1. Introduction to Management Information Systems (MIS)
Minder Chen, Ph.D.
Professor of Management Information Systems
Martin V. Smith School of Business and Economics
CSU Channel Islands

2. What is MIS? M: Management I: Information
Business Functions/Processes, Organizations, and Human Behaviors
I: Information
Contents: Data, Information, Knowledge
Processes: Create, Gather/capture/elicit, Store, Organize, Consolidate & Condense, Filter, Deliver, and Share
S: System (Information Systems/Information Technology)
Input-Process-Output and Storage
General Systems Theory (GST)

3. A System View of an Information System
Information System Boundary
Environments
Information System (Producer)
Data Providers
Input
Process
Output
Data
Sources/
Business
events
Information
Destinations
RFID in the CSUCI library
Consumers
Users
organization units
Main memory
Data storage
Control
Secondary storage
Procedure
What are the hardware options or Inputs, Outputs, Processing, and Storages?

4. Characteristics of Good Information
Accurate
Timely
Relevant (provide context) to decisions
Just sufficient
Worth its cost (to justify its benefits)
Information overloading
Deliver just enough accurate, relevant, and timely information to the right persons to make better decisions.
How much energy does a Google search consume?
kWh of energy per search; a Google search uses just about the same amount of energy that your body burns in ten seconds.

5. Information Quality (IA) and Categories
Source:

6. Presentation of Information

7. Another Version

8. A Picture Is Worth a Thousand Words
24 June – 14 December 1812

9. Managing Information as a Resource
The resources of the industrial age were tangible things (e.g., raw materials and human resources) and easily understood.
In the emerging post-industrial society, there is little understanding of the characteristics of information – the basic yet abstract/intangible resource.
Both physical resources and information could be mined, processed, bought, sold, and managed.
In terms of greenhouse gases, one Google search is equivalent to about 0.2 grams of CO2. The current EU standard for tailpipe emissions calls for 140 grams of CO2 per kilometer driven, but most cars don't reach that level yet. Thus, the average car driven for one kilometer (0.6 miles for those in the U.S.) produces as many greenhouse gases as a thousand Google searches.
Harland Cleveland, "Information as Resource," The Futurist, December 1982,

10. Information Life Cycle
Data
Decision
Intelligence
Design
Choice
Action *

11. Characteristic of Information
Expandable: Information explosion*  Reduce information overload to reduce uncertainty in decision making.
Compressible: Sorting, categorizing, filtering, aggregating, summarizing**, and consolidating.
Substitutable: Substitute with other resources via productivity improvement.
Transportable: Data communications and networking.
Diffusive: Spreading (sharing) and leaking (Security & privacy)
Sharable: Sharing information is a shared transaction instead of an exchange transaction.
* Digital Universe: The world’s information is doubling every two years. In 2011 the world will create a staggering 1.8 zettabytes. 
** Summly, a news-summarizing app acquired by Yahoo for $30 millions.

12. Even the Caveman Needs Knowledge to Survive
Expandable
Compressible
Substitutable
Transportable
Diffusive
Shareable
The information-knowledge-wisdom hierarchy. The caveman has lots of information; he selects and organizes useful information into knowledge, but he does not achieve wisdom until he has integrated his knowledge into a whole that is more than useful than the sum of its parts.
Source: Harlan Cleveland, "Information as a Resource," The Futurist, December 1982,

