1

An information system (IS) is an arrangement of people, data, processes, communications, and information technology that interact to support and improve day-to-day operations in a business as well as support the problem-solving and decision making needs of management and users.

Information technology is a contemporary term that describes the combination of computer technology (hardware and software) with telecommunications technology (data, image, and voice networks).

2

Front- and Back-Office Information Systems

Front-office information systems support business functions that reach out to customers (or constituents). Marketing Sales Customer management

Back-office information systems support internal business operations and interact with suppliers (of materials, equipment, supplies, and services). Human resources Financial management Manufacturing Inventory control

3

Information System Resources People Resources

End Users – the people who use an information system or the information it produces. Ex: Accountants, salespeople, customers

IS Specialists – the people who develop and operate information systems based on the requirements of end users. Ex: programmers, analysts, system operators

4

Information System Resources Hardware Resources

Machines, such as computers and other devices, and media, such as paper, disks

Computer Systems such as the personal computer (desktop), mainframe, or laptop

Computer peripherals such as keyboard, mouse, monitor, scanner, printer, disks

5

Information System Resources Software Resources

Programs – sets of operating instructions that direct and control computer hardware

Procedures – sets of information processing instructions that people need

6

Information System Resources Software Resources continued

System Software – such as operating system that supports the operations of a computer system. Ex. Windows 98

Application Software – programs that direct processing for a particular use of computers by end users. Ex. Excel

Procedures – operating instructions for people who will use an IS. Ex. Instructions for filling out a form.

7

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 Processes: processing

software Output: reports, rental

agreement Feedback: error repots

8

Information & Decision Making

Strategic

Tactical

Operational

Operational Activity

Raw Data

Increasing Detail

Increasing Scope

RecurringInformation Needs

+

- Imprecise

Precise

External

InternalTPS

MISDSS

EIS

9

Strategic Planning Decisions

Decide Organisations Objectives – top down management

Plan how to achieve Objectives

1. Long term2. High levels of Uncertainty

and Risk3. Situations may not be

recurring4. Deals with complex issues

Tactical

Strategic

Operational

Operational Activity

Raw Data

Summarised Information

EnvironmentalInformation

10

Management Control Decisions Taken within the framework

of strategic plans Ensure that resources are

obtained and used efficiently and effectively

Decisions encompass planning activities e.g. pricing a new product

Tactical

Strategic

Operational

Operational Activity

Raw Data

Summarised Information

SomeEnvironmentalInformation

11

Sector Operations Tactics Strategy

Production • Machine settings

• Worker schedules

• Maintenance sch.

• Rearrange work area

• Schedule new products

• Change inventory

method

• New factory

• New products

• New industry

Accounting • Categorize assets

• Assign expenses

• Produce reports

• Inventory valuation

• Depreciation method

• Finance short/long term

• New GL system

• Debt vs. equity

• International taxes

Marketing • Reward

salespeople

• Survey customers

• Monitor

promotions

• Determine pricing

• Promotional campaigns

• Select marketing media

• Monitor

competitors

• New products

• New markets

Operations, Tactics, Strategy

Decision LevelsDecision

LevelDescription 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.

13

History of the Role of IS

Data Processing

ManagementReporting

DecisionSupport

Strategic &End User

Electronic Commerce

1950-1960 1960-1970 1970-1980 1980-1990 1990-2000

ElectronicData Processing- TPS

ManagementInformationSystems Decision

SupportSystems- Ad hoc Reports

End UserComputingExec Info SysExpert SystemsSIS

ElectronicBusiness & Commerce-InternetworkedE-Business &Commerce

14

Operational-level Systems Transaction-Processing Systems (TPS)

Basic business systems Perform daily routine transactions necessary for

business functions At the operational level, tasks, resources and

goals are predefines and highly structured Generally, five functional categories are identified,

as shown in the diagram.

15

16

System Architecture: Transaction Processing System

17

System Example: Payroll System (TPS)

18

What is MIS? A Management Information System (MIS) is an organized

method of providing past, present and projection information relating to internal operations and external intelligence. It supports the planning, control and operational functions of an organization by furnishing uniform information in the proper time-frame to assist the decision-maker ["MIS Universe", Data Management, Sept 1970]

A Management Information System provides managers with information and support for effective decision making and provides feedback on daily operations.

