DATA, INFORMATION, AND SYSTEMS Data vs. Information ◦ Data A “given,” or fact; a number, a statement, or a picture. Represents something in the real world. The raw materials in the production of information. ◦ Information Data that have meaning within a context. Data in meaningful form. Data after manipulation. What Is a System? ◦ System: A system is a group of interrelated components working together toward a common goal by accepting inputs and producing outputs in an organized transformation process.A system (sometimes called a dynamic system) has three basic interactingcomponents or functions. These include: Input involves capturing and assembling elements that enter the system to beprocessed. Processing involves transformation processes that convert input intooutput.Output involves transferring elements that have been produced by a transformationprocess to their ultimate destination. Feedback and Control are two additional components of the system concept.A system with feedback and control components is sometimes called a cyberneticsystem, that is, a self-monitoring, self-regulating system. Feedback is data about the performance of a system.Control involves monitoring and evaluating feedback to determine whether a systemis moving toward the achievement of its goals. The control function then makesnecessary adjustments to a systems input and processing components to ensure that itproduces proper output. ◦ Subsystem: One part of a system where the products of more than one system are combined to reach an ultimate goal
◦ Why Do People Need Information? ◦ Individuals - Entertainment and enlightenment ◦ Businesses - Decision making, problem solving and control.INFORMATION SYSTEMAn organized combination of people, hardware, software, communication networks,and data resources. It is a system that uses the resources of hardware, software, andpeople to perform input, processing, output, storage, and control activities thattransform data resources into information products. The purpose is to collect,transform, and disseminates information in an organization.CLASSIFICATION OF INFORMATION SYSTEMS Information Systems perform important operational and managerial support roles inbusinesses and other organizations. Therefore, several types of information systemscan be classified conceptually as either:
1. Operations Support Systems 2. Management Support SystemsOperations Support SystemsInformation systems are needed to process data generated by and used in businessoperations. Such operations support systems (OSS) produce a variety of informationproducts for internal and external use. However, they do not emphasize producing thespecific information products that can best be used by managers. Further processingby management information systems is usually required. The role of a business firm’soperations support systems is to:• Effectively process business transactions• Control industrial processes• Support enterprise communications and collaboration• Update corporate databases.Transaction Processing Systems (TPS) Focus on processing the datagenerated by business transactions and operations. Transaction processing systemsrecord and process data resulting from business transactions (sales, purchases,inventory changes). TPS also produce a variety of information products for internal orexternal use (customer statements, employee paychecks, sales receipts etc.).TPS process transactions in two basic ways:• Batch Processing - transactions data is accumulated over a period of time andprocessed periodically.• Real-time (or online) processing - data is processed immediately after atransaction occurs.Process Control Systems (PCS) - Process control systems are systems, whichmake use of computers to control ongoing physical processes. These computers aredesigned to automatically make decisions, which adjust thePhysical production process. Examples include petroleum refineries and the assemblylines of automated factories.Enterprise Collaboration Systems - Enterprise collaboration systems areinformation systems that use a variety of Information technologies to help peoplework together. Enterprise collaboration systems help us ◦ Collaborate- to communicate ideas ◦ Share resources ◦ Co-ordinate our cooperative work efforts as members of the many formal and informal process and project teams.The goal of enterprise collaboration systems is to use information technology toenhance the productivity and creativity of teams and workgroups in the modernbusiness enterprise.
Management Support Systems (MSS)Management support systems focus on providing information and support foreffective decision making by managers. They support the decision-making needs ofstrategic (top) management, tactical (middle) management,and operating (supervisory) management. Conceptually, several major types ofinformation systems support avariety of decision-making responsibilities:• Management Information Systems (MIS)• Decision Support Systems (DSS)• Executive Information Systems (EIS)Management information systems - are the most common form ofmanagement support systems. They provide managerial end users with informationproducts that support much of their day-to-day decision-making needs. MIS provide avariety of prespecified information (reports) and displays to management that can beused to help them make more effective, structured types of day-to-day decisions.Information products provided to managers include displays and reports that can befurnished:• On demand• Periodically, according to a predetermined schedule• Whenever exceptional conditions occurDecision support systems -Provide managerial end users with information in aninteractive session on an ad hoc (as needed) basis. Managers generate the informationthey need for more unstructured types of decisions in aninteractive, computer-based information system that uses decision models andspecialized databases to assist the decision-making processes of managerial end users.Executive information systems - Provide top and middle management withimmediate and easy access to selective information about key factors that are criticalto accomplishing a firm’s strategic objectives. EIS are easy to operate andunderstand.Other Classifications of Information Systems:Several other categories of information systems that support either operations ormanagement applications include: • Expert systems • End user computing systems • Business information systems • Strategic information systems 1. Expert Systems are knowledge-based systems that provide expert advice and act as expert consultants to the users.
