Information system...All Topics

Course: Information System
Lecturer: Tahzeeb-ul-Hassan Chis
1
Muhammad ZAhid Faiz
4th
semester

Why Study Information
System
 Ease the managing task
 Guide for problem solving & decision making
 Advance in carrier. Realize opportunities and
meet personal and company goals.
 In Business: used in all functional areas.
 CBIS important for type of job.
2

INFORMATION SYSTEM
 SUBJECT OBJECTIVE
 To enable students to understand basic information
technology concepts and participate in developing
information systems solutions to business problems.
 To assist students to understand the fundamental concepts
of real-world information systems and to demonstrate the
potential advantages of state-of-the-art information
technology applications in organizational.
 SUBJECT SYNOPSIS
 The foundations of information systems. Information
management and its strategic role in organizations. The
technical foundations of information systems; elements of
information processing and the telecommunication. The
contemporary tools, techniques and approaches used to
build information systems.
3

Introduction and Classification of Information Systems,
Lifecycle of IS Projects,
Major Taxonomies of Information Systems,
IS Strategies, Types of IS Strategies,
Business Strategies and Types,
Alignment of both Strategies,
Information Systems success and Failure,
Critical Success Factors,
Information Systems Project Evaluation,
IS Feasibility Study and Types,
Managing Information Systems Projects,
Structure of IS Projects,
Managing Conflicts in Information Systems projects,
Role of CIO,
System Analysis of IS Projects,
Design Issues in IS, Coupling,
Cohesion and Structured Charts,
Team Composition, Detailed IS Design Issues,
Advanced Design Issues,
Measuring Project Complexity,
Prototype Approaches,
CASE Tools,
Soft System Methods (SSM),
Rapid Application Development (RAD), Case Studies.
COURSE CONTENT 4

(LECTURE 1)
INTRODUCTION TO
INFORMATION SYSTEMS
5

Need for information
 Information is required in day to day decision
making. Without the availability of right quantity
of information at the right time, the process of
decision making is highly affected.
 For this reason various

sources of information are used to extract
information. Some of these are:
o Newspapers
o Internet
o Marketing Brochures
o Friends & Relatives
6

Sources of Information
Sources of information are generally categorized as primary,
secondary or tertiary depending on their originality and their
proximity to the source or origin. For example, initially, findings
might be communicated informally by email and then presented
at meetings before being formally published as a primary source.
Once published, they will then be indexed in a bibliographic
database, and repackaged and commented upon by others in
secondary sources.
The designations of primary, secondary and tertiary differ
between disciplines or subjects, particularly between what can
generally be defined as the sciences and the humanities. For
example,
• The historian’s primary sources are the poems, stories, and films
of the era under study.
• The research scientist's primary sources are the results of
laboratory tests and the medical records of patients treated with
the drug.
Written information can be divided into several types.
• Primary Sources
• Secondary Sources
• Tertiary Sources
7

What is Organization?
 Basically, an organization is group of people
organized to accomplish an overall goal.
Organizations can range in size from two people
to hundreds of thousands -- some people might
argue that organizations are even larger.
Organizations have an overall goal (or mission)
which is usually subdivided into various other
goals (often called strategic goals) that, in total,
will achieve the overall goal of the organization.
8

Need for Organization
 An organization’s primary aim is to achieve the
objective that it lays down for itself and in
pursuance of which various actions are
undertaken. Such objective could be to generate
profits or specific socioeconomic cultural
objectives. What ever the objectives are, these
activities interrelate and their occurrence
generate a series of events which helps
organization achieve its goal. The regular and
timely recording of information is critical to the
proper management of business operations.
9

Size of the Organization and
Information Requirements
 Small Organizations
Small organizations usually have simple management
structure. The need invariably grows from the limited scope
and operations of management. Since tasks to be
handled are usually limited and manageable, hence need
for introducing more levels is not required. Since operations
can be managed at the top level by one or two members
of the senior management, officers from the lower level of
management are not usually involved in decision making.
Hence the final decisions are centrally taken. Information
flows and formats are easy to define and change. Since
information requirements are not extensive, number of
documents prepared and generated will also be few in
number. Mostly the interested
party itself is running the business, hence the management
is centralised to few people
10

