Chapter

Two
FOUNDATIONAL
CONCEPTS IN MIS
 TABLE OF CONTENTS
01 02
Introduction Business and
Management Functions

03 04
Data, Information, The Information Needs and
Knowledge and Wisdom Sources of Managers

05
Business Systems
 01
Introduction
 Introduction to Foundational
Concepts in MIS
 Definition of MIS:
 MIS combines technology, people, and
processes to manage information within an
organization effectively.
 Importance of MIS:
 Supports decision-making.
 Enhances communication and collaboration.
 Improves efficiency and productivity.
 Core Functions of MIS ?
 Data Collection and Storage:
 Systems gather, store, and
organize data crucial for business
operations.
 Information Processing:
 Data is processed into meaningful
information for analysis and
decision-making.
 Decision Support:
 MIS provides insights that help in
making strategic, tactical, and
operational decisions.
 02
Business and Management
Functions
Key Roles of MIS?
 MIS supports daily business operations
through automation and data processing.

 It enhances decision-making by providing

 MIS improves efficiency by optimizing

 It gives organizations a competitive


 Business Functions Supported by
MIS
 MIS enhances production and operations by improving process flows
and resource management.
 In marketing, MIS collects and analyzes data to provide customer
insights and market trends.
 Finance departments rely on MIS for accurate reporting, budgeting,
and financial analysis.
 Human resources use MIS for automating tasks such as payroll,
employee management, and recruitment.
 Research and development (R&D) use MIS for analyzing innovation
trends and supporting collaboration.
Management Functions Overview
 Planning involves setting organizational goals and
developing strategies, supported by MIS data analysis.
 Organizing refers to structuring resources efficiently,
with MIS helping in resource allocation.
 Leading involves directing and motivating employees,
where MIS supports through communication tools.
 Controlling monitors performance and ensures that
activities stay aligned with organizational goals.
 Decision-making is central to all management
functions, and MIS provides decision support systems
(DSS).
 03
Data, Information,
Knowledge, and Wisdom
Data: The Foundation of MIS?
 Data consists of raw facts and figures collected from
various sources.
 Data is meaningless until it is processed into
information through MIS.
 Internal and external sources provide the data for
decision-making processes.
 Data quality is essential for accurate analysis and
strategic decisions.
 Data forms the foundation for generating
meaningful insights in any organization.
 Information: Processed Data
 Information is data that has been processed,
organized, and structured for decision-making.
 It provides context and meaning, turning raw data
into actionable insights.
 MIS converts raw data into useful reports,
dashboards, and visualizations.
 Information allows managers to make informed
decisions based on current trends and patterns.
 Accurate information improves the quality of both
strategic and operational decisions.
Knowledge: Application of Info.
 Knowledge is gained through the application and
interpretation of information.
 Tacit knowledge is based on personal experience, while
explicit knowledge is documented and shareable.
 MIS helps store, retrieve, and disseminate knowledge
across the organization.
 Knowledge is critical for problem-solving, innovation, and
decision-making.
 By applying knowledge, organizations can improve
processes and maintain competitiveness.
 Wisdom: The Ultimate Goal
 Wisdom is the highest level of understanding, using
knowledge effectively for long-term success.
 It involves applying knowledge and experience to
make sound judgments and decisions.
 MIS aids in developing wisdom by providing relevant
information at critical decision points.
 Wisdom enables managers to foresee potential
challenges and opportunities in business.
 The goal of MIS is to support organizations in making
wise, strategic decisions for sustainable growth.
 04
The Information Needs
and Sources of Managers
 Managerial Information Needs
 Managers need strategic information for long-term planning
and achieving business objectives.
 Tactical information is required for translating strategy into
actionable steps.
 Operational information supports day-to-day decision-
making at lower management levels.
 Real-time data is essential for responding to dynamic
market conditions and making quick decisions.
 MIS provides customized reports based on specific
managerial information needs.
Sources of Managerial Information
 Internal data sources include sales records, operational
data, and employee performance reports.
 External data sources include market research, industry
reports, and competitor analysis.
 Formal sources consist of structured reports, financial
statements, and official documents.
 Informal sources include personal networks, industry
forums, and conversations with stakeholders.
 Collaborative tools and platforms allow managers to share
and access information quickly.
 Info. Processing for Managers
 Data is collected from various sources, including internal
and external systems.
 MIS stores data in databases, making it easily accessible for
analysis and decision-making.
 Data analysis tools within MIS help uncover trends,
correlations, and insights.
 MIS generates customized reports that are tailored to the
specific needs of each management level.
 Decision-making is supported by DSS, ensuring that
managers have the information they need.
 04
The Evolution &
Characteristics Of The
Information Age
 Data Resources
Late 20th Century saw rapid growth in
information and communication
technology.
Computers went from being locked away
mainframes to personal desktop machines
available to all.
Computers (and their users) went from
isolation to being able to communicate
 Cont …
Characteristics of Information Age are
many, but the most dominant are:
o Control of the organization system got
efficient
o Large corporations regained effectiveness
through proper management of Information.
o Moved from centralization to decentralization
but keeping all strengths of centralization.
o Effective communication, effective distribution
of work, effective management of projects.
 05
Business Systems
Introduction to Business Systems
 Definition of Business Systems:
 Organized systems and procedures used to achieve
business goals.
 Types of Business Systems:
 Transaction Processing Systems (TPS) – handles day-
to-day transactions.
 Management Information Systems (MIS) – supports
decision-making and management.
 Decision Support Systems (DSS) – helps in analyzing
data for complex decisions.
 Enterprise Resource Planning (ERP) – integrates core
business processes.
 Introduction to E-Business
 Definition of E-Business:
 Conducting business processes through digital
means, primarily the internet.
 Key Aspects of E-Business:
 E-Commerce: Buying and selling of goods
online.
 Supply Chain Management (SCM): Digital
management of logistics and suppliers.
 Customer Relationship Management (CRM):
Enhancing customer interactions online.
 Benefits and Challenges of E-
Business
 Benefits:
 Global reach and accessibility.
 Reduced operational costs.
 Improved customer engagement.
 Challenges:
 Security and privacy concerns.
 Increased competition.
 Dependence on technology infrastructure.
 Introduction to E-Business
 Benefits:
 Global reach and accessibility.
 Reduced operational costs.
 Improved customer engagement.
 Challenges:
 Security and privacy concerns.
 Increased competition.
 Dependence on technology infrastructure.
 Introduction to E-Business
 Benefits:
 Global reach and accessibility.
 Reduced operational costs.
 Improved customer engagement.
 Challenges:
 Security and privacy concerns.
 Increased competition.
 Dependence on technology infrastructure.
 Types of E-Business Models