2. End user computing systems support the direct, hands on use of computers by end users for operational and managerial applications. 3. Business information systems support the operational and managerial applications of the basic business functions of a firm. 4. Strategic information systems provide a firm which strategic products, services, and capabilities for competitive advantage. MANAGEMENT INFORMATION SYSTEMS (MIS)Management information systems (MIS) are a combination of hardware and softwareused to process information automatically. Commonly, MIS are used withinorganizations to allow many individuals to access and modify information. In mostsituations, the management information system mainly operates behind the scenes,and the user community is rarely involved or even aware of the processes that arehandled by the system.A computer system used to process orders for a business could be considered amanagement information system because it is assisting users in automating processesrelated to orders. Other examples of modern management information systems arewebsites that process transactions for an organization or even those that serve supportrequests to users. A simple example of a management information system might bethe support website for a product, because it automatically returns information to theend user after some initial input is provided.Online bill pay at a bank also qualifies as a management information system — whena bill is scheduled to be paid, the user has provided information for the system to actagainst. The management information system then processes the payment when thedue date approaches. The automated action taken by the online system is to pay thebill as requested. Since the bills within an online bill pay system can be scheduled tobe automatically paid month after month, the user is not required to provide furtherinformation. Many times, the bill pay system will also produce an email for the userto let him know that the action has occurred and what the outcome of the action was.Management information systems typically have their own staff whose function it isto maintain existing systems and implement new technologies within a company.These positions are often highly specialized, allowing a team of people to focus ondifferent areas within the computer system. In recent years, colleges and universitieshave begun offering entire programs devoted to management information systems. In
these programs, students learn how to manage large interconnected computer systemsand troubleshoot the automation of these management information systems."MIS primarily serve the functions of planning, controlling, and decision making atthe management level." MIS are one of a number of different types of informationsystems that can serve the needs of different levels in an organization. For example,information systems might be developed to support upper management in planningthe companys strategic direction or to help manufacturing in controlling a plantsoperations. Some of the other types of information systems include: transactionprocessing systems, which simply record the routine transactions needed to conductbusiness, like payroll, shipping, or sales orders; and office automation systems, whichare intended to increase the productivity of office workers and include such systemsas word processing, electronic mail, and digital filing. Ideally, the various types ofinformation systems in an organization are interconnected to allow for informationsharing.Purpose & Scope of Management Information SystemThe Purpose and Scope of MIS can be defined as “The combination of human andcomputer based resources that results in the collection, storage, retrieval,communication and use of data for the purpose of efficient management of operationsand for business planning”.In order to get a better grip on the activity of information processing, it is necessary tohave a formal system which should take care of the following points: Handling of a voluminous data. Confirmation of the validity of data & transaction. Complex processing of data and multi-dimensional analysis. Quick search & retrieval. Mass Storage. Communication of the information system to the user on time. Fulfilling the changing needs of the information.The management information system uses computers and communication technologyto deal with these points of supreme importance.Role of Management Information SystemThe role of the MIS in an organization can be compared to the role of heart in thebody. The information is the blood and MIS is the heart. In the body, the heart playsthe role of supplying pure blood to all the elements of the body including the brain.The heart works faster and supplies more blood when needed. It regulates andcontrols the incoming pure blood, processes it and sends it to the destination in thequantity needed. It fulfills the needs of blood supply to human body in normal courseand also in crisis.The MIS plays exactly the same role in the organization. The system ensures that anappropriate data is collected from the various sources, processed, and sent further toall the needy destinations. The system is expected to fulfill the information needs of
an individual, a group of individuals, the management functionaries: the managers &the top management.The MIS satisfies the diverse needs through a variety of systems such as QuerySystems, Analysis Systems, Modeling Systems and Decision Support Systems. TheMIS helps in Strategic Planning, Management Control, Operational Control andTransaction Processing.Outputs of management information systems Scheduled reports These are the reports Produced periodically, or on a schedule (daily, weekly, and monthly) Key-indicator report These are the reports that Summarizes the previous day’s critical activities. Typically available at the beginning of each day. Demand reportThese are the reports which Gives certain information at a manager’s request. Exception reportThese are automatically produced when a situation is unusual or requires managementaction.Characteristics of a Management Information System • MIS Provides reports with fixed and standard formats, like Hard-copy and soft-copy reports • MIS Uses internal data stored in the computer system • End users can develop custom reports. • Requires formal requests from users.
