What are information systems?

WordNet describes an information system as

"a system consisting of the network of all communication channels used within an organization" An information system comprises all the components that collect, manipulate, and disseminate data or information. It usually includes hardware, software, people, communications systems such as telephone lines, and the data itself.
1 Management Information Systems (2) 18th September 2009

 Information systems deal with the

development, use and management of an organization's IT infrastructure. The biggest asset of companies today is their information--represented by people, experience, know-how, innovations (patents, copyrights, trade secrets)--and for a market operator to be able to compete, he or she must have a strong information infrastructure, at the heart of which lies the information technology infrastructure
2 Management Information Systems (2) 18th September 2009

Components of an IS
People resources in an IS are made up of end

users (all the stakeholders of information); IS specialists (computer programmers, systems analysts, information managers, librarians, administrators etc). Hardware resources are made up of machines and media (computers, videos, tape drives, flash disks, scanners, printers, paper etc) Software resources include programs and procedures. Information resources are made up of data bases, Network resources are made up of communication media and networks, (telephone, fax internet, satellite communication etc.)September 2009 Management Information Systems (2) 18th

Information Systems and Society

We are in the information age and everywhere

people are using information for maximum effect. Information systems (IS) and Information Technology (IT) have become a vital component of our very existence. Information systems are now being used for a variety of activities and they range from entertainment, emails, business, communication social networking, politics etc.

Management Information Systems (2)

18th September 2009

 The technology used to implement an information

systems does not necessarily have to be a computer. It can even be on paper, telephone and faxes. People, hardware, software, information (data) and communication (networks) are the basic components of an information system.

Management Information Systems (2)

18th September 2009

Types of Information Systems

For most businesses, there are a variety of

requirements for information.

Senior managers need information to help with their

business planning. Middle management need more detailed information to help them monitor and control business activities. Employees with operational roles need information to help them carry out their duties.
As a result, businesses tend to have several

"information systems" operating at the same time.

6 Management Information Systems (2) 18th September 2009

 Transaction processing system (TPS)

Executive Support Systems

Knowledge Management Systems Expert Systems Management Information Systems

Management Information Systems (2)

18th September 2009

Transaction processing system (TPS):

TPS collects and stores information about

transactions, and controls some aspects of transactions. A transaction is an event of interest to the organisation. A company may have several TPS in place. e.g.
A sale at a store. Billing systems to send invoices to customers Systems to calculate the weekly and monthly

payroll and tax payments Production and purchasing systems to calculate raw material requirements Stock control systems to process all movements into, within and out of the business
8 Management Information Systems (2) 18th September 2009

Definition 2
A Transaction Processing System (TPS) is a type

of information system that collects, stores, modifies and retrieves the data transactions of an enterprise Source : Read: http://www.bestpricecomputers.co.uk/glossary/tra nsaction-processing-systems.htm

Management Information Systems (2)

18th September 2009

TPS will exhibit the following characteristics:

Rapid Processing Reliability

Standardisation Controlled Access

10

Management Information Systems (2)

18th September 2009

Transactions Processing Qualifiers

In order to qualify as a TPS, transactions made

by the system must pass the ACID test. The ACID tests refers to four prerequisites: Atomicity Consistency Isolation Durability These four conditions ensure that TPS systems carry out their transactions in a methodical, standardised and reliable manner. Read about these qualifiers in hand out 1
18th September 2009

11

Management Information Systems (2)

Executive Support Systems

An Executive Support System ("ESS or EIS")

12

is a set of management tools supporting the information and decision making needs of management by combining information available within the organisation with external information in an analytical framework It is designed to help senior management make strategic decisions by gathering, analysing and summarising the key internal and external information used in the business. it provides executives with information in a readily accessible and interactive format. Management Information Systems (2)
18th September 2009

 An EIS/ESS usually allows summary over the entire

organisation and also allows drilling down to specific levels of detail. They also use data produced by the ground-level TPS so the executives can gain an overview of the entire organisation. Intended for and used by top level (strategic) management. They are designed for the individual. They let the CEO of an organisation tie in to all levels of the organisation. They are very expensive to run and require extensive staff support to operate.

13

Management Information Systems (2)

18th September 2009

Knowledge Management Systems

Knowledge Management Systems ("KMS") exist

to help businesses create and share information. These are typically used in a business where employees create new knowledge and expertise which can then be shared by other people in the organisation to create further commercial opportunities. Good examples include firms of lawyers, accountants and management consultants.

