Management Information System


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Management Information System

  1. 1. Superior University, Lahore. Assignment on MANAGEMENT INFORMATION SYSTEM Presented to: MISS.RAFIA BHOKHARI Presented by: Group “Supereye” MUBEEN ABDUR REHMAN MCE 12151 SALMAN ANJUM MCE 12157 HAFIZ ASHFAQ SALAMAT MCE 12155 ZOHAIB AHMAD MCE 12152 SHABAN CHEEMA MCE 12169 MUTAHIR BILAL MCE 12147 MEMONA JAVED MCE 12104 NADIA IZHAR MCE 12170 Class M.Com Semester 1st Evening Superior University Kalma Chowk Campus, Lahore. 1
  2. 2. Superior University, Lahore. Table of contentsInformation System …………………………………………… 03Types of I.S ….……………………………………. 04Strategic Information System …………………………………… 06Key features of SIS ……………………………………… 07Need Of SIS …………………………………… 08Top manager’s point of view ……………………………… 09Benefits of SIS to organization ………………………………….. 11(Real Time Example UPS) ……………………………………… 15Real Time Example (KIA) ……………………………………….. 16Summary ……………………………………….. 17Referencing ……………………………………….. 18 2
  3. 3. Superior University, Lahore. INFORMATION SYSTEM Information System gives us combination of all data and processes of an organization. And join different department and provides activities. These activities can include, maintaining business accounting records, defining & monitoring budgets, managing business assets, production planning, purchasing schedules, maintaining inventories, interacting with suppliers & Customers, providing customer services, managing orders and meeting legal and statutory requirements of the business. A combination of hardware, software, infrastructure and trained personnel organized to facilitate planning, control, coordination, and decision making in organization. People, hardware, network, software and data area five basic resources of information system. When talking about information systems, first of all, their is need to be definedwhat is information and what is to the difference between data and information. So,information can be defined as data converted into something valuable and usable forcertain users. Out of this definition the following can be concluded: Information is datasets that together offer new knowledge to data owners. For example, the currencyexchange rate is, for the ordinary person, just data, but for financial analysts it isinformation because together with other historical currency exchange rates, he/she givenew information, about short-term currency trends. From this example, financial experts can analyze gathered data; compare it withother data like funds and cash flow and to conclude level of profit or losses from effectsof currency exchange rates. Such sets of analyzed data that, of course, need to berelevant to end users for acceptance of certain knowledge, is information. 3
  4. 4. Superior University, Lahore. Six Major Types of Information System 1) Executive support systems 2) Decision Support Systems 3) Management Information Systems 4) Knowledge Work Systems 5) Office Automation Systems 6) Transaction Processing Systems Strategic-Level Systems Executive Support Systems: An Executive Information System (EIS) is a type of management information system intended to facilitate and support the information and decision-making needs of senior executives by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization.  5-year sales trend forecasting  5-year operating plan 5-year budget forecasting Management-Level Systems 4
  5. 5. Superior University, Lahore. Decision Support Systems: Decision Support Systems (DSS) are a specific class of computerized information systems that supports business and organizational decision-making activities. A properly-designed DSS is an interactive software-based system intended to help decision makers compile useful information from raw data, documents, personal knowledge, and/or business models to identify and solve problems and make decisions. Sale region analysis.  Production scheduling  Cost analysis  Pricing/profitability analysis Management Information Systems: Management Reporting Systems are intended to provide aggregated data about the performance of the organization. Usually these are created from data generated by the knowledge or operational layers of information systems.  Sales management, Inventory control, Annual budgeting, Capital investment Analysis. Knowledge-Level Systems Knowledge base Work Systems: Knowledge Management Systems are to facilitate knowledge management in an organization. As described in our approach and in the knowledge creation cycle they are only part (although very important) of a knowledge management strategy. It is not an Office Information System as is often thought and should be smaller in size than Office Information System. If implemented and used properly they can be considered as force multipliers for an organization.  Engineering workstations  Graphics workstations Managerial workstation Office Automation Systems: Office Information Systems provide information to the organization that is not directly available from operational support systems. Often this is textual data (e.g. Office-documents or E-mail), but it can also be a CRM (Customer Relationship Management) system. Intranet and wikis are very popular applications of these.  Work processing systems 5
