Information Processing

and Management (MBAd

531)

Instructor: Asmamaw T. (PhD)

July, 2019

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 CHAPTER ONE
OVERVIEW OF INFORMATION
SYSTEM

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1.1 Basic Concepts
MIS
It is combination of three words i.e.
Management,
Information and
System.

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 MANAGEMNET
• Koontz’s definition of Management:
 “Management is the art of getting things
done through and with the efforts of other
people” (Koontz, 1972)
 However, a manager gets things done by
performing basic managerial functions.
These functions are:
Planning,
organizing,
staffing,
directing and 4
• Management can be extremely a creative
endeavor.
• Managers are not bureaucrats. They do more
than just keep the trains running on time.
• Managers can also give organizations a sense of
purpose and direction.
• As Wal-Mart's founder Sam Walton was fond of
saying, they can motivate
“ordinary people to do extraordinary
things.”
• They can transform organizations; create new
ways of producing and distributing goods and
services; and change how the world works
through their actions.
• Think about what some of the greatest managers
of this era have done. 5
• Sam Walton built Wal-Mart from scratch
into the largest retailer in the world.
• Lou Gerstner repositioned IBM from a
troubled manufacturer of mainframe
computers into the dominant provider of
computer software services in the world.
• Jack Welch reenergized General
Electric, transforming a tired engineering
conglomerate into an efficient, vibrant,
entrepreneurial enterprise that set the
standard for excellence in many industries
in which it competed.

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• Steve Jobs of Apple Computer gave the
world the first mass marketed, easy-to-use
personal computers; and today Apple is still
driving innovation with its iPod music
player, iPhone , iPad and Apple Watch.
• Meg Whitman provided the leadership
that helped eBay become the world’s first
and most successful online auction house,
revolutionizing the auction industry.
• Mark Zukerberg built facebook
• Sergey Brin and Larry Page have built one
of the largest and most profitable online
enterprises in the world, Google.
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• To perform these functions, a manager has to
take a variety of decisions.
• Decision-making is a fundamental prerequisite
for reach of the foregoing processes.
• Peter Drucker, a management guru, has gone
to the extent of saying :
“Whatever a manager does, he does it
through decision making.”
• Decision making is the essence of
management.
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• An organization or individual that identifies more than one
way to solve a problem or a dilemma must make a decision.

– The problem “2+2=?”does not require decision making

because it has only one solution.

• However, as a manager, you might face a dilemma such as

“Which is the best way to promote the company’s new
car?”

• There are many potential ways to promote the new car—

television advertising, radio advertising, newspaper
advertising, Web advertising, auto shows, direct mail, or
any combination of these methods. This dilemma calls for
decision making. 9
• Robert B Anthony, a management thinker,
described three levels of business activities
carried out in operating an organization:
 Operational Control (Operating Management
)
 Management Control (Middle management)
and
 Strategic Planning (Top Management)

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• In general we can say that
 Management is the process of allocating
an organization's inputs, including human
and economic resources, by planning,
organizing, directing, and controlling for
the purpose of producing goods or services
desired by customers so that
organizational objectives are
accomplished.
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 INFORMATION
• It is the second component of ‘MIS’.
• Information is considered as a fifth important
resources of along with the traditional four
resources of money, materials, men, and
machines.
• Information is a Resource because:
– It is scarce
– It has a cost
– It has alternative uses
– There is an opportunity cost factor involved if
one does not process information
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• Information is a data which is processed and presented
to decision makers and helps them in making
decisions.
• Information, in MIS, means the processed data that
helps the management in planning, controlling and
operations.
• Data means all the facts arising out of the operations
of the concern.
• Data is processed i.e. recorded, summarized,
compared and finally presented to the management in
the form of MIS report.
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 Example

• Supermarket checkout counters scan millions of

pieces of data from bar codes, which describe each
product.
• Such pieces of data can be totaled and analyzed to
provide meaningful information, such as the total
number of bottles of dish detergent sold at a
particular store, which brands of dish detergent were
selling the most rapidly at that store or sales
territory, or the total amount spent on that brand of
dish detergent at that store or sales region.
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 SYSTEM

• The word ‘System’ is a set of elements that are

inter-related and interdependent to achieve a

common goal.

