MANAGEMENT INFORMATION SYSTEMS AN INSIDE

By Dr. Atanu Rakshit Email: atanu.rakshit@iimrohtak.ac.in atanu.raks@gmail.com

MANAGEMENT INFORMATION SYSTEMS (MIS)

Text Book:
Management

Information Systems: Managing the Digital Farm by Ken Laudon, Jane Laudon and Rajanish Dass, 11/e, Pearson Publication, 2010
Information Systems by James A ORrien, George M Marakas and Ramesh Behl, 9/e, McGraw Hill, 2010

Reference Material:
Management

MANAGEMENT INFORMATION SYSTEMS (MIS)

Reference Material (Contd.):

Managent

Information Systems by Mahadeo Jaiswal and Monika Mital, Oxford Univ. Press, 2011 Decision Support and Business Intelligence Systems by Efraim Turban, Ramesh Sharda and Dursun Delen, 9/e, Pearson Publication, 2011 Information Technology Management by Henry C. Lucas, Jr. Tata McGraw-Hill Publication, 2011 Harvard Business Publication

MANAGEMENT INFORMATION SYSTEMS (MIS)

Sessions Plan

Information system and its impact in business in todays scenarios Classification of types of information systems in an organization: Operational, MIS, DSS, ESS, ES Information Systems, Organizations and Strategies Emerging Technologies: Virtualization, Cloud Computing, SOA, BPM, Telecommunication and Wireless Technologies Enterprise Systems ERP, CRM, SCM, etc Data Management Systems: RDBMS, Data Warehousing, OLAP, Data Quality etc.

Information Systems and its Impact in Todays Business Scenarios

LEARNING OBJECTIVES

Explain why knowledge of information systems is important for business professionals and identify five key areas of information systems knowledge.

Give examples to illustrate how the IT Driven business applications can support a firms business processes, managerial decision making, and strategies for competitive advantage.

Information Systems in

Global Business Today

LEARNING OBJECTIVES
Understanding the effects of information systems on business and their relationship to globalization. Explain why information systems are so essential in business today. Define an information system and describe its management, organization, and technology components.

LEARNING OBJECTIVES (Continued)

Define complementary assets and explain how they ensure that information systems provide genuine value to an organization. Describe the different academic disciplines used to study information systems and explain how each contributes to our understanding of them. Explain what is meant by a sociotechnical systems perspective.

IPL Teams Strike Gold with Information Technology

Cricket is fast-paced, high-energy sport, high-stack with big business opportunity Each team in IPL pays their players ranging from 20 lakh to 2 crore per year Objective: Elegant performance for most of the players leads to more wins implies more money business opportunities for the team.

Problem: Lack of historical and statistical data match-wise, country-wise, player-wise hard data usable in decision-making processes, costly and competitive market.

IPL Team Strike Gold with Information Technology

A Company called Sport Mechanics providing the solution for requirement. Solutions: Developed a new system designed to collect and organize data using video clips of games.

Synergy Sports Technology tags video of each game with hundreds of descriptive categories and allows coaches and players to stream game footage from the Web.
Demonstrates ITs role in innovation and improving business processes. Illustrates how the Web has allowed businesses to use new tools to analyze critical data.

RECENT NEWS

ToI dated 02/01/2012

John

Chambers, Global Chairman and CEO, CISCO

Intelligent

IT Wave / Infrastructure IT and Communication resources are more Virtual, Visual, Social, Mobile and Video enabled than before

ToI dated 03/01/2012

IITs

have allowed MIT to use their Open Courseware through NPTEL (National Programme for Technology Enhanced Learning)

The Role of Information Systems in Business Today

How information systems are transforming business

Increase in wireless technology use, Web sites Resource Optimization (ERP and SCM) Shifts in media and advertising New federal security and accounting laws

Globalization opportunities Internet has drastically reduced costs of operating on global scale Presents both challenges and opportunities

The Role of Information Systems in Business Today

Information Technology Capital Investment

Information technology investment, defined as hardware, software, and communications equipment, grew from 32% to 51% between 1980 and 2008. Source: Based on data in U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 2008.