14

Management Information Systems (2)

18th September 2009

 KMS are built around systems which allow

efficient categorisation and distribution of knowledge. For example, the knowledge itself might be contained in word processing documents, spreadsheets, PowerPoint presentations, internet pages or whatever. To share the knowledge, a KMS would use group collaboration systems such as an intranet.

15

Management Information Systems (2)

18th September 2009

Expert Systems
Expert system (noun): "a computer system or

program that uses artificial intelligence techniques to solve problems that ordinarily require a knowledgeable human. The method used to construct such systems, knowledge engineering, extracts a set of rules and data from an expert or experts through extensive questioning. Expert systems imitate human experts in many different fields of expertise. Expert systems are built with decision-making rules, and they can ask humans a series of questions to narrow down the correct answer. One early and influential expert system was MYCIN, a disease Management system. 18th September 2009 16 diagnosis Information Systems (2)

 This material is then organized in a format

17

suitable for representation in a computer and a set of tools for inquiry, manipulation, and response is applied. While such systems do not often replace the human experts, they can serve as useful adjuncts or assistants. Among some of the successful expert systems developed are INTERNIST, a medical diagnosis tool that contains nearly 100,000 relationships between symptoms and diseases, and PROSPECTOR, an aid to geologists in interpreting mineral data." Management Information Systems (2) 18th September 2009 (http://www.encyclopedia.com/articles/04322.html

 Advantages of expert systems:

The computer can store far more information than a

human. The computer does not 'forget', make silly mistakes or get drunk when it is most needed. Data can be kept up-to-date. The expert system is always available 24 hours a day and will never 'retire'. The system can be used at a distance over a network.

18

Management Information Systems (2)

18th September 2009

Ref: wikipedia and glossary of terms

Management Information Systems (MIS) are

information systems which are typically computerbased, that are used within an organization for decision making Condenses and converts TPS data into information for monitoring performance and managing an organisation. Transactions recorded in a TPS are analyzed and reported by an MIS. 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. Systems (2) Management Information 18th September 2009 19 (http://www.bestpricecomputers.co.uk/glossary/mana

 They have large quantities of input data and they

produce summary reports as output. Used by middle managers. An example is an annual budgeting system or a human resource database

20

Management Information Systems (2)

18th September 2009

MIS

Def 2 :ref Haag, Cummings &McCubbrey

MIS deals with the planning, development,

management, and use of information technology tools to help people perform all tasks related to information processing and management.

21

Management Information Systems (2)

18th September 2009

MIS

ref: www.wikipedia.com

It may also be defined as "a system that collects

and processes data (information) and provides it to managers at all levels who use it for decision making, planning, program implementation, and control."

22

Management Information Systems (2)

18th September 2009

 Three key resources are found in all the

definitions
A. Information Technology B. Information C. People (Knowledge worker)

23

Management Information Systems (2)

18th September 2009

A. IT: The Role of IT in the business environment

The use of IT in the business is only a recent

24

development. It is however one of the most important resources in todays business environment. This has resulted in heavy investments in this area. IT is defined as a computer based tool that people use to work with information and support the information processing needs of an organization. Use hardware and appropriate software to conduct business Management Information Systems (2) 18th September 2009

Ways in which IT are used: Supporting Information processing tasks (5Cs)

Supporting Information processing tasks (5Cs)

Capturing information Conveying information Creating information Cradling (Storing) information Communication information These tasks have to be combined for maximum effect.

25

Management Information Systems (2)

18th September 2009

A. IT: The Role of IT in the business environment

The use of IT in the business is only a recent

development. It is however one of the most important resources in todays business environment. This has resulted in heavy investments in this area. IT is defined as a computer based tool that people use to work with information and support the information processing needs of an orgn. Use hardware and appropriate software to conduct business
26 Management Information Systems (2) 18th September 2009

Ways in which IT are used: Supporting Information processing tasks (5Cs)

Supporting Information processing tasks (5Cs)

Capturing information Conveying information Creating information Cradling (Storing) information Communicating information These tasks have to be combined for maximum effect.

