Information Systems for Managers

I MBA

Instructor
Dr. Azath Hussain
Assistant Professor
Department of CS & IT
AMIT
Arba Minch University
Chapter 1: Introduction to IS
Definition – Information Systems
An Information System is an arrangement of people, data, processes, interfaces,
networks, and technology that interact for the purpose of supporting and
improving day-to-day operations in a business (sometimes called data processing),
as well as supporting the problem solving and decision making needs of
management (sometimes called information services).
Data, Information, and Knowledge
Data vs. Information
Data
Raw facts
Distinct pieces of information, usually formatted in a special way
Information
A collection of facts organized in such a way that they have additional value
beyond the value of the facts themselves
Database
Collection of data in a structured, secured and efficient form so that it can be
stored and retrieved easily
 Continue..
Knowledge

An awareness and understanding of a set of information and how

that information can be made useful to support a specific task

Knowledge base
The collection of data, rules, procedures, and relationships that
must be followed to achieve value or the proper outcome
Continue..
One of the primary goals of information systems is to economically process data into information and
knowledge.
Data items refer to an elementary description of things, events, activities, and transactions that are

recorded, classified, and stored but are not organized to convey any specific meaning. It can be
numbers, letters, figures, sounds, or images. Examples of data items are a student grade in a class
and the number of hours an employee worked in a certain week.
Information refers to data that have been organized so that they have meaning and value to the

recipient. For example, a grade point average (GPA) is data, but a student’s name coupled with his or
her GPA is information. The recipient interprets the meaning and draws conclusions and
implications from the information.
Knowledge consists of data and/or information that have been organized and processed to convey

understanding, experience, accumulated learning, and expertise as they apply to a current business
problem.
Types of Data

Data Represented by

Numeric data Numbers with their natural order and

weight (integer, double, float etc…)
Text (string) data Streams of alphanumeric without
numerical values
Image data Graphic images or pictures
Audio data Sound, noise, tones
Video data Moving images or pictures
Information
Source:

Data Transformation Information

Characteristics
Accurate, complete, economical, flexible, reliable, relevant, simple,
timely, verifiable, accessible, secure
System

System
A set of elements or components that interact to accomplish goals
A combination of components working together for a certain defined

goal
Elements of system
Inputs
Processing mechanisms
Outputs
 Example - System

Elements
System Processing Goal
Inputs Outputs
elements
Actors, Filming, editing, Finished film Entertaining movie,
director, special effects, delivered to film awards, profits
Movie staff, sets, distribution movie studio
equipment

Data Application SW, Information Data processing,

Operating system, transforming, storing,
Computer
hardware system communicating and
retrieving
System Performance and Standards

Efficiency
A measure of what is produced divided by what is consumed

Effectiveness
A measure of the extent to which a system achieves its goals

System performance standard

A specific objective of the system.
 System Variables and Parameters

System variable
A quantity or item that can be controlled by the decision maker
E.g. the price a company charges for a product

System parameter
A value or quantity that cannot be controlled by the decision maker
E.g., cost of a raw material
 Modeling a System

Model
An abstraction or an approximation that is used to represent reality

Types of models
Narrative (descriptive)

Physical
Schematic
Mathematical
 Information System (IS)
Definition
A set of interrelated elements or components (procedures, materials, manpower

etc.) that collect (input), manipulate (process), and disseminate (output) data
and information and provide a feedback mechanism to meet an objective
(IS) Pronounced as separate letters, and short for Information Systems or

Information Services. For many companies, IS is the name of the department

responsible for computers, networking and data management. Other companies
refer to the department as IT (Information Technology) and MIS (Management
Information Services).
Model of an Information System?

