Information Systems for Managers

I MBA

Instructor
T

AMIT
Arba Minch University
Chapter 1: Introduction to IS
Definition – Information Systems
An Information System is an arrangement of people, data,
processes, interfaces, networks, and technology that interact
for the purpose of supporting and improving day-to-day
operations in a business (sometimes called data processing),
as well as supporting the problem solving and decision making
needs of management (sometimes called information services).
Data, Information, and Knowledge
Data vs. Information
Data
Raw facts
Distinct pieces of information, usually formatted in a special
way
Information
A collection of facts organized in such a way that they have
additional value beyond the value of the facts themselves
Database
Collection of data in a structured, secured and efficient form
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Knowledge

An awareness and understanding of a set of

information and how that information can be made
useful to support a specific task

Knowledge base
The collection of data, rules, procedures, and
relationships that must be followed to achieve value
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One of the primary goals of information systems is to economically process
data into information and knowledge.
Data items refer to an elementary description of things, events, activities,

and transactions that are recorded, classified, and stored but are not
organized to convey any specific meaning. It can be numbers, letters,
figures, sounds, or images. Examples of data items are a student grade in a
class and the number of hours an employee worked in a certain week.
Information refers to data that have been organized so that they have

meaning and value to the recipient. For example, a grade point average
(GPA) is data, but a student’s name coupled with his or her GPA is
information. The recipient interprets the meaning and draws conclusions
and implications from the information.
Knowledge consists of data and/or information that have been organized
Types of Data

Data Represented by

Numeric data Numbers with their natural order and

weight (integer, double, float etc…)
Text (string) data Streams of alphanumeric without
numerical values
Image data Graphic images or pictures
Audio data Sound, noise, tones
Video data Moving images or pictures
Information
Source:

Data Transformation Information

Characteristics
Accurate, complete, economical, flexible, reliable,
relevant, simple, timely, verifiable, accessible, secure
System

System
A set of elements or components that interact to

accomplish goals
A combination of components working together for

a certain defined goal

Elements of system
Inputs
Processing mechanisms
Outputs
 Example - System

Elements
System Processing Goal
Inputs Outputs
elements
Actors, Filming, editing, Finished film Entertaining movie,
director, special effects, delivered to film awards, profits
Movie staff, sets, distribution movie studio
equipment

Data Application SW, Information Data processing,

Operating system, transforming, storing,
Computer
hardware system communicating and
retrieving
System Performance and Standards

Efficiency
A measure of what is produced divided by what is

consumed
Effectiveness
A measure of the extent to which a system achieves

its goals
System performance standard
A specific objective of the system.
 System Variables and Parameters

System variable
A quantity or item that can be controlled by the decision maker
E.g. the price a company charges for a product

System parameter
A value or quantity that cannot be controlled by the decision maker
E.g., cost of a raw material
 Modeling a System

Model
An abstraction or an approximation that is used to

represent reality
Types of models
Narrative (descriptive)
Physical
Schematic
Mathematical
 Information System (IS)
Definition
A set of interrelated elements or components (procedures,

materials, manpower etc.) that collect (input), manipulate

(process), and disseminate (output) data and information
and provide a feedback mechanism to meet an objective
(IS) Pronounced as separate letters, and short for
Information Systems or Information Services. For many
companies, IS is the name of the department responsible for
computers, networking and data management. Other
companies refer to the department as IT (Information
Model of an Information System?

Schematic model of an information system

Feedback

Input Processing Output

Input, Processing, Output,
Input
The activity of gathering, capturing and converting

(digitizing) data
Whatever goes into the computer

Processing
Converting or transforming data into useful
outputs

Output
Useful information, usually in the form of
Feedback

Feedback
Output that is used to make changes to input or

processing activities
Forecasting
A proactive approach to feedback
Use for estimating future sales or inventory needs
Manual vs. Computerized Systems

Manual systems still widely used

Eg., some investment analysts manual draw charts

and trend lines to assist them in making investment

decisions

Computerized systems
Eg., the above trends lines can be drawn by
computer

Evolution
Many computerized system began as manual
Computer-based Information Systems

A CBIS is composed of…

Hardware, Software and Databases
Telecommunications
People
Procedures

Together they are…

Configured to collect, manipulate, store, and process data

into information
Business Information Systems
Business Information Systems is a boundary-spanning field of study relating to
how Information and Communication Technologies (ICT) can be deployed to
improve business processes and enhance the organization's value chain
networks, which organizations use to acquire, produce, and deliver goods and
services all over the world, through efficient, effective and competitive use of
ICT.
Example
An understanding of Business Information Systems will help individuals to

develop critical skills needed to function effectively in a global information-

based and technology-driven business environment.
Individuals will understand how organizations can take advantage of
computer-based information systems and related emerging technologies to
share information in order to improve business efficiency, develop effective
Components of Business Information
Systems
Business Information Systems Resources
People : Specialist (System Analysts, Programmers,
Computer Operators)
Hardware: Machines (Computers, Monitors, Printers,
scanners),Media (Floppy disks, Paper form)
Software: Programs (Operating System, Word processing,
Spreadsheet), Procedures(Data entry procedures, error
correction procedures).
Communication Network: Communication Media (Twisted pair
wire, Coaxial cable, Fiber optics), Communication Processor
(Modems, Internetwork processors), Network Software ( Novell,
 People and Procedures
People
The most important element in most computer-based information

systems.
Includes people who manage, develop, run, program, and maintain

the system
e.g., System Analyst, Programmer, DB Admin, Help Desk/Support

Analyst, Trainer, Project Managers, ERP Management, Information

Security Officer, Users etc.,
Procedures
Includes the strategies, policies, methods, and rules for using the

CBIS.
Hardware

Hardware
Computer equipment used to perform input, processing,

storage and output activities.

