by: prof. riyanka dwivedi information systems in organizations

By: Prof. Riyanka Dwivedi Information systems in Organizations

Types of management systems : The main purpose of Information systems is to assist the management in decision making. The various processes in decision making requires information in various forms. Basically information is provided by the systems to the management at various levels like strategic level information, tactical level information and operational level information. The nature of information at the operational level is highly structured. The nature of information at the top level strategic is highly unstructured. Similarly the volume of information processed is very high at the bottom level and less at the top level. Management activities at different levels can be divided depending upon the nature of management function like marketing function, financial function, personnel function etc.

Transaction processing system (TPS) TPS are mainly observed at the bottom level of the management. Plenty of operational activities at the bottom level results in one or more transactions. Every transaction may be considered to generate information. The information generated can be highly structured. A structured information is easy to process further. Examples payroll system, transport ticket reservation system, purchase order entry system, marks tabulation system etc. Output of such systems may be of printed type or display type on the monitor of the computer. TPS may further be classified as online systems or batch systems. In online systems there is direct interaction of the operator and the TPS system. In batch systems activities of the same type are batched into groups and then processed. Example of online systems enquiry, checking availability of tickets etc. example of batch systems entering parcel details belonging to one destination, process student marks of one subject etc.

Transaction Processing Systems Most of an organizations daily activities are recorded and processed by its transaction processing system (TPS), which receives input data and converts them into output informationintended for various users. Input data are called transactionsevents that affect a business. A financial transaction is an economic event: it affects the firms assets, is reflected in its accounting statements, and is measured in monetary terms. Sales of goods to customers, purchases of inventory from suppliers, and salaries paid to employees are all financial transactions. Everything else is a nonfinancial transaction. The marketing department, for example, might add some demographic data to its customer database. The information would be processed by the firms TPS, but it wouldnt be a financial transaction.

MIS 175 Spring 2002 Chapter 10 7 Executive Information Systems What information does a chief executive of board member require?

Executive information systems (EIS) Executive information system may be considered to be useful at any level of management, specially at the middle level and bottom level. It mainly revolves around the day to day activities of management but not in strategic decisions. example where EIS is can be used assigning responsibilities to subordinates, analyzing the data generated out of a management process, documenting the reports generated, plotting trends, sales forecast etc. It provides information to the executives to manage their functions.

Executive Information Systems They set performance targets, determine whether theyre being met, and routinely scan the external environment for opportunities and threats. To accomplish these tasks, they need relevant, timely, easily understood information. Often, they can get it through an executive information system (EIS), which provides ready access to strategic information thats customized to their needs and presented in a convenient format. Using an EIS, for example, a gaming-company executive might simply touch a screen to view key summary information that highlights in graphical form a critical area of corporate performance, such as revenue trends. After scanning this summary, our executive can drill down to retrieve more detailed informationfor example, revenue trends by resort or revenue trends from various types of activities, such as gaming, hotel, retail, restaurant, or entertainment operations.

MIS 175 Spring 2002 Chapter 10 10 Executive Information Systems High level with drill down Key business and industry data Structured and unstructured information Structured: MTD orders Unstructured: Industry newsfeed Graphical

Decision support systems (DSS) In management many a times problems arise out of situations for which simple solution may not be possible. To solve such problems complex theories may have to be used. The models that would be required to solve such problems may have to be identified. DSS requires a lot of managerial abilities and managers judgment. Manager may sometimes find it difficult to solve such problems. Eg in a sales problems if there are multiple decision variables modeled as a simple linear problem but having multiple optima, it becomes difficult to take a decision. Since any of the multiple optima would give optimum results. But the strategy to select the one most suitable under conditions prevailing in the market, requires skills beyond the model. A system which consists of database pertaining to decision making based on certain rules is known as decision support system. It is a flexible system which can be customized to suit the organization needs. It can work in the interactive mode in order to enable managers to take quick decisions. DSS is a consistent decision making system. It can be used to generate reports of various level management activity. It is capable of performing mathematical calculations and logical calculation depending upon the model adopted to solve the problem.

GDSS Time/Place Environment Same-Time Same-Place (Most widely used GDSS- computers with projectors, voting tools) Same-Time Different-Place (team room, tools, audio conferencing, screen sharing, chat) Different-Time Same-Place (audio/video conferencing, document sharing) Different-Time Different-Place (voice mail, email, bulletin boards)

Advantages of GDSS Anonymity drive out fear leading to better decisions from a diverse hierarchy of decision makers Parallel Communication eliminate monopolizing providing increased participation, better decisions Automated record keeping no need to take notes, theyre automatically recorded Ability for virtual meetings only need hardware, software and people connected Portability - Can be set up to be portable laptop Global Potential - People can be connected across the world No need for a computer guru although some basic experience is a must

