INTRODUCTION TO MIS

 Definition and Importance

 Definitions
 'A computer system or related group of systems which collects and
presents management information to a business in order to facilitate its
control.' (Ray Franks, 1997 : Computing Terminology)
 'A system to convert data from internal and external sources into
information and to communicate that information, in an appropriate
form, to managers at all levels in all functions to enable them to make
timely and effective decisions for planning, directing and controlling the
activities for which they are responsible (Terry Lucey,
1976 :Management Information systems).
 Management information systems (MIS) is an integrated, user-
machine system for providing information to support operations,
management, and decision-making functions in an organization.
 The system utilizes computer hardware and software; manual procedures;
models for analysis, planning, control and decision-making; and a database
(Davis and Olson:1985).

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INTRODUCTION TO MIS…
 WHAT IS INFORMATION TECHNOLOGY?

 Information technology refers to the variety of

items and abilities that are used in

 the creation,
 storage, and
 dispersal of information.
INTRODUCTION TO MIS…
 Information technology is divided into three
primary components:

 computers,
 communications networks and
 know-how
INTRODUCTION TO MIS…
 Computers:
 An electronic system that can be instructed to
 accept,
 process,
 store and
 present data and information.
 Computers come in four different sizes:
 Microcomputers/pc,
 midrange/minicomputers,
 mainframes, and
 supercomputers.
INTRODUCTION TO MIS…

 Communication Networks:

 A communication network is the interconnection of

stations at different locations through a medium that
enables people to send and receive data and
information.
 Telephone wires and cables are common
communications media.
INTRODUCTION TO MIS…
 Know How:
 It means to do something well.
 Know how includes:
 Familiarity with the tools of IT;
 The skills needed to use these tools;
 Understanding when to use IT to solve a problem or capitalize
on an opportunity.
INTRODUCTION TO MIS…
 THE PRINCIPLES OF INFORMATION TECHNOLOGY
 The most important principle of information technology describes the

purpose of IT.
 The purpose of information technology is to
 solve problems,
 to unlock creativity and
 to make people more effective than they would be if they did not involve IT
in their activities.
 An equally important principle of information technology, states that
 the more you rely on advanced technology, like information technology, the
more important it is to consider the “high-touch” aspects of the matter ---
that is, “the people side.”
 A related principle stresses that:
 we should always fit information technology to people, rather than ask
people to adjust to information technology.
INTRODUCTION TO MIS…

 THE FUNCTIONS OF INFORMATION

TECHNOLOGY
 What exactly can IT do?
 IT performs six information handling functions:
 capture,
 processing,
 generation,
 storage,
 retrieval, and
 transmission.
INTRODUCTION TO MIS…

 THE BENEFITS OF INFORMATION

TECHNOLOGY
 Computers and communication systems
collectively offer four benefits to users:
 speed,
 consistency,
 precision, and
 reliability
INTRODUCTION TO MIS…
 ROLE OF INFORMATION TECHNOLOGY IN OUR LIVES
 Assignment: How are the following affected by IT?
 The home
 Shipping
 Paperwork
 Money and Investments
 Agriculture
 Taxation and Accounting
 Education
 Training
 Travel
 Health and Medicine
 Manufacturing
 Journalism
 Energy
INTRODUCTION TO MIS…

 THE CAREER SIDE OF INFORMATION

TECHNOLOGY

 INFORMATION TECHNOLOGY AS A CAREER

 INFORMATION TECHNOLOGY AS AN AID TO
YOUR CAREER
BASIC CONCEPTS IN MIS

 MIS is a concept that combine

 Management,
 Information and
 System
BASIC CONCEPTS IN MIS …
1. Management
 For the purpose of this course, management may be defined as
the processes or activities that describe what managers do in
the operation of their organization with regards to planning,
organizing, initiating, and controlling these operations.

 They plan by setting strategies and goals, and selecting the best
course of action to achieve the plan.
 They organize the tasks necessary for the operational plan,
 Set these tasks up into homogeneous groups, and assign authority
delegation.
 They control the performance of the work by setting performance
standards and avoiding deviations from standard.
BASIC CONCEPTS IN MIS …
 Informed decision making plays a vital role in each of
these activities. And hence the need for MIS.

