Cis

Computer Information Systems

Objectives of this Course • This course deals with the process of designing, developing and implementing computer based information systems in an organisation. – Question to class • What have you learnt so far? • What are the other subjects being taught? • What are the other MIS/ CIS related subjects that will be taught later? Course Content

Why we need Information?

Basic questions • WHAT is the purpose? • WHAT do I need to be SUCCESSFUL in that purpose? • HOW to fulfill those needs?

Questions • What are the different types of business & what can be the different information needs? • How do we capture these information? • Source & target audience for these information

Introductory Case Study Discussion • Knowing your customer. – What do they want? – What should they want?

• Knowing your product. – What are you selling? – What should you sell?

• Knowing your channel of distribution. – How do you sell?

"The secret of business is to know something that nobody else knows."

Much of the data to answer the questions exists and more is available but there is a growing gap in the ability of organizations to analyze it

Information Availability

Data

Knowledge Gap Analytical Potential

1960

1970

1980

1990

2000 Source: Gartner Group

Discussion Questions – What challenges you the most in your effort to make informed decisions? – What roadblocks do you have to cross in order to get the information that you need to do your job? – What you need to do to move data to information to knowledge to Decision?

The Value Chain •

Data – Lifestyle – Point of Sales – Demographic & Geographic • Information – X lives in Z – S is Y years old – X and S moved – W has money in Z • Knowledge – Product A is bought X% of time if product B is bought – Amount of matter Y is mostly used in region Z – Customers of class Y will use X% of C during period D • Decision – Let us promote product A in region Z in stores – Send catalogs to houses of profile P – Allocate X% of funds to population B – Offer additional service to client P

Key Issues? • How do I proactively manage risks of my receivables portfolio? • How does supplier performance impact customer satisfaction and revenue? • How does employee tenure, training & compensation affect efficiency and cross-selling performance? • How do we look our shareholders? • Can we improve and create value? • What must we excel at? • How do our customer see us?

The meaning and Role of MIS in Managing • • • • • • •

The manager of tomorrow Systems view of business Advances in Management The MIS Example of MIS The Process of MIS development MIS organisation within the Company

What Do Managers Do? •

Management Functions –

Planning •

–

Organizing •

–

Delegating and coordinating tasks and allocating resources to achieve objectives.

Leading •

–

Setting objectives and determining in advance exactly how the objectives will be met.

Influencing employees to work toward achieving objectives.

Controlling •

Establishing and implementing mechanisms to ensure that objectives are achieved.

The Systems Relationship among the Management Functions Planning

Controlling

Organizing

Leading

Exhibit 1–3

Manager of Tomorrow • Challenge- manage the change in the conceptual framework that underlies all organisations and operations. Change will be in the development of system concepts. That is all aspects of total business including people, their activities, physical parts of business and suppliers, customers etc. • Use of Information/ Knowledge

New Workplace Issues and Challenges Technology and Speed

Networking and Boundaryless Relationships

Globalization and Diversity

Knowledge, Learning, Quality, and Continuous Improvement

Ethics and Social Responsibility

Participative Management, Empowerment, and Teams

Knowledge Management Change, Creativity, Innovation, and Entrepreneurship

New Workplace Issues and Challenges (cont’d) • Technology and Speed – E-business: work done by using electronic linkages (including the Internet) between employees, partners, suppliers, and customers. – E-commerce: business exchanges or transactions that occur electronically.

• Globalization and Diversity – Mergers are creating larger globalized firms. – Firms competing globally have to act locally. – Diversity is increasing as minorities grow and markets globalize.

E-Commerce

Exhibit 1–8

New Workplace Issues and Challenges (cont’d) • Knowledge, Learning, Quality, and Continuous Improvement – Information is the foundation of knowledge which, in turn, is the foundation of competitive advantage. • •

Knowledge workers The learning organization

• Knowledge Management – Involves everyone in an organization in sharing knowledge and applying it to continuously improve products and processes.

