Introduction to Management Information Systems ITE106: Management Information Systems Thossaporn Thossansin, BS.c, MS.c Introduction to Management Information Systems There are two video cases available for this chapter: Business Information Systems in Your Career Case 1 UPS Global Operations with the DIAD IV Case 2 IBM, Cisco, Google: Global Warming by Computer

ITE106: Management Information Systems email: thossaporn.piu@gmail.com Lecture: Wednesday 09:00 PM - 11:45 PM Thossaporn Thossansin, Bs.c, Ms.c email: thossaporn.piu@gmail.com

Course Books ตำราหลัก : Laudon, Kenneth C, Jane Price, Essentials of Management Information Systems, January 2010 (ISBN: 978-0-136-11444-4) ตำราประกอบ : Joseph Valacich / Christoph Schneider, Information Systems Today: Managing the Digital World, April 2009 (ISBN: 978-0-13607-840-1) http://www.thaiall.com/mis/indexo.html

The grade received in the course will be based on: Grading The grade received in the course will be based on: Participation/Homework (30%) Mid-Term Exam (30%) Final Exam (40%)

Information Concepts: Data, Information, and Knowledge Data: raw facts Alphanumeric, image, audio, and video Information: collection of facts organized in such a way that they have additional value beyond the value of the facts themselves Value of Information is directly linked to how it helps decision makers achieve their organization’s goals and can be measured in time required to make a decision Increased profits to the company

Figure 1.2: The Process of Transforming Data into Information Data, Information, and Knowledge Figure 1.2: The Process of Transforming Data into Information

The Characteristics of Valuable Information Table 1.2: Characteristics of Valuable Information

The Characteristics of Valuable Information (continued) Table 1.2: Characteristics of Valuable Information (continued)

What is an Information System? Figure 1.3: The Components of any Information System

Computer-Based Information Systems Computer-based information system (CBIS): single set of hardware, software, databases, telecommunications, people, and procedures configured to collect, manipulate, store, and process data into information

Computer-Based Information Systems CBIS components Hardware: computer equipment used to perform input, processing, and output activities Software: computer programs that govern the operation of the computer Database: organized collection of facts and information Telecommunications: electronic transmission of signals for communications Networks: connect computers and equipment in a building, around the country, and around the world

Business Information Systems Most common types of information systems used in business organizations Electronic and mobile commerce systems Transaction processing systems Management information systems Decision support systems Specialized business information systems

Electronic and Mobile Commerce E-commerce: any business transaction executed electronically between parties Companies (B2B) Companies and consumers (B2C) Consumers and other consumers (C2C) Companies and the public sector Consumers and the public sector

Transaction Processing Systems Transaction: business-related exchange Payments to employees Sales to customers Payments to suppliers Transaction processing system (TPS): organized collection of people, procedures, software, databases, and devices used to record completed business transactions

Additional Business Information Systems Management Information Systems (MIS) provide routine information to managers and decision makers Knowledge Management Systems (KMS) create, store, share, and use the organization’s knowledge and experience Artificial intelligence (AI) field in which the computer system takes on the characteristics of human intelligence Decision support system (DSS) used to support problem-specific decision making

What is MIS? Information Data that has been put into a meaningful and useful context. Usually to help make a decision. Management Information System A combination of computers and people that is used to provide information to aid in making decisions and managing a firm. Information Technology (IT)

Why is MIS Important? MIS affects all areas of business Manufacturing Accounting & Finance Human resources Marketing Top management Performance evaluations—expectations

What are e-Commerce and e-Business? Business-to-Consumer (B2C) Selling retail products to consumers Business-to-Business (B2B) Selling at the wholesale level to other businesses E-Business Using Internet technologies to conduct any level of business E-Commerce Intranets Most areas of MIS

Several Terms E-World; Digital Age; Digital Firms Information Technology (IT) Information Systems (IS) Office Workers; Knowledge Workers; End-Users; End-User Managers E-Business; E-Commerce Business initiatives drive IT choices

Meetings Managers and professionals spend considerable time in meetings. Providing support for teamwork and group decisions is an important issue in MIS.

Making Decisions Methodology v. Ad Hoc Decisions Decision Process Collect Data Identify Problems & Opportunities Make Choices 2 3 1

Traditional Management CEO Condensed reports Commands VP Finance VP Marketing VP Accounting VP HRM VP MIS Analyze data Layers of middle managers Collect data Customers

Decentralization Management Team CEO Strategy Corporate Database & Network VP Fin VP Mrkt VP Acct VP HRM VP MIS Strategy Finance Team Marketing Team Accounting Team HRM Team Sales Team Methodology/Rules Franchise Customers

Business Trends Changing business environment Specialization Management by Methodology and Franchises Mergers Decentralization and Small Business Temporary Workers Internationalization Service-Oriented Business Re-engineering Need for faster responses and flexibility

Business Trend Summary Implications for Technology Specialization Increased demand for technical skills Specialized MIS tools Increased communication Methodology & Franchises Reduction of middle management Increased data sharing Increased analysis by top management Computer support for rules Re-engineering Mergers Four or five big firms dominate most industries Need for communication Strategic ties to customers and suppliers Decentralization & Small Business Communication needs Lower cost of management tasks Low maintenance technology Temporary Workers Managing through rules Finding and evaluating workers Coordination and control Personal advancement through technology Security Internationalization Communication Product design System development and programming Sales and marketing Service Orientation Management jobs are information jobs Customer service requires better information Speed

US Employment Patterns

International Web Browsers Source: http://www.glreach.com/globstats/

MIS Organization EIS Strategic ERP Mgt. ES DSS Tactical Transaction Management Transaction Process Control Business Operations

Operations, Tactics, Strategy

Decision Levels Decision Level Description Example Type of Information Strategic Competitive advantage, become a market leader. Long-term outlook. New product that will change the industry. External events, rivals, sales, costs quality, trends. Tactical Improving operations without restructuring the company. New tools to cut costs or improve efficiency. Expenses, schedules, sales, models, forecasts. Operations Day-to-day actions to keep the company functioning. Scheduling employees, ordering supplies. Transactions, accounting, human resource management, inventory.