19

Management-level Systems Management Information Systems (MIS)

MIS provide managers with reports and, in some cases, on-line access to the organisations current performance and historical records

Typically these systems focus entirely on internal events, providing the information for short-term planning and decision making.

MIS summarise and report on the basic operations of the organisation, dependent on the underlying TPS for their data.

20

21

System Description: Management Information Systems

MISs are used by managerial employees to support recurring decision making in managing a function or the entire business

Supported Activities• Scheduled Reporting - the system produces automatically

based on a predetermined schedule. Some include:• Key Indicator – High-level summaries to monitor

performance (e.g. Monthly Sales Report)• Exception – Highlights situations where data is out of normal

range (e.g. Monthly Late Shipments)• Drill Down – Provides lower level detail aggregated in a

summary report (printed only if needed)• Ad Hoc Reporting – unscheduled reports that are usually

custom built to answer a specific question (e.g. sales data by person report to identify issues)

Scheduled Report Example

Daily Sales Detail ReportPrepared: 08/10/xx

Order#

CustomerID

Sales Rep ID

ShipDate Quantity Item # Amount

P12453 C89321 CAR 08/12/96 144 P1234 $3,214

P12453 C89321 CAR 08/12/96 288 P3214 $5,660

P12453 C03214 GWA 08/13/96 12 P4902 $1,224

P12455 C52313 SAK 08/12/96 24 P4012 $2,448

P12456 C34123 JMW 08J/13/96 144 P3214 $720

Key Indicator Report Example

Daily Sales Key Indicator Report

ThisMonth

LastMonth

LastYear

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 ReportPrepared: 08/10/xx

Sales Rep ID Amount

CAR $42,345

GWA $38,950

SAK $22,100

JWN $12,350

Exception Report Example

Daily Sales Exception Report – ORDERS OVER $10,000Prepared: 08/10/xx

Order#

CustomerID

Sales Rep ID

ShipDate Quantity Item # Amount

P12453 C89321 CAR 08/12/96 144 P1234 $13,214

P12453 C89321 CAR 08/12/96 288 P3214 $15,660

P12453 C03214 GWA 08/13/96 12 P4902 $11,224

… … … … … … …

… … … … … … …

Outputs of a Management Information System

Earnings by Quarter (Millions)

Actual Forecast Variance

2ND Qtr 1999 $12.6 $11.8 6.8%

1st Qtr 1999 $10.8 $10.7 0.9%

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.

27

Management Information System Management Information System (MIS)(MIS)

Inputs: Summary transaction data Processing: Simple models; low level analysis Outputs: Summary reports Users: Middle managers

Example: Weekly, monthly, and annual resource allocation. Not five year plans and not daily details, but something in between.

28

System Architecture: Management Information System

29

Guidelines for Developing MIS reportsGuideline Explanation Tailor each report to user needs Involve user in the design

Produce only needed reports If no one reads the report, do not produce it

Pay attention to report content and layout

Display the information most desiredUse user accepted words and phrasesDo not use unnecessary data

Use management by exception in reporting

Produce reports to solve a problem or take action

Set parameters carefully Low parameters may result in too many reports, while high parameters may overlook valuable information

Produce all reports in a timely fashionOutdated reports are of little or no value

30

System Description: Functional Area Info Systems

Functional Area Information SystemsCross-organizational information systems are designed to support a specific functional area

Supported ActivitiesThe following functional organizations have systems to support their operational and managerial activities

• Accounting• Finance• Human Resources• Marketing• Operations

31

32

Overview of a Marketing MIS

33

Overview of a Financial MIS

34

Manufacturing MIS

Material requirements planning (MRP) Manufacturing resource planning (MRPII) Just in time (JIT) inventory system

35

Overview of a Manufacturing MIS

36

Human Resource MIS

Concerned with activities related to employees and potential employees of the organization.

Subsystems include: needs and planning assessments recruiting training and skills development scheduling and assignment employee benefits

37

Overview of a Human Resource MIS

38

Information Systems in Industry Airline industry (e.g., ticketing sites)

Investment firms (e.g., analyze stocks and bonds)

Banks (e.g., online check payment)

Transportation industry (e.g., schedule trucks and trains)

39

Information Systems in Industry Healthcare organizations (e.g., track patient records)

Retail companies (e.g., process customer orders)

Power management and utility companies (e.g., monitor and control power generation and usage)

Professional services (e.g., provide information on products and services to its consultants)