Schematic model of an information system

Feedback

Input Processing Output

Input, Processing, Output,
Input
The activity of gathering, capturing and converting (digitizing) data
Whatever goes into the computer

Processing
Converting or transforming data into useful outputs

Output
Useful information, usually in the form of documents and/or

reports
Anything that comes out of a computer (mostly human readable)
Feedback

Feedback
Output that is used to make changes to input or processing activities

Forecasting
A proactive approach to feedback

Use for estimating future sales or inventory needs

Manual vs. Computerized Systems

Manual systems still widely used

Eg., some investment analysts manual draw charts and trend lines

to assist them in making investment decisions

Computerized systems
Eg., the above trends lines can be drawn by computer

Evolution
Many computerized system began as manual systems
Eg., directory assistance (“411”)
Computer-based Information Systems

A CBIS is composed of…

Hardware, Software and Databases
Telecommunications

People
Procedures

Together they are…

Configured to collect, manipulate, store, and process data into information
Business Information Systems
Business Information Systems is a boundary-spanning field of study relating to how Information and
Communication Technologies (ICT) can be deployed to improve business processes and enhance the
organization's value chain networks, which organizations use to acquire, produce, and deliver goods and
services all over the world, through efficient, effective and competitive use of ICT.
Example
An understanding of Business Information Systems will help individuals to develop critical skills

needed to function effectively in a global information-based and technology-driven business

environment.
Individuals will understand how organizations can take advantage of computer-based information

systems and related emerging technologies to share information in order to improve business
efficiency, develop effective decision making, and maintain competitiveness in their industries.
Components of Business Information Systems
Business Information Systems Resources
People : Specialist (System Analysts, Programmers, Computer Operators)
Hardware: Machines (Computers, Monitors, Printers, scanners),Media (Floppy
disks, Paper form)
Software: Programs (Operating System, Word processing, Spreadsheet),
Procedures(Data entry procedures, error correction procedures).
Communication Network: Communication Media (Twisted pair wire, Coaxial cable,
Fiber optics), Communication Processor (Modems, Internetwork processors),
Network Software ( Novell, Windows NT)
Data: Product descriptions, Customer records, Inventory databases.
 People and Procedures
People
The most important element in most computer-based information systems.
Includes people who manage, develop, run, program, and maintain the system
e.g., System Analyst, Programmer, DB Admin, Help Desk/Support Analyst, Trainer, Project

Managers, ERP Management, Information Security Officer, Users etc.,

Procedures
Includes the strategies, policies, methods, and rules for using the CBIS.
Hardware

Hardware
Computer equipment used to perform input, processing, storage and output

activities.
The objects that you can actually touch, like disks, disk drives, display screens,

keyboards, printers, boards, and chips.

Software
Software
A set of computer programs that govern or determine or control the operation

of the computer.
Types
System software
Application software
Database
Database
An organized collection of facts and information
A collection of information organized in such a way that a computer program

can quickly select desired pieces of data

Networks

Network
Used to connect computers and computer equipment in a building, around the

country, across the world, to enable electronic communications.

A group of two or more computer systems linked together.
Classification of Networks
Coverage area and technology:
Local-area networks (LANs): The computers are geographically close together (that is, in

the same building).

Wide-area networks (WANs): The computers are farther apart and are connected by

telephone lines or radio waves.

Topology: The geometric arrangement of a computer system. Common topologies include a bus,
star, and ring.
Protocol: Defines a common set of rules and signals that computers on the network use to
communicate. Ethernet and Token-ring network .

Architecture: Networks can be broadly classified as using either a peer-to-peer or client/server

architecture.
Network Nodes
Computers on a network are sometimes called nodes.
Computers and devices that allocate resources for a network are called
servers.
Internet and Intranet
Internet
The world’s largest telecommunications network
A network of networks
Free exchange of information
A global network connecting millions of computers
Intranet
A network that uses Internet technology within an organization
A network belonging to an organization
A network not visible outside the organization boundaries
Eg: www.intranet.amu.edu.et
Business Information Systems
Types
Transaction processing systems
E-commerce systems

Management information systems

Decision support systems
Executive information systems

Office Automation Systems

Business Expert Systems

1. Transactions Processing Systems
Transaction
Any business-related exchange

E.g., generating a weekly payroll

Transaction processing system (TPS)

A transaction process system (TPS) is an information processing system for business transactions

involving the collection, modification and retrieval of all transaction data. Characteristics of a TPS
include performance, reliability and consistency.
An organized collection of people, procedures, software, databases, and devices used to record

completed for business related exchanges.

