MANAGEMENT

INFORMATION SYSTEM

MODULE :- 1

Prepared by:
Prof. Alpesh Ganatra
MODULE – 1

• Introduction to Management Information

Systems: Meaning of information system, difference
between information and data, Role and Importance
MIS in modern business. Types of decisions and the
use of information system

2
WHAT IS A SYSTEM?

Definition:

A group of interrelated components, with a clearly

defined boundary, working together toward a
common goal by accepting inputs and producing
outputs in an organized transformation process.
WHAT IS AN INFORMATION
SYSTEM

• An information system can be defined technically as

a set of interrelated components that collect (or
retrive), process, store and distribute information to
support decision making and control in an
organization
WHAT IS AN INFORMATION
SYSTEM ?
INFORMATION SYSTEM
MODEL
INFORMATION SYSTEM CONSISTS
FOLLOWING COMPONENTS AND
RESOURCES:

– Data
– Hardware
– Software
– Communication networks
– People
– Procedures
INFORMATION SYSTEM
ACTIVITIES:

– Input
– Processing
– Output
– Storage
– Feedback
– Control
DATA, INFORMATION & ITS
ATTRIBUTES

• Data
– It is a stream of raw facts representing events occurring in
org. or the physical environment before they have been
organized and arranged into a form that people can
effectively understand and use.

• Information
– It is set of data that has been shaped into a form
that is meaningful and useful to human beings.
INFORMATION :-

 It adds to a representation

 It is useful in conforming or correcting the previous

information was available

 It tells things which were previously not known to the

receiver and thereof adds to his knowledge

 It adds to the certainty factor in decision making

EXAMPLES

• Data
– 331 brite dish soap 1.29 lacs
– 863 bl hill coffee 4.69 lacs

• Information
– Item no 331 desc. Brite dish soap units sold 1.29 lacs
– Item no 863 desc. Bl hill coffee units sold 4.69 lacs
CHARACTERISTICS OF
GOOD INFORMATION

• Timeliness
• Appropriateness
• Accuracy
• Conciseness
• Frequency
• Understandability
• Relevant
• Complete
• Current
• Economical
DATA VS INFORMATION

BASIS FOR
DATA INFORMATION
COMPARISON

Data means raw facts Facts, concerning a particular

gathered about someone or event or subject, which are
Meaning
something, which is bare and refined by processing is
random. called information.

Data is in the form of

Format numbers, letters, or a set of Ideas and inferences
characters.

Based on Records and Observations Analysis

Support for Decision It can't be used for decision It is widely used for
making making decision making.
 It can be structured, tabular Language, ideas, based
Represented in
data, graph, data tree, etc. on the given data
Information is useful
The data collected by the
and valuable as it is
Usefulness researcher, may or may not
readily available to the
be useful.
researcher for use.
Does not depend on Without data, information
Dependency
information. cannot be processed.

Information is the
Data is a single unit and is
product and group of
Feature raw. It alone doesn't have
data which jointly carry
any meaning.
a logical meaning.
Measured in meaningful
Measuring unit Measured in bits and bytes. units like time, quantity,
etc.
DETAILED EXPLANATION
OF DATA VS INFORMATION

• Key Differences Between Data and Information

• Raw facts gathered about a condition, event, idea,
entity or anything else which is bare and random, is
called data. Information refers to facts concerning a
particular event or subject, which are refined by
processing.

• Data are simple text and numbers, while information

is processed and interpreted data.
• Data is in an unorganized form, i.e. it is randomly
collected facts and figures which are processed to draw
conclusions. On the other hand, when the data is
organized, it becomes information, which presents data
in a better way and gives meaning to it.
• Data is based on observations and records, which are
stored in computers or simply remembered by a person.
As against this, information is considered more reliable
than data, as a proper analysis is conducted to convert
data into information by the researcher or investigator.
• The data collected by the researcher, may or may not be useful to
him, as when the data is gathered, it is not known what they are
about or what they represent? Conversely, information is valuable
and useful to the researcher because it is presented in the given
context and so readily available to the researcher for use.

• Data is not always specific to the need of the researcher, but

information is always specific to his requirements and expectations,
because all the irrelevant facts and figures are eliminated, during the
transformation of data into information.
• When it comes to dependency, data does not depend on information.
However, information cannot exist without data.
THE ROLE OF
INFORMATION SYSTEM

• For Globalizing opportunities

• Operational excellence
• New products , services and business models
• Improved decision making
• Competitive advantage
• Survival
WHY TO STUDY
INFORMATION SYSTEMS?