13. Source: IBM Academic Program course materials

14. The Knowledge Value Chain: Data
Source: IBM Academic Program course materials

15. The Knowledge Value Chain: Information
Source: IBM Academic Program course materials

16. The Knowledge Value Chain: Knowledge
Source: IBM Academic Program course materials

17. Knowledge Is Not Enough
Source: IBM Academic Program course materials

18. DIKW (Information) Hierarchy
Wisdom
Know why
Integrating: Connect the dots
Knowledge
Know how
Learning: Derive rules/policies through experiences & patterns
Information
Know what
1934 Eliot wrote in "The Rock"[3]:
Where is the Life we have lost in living?
Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?
The Origin of the
Data Information Knowledge Wisdom Hierarchy By
Nikhil Sharma
[Updated: 11/01/2004]
Source: "Information as a Resource", Harlan Cleveland
The Hierarchy
The Data Information Knowledge and Wisdom Hierarchy (DIKW) is commonly referred to by many names. In most of the "Knowledge Management" literature the hierarchy is referred to as the "Knowledge Hierarchy", while the information science domain refers to the same hierarchy as "Information Hierarchy" for obvious reasons. Sometimes it is also referred to as the "Knowledge Pyramid".
There is a lot of literature on the hierarchy, but this page is devoted to the origin of that hierarchy. To read more about the hierarchy please refer to some of the References.
The Domains
While the domains of Information Science and Knowledge Management (KM) both refer to DIKW, they usually do not cross-reference. Thus there are two separate threads that lead to the origin of the hierarchy.
In the domain of KM, Prof. Russell Ackoff is often cited as the initiator of the DIKW hierarchy. His 1988 Presidential Address to ISGSR is widely considered to be the earliest to mention the hierarchy in the KM literature. This address was printed in a 1989 article "From Data to Wisdom" [2]. It does not cite any earlier sources of the hierarchy.
However in response to this webpage I was made aware of an article by Milan Zeleny [7] which details out the DIKW hierarchy in Zeleny builds the DIKW hierarchy by equating Data, Information, Knowledge and Wisdom to “know-nothing”, “know-what”, “know-how” and “know-why” respectively. Zeleny’s 1987 mention of the hierarchy is earlier than Ackoff’s 1989 address, and he does not cite any earlier sources of the hierarchy. It can thus be argued that Zeleny was the first to mention the hierarchy in the field of KM.
But the “Information Science” domain mentions the hierarchy as early as 1982, when Harlan Cleveland [2] wrote about it in a Futurist article. The article mentions the Information-Knowledge-Wisdom hierarchy in detail giving an example (see figure above). This article itself is not the origin of the hierarchy, but points to the origin.
The Origin
Interestingly the first ever mention of the hierarchy came from neither the KM field, nor the Information Science domain, but in poetry. In his Futurist article, Cleveland cites T.S. Eliot as the person who suggested the hierarchy in the first place- calling it "the T.S. Eliot hierarchy". The poet T.S. Eliot was the first to mention the "information hierarchy" without even calling it by that name. In 1934 Eliot wrote in "The Rock"[3]:
This is the first vague mention of the hierarchy that was expanded by Cleveland, and later by others to add a layer of "Data".
Beyond DIKW- Building on the Hierarchy
In his futurist article [2], Harlan Cleveland concedes that information scientists are “still struggling with the definitions of basic terms”. He uses Elliot’s hierarchy as a starting point to explain the basic terms. He also agrees that there are many ways in which the elements of the hierarchy may be defined, but there is no need for universal agreement on them.
While Cleveland himself doesn’t add ‘Data’ to Eliot’s hierarchy he mentions Yi-Fu Tuan’s and Daniel Bell’s version of the hierarchy in the article which includes data. Regarding ‘data’, Tuan says that data to become useful “they have to be linked to another rung or category of data” [2].
In the information field others like Lucky [5] have detailed out their own versions of the hierarchy.
Russell Ackoff’s version of the hierarchy has another category of “Understanding” built in. Thus Ackoff’s hierarchy is Data-Information-Knowledge-Understanding & Wisdom. According to him, understanding “requires diagnosis and prescription”. The DIKW hierarchy can also have many dimensions. One dimension of Ackoff’s hierarchy is temporal. He says that while information “ages rapidly”, knowledge “has a longer life-span” and only understanding “has an aura of permanence”. It is wisdom that he considers to be “permanent”.
Zeleny himself proposes to add “enlightenment” on top of the familiar DIKW framework [7]. Enlightenment, according to Zeleny (personal communication, October 29, 2004) “is not only answering or understanding why (wisdom), but attaining the sense of truth, the sense of right and wrong, and having it socially accepted, respected and sanctioned.”
References
1. Ackoff, R.L. "From Data to Wisdom", Journal of Applied Systems Analysis, Volume 16, 1989 p 3-9.
2. Cleveland H. "Information as Resource", The Futurist, December 1982 p
3. Eliot, T.S. "The Rock", Faber & Faber 1934.
4. Cleveland Harland, “The Knowledge Executive: Leadership in an Information Society” (New York: Truman Talley Books, 1985) 21-23;
5. Robert W. Lucky, Silicon Dreams: Information, Man and Machine (New York: St. Martin’s Press, 1989)
6. Gene Bellinger, Durval Castro, Anthony Mills: Data, Information, Knowledge, & Wisdom,
7. Zeleny, M. "Management Support Systems: Towards Integrated Knowledge Management," Human Systems Management, 7(1987)1, pp
Contact me for comments & suggestions
Nikhil Sharma, Doctoral Student, School Of Information, University of Michigan, Ann Arbor.
Analyzing: To support decision making
Know nothing
Data
Observing: Description of events
Happening/Doing
Event

