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MANAGEMENT INFORMATION SYSTEM

Some key words

DATA : Data are the set of isolated, unrelated, un-interpreted raw facts. INFORMATION : Processed data or meaningful data. KNOWLEDGE : is information that is paired, shaped, interpreted, selected and transformed. If we interpret, select, shape or transform information in a problem solving context to reach at a decision it will be knowledge. SYSTEM : System is a set of elements or components that operate together / integrated to accomplish an objective. They have inputs, processing mechanism, outputs and feedbacks. Eg: Educational system, railway system etc.

Elements of SYSTEM
All system work within some sort of environment. All systems have a boundary that depicts its scope of activities. The features that defines a system form its boundary.
Environment Super system

INPUT

PROCESS Feedback and Control

OUTPUT

Environment

SYSTEM APPROACH
The system approach to management is designed to utilize scientific analysis in complex organization for 1) Developing and managing operating system. (e.g.: money flows, personnel system) and 2) Designing information system for decision making.

The link between these two is that information system design is to assist in decision making regarding the management of operating system. FACTORS FOR COMPLEXITY IN BUSINESS
The technological Revolution. Research and Development. Product Changes. The information explosion.

WHY ERA OF SYSTEM APPROACH


Four improvements that led to system approach

and provide break through in improving management process.


Information feedback System. Decision Making. Management Science. The electronic age.

ORGANISATION & ENVIORMENT


Organization refers to specific configuration of structure, people, task and technique. Organization resides in environment from which they draw resources.
The community Stockholders Govt Agencies Competitors

Management Control Monitor & Feedback

Labour Unions

Suppliers
Financial Institute.

Customers

input

process

output

Information system plays vital role to cope and adjust to the changing factors in the enviorment

WHY INFORMATION ??
AGES

AGRICULTURAL

INDUSTRIAL

INFORMATION And SYSTEM AGE

We are currently in information age i.e. primary resource is information , transforming resource is information (becomes knowledge)

technology is computers + communication/info. = information technology.


Data --->Processing--->Information--->Processing--->Knowledge

FEATURES OF EFFICIENT INFORMATION

Validity information with minimized rather no uncertainties is valid and it solves the problem for decision making. Accurate Timely Complete / Meaningfulness Precision / relevant i.e. should be summarized relevant data and point out the areas of exception to normal or planned activities. Reliable : info. Is reliable if it is accurate and complete. Information should be collected from right source. Relevance : Contents of information must serve a purpose. Impartiality Cost-benefit analysis : Benefits derived must justify the cost incurred in collecting information. Explicit : i.e. it does not require any further analysis by recipient for decision making.

NEED FOR INFORMATION

Information needs are different at different levels of management. They are needed for : 1) Addition to knowledge : more information means more knowledge hence capable of applying in various contexts. 2) Decision making aid : Information plays very crucial role in decision making,. Information is significant for manager as it can add to his knowledge in planning the operations. 3) Impact on society : Information can do miracles in society transformation, it is very important to be informed, remain informed. Eg: Using IT weather may be predicted and communicated to rural areas thereby helping them decide and live accordingly. 4) Increase in productivity : Information availability can reduce wastage of time, money and efforts thereby increasing productivity. Eg: exception reports can quickly signal out-of-control conditions.

Types of information

Strategic Information
Long term Planning Type of information is less structured. Information support would mainly external information.

Tactical Information
Short range decisions to run business efficiently. Information requires processing of data obtained from day to day routine. Volume is more than strategic data.

Operational Information
Needed for day to day operation of business. Easy to obtain by clerical processing of data. Volume is more than strategic and tactical information.

Statutory Information
Required by law to be sent to government.

INFORMATION NEEDS AT DIFFERENT LEVELS

TOP LEVEL MANAGERS (CEO/President etc.) STRATEGIC INFORMATION POLICIES | PLANS | OBJECTIVELONG RANGE PLANNING |

MIDDLE LEVEL MANAGERS (Branch Manager/GM etc.) TACTICAL INFORMATION REVENUE | COSTS | STOCK DECISIONS | PROFIT GOALS | SCHEDULES

LINE MANAGERS (Dept. Manager/Crew Leader etc OPERATIONAL INFORMATION GOODS | SERVICES | DUE DATE BILLS | DAY TO DAY ACTION

INFORMATION SYSTEM (I.S.)