Disadvantages of GDSS Cost infrastructure costs to provide the hardware and software/room/network connectivity can be very expensive Security especially true when companies rent the facilities for GDSS; also, the facilitator may be a lower-level employee who may leak information to peers Technical Failure power loss, loss of connectivity, relies heavily on bandwidth and LAN/WAN infrastructure properly setup system should minimize this risk Keyboarding Skills reduced participation may result due to frustration Training learning curve is present for users, varies by situation Perception of messages lack of verbal communication could lead to misinterpretation

Typical GDSS Process 1) Group Leader (and Facilitator?) select software, develop agenda 2) Participants meet (in decision room/Internet) and are given a task. 3) Participants generate ideas brainstorm anonymously 4) Facilitator organize ideas into categories (different for user-driven software) 5) Discussion and prioritization may involve ranking by some criteria and/or rating to the facilitators scale 6) Repeat Steps 3, 4, 5 as necessary 7) Reach decision 8) Recommend providing feedback on decision and results to all involved

Future Implications of GDSS GDSS may play a large role in the future of the virtual companies GDSS can help the virtual companies do business in the global business environment GDSS can help promote a culturally diverse work environment Telework seems to make a lot of sense using GDSS

Choosing The Right GDSS Consider the following; Decision Task Type Group Size Location of members of the group

Available Software GroupKit - University Of Calgary - GroupKit has been used for prototyping groupware, investigating multi-user architectures and interfaces, and as a CSCW teaching tool. GroupKit - University Of Calgary http://www.banxia.com/demain.html - Decision Explorer http://www.banxia.com/demain.html Delphi / Promethee http://www.teamwave.com/ QuestMap v3.12 Accrue(decision support analysis software) Accrue http://www.aliah.com/site/index.html

Management Information System Management information system (MIS) is one of the major computer based information systems. Its purpose is to meet the general information need of all the managers in the firm or in some organizational subunit of the firm. Management information system (MIS) can be described as "an organizational method of providing past, present and projected information related to internal operations and external intelligence. It supports the planning, control and operation functions of an organization by furnishing uniform information in the proper time frame to assist the decision makers. The information is made is available in form of periodic reports, special reports and output of mathematical simulations. All managers use the information output as they make decisions to solve the firms problems.

Corporate databases of internal data Databases of external data Databases of valid transactions Operational databases Transaction processing systems Management information systems Decision support systems Executive support systems Expert systems Business transactions Input and error list Drill-down reports Exception reports Demand reports Key-indicator reports Scheduled reports Employees Corporate intranet Application databases

Outputs of a Management Information System Scheduled reports Produced periodically, or on a schedule (daily, weekly, monthly) Key-indicator report Summarizes the previous days critical activities Typically available at the beginning of each day Demand report Gives certain information at a managers request Exception report Automatically produced when a situation is unusual or requires management action

Scheduled Report Example Daily Sales Detail Report Prepared: 08/10/xx Order # Customer ID Sales Rep ID Ship DateQuantityItem #Amount P12453C89321CAR08/12/96144P1234$3,214 P12453C89321CAR08/12/96288P3214$5,660 P12453C03214GWA08/13/9612P4902$1,224 P12455C52313SAK08/12/9624P4012$2,448 P12456C34123JMW08J/13/96144P3214$720

Key Indicator Report Example Daily Sales Key Indicator Report This Month Last Month Last Year Total Orders Month to Date$1,808$1,694$1,014 Forecasted Sales for the Month$2,406$2,224$2,608

Demand Report Example Daily Sales by Sales Rep Summary Report Prepared: 08/10/xx Sales Rep IDAmount CAR$42,345 GWA$38,950 SAK$22,100 JWN$12,350

Exception Report Example Daily Sales Exception Report ORDERS OVER $10,000 Prepared: 08/10/xx Order # Customer ID Sales Rep ID Ship DateQuantityItem #Amount P12453C89321CAR08/12/96144P1234$13,214 P12453C89321CAR08/12/96288P3214$15,660 P12453C03214GWA08/13/9612P4902$11,224

Outputs of a Management Information System Earnings by Quarter (Millions) ActualForecastVariance 2 ND Qtr 1999$12.6$11.86.8% 1 st Qtr 1999$10.8$10.70.9% 4 th Qtr 1998$14.3$14.5-1.4% 3 rd Qtr 1998$12.8$13.3-3.0% Drill Down Reports Provide detailed data about a situation.

Management Information Systems for Competitive Advantage Provides support to managers as they work to achieve corporate goals Enables managers to compare results to established company goals and identify problem areas and opportunities for improvement

An Organizations MIS Financial MIS Marketing MIS Human Resources MIS Etc. Accounting MIS Drill down reports Exception reports Demand reports Key-indicator reports Scheduled reports Databases of external data Databases of valid transactions Transaction processing systems Business transactions Extranet Internet Figure 9.3 Etc.