  6. 6. Superior University, Lahore.  mage storage Electronic calendars Operational Level Systems Transaction Processing Systems: A Transaction Processing System is a set of information which process the data transaction in database system that monitors transaction programs (a special kind of program). The essence of a transaction program is that it manages data that must be left in a consistent state. These are usually databases.  Order processing, Plant scheduling, Payroll Employee record keeping.  Sales and Marketing Manufacturing Finance Accounting Human. Strategic Information System o A Strategic Information System can be any IS at any level of an organization that change the goals, business processes, products, services, or environmental relationships to help the organization in order to gain a competitive advantage” o Information system that provide a firm with competitive products and services which give it strategic advantages over its competitive in the market place. o Systems that help company’s change or otherwise modify their business strategy and structure. These systems usually increase the customer value by customizing products,increase products thorough information and services, eliminate delays, improvereliability, make products easier to use, or reducing transaction times. 6
  7. 7. Superior University, Lahore. Key features of strategic information systemKey features of the Strategic Information Systems are the following: “Operational Effectiveness” means performing similar activities better than competitors do “Strategic Positioning” means performing different activities from competitors or performing similar activities in different ways. “Organizations have competitive advantage when they provide more value to their customers or when they provide the same value to customers at a lower price” Decision support systems that allow developing a strategic approach to arrange Information Systems (IS) or Information Technologies (IT) with an organization business strategies. Mainly Enterprise resource planning (ERP) solutions that integrate the business processes to meet the enterprise objectives for the optimization of the enterprise resources. Database systems with the capabilities to make the best use of available corporate information for marketing, production, promotion and innovation. The SIS systems also facilitate identification of the data collection strategies to help optimize database marketing opportunities. 7
  8. 8. Superior University, Lahore. Why organizations need information system? Information system is the lifeblood of any organization. If we cannot usedinformation system then we damaged or lost data can cause disruptions in normalbusiness activities leading to financial losses etc. Information systems, which comprisehardware, software, data, applications, communication and people, help an organizationto better manage and secure its critical corporate, customer and employee data.Information systems also improve growth and work process. Business efficiency: Businesses improve the efficiency withthe used of information system and also toachieve higher profitability. Informationsystems are provided important tools(communication, reports garnets, decisionmaking) available to top management forachieving higher levels of efficiency. Business effectively: Management with the used of information system doing his work effectively. With the helped of information system properly measurement the work effectiveness and solve the problem. New products, services, and business models: Information system is a major tool for firms to create new products and services,and also an entirely new business models. A business model describes how a companyproduces, delivers, and sells a product or service to create wealth.Example: Apple Inc. transformed an old business model based on its iPod technologyplatform that included iPod, the iTunes music service, and the iPhone. Decision making: Many management never having theright information at the right time to makingdecision because lack of information system.These poor decision making raise costs and 8
  9. 9. Superior University, Lahore.lose customers. Information system made it possible for the management to use realtime data of origination in any the marketplace when making decision needs. Competitive advantage: Management with the used of the information system gets or achievescompetitive advantage with the innovation of new things. If we not used the informationsystem so others competitive organization get advantage with the used of informationsystem. Support business process: Information system help to business processes (store, recoding, communication).Example retailer store used the information system used for helps to recodinginformation of customer or recorded of sales and communication with customer orsuppler. Decrease cost: Information system also helps to decrease cost. For making information systemstructure only one time cost required or one time problem face for making or introducedinformation system. Top manager’s point of view Expensive: Installing a Strategic information system can be expensive for a company. it present a significant expense specially for large scale organizations due to their vast connection. Companies must create a budget to pay for these items otherwise a company cannot earn profit in competitive environment. These systems require ongoing support upgrade fee which can represent future fixed outflows. Maintenance: Company need to hire maintainingindividuals help and keep an electronicstrategic information system runningsmoothly. These individuals need a wideinformation or specific knowledge ofcomputer science functions which increases 9