19. DIKW Hierarchy: version 2
T: Tacit knowledge
E: Explicit knowledge

20. Moving Up the DIKW Hierarchy
Where is the Life we have lost in living?
Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?
T.S. Eliot, Choruses from “The Rock”, 1934
Where is the knowledge we have lost in information? (Information overloading)
Where is the wisdom we have lost in knowledge? (Not able to see the holistic picture)
Where is the life we have lost in living? (Live without a meaningful purpose)

21. Information as Products/Services
CarFax: CARFAX - Vehicle History Reports and VIN number check - (1 CARFAX Report $39.99)
Britannica*:
Blown to Bits: How the New Economics of Information Transforms Strategy
The printed version was blown away by three disruptive forces
A comeback act? (iPad app)
Why Britannica matter? No printed version, 2012.
Information as services
Google: Searching for information (Google would provide “access to the world's information in one click”)
Facebook: Social networking ("Facebook's mission is to give people the power to share and make the world more open and connected." )
The Britannica, however, isn't going away, or ignoring the digital world. It has long had a paid website. When it comes to school research, it is often trusted by many teachers and parents over less rigorously vetted sources. And now, it is about to launch a slick iPad app containing its entire content at a greatly reduced price: $2 a month, or $24 a year, versus $70 a year for the Web version and about $1,400 for the venerable print version. (People who pay for the Web version also get access to the iPad app at no extra cost.)
hbr.org/products/877X/877Xp4.pdf
“The most venerable can prove the most vulnerable.”
Britannica
sells for
$1,500 to $2,200 per set
Encarta, Grolier, and Compton list for $50 to $70.
Microsoft had licensed
the text for its encyclopedia from Funk & Wagnalls, whose
third-rate, nearly defunct product, surviving as a periodic
promotional item in the aisles of supermarkets, was perceived
to be a brand so pathetic that Microsoft dropped its name in favor of the ad agency coinage
Encarta
a parable about the dangers of complacency. It illustrates
what we will call the
new economics of information
: how the
evolving technological capabilities for sharing and using
information can transform business definitions, industry definitions,
and competitive advantage.
CD Encyclopedia: Encarta then the fundamental competitor is not Encarta, it is the PC.
Internet Directory and search engine
Wikipedia
The first is obvious: the most venerable can prove the most vulnerable.
The second point is a bit less obvious: the history, the
myths, the shared values, and the unreflective presuppositions
that define a strong corporate culture can blind business
leaders to events that do not fit into their collective
mental framework.
There is a third lesson: even if the executives of established
businesses fully grasp the impact of new technologies,
and even if they can reason their way beyond their corporate
myths and assumptions, they still face a massive competitive
disadvantage arising precisely because they are incumbents.
Incumbents are saddled with legacy assets—not just clunky
mainframe systems, but sales and distribution systems,
bricks and mortar, brands and core competencies. Competing
in the face of the new economics of information requires
cannibalizing those assets, perhaps even destroying them.
one-third of the cost of health care in the
United States—some $350 billion—consists of the cost of capturing,
storing, processing, and retrieving information:
patient records, cost accounting, and insurance claims. 1 By
that measure, health care is a larger information industry
than the “information” industry.
*Source: Jorge Cauz, “Encyclopaedia Britannica's President on Killing Off a 244-Year-Old Product,” Harvard Business Review, Mar 01, 2013.