Problems Business Issues •Evolving business scenarios with changing customer demographics •Increasing complexity in assessing risk •Expanding challenges in tracking and managing performance •Increasing amounts of data providing little valuable information •CEO’s are demanding more Technological Issues •Operational systems are aging •Key data resides in multiple systems from different vendors •Access to data is complicated, difficult to find and often requires special requests to IT •The data isn’t timely •Data isn’t information and doesn’t tell you what’s really going on

What if? What if you could…….. •Provide a clearer picture of your company’s status on a single page? •Drill down into detailed information from a big picture view? •Be proactively notified when key events occur within your company? •Access the information you need without having to involve your IT organization? .…wouldn’t your BOSS/ CEO be happier?

Systems View of Business • Past Isolated problem solving. – Shoe sales droplack of effort by salesman  sales mgt problem train/ replace salesman.

• Systems approach is to understand many factors affecting sales.

Manufacturing System • A group of people, machines and facilities (a set of elements) work to produce specified number & types of products (seek a common goal) by operating on product specs, schedules, raw materials, sub-assemblies, and electrical power converted to mechanical power (operate on data, matter and energy) to yield the specified products and information by the date the customer wants them (yield matter in a time reference) .

Business organisation System • A group of people (a set of elements) gathers and processes materials and informational resources (form an activity) toward a set of multiple common goals including an economic profit for the business (seek common goals) by performing financing, design, production and marketing (operate on data, energy and matter), to achieve finished products and their sale at a specified minimum rate per year (yield matter in a time reference)

Management Information System • A group of people, set of manuals, data processing equipments (a set of elements) select, store, process and retrieve data (operate on data & matter) to reduce the uncertainty in decision making (seek a common goal) by yielding information for managers at the time they can most efficiently use it (yield information in a time reference).

System • A system is therefore a set of elements performing an activity or a process seeking a common goal by operating on data and/or material and or energy in a time reference to yield information and/or energy and or matter.

System Approach to Managing • Aims to – Developing and managing operating systems (eg money flows, manpower systems, manufacturing, etc) – Designing information systems for decision making • What is the link between the above two processes?

The link The Reason for Information System design is to assist in making decisions regarding management of operating systems.

• Fundamental Concept of the systems Approach To Organisation and Management is the interrelationship of the parts or sub-systems of the organisation. – Objective Oriented focussed on design of the whole as compared to design of components or subsystems.

• Classical approach  Authority Based • Systems Approach  Information Based. – Achieve Synergy – Question: – What are the business processes in an organisation and what are the information reqmts at each stage?

Fish & Prawns Restaurant • Function – components vs Process -systems • Cooking area and process • Serving Process • Dining area and collections

Changes in Managing Style • Systems Approach vs Inductive Style • Necessity for Systems Approach

Modern Organisation Theory- A Systems View • An organisation is a set of sub-systems whose interaction determines its survival. – What are the strategic parts of the system? – What is the nature of their mutual dependencies? – What are the main processes in the system that link the parts together and facilitate their adjustments to each other? – What are the goals sought by the systems? Elements of Modern Org Theory

Questions • What was the initial role of MIS? • Process Data and present it in the form of reports

• What were the activities? • Storing  Collection  Processing

• What was the nature of MIS? • More impersonal

• What was the next step? • Distinction between Information and Data

Questions • What is information in simple terms? • Processed Data • But data can be processed in different ways

• What did this lead to? • So this was more individual oriented

• The obvious next stage of MIS? • Provoke Decisions!

• Do we need to know all? • Exception reporting • Need Based reporting

Where did this Need Lead to? • Need can be different for different people. • Anybody may need data, any time. • What arrived? • DATABASE

• The next fundamental change in computing style that happened was? • End user Computing/ PCs..

• The result? • User becoming independent of computer professionals. • MIS turned into a Decision Making System

• Concept of MIS gives high regard to individual and his ability to use information • Analysis of data to provide information is based on many academic disciplines. – What are they? • Theories, Principles and Concepts of – – – – – – – –

Management Science, Management Accounting, Operations Research, Organisational Behaviour Engineering Computer Science Psychology Human Behaviour

• The foundation of MIS is the principles of Management and its practices. • MIS uses the concept of Management Control in its design and relies heavily on the fact that the decision maker is a human processor of information.