  10. 10. Superior University, Lahore.organizations expenses. Business technology change frequently creating anenvironment where the companies have trained staff, individuals or operators who canproperly maintain computers web sites servers and other equipments in the use bystrategic information systems. Hiring qualified persons: Strategic information system is the most unique system used by the organizations in the world for the proper working of information system organization need to hire qualified persons. For the new comers or operators in this field there must be additional training to have some experience to run system smoothly or correctly. It increase the labor cost of an organization. Complex task: Gathering unimportant or nonessential information can delay business decisionsbecause manager must request for additional inputs. Spending to mutch time onreprogramming or correcting issue can also increase the time spends in decisionmaking process. Extensive training on new systems involves which shows that tooperate a strategic informationsystem is a complex task. Employees dissatisfaction: Due to improved technologyday by day employees of anorganization take low interest incomplex technology oforganization. These technologiesdo not give then chance to showtheir own creation or abilities incomplex organization ups anddown situations. They also relay with orders training, maintaining, working, reporting orother complex situations and feel dissatisfaction in organizations task. Untrained staff: In Pakistan illiteracy rate is 1.7 %. No chance of proper education or training is givento our youth. So our youth remain illiterate. For their meal they have to work inorganization at any cost so organization hire untrained staff which is not able to workwith strategic information system. 10
  11. 11. Superior University, Lahore. Health issue: Health issue employees or operators arealso a big problem due to long hours of workon complex information system. Employeesdo not given time to take rest which result indifferent health or physical diseases. Foremployee’s medical treatment or otherhealth Issues Company expenses increases. Benefits of SIS to organizations Competitive Advantage: The alignment increases the capability to respond faster to environmentalchanges and thus creates a competitive advantage. An early example was thefavorable position afforded American and United Airlines by their reservation systems,Sabre & Apollo American Airlines worked with IBM to develop an improvedbooking/reservation system, and the Airline Reservation Systems (ARS). And theSemi-Automatic Business Research System (SABRE) launched thereafter in 1960. Thenetwork completed set-up in 1964, and it was recognized as the largest data processingsystem in existence. United Airlines developed the Apollo Reservation System, andshortly after allowed travel agents access. For many years these two systems ensuredthat the two carriers’ flights appeared on the first screens observed by travel agents,thus increasing their bookings relative to competitors. Efficiency & Effectiveness: Due to the alignment of business strategies with IS the business processesbecome more efficient & effective. When the united airlines develop the Apolloreservation system it increased their bookings & made their reservation system moreeffective because of travel agents. Product Differentiation: 11
  12. 12. Superior University, Lahore. A strategic information system in an organization assures the uniqueness of theirproducts & services as it differentiate the way of their business. The above exampleclear it when Apollo reservation system developed it makes their ARS different fromother competitors. Strong linkage among departments: Core business processes areaccomplished through digital networks .ERPsystem in organization link differentdepartments and make the information flowsfrom one department to another smoothly. Customers & suppliers satisfaction: Serving customers well make thecustomers adapting the CRMstrategic information system an organizationcan satisfy their customer for long time.Similarly significant business relationship withsuppliers is also maintained by SCM. The goalof SCM is to create fast efficient & low costnetwork of business relationship. Cost leadership: IS has provided an opportunity of doingjob though networking called “telecommuting”.It is a job that the workers do not have to workin the office. They can work anywhere andanytime through digital systems. There is no space and time limitation. The businessmodel of digital firm is proved that it could reduce the cost for doing business becausethe firms do not have to invest in the office and the workers do not have to spend theirtimes in the traffic. Moreover, telecommuting job does not create any pollution to thesociety and these are the main advantages of this kind of job. Organizations which aligntheir strategies with this IS become low cost producer & have cost leadership againsttheir competitors. Growth & promotion: 12
