The document discusses subsystems and types of management information systems (MIS). There are two approaches to defining subsystems: organisational function and activity. Organisational function subsystems support marketing, production, personnel, etc. Activity subsystems support transactions, operations, etc. Common MIS subsystems include transaction processing, production, marketing, and personnel. Types of systems include operations support systems, management support systems like management information systems and decision support systems, and executive information systems.

1. MIS – Subsystems & Types By Arun Mishra

2. Subsystems of an MIS Two approaches to define subsystem Organisational Function Subsystem: Supports the various functions of an Organisation. Ex. Marketing, Production, Personnel etc. Activity Subsystem: Supports the activity for which they are used. Ex. Transactions, Operations etc.

3. MIS Subsystems Organisational Functions MIS Subsystems STRATEGIC PLANNING MANAGEMENT CONTROL OPERATIONAL CONTROL TRANSACTION PROCESSING PRODUCTION MARKETING LOGISTICS PERSONNEL FINANCE INFORMATION PROCESSING TOP MANAGEMENT ACTIVITIES

4. Organisational Function Subsystems Major Functional Subsystems Some Uses Marketing Information System Sales forecasting, Sales planning, Sales analysis Manufacturing Information System Production planning & scheduling, cost control analysis Personnel Information System Salary Admn., Planning HR requirement, performance analysis Accounting Information System Financial Analysis, cost analysis, Capital planning, etc. Logistics Information System Planning & control of Purchasing, inventories, distribution. Information Processing System Planning of Information System, cost – effectiveness analysis Top Management System Strategic Planning, resource allocation

5. Activities Subsystems Activity Subsystems Some Uses Transaction Processing System Processing of orders, shipments, & receipts Operational Control System Scheduling of activities and performance reports Management Control System Formulation of Budgets & resource allocation Strategic Planning System Formulation of Objectives & strategic plan

6. Types of Information Systems

7. Levels of Management Upper or Top or Strategic Management Middle or Tactical Management Lower level Management Three levels of management Strategic Tactical Operational

8. Levels of Management

9. Lower or Operational level Management They make structured decisions (Operational decisions). Structured decision It’s a predictable decision that can be made following a well defined set of routine procedures. Most decisions at this level require easily defined information that relates to the current status and activities within the basic business functions. Information is gained from detailed reports which contain information about routine activities. Detailed tasks defined by middle management are carried out by people at operational level.

10. Middle or Tactical Management Acquire and arrange the resources (Computers, people etc) to meet the goals of an organization. Define the detailed tasks to be carried out at the operational level. Information needed involves review, summarization and analysis of data to help plan and control operations and implement policy that has been formulated by upper management. Information is usually given to middle managers as summarized reports. Deals with semi structured decisions. (Tactical decisions) Semi structured decisions that must be made without a base of clearly defined informational procedures. In most cases a semi structured decision is complex, requiring detailed analysis and extensive computations.

11. Upper or Top or Strategic Management Decides on the broad objectives of an organization. Make unstructured decisions. (Strategic decision). Unstructured decisions are the most complex type of decisions and are rarely based on predetermined routine procedures. They involve subjective judgments of the decision maker.

12. Types of Information Systems

13. Operations Support Systems TRANSACTION PROCESSING SYSTEMS Transaction processing systems record and process data resulting for business transactions. Typically examples are information systems that process sales, purchases, and inventory changes. These can be processed and used by management information systems, decision support systems, and executive information systems. PROCESS CONTROL SYSTEMS Operation support systems also make routine decisions that control operational processes. Examples are automatic inventory reorder decisions and production control decisions.

14. Operations Support Systems ENTERPRISE COLLABORATION SYSTEMS Enterprise collaboration systems are information systems that use a variety of information technologies to help people work together. Enterprise collaboration systems help us collaborate to communicate ides, share resources, and coordinate our cooperative work efforts as members of the many formal and informal process and project teams and other workgroups.

15. Management Support Systems MANAGEMENT INFORMATION SYSTEMS: Management information systems (MIS) are the most common form of management support systems. They provide managerial end users with information that support much of their day-to-day decision-making needs. M IS provide a variety of reports and displays to management.

16. Management Support Systems DECISION SUPPORT SYSTEMS: A natural progression from information reporting systems and transaction processing systems. Decision support systems are interactive, computer-based information systems that use decision models and specialized database to assist the decision making process of managerial end users. EXECUTIVE INFORMATION SYSTEMS: EIS are management information systems tailored to the strategic information needs of top management. Top executives get the information they need from many sources, including letters, memos, periodicals, and reports produced manually as well as by computer systems.