BUSINESS GOALS & MISSION APPLICATION OF PURE & SOCIAL SCIENCE

APPLICATIONS OF PRINCIPLES & PRACTICES OF MANAGEMENT

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ST R

UC T

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IS

MIS

USE OF DATABASE & KNOWLEDGEBASE

INFORMATION TECHNOLOGY AND ENTERPRISE SOFTWARE

CONCEPTUAL VIEW OF MIS

BUSINESS INFORMATION SYSTEM MISSION CRITICAL APPLICATIONS FUNCTIONAL INFORMATION SUB-SYSTEMS

DATABASE & KNOWLEDGEBASE

IN

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G RA TE D

IS

ST R

UC TU RE

EIS

DATA PROCESSING & ANALYSIS SYSTEMS

OLTP, DATA & VALIDATION SYSTEMS

PHYSICAL VIEW OF MIS

Questions • Define MIS • What are the points that a formal system should take care of? – Handling of Voluminous data – Confirmation of the validity of data and transaction – Complex processing of data and multidimensional analysis. – Quick search and retrieval – Mass Storage – Communication of the information to the user on time. – Fulfilling the changing needs of the information.

Role of the MIS • MIS satisfies diverse needs through a variety of systems such as:– Query Systems – Analysis Systems – Modelling Systems – Decision Support Systems

Role of the MIS • MIS helps in? – Strategic Planning – Management Control – Operational Control – Transaction Processing

Management as a control System – See figure.

• Characteristics of control system – EARLY warning system – Performance Standard – Strategic Controls. – Feedback – Accuracy & timeliness – Realistic – The information Flow – Exception Principle

MIS a support to Management Steps

Decisions

Planning

A selection from various alternativesstrategies, resources, methods etc

Organisation A selection of a combination out of several combinations of the goals, people, resources, method and authority. Staffing Providing proper manpower

MIS a support to Management Directing

Choosing a method from the various methods of directing the efforts in the organisation Coordinating Choice of the Tools and techniques for coordinating the efforts for optimum results Controlling

A selection of exceptional conditions and the decision guidelines.

• Figure

Management Effectiveness and MIS • Emphasis on Management Philosophy and Environment factors – Different Philosophies give rise to different end-results through different actions – Figure

Organisation as a System • Figure: Modified Model of the Organisation System – A system is a collection of elements. – There are more elements to the system than mere people.

• S-Curve – All organisations & their business go through the different phases of growth cycle in stages. – Each phase generates new goals to be served. • If the changed or displaced goals are not reflected in the organisation as a system, the organisation is bound to suffer from decay

MIS: Organisation Effectiveness • Figure • Considerations in MIS design • MIS plays an imp role in creating organisational behaviour which in turn sets the goals for achievement. Technology and people decide the org structure and style of management. • Figure explains the impact of and relationship of MIS on org behaviour. How?

Planning Dimensions • Planning – Determining what you want to accomplish and developing approaches to achieving your objectives.

• Planning Dimensions:

Exhibit 5–1

Strategic and Operational Planning • Strategic Planning – The process of developing a mission and long-range objectives and determining in advance how they will be accomplished.

• Operational Planning – The process of setting short-range objectives and determining in advance how they will be accomplished.

• Strategy – A plan for pursuing the mission and achieving objectives.

The Strategic Planning Process

Exhibit 5–2

Strategic Planning • Corporate-Level Strategy – The plan for managing multiple lines of businesses

• Business-Level Strategy – The plan for managing one line of business

• Functional-Level Strategy – The plan for managing one area of the business

Strategic and Operational Levels

Exhibit 5–3

Information Quality

Types of Information Systems

Top Five Success

Reasons

for Top Five Reasons for Failure

Us er i nvo lvement

Lack of user in put

Executive manageme nt support

In comp le te require me nts and specific ations

Cle ar sta te ment of Changing requir eme nts require me nts and specific ations Pro per pla nning

Lack of executive support

Realist ic expectatio ns

Te chnolo gical incompetence

• OLAP

USING DSS

•

Knowledge management Systems

Domains of Artificial Intelligence

CIS Concepts • Initial Concept of MIS-> Data and reporting – Data collection to processing

• Information= Product of analysed data – Egs.