22. CD-ROM based Encyclopedia
Encarta (1993), Grolier, and Compton, list for $50 to $70; usually bundled with a new PC for free.
Content quality and distribution channel
Cost:
With a marginal manufacturing cost of $1.50 per copy, the CD-ROM as freebie makes good economic sense.
The marginal cost of Britannica, in contrast, is about $250 for production plus about $500 to $600 for the salesperson’s commission.

23. Google Inc. incorporated, 1999
Britannica Sales
WWW invented
1990
Netscape 1995
Google Inc. incorporated, 1999
Google IPO, 2004
Encarta discontinued 2008
Source:

24. The Rise of Wikipedia
Disruptive force

25. Britannica vs. Wikipedia
Characteristic
Britannica
Wikipedia
Price
Content generation/Editorial
Update frequency
Revenue stream
Quality of the content
Wiki is an open source content management system (CMS).
Wikipedia uses wiki as a development tool.

26. Information Systems Components
Computers
Server PC
Mobile
Networking
Information
You are part of every information system that you use.
Even if you have the perfect information system, if you do not know what to do with the information that it produces, you are wasting your time and money.
Your quality of thinking is a large part of the quality of an information system.
Substantial cognitive research has shown that you cannot increase your basic IQ.
You can dramatically increase the quality of your thinking by changing the way you have programmed your brain to work.
Individuals, Groups, Departments, Enterprise-wide, Customers, Trading partners
System SW, Application SW
Data, Information,
Knowledge
Manual Procedures and Business Process
Source: adapted from Using MIS 3e

27. huMan, Market, Money, Method, Machine, Material, Message
Business environments
Market demands
Technology development
Social trends
Locations/Localization
Man: Human Resource, Employees
Market: Customers
People
 
Message:
Information
Who?
$$$
Money:
Accounting,
Finance,
Investment
Processes
Things
Vision  Why?
Goals/Objectives/
Performance measures
How, When?
What?
Machine:
Property, Facility, Technology
Material: Raw material, Product
Method:
Technique, Process, Project, Task

28. Organizational Hierarchy and Information
Aggregated
Executives
Middle-Level Managers
Operational Employees
External
OLAP
Planning
Control
Operation
Level of Detail
The structure of a typical organization is similar to a pyramid
Organizational activities occur at different levels of the pyramid
People in the organization have unique information needs and thus require various sets of IT tools (see Figure)
At the lower levels of the pyramid, people perform daily tasks such as processing transactions
Moving up through the organizational pyramid, people (typically managers) deal less with the details (“finer” information) and more with meaningful aggre­gations of information (“coarser” information) that help them make broader decisions for the organization
Granularity refers to the extent of detail in the information (means fine and detailed or “coarse” and abstract information)
source
Processing
Detail
Internal
OLTP

29. Information Systems Triangle
Operational
Database
Data Warehouse
Data Mart
Enterprise
Workflow
OLAP
Online
Analytical
Processing
BI DSS
EIS
OLTP
Online Transaction
Processing
Business
Process
Workflow
Data
Information
Messaging Systems
Knowledge
Workflow, Collaboration, Groupware

30. Classification of Information Systems
Transaction Processing System
Online transaction processing system (OLTP)
Batch, Online, real-time
Management support system
Decision support system (DSS), Executive information system (EIS), and Digital Dashboard
Data warehouse, Business intelligence (BI), and Online Analytical Processing (OLAP)
Units involved
Individual, group, and departmental, enterprise-wide, inter-organizational, and social networking systems
Strategic Information Systems
Based on IT Platforms
Traditional desktop/client-server applications
Web-based applications (e.g., Electronic Commerce)
Mobile applications