17. ASSIGNMENT #2 Explain Subsystems of an MIS. Describe Briefly Types of Systems.

18. HOW SYSTEMS ARE BUILD FROM SUBSYSTEMS

19. Decomposition A complex system is very difficult to understand as a whole. Therefore, it is decomposed or divided into subsystems. The sum of subsystems constitutes the entire system. The process of decomposition is continued to with subsystems divided into smaller subsystems until the smallest subsystem are of manageable size. These subsystems generally form hierarchical structure.

20. Hierarchical relations of subsystems

21. An example of Decomposition Information system divided into subsystem such as: Sales & Order entry Inventory Production Personnel & Payroll Purchasing Accounting & Control Planning Each subsystem is further divided into subsystems. Ex. Personnel & Payroll: Personnel Reports Payroll data entry & validation Hourly Payroll processing Salaried payroll processing Payroll Report for management Payroll report for Government The subsystems defined in (2) might be further subdivided into smaller subsystems or modules. For Example, the hourly payroll processing might be divided into modules for calculation of deductions & net pay, payroll register & audit controls preparations, register & controls outputs.

22. Simplification The process of decomposition could lead to a large number of subsystem interfaces to define. Each interconnection is a potential interface for communication among subsystems. Simplification is the process of organizing subsystems so as to reduce the number of interconnections. Methods of simplification are: Clusters Decoupling

23. All systems interconnected A 1 A 2 A 3 A 4 B 1 B 2 B 3 B 4

24. Cluster Method Clusters of subsystems are established which interact with each other, then a single interface path is defined from the cluster to other subsystems or clusters of subsystems. For Example: A database assessed by many programs, but the interconnection is through a database management interface.

25. Systems connected within cluster & clusters interconnected with single interface A 1 A 2 A 3 A 4 B 1 B 2 B 3 B 4

26. Decoupling Method If two different subsystems are connected very tightly, very close coordination & timing between them is required. Because, they are somewhat independent, it is difficult to make them operate completely in synchronized fashion. The solution is to decouple or loosen the connection so that the two systems can operate in the short run with some measures of independence. Some means of decoupling are: Inventories, buffer or waiting line Slack & flexible resources Standards

27. Means of Decoupling

29. What is Information? Information is data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or prospective action or decision. Information reduces uncertainty. Information tells something the receiver did not know or could not predict.

30. Data Vs. Information Data Raw facts in isolation. These are isolated facts convey meaning but generally are not useful by themselves. Information is data that has been manipulated to be useful to someone. In other words, information must have value, or it is still data. Information tells people something they don’t already know or confirms something that is suspect.

31. Value of Information The value of Information is described most meaningfully in the context of a decision. The definition discussed earlier recognizes both; the value of information in a specific decision and, the value of information in motivation, model building, & background building affecting the future decisions & actions.

32. Value of Information in Decision Making Decision theory provides approaches for making decisions under certainty, risk, & uncertainty. Decision making under certainty assumes perfect information as to outcomes; Risk assumes information as to the probability of each outcome; and Uncertainty assumes a knowledge of possible outcomes but no information as to probability.

33. Value of Information in Decision Making In decision theory the value of information is the value of change in decision behaviour caused by the information less the cost of obtaining the information. In other words, out of set of possible decisions, a decision maker will select one on the basis of information at hand. If the new information causes the different decision, the value of new information is the difference in value of outcome of the old decision & that of the new decision, less the cost of obtaining the new information. If the new information does not cause different decision then value of information is Zero.

34. Value of Information in Decision Making Value of Perfect Information: is computed as the difference between the optimal policy without perfect information & the optimal policy with perfect information. Almost no decisions are made with perfect information because: The needed information is unavailable. The effort to acquire the information is too costly. There is no knowledge of the availability of the information. The information is not available in the form needed.

35. Value of Information in Decision Making Value of Information & Sensitivity Analysis: Sensitivity analysis consists of procedures to determine the degree of impact on a solution or a model of changes in one or more variables. For Example: What is the effect on the profit of a 10% increase in sales or 10% decrease in sales? Will the project be justified of the cost increases 10%? If the decision is not sensitive to the value of variables, additional information on the future value of variable will have no effect on decision (have no Value.) If the decision is highly sensitive to change in the future value of variable, sensitivity analysis also indicates the degree of sensitivity. The effect shows the value of more information to reduce uncertainty.

36. Value of information other than in a Decision Motivation: Some information is motivational, it provides the information with a report on how well they are doing. This feedback information may motivate decisions. Model Building: The management & operation of a enterprise function with models of the enterprise. Information that is received be these managers may result in change or reinforcement of their models.

37. Value of information other than in a Decision Background Building: In decision theory the value of information is the value of change in decision behaviour, but the information has value only to those who have the background knowledge to use it in a decision. The most qualified person generally uses information most effectively but may need less information since experience has already reduced uncertainty.