Examples of Information
requirements of Small
Organizations
• Day to day transactions
• Daily Sale
• Cash management
• Receivables and Payables
11

Medium Sized
Organizations
 Medium Sized organizations are normally a family
ownership run by brothers, father-son. There are many
organizations existing these days which are being run by
the family members. The prime concern may be the trust
already fostered among the blood relations but this might
give rise to informal relationship among
them. Since all critical managerial positions are usually
controlled by the family members, information is structured
only to the extent of external reporting. The level of
reporting that could meet the information needs of the
clients is best suited for such an organization.
Medium sized organizations are run under direct
supervision of the family members which rarely extends to
segregation of duties and delegation of authority.
• Centralized decision making
• Above mentioned structure rarely changes with
complexity and dynamism of environments.
12

Large Organizations
 Usually such organizations are characterized by
large scale of operations. Various criteria can be
used for this purpose.
• Number of employees
• Amount of turnover
• Number of branches
• Profit size
• Value of assets
• Number of businesses the organization is
working
13

(LECTURE 2)
INTRODUCTION TO
INFORMATION SYSTEMS
14

Information Concepts (1)
 Data vs. Information
 Data
 Raw facts
 Different pieces of information, usually arranged in a
special way
 Information
 A collection of facts organized in such a way that they
have additional value beyond the value of the facts
themselves, OR Processed form of data is called
information.
15

Examples
 Data – thermometer readings of temperature
taken every hour:
16.0, 17.0, 16.0, 18.5, 17.0,15.5….
 Information – today’s high: 18.5
today’s low: 15.5
16
Transformation

Types of Data 17
Data Represented by
Alphanumeric data Numbers, letters, and other characters
Image data Graphic images or pictures
Audio data Sound, noise, tones
Video data Moving images or pictures

Data  Information
Lecturer:Tahzeeb-ul-HassanChishti
18
Data InformationTransformation

Characteristics of Valuable
Information
 accurate,
 complete,
 economical,
 flexible,
 reliable,
 relevant,
 simple,
 timely,
 verifiable,
 accessible,
 secure
19

Example: Health Information
 You want the information about you
in a health information system to be:
 As accurate as possible (e.g. your age,
sex)
 As complete as possible
 Relevant
 To be reliable
 Should be available in a timely manner
(e.g. information about your drug
allergies are available before your
operation!)
20

Need of Information
 Business require decisions
 Decisions require information
 Nature of information varies with the nature of
business and decisions
 Planning for business require information att
regular intervals
21

System
 Definition
 A set of elements or components that interact to
accomplish goals
 A combination of components working together
23

Example of a System with
sub-components
24
Customer
Maintenance
Component
Order Entry
Component
Catalog
Maintenance
Component
Order Fulfillment
Component
Customer Support System

System ‘Discussion’
(1) Refers to a combination of components working
together. For example, a computer system includes
both hardware and software. A Windows system is a
personal computer running the Windows operating
system. A desktop publishing system is a computer
running desktop publishing software.
(2) Short for computer system.
(3) Short for operating system.
(4) An organization or methodology. The binary
numbering system, for instance, is a way to count
using only two digits
25

System Elements
 Inputs
 Processing mechanisms
 Outputs
26

System Example 27
System
Elements
Goal
Inputs
Processing
elements
Outputs
Movie
Actors, director,
staff, sets,
equipment
Filming,
editing,
special
effects,
distribution
Finished film
delivered to
movie studio
Entertaining
movie, film
awards,
profits

System Components and
Concepts
 System boundary
 Defines the system and distinguishes it
from everything else
 System types
 Simple vs. complex
 Open vs. closed
 Stable vs. dynamic
 Adaptive vs. non-adaptive
 Permanent vs. temporary
28

(LECTURE 3)
SYSTEM PERFORMANCE
AND STANDARDS
29

System Performance and
Standards
 Efficiency
 A measure of what is produced divided
by what is consumed (eg. Efficiency of a
motor is the energy produced divided by
what is consumed)
 Effectiveness
 A measure of the degree to which a
system achieves its goals
 System performance standard
 A specific objective of the system
30