31. The Extended Enterprise
Buy
Make/Add Value
Sell
E-Commerce
B2B
E-Commerce
B2C or B2B
Back
Office
Front
Office
Customers
Suppliers
E-Business: Virtual and Dynamic Enterprise
Monolithic architecture
Constituting a monolith: a monolithic sculpture.
Massive, solid, and uniform: the monolithic proportions of Stalinist architecture.
Constituting or acting as a single, often rigid, uniform whole: a monolithic worldwide movement.
Mention Documentation-centric view
Opportunity
Integrate the virtual company
Multi-system, multi-company, multi-audience
Rapidly adapt to changing business
Improve developer productivity, time to market
Challenge: Lack of infrastructure
Interoperability an afterthought
Expensive, hard, time-consuming, brittle
Deployment, management, scalability, security
Current model can’t keep up with business
Warehousing
Logistic/Transportation
Order Fulfillment
Manufacturing
Finance/Accounting
Engineering HR
Marketing
Sales
Support/Service
Supply Chain
Back Office Integration
Demand Chain
Enterprise Resource Planning
Supply Chain Management
Customer Relationship Management

32. Other Resources: HR, Money, Material, etc. As Products or Services
MIS
Management BY Information Systems
Management OF Information Systems
Resources
Other Resources: HR, Money, Material, etc.
Information
Information
Systems
Manages
As Products or Services
Managing Information as a Resource (i.e., Inventory Info. System)
Selling Information as Products (i.e., CarFax)
Offering Information/IS as Services (i.e., Facebook, Google)

33. Summary
What information does one may need to obtain to do his/her works?
What kinds of information systems/technologies may be the best to manage such information?
Be sensitive to the information, IS, and IT.
Know how to apply conceptual frameworks introduced this module in understanding information needs, but start with the analysis of decisions and/or business processes.

34. IT, IS and IM
Source: Competing with Information: A Manager's Guide to Creating  Business Value with Information Content 

35. Key Frameworks

36. Information Systems Applications in a Firm
Customer Relationship Management (CRM)
Teaching Notes
This slide visually illustrates front- and back-office applications and highlights the following:
Many organizations purchase their back-office systems in the form of enterprise resource planning (ERP) products such as SAP, PeopleSoft, and Oracle.
The ERP industry is trying to expand into the front-office applications.
It might be noted that electronic commerce and business extensions are being added to both front- and back-office applications in order to streamline interfaces to both customers and suppliers.
E-commerce is being driven by the Internet (and private extranets).
E-business is being enabled by intranets.

37. Information as: Product vs. By-Product

38. COBIT’s Information Criteria (I)
Effectiveness deals with information being relevant and pertinent to the business process as well as being delivered in a timely, correct, consistent and usable manner.
Efficiency concerns the provision of information through the optimal (most productive and economical) use of resources.
Confidentiality concerns the protection of sensitive information from unauthorized disclosure. (Sony PlayStation Network hacked)
Integrity relates to the accuracy and completeness of information as well as to its validity in accordance with business values and expectations.

39. COBIT’s Information Criteria (II)
Availability relates to information being available when required by the business process now and in the future. It also concerns the safeguarding of necessary resources and associated capabilities.
Compliance deals with complying with the laws, regulations and contractual arrangements to which the business process is subject, i.e., externally imposed business criteria as well as internal policies. (Sarbanes–Oxley Act)
Reliability relates to the provision of appropriate information for management to operate the entity and exercise its fiduciary and governance responsibilities.

40. Exercise – 20-minute break and 5-minute presentation
Describe your background and experiences
Company name and the industry it belongs to
Position and general responsibility
Three major decisions
Pick the most important decision involved in this position and find out the following:
Characteristic of the decision: Operational vs. Strategic; Structured vs. Unstructured; Routine vs. Non-routine
What information is current used to support the decision
What kind of source data should be collected to generate the information needed
Under which task is this decision performed
What is the broader business process that this task belongs.
What additional improvements can be made from the perspectives of information systems and decision making

41. Information System Applications
Teaching Notes
It may be useful to walk through this diagram in class. The textbook coverage included numbered annotations that highlight portions of this diagram.
Remind students that any given information system may include many instances of each of these IS application processes and databases.