DEFINITION: I.S. Can be defined technically as a set of interrelated components that collect (or retrieve) , process, store and distribute data and information and provide feedback mechanism to meet an objective. I.S. is closely associated with three basic activities viz. INPUT, PROCESS AND OUTPUT.

DATA

PROCESSING

INFORMATION

COMPONENTS OF INFORMATION SYSTEM


Information system is an organized combination of people, hardware, software, communication networks and data resource that collects, transform and disseminates information in an organization.
HARDWARE
CONTROL OF SYSTEM PERFORMANCE

DATA

INPUT
SOFTWARE

PROCESSING OF DATA TO INOFRMATION

OUTPUT

PEOPLE

STORAGE
NETWORK

I.S.

It supports managers and workers make decisions, control operations, analyze problems, visualize complex objects and create new products and services. It is information about organization and its environment. Depending upon the position of the manager he/she has to carry out the responsibilities. Management system are formal, observable ways in which organization administers its operations. Various system available are: TPS Transaction Processing system. OAS Office Automation / information system. KWS DSS Decision support system. MIS Management Information system. ESS Executive Support/information system. Expert System.

MANAGEMENT FUNCTION
PLANNING What to do? When to do? Who is to do? In planning goals are set, objectives and policies are defined, strategies and schedules are finalized. ORGANISING : It is the process of identifying the entire job, dividing the job into convenient subjects/tasks, allocating sub-jobs to persons or group of persons and delegating authority to each so that the job is carried out as it is planned. CORDINATING : Is the process of putting the right person or group of persons at right job. DIRECTING : Directing includes Communication, Motivation and Leadership. CONTROLLING : Is the function to ensure that things are going as they should be. Thus, it involves: Fixing standards for measuring work performance. Measurement of actual performance. Comparing actual with standards and finding out deviations, if any Taking corrective actions.

LEVELS OF MANAGERS ( HEIRARCHY OF MANAGERSS)


Top level managers Middle level managers Knowledge workers : They are above the operational managers in the organization. There work deals mail with the research and development jobs and also with analyzing data for knowledge extraction. First-level / Operational managers TOP MGT OR STRATEGIC LEVEL. POLICIES || PLANS || OBJECTIVES
REVENUE || COSTS

MIDDLE MGT OR MANAGEMENT LEVEL.

SCHEDULES

KNOWLEDGE LEVEL WORKERS

LOWER LEVEL OR OPERATIONAL MGT.

GOODS || SERVICES

BUSINESS FUNCTIONS AND PROCESSES (FUNCTIONAL SYSTEMS)


1. PRODUCTION
PRODUCTION PLANNING & CONTROL MAINTENANCE QUALITY CONTOL R&D

2. MATERIALS MANAGEMENT
MATERIAL PLANNING BILL OF MATERIAL COST ESTIMATE WAREHOUSING

3. FINANCE & ACCOUTS


FINANCIAL PLANNING BUDGETING COST ACCOUNTING PAYROLL A/C RECIEVABLES A/C PAYABLE

4. SALES & MARKETING


SALES ORDER FORECASTING SALES ANALYSIS BILLING PRICING PRODUCT PROMOTION

5. HUMAN RESOURCE

EMPLOYEE SELTION TRANSFER EMPLOYEE EVALUATION WELFARE RETIREMENT

INTEGERATED FUNCTIONS AND BUSINESS PROCESSES

MANAGEMENT SYSTEM
Management system provides the framework of processes and procedures used to ensure that an organization can fulfill all the task required to achieve its objective. Environmental management system enables organization to improve their environmental performance through a process of continuous improvement. PLAN, DO, CHECK, ACT DIFFERENT MANAGEMENT SYSTEM TYPES: Administrative management system. HR management system. CRM Process management system. Time management system etc.

MANAGEMENT SYSTEM REQUIREMENTS


EFFECTIVE and EFFICIENT operation of a business requires a management system which can support business processes and operations, decision-making and competitive strategies.

THE FUNCTIONAL SUPPORT ROLE


I.S. supports business process and operations by : Recording and storing Accounting records. Processing records into financial statements. Recording and storing Inventory data. Processing these operations into production schedules, inventory system etc. Recording and storing human resource records. ( salary etc.) Processing these human resources records into employee expense reports etc. Recording and storing market data, customer profiles, customer purchase etc. Processing these into reports ( advertising & marketing plans, sale activity etc.) Recording and storing business intelligence data.(Forecasting) Processing these records into industry trend reports, share market reports etc.