MIS 175 Spring 2002 Chapter 10 30 Functional Perspectives of MIS Financial MIS Will integrate information from multiple sources Functions Costing P&L reporting Auditing Funds management

MIS 175 Spring 2002 Chapter 10 31 Functional Perspectives of MIS Manufacturing Design and Engineering Master Production Scheduling Inventory Control Materials Planning Manufacturing and Process Control Quality Control

MIS 175 Spring 2002 Chapter 10 32 Functional Perspectives of MIS Marketing Market research Web-based market research Pricing

MIS 175 Spring 2002 Chapter 10 33 Functional Perspectives of MIS Transportation and Logistics Route and schedule optimization Human Resources Accounting

Expert Systems Expert systems (ES) are programs that mimic the judgment of experts by following sets of rules that experts would follow. Theyre useful in such diverse areas as medical diagnosis, portfolio management, and credit assessment. For example, youve called the customer-service department of your credit-card company because you want to increase your credit line. Dont expect to talk to some financial expert whos authorized to say yes or no. Youll be talking to a service representative with no financial expertise whatsoever. He or she will, however, have access to an ES, which will give you an answer in a few seconds. How does it work? The ES will prompt the representative to ask you certain questions about your salary and living expenses. It will also check internal corporate data to analyze your purchases and payment behavior, and, based on the results, it will determine whether you get an increase and, if so, how much.

2-37 Types (Categorization) of Knowledge Shallow (readily recalled) and deep (acquired through years of experience) Explicit (already codified) and tacit (embedded in the mind) Procedural (repetitive, stepwise) versus Episodical (grouped by episodes) chunks Knowledge exist in chunks

Chapter 3: Knowledge Management Systems Life Cycle Knowledge Explicit knowledge Objective, rational, technical Policies, goals, strategies, papers, reports Codified Leaky knowledge Tacit knowledge Subjective, cognitive, experiential learning Highly personalized Difficult to formalize Sticky knowledge

Chapter 3: Knowledge Management Systems Life Cycle Why Knowledge Management? Organizations are realizing how important it is to "know what they know" and be able to make maximum use of the knowledge. Preventing reinvent the wheel many times.

Chapter 3: Knowledge Management Systems Life Cycle Why Knowledge Management? Thus, organizations need to know: what their knowledge assets are; how to manage and make use of these assets to get maximum return. KM can improve organization efficiency by providing framework, tools and techniques to reuse captured intellectual assets.

Chapter 3: Knowledge Management Systems Life Cycle Why Knowledge Management? We have four people in Boston who know how to solve this problem. How can we get them to help our team in Korea? "People are leaving the company with a lifetime's experience. How can we capture and re-use that?" "We had a team that did a successful proposal for aerospace five years ago. Why did they make the decisions they did? How did they deal with the customer? What made the team tick?"

Chapter 3: Knowledge Management Systems Life Cycle Why Knowledge Management? "How do we start learning from our experiences and help our people stop repeating others' mistakes?" "We're involved in an exciting project with four other companies. How can we all learn how these virtual teams tick?" "Needs change often these days and we're always bringing new people into projects. How can we get them up to speed and contributing quickly?"

Chapter 3: Knowledge Management Systems Life Cycle Knowledge Management Initiatives Aims Make knowledge visible Develop knowledge intensive culture Build knowledge infrastructure Surrounding processes Creation of knowledge Sharing of knowledge Seeking out knowledge Using knowledge

Chapter 3: Knowledge Management Systems Life Cycle Knowledge Management Initiatives Knowledge creation Generating new ideas, routines, insights Modes Socialization, externalization, internalization, combination Knowledge sharing Willing explanation to another directly or through an intermediary Knowledge seeking Knowledge sourcing

Chapter 3: Knowledge Management Systems Life Cycle KM Benefits Reduction in loss of intellectual capital when people leave the company Reduction in costs by decreasing the number of times the company must repeatedly solve the same problem Economies of scale in obtaining information from external providers Reduction in redundancy of knowledge-based activities Increase in productivity by making knowledge available more quickly & easily Increase in employee satisfaction by enabling greater personal development and empowerment Strategic competitive advantage in the marketplace

Chapter 3: Knowledge Management Systems Life Cycle Human Resources Chief knowledge officer (CKO) Senior level Sets strategic priorities Defines area of knowledge based on organization mission and goals Creates infrastructure Identifies knowledge champions Manages content produced by groups Adds to knowledge base CEO Champion knowledge management Upper management Ensures availability of resources to CKO Communities of practice Knowledge management system developers Team members that develop system Knowledge management system staff Catalog and manage knowledge

Chapter 3: Knowledge Management Systems Life Cycle KM Integration Since a KM system is an enterprise system, it must be integrated with other enterprise and information systems in an organization. The most important systems to integrate with are; Decision Support Systems Artificial Intelligence Databases and Information Systems Customer Relationship Management Systems Supply Chain Management Systems Corporate Intranets and Extranets

Chapter 3: Knowledge Management Systems Life Cycle Factors Leading to Success and Failure of Systems Success Companies must assess need System needs technical and organizational infrastructure to build on System must have economic value to organization Senior management support Organization needs multiple channels for knowledge transfer Appropriate organizational culture Failure System does not meet organizations needs Lack of commitment No incentive to use system Lack of integration

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