The Role of Information Systems in Business Today

In the emerging, fully digital firm

Significant business relationships with customers, suppliers and employees are digitally enabled and mediated Core business processes are accomplished through digital networks within or across organizations Key corporate i.e., IP, Financial, Human assets etc. are managed digitally

Digital firms offer greater flexibility in organization and management

Time shifting 24/7, space shifting Global work place

The Role of Information Systems in Business Today

Growing interdependence between ability to use information technology and ability to implement corporate strategies and achieve corporate goals Business firms invest heavily in information systems to achieve six strategic business objectives:

Operational excellence New products, services, and business models Customer and supplier intimacy Improved decision making Competitive advantage Survival

The Role of Information Systems in Business Today

Operational excellence:

Improvement of efficiency to attain higher profitability Information systems, technology an important tool in achieving greater efficiency and productivity Wal-Marts RetailLink system links suppliers to stores for superior replenishment system

The Role of Information Systems in Business Today

New products, services, and business models:

Business model: describes how company produces, delivers, and sells product or service to create wealth Information systems and technology a major enabling tool for new products, services, business models

Examples: Apples iPod, iTunes, and iPhone, Netflixs Internet-based DVD rentals

The Role of Information Systems in Business Today

Customer and supplier intimacy:

Serving customers well leads to customers returning, which raises revenues and profits

Example: High-end hotels that use computers to track customer preferences like room temperature, check-in time, frequent dialed number, television channels etc. and use to monitor and customize environment

Intimacy with suppliers allows them to provide vital inputs, which lowers costs

Example: J.C.Penneys information system which links sales records to contract manufacturer

The Role of Information Systems in Business Today

Improved decision making

Without accurate information:

Managers must use forecasts, best guesses, luck Leads to:

Overproduction, underproduction of goods and services Misallocation of resources Poor response times

Poor outcomes raise costs, lose customers

Example: Verizons Web-based digital dashboard to provide managers with real-time data on customer complaints, network performance, line outages, etc.

The Role of Information Systems in Business Today

Operational excellence:

Improvement of efficiency to attain higher profitability Enabled by technology Serving customers raises revenues and profits Better communication with suppliers lowers costs More accurate data leads to better decisions

New products, services, and business models:

Customer and supplier intimacy:

Improved decision making

The Role of Information Systems in Business Today

Competitive advantage
Delivering

better performance Charging less for superior products Responding to customers and suppliers in real time Example: Toyota and TPS (Toyota Production System) enjoy a considerable advantage over competitors information systems are critical to the implementation of TPS

The Role of Information Systems in Business Today

Survival
Information

technologies as necessity of

business May be:

Industry-level

changes, e.g. Citibanks introduction

of ATMs Governmental regulations requiring record-keeping

Examples: Toxic Substances Control Act, SarbanesOxley Act

The Role of Information Systems in Business Today

The Interdependence Between Organizations and Information Technology

In contemporary systems there is a growing interdependence between a firms information systems and its business capabilities. Changes in strategy, rules, and business processes increasingly require changes in hardware, software, databases, and telecommunications. Often, what the organization would like to do depends on what its systems will permit it to do.

EMBEDDED INFORMATION SYSTEM

Implement Business Strategies to obtain Business Goal Business Operation for optimize resources and performances Extended Business Operation for customer support and increase profitability & loyalty Business Analytics for smarter and predictive business

Perspectives on Information Systems

Information system:

Set of interrelated components Collect, process, store, and distribute information Support decision making, coordination, control operations, analyze problems, new product ans services

Information vs. data

Data are streams of raw facts Information is data shaped into meaningful form

Perspectives on Information Systems

Data and Information

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as the total unit sales of dish detergent or the total sales revenue from dish detergent for a specific store or sales territory.