  13. 13. Superior University, Lahore. Web based marketing like e-commerce; e-business provides anorganization way of growth &promotion. Which is the one of themost important objective of anorganization these strategic informationsystems in return gives maximum profitthrough efficient, effective and low costbusiness comparatively to othercompetitors. Synergies or Alignment: IS provide synergy strategy that tie together the operations of disparatebusinesses units so that they work together to get competitive advantage. In this way itencourage sharing of knowledge across business units. Innovation: One of the important things tocompete with other competitors and tostay in market competition is to beinnovative. Information systemsprovide opportunities to the managersto produce unique products and makeradical change in business processesfor producing and distributing productsand services that are so different fromthe way a business has beenconducted. Similarly adopting newtechnologies is directly related to the adoption of innovation. Information systems alsoalter the fundamental structure of an industry. Good decision making: Different information systems (MIS, TPS, DSS, & ESS) enable managers tomake better decisions related to business activities. Making effective and profitmaximizing decision by focusing different aspects like involved risk, competitor’s 13
  14. 14. Superior University, Lahore.position in market, forecasting is a complex task to be done by managers. Informationsystems support managers in making good decision making. Better communication system: Information system through networking has provided better ways of communication among different business processes departments. Intranet develops strong communication & collaboration within organization. Similarly extranet provides strong linkage among all business partners. These systems provide better opportunity of sharing the necessary information related to business among all business partners which consequently make the business more effective & efficient. Maximum return on investments: Strategic information system is the onlyopportunity that can give an organizationmaximum return on its investments by adoptingdifferent information systems. Enterpriseresources planning system improves theprocessing comparatively at low cost. CRMallow a business to identify its best customerswho are the most profitable to the business sothey can be retained for a long time for greater& more profit. These systems provide strategicvalue to the business and hence give maximumreturn on investments to organizations. Example: 1) United parcel serves (UPS)Jim Casey and Claude Rayan 1907 with 2 bicycle and1 phone 14
  15. 15. Superior University, Lahore.Problems Decentralized information Poor work Time-consuming Late order deliver Less satisfaction of customersDetails  DIAD automatically capture customer signature vehicle adapter  Main computers in countries Georgia Mahwah etc  Cisco system for tracking and cost calculation without vesting the UPS  14.1 millions parcels delivered in per day  Centralized information easily tradable  Anyone with a package to ship can access UPS website to track packages check delivery routes calculate ship ingrates and schedule pickup  Custom built software that uses operations research and mapping technology to optimize the way packages or loaded and delivered  Adidas and Oregon is one of the biggest costumer of UPS  Every three months the company introduced as many as 10000 new apparel items and 4000 new footwear items it must handle orders for many thousands of retailers for this order and many of these orders are priority request that must be fulfilled within one or two days 2) KIA Motors 15
  16. 16. Superior University, Lahore. Korean company 1994 in united state Average defect ratio is 1.33 and Kia defected ratio is 2.12 10 years warranty and 100000 mile warranty Kia had to create software first December 2003 to capture defect accident or injuries included his vehicles. Information stored in 7 different parts. Brake pads problems it’s made for four wheels derive that’s y there is a vibration in car Stopgap software for centralized information. Time-consuming, not provide benefit to company Engine software 1. Warranty claims 2. Parts sales 3. Vehicles inventories 4. Store essential information in a single common data repository vehicle identification number master storage files. Crystal analysis That’s software highlights problems defeats an managers can resolve all this problems by the time now the 2005 the defect ratio of Kia motors is only 1.40 and also improved productivity. Summary: IS provides combination of all data and processes of an organization. It has sixtypes Executive support systems, Decision Support Systems, Management InformationSystems, Knowledge Work Systems, Office Automation Systems and TransactionProcessing Systems. Information system that provide a firm with competitive productand services which give it strategic advantage over its competitor in the marketplace iscalled the strategic information system. The organization needs the S.I.S. operational excellence, manage the laborforce; support the business aim, improved decision making. The manager’s point of 16
  17. 17. Superior University, Lahore.view is that it is expensive, difficult to maintenance; need to hire qualified persons,employee’s dissatisfaction, untrained staff and health issue. On the other hand SIS hasa lot of advantages that are sufficient to convinces the top management to use theS.I.S. as every organization is running to improve their S.I.S to gain competitiveadvantage over their revelries for example competitive advantage, maximum return oninvestments, better communication system, good decision making and innovation. Atthe end there are also some real time examples which show the improvement in thebusiness progress by using the information system in the organization. e.g. (UPS, KIA). Referencing: o James O’Brien Management information system. o Steven Alter Information system. o %20Lecture%202-UoA.pdf 17
  18. 18. Superior University, Lahore. o system.html#ixzz1lzCblJDN o o o %20Lecture%202-UoA.pdf 18