System Variables and
Parameters
 System variable
 A quantity or item that can be controlled by the
decision maker
 E.g. the price a company charges for a product
 System parameter
 A value or quantity that cannot be controlled by
the decision maker
 E.g., cost of a raw material
31

Modeling a System
 Model
 An abstraction or an approximation that is used to
represent reality
 Types of models
 Narrative (aka descriptive)
 Physical (Physical models are three-dimensional
representations of reality. Two types of physical
models exists: mock-ups and prototypes.
The first type of physical model is designed to
show people how a product or structure will look.
)
 Schematic
 Mathematical
32

Why do we need models?
 Make understanding complex systems easier
(simplifies)
 Can be used to design – make models of new
systems so can refine them
 Makes communication about systems easier (e.g.
a picture can communicate a thousand words)
34

(LECTURE 4)
INFORMATION SYSTEM (IS)
35

Information System (IS)
 Definition
 A set of interrelated elements or components that
collect (input), manipulate (process), and distribute
(output) data and information and provide a
feedback mechanism to meet an objective
 (IS) Pronounced as separate letters, and short for
Information Systems or Information Services. For many
companies, IS is the name of the department
responsible for computers, networking and data
management. Other companies refer to the
department as IT (Information Technology) and MIS
(Management Information Services).
36

Activities of an IS 37
Input Processing Output
Organisation
Environment
Feedback

Components of an IS
38
Information
System
External Environment
People Organisation
Technology

Input, Processing, Output,
 Input
 The activity of gathering and capturing
data
 Whatever goes into the computer
 Processing
 Converting or transforming data into
useful outputs
 Output
 Useful information, usually in the form of
documents and/or reports
 Anything that comes out of a computer
39

Input ‘Discussion’
(n) Whatever goes into the computer. Input can
take a variety of forms, from commands you
enter on a keyboard to data from another
computer or device. A device that feeds data
into a computer, such as a keyboard or
mouse, is called an input device.
(v) The act of entering data into a computer
40

Output ‘Discussion’
(n) Anything that comes out of a computer.
Output can be meaningful information
or gibberish, and it can appear in a
variety of forms -- as binary numbers, as
characters, as pictures, and as printed
pages. Output devices include display
screens, loudspeakers, and printers.
(v) To give out. For example, display screens
output images, printers output print, and
loudspeakers output sounds.
41

Feedback
 Feedback
 Output that is used to make changes to input or
processing activities
 Forecasting
 A proactive approach to feedback
 Use for estimating future sales or inventory needs
42

INFORMATION
TECHNOLOGY
Hardware
Software
Databases
Networks
Other related
components
are used to build
INFORMATION
SYSTEMS
Payroll
System
Inventory
System
Marketing
System
Customer
Service
System
IS Vs IT
43

(LECTURE 5)
MANUAL VS.
COMPUTERIZED SYSTEMS
44

Manual vs. Computerized
Systems
 Manual systems still widely used
 E.g., some investment analysts manual
draw charts and trend lines to assist them
in making investment decisions
 Computerized systems
 E.g., the above trends lines can be drawn
by computer
 Evolution
 Many computerized system began as
manual systems
 E.g., directory assistance (“911”)
45

Computer-based Information
Systems (CBIS)
 A CBIS is composed of…
 Hardware
 Software
 Databases
 Telecommunications
 People
 Procedures
 Together they are…
 Configured to collect, manipulate, store,
and process data into information
46

Parts of a CBIS
 Five parts
 Hardware
 Software
 Database
 Networks
47

(LECTURE 6)
PARTS OF A CBIS
48

Parts of a CBIS
 Five parts
 Hardware
 Software
 Database
 Networks
49

Hardware
 Hardware
 Computer equipment used to perform input,
processing, and output activities
 The objects that you can actually touch, like disks,
disk drives, display screens, keyboards, printers,
boards, and chips.
50

Hardware ‘Discussion’
Hardware refers to objects that you can
actually touch, like disks, disk drives, display
screens, keyboards, printers, boards, and chips.
In contrast, software is untouchable. Software
exists as ideas, concepts, and symbols, but it
has no substance.
Books provide a useful analogy. The pages
and the ink are the hardware, while the words,
sentences, paragraphs, and the overall
meaning are the software. A computer without
software is like a book full of blank pages -- you
need software to make the computer useful just
as you need words to make a book meaningful.
51

