2Management Information System MISManagement Information System
3MANAGEMENTManagement in all business and human organization activity is simply the act of getting people together to accomplish desired goals and objectives.Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal.Resourcing encompasses the deployment and manipulation of human-resources, financial resources, technological resources, and natural resources.
4MANAGEMENTFrenchman Henri Fayol considers management to consist of seven functions:planningorganizingleadingcoordinatingcontrollingstaffingmotivating
5InformationAs a concept has a diversity of meanings, from everyday usage to technical settings. Generally speaking, the concept of information is closely related to notions of constraint,communication, control, data, form, instruction, knowledge, meaning, mental stimulus, pattern,perception, and representation.
6SystemSystem (from Latin systēma, in turn from Greek ) is a set of interacting or interdependent entities, real or abstract, forming an integrated whole.
7MIS Management Information Management information system helps middle level management planning, controlling and decision making.The data stored can be used or manipulated to produce differently defined reports from pre-defined reports.It can be presented graphically or pictorically
8DEFINITIONAn 'MIS' is a planned system of the collecting, processing, storing and disseminating data in the form of information needed to carry out the functions of management. In a way it is a documented report of the activities those were planned and executed.
9DEFINITION According to Philip Kotler "A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers
10OVERVIEWthe term "MIS" arose to describe these kinds of applications. Today, the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems, resource and people management applications,project management and database retrieval application.
11OVERVIEWAt the start, in businesses and other organizations, internal reporting was made manually and only periodically, as a by-product of theaccounting system and with some additional statistics, and gave limited and delayed information on management performance.
12OVERVIEWIn their infancy, business computers were used for the practical business of computing the payroll and keeping track of accounts payableand accounts receivable. As applications were developed that provided managers with information about sales, inventories, and other data that would help in managing the enterprise,
13MIS = IS ??? The terms MIS and information system are often confused. Information systems include systems that are not intended for decision making.MIS is sometimes referred to, in a restrictive sense, as information technology management. That area of study should not be confused with computer science. IT service management is a practitioner-focused discipline.MIS has also some differences with Enterprise Resource Planning (ERP) as ERP incorporates elements that are not necessarily focused on decision support.
14Various Advantages of Information Management Systems 1. It Facilitates planning : MIS improves the quality of plants by providing relevant information for sound decision – making . Due to increase in the size and complexity of organizations, managers have lost personal contact with the scene of operations.2. In Minimizes information overload : MIS change the larger amount of data in to summarized form and there by avoids the confusion which may arise when managers are flooded with detailed facts.
15Various Advantages of Information Management Systems 3. MIS Encourages Decentralization : Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures4. It brings Co ordination : MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centers in the organization .
16Various Advantages of Information Management Systems 5. It makes control easier : MIS serves as a link between managerial planning and control. It improves the ability of management to evaluate and improve performance . The used computers has increased the data processing and storage capabilities and reduced the cost .6. MIS assembles, process , stores , Retrieves , evaluates and Disseminates the information
19Management Information Systems By Sarfraz Haider
20Data Versus Information In everyday language data and information are used interchangeably. For example, the Oxford American Dictionary defines data as:"facts or information to be used as a basis of discussing or deciding something." At the same time information is defined as"facts told or discovered or facts to be fed to a computer". In both definition, data and information are assumed to be one and same concept.
21Data are collection of observations, which may or may not be true Data are collection of observations, which may or may not be true. Thus data may not be facts. Data become information when they are processed. To process data one needs to(1) clean the data from errors and reduce sources of unreliability,(2) analyze data to make it relevant to decision at hand, and(3) organize data in ways that help understanding.
22Role of Information in Organizations Organizations collect and distribute information. In the process, they also distort it. Some distortions are intentional.Sometimes employees are asked to summarize data and report it to their supervisors. By definition, summarizing data means leaving some parts of it out. This is one type of distortion that is intentional. Other times, organizations distort data so much as to changes its meaning and value. This section describes the importance of information within organization and how information is acquired and changed within organizations.
23In this definition, information is "meaningful data In this definition, information is "meaningful data." Data are the building blocks and information is the finished house. The raw materials are useless as a pile but once organized into a structure they become someone's home. Likewise data are useless for managers unless organized into information.
24OrganizationBasically, an organization is a group of people intentionally organized to accomplish an overall, common goal or set of goals. Business organizations can range in size from two people to tens of thousands.
25Organization as a System It helps to think of organizations as systems. Simply put, a system is an organized collection of parts that are highly integrated in order to accomplish an overall goal. The system has various inputs which are processed to produce certain outputs, that together, accomplish the overall goal desired by the organization.