27

Management Information Systems (2)

18th September 2009

 Capturing information: Obtaining information at its point of origin Tools: Mouse, Keyboard, Scanner, barcode reader, camera Conveying information Presenting information in a useful form Tools: Screen, printer, Creating Information Processing information to create new information Tools: CPU Cradling Storing information for use at a later time Tools: hard disk, flash disk, CD_ROM, DVD

Communicating Sending info to other people Tools: Email, internet, telephone, video link (Modem, radio, wireless, satellite, pager)
28 Management Information Systems (2) 18th September 2009

Supporting Decision making tasks

processing information such as payroll, sales

order is referred to as Online Transaction Processing (OLTP). It involves the gathering and processing of input information and updating existing information. OLTP supports efficiency (cheaper, faster) On-Line Transaction Processing are also Operational systems for collecting and managing the base data in an organization, such as sales order processing, inventory, accounts payable, etc. They usually offer little or no analytical capabilities.
29 Management Information Systems (2) 18th September 2009

 Businesses also use IT to support decision making

tasks referred to as online analytical processing (OLAP). OLAP is the manipulation of information to support decision making. OLAP supports effectiveness (taking the right decision and doing the right thing.) OLAP can range from performing simple queries on a database to determine which customers are defaulting in re-payment of a loan.

30

Management Information Systems (2)

18th September 2009

Supporting shared information through decentralized computing

Decentralized computing Is an environment in which an organisation splits computing power and locate it in functional business areas as well as on the desk tops of knowledge workers. Made possible by inexpensive sophisticated computer systems (eg now handheld computers, desktops are now more powerful than earlier mainframes but also cheaper.) Shared Information Is when an information in an organization is organized in one central location. Makes it possible for anyone who needs it to access it.
31 Management Information Systems (2) 18th September 2009

Supporting Innovation
IT also supports innovation. Many companies

32

are now using IT to gain competitive advantage. It is used to determine how IT can significantly alter what your business does to achieve the greatest advantage. Eg Fedex was the first company to use IT for managing packages. http://www.fedex.com/Tracking?cntry_code=u s Now most of the others like DHL use it. You can trace the movement of your package on Management Information Systems (2) 18th September 2009 the internet.

Examples of innovative use of IT

Airlines (BA, KLM)

Banks (SCB, Barclays, TTB, GCB, Ecobank)

Financial Institutions (Databank, Stock

33

echange) Grocery stores (shoprite, ) Phone companies MTN, Vodafone Kasapa, Tigo) Hotels (International hotels book online) Utility companies (ECG) Associations (conference website, Management Information Systems (2) 18th September 2009 membership of associations)

In business, ICT is often categorised into two broad types of products:

(1) The traditional computer-based

technologies (things you can typically do on a personal computer or using computers at home or at work); and (2) The more recent, and fast-growing range of digital communication technologies (which allow people and organisations to communicate and share information digitally)

34

Management Information Systems (2)

18th September 2009

Traditional Computer Based Technologies

These types of ICT include:

Standard Office Applications - Main Examples

Word processing :E.g. Microsoft Word: Write

letters, reports e Spreadsheets :E.g. Microsoft Excel; Analyse financial information; calculations; create forecasting models etc Database software ;E.g. Oracle, Microsoft SQL Server, Access; Managing data in many forms, from basic lists (e.g. customer contacts through to complex material (e.g. catalogue)
35 Management Information Systems (2) 18th September 2009

 Presentation software : E.g. Microsoft

36

PowerPoint; make presentations, either directly using a computer screen or data projector. Publish in digital format via email or over the Internet Desktop publishing: E.g. Adobe Indesign, Quark Express, Microsoft Publisher; produce newsletters, magazines and other complex documents. Graphics software :E.g Adobe Photoshop and Illustrator; Macromedia Freehand and Fireworks; create and edit images such as logos, drawings Management Information Systems (2) 18th September 2009 or pictures for use in DTP, web sites or other

 Specialist Applications - Examples (there are

37

many!) Accounting package E.g. Sage, Oracle; Manage an organisation's accounts including revenues/sales, purchases, bank accounts etc. A wide range of systems is available ranging from basic packages suitable for small businesses through to sophisticated ones aimed at multinational companies. Computer Aided Design Computer Aided Design (CAD) is the use of computers to assist the design process. Specialised CAD programs exist for many types of design: architectural, engineering, electronics, 2009 Management Information Systems (2) 18th September roadways

 Customer Relations Management (CRM)

Software that allows businesses to better

understand their customers by collecting and analysing data on them such as their product preferences, buying habits etc. Often linked to software applications that run call centres and loyalty cards for example.