Parts of a CBIS
 Five parts
 Hardware
 Software
 Database
 Networks
52

Software
 Software
 Computer programs that govern/determine/control
the operation of the computer
 Computer instructions or data
53

Software ‘Discussion’ (1)
Software is computer instructions or
data. Anything that can be stored
electronically is software. The storage
devices and display devices are
hardware.
The terms software and hardware are
used as both nouns and adjectives. For
example, you can say: "The problem lies
in the software," meaning that there is a
problem with the program or data, not
with the computer itself. You can also
say: "It's a software problem.“
54

Software ‘Discussion’ (2)
The distinction between software and hardware
is sometimes confusing because they are so
integrally linked. Clearly, when you purchase a
program, you are buying software. But to buy the
software, you need to buy the disk (hardware) on
which the software is recorded.
Software is often divided into two categories.
Systems software includes the operating system and
all the utilities that enable the computer to function.
Applications software includes programs that do real
work for users. For example, word processors,
spreadsheets, and database management systems
fall under the category of applications software.
55

Parts of a CBIS
 Five parts
 Hardware
 Software
 Database
 Networks
56

Database
 Database
 An organized collection of facts and information
 A collection of information organized in such a way
that a computer program can quickly select
desired pieces of data
57

Database ‘Discussion’ (1)
A database is a collection of information
organized in such a way that a computer
program can quickly select desired pieces of
data.
You can think of a database as an
electronic filing system. Traditional databases
are organized by fields, records, and files. A
field is a single piece of information; a record is
one complete set of fields; and a file is a
collection of records. For example, a telephone
book is analogous to a file. It contains a list of
records, each of which consists of three fields:
name, address, and telephone number.
58

Database ‘Discussion’ (2)
An alternative concept in database design
is known as Hypertext. In a Hypertext database,
any object, whether it be a piece of text, a
picture, or a film, can be linked to any other
object. Hypertext databases are particularly
useful for organizing large amounts of disparate
information, but they are not designed for
numerical analysis.
To access information from a database,
you need a database management system
(DBMS). This is a collection of programs that
enables you to enter, organize, and select data
in a database.
59

Database ‘Discussion’ (3) 60

Parts of a CBIS
 Five parts
 Hardware
 Software
 Database
 Networks
61

(LECTURE 7)
PARTS OF A CBIS
62

Telecommunications
 The electronic transmission of signals for
communications; enables organizations to link
computer systems into effective networks
 Refers to all types of data transmission, from voice
to video
63

Parts of a CBIS
 Five parts
 Hardware
 Software
 Database
 Networks
64

Networks
 Network
 Used to connect computers and computer
equipment in a building, around the country, across
the world, to enable electronic communications
 A group of two or more computer systems linked
together
65

Network ‘Discussion’ (1)
There are many types of computer
networks, including:
local-area networks (LANs) : The
computers are
geographically close together (that
is, in the same building).
wide-area networks (WANs) : The
computers are farther apart and are
connected by telephone lines or radio
waves.
66

In addition to these types, the following characteristics are
also used to categorize different types of networks:
topology : The geometric arrangement of a computer
system. Common topologies include a bus, star, and
ring.
protocol : The protocol defines a common set of rules and
signals that computers on the network use to
communicate. One of the most popular protocols for
LANs is called Ethernet. Another popular LAN protocol
for PCs is the IBM token-ring network .
architecture : Networks can be broadly classified as using
either a peer-to-peer or client/server architecture.
67

Computers on a network are sometimes
called nodes.
Computers and devices that allocate
resources for a network are called servers.
68

Network ‘Discussion’ (4) 69

(LECTURE 8)
INTERNET AND INTRANET
70

Internet and Intranet
 Internet
 The world’s largest telecommunications
network
 A network of networks
 Free exchange of information
 A global network connecting millions of
computers.
 Intranet
 A network that uses Internet technology
within an organization
 A network belonging to an organization
71

People and Procedures
 People
 The most important element in most computer-
based information systems
 Includes people who manage, run, program, and
maintain the system
 E.g., IT professionals (you!)
 Procedures
 Includes the strategies, policies, methods, and rules
for using the CBIS
72