26Organization as a System There is ongoing feedback among these various parts to ensure they remain aligned to accomplish the overall goal of the organization. There are several classes of systems, ranging from very simple frameworks all the way to social systems, which are the most complex. Organizations are, of course, social systems.
27Organization as a System Systems have inputs, processes, outputs and outcomes. To explain, inputs to the system include resources such as raw materials, money, technologies and people. These inputs go through a process where they're aligned, moved along and carefully coordinated, ultimately to achieve the goals set for the system. Outputs are tangible results produced by processes in the system, such as products or services for consumers.
28Management again Management is the process of leading,controlling,planning,and organizing.The most important thing managers do is make quick, accurate, and decisive decisions. The manager is important because he/she is the leader of the organization that leads people to get things done.
29Organization and information The issue of information requirements of an organization and their specifications span two isolated territories. One territory is that of organization and management and the other belongs to technicians. There is a considerable gap between these two territories. Research in requirements engineering (technician's side) has primarily concentrated on designing and developing formal languages to document and analyze user requirements, once they have been determined.
30Organizational Structure Organizational structure is the formal system of task and reporting relationships that controls, coordinates, and motivates employees so they cooperate and work together to achieve organizational goals.Organizations areSocial entitiesGoal orientedDeliberately structuredLinked to the external environment
33Components of an Organization The environment influences organizational design. When uncertainty exists, the ability to respond quickly and creatively is important; when the environment is stable, an organization improves performance by making attitudes and behaviors predictable. Creativity and predictability are fostered by certain structures and cultures.Task - an organization’s mission, purpose, or goal for existingPeople - the human resources of the organization
34Components of an Organization Structure - the manner in which an organization’s work is designed at the micro level; how departments, divisions, & the overall organization are designed at the macro levelTechnology - the intellectual and mechanical processes used by an organization to transform inputs into products or services that meet
35Information SystemInformation System (IS) refers to a system of people, data records and activities that process the data and information in an organization, and it includes the organization's manual and automated processes. In a narrow sense, the term information system (or computer-based information system) refers to the specific application software that is used to store data records in a computer system and automates some of the information-processing activities of the organization.
38Levels of decision Making Strategic Management: Set long-term objectives, allocate resources Tactical Management: Monitor performance, make adjustments Operational: How to carry out specific day-to-day tasks
39Types of Decisions Structured: Semi- structured: Unstructured: A routine decision whose factors are known Semi- structured: A risky decision in which one or more factors isunknown Unstructured: A unique decision for which the relevant factors areunknown; entails uncertainty and requires judgment
406 Major Information Sys: Types by Support Provided Transaction Processing Systems (TPS) Office (Automation) Systems (OAS) Knowledge (Work) Systems (KWS) Management Information Systems (MIS) Decision Support Systems (DSS) Executive Support Systems (ESS)
42Management Information Systems (MIS) Mainly support tactical management level Deals with structured/semi-structured decisions Generally reporting and control oriented Little analytical capability Input: data stored in DB by TPS Processing: simple models Output: summary and exception reports Example: inventory control systems, sales performance analysis,pricing systemsTPS KWS OAS MIS DSS EIS
44Computer Based Information Sys: Computer-based information system) refers to the specific application software that is used to store data records in a computer system and automates some of the information-processing activities of the organization. Computer-based information systems are in the field of information technology.
45a technologically implemented medium for recording, storing, and disseminating linguistic expressions, as well as for drawing conclusions from such expressions
46Decision Making Decision Making Decision making involves choosing between two or more alternatives− Remember that not making a decision is a decision− It has four major elements
47Decision Making− Problem definition: clearly there are more issues, questions, and problems than individuals or society has the time or resources to confront.− Problems are plentiful; attention is scarce.− In order for problems to get attention they have to first get on the policy agenda− As the problem emerges and gains attention, it also tends to gain focus and take shape− See problem definition notes below.
48Decision Making− Information search: The definition between problem definition and information is never sharp. When we are vaguely aware of some problem, our first step is often to learn more about it. This learning process often gives the problem focus.− Time is often a big factor in information search. When time is short we often satisfice rather than optimize (see discussion on bounded rationality below).
49Decision Making− Choice: Weighing options and selecting among alternatives are often the visible part of decision-making processes.− However, choices are rarely clear and when clear alternatives are know, the consequences of these actions is often poorly understood.− Similarly, our preferences are rarely clear or constant when viewed over time.