Information Technology (IT) Computer Technology (Hardware and Software) Processing and Storing Information Communication Technology Transmitting information

“Better” Tangible Outputs IT is used to make the process in producing a tangible output more efficient and more effective Implication Issues whether or not to use IT selecting the proper IT employing correct procedures for the utilization of the IT

Intangible Outputs A schematic view - the information/decision level MIS involves identifying the key decisions that are related to reaching objectives, on determining the proper information needed to make these decisions, and on improving the decision processes employed to make the decisions. Implications: Activity at this level concentrates on developing tools and processes that allow better management decision making

The MIS Concept Intangible Outputs (achieving desired objectives)

System Concepts What is a system? What is an IS? A set of components that interact to accomplish goals Systems can be viewed as process models in terms of their inputs, outputs, processing, and feedback/control mechanisms. Examples. What is an IS? A set of interrelated components that collect input, process, and output data and information and provide a feedback/control mechanism What is a CBIS? (Computer-Based Information System ) An IS that uses IT. Components: hardware, software, databases, networks, people, procedure

System Examples University – an example Inputs: students, faculty, textbooks Processing mechanisms: teaching, research, service Output: graduates Goal: acquisition of knowledge The Manufacturing System Other example Subsystem, interface, open, adaptive Boundary Feedback

A Manufacturing System: Generic Components Environment Control by Management Feedback Signals Feedback Signals Control Signals Control Signals Input of Raw Materials Manufacturing Process Output of Finished Products System Boundary Other Systems

Systems: Some Examples University Inputs: Students, Faculty, Textbooks Processes: Education/Courses Output: graduates Feedback: surveys, grades Toyota Plant Inputs: raw materials, components Processes: assembly line Output: mini-vans Feedback: customer surveys, quality reports Fast Food IS Inputs: consumer orders Processes: processing software Output: receipts, cook’s order list Feedback: invalid entry message Video Store IS Inputs: rentals, returns Output: reports, rental agreement Feedback: error repots

System Classifications and Characteristics Subsystem System Boundary Interface Open, Adaptive Systems Open Closed Adaptive Nonadaptive

Input, Processing, Output, Feedback/Control INPUTS Gathering and capturing raw data PROCESSING Converting or transforming data into useful outputs OUTPUTS Producing useful information, usually in the form of documents. Feedback/Control Output that is used to make changes to input or processing activities

Procedures Procedures - set of instructions used by people to complete a task Procedures include the strategies, policies, methods, and rules for using the CBIS. Examples: procedures describe When each program is to be run Who can have access to database What is to be done in case of a disaster

System Performance Standards: Efficiency and Effectiveness Efficiency: a measure of what is produced divided by what is consumed an improved product the same level product produced cheaper or faster the improvement in the product exceeds the increased cost Effectiveness: a measure of the extent to which a system achieves its goals. Goal: to reduce damaged parts by 100 units Q: Actual reduction in damaged parts using a control system is only 85 units. Effectiveness? A: The effectiveness of the control system is 85 percent

What You Need to Know Foundation Concepts: Fundamental concepts about the components and roles of IS IT: Major concepts, developments, and management issues in information technologies Business Applications: The major uses of IS for the operations, management, and competitive advantage Development Processes: How end users or information specialists develop and implement IS The challenges of effectively and ethically managing information technologies, strategies, and security at the end user, enterprise, and global levels of a business

Major Roles of Information Systems Support of Strategic Advantage Managerial Decision Making Business Operations

History of the Role of IS Data Processing Management Reporting Decision Support Strategic & End User Electronic Commerce 1950-1960 1960-1970 1970-1980 1980-1990 1990-2000 - TPS Information Systems - Ad hoc Reports Computing Exec Info Sys Expert Systems SIS Business & -Internetworked E-Business &

Trends in ISs Data Processing: 1950s - Transaction processing, record keeping, traditional accounting applications Management Reporting: 1960s - MIS – predefined management reports for decision-making purposes Decision Support: 1970s - DSS – interactive ad hoc support of the managerial decision-making process Strategic and End User Support: 1980s - EUC, Executive Information Systems, Expert Systems, Strategic Information Systems Electronic Business and E-Commerce: 1990s -

The Electronic Business Manufacturing and Production Engineering & Research Accounting, Finance, and Management Suppliers and Other Business Partners Procurement, Distribution, and Logistics Advertising Sales Customer Service Consumer and Business Customers Company Boundary Intranets The Internet Extranets

Ethical Dimensions of IT What uses of IT might be considered improper, irresponsible, or harmful to other individuals or to society? What is the proper use of an organization’s information resources? What does it take to be a responsible end user of IT? How can you protect yourself from computer crime and other risks of IT?