38

Management Information Systems (2)

18th September 2009

B. Information: Information as a key business resource

Information is the basis on which many

organisations operate in todays business environment. Information is more or less intangible but a very valuable resource. It is simply a collection of data that has been given a specific meaning within a certain context. Data are raw facts that describe a particular phenomenon and has not been processed.
39 Management Information Systems (2) 18th September 2009

 Information is therefore data that has been

processed in such a way as to be meaningful to the person who receives it.

Businesses and other organisations need

information for many purposes. These are summarised below in a table:

40

Management Information Systems (2)

18th September 2009

Use Planning

Description To plan properly, a business needs to know what resources it has (e.g. cash, people, machinery and equipment, property, customers). It also needs information about the markets in which it operates and the actions of competitors. At the planning stage, information is important as a key ingredient in decision-making.

Recording

Information about each transaction or event is needed. Much of this is required to be collected by law - e.g. details of financial transactions. Just as importantly, information needs to be recorded so that the business can be properly managed.

41 Management Information Systems (2)

18th September 2009

Controlling

Measuring

Once a business has produced its plan it needs to monitor progress against the plan - and control resources to do so. So information is needed to help identify whether things are going better or worse than expected, and to spot ways in which corrective action can be taken Performance must be measured for a business to be successful. Information is used as the main way of measuring performance. For example, this can be done by collecting and analysing information on sales, costs and profits

42

Management Information Systems (2)

18th September 2009

Decision-making Information used for decision-making is often categorised into three types: (1) Strategic information (2) Tactical Information: (3) Operational Information:

43

Management Information Systems (2)

18th September 2009

 Strategic information: used to help plan the

objectives of the business as a whole and to measure how well those objectives are being achieved. Examples of strategic information include:
- Profitability of each part of the business

- Size, growth and competitive structure of the markets in which a business operates - Investments made by the business and the returns (e.g. profits, cash inflows) from those investments
44 Management Information Systems (2) 18th September 2009

 Tactical information: this is used to decide

how the resources of the business should be employed. Examples include: - Information about business productivity (e.g. units produced per employee; staff turnover) - Profit and cash flow forecasts in the short term Pricing information from the market
Management Information Systems (2) 18th September 2009

45

 Operational Information: this information is

used to make sure that specific operational tasks are carried out as planned or intended (i.e. things are done properly).
For example, a production manager will want

information about the extent and results of quality control checks that are being carried out in the manufacturing process
Management Information Systems (2)

46

18th September 2009

 Business data and information comes from

47

multiple sources. The challenge for a business is to capture and use information that is relevant and reliable. The main sources are: Internal Information Accounting records are a prime source of internal information. They detail the transactions of the business in the past - which may be used as the basis for planning for the future (e.g. preparing a financial budget or forecast). Accounting records for eg also give information about what Systems (2) are Management Information % of the monetary resources September 2009 18th used for salaries

 A lot of internal information is connected

to accounting systems - but is not directly part of them. for example: Records of the people employed by the business (personal details; what they get paid; skills and experience; training records) Data on the costs associated with business processes (e.g. costing for contracts entered into by the business)
48 Management Information Systems (2) 18th September 2009

 Data from the production department

49

(e.g. number of machines; capacity; repair record) Data from activities in direct contact with the customer (e.g. analysis of calls received and missed in a call centre) A lot of internal information is also provided informally. For example, regular meetings of staff and management will result in the 18th September 2009 Management Information Systems (2)

External Information
As the term implies, this is information that is

obtained from outside the business. There are several categories of external information: - Information relating to way a business should undertake its activities
E.g. businesses need to keep records so that they

can collect taxes on behalf of the government. e taxation system (e.g. PAYE, VAT, Corporate Tax)
- Information about the markets in which a

business operates
This kind of external information is critically important
50 Management Information Systems (2)

to a business. It is often referred to as "market" or 2009 18th September "competitive intelligence".