50Decision Making− Evaluation: Decisions do not end with a choice among alternatives. Few choices are final and most are continually reconsidered in light of new information.− Even if choices are not repeated, current choices become precedents for future decision
51Decision Making− Most difficult aspect of evaluating choices is to establish criteria for evaluation and to not fall victim to common decision-making problems like cognitive bolstering (discussed below) where you search for information to justify rather than scrutinize past decisions.
52Constraints on decision making − Upper Limits of a Decision: Limitations on how far a decisionmaker can go− Lower Limits of a Decision: Minimum that must occur for problem to be solved− Strategic Limiting Factors: Factor whose availability in the right form, at the right place and time will establish a new system of conditions
53Individual differences: individuals have different decision-making styles − Different ways of thinking (e.g., some are logical, some process information serially, some are intuitive or creative, some view interconnections better than others, etc.)− Some are more tolerant of ambiguity
54Combination of these two factors creates four styles − Directive style have low tolerance for ambiguity and seek rationality− Analytical types accept ambiguity and seek rationality− Conceptual style tend to be intuitive and accept ambiguity− Behavioral styles work well with others, are intuitive and have a low tolerance for ambiguity
55Organizational constraints − Managers are strongly influenced by the criteria that they will be evaluated on− Reward systems influences decision-makers by suggesting to them what choices are preferable in terms of a personal payoff− Organizations often impose time constraints− Organizations often give preference to historical precedents and decisions are often made in the context of a stream of decisions
56Decisionmakers tend to rely on heuristics, (serving to indicate, Pattern ) judgmental shortcuts, when making decisions− Availability heuristic: the tendency for people to base their judgments on information that is readily available to them− Representative heuristic: Decision-makers tend to assess the likelihood of an occurrence by trying to match it with a preexisting category− Escalation of commitment: is an increased commitment to a pervious decision in spite of negative information
57Improving Creativity− Direct instruction: ask people to be creative. It works because people tend to accept obvious solutions and this often prevents people from exploring creative solutions− Attribute listing: list attributes of alternatives and examine them fully to generate new alternatives or eliminate them− Lateral thinking: instead of thinking beginning to end, other avenues are explored – perhaps starting with the solution and working towards the beginning
58Cultural differences− People from different cultures often make decisions in different ways by giving different importance to rationality, their belief in the ability of people to solve problems, and emphasis on solving problems
61Management Information Systems Chapter 9Management Information Systems
62Management Information Systems (MIS) Management information system (MIS)An MIS provides managers with information and support for effective decision making, and provides feedback on daily operationsOutput, or reports, are usually generated through accumulation of transaction processing dataEach MIS is an integrated collection of subsystems, which are typically organized along functional lines within an organization
64Databases of external data Corporate intranet EmployeesCorporatedatabasesof internal dataDatabases of external dataCorporate intranetDecision support systemsDatabases of valid transactionsApplicationdatabasesBusiness transactionsTransaction processing systemsManagement information systemsExecutive support systemsOperational databasesExpert systemsDrill-down reportsException reportsDemand reportsKey-indicator reportsInput and error listScheduled reports
65Outputs of a Management Information System Scheduled reportsProduced periodically, or on a schedule (daily, weekly, monthly)Key-indicator reportSummarizes the previous day’s critical activitiesTypically available at the beginning of each dayDemand reportGives certain information at a manager’s requestException reportAutomatically produced when a situation is unusual or requires management action
67Key Indicator Report Example Daily Sales Key Indicator ReportThis MonthLast MonthLast YearTotal Orders Month to Date$1,808$1,694$1,014Forecasted Sales for the Month$2,406$2,224$2,608
68Daily Sales by Sales Rep Summary Report Demand Report ExampleDaily Sales by Sales Rep Summary ReportPrepared: 08/10/xxSales Rep IDAmountCAR$42,345GWA$38,950SAK$22,100JWN$12,350
69Exception Report Example Daily Sales Exception Report – ORDERS OVER $10,000Prepared: 08/10/xxOrder #Customer IDSales Rep IDShip DateQuantityItem #AmountP12453C89321CAR08/12/96144P1234$13,214288P3214$15,660C03214GWA08/13/9612P4902$11,224…
70Outputs of a Management Information System Earnings by Quarter (Millions)ActualForecastVariance2ND Qtr 1999$12.6$11.86.8%1st Qtr 1999$10.8$10.70.9%4th Qtr 1998$14.3$14.5-1.4%3rd Qtr 1998$12.8$13.3-3.0%Drill Down ReportsProvide detailed data about a situation.Etc. See Figure 9.2