Payroll Example

Hours
worked
Payroll
Payroll
transaction
checks
processing
Pay
rate
2. E-Commerce System
E-commerce
E-commerce (electronic commerce or EC) is the buying and selling of goods and services,

or the transmitting of funds or data, over an electronic network, primarily the internet.
For example, between…
Companies

Companies and consumers

Business and the public sector
Consumers and the public sector
Example for placing a purchase order
Purchase Order - Traditional
Purchase Order – E-commerce
3. Management Information Systems
An MIS is…

An organized collection of people, procedures, software, databases, and devices used to provide

routine information to managers and decision makers.

Management Information Systems Provide information in the form of pre-specified reports and displays
to support business decision making.
Systems that deal with the planning, development, management, and use of information technology tools
to help people perform all tasks related to Information Processing and Management. Information
technology (IT) relates to any computer-based tool that people use to work with information and to
support the information and information processing needs of an organization.
Examples: sales analysis, production performance, and cost trend reporting systems.
Schematic of MIS

Marketing Manufacturing
management Management
information Information
system system

Common
databases
Financial Order
management Management
Information Information
system system

Transaction
Processing
System
 4. Decision Support Systems
An organized collection of people, procedures, software, databases, and devices used to support problem-
specific decision making. A DSS helps a manger “do the right thing”.
It is a computer-based application that collects, organizes and analyzes business data to facilitate quality
business decision-making for management, operations and planning. A well-designed DSS aids decision
makers in compiling a variety of data from many sources: raw data, documents, personal knowledge from
employees, management, executives and business models. DSS analysis helps companies to identify and solve
problems, and make decisions.
Identification of problems or decision making opportunities (similar to exception reporting).
Identification of possible solutions or decisions.
Access to information needed to solve a problem or make a decision.
Analysis of possible decisions, or of variables that will impact a decision. Sometimes this is called ‘what if’
analyses.
Simulation of possible solutions and their likely results.
5. Executive Information Systems
EIS is a system used to assist senior executives in the decision-making process. It does
this by providing easy access to important data needed to achieve strategic goals in an
organization. An EIS normally features graphical displays on an easy-to-use interface. 
Executive information systems can be used in many different types of organizations to
monitor enterprise performance as well as to identify opportunities and problems.
Enterprise or Executive Information Systems Provide critical information from MIS,
DSS, and other sources tailored to the information needs of executives.
Examples: Systems for easy access to analyses of business performance, actions of
competitors, and economic developments to support strategic planning.
6. Office Automation Systems
Office Automation Systems (OAS) refers to the application of computes and communication technology
to office functions.
Office automation systems are meant to improve the productivity of managers at various levels of
management of providing secretarial assistance and better communication facilities.
Office activities may be grouped under two classes, namely
i)Activities performed by clerical personnel (clerks, secretaries, typist, etc.,)
a) Typing

b) Mailing

c) Scheduling of meetings and conferences,

d) Calendar keeping, and

e) Retrieving documents

Continue..
ii)Activities performed by the executives (managers, engineers or other
professionals like economist, researches etc.)
Activities in this category (managerial category)

a) Conferencing
b) Production of information (messages, memos, reports, etc.) and controlling
performance
7. Business Expert Systems
Business Expert Systems: These systems are one of the main types of knowledge-
based information systems. These systems are based on artificial intelligence, and
are advanced information systems. A business expert system is a knowledge based
information system that uses its knowledge about a specific, complex application
area to act as an expert. The main components of an expert system are:
a. Knowledge Base
b. Interface Engine
c. User Interface
Discussions
Let us assume we require information for decision making!!!
Tips will help you make better decisions:
Collect only useful data
Use Analytical Tools
Get Accurate Data
Convert data into information
Make decisions with the information
Solidify your business case
Thank You!