Business Information
Systems
 Types
 Transaction processing systems
 E-commerce systems
 Management information systems
 Decision support systems
 Expert systems
73

(LECTURE 9)
BUSINESS INFORMATION
SYSTEMS
74

Transactions Processing
Systems
 Transaction
 Any business-related exchange
 E.g., generating a weekly payroll
 Transaction processing system (TPS)
 An organized collection of people, procedures,
software, databases, and devices used to record
completed for for business related exchanges
75

Payroll Example
76
Hours
worked
Pay
rate
Payroll
transaction
processing
Payroll
checks

Systems
 Types
 Expert systems
77

E-Commerce System
 E-commerce
 Involves any business transaction
executed electronically
 Conducting business on-line
 For example, between…
 Companies
 Companies and consumers
 Business and the public sector
 Consumers and the public sector
 Example for placing a purchase order
78

Purchase Order - Traditional 79

Purchase Order – E-commerce80

Systems
 Types
 Expert systems
81

Management Information
Systems
 An MIS is…
software, databases, and devices used to routine
information to managers and decision makers
82

Schematic of MIS
83
Common
databases
Marketing
management
information
system
Financial
management
Information
system
Manufacturing
management
Information
system
Order
management
information
system
TPS

MIS ‘Discussion’
MIS is short for management information system
or management information services, and
pronounced as separate letters
MIS refers to a class of software that provides
managers with tools for organizing and
evaluating their department. Typically, MIS
systems are written in COBOL and run on
mainframes or minicomputers.
Within companies and large organizations, the
department responsible for computer
systems is sometimes called the MIS
department. Other names for MIS include IS
(Information Services) and IT (Information
Technology).
84

(LECTURE 10)
BUSINESS INFORMATION
SYSTEMS
85

Systems
 Types
 Expert systems
86

Decision Support Systems
 A DSS is…
software, databases, and devices used to support
problem-specific decision making
 A DSS helps a manger “do the right thing”
87

Systems
 Types
 Expert systems
88

Expert Systems
 An expert system is…
 A computer application that performs a
task that would otherwise be performed
by a human expert
 gives the computer the ability to make
suggestions and to act like an expert in a
particular field
 Examples: diagnose human illnesses,
make financial forecasts, schedule routes
for delivery vehicles
 Expert systems typically include
“artificial intelligence” (next slide)
89

(LECTURE 11)
ARTIFICIAL INTELLIGENCE &
PROBLEMS WITH EXPERT
SYSTEMS (AND AI IN GENERAL)
90

Artificial Intelligence
 AI is…
 A branch of computer science concerned with
making computers behave like humans
 Term was coined in 1956 by John McCarthy at the
Massachusetts Institute of Technology
 Draws from many areas, including cognitive
psychology
91

AI ‘Discussion’(1)
Artificial intelligence includes games playing: programming
computers to play games such as chess and checkers
expert systems : programming computers to make decisions
in real-life situations (for example, some expert systems
help doctors diagnose diseases based on symptoms)
natural language : programming computers to understand
natural human languages
neural networks : Systems that simulate intelligence by
attempting to reproduce the types of physical
connections
that occur in animal brains
robotics : programming computers to see and hear and react
to other sensory stimuli
92

Problems with Expert Systems (and
AI in general)
 Attempted to replace humans in decision making
 However did not take into account
 How humans actually reason
 Human information needs (doctors do not want
their decision making replaced, but rather want it
supported)
93

Working with Systems (1)
 Systems development
 The activity of creating or modifying
an existing business system
 Systems investigation and analysis
 Defines the problems and
opportunities of an existing system
 Systems design
 Determine how a new system will work
to meet business needs
94

Working with Systems (2)
 Systems implementation
 Creating and acquiring system components
defined in the design
 Systems maintenance and review
 Checks a modifies the system so that it continues to
meet changing business needs
95

(LECTURE 12)
SOFTWARE DEVELOPMENT
LIFE CYCLE (SDLC)
96

Software
Development Life
Cycle (SDLC)
“YOU’VE GOT TO BE VERY CAREFUL IF YOU
DON’T KNOW WHERE YOU’RE GOING,
BECAUSE YOU MIGHT NOT GET THERE.”
YOGI BERRA
97