71Characteristics of a Management Information System Provides reports with fixed and standard formatsHard-copy and soft-copy reportsUses internal data stored in the computer systemEnd users can develop custom reportsRequires formal requests from users
72Management Information Systems for Competitive Advantage Provides support to managers as they work to achieve corporate goalsEnables managers to compare results to established company goals and identify problem areas and opportunities for improvement
73MIS and Web TechnologyData may be made available from management information systems on a company’s intranetEmployees can use browsers and their PC to gain access to the data
74Functional AspectsMIS is an integrated collection of functional information systems, each supporting particular functional areas.Schematic
75Figure 9.3 Internet An Organization’s MIS Financial MIS Business transactionsDatabases of valid transactionsDrill down reportsAccounting MISTransaction processing systemsException reportsDemand reportsKey-indicator reportsMarketing MISScheduled reportsBusiness transactionsDatabases of external dataHuman Resources MISEtc.ExtranetEtc.Figure 9.3
76Financial MISProvides financial information to all financial managers within an organization.Schematic
77Financial MIS Figure 9.3 Financial DSS Business transactions Databases of internal dataDatabases of external dataFinancial DSSBusiness transactionsDatabases of valid transactions for each TPSFinancial applications databasesTransaction processing systemsFinancial MISBusiness transactionsOperational databasesFinancial statementsFinancial ESUses and management of fundsInternet or ExtranetFinancial statistics for controlBusiness transactionsCustomers, SuppliersFigure 9.3
78Inputs to the Financial Information System Strategic plan or corporate policiesContains major financial objectives and often projects financial needs.Transaction processing system (TPS)Important financial information collected from almost every TPS - payroll, inventory control, order processing, accounts payable, accounts receivable, general ledger.External sourcesAnnual reports and financial statements of competitors and general news items.
79Financial MIS Subsystems and Outputs Financial subsystemsProfit/loss and cost systemsAuditingInternal auditingExternal auditingUses and management of funds
81Manufacturing MIS Figure 9.6 Manufacturing DSS Business transactions Databases of internal dataDatabases of external dataManufacturing DSSBusiness transactionsDatabases of valid transactions for each TPSManufacturing applications databasesTransaction processing systemsManufacturing MISBusiness transactionsOperationaldatabasesQuality control reportsManufacturing ESProcess control reportsInternet or ExtranetJIT reportsMRP reportsProduction scheduleCAD outputBusiness transactionsCustomers, SuppliersFigure 9.6
82Inputs to the Manufacturing MIS Strategic plan or corporate policies.The TPS:Order processingInventory dataReceiving and inspecting dataPersonnel dataProduction processExternal sources
83Manufacturing MIS Subsystems and Outputs Design and engineeringMaster production schedulingInventory controlManufacturing resource planningJust-in-time inventory and manufacturingProcess controlComputer-integrated manufacturing (CIM)Quality control and testing
84Marketing MISSupports managerial activities in product development, distribution, pricing decisions, and promotional effectivenessSchematic
85Marketing MIS Figure 9.9 Manufacturing DSS Databases of internal dataDatabases of external dataManufacturing DSSDatabases of valid transactions for each TPSMarketing applications databasesTransaction processing systemsMarketing MISBusiness transactionsSales by customerOperationaldatabasesManufacturing ESSales by salespersonSales by productPricing reportTotal service callsCustomer satisfactionFigure 9.9
86Inputs to Marketing MIS Strategic plan and corporate policiesThe TPSExternal sources:The competitionThe market
87Marketing MIS Subsystems and Outputs Marketing researchProduct developmentPromotion and advertisingProduct pricing
88Human Resource MISConcerned with all of the activities related to employees and potential employees of the organization
89Human Resource MIS Figure 9.12 Manufacturing DSS Databases of internal dataDatabases of external dataManufacturing DSSDatabases of valid transactions for each TPSHuman resource applications databasesTransaction processing systemsHuman Resource MISBusiness transactionsBenefit reportsOperationaldatabasesManufacturing ESSalary surveysScheduling reportsTraining test scoresJob applicant profilesNeeds and planning reportsFigure 9.12
90Inputs to the Human Resource MIS Strategic plan or corporate policiesThe TPS:Payroll dataOrder processing dataPersonnel dataExternal sources
91Human Resource MIS Subsystems and Outputs Human resource planningPersonnel selection and recruitingTraining and skills inventoryScheduling and job placementWage and salary administration
92Other MISs Accounting MISs Geographic information systems (GISs) Provides aggregated information on accounts payable, accounts receivable, payroll, and other applications.Geographic information systems (GISs)Enables managers to pair pre-drawn maps or map outlines with tabular data to describe aspects of a particular geographic region.