Management Information Systems - Meaning & Role of Information - System, Types of IS

The Purpose of Information Systems

Businesses use information systems
To make sound decisions To solve problems

Problem is any undesirable situation Decision arises when more than one solution to problem exists

The Purpose of Information Systems (continued)

Problem solving and decision making require information Keys to success in business are:
Gathering correct information Storing information Using information

Data, Information, and Information Systems

Data & information are commonly used terms Important to understand their similarities and differences.

Data vs. Information

Data: a given or fact
Can be number, statement, or picture

Information: facts or conclusions that have meaning within context

Composed of data that is manipulated

Data Manipulation
Data is manipulated to make useful information Survey is common method of collecting data Raw data is hard to read Information is more useful to business than data

Generating Information

Figure 1.1: Input-process-output

Information in Context
Not all information is useful Useful information is
Relevant Complete Accurate Current Obtained economically (in business)

Information in Context (continued)

What Is a System?
System: array of components that work together to achieve goal or goals System
Accepts input Processes input Produces output

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What is a system? (continued)

System may have multiple goals System may contain subsystems Subsystems have sub-goals that meet main goal Subsystems transfer output to other subsystems

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What is a system? (continued)

Closed system: has no connections with other systems Open system: interfaces and interacts with other systems
Often a subsystem of a bigger system

Information System: processes data and produces information

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Information and Managers

Systems thinking: thinking of an organization in terms of subsystems Database: collection of electronic records. Information systems automate exchange among subsystems. Information map: network of information systems. Information technology: technologies that facilitate construction and maintenance of information systems.

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The Benefits of Human-Computer Synergy

Humans are relatively slow and make mistakes Computers cannot make decisions Synergy: combining resources to produce greater output

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The Benefits of Human-Computer Synergy (Continued)

Figure : Qualities of humans and computers that contribute to synergy

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Information Systems in Organizations

Computer-based Information system: system with computer at center Certain trends have made information systems important in business Organizations lag behind if they do not use information systems

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Components of information systems

Figure : Components of an information system

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The Four Stages of Processing

Input: collect and introduce data to system
Transaction: a business event, usually entered as input

Data processing: perform calculations on input Output: what is produced by the information system Storage: vast amounts of data stored on optical discs, magnetic tapes, magnetic hard disks etc.

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Computer Equipment for Information Systems

Input devices: receive input Computer: process data Output: displays information Storage devices: store data Network devices: transfer data
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Computer Equipment for Information Systems (continued)

Figure: Input, process, output, storage, and networking devices

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From Recording Transactions to Providing Expertise:

Types of Information Systems

Many types of information systems

Capabilities of applications have been combined and merged Management Information System: supports planning, control, and making decisions
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Transaction Processing Systems

Most widely used type of system Records data collected at point where organization interacts with other parties Encompasses cash registers, ATMs and purchase order systems

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Supply Chain Management Systems

Supply chain: sequence of activities involved in producing products
Activities include marketing, purchasing raw materials, manufacturing, shipping, billing, collection, and after-sale services

Also known as enterprise resource planning systems

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Customer Relationship Management Systems

Customer relationship management: managing relations with customers
Used in combination with telephones to provide customer service Often linked to Web applications that track online transactions

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Business Intelligence Systems

Business Intelligence: gather data to help organization compete.
Often contains statistical models Access large pools of data

Data warehouse: large database that usually store transactional records

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Decision Support and Expert Systems

Decision support system: supports decisionmaking
Relies on models to produce tables Extrapolates data to predict outcomes

Expert system: supports knowledge-intensive decision-making

Uses artificial intelligence
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Geographic Information Systems

Geographic information system: ties data to physical locations
Represents data on a map in different formats May reflect demographic information in addition to geographic May use information from GPS satellites
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Geographic Information Systems (continued)

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Information Systems in Business Functions

Functional business area: services within a company that support main business
Includes accounting, finance, marketing, and human resources Part of a larger enterprise system

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Accounting
Information systems help record transactions Produce periodic statements Create required reports for law Create supplemental reports for managers

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Finance
Finance systems facilitate financial planning and business transactions Tasks include organizing budgets, managing cash flow, analyzing investments, and making decisions

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Marketing
Pinpoint likely customers and promote products Marketing information systems analyze demand for products in regions and demographic groups
Identify trends in demand for products/services
(It helps in marketing the right product to right customers)

Web provides opportunity to collect marketing data

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Human Resource
Human resource management systems aid record-keeping
Must keep accurate records Aids recruiting, selection, placement, and reward analysis

Performance evaluation systems provide grading utilities

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Web Empowered Enterprises

E-commerce: Buying and selling goods and services through Internet Internet is a vast network of computers connected globally Web has a profound impact on information systems

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Information system

Support of Business Operations

Operations Support system

Management Support Systems

Support of Managerial Decision Making

Transaction Processing Systems

Processing Business Transactions eg. Sales & Inventory Processing

Process Control Systems

Control of Industrial Processes eg. Power generation

Enterprise Collaboration Systems

Team and Workgroup Collaboration eg. email., chat, video conferencing

Management Information Systems

Pre specified Reporting for Managers eg. Sales Analysis, Production Performance

Decision Support Systems

Interactive Decision Support eg. Product Pricing, Risk Analysis

Executive Information Systems

Information Tailored for Executives eg. Analysis of Business Performance, actions of Competitors

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Summary
Computer-based information systems pervade almost every aspect of our lives A system is a set of components that work together to achieve a common goal Subsystem: a system performs a limited task that produces an end result, which must be combined with other products from other systems to reach an ultimate goal Data processing has four stages
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Summary (continued)
Any IS that helps in management is a management information system (MIS) Many different types of MIS Enterprise application systems (SCM or ERP) tie together different functional areas of a business ISs are used in accounting, finance, marketing, and human resources

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