Capability Maturity Model
(CMM)
 A bench-mark for measuring the maturity of an
organization’s software process
 CMM defines 5 levels of process maturity based
on certain Key Process Areas (KPA)
98

CMM Levels
Level 5 – Optimizing (< 1%)
-- process change management
-- technology change management
-- defect prevention
Level 4 – Managed (< 5%)
-- software quality management
-- quantitative process management
Level 3 – Defined (< 10%)
-- peer reviews
-- intergroup coordination
-- software product engineering
-- integrated software management
-- training program
-- organization process definition
-- organization process focus
Level 2 – Repeatable (~ 15%)
-- software configuration management
-- software quality assurance
-- software project tracking and oversight
-- software project planning
-- requirements management
Level 1 – Initial (~ 70%)
99

SDLC Model
A framework that describes the activities
performed at each stage of a software
development project.
100

Waterfall Model
 Requirements – defines
needed information,
function, behavior,
performance and interfaces.
 Design – data structures,
software architecture,
interface representations,
algorithmic details.
 Implementation – source
code, database, user
documentation, testing.
101

Waterfall Strengths
 Easy to understand, easy to use
 Provides structure to inexperienced
staff
 Milestones are well understood
 Sets requirements stability
 Good for management control (plan,
staff, track)
 Works well when quality is more
important than cost or schedule
102

Waterfall Deficiencies
 All requirements must be known upfront
 Deliverables created for each phase are
considered frozen – inhibits flexibility
 Can give a false impression of progress
 Does not reflect problem-solving nature of
software development – iterations of phases
 Integration is one big bang at the end
 Little opportunity for customer to preview
the system (until it may be too late)
103

When to use the Waterfall
Model
 Requirements are very well known
 Product definition is stable
 Technology is understood
 New version of an existing product
 Porting an existing product to a
new platform.
104

(LECTURE 13)
PROJECT MANAGEMENT
105

106
Project Management’s FIVE processes
The capacity to marshal resources, lay out plans, program work and
division effort for a temporary business which is finite in that it has a
defined beginning and ending, and which is undertaken to create a
unique product or service.
Initiating a project
Planning the project
Executing the project/plan
Controlling execution of the project/plan
Closing the project

107
Project Management’s THREE elements
The capacity to marshal resources, lay out plans, program work and division
effort for a temporary business which is finite in that it has a defined
beginning and ending, and which is undertaken to create a unique
product or service.
Tasks
Resources
Time

108
Project Management success factors
The capacity to marshal resources, lay out plans, program work and spur
effort for a temporary endeavor which is finite in that it has a defined
beginning and ending, and which is undertaken to create a unique
product or service.
On time delivery
Within budget delivery
High quality delivery

PM Fundamentals
109

110

111
Project Life Cycle
5. Requirements

112
Project Life Cycle
Testers
PMs
Programmers
Art

(LECTURE 14)
TYPES OF INFORMATION
SYSTEMS
115

116
SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN
Types of system Groups Served
STRATEGIC LEVEL SENIOR MANAGERS
MANAGEMENT LEVEL MIDDLE MANAGERS
OPERATIONAL OPERATIONAL
LEVEL MANAGERS
KNOWLEDGE LEVEL KNOWLEDGE &
DATA WORKERS
RESOURCESMARKETING & ENGINEERING
Horizontal information flows
Verticalinformationflows
Information System from business perspective

Management Structures and
Information Requirements
 Higher up the pyramid, the less structured the decision
 Less defined (structured)
 internal/External orientation
 More summarized information
 Lower down the pyramid, the more structured the decision
 More defined (structured)
 Internal orientation
 More detailed information
117

Classification (types) of for IS
• Executive Support Systems (ESS)
• Management Information Systems (MIS)
• Decision Support Systems (DSS)
• Transaction Processing Systems (TPS)
118