• Data is processed into information with the

help of a system.

• A system is made up of inputs, processing,

output and feedback or control.

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• A system is an integrated set of components, or

entities, that interact to achieve a particular

function or goal.

• Systems have characteristics such as

– boundaries,

– outputs and inputs,

– methods of converting inputs into outputs, and

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Systems Have Three Components or Functions
 Input:
 involves capturing & assembling elements
that enter the system to be processed.
 Processing:
 involves transformation process that
convert input into output.
 Output:
 involves transferring elements that have
been processed by the transformation
process to their ultimate destination. 17
 What is Cybernetic System?
• All systems have input, processing and output

• A cybernetic system, a self-monitoring, self-

regulating system, adds feedback and control
 Feedback:
 is data about the performance of a system
 Control:
 involves monitoring and evaluating
feedback to determine whether a system is
moving towards the achievement of its
goals. 18
 Example- Cybernetic system

1. A familiar example of self-monitoring, self-

regulating system is the thermostat-
controlled heating system found in many
homes,
 which automatically monitors and
regulates itself to maintain a desired
temperature on the basis of feedback it
gets from the environment.

2. Another example is the human body,

 which can be regarded as a cybernetic19
12/02/2024
 1. A business also has many control activities.
For example,
 Computers may monitor and control
manufacturing processes,
 Accounting procedures help control
financial systems,
 Data entry displays provide control of data
entry activities, and
 Sales quotas and sales bonuses attempt to

12/02/2024
control sales performance. 20
• In general, systems are composed of
interrelated and interdependent sub-systems.
• Examples of systems are all around us-in fact;
an excellent example is your class.

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22
• A business is also a system. A business uses
resources such as people, capital, materials,
and facilities to achieve the goal of making a
profit.
• Business procedures, such as order handling,
marketing research, financial planning, and
manufacturing, are the interactions that need
to be managed to achieve this objective.

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 AA Business
Business as
as aa System
System
The Community
Competitors
Control

Governme Management Customers

nt
Agencies
Feedback
Information
Systems

Economic
Resources:
•People
•Money Goods & services
•Material Business Processes: •Products
•Production •Services
•Machinery
•Marketing •Payments
•Land
Suppliers •Finance •Contributions Stockholde
•Facilities
•Personnel •Information rs
•Energy
•Other processes •Other effects
•Information

Input Processing Output

Financial Institutions Labor Unions

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 MANAGEMENT INFORMATION SYSTEM (MIS)

• A system which consists of people, machines,

procedures, databases and data models as its
components is known as Management
Information System.
• This system collects data from external and
internal sources of an organization, analyzes it
and supplies management information to
managers and helps them in making decisions.
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• MIS is the system, which makes available the
right information
– to the right person,
– at the right place,
– at the right time,
– in the right form and
– at the right cost.

• According to G.B. Davis, “MIS is a man or

machine that provides information to
support management in decision making
process.” 26
• Management Information System or 'MIS' is a

planned system of collecting, storing, and

disseminating data in the form of information

needed to carry out the functions of management.

• It is the study of information systems focusing on

their use in business and management.

• MIS is defined as a system which provides

information support for decision making in the

organization.

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• MIS is defined as a Computer – based
Information System.
• MIS involve three primary resources:
technology, information, and people.
• MIS provides managers with information and
support for effective decision making, and
provides feedback on daily operations.

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 Outputs of Management Information System

• Scheduled reports

• Produced periodically, or on a schedule (daily,

weekly, monthly)
• Key-indicator report

• Summarizes the previous day’s critical activities

• Typically available at the beginning of each day

• Demand report

• Gives certain information at a manager’s

request
• Exception report
• Automatically produced when a situation is
unusual or requires management action 29
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 Objectives of MIS

• Capturing Data: Capturing contextual data, or

operational information that will contribute in

decision making from various internal and

external sources of organization.