 The job of MIS is to facilitate decisions necessary for

 Planning
 Organizing and
 Controlling the work and functions of the business
BASIC CONCEPTS IN MIS …
 To understand the role played by MIS, it helps to understand the
process of decision making in an organization.

 Classification of decision making by organizational level

provides:-
 Strategic decision making
 Determines the objectives, resources, and policies of the organization
 Management control decision making
 Primarily concerned with how efficiently and effectively resources are
used and how well operational units are performing.
BASIC CONCEPTS IN MIS …
 Operational control decision making
 Determines how to carry out the specific tasks set forth by
strategic and middle management decision makers.

 Knowledge-level decision making

 Deals with new ideas for products and services, ways to
communicate new knowledge, and ways to distribute information
through out the organization.
BASIC CONCEPTS IN MIS …
 Each of the above types of decision making can further be
classified into:-
 Structured decision
 Unstructured decision

 Structured decision are repetitive and routine and involve a definite

procedure for handling them so that they do not have to be treated each
time as if they were new.

 Unstructured decisions are those in which the decision maker must

provide judgment, evaluation, and insights into the problem definition.
There is no well-understood or agreed upon procedure for making these
decisions.

 There are information systems which are developed to support each

of these types of decisions.
BASIC CONCEPTS IN MIS …
Four stages in decision making (Simon 1960)
 Intelligence
 consists of identifying and understanding the problems occurring in the
organization
 Design
 the decision maker designs alternative solutions to the problems
 Choice
 choosing among alternative solutions
 Implementation
 Putting the decision into effect

 How does MIS support each of these stages in decision making?

BASIC CONCEPTS IN MIS …
 Decision making models
 Individual models for decision making
 Based on the assumption that human beings are in some sense
rational

 Organizational models for decision making

 Takes into account the structural and political characteristics of
the organization
 Bureaucratic, political, garbage can models are used to describe
how decision is reached in organizations.
 Assignment
 Describe each of the models
 Bureaucratic,
 Political and,
 garbage can
BASIC CONCEPTS IN MIS …
 To satisfy the requirements of decision making at the various levels,
information systems should have the following characteristics:-

 Be flexible and provide many options for handling data and evaluating information.

 Be capable of supporting a variety of styles, skills and knowledge.

 Be powerful in the sense of having multiple analytical and intuitive models for the
evaluation of data and the ability to keep track of many alternatives and
consequences.

 Reflect understanding of group and organizational processes of decision making.

 Be sensitive to the bureaucratic and political requirements of systems

BASIC CONCEPTS IN MIS …
2. Data, information, knowledge, and wisdom

DATA
Data is raw material for information. Data may be available in the following types.

Text
Graphic
Image
Animation
Audio
Video

The availability of data in these various types have led to the notion of multimedia,
multimedia database, and multimedia information systems.

Information is processed data that is used for decision making.

BASIC CONCEPTS IN MIS …
 INFORMATION
 Information may refer to any of the following as used in our day to day
conversation:-
 Information as a commodity
 This refers to an item in a book, in someone’s head, in a corporate file, or a statistic
 When information is regarded as a commodity, it often assumes economic value
 “information (or knowledge) is power” refers to this usage of information
 Information as energy
 It is regarded as a quantifiable physical entity whose presence or absence can be
verified experimentally
 Example: The information provided by sound waves emitted by a school bell
 Information as communication
 To be informed is the result of communication, or information transfer
 Information as facts
 How many weeks is it since the start of classes? How many weeks are there before
the mid-semester exams? How many students are there is his class?
 When the term information is used in this way, it does not necessarily mean that
there is any implied or actual use of the fact
 Information as data
 The symbols OF-27-13-1 are data. They could mean anything or nothing. In the
context of an item registration form, they become an identification number- a fact
 Information as knowledge
 Information is often used interchangeably with knowledge
BASIC CONCEPTS IN MIS …
 The late scholar Fritz Machlup (1983) carefully assessed the different
meanings associated with information.

 Something one did not know before.