Perspectives on Information Systems

Information system: Three activities produce information organizations need

Input:

Captures raw data from organization or external environment

Processing:

Converts raw data into meaningful form

Transfers processed information to people or activities that use it

Output:

Perspectives on Information Systems

Feedback:

Output returned to appropriate members of organization to help evaluate or correct input stage

Computer/Computer program vs. information system

Computers and software are technical foundation and tools, similar to the material and tools used to build a house

Perspectives on Information Systems

Functions of an Information System

An information system contains information about an organization and its surrounding environment. Three basic activitiesinput, processing, and outputproduce the information organizations need. Feedback is output returned to appropriate people or activities in the organization to evaluate and refine the input. Environmental actors, such as customers, suppliers, competitors, stockholders, and regulatory agencies, interact with the organization and its information systems.

Perspectives on Information Systems

Information Systems Are More Than Computers

Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems. An information system creates value for the firm as an organizational and management solution to challenges posed by the environment.

Perspectives on Information Systems

Organizational dimension of information systems

Key elements of organization are people, structure, business processes, politics and culture Hierarchy of authority, responsibility
Senior

management Middle management Operational management Knowledge workers Data workers Production or service workers

Perspectives on Information Systems

Levels in a Firm

Business organizations are hierarchies consisting of three principal levels: senior management, middle management, and operational management. Information systems serve each of these levels. Scientists and knowledge workers often work with middle management.

Perspectives on Information Systems

Organizational dimension of information systems (cont.) Separation of business functions

Sales and marketing, Human resources, Finance and accounting, Manufacturing and production etc.

Unique

business processes Unique business culture fundamental sets of

assumptions, values, way of doing things
Organizational

politics People occupy different

positions with different specialties, concerns and perspective. Leads to diverge viewpoints of resources, rewards and punishments - conflicts

Perspectives on Information Systems

Management dimension of information systems

Make decisions, formulate action plan Managers set organizational strategy for responding to business challenges Allocates all resources and coordinate work for success In addition, managers must act creatively:

Creation of new products and services Occasionally re-creating the organization

Perspectives on Information Systems

Technology dimension of information systems

Computer hardware and software

Data management technology Networking and telecommunications technology

Networks, the Internet, intranets and extranets, World Wide Web

IT infrastructure: provides platform that system is built on Cloud Computing

CASE STUDY ON UPS

UPS Competes Globally with Information Technology

Perspectives on Information Systems

What are the inputs, processing, and outputs of UPSs package tracking system?
Inputs: The inputs include package information, customer signature, pickup, delivery, time-card data, current location (while en route), and billing and customer clearance documentation. Processing: The data are transmitted to a central computer and stored for retrieval. Data are also reorganized so that they can be tracked by customer account, date, driver, and other criteria. Outputs: The outputs include pickup and delivery times, location while en route, and package recipient. The outputs also include various reports, such as all packages for a specific account or a specific driver or route, as well as summary reports for management.

Perspectives on Information Systems

What technologies are used by UPS
Technologies include handheld computers (DIADs), barcode scanning systems, wired and wireless communications networks, desktop computers, UPSs central computer (large mainframe computers), and storage technology for the package delivery data. UPS also uses telecommunication technologies for transmitting data through pagers and cellular phone networks. The company uses in-house software for tracking packages, calculating fees, maintaining customer accounts and managing logistics, as well as software to access the World Wide Web.

Perspectives on Information Systems

How are these technologies related to UPSs business strategy?
UPS has used the same strategy for over 90 years. Its strategy is to provide the best service and lowest rates. One of the most visible aspects of technology is the customers ability to track his/her package via the UPS Web site. However, technology also enables data to seamlessly flow throughout UPS and helps streamline the workflow at UPS. Thus, the technology described in the scenario enables UPS to be more competitive, efficient, and profitable. The result is an information system solution to the business challenge of providing a high level service with low prices in the face of mounting competition.