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• Processing Data: The captured data is
processed into information needed for
planning, organizing, coordinating, directing
and controlling functionalities at strategic,
tactical and operational level. Processing data
means:
– making calculations with the data
– sorting data
– classifying data and
– summarizing data 32
• Information Storage: Information or processed
data need to be stored for future use.
• Information Retrieval: The system should be
able to retrieve this information from the storage
as and when required by various users.
• Information Propagation
(dissemination): Information or the finished
product of the MIS should be circulated to its
users periodically using the organizational
network.
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 Features of Management Information
System

• Provides reports with fixed and standard

formats
– Hard-copy and soft-copy reports
• Uses internal data stored in the computer
system
• End users can develop custom reports
• Requires formal requests from users

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 Components of MIS

1. People: play roles in developing software and

hardware, and implementing them into their work
routines.

2. Hardware

3. Software: set of instructions

4. Database/Data warehouse: the repository of

organizational data from within and outside the
organization

5. Network:

6. Processes: includes business processes, procedures

and policies of the organization. 35
 Information System and Information
Technology
• Information systems are combinations of
hardware, software, and telecommunications
networks that people build and use to collect,
create, and distribute useful data, typically in
organizational settings.”
• Information systems are made up of different
components that work together to provide
value to an organization.
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• The first four, fitting under the technology
category.
• But the last two, people and process, are really
what separate the idea of information systems from
more technical fields, such as computer science.
• In order to fully understand information systems,
students must understand how all of these
components work together to bring value to an
organization.

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 The Evolution and Features of the
Information Age
• Agricultural Age: The period up to the 1800s,
when the majority of workers were farmers
whose lives revolved around agriculture.
• Industrial Age: The period from the 1800s to
1957, when work processes were simplified
through mechanization and automation.

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• Information Age: The period that began in
1957, in which the majority of workers are
involved in the creation, distribution, and
application of information.
• Knowledge Workers: Workers involved
in the creation, distribution, and
application of information.

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The Evolution of the Information Age

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 The Features of the Information Age

• An information-based society has arisen.

– Information Society: A society in which
more people work at handling information
than at agriculture and manufacturing
combined.
• Businesses depend on information technology
to get their work done.

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• Work processes are being transformed to
increase productivity.
– Work Processes: The combination of
activities that workers perform, the way they
perform those activities, and the tools they
use.
– Productivity: The relationship between the
results of an activity (output) and the
resources used to create those results
(inputs).
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• Information technology provides the means to
rethink/recreate/reengineer usual business
processes.
• Success in business is largely determined by the
effectiveness with which information technology is
used.
• Reengineering efforts to attain greater productivity:

– Industrial Age - Division of Labor: Separation of

work process into component task, with different
workers specializing in each of the tasks.
– Information Age – Teamwork, Interconnection,
and Shared Information.
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Data, Information, Knowledge and Wisdom

• The DIKW pyramid, also known as the DIKW

hierarchy, wisdom hierarchy, knowledge
hierarchy, information hierarchy, and
the knowledge pyramid.
• It shows the relationships between data,
information, knowledge and wisdom.
• Information is defined in terms of data,
knowledge in terms of information, and wisdom
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in terms of knowledge.
DIKW Pyramid

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 Data
• The word data is the plural of
datum , though data commonly
represents both singular and plural forms.
• Data are raw facts or observations,
typically about physical phenomena or
business transactions.
• People often use the terms data and
information interchangeably.
• However, it is better to view data as raw
material resources that are processed into
finished information products.
• Then we can define information as data
that have been converted into a meaningful46
• Example: Names, quantities, and
dollar amounts recorded on sales forms
represent data about sales transactions.
However, a sales manager may not regard
these as information.
• Only after such facts are properly
organized and manipulated can meaningful
sales information be furnished and specify,
• For example, the amount of sales by
product type,
sales territory,
or salesperson.

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• Data: Unorganized and unprocessed facts;
static; a set of disconnected facts about events.
• Data comprises facts, observations, or
perceptions
• Data represents raw numbers or assertions.
• Data are raw facts and figures that on their own
have no meaning.
• These can be any alphanumeric characters i.e.
text, numbers, symbols.
Data Examples
• Yes, Yes, No, Yes, No, Yes, No, Yes
• 42, 63, 96, 74, 56, 86
• 111192, 111234
• None of the above data sets have any meaning
until they are given a CONTEXT and 48
PROCESSED into a useable form.
 Data into Information

• To achieve its aims the organisation will need

to process data into information.
• Data needs to be turned into meaningful
information and presented in its most useful
format.
• Data must be processed in a context in order
to give it meaning.
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 Information
• Information means the words, numbers, graphics that
are displayed or printed as the basis for making
decisions.
• Information is the result derived by processing data.