Management Information Systems for CompetitiveAdvantage • MIS Provides support to managers as they work to achieve corporate goals. • These Enables managers to compare results to established company goals and identify problem areas and opportunities for improvement.
Advantages of MIS1. It Facilitates planning: MIS improves the quality of plants by providing relevant informationfor sound decision – making. Due to increase in the size and complexity of organizations,managers have lost personal contact with the scene of operations.2. In Minimizes information overload: MIS change the larger amount of data in to summarizeform and there by avoids the confusion which may arise when managers are flooded withdetailed facts.3. MIS Encourages Decentralization: Decentralization of authority is possibly when there is asystem for monitoring operations at lower levels. MIS is successfully used for measuringperformance and making necessary change in the organizational plans and procedures.4. It brings Co -ordination: MIS facilities integration of specialized activities by keeping eachdepartment aware of the problem and requirements of other departments. It connects all decisioncenters in the organization..5. It makes control easier: MIS serves as a link between managerial planning and control. Itimproves the ability of management to evaluate and improve performance. The used computershas increased the data processing and storage capabilities and reduced the cost.6. MIS assembles, process, stores, Retrieves, evaluates and disseminates the information.Disadvantages of MIS1. Highly sensitive requires constant monitoring.2. Budgeting of MIS extremely difficult.3. Quality of outputs governed by quality of inputs.4. Lack of flexibility to update it self.5. Effectiveness decreases due to frequent changes in top management6.takes into account only qualitative factors and ignores non-qualitative factors like morale ofworker, attitude of worker etc...
Applications of MISWith computers being as ubiquitous as they are today, theres hardly any large business that doesnot rely extensively on their IT systems.However, there are several specific fields in which MIS has become invaluable.* Strategy SupportWhile computers cannot create business strategies by themselves they can assist management inunderstanding the effects of their strategies, and help enable effective decision-making.MIS systems can be used to transform data into information useful for decision making.Computers can provide financial statements and performance reports to assist in the planning,monitoring and implementation of strategy.MIS systems provide a valuable function in that they can collate into coherent reportsunmanageable volumes of data that would otherwise be broadly useless to decision makers. Bystudying these reports decision-makers can identify patterns and trends that would have remainedunseen if the raw data were consulted manually.MIS systems can also use these raw data to run simulations – hypothetical scenarios that answera range of ‘what if’ questions regarding alterations in strategy. For instance, MIS systems canprovide predictions about the effect on sales that an alteration in price would have on a product.These Decision Support Systems (DSS) enable more informed decision making within anenterprise than would be possible without MIS systems.* Data ProcessingMIS not only do MIS systems allow for the collation of vast amounts of business data, but theyalso provide a valuable time saving benefit to the workforce. Where in the past businessinformation had to be manually processed for filing and analysis it can now be entered quicklyand easily onto a computer by a data processor, allowing for faster decision making and quickerreflexes for the enterprise as a whole.*Management by ObjectivesWhile MIS systems are extremely useful in generating statistical reports and data analysis theycan also be of use as a Management by Objectives (MBO) tool.MBO is a management process by which managers and subordinates agree upon a series ofobjectives for the subordinate to attempt to achieve within a set time frame. Objectives are setusing the SMART ratio: that is, objectives should be Specific, Measurable, Agreed, Realistic andTime-Specific.
The aim of these objectives is to provide a set of key performance indicators by which anenterprise can judge the performance of an employee or project. The success of any MBOobjective depends upon the continuous tracking of progress.In tracking this performance it can be extremely useful to make use of an MIS system. Since allSMART objectives are by definition measurable they can be tracked through the generation ofmanagement reports to be analyzed by decision-makers.Challenges faced by MIS 1. Workforce downsizing. 2. Information overload. 3. Employee mistrust. 4. Difficult to build. 5. Security breaches.Opportunities1. Enhanced global competitiveness.2. Capture market opportunities.3. Support corporate strategy.4. Enhance worker productivity.5. Improve quality of goods and services.
ConclusionThrough the MIS, the information can be used as a strategic weapon to counter the threats tobusiness, make businesses more competitive, and bring about the organizational transformationthrough integration. A good MIS also makes an organization effective.