 A clue.
 Something that affects what one already knows
 How data are interpreted.
 Something useful in some way to the person receiving it.
 Something used in decision making.
 Something that reduce uncertainty.
 The meaning of words in sentences.
 Something that provides more than what is stated.
 Something that changes what a person who receives it believes or expect.
BASIC CONCEPTS IN MIS …
 KNOWLEDGE
 Knowledge includes the capability of evaluating information in
some meaningful or powerful way.
 It is a cognitive state beyond awareness.
 It is deduced, not simply sensed.
 WISDOM
 Wisdom implies the application of knowledge as contained in
human judgment centered around certain criteria or values that
are generally accepted by the culture or society.
BASIC CONCEPTS IN MIS …
 Some comparisons between information and knowledge. (Machlup,
1983 in Tague-Sutcliffe, 1995)

 Information is piecemeal, fragmented, particular, whereas knowledge is

structured, coherent, and often universal.

 Information is timely, transitory, whereas knowledge is of enduring

significance.

 information is flow of messages, whereas knowledge Is a stock.

 Information is acquired by being informed, whereas knowledge can be

acquired by thinking.
BASIC CONCEPTS IN MIS …

 Assignment
 Start from a given set of data and show how this may
be transformed to become.
 Information
 Knowledge
 Wisdom
INTRODUCTION TO MIS…
 In summary:
 Management information system is
 An integrated user-machine system (Some can be performed using
machine, other without machines).
 That provides information;
 To support the operations, management, analysis, and decision-making
functions of an organization.

 In so doing the system makes use of:

 Computer hardware and software,
 Manual procedures,
 Models for analysis, planning, control, and decision making and,
 A database.

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INTRODUCTION TO MIS…
 Importance of MIS in Business:
 Well managed IS
 Improves process;
 Improves products and services;
 Improves quality;
 Cuts costs;
 Improves management, problem solving and decision making.
 At strategic level, MIS can support organization in supporting
strategic goals such as :-
 cost leadership,
 product differentiation,
 market niche, etc.,

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INTRODUCTION TO MIS…
 Scope of MIS:

 In addition to presenting information to management MIS also performs the

following tasks simultaneously:

 initiate transactions (e.g. automatically making a purchase order if stock levels

are below a specified amount);
 record transactions as they occur (e.g., a sale is input to the sales ledger
system);
 process data;
 produce reports (e.g. summaries);
 Respond to enquiries.

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INTRODUCTION TO MIS…
 Objectives of MIS:
 The objective of an MIS is to provide information for
decision making on :-

 planning,
 initiating,
 organizing, and
 controlling the operations of the subsystems of the firm
 and to provide a synergistic organization in the process.

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INTRODUCTION TO MIS…
 SUBSYSTEMS OF AN MIS

 MIS is introduced as a broad concept referring to a

federation of subsystems.

 Two approaches to defining the subsystems of an

MIS are according to
 the organizational functions which they support and
 the managerial activities for which they are used.

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INTRODUCTION TO MIS…
 ORGANIZATIONAL FUNCTION SUBSYSTEMS
 MIS may be viewed as a federation of information
system– Because organizational functions are
somewhat separable in terms of activities and are
defined managerially as separate responsibilities, one
for each major organizational function such as
 production, marketing, finance, etc..
 Typical subsystems for a business organization engaged in
manufacturing are marketing, manufacturing, logistics and
personnel.

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 INTRODUCTION TO MIS…
 Major functional subsystem Some typical uses
Marketing Sales forecasting, sales planning, customer and sales
analysis

Manufacturing Production planning and scheduling, cost control analysis

Logistics Planning and control of purchasing, inventories,

distribution

Personnel Planning personnel requirements, analyzing performance,

salary administration

Finance and accounting Financial analysis, cost analysis, capital requirement

planning, income measurement

Information processing Information system planning, cost-effectiveness analysis

Top management Strategic planning, resource allocation

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INTRODUCTION TO MIS…
 The database is the primary means of
integration of the various subsystems.

 A data item that is stored or updated by one

subsystem is then available to the other
subsystems.