• Information is processed data.

• Information is a subset of data, only including those

data that possess context, relevance and purpose.
• Information involves manipulation of raw data.

• Aggregation of data that makes decision making

easier. 50
• Information is created by analyzing
relationships and connections between the
data.
• It is capable of answering
simple “Who/What/Where/How
many/When/Why is” style questions

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 Characteristics of Information

Now, let us discuss about the characteristics of

good information
1. Timeliness: Information must reach the
user in a timely manner, just when it is
needed; not too early, because by the time it is
used it would be out-of-date; not too late
because the user will not be able to
incorporate it into his/her decision-making.
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2. Appropriateness: Information must be
relevant to the person who is using it.
• It must be within the sphere of his/ her
activities so that it can be used to reduce
uncertainty in his/her decision-making.

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3. Accuracy: We don’t always need 100%
accurate information so long as we know the
degree of accuracy it represents (eg: + or -
5%).

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4. Conciseness: (Level of detail)- Information
should always contain the minimum amount
of detail that is appropriate for the user.
• Too much detail causes information overload.

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5. Frequency: Frequency is related to
timeliness. Too often the information
presented is linked to the calendar (end of the
week, beginning of the month); its frequency
should be synchronized with the timing of the
decision making of the user.

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6. Understandability: The format and
presentation of information are very
important. Some people prefer tabular
information, whereas others may need it in a
graphical form.
• Also the use of colors enhances the
understandability of what is presented.

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7. Relevant: It pertains to the particular
problem. What data is relevant depends on the
decision-making model used.
E.g. university admissions officials may choose to
consider the results of some high-school test
irrelevant, if they believe that it does not
improve the chances of some applicant later
becoming a successful student.
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8. Complete: All the relevant parts are
included. E.g. marketing data about
household incomes may lead to bad decisions,
if not accompanied by consumption habits of
the target population.

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9. Current: Decisions are often based on the
latest information available.

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10. Economical: The costs of gathering
information should be justified by the overall
benefits.

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 Knowledge

• Knowledge is the understanding of rules

needed to interpret information
“…the capability of understanding the
relationship between pieces of
information and what to actually do with
the information”
• Knowledge represents a pattern that connects
and generally provides a high level of
predictability as to what is described or what
will happen next.
• Example: If the humidity is very high and the
temperature drops substantially the
atmospheres is often unlikely to be able to hold
the moisture so it rains. 62
• Knowledge is facts, information, and skills
acquired through experience or education; the
theoretical or practical understanding of a
subject.
• Education and experience create knowledge in
humans.
• In some cases, this knowledge can be
transferred to specialized.

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Example
Data
• chocolate, strawberry, vanilla, strawberry,
vanilla, vanilla, strawberry, vanilla, vanilla
• Information - this is a list of flavor of ice
cream sales yesterday.
• The data now has some context and so make
sense. A bit of analysis is useful to glean more
information.
For example, the most popular flavor of ice
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Knowledge
• The shop manager can see that vanilla is
the most popular ice-cream flavor. Next
time he places an order, he will ask for five
times as much vanilla ice-cream than
chocolate ice-cream.

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For example
• Data: movie listings giving the times and
locations of all movies being shown today —I
download the listings.
• Information: For example, I can’t leave
before 5, so I will go to the 7 pm show at the
cinema near my office.
• Knowledge: At that time of day, it will be
impossible to find parking. I remember the
last time I took the car, I was so frustrated
and stressed because I thought I would miss
the opening credits. I’ll therefore take the
commuter train. But first, I’ll check with
John. I usually love all the movies he hates,
so I want to make sure it’s worth seeing! 66
 Wisdom
• Wisdom is more difficult to define but
represents the ability to learn from experience
and adapt to changing conditions.
• Wisdom enables a manager to spot trends,
identify potential problems, and develop new
techniques to analyze the data.
• Knowledge, is “information gained through
experience, reasoning.” Knowledge can exist
without wisdom, but not the other way around.
One can be knowledgeable without being wise.67
• Knowledge is knowing how to use a gun;
wisdom is knowing when to use it and
when to keep it holstered.
• Knowledge is gathered from learning and
education, while most say that
• wisdom is gathered from day-to-day
experiences and is a state of being wise.