● Business-to-Business ● Business-to-Consumer
(B2B): (B2C):
• Description: Companies sell • Description: Businesses sell
goods or services to other directly to consumers.
businesses. • Example: Amazon, where
• Example: Alibaba, a platform consumers purchase goods
connecting manufacturers with from a retailer online.
wholesale buyers. • Characteristics: Shorter
• Characteristics: Typically sales cycles, individual
involves bulk orders, longer purchases, focuses on
sales cycles, and focused on consumer experience.
business needs.
 Cont …

● Consumer-to-Consumer ● Consumer-to-Business
(C2C): (C2B):
• Description: Consumers • Description: Consumers
sell directly to other offer products or services to
consumers. businesses.
• Example: eBay or Facebook • Example: Platforms like
Marketplace, where Upwork, where freelancers
individuals can buy and sell provide services to
items. companies.
• Characteristics: Peer-to- • Characteristics: Demand-
peer transactions, often driven, involves individual
 Future Trends in E-Business
 Trends to Watch:
 Artificial Intelligence (AI): Personalized
recommendations, customer support chatbots.
 Blockchain: Enhanced security and transparency for
transactions.
 Augmented Reality (AR): Virtual try-on experiences
for online shopping.
 Big Data and Analytics: Informed business decisions
and customer insights.
 Challenges:
 Rapid technology changes require continuous
adaptation.
 Increasing competition and customer expectations.
THANK YOU!