• Information technology can help all kinds of

businesses improve the efficiency and effectiveness
of their business processes, managerial decision
making, and workgroup collaboration, thus
strengthening their competitive positions in a rapidly
changing marketplace.
• Internet-based systems have become a necessary
ingredient for business success in today’s dynamic
global environment.
• Information technologies are playing an expanding
role in business.
INFORMATION SYSTEMS VS.
INFORMATION TECHNOLOGY

• Information Systems (IS) – all components and

resources necessary to deliver information and
information processing functions to the organization

• Information Technology (IT) – various hardware

components necessary for the system to operate
TYPES OF INFORMATION
TECHNOLOGIES

• Computer Hardware Technologies

including microcomputers, midsize servers, and large
mainframe systems, and the input, output, and storage
devices that support them

• Computer Software Technologies

including operating system software, Web browsers,
software productivity suites, and software for
business applications like customer relationship
management and supply chain management
INFORMATION SYSTEMS

– Zwass, f1.2, p14

22
• Telecommunications Network Technologies
including the telecommunications media, processors,
and software needed to provide wire-based and
wireless access and support for the Internet and
private Internet-based networks

• Data Resource Management Technologies

including database management system software for
the development, access, and maintenance of the
databases of an organization
THREE MAIN ACTIVITIES

• Input

• Processing

• Output (and feedback)

INFORMATION SYSTEM
OBJECTIVES

• Information provided should be accurate, timely,

right, well formatted, filter unwanted and unnecessary
information
• To provide set of performance indicators to judge the
employee’s performance
• Management by objectives(MBO) can be achieved
smoothly
BENEFITS OF M.I.S

• Core competencies
• Enhance supply chain management
• Quick response
• Time saving
• Cost reduction
• Reduced human resource requirement
• Efficient and effective work
ORGANIZATIONAL CHART
FUNCTIONS OF MANAGERS

• P- Planning

• O- Organizing

• S- Staffing

• D- Directing or leading

• Co- Controlling
M.I.S SUPPORT TO
MANAGEMENT

• Planning – it offers alternatives to managers for selecting

the best among them
• Organization- it helps in setting goals, objectives, and
offers various combination which are possible
• Staffing- it helps in taking decision related to manpower
requirement
• Directing- it gives direction towards achieving the org.
goals
• Coordinating- it helps in integrating the resources
• Controlling- the control of performance, and budget and
reports, taking corrective actions in case of deviations
PURPOSE OF MANAGEMENT
SYSTEM

• M.I.S. not only deals with the mgmt functions but

also using and disposing the cooperation and
operation information.
• It is designed to work in the integrated manner
• It deals with the future mgmt and action plan
• M.I.S. is the product of continuous and careful efforts
done by experts to meet the informational needs of
mgmt.
MANAGEMENT LEVEL AND
INFORMATION NEED

• Lower level managers:

– which is concerned with operational control require
frequent and detailed information. The source of
information is internal

• Middle level managers:

– Mainly formulate operational plans and objectives to
implement strategy and also make operational decisions.
Internal and external information required
• Top level managers:
– Primarily responsible for strategic planning and control and
hence the information needed is external and future oriented

• Types and nature of information at each

managerial level:

 Operational activities
 Tactical activities
 Strategic activities
OPERATIONAL ACTIVITIES

• Characteristics:
– Repetitive in nature
– Predictable nature of information
– Attention to details
– Structured
– Origin of nature is internal in most of cases
– Mostly computerized or with human machine interface
– Accurate
TACTICAL ACTIVITIES:

• Characteristics:
– Periodic in nature
– Comparative in nature
– Internal as well as external sources of information
– Findings of the report may be unexpected
– Reports are not detailed and may be in summary form more
comparative in nature
STRATEGIC ACTIVITIES

• Characteristics:
– Periodic in nature
– Information produced as per requirement rather on an ad
hoc basis
– Internal as well as external data
– Summary form
– Structured as well as unstructured
– Some data may lack accuracy and may be suspect
– Data is subjective in nature
CLASSIFICATION OF
INFORMATION

1) Action and no-action information

2) Recurring and non-recurring information

3) Internal and external information

TYPES OF DECISION

1. Business decisions:
– Characteristics
• Sequential in nature and not an isolated event
• Complex in nature due to the risk involved
• Personal values play a major role in the decision
• Decisions made in a business environment
– Types of business decisions :
• Programmed decisions
• Non-programmed decisions
• Strategic decisions
• Tactical decisions
• Operational decisions
RATIONAL DECISION
MAKING

Types :

 Personal rationality
 Objective rationality
 Subjective rationality
 Conscious rationality
 Organizational rationality
PROGRAMMED DECISIONS
PROGRAMMED DECISION

• When the decisions can be programmed the

organization can prepare a procedure that is to be
followed for the decision to be taken.
• The procedure can be a set of steps, flow chart or a
table which should be followed to arrive at decision
• It can be handled by the lower management by having
specialized knowledge of how to use the tables or
flow chart in arriving at an decision
• It works in a closed system and isn’t so effective in an
open system.
• In a programmed decision making there will be no
error in the decisions because it is routine and
managers usually have the information they need to
create rules and guidelines to be followed by others.

• But some times small error (not big one) occurs

which is negligible.

• In this the rules for each stage must be clearly

designed. This is why it is so called Programmed
decision
NON-PROGRAMMED
DECISIONS

• They are made in response to situations those are

unique, are poorly defined and largely unstructured.
• It is used when company is deciding to invest in new
machines.
• This type of decision making does not need rules or
guidelines to be followed because the situation is
unexpected or uncertain.
• There is no pre-established decision procedure
because the decision isn’t required to be taken
frequently for the organization.
• These type of decision has more chance of errors and
difficult for managers to handle as it is challenging.

• These errors are of dangerous kind, they affect

organization badly.

• For example McDonald’s new menu…

• Some decisions are neither programmed nor non-

programmed but are combination of the two
• They are classified as…

– Decision making under certainty

– Decision making under risk
– Under uncertainty