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Knowledge:
• Knowing or understanding something,
especially about a particular subject
• Having awareness of facts and/or truths
• Something that can be known, information

Wisdom:
• The state of being wise
• The ability to use knowledge and/or experience
intelligently
• Capable of determining what is wise vs. what is
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 A Sequential Process of Knowing

Understanding supports the transition from one

stage to the next, it is not a separate level in its
own right

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 Rate of Motion towards Knowledge
• What is this (note the point when you realise
what it is but do not say)
 I have a box.
 The box is 3' wide, 3' deep, and 6' high.
 The box is very heavy.
 When you move this box you usually find lots
of dirt underneath it.
 Junk has a real habit of collecting on top of
this box.
 The box has a door on the front of it.
 When you open the door the light comes on.
 You usually find the box in the kitchen.
 It is colder inside the box than it is outside.
 There is a smaller section inside the box with
ice in it.
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 When I open the box it has food in it.
• It was a refrigerator

• At some point in the sequence you connected

with the pattern and understood
• When the pattern connected the information
became knowledge to you
• If presented in a different order you would still
have achieved knowledge but perhaps at a
different rate
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 Knowledge Management

• Are you and your company actively

managing knowledge? (Photo credit:
Microsoft Free Clip Art)

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• In an economy where the only certainty
is uncertainty, the one sure source of
lasting competitive advantage is
knowledge. I. Nonaka (1995)

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• Although knowledge is increasingly being
viewed as a commodity or an intellectual asset,
it possesses some paradoxical characteristics
that are radically different from those of other
valuable commodities.
• These knowledge characteristics include the
following:
– Use of knowledge does not consume it.
– Transferrable of knowledge does not result
in losing it.
– Knowledge is abundant, but the ability to use
it is scarce.
– Much of an organization’s valuable
knowledge walks out the door at the end of
the day. 75
• Knowledge Management, (KM) is a concept
and a term that arose approximately two
decades ago, roughly in 1990.
• Very early on in the KM movement, Davenport
(1994) offered the still widely quoted
definition:
• "Knowledge management is the process of
capturing, distributing, and effectively
using knowledge."
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• Gartner Group created another second definition of KM,
which is perhaps the most frequently cited one (Duhon,
1998):
– "Knowledge management is a discipline that
promotes an integrated approach to identifying,
capturing, evaluating, retrieving, and sharing all
of an enterprise's information assets.
– These assets may include databases, documents,
policies, procedures, and previously un-captured
expertise and experience in individual workers."

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• Knowledge management (KM) is the process
of creating, sharing, using and managing the
knowledge and information of an organization.
• It refers to a multi-disciplinary approach to
achieving organizational objectives by making
the best use of knowledge.
• Knowledge management refers to the set of
business processes developed in an
organization to create, store, transfer, and
apply knowledge. 78
• Knowledge management increases the
ability of the organization to learn from
its environment and to incorporate
knowledge into its business processes.
• Knowledge management efforts typically
focus on organizational objectives such as
– improved performance,
– competitive advantage,
– innovation,
– the sharing of lessons learned,
– integration, and
– continuous improvement of the
organization. 79
 Types of Knowledge

1. Tacit knowledge
2. Explicit knowledge
Let us discuss one by one:
1. Tacit Knowledge
• Knowledge residing in the minds of employees
that has not been documented is called tacit
knowledge.
• Tacit knowledge (knowing-how): knowledge
embedded in the human mind through
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experience and jobs. Know-how and learning
2. Explicit Knowledge
• Knowledge that has been documented is called
explicit knowledge.
• It is knowledge codified and digitized in books,
documents, reports, memos, etc.
• Documented information that can facilitate
action.
• Knowledge what is easily identified,
articulated, shared and employed.
• Knowledge can reside in e-mail, voice mail,
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graphics, and unstructured documents as well
• Knowledge is generally believed to have a
location, either in the minds of humans or in
specific business processes.

