing
A multitier, load-balancing scheme for Web-based applications. Processing load is distributed closer to the user and handled by lower-cost servers. Lowers cost of hardware

Increases service levels

Provides firm greater flexibility in responding to service requests

Seasonal spikes in demand can be off-loaded to other edge servers.

Service-Oriented Architecture
SOA refers to the use of Web services in a firm to achieve integration among disparate applications and platforms.

A firm might have applications (payroll) running on older AS400 IBM machines, IBM mainframes (customer data and inventory) and newer applications running on client/server networks. In SOA, these applications are integrated so that information stored on various systems can be brought together and fed into newer applications running on more contemporary equipment.
SOA is generally less expensive than rebuilding all the older applications and adopting a new enterprise wide system.