Information provision

Because a high premium is place of information and the role it plays in management of the business, it must be handled with care and must exhibit spcific characteristics:

51

Management Information Systems (2)

18th September 2009

Timeliness

52

An effective MIS must be capable of providing current information. Time is important in business activities.eg stock exchange, filing of business reports and audited accounts The MIS system should be robust enough to collect all relevant data and summarise it for use by the relevant people At the right place: Customers should have access to the info regardless of where it is located or where they are (Now you can connect to the internet even on the plane; Use of intranets to keep the information secure but made accessible remotely.) Management Information Systems (2) 18th September 2009

 In the right form: (audio, text, video,

graphics etc). The information being provided should also be accurate and error free.
To improve the speed with which

information is produced, businesses usually need to look at upgrading or replacing their information systems.
53 Management Information Systems (2) 18th September 2009

Accuracy
All information provided should be accurate. The

system should be well edited with internal controls well in place As far as possible, information should be free from errors (e.g. the figures add up; data is allocated to the correct categories). May be the need to introduce internal and external audits to ensure that controls work well.

54

Management Information Systems (2)

18th September 2009

 The users of information should be informed

whenever assumptions or estimates have been used. Accurate information is usually a function of accurate data collection. If information needs to be extremely accurate, then more time needs to be allocated for it to be checked. However, businesses need to guard against trying to produce "perfect" information - it is often more important for the information to be up-todate than perfect.
55 Management Information Systems (2) 18th September 2009

Consistency
Information should be reliable and

should be processed consistently Procedures for collecting and processing information should be established and well documented and clearly communicated to all users. Allowance should be made for any changes that may occur.
56 Management Information Systems (2) 18th September 2009

Meet the needs of the User

Users of information have different needs.

The managing director doesn't have time to go

57

through thick printouts of each week's production or sales listings - he or she wants a summary of the key facts. The quality control supervisor will want detailed information about quality testing results rather than a brief one-line summary of how things are going. It is a good idea to encourage users to help develop the style and format of information reporting that they Management Information Systems (2) require. 18th September 2009

Easy to use and understand

Information should be clearly presented

58

(e.g. use summaries, charts) and not too long. It also needs to be communicated using an appropriate medium (e.g. email, printed report, presentation. Businesses should also consider developing "templates" which are used consistently throughout the organisation - so Information Systems (2) Management that users get used to seeingSeptember 2009 18th

Worth the cost

This aspect is often forgotten.

Information costs money. Data is costly to collect, analyse and report. Information takes time to read and assimilate. All users should question whether the information they receive/have requested is worthwhile
59 Management Information Systems (2) 18th September 2009

Completeness
Information provided should be

complete and should not be part of a story In spite of striving to be complete, every effort should be made to ensure unnecessary detail is also avoided. Complete information provides the user with all that needs to be known about a particular situation.
60 Management Information Systems (2) 18th September 2009

Relevance
Information should be relevant

It must be capable of supporting the

decision making process. A clear distinction must be made as to what kind of information is needed for which purpose. Information provided must be ethical and legal
61 Management Information Systems (2) 18th September 2009

Breadth and integrity of information

This defines the scope of information

Information Integrity is the

trustworthiness and dependability of information. More specifically, it is the accuracy, consistency and reliability of the information content, processes and systems.
62 Management Information Systems (2) 18th September 2009

Information flow
There are several ways in which information can

flow in an organisation. Downward communication flow

This is any communication that flows from a

manager to employees. This method is used to inform, direct, co-ordinate and evaluate employees. Eg giving out job descriptions, informing about organisational policies etc.

 Upward communication flow This is when information flows from employees to managers. This methods keeps managers informed of how employees feel about their jobs, co-workers and the organisation in general Upward communication provides managers with ideas and how things can be improved. Eg of this are performance reports prepared by employees, employee messages in suggestion boxes, attitude surveys etc

 Lateral communication This refers to communication that takes place among employees on the same organisational level . May be meeting of divisional heads, staff associations etc.

 Diagonal communication flow This is communication that crosses both work areas and organisational levels. This is rampant now in these days of information technology where emails can be sent to any one in the organisation

Information flow in an organization

Current state of the organization
down UP

out

Between suppliers customers and other partners/stakeholders

Strategies goals & directives

horizontal
67 Management Information Systems (2)

Between functional business units & work teams

18th September 2009

Structure of an organisation
Strategic management Management boards (provides orgn with overall direction and guidance) Tactical management HOD (Develops goals & strategies outlined by strategic management) Operational management (Line managers) (manages and directs the day to day implementation of the strategies and goals)

Non management employees

68

Management Information Systems (2)

18th September 2009

Information and what it describes

Users of information have differing needs. In the same way different job profiles also need different information. Internal describes specific operational aspects of the organization External describes the (external) environment surrounding the orgn Subjective describes what is not known Objective describes something that is known
69 Management Information Systems (2) 18th September 2009