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83
 The Knowledge Creation Process

• Knowledge creation consists of a social

process between individuals in which
knowledge transformation is not simply a
unidirectional process but it is interactive
and spiral.
• According to Nonaka and Takeuchi, there are
four modes of knowledge conversion that
constitute the “engine” of the entire
knowledge-creation process.

84
 Knowledge Conversion
There are four modes of knowledge
conversion:
1. From tacit knowledge to tacit knowledge:
the process of socialization.
2. From tacit knowledge to explicit
knowledge: the process of externalization.
3. From explicit knowledge to explicit
knowledge: the process of combination.
4. From explicit knowledge to tacit
knowledge: the process of internalization.

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86
• Tacit-to-tacit (socialization) - individuals acquire
knowledge from others through dialogue and
observation
• Tacit-to-explicit (externalization) - the articulation
of knowledge into tangible form through elicitation
and documentation
• Explicit-to-explicit (combination) - combining
different forms of explicit knowledge, such as that in
documents or databases
• Explicit-to-tacit (internalization) - such as learning
by doing, where individuals internalize knowledge into
their own mental models from documents.
87
 Knowledge management Systems

• Knowledge management system consists of

acquisition, storing, disseminating and
applying knowledge.
Acquire Dissemin
Store Apply
ate

Knowledge Knowledge Intranet Portals

Discovery Databases Search Engines
Social Networks

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1. Knowledge Acquisition
• Organizations acquire knowledge in a number of
ways, depending on the type of knowledge they seek.
It includes:
• Corporate repositories of documents, reports,
presentations, and best practices.
• Unstructured documents (such as e-mail).

• Organizations can also create new knowledge by

discovering patterns in corporate data or by using
knowledge workstations where engineers can
discover new knowledge.
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2. Knowledge Storage
• Once they are discovered, documents,
patterns, and expert rules must be stored so
they can be retrieved and used by employees.
• Knowledge storage generally involves the
creation of a database.

90
3. Knowledge Dissemination
• Portals, e-mail, instant messaging, social
networks, social business tools, and search
engines technology have added to an existing
array of collaboration tools for sharing
calendars, documents, data, and graphics.

91
4. Knowledge Application
• Regardless of what type of knowledge management
system is involved, knowledge that is not shared and
applied to the practical problems facing firms and
managers does not add business value.
• To provide a return on investment, organizational
knowledge must become a systematic part of
management decision making and become situated
in systems for decision support.

92
 The importance of Knowledge
Management

Why knowledge management is important to the

success of a company?
Three key reasons why actively managing knowledge
is important to a company’s success are:
1. Facilitates Decision-Making Capabilities
2. Builds Learning Organizations by Making
Learning Routine
3. Stimulates Cultural Change and Innovation
93
1. Facilitates Decision-Making Capabilities
• Data can offer managers a wealth of information
but processing overwhelming amounts can get in
the way of achieving high-quality decisions.
• While information overload or needing knowledge
from people in other parts of the company for
decision-making can handicap managers, putting
in place knowledge management systems can
facilitate better, more informed decisions.

94
2. Builds Learning Organizations by
Making Learning Routine
• A learning organization is an organization
that encourages and facilitates learning in
order to continually transform itself to
survive and excel in a rapidly changing
business environment.
• Author David Garvin (2000) notes that “To
move ahead, one must often first look
behind”.
• Learning organizations created a culture
where everyone continuously assesses
themselves, their units, and their
organization, looking for ways to improve.
• This approach to capturing learning from95
3. Stimulates Cultural Change and Innovation
• Actively managing organizational knowledge can
also stimulate cultural change and innovation by
encouraging the free flow of ideas.
• In this complex, global business environment,
knowledge management programs can help
managers embrace change and encourage ideas
and insight, which often lead to innovation.