ROLE PLAYED BY MANAGEMENT SYSTEM


I.S. use all the above to implement, control and monitor plans, strategic, tactics, new products, new business models or new business ventures. Role of management system (in case of HR management) Decision role. The interpersonal role The communication role. The performance monitoring role.

TPS TRANSACTION PROCESSING SYSTEM


TPS- is an information system that captures and processes data generated during an organization's day-to-day transactions. Gather input necessary for other types of system and company's database. They handle internal information. Aim to generate operational information. TPS support The monitoring, collection, storage and dissemination of the organization's basic business transaction. TPS provides timely document and reports. It ensures accuracy and integrity of data and information. It provides framework for analyzing on organizations activities. Provide necessary input to MIS. Thus, can reduce or eliminate people from the process. This reduces processing cost as well as data entry error. Eg: Payroll System, Sales & order processing, Inventory management etc.

SYSTEM ARCHITECTURE TRANSACTION PROCESSING SYSTM

HR SYSTEM

INVENTORY SYSTEM

PAYROL SYSTEM (TPS)

PAYROLL SYSTEM (TPS)

FEATURES OF TPS
A) B) C) D) E) RAPID RESPONSE RELIABILITY INFLEXIBILITY CONTROLLED PROCESSING ACID TEST PROPERTIES Atomicity : Transaction changes to state are atomic i.e. either all happens or none happen. Consistency : Maintains correct state after transaction Isolation Durability

KWS (KNOWLEDGE WORK SYSTEM)


The Knowledge Worker System (KWS) is a computer application designed to help knowledge workers (professionals who use information as their primary input and whose major products are distillations of that information) to capture and organize work activity information, and to learn, prioritize, and execute their tasks more efficiently and effectively. KWS integrates methods and technologies from the disciplines of information management, workflow, work scheduling, software agent, and work measurement into a Performance Support Environment. KWS enhances productivity by delivering task-specific information as needed, and by associating all automated tools, software agents, and multimedia document references needed to complete a specific task.

COST INCURED The cost to implement KWS will vary depending on the customers requirements and existing computing environment. KWS is a client/server application that supports an open system environment. The relational process database is accessed via an Open Database Connectivity (ODBC) application program interface across a (required) local area network (LAN).

KWS
Benefits/Savings The system provides the following major benefits: Improvements in Efficiency: Allows the same work to be accomplished in less time. Improvements in Effectiveness: Helps increase intellectual specialization within an organization. Improvements in Focus: Allows more time to be devoted to the organizations primary mission/function. Work Elimination: Eliminates the need for some tasks or accomplishes them automatically. Less Rework: Reduces the amount of work that must be redone. Productivity measurements of KWS impact indicate a (minimum) 15 percent improvement in efficiency.

OAS (OFFICE AUTOMATION SYSTEM)


Types of functions integrated by office automation systems include (1) electronic publishing; (2) electronic communication; (3) electronic collaboration; (4) image processing; and (5) office management. At the heart of these systems is often a local area network (LAN) . The LAN allows users to transmit data, voice, mail, and images across the network to any destination, whether that destination is in the local office on the LAN, or in another country or continent, through a connecting network. An OAS makes office work more efficient and increases productivity.

SIMILARITY BETWEEN KWS AND OAS Serve the information needs at knowledge level of the organization. DIFFERENCE KWS aids Knowledge Worker. OAS aids data Worker.

Knowledge workers in today's workforce are individuals who are valued for their ability to act and communicate with knowledge within a specific subject area. They will often advance the overall understanding of that subject through focused analysis, design and/or development. They use research skills to define problems and to identify alternatives. Fueled by their expertise and insight, they work to solve those problems, in an effort to influence company decisions, priorities and strategies.
Data worker process information.

STRATEGIC ROLE OF INFORMATION SYSTEMS Strategic info system: Can change WAY of achieving goals, processes, products, services or environment To Gain Competitive Advantage

Knowledge workers bring benefits to organizations in a variety of important ways. These include:

analyzing data to establish relationships assessing input in order to evaluate complex or conflicting priorities identifying and understanding trends making connections understanding cause and effect

ability to brainstorm, thinking broadly (divergent thinking) ability to drill down, creating more focus (convergent thinking) producing a new capability creating or modifying a strategy

MIS
(MANAGEMENT INFORMATION SYSTEM)

MIS

MANAGEMENT

INFORMATION

SYSTEM

MIS
The objective of an MIS is to provide information for decision making on planning, initiating, organizing and controlling the operations of subsystems of the firm and to provide a synergistic organization the process.