119Transaction Processing Systems (TPS)
Computerized system that performs and records theComputerized system that performs and records the
daily routine transactions necessary to conduct thedaily routine transactions necessary to conduct the
business; these systems serve the operational levelbusiness; these systems serve the operational level
of the organizationof the organization
• TYPE: Operational-levelTYPE: Operational-level
• INPUTS: transactions, eventsINPUTS: transactions, events
• PROCESSING: updating; e.g. stock levels)PROCESSING: updating; e.g. stock levels)
• OUTPUTS: detailed reportsOUTPUTS: detailed reports
• USERS: operations personnel, supervisorsUSERS: operations personnel, supervisors
• DECISION-MAKING: highly structured. (sale ofDECISION-MAKING: highly structured. (sale of
products)products)
EXAMPLE:EXAMPLE: payroll, accounts payable, point of salepayroll, accounts payable, point of sale

(LECTURE 15)
MANAGEMENT
INFORMATION
SYSTEMS(MIS)
121

Management information
systems(MIS)
 Information system
at the management
level of an
organization that
serves the functions
of planning,
controlling, and
decision making by
providing routine
summary and
exception reports.
122

Differences between the
TPS and the MIS
Transaction
Processing
Systems (TPS)
 Support operation
 Management and
control
 Routine, normal
operations
 structured
Management
Information
Systems (MIS)
 Provide decision-
making support for
routine, structured
decisions
 Closely linked to and
fed by TPS
 Structure and sem-
structure
123

Characteristics of Management informationCharacteristics of Management information
SystemsSystems1. MIS support structured decisions
at the operational and
management control levels.
However, they are also useful
for planning purposes, semi-
structured problems, of senior
management staff.
2. MIS are generally reporting and
control oriented. They are
designed to report on existing
operations, sales , production
costs…, and therefore to help
provide day-to-day control of
operations.
3. MIS rely an existing corporate
data-and data flows.
4. MIS have little analytical
capability.
5. MIS generally aid in decision
making using past and present
data.
6. MIS are relatively inflexible.
7. MIS have an internal rather than
an external orientation.
124

Management problems
 Most management problems, involving decisions have three
elements – objectives, decision variables, and constraints.
 Objective
 Maximize profit
 Provide earliest entry into market
 Minimize employee discomfort/turnover
 Decision variables
 Determine what price to use
 Determine length of time tests should be run on a new
product/service
 Determine the responsibilities to assign to each worker
 Constraints
 Can’t charge below cost
 Test enough to meet minimum safety regulations
 Ensure responsibilities are at most shared by two workers
125

(LECTURE 16)
STRUCTURED DECISION
126

Structured Decision
 Structured decisions are those which are made
according to specified procedures of rules or
structured decisions are those that are easily
made from a given set of inputs.
 Deciding to send a reminder notice to a customer
for an overdue balance is considered to be
structured decision
127

Semi-structured Decision
 Semi-structured decisions are those for which
information obtained from a computer system or
information system is only a portion of the total
knowledge needed to make decision.
 Advertise a new product or how much to spend on
MIS.
128

Unstructured Decision
 Unstructured decisions are novel.
 There is no cut and dried method for handling the problem
because it hasn't arisen before or because it's precise nature
and structure are mysterious or complex, or because it so
important' that it deserves a custom tailored treatment.
 They may require a lot of creativity from the decision maker
to tell what factors will come into play in an unstructured play.
 Deciding whether to use an integrated or intensive strategy for a
product that is the star quadrant of the BCG matrix
 How successful to improving market size was the recent
marketing campaign
129

Information Systems to support
decisions
Management
Information
Systems
Decision Support
Systems
Decision
support
provided
Provide information about
the performance of the
organization
Provide information and
techniques to analyze
specific problems
Information
form and
frequency
Periodic, exception,
demand, and push reports
and responses
Interactive inquiries and
responses
Information
format
Prespecified, fixed format Ad hoc, flexible, and
adaptable format
Information
processing
methodology
Information produced by
extraction and manipulation
of business data
Information produced by
analytical modeling of
business data
130

(LECTURE 17)
DECISION SUPPORT
SYSTEM
131

Decision support system
 Information system at
the management level
of an organization that
combines data and
sophisticated analytical
models or data analysis
tools to support semi-
structured and
unstructured decision
making.
 E.g.:sales region analysisE.g.:sales region analysis
132