The objects that you can actually touch, like disks, disk

drives, display screens, keyboards, printers, boards, and

chips.
Software
Software
A set of computer programs that govern or determine or

control the operation of the computer.

Types
System software
Application software
Database
Database
An organized collection of facts and information

A collection of information organized in such a way that a

computer program can quickly select desired pieces of data

Networks

Network
Used to connect computers and computer equipment in a

building, around the country, across the world, to enable

electronic communications.
A group of two or more computer systems linked together.
Classification of Networks
Coverage area and technology:
Local-area networks (LANs): The computers are geographically close

together (that is, in the same building).

Wide-area networks (WANs): The computers are farther apart and are

connected by telephone lines or radio waves.

Topology: The geometric arrangement of a computer system. Common
topologies include a bus, star, and ring.
Protocol: Defines a common set of rules and signals that computers on
the network use to communicate. Ethernet and Token-ring network .

Architecture: Networks can be broadly classified as using either a peer-

to-peer or client/server architecture.
Network Nodes
Computers on a network are sometimes called nodes.
Computers and devices that allocate resources for a
network are called servers.
Internet and Intranet
Internet
The world’s largest telecommunications network
A network of networks
Free exchange of information
A global network connecting millions of computers
Intranet
A network that uses Internet technology within an
organization
A network belonging to an organization
A network not visible outside the organization
boundaries
Business Information Systems
Types
Transaction processing systems
E-commerce systems
Management information systems
Decision support systems
Executive information systems
Office Automation Systems
Business Expert Systems
1. Transactions Processing Systems
Transaction
Any business-related exchange

E.g., generating a weekly payroll

Transaction processing system (TPS)

A transaction process system (TPS) is an information processing system for

business transactions involving the collection, modification and retrieval of

all transaction data. Characteristics of a TPS include performance,
reliability and consistency.
An organized collection of people, procedures, software, databases, and

devices used to record completed for business related exchanges.

Payroll Example

Hours
Hours
worked
worked
Payroll
Payroll Payroll
Payroll
transaction
transaction checks
checks
processing
processing
Pay
Pay
rate
rate
2. E-Commerce System
E-commerce
E-commerce (electronic commerce or EC) is the buying and selling

of goods and services, or the transmitting of funds or data, over an

electronic network, primarily the internet.
For example, between…
Companies

Companies and consumers

Business and the public sector
Consumers and the public sector
Example for placing a purchase order
Purchase Order - Traditional
Purchase Order – E-commerce
3. Management Information Systems
An MIS is…

An organized collection of people, procedures, software, databases, and

devices used to provide routine information to managers and decision

makers.
Management Information Systems Provide information in the form of pre-
specified reports and displays to support business decision making.
Systems that deal with the planning, development, management, and use of
information technology tools to help people perform all tasks related to
Information Processing and Management. Information technology (IT) relates
to any computer-based tool that people use to work with information and to
support the information and information processing needs of an organization.
Examples: sales analysis, production performance, and cost trend reporting
Schematic of MIS

Marketing
Marketing Manufacturing
Manufacturing
management
management Management
Management
information
information Information
Information
system
system system
system

Common
databases
Financial
Financial Order
Order
management
management Management
Management
Information
Information Information
Information
system
system system
system

Transaction
Transaction
Processing
Processing
System
System
 4. Decision Support Systems
An organized collection of people, procedures, software, databases, and devices
used to support problem-specific decision making. A DSS helps a manger “do the
right thing”.
It is a computer-based application that collects, organizes and analyzes business
data to facilitate quality business decision-making for management, operations and
planning. A well-designed DSS aids decision makers in compiling a variety of data
from many sources: raw data, documents, personal knowledge from employees,
management, executives and business models. DSS analysis helps companies to
identify and solve problems, and make decisions.
Identification of problems or decision making opportunities (similar to exception
reporting).
Identification of possible solutions or decisions.
Access to information needed to solve a problem or make a decision.
5. Executive Information Systems
EIS is a system used to assist senior executives in the decision-
making process. It does this by providing easy access to important
data needed to achieve strategic goals in an organization. An EIS
normally features graphical displays on an easy-to-use interface.
Executive information systems can be used in many different types
of organizations to monitor enterprise performance as well as to
identify opportunities and problems.
Enterprise or Executive Information Systems Provide critical
information from MIS, DSS, and other sources tailored to the
information needs of executives.
Examples: Systems for easy access to analyses of business
6. Office Automation Systems
Office Automation Systems (OAS) refers to the application of computes and
communication technology to office functions.
Office automation systems are meant to improve the productivity of managers
at various levels of management of providing secretarial assistance and better
communication facilities.
Office activities may be grouped under two classes, namely
i)Activities performed by clerical personnel (clerks, secretaries, typist, etc.,)
a) Typing

b) Mailing

c) Scheduling of meetings and conferences,

d) Calendar keeping, and

e) Retrieving documents

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ii)Activities performed by the executives (managers, engineers
or other professionals like economist, researches etc.)
Activities in this category (managerial category)

a) Conferencing
b) Production of information (messages, memos, reports,
etc.) and controlling performance
7. Business Expert Systems
Business Expert Systems: These systems are one of the main
types of knowledge-based information systems. These systems
are based on artificial intelligence, and are advanced
information systems. A business expert system is a knowledge
based information system that uses its knowledge about a
specific, complex application area to act as an expert. The main
components of an expert system are:
a. Knowledge Base
b. Interface Engine
c. User Interface
Discussions
Let us assume we require information for decision making!!!
Tips will help you make better decisions:
Collect only useful data
Use Analytical Tools
Get Accurate Data
Convert data into information
Make decisions with the information
Solidify your business case
Thank You!