MIS
Management level Inputs: high volume data Processing: routine reports, simple models, low-level analysis Outputs: summary reports and exception reports Users: middle Managers structured & Semi-structured decisions Reporting and control oriented Past & present data (rely on existing tps data) Internal orientation Lengthy design process Relatively inflexible *

Example: annual budgeting

TPS DATA FOR MIS APPLICATIONS

TPS
Order Processing System ORDER FILE Materials Resource Planning System PRODUCTION MASTER FILE General Ledger System ACCOUNTING FILES UNIT PRODUCT COST PRODUCT CHANGE DATA EXPENSE DATA MIS FILES SALES DATA

MIS

MIS

REPORTS

MANAGERS

System architecture of MIS

DRILL DOWN REPORT PROVIDES DETAILED DATA ABOUT HE SITUATION.

DECISION SUPPORT SYSTEM (DSS)


They address the problem where the procedure for arriving at a solution may not be fully pre-defined in advance. They use internal information from TPS and MIS, they often uses information from external sources such as stock market prices etc. They offer tools for analyzing info. more rigorously and help generating tactical information and performing what-if analysis. Have more analytical power than any other system and condense large amount of data. They also help user to reach a decision when decision-making situation arises. Decision makers can make better, more consistent decisions in a timely manner

Characteristics and Capabilities of DSS


1. Provide support in semi-structured and unstructured situations, includes human judgment and computerized information 2. Support for various managerial levels 3. Support to individuals and groups 4. Support to interdependent and/or sequential decisions 5. Support all phases of the decision-making process 6. Support a variety of decision-making processes and styles 7. Are adaptive 8. Have user friendly interfaces 9. Goal: improve effectiveness of decision making 10. The decision maker controls the decision-making process 11. End-users can build simple systems 12. Utilizes models for analysis 13. Provides access to a variety of data sources, formats, and types

Capabilities of a DSS

Supports Problem solving phases Different decision frequencies Highly structured problems Straightforward problems, requiring known facts and relationships. Semi-structured or unstructured problems Complex problems wherein relationships among data are not always clear, the data may be in a variety of formats, and are often difficult to manipulate or obtain

DSS Components
1. Data Management Subsystem (DMS) DSS database Database management system (DBMS) Data directory Query facility 2. Model Management Subsystem (MMS) Model management software (MMS) Coordinates the use of models in the DSS Model base Provides decision makers with access to a variety of models Dialogue manager Allows decision makers to easily access and manipulate the DSS 3. Knowledge-based (Management) Subsystem (KBS) 4. User Interface Subsystem 5. The User

DSS Components
User

User Interface KBS1

DBMS KBS2

MBMS KBS3

DSS Database Issues


Data warehouse Data mining Special independent DSS databases Extraction of data from internal, external, and private sources Web browser data access Web database servers Multimedia databases Special GSS databases (like Lotus Notes / Domino Server) Online Analytical Processing (OLAP) Object-oriented databases Commercial database management systems (DBMS)

The Model Management Subsystem


Database Model base

DBMS

MMS

Access to the internet, networks, and other computer systems

External database access

External databases

Dialogue manager

Use of AI and fuzzy logic in MBMS

The Knowledge Based (Management) Subsystem

Provides expertise in solving complex unstructured and semi-structured problems with the help of expert or intelligent system. Advanced DSS have a knowledge based (management) component Leads to intelligent DSS Example: Data mining

The User Interface (Dialog) Subsystem


Includes all communication with a user. Graphical user interfaces (GUI) To most users, the user interface is the system

The User
Different usage patterns for the user, the manager, or the decision maker * Managers * Staff specialists * Intermediaries which includes 1. Staff assistant 2. Expert tool user 3. Business (system) analyst z. GSS Facilitator

DSS Hardware
Evolved with computer hardware and software technologies Mainframe Workstation Personal computer Web server system Internet Intranets Extranets

Ingredients for DSS Success or Failure


For DSS Success Management Support Users Involved in Design & Development Early Benefits Shown For DSS Failure Lack of Management Support Users Ignored in Design & Development No Early Benefits Shown

ESS
ESS is highly interactive information system that is designed to support the information needs of executive management. Incorporate data from external events such as new laws etc. and summarized information from internal MIS and DSS. Use A.I. tools to generate knowledge out of information, existing theories & beliefs etc. Immediate delivery of graphs.

RELATIONSHIP AMONG DIFFERENT I.S.

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