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It is necessary to understand the concepts of decision making as they are relevant to thedesign of
the MIS. The Simon Model provides a conceptual design of the MIS and decision making, wherein the
designer has to design the system in such a way that the problem is identified in precise terms. That means
the data gathered for data analysis should be such that it provides diagnostics and also provides a path to
bring the problem to surface.
In the design phase of the model, the designer is to ensure that the system provides models for
decision making. These models should provide for the generation of decision alternatives, test them and
pave way for the selection of one of them. In a choice phase, the designer must help to select the criteria to
select one alternative amongst the many.
The concept of programmed decision making is the finest tool available to the MIS designer, whereby
he can transfer decision making from a decision maker to the MIS and still retain the responsibility and
accountability with the decision maker or the manager. In case of non-programmed decisions, the MIS
should provide the decision support systems to handle the variability in the decision making conditions.
The decision support systems provide a generalized model of decision making.
The concept of decision making systems, such as the closed and the open systems helps the designer
in providing design flexibility. The closed systems are deterministic and rule based; therefore, the design
needs to have limited flexibility, while in an open system, the design should be flexible to cope up with the
changes required from time to time. The methods of decision making can be used directly in the MIS
provided the method to be applied has been decided. A number of decision making problems call for
optimization,and OR models are available which can be made a part of the system. The optimization
models are static and dynamic, and both can be used in the MIS. Some of the problems call for a
competitive analysis, such as a payoff analysis. In these problems, the MIS can provide the analysis based
on the gains, the regrets and the utility.
The concepts of the organizational and behavioral aspects of decision making provide an insight to the
designer to handle the organizational culture and the constraints in the MIS.The concepts of the rationality
of a business decision, the risk averseness of the managers and the tendency to avoid an uncertainty, makes
the designer conscious about the human limitations, and prompts him to provide a support in the MIS to
handle these limitations. The reliance on organizational learning makes the designer aware of the strength
of the MIS and makes him provide the channels in the MIS to make the learning process more efficient.
The relevance of the decision making concepts is significant in the MIS design. The significance arises
out of the complexity of decision making, the human factors in the decision making, the organizational and
behavior aspects, and the uncertain environments.The MIS design addressing these significant factors turns
out to be the best design.
Todays managers depend on information systems for decision making. The managers
have handful of data around them but manually they cannot process the data
accurately and with in the short period of time available to them due to heavy
competition in modern world. Therefore mangers depend on information systems.
Management: Management has been defined in a variety of ways, but for our
purposes it comprises the process or activities what managers do in the operation of
their organization: Plan, Organize, Initiate and Control operations.
Information:
Data are facts and figures that are not currently being used in a decision processes
and usually take the form of historical records that are recorded and filed without
immediate intent to retrieve for decision making.
Information consists of data that have been retrieved, processed or otherwise used
for information or inference purposes, argument, or as a basis for forecasting or
decision making.
System can be described simply as a set of elements joined together for a common
objective. A subsystem is is part of a larger system with which we are concerned. All
systems are part of larger systems.
• Data processing systems record day too day transactions, e.g. sale of a
CD to a customer.
• The MIS will analyse the sales data to highlight sales trends of different
product lines, to enable decisions to be made as to whether the product
needs special promotion, or whether it should be discontinued.
The MIS deals with internal and external information. The internal information
can be got quite easily from the various systems on the company network, e.g.
sales figures for each product line. The external information is gathered from:
The MIS can be used to gather information from both formal and informal
flows of information.
• A formal flow of information is one in which a procedure is adopted,
e.g. the downloading of sales figures from several branches first thing on
a Monday morning. External data can be collected using specialised
data collection agencies such as Dun and Bradstreet who produce
economic data for academic and commercial organisations. Formal
flows can also come from people working on the same document at
several locations, or by use of e-mail, or by use of company intranets.
• Strategic – long term decisions that will affect the future of the
organisation, e.g. whether to open a new store, or take over a rival
concern.
In 1973 a study showed the following about the time taken by a manager on
various different tasks:
• Desk work – 22 %
• Travel – 3 %
• Unscheduled meetings – 10 %
• Telephone calls – 6 %.
Some chief executives have to change their attention rapidly form one task to
another. In some cases, half their activities last less than nine minutes.