• Data analysis can be in different ways – Individual oriented – Provoke the individual to action

CIS Concepts-2 • Selective approach Exception Reporting • Need based exception reporting – Different needs from same data • Rise of Database Concept

Emergence of End-user Computing using Multiple databases – Brought fundamental changes in MIS

CIS Concepts-3 The change Decentralisation of the system Became Independent of • MIS became a Decision Making System

CIS Concepts-4 • Job of

• Job of

→Manage the Information Resource →Information Processing

CIS Concepts-5 • MIS A system which handles the databases, provides computing facilities to the end user and gives a variety of decision making tools to the user of the system

CIS Concepts-6 New concept based on:– Individual’s ability to use information – Information through Data analysis, using academic disciplines, which includes • Theories, Principles and concepts of Management Science • Management Accounting • O.R. /O.B./ Engineering /Computer Science /Psychology and human behaviour

To design the MIS and the DSS tools.

MIS •

Management Information System (MIS) Computer-based or manual system that transforms data into information useful in the support of decision making. MIS can be classified as performing three functions: • (1) To generate reports-for example, financial statements, inventory status reports, or performance reports needed for routine or nonroutine purposes. • (2) To answer what-if questions asked by management. For example, questions such as "What would happen to cash flow if the company changes its credit term for its customers?" can be answered by MIS. This type of MIS can be called Simulation. • (3) To support decision making. This type of MIS is appropriately called Decision Support System (DSS). DSS attempts to integrate the decision maker, the data base, and the quantitative models being used.

1.2 Types of Information Systems • Information Systems that support specific functional areas and operations include: – Functional Area Information System – Transaction Processing System (TPS) – Enterprise Resource Planning (ERP) System – Interorganizational Information System – Electronic Commerce Systems

Types of Information Systems (Continued) • Functional area information systems or departmental information systems – Function: Support the activities within specific functional areas. – Example: System for processing payroll.

Types of Information Systems (Continued) • Transaction processing system (TPS) – Function: Process transaction data from business events. – Example: Walmart checkout point-of-sale terminal.

• Enterprise Resource Planning System (ERP) – Function: Integrate all functional areas of the organization. – Example: Oracle, SAP

Types of Information Systems (Continued) • Interorganizational information systems (IOS) are information systems that connect two or more organizations and support interorganizational operations such as supply chain management. – Function: Manage flows of products, services and information among organizations. – Example: Walmart Retail Link System connecting suppliers to Walmart. – Supply chain describes the flow of materials, information, money and services from raw material suppliers through factories and warehouses to the end customers.

Types of Information Systems (Continued) • Electronic Commerce Systems – Function: Enable transactions among organizations and between organizations and customers. – Business-to-Business (B2B) – Business-to-Consumer (B2C) – Example: www.dell.com

Support for Organizational Employees • Knowledge workers are professional employees such as financial and marketing analysts, engineers, lawyers and accountants. – They create information and knowledge about a specific subject area and integrate it into an organization. – Act as advisors to middle managers and executives.

Support for Organizational Employees (Continued) • Office Automation System (OAS) – Function: Support daily work activities of individuals and groups. – Example: Microsoft Office – Support: Clerical staff, lower and middle managers and knowledge workers.

Support for Organizational Employees (Continued) • Management Information System (MIS) – Function: Produce reports summarized from transaction data, usually in one functional area. – Example: Report on total sales of each customer. – Supports: Primarily for middle managers, sometimes for lower level managers as well.

Support for Organizational Employees (Continued) • Decision Support System (DSS) – Function: Provide access to data and analysis tools. – Example: “What if” analysis of changes in a budget. – Supports: Primarily for Middle managers and knowledge workers

Support for Organizational Employees (Continued) • Expert System (ES) – Function: Mimic human expert in a particular area and make a decision. – Example: Credit card approval analysis. – Supports: Knowledge workers

Support for Organizational Employees (Continued) • Executive Information System (EIS) – Function: Present structured, summarized information about aspects of business important to executives. – Example: Status of production by product. – Supports: Top managers of the organization.