CHAPTER 1

CORE CONCEPTS IN INFORMATION SYSTEMS

What is MIS? An information system designed by an

organization to collect collect, manipulate, and disseminate data or information on a program

Includes hardware, software, people, communications systems, and data

Allows managers to plan, monitor, and evaluate operations and performance of an activity

Designed and used for administrative purposes

Role of MIS in business

Roles:- support of business operations- support of managerial decision

making- support of strategic competitive

advantage ‘In an organization, information is

the blood and MIS is the heart’.

I

Organization:- business process- people- data- strategy

ISITIT

Subsystems and supersystems of IS

Information Technology

Information Systems

BusinessEnvironment

Computer Based Information Systems : 4 Phases

Key:Operate - Cost to run & maintain site for 1 year.Build - Cost to design, build & implement

$

Automate Cross-Functional Transactions

Integrate/Transform(BPR)

Customer and SupplierRelationship Impact

Cost

Ben

efi

t

Automate Functional TransactionsOperateINR 10 K

BuildINR 50 K

Operate50 K

Build200 K

Operate100 K

Build500 K

Operate150 K

Build1500 K

Automate Accounting

Costs, complexity anduncertainty increase assites gain sophistication

over time

3-12 months

Net returnAccounting and Transactional Planning and Coordinational

IN

REAL

TIME

AT

VERY

LOW

COST

Information can be created in multimedia

Information can be stored

Information can be retrieved

Information can be shared

Information can be distributed

Information can be processed

Information can be transmitted

Progress in MIS

Managers make all the Software tools Decision making is decisions part of everyone’s job

Businesses must choose Telecommunication Centralization and between centralization and networks decentralizationdecentralization possible

Only experts can perform Expert Systems Generalists can act as complex jobs experts.

Information can appear Shared databases Information appears only at one place simultaneously

Old Business Rule Technology intervention New Business Rule

Enabling Role of Information Technology

Plans get revised On line computing Plans get revisedperiodically instantly

Enabling Role of Information Technology

Personal contacts Internet / email Effective contacts

Field persons need offices Wireless/internet/laptops Field offices can bevirtual

Old Business Rule Technology intervention New Business Rule

Find out the information Enterprise software Information comes to you

* Reference : Reengineering the corporation by Michael Hammer & James Champy, 1993-94

Impact of MIS and IT on an Organization

- enables enterprise-wide shared and integrated databases through :

i. improved decision makingii. improved MIS reporting

- enables enterprise-wide cross functional work flow automation through :

i. improving Intra-organizational transactionsii. reducing in business processes lead timesiii. improved inventory and working capital managementiv. improved financial reconciliation

•As transactional Information Systems:

• Improves business process performance through:

- automation of business processes

- simplification of business processes

- elimination of non value adding business processes

- reengineering of business processes

Impact of MIS on an organization

Work Flow: Purchase Process

Supply Chain Processing

OutboundDelivery

OutboundShipment

Goods Receipt Processing

MaterialRequest

PurchaseOrder

PurchaseRequest

GoodsReceipt

Material Issue

Requisition of a valve

Material Receipt

- improved coordination among sales, production stores, purchase, and accounts due to close loop systems and online data- dynamic scheduling of production and purchase- based on feedback from sales and visa versa

• MIS as a coordination and planning information system results in:

Impact of MIS on an organization

Sales Order Processing

Fin. Accounting

Hist./Stats.

Sales Quotatio

ns

SalesContracts

EDI

Manually

Order entry

Invoicing

Outbound Advice

Delivery

Close Order

Order AcknowledgmentPicking Lists

Dispatch ListDispatch NotesConsignment Notes

Invoice

Margin ControlCustomer Monitoring

Inventory CheckAdditional Costs

InstallmentsSales Order/

Quotation Existence

Margin ControlCustomer Monitoring

Inventory CheckAdditional Costs

InstallmentsSales Order/

Quotation Existence

Sales Order

Sales Statistics

Display codes

Period Codes

Layout Codes

Sales Budget

SET UP STATISTICS

budgetsalesdifferencefrom/till

group 1group 2

group 1budgetsales

col.1 diff.

group 2budgetsales

col.2

Sorting CodesParameters

•To be competitive today you need:- the flexibility to take on new business opportunities as

they arise- a business framework that lets you

i. optimize business processesii. cut costs ii. improve customer serviceiv. shorten your time to market

- comprehensive decision support tools to provide up-to-date information on revenues, budget performance, sales, and cash-flow

•E-business can help provide the competitive edge you need

The competitive edge

Telecommunication

Information Technology

Business E-Business

E-Business

What is E-Business?

• E-business is a new way of conducting, managing, and executing business transactions using IT and telecommunications networks (Internet and Extranet)• E-business is remaking the business world by:

- redefining virtually every business process and function- changing conventional concepts and rules about strategic alliances, outsourcing, competition, industry specialization, and

customer relationships- creating a wealth of information about customers, enabling

businesses to anticipate and satisfy individual needs with pinpoint precision

- blurring the lines between industries- challenging every business to reinvent itself

· It provides companies with new, more cost and time-efficient means for working with customers, suppliers, and development partners