Types of Decision
Consider
solutions
Choose a
solution
Is there a problem
or opportunity?
1. Recognise the problem. The MIS may give information about the
performance of the department, and where there is a problem.
in the organisation.
There are a number of ways that computer projects can be managed. We will
look at
• prototyping.
The systems life cycle was the traditional way in which projects were carried
out. Each stage was completed before the next was started.
Testing
Feasibility study
Maintenance
Design
Analysis
Implementation
You will have done something fairly similar with your project. This system had
its drawbacks, in that experience in a later stage could not inform work that
had been done previously.
Analysis
Design
Implementa-tion
Feasibility Study
Requirements analysis
Design
Conversion
Post-implementation review
The waterfall model has disadvantages, which can be overcome using
prototyping, in which a model of the system is developed in partnership with
the end-user. The features are worked out with the end user using a
prototype, and the end user can have a considerable input into the
development of a project. The approach is shown below:
Evaluate
Specify
Drawbacks are:
Feasibility Study
The scope and objectives of the system are specified. The aim is to understand
the problem and see if it is worth continuing. A feasibility report is produced
by the systems analyst which considers the five main factors which are
(TELOS):
All of this is carried out by systems analysts who produce data flow diagrams
to picture the company’s operations. Click HERE to see a DFD.
The analysts also consider the costs and benefits implications. They also
consider the way the project will be implemented:
You will have done much of this in your Module 3 project (didn’t you?).
Then there’s the implementation, where the system is coded and tested. Also
Hardware is installed, ready to convert from the old system to the new.
Definition: Management Information Systems (MIS) is the term given to the discipline
focused on the integration of computer systems with the aims and objectives on an
organisation.
The development and management of information technology tools assists executives and
the general workforce in performing any tasks related to the processing of information.
MIS and business systems are especially useful in the collation of business data and the
production of reports to be used as tools for decision making.
Applications of MIS
With computers being as ubiquitous as they are today, there's hardly any large business
that does not rely extensively on their IT systems.
However, there are several specific fields in which MIS has become invaluable.
* Strategy Support
While computers cannot create business strategies by themselves they can assist
management in understanding the effects of their strategies, and help enable effective
decision-making.
MIS systems can be used to transform data into information useful for decision making.
Computers can provide financial statements and performance reports to assist in the
planning, monitoring and implementation of strategy.
MIS systems provide a valuable function in that they can collate into coherent reports
unmanageable volumes of data that would otherwise be broadly useless to decision
makers. By studying these reports decision-makers can identify patterns and trends that
would have remained unseen if the raw data were consulted manually.
MIS systems can also use these raw data to run simulations – hypothetical scenarios that
answer a range of ‘what if’ questions regarding alterations in strategy. For instance, MIS
systems can provide predictions about the effect on sales that an alteration in price would
have on a product. These Decision Support Systems (DSS) enable more informed
decision making within an enterprise than would be possible without MIS systems.
* Data Processing
While MIS systems are extremely useful in generating statistical reports and data analysis
they can also be of use as a Management by Objectives (MBO) tool.
MBO is a management process by which managers and subordinates agree upon a series
of objectives for the subordinate to attempt to achieve within a set time frame. Objectives
are set using the SMART ratio: that is, objectives should be Specific, Measurable,
Agreed, Realistic and Time-Specific.
The aim of these objectives is to provide a set of key performance indicators by which an
enterprise can judge the performance of an employee or project. The success of any MBO
objective depends upon the continuous tracking of progress.
In tracking this performance it can be extremely useful to make use of an MIS system.
Since all SMART objectives are by definition measurable they can be tracked through the
generation of management reports to be analysed by decision-makers.
Benefits of MIS
The field of MIS can deliver a great many benefits to enterprises in every industry.
Expert organisations such as the Institute of MIS along with peer reviewed journals such
as MIS Quarterly continue to find and report new ways to use MIS to achieve business
objectives.
Core Competencies
Every market leading enterprise will have at least one core competency – that is, a
function they perform better than their competition. By building an exceptional
management information system into the enterprise it is possible to push out ahead of the
competition. MIS systems provide the tools necessary to gain a better understanding of
the market as well as a better understanding of the enterprise itself.