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 INTRODUCTION TO MIS…

 ACTIVITIES SUBSYSTEMS

Activity subsystem Some typical uses

Transaction processing Processing of orders, shipments, receipts
Operational control Scheduling of activities and performance reports

Management control Formulation of budgets and resource allocation

Strategic planning Formulation of objectives and strategic plans

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INTRODUCTION TO MIS…

 MIS can also be considered in terms of

 inputs, processes and outputs
INPUTS PROCESS OUTPUT
Strategic Plans, competitor Summarize, Key ratios, ad hoc
information, overall Investigate, Compare, market analysis,
market information Forecast strategic plans
Management | Historical, and budget Compare, Classify, Variance analysis
Tactical data Summarize Exception report

Operational Customer orders, Update files, Output Updated files listings,

Programmed stock reports invoices
control levels, cash
receipts, payments

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INTRODUCTION TO MIS…
 CONTEMPORARY APPROACHES TO MIS
 Multiple perspectives on management information systems show that the study of
MIS is a multidisciplinary field. No singe theory or perspective dominates.

Computer
Science

Operations
Psychology
Research

MIS

Management
Sociology
Science

Economics

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INTRODUCTION TO MIS…
 Technical Approach.
 The technical approach to MIS emphasizes mathematically based models
to study information systems as well as the physical technology and formal
capabilities of these systems.

 The disciplines that contribute to the technical approach are

 Computer science,
 Management science, and
 Operations research.

 Computer science is concerned with establishing theories of computability,

and methods of efficient data storage and access.
 Management science emphasizes the development of models for decision
making and management practice.
 Operations research focuses on mathematical techniques for optimizing
selected parameters of organization, inventory control and transaction
costs.

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INTRODUCTION TO MIS…
 Behavioral Approach
 Issues such as strategic business integration, design, implementation, utilization, and
management cannot be explored usefully only with the models used in the technical approach.
Other behavioral disciplines contribute important concepts and methods.
 Disciplines that contribute in this area are
 Sociology
 Psychology
 Economics
 sociologists study information systems with an eye toward how groups and organizations
shape the development of systems and also how systems affect individuals, groups, and
organizations.
 Psychologists study information systems with an interest in how human decision makers
perceive and use formal information; they also study how people deal with the changes
brought about by new technology.
 Economists study information systems with an interest in the impact systems have on control
and cost structures within the firm and within the markets.
 The behavioral approach does not ignore technology. Indeed, information systems
technology is often stimulated for a behavioral problem or issue. But, the focus of this
approach is generally not on technical solutions. Instead, it concentrates on changes in
attitudes, management and organizational policy and behaviors.

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INTRODUCTION TO MIS…
 Socio-technical Systems.

 Adopting a socio-technical systems perspective helps to avoid a purely

technological approach to information systems.

 In this approach, there is the need to optimize systems performance as a

whole.

 Both technical and behavioral components need attention.
 This means that technology must be changed and designed in such a way as to fit
organizational and individual needs.
 At times, the technology may have to be “de-optimized” to accomplish fit.
 Organizations and individuals must also be changed through training, learning, and
planned organizational change to allow the technology to operate and prosper.
People and organizations change to take advantage of new information technology
change.

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INTRODUCTION TO MIS…
 THE EVOLUTION AND CHARACTERISTICS OF THE INFORMATION
AGE
 THE EVOLUTION OF THE INFORMATION AGE

Agricultural Age Industrial Age Information Age

Time period Pre-1800s 1800 to 1957 1957 to present

Majority of Farmers Factory workers Knowledge workers

workers
Partnership People and land People and People and people
machines
Principal tool Hand tools Machines Information
Technology

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INTRODUCTION TO MIS…
 THE CHARACTERISTICS OF THE INFORMATION AGE
 The information age is distinguished from previous ages on the
basis of five characteristics.
 The Information Age came about with the rise of an information based
society.
 Businesses in the Information Age depend on information technology to
get their work done.
 In the Information Age, work processes are transformed to increase
productivity.
 Success in the Information Age is largely determined by the
effectiveness with which information technology is used.
 In the Information Age, information technology is embedded in many
products and services.

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