Perspectives on Information Systems

What problems do UPSs information systems solve?
Some problems this information system solves relate directly to logistics and supply chain activities, not just for itself, but also for other companies. These services include supply chain design and management, freight forwarding, customs brokerage, mail services, multimodal transportation, and financial services, in addition to logistics services.
Because of the advanced integration of its technology, UPS can provide these services cheaper and more efficient than most companies can create them in-house.

Perspectives on Information Systems

What are the key elements for the success of UPS systems? Barcoded package information also ensure data quality User friendly handheld computing device (Delivery Information Acquisition Device (DIAD)) Most efficient delivery route for each driver considering traffic condition, weather conditions and location for each stop Saves 28 million truck travelling and 3 million gallons of fuels in each year Effective workflow systems seamless with business process

Perspectives on Information Systems

What are the key elements for the success of UPS systems? Customer can also know the status through tracking system Customer self service capabilities Seamless integration of the tracking systems with back end application and also with devices System provides the complete tracking data for effective control and improvement Customers view UPSs technology as value-added services as opposed to increasing the cost of sending packages

Perspectives on Information Systems

Dimensions of UPS tracking system

Organizational:

Procedures for tracking packages and managing inventory and provide information

Management:

Monitor service levels and costs

Technology:

Handheld computers, bar-code scanners, networks, desktop computers, etc.

Perspectives on Information Systems

Business perspective on information systems:

Information system is instrument for creating value Investments in information technology will result in superior returns:
Productivity

increases Revenue increases Superior long-term strategic positioning

Business information value chain

Raw data acquired and transformed through stages that add value to that information Value of information system determined in part by extent to which it leads to better decisions, greater efficiency, and higher profits

Perspectives on Information Systems

The Business Information Value Chain

From a business perspective, information systems are part of a series of value-adding activities for acquiring, transforming, and distributing information that managers can use to improve decision making, enhance organizational performance, and, ultimately, increase firm profitability.

Perspectives on Information Systems

Investing in information technology does not guarantee good returns Considerable variation in the returns firms receive from systems investments Factors:

Adopting the right business model Supportive values, structures and behavior pattern Investing in complementary assets (organizational and management capital)

Perspectives on Information Systems

Complementary assets:
Assets

required to derive value from a primary investment like for Automobiles requires investment in highway, roads, petrol pump, service points etc. Firms supporting technology investments with investment in complementary assets receive superior returns E.g.: invest in technology and the people to make it work properly

Perspectives on Information Systems

Complementary assets include:

Organizational investments, e.g.

Appropriate business model Efficient business processes

Managerial investments, e.g.

Incentives for management innovation Teamwork and collaborative work environments

Social investments, e.g.

The Internet and telecommunications infrastructure Technology standards

Perspectives on Information Systems

Contemporary Approaches to Information Systems

The study of information systems deals with issues and insights contributed from technical and behavioral disciplines.

Contemporary Approaches to Information Systems

Technical approach Emphasizes mathematically based models Computer science, management science, operations research

Behavioral approach Behavioral issues (strategic business integration, implementation, etc.) Psychology, economics, sociology

Contemporary Approaches to

Information Systems
Management Information Systems Combines computer science, management science, operations research and practical orientation with behavioral issues

Four main actors Suppliers of hardware and software Business firms Managers and employees Firms environment (legal, social, cultural context)

Contemporary Approaches to

Information Systems
Approach of this book: Sociotechnical view Optimal organizational performance achieved by jointly optimizing both social and technical systems used in production Helps avoid purely technological approach

NEW IN MIS
Change Technology
Cloud Computing Growth of SaaS Mobile Digital Platform Dynamic and Agile Business Need Effective Business Model Solution Penetrations

Business Impact

Management
Online Collaboration and Social Networking BI
Mobile Tools Smartphones, Mobile Internet Devices

Effective user involvement Intelligent and Smart Decisions

Accuracy, Speed and richness

Improving Collaboration and Decision making

Virtual Meeting

Organization
Web 2.0 Collaboration and Online Community

Outsourcing Production
Telework in the workplace

Reduce production and service cost

Work from home enhance productivity

Q&A