96
Bottom Line
• Fortune 500 companies lose roughly “$31.5 billion a year
by failing to share knowledge”, a very scary figure in this
global economy filled with turbulence and change.
• Actively managing knowledge can help companies
increase their chances of success by facilitating decision-
making, building learning environments by making
learning routine, and stimulating cultural change and
innovation.
• By proactively implementing knowledge management
systems, companies can re-write the old saying,
“Change is inevitable, growth is optional” to
“Change is inevitable, growth is intentional.” 97
 TYPES
TYPES OF
OF IS
IS
INFORMATION
SYSTEMS

Operations Support Management Support

systems Systems

Proces Decisi
Enterprise
s Managem on Executive
Transaction Specializ
Contro ent Suppor Informati
Processing Collaborat ed
l Informatio t on
Systems ion Processin
Syste n Systems Syste Systems
Systems g
ms ms
Specialized Systems
Processing
Knowledge Strategic Functional
Systems Expert Management Information Business
Systems Systems Systems Systems

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 Types
Types of
of IS…
IS…

1. Operations Support Systems

What are they?
Efficiently process business transactions
Control industrial processes
Support office communications and
collaborations
Update corporate databases

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Types of Operations Support Systems-

I. Transactions Processing Systems:

 Record and process data from business
transactions
 Examples: sales processing, inventory systems,
accounting systems

II. Process Control Systems:

 Monitor and control physical processes
 Example: In a petroleum refinery use sensors to
monitor chemical processes

III. Enterprise Collaboration Systems:

 Enhance team and workgroup communications
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Two ways to Process Transactions
 Batch Processing:
 Accumulate transactions over time and process periodically
 Example: a bank processes all checks received in a batch
at night
 Online Processing:
 Process transactions immediately
 Example: a bank processes an ATM withdrawal
immediately

2. Management Support Systems

 What are they?
 Provide information, and
 Support for effective decision making by managers
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 Types of Management Support Systems

I. Management Information Systems (MIS):

 Provide reports and displays to managers

• Example: Daily sales analysis reports

II. Decision Support Systems (DSS):

 Provide interactive and ad hoc support for
decision making
 Example: A what-if-analysis to determine where
to spend advertizing dollars

III. Executive Information Systems (EIS):

 Provide critical information for executives and
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managers
 3) Specialized Information Systems

4) Expert Systems:
 Uses knowledge about a specific area to
provide expert advice to users
 Example: Credit application advise

5) Knowledge Management Systems:

 Support creation, organization and
dissemination of business knowledge
throughout company
 Example: Intranet access to best business
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Measuring Success of an IS
Efficiency:
 Minimize cost, time and use of information
resources
Effectiveness:
 Support business strategies
 Enable business processes
 Enhance organizational structure and
culture
 Increase the customer and business value
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 2.
2. Developing
Developing IS
IS Solutions
Solutions
is a major responsibility of today’s managers

They are responsible for proposing or developing

new or improved information systems for their
organizations
This section helps to show how information
system solutions that meet the business needs of
end users and their organizations can be
developed.

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 The
The Systems
Systems Development
Development Life
Life Cycle
Cycle
 When the systems approach to problem solving is applied
to the development of information system solutions to
business problems:
 It’s called information systems development or
application development.
 When the systems approach is applied to the development
of information system solutions, a multiple process or
cycle emerges
 Frequently called the systems development
cycle, or systems development life cycle (SDLC)

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 The
The Process
Process of
of Developing
Developing Information
Information System
System
Solutions
Solutions
 Steps-
1.Investig
ate

Developing 2. Analy
5. Mainta
Informatio sis
in
n Systems
Solutions
3. Desig
4. Impleme n
nt

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1. Systems Investigation
 the 1st stage in the systems development
process.
 preliminary study of proposed IS solutions to
business problems.
 Activities
 Determine whether a business problem or
opportunity exists.
 Conduct a feasibility study to determine whether a
new or improved information system is feasible
solution.
 Develop a project management plan and obtain
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 2. Systems Analysis- is in detail study of end
user information needs.
Activities
 Analyze the information needs of end users,
the organizational environment, and any
system presently used.
 Develop the functional requirements of a
system that can meet the needs of end users.
Product
 Functional Requirements
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 3. Systems Design
Activities
 Develop specifications for the hardware,
software, people, and data resources, and the
information products that will satisfy the
functional requirements of the proposed system.
Product:
 System Specification

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 4. Systems Implementation
Activities
 Acquire (or develop) hardware and software.
 Test the system, and train people to operate
and use it.
 Convert to the new system

Product:
 Operational System

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 5. Systems Maintenance
Activities:
 Use a post-implementation review process to
monitor, evaluate, and modify the system as
needed.
Product:
 Improved System

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