Characteristics ofCharacteristics of
Decision-Support SystemsDecision-Support Systems
133
• DSS offer users flexibility, adaptability, and a quick response.
• DSS provide support for decisions and problems whose solutions
cannot be specified in advance.
• DSS use sophisticated data analysis and modelling tools.
• Decision support system (DSS) tends to be used in planning,
modelling, analysing alternatives, and decision making by using
small, simple models which can easily be understood and used by
the manager

Examples
Typical information that a decision support application might
gather and present would be:
Accessing all of your current information assets, including
legacy and relational data sources, cubes, data warehouses,
and data marts
Comparative sales figures between one week and the next
Projected revenue figures based on new product sales
assumptions
The consequences of different decision alternatives, given past
experience in a context that is described
Could be use to aid Strategic systems
134

Tools used in aiding the
DSS
 Functions
 Functions: pre-stored formulas that enable a user to
perform a calculator type task as soon as the
function is invoked
 Analysis
 Analysis: review a set of facts and to assist in
drawing conclusions based on there facts.
 Statistical Tools: regression/correlation
 Optimizing tools: best decision for “structured”:
maximise production capacity (labour, capacity)
 What if analysis: if increase cost what is the effect
on sales; check for various increases (€1, €2….)
135

(LECTURE 18,19)
EXECUTIVE SUPPORT
SYSTEMS (ESS)
136

137Executive Support Systems (ESS)
Information system at the strategic level of an
organization that address unstructured decision making
through advanced graphics and communications.
TYPE: Strategic levelTYPE: Strategic level
• INPUTS: total data; internal and externalINPUTS: total data; internal and external
• PROCESSING: collaboratingPROCESSING: collaborating
• OUTPUTS: analysesOUTPUTS: analyses
• USERS: senior managersUSERS: senior managers
• DECISION-MAKING: highly unstructuredDECISION-MAKING: highly unstructured
EXAMPLEEXAMPLE: 5 year operating plan: 5 year operating plan

Executive Support Systems: other
properties
 Tailored to individual executives
 Not to managers in other levels
 Easy to use
 Drill down capabilities (more specific details)
 Support need for external data: demographics,
competitors…
 Can help when uncertainty is high
 Future-oriented
 Linked to value-added processes: competitive
advantage…
138

 Although executive support systems have much
in common with decision support systems, they
have important differences. Generally, a DSS
provides a number of modeling tools and is
designed to help a user answer a question.
Executive support systems allow executives to ask
the right questions. An ESS is interactive and helps
an executive focus, filter and organize data and
information.
 Unlike a DSS, an ESS is usually customized for a
specific individual. Content and format can both
be customized.
 Since executives are typically busy, an ESS must
be easy to learn and to use – or it won’t be used.
139

(LECTURE 20)
BUSINESS STRATEGY
140

Business strategy
 A business strategy is a business plan that takes
place Long-term in order to help achieve a
specific goal or Objective.
Types of Business strategy
 Cost Leadership Strategy
 Differentiation Strategy
 Innovation Strategy.
 Growth Strategies
 Alliance Strategies
141

 Cost Leadership Strategy. Becoming a low-cost producer of products
and services in the industry or finding ways to help suppliers or customers
reduce their costs or increase the costs of competitors.
• Differentiation Strategy. Developing ways to differentiate a firm’s
products and services from those of its competitors or reduce the
differentiation advantages of competitors. This strategy may allow a firm
to focus its products or services to give it an advantage in particular
segments or niches of a market.
• Innovation Strategy. Finding new ways of doing business. This strategy
may involve developing unique products and services or entering unique
markets or market niches. It may also involve making radical changes to
the business processes for producing or distributing products and services
that are so different from the way a business has been conducted that
they alter the fundamental
structure of an industry.
.
142

 • Growth Strategies. Significantly expanding a
company’s capacity to produce goods and
services, expanding into global markets,
diversifying into new products and services, or
integrating into related products and services.
• Alliance Strategies. Establishing new business
linkages and alliances with customers, suppliers,
competitors, consultants, and other companies.
These linkages may include mergers, acquisitions,
joint ventures, forming of “virtual companies,”
or other marketing, manufacturing, or distribution
agreements between a business and its trading
partners
143

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