Unit 1 Introduction to MIS, MIS & Data Mining , MIS & Decision Making

Unit-1 : Introduction to MIS
Presented By: Asmita Singh
(Assistant Prof. ,Visiting Faculty,
Swami Keshwanand Rajasthan Agriculture
University, Bikaner)
1

List of Contents
• Information & Data
• Data Mining
Concept of Databases, Data-Warehouse & Data-Marts
Types of Information & its Characteristics
System
• MIS: Definition & Concept
• Components of Information System
• Types of Information System
• Need of MIS
• Role of MIS
• Outputs of MIS : MIS Reports
• MIS & Decision Making
• Decision making in Business Mgmt : SWOT Analysis
Cost Benefit Analysis
• Herbert Simon Model of Decision Making
• Types of Decisions- Structured
Semi- Structured
Un-Structured
2

Information is critical
“The information we have is not what we want, The
information we want is not the information we need, The
information we need is not available”.
3

Information is a Resource
• It is scarce
• It has a cost
• It has alternative uses
• There is an opportunity cost factor involved if one does not
process information
4

Why need Information?
To ensure effective and efficient decision - leading
to prosperity of the
Organization.
5

Data and Information
• Data
• A “given,” or fact; a number, a statement, or an image
• Represents something (quantities, actions and objects) in the real
world
• The raw materials in the production of information
• Information
• Data that have meaning within a context
• Data that has been processed into a form that is meaningful to the
recipient and is of real or perceived value in the current or in the
prospective actions or decisions of the recipient.
Data Manipulation
Example: customer survey
• Reading through data collected from a customer survey with
questions in various categories would be time-consuming and not
very helpful.
• When manipulated, the surveys may provide useful information.
6

Data Mining/Information Mining
Fact Files/Raw data
7

Database, Data-Warehouse & Data Marts
• Database: Database is a management system for your data and
anything related to those data.
• It is like a giant library of excel files. Each excel file is a table in a
database. You have a library of excel files, that entire library is
called a database.
OLTP
8

Data Warehouse : It is a centralized repository that includes
data from multiple, heterogeneous databases , integrated at a
single site.
• A data warehouse stores data that is extracted from multiple
data stores or databases and external sources.
• Data warehousing involves data cleaning & data integration
OLTP OLAP
9

• Data Mart: It is a subset of data warehouse. A data mart is a
repository of data that is designed to serve a particular
community of knowledge workers.
• Data marts enable users to retrieve information for single
departments or subjects, improving the user response time
• A data mart is basically a condensed and more focused version
of a data warehouse that reflects the regulations and process
specifications of each business unit within an organization.
• Each data mart is dedicated to a specific business function or
region. Used to retrieve client-facing data.
10

Database,Data-Warehouse& Data-Marts:
Overall Basic Diagram
OLTP OLAP
11

Organisation
Oriented
Department
Oriented
12

Classification by Application :
• Planning Information : Info needed for establishing standard norms and
specifications in an organization. This information is used in strategic,
tactical, and operation planning of any activity.
• Control Information: This information is needed for establishing control over
all business activities through feedback mechanism.
• Knowledge Information: Knowledge is defined as "information about
information". Knowledge information is acquired through experience and
learning, and collected from archival data and research studies.
13

• Strategic Information − Strategic information is concerned
with long term policy decisions that defines the objectives of a
business and checks how well these objectives are met. For
example, acquiring a new plant, a new product, diversification
of business etc, comes under strategic information.
• Tactical Information − Tactical information is concerned with
the information needed for exercising control over business
resources, like budgeting, quality control, service level,
inventory level, productivity level etc.
• Operational Information − Operational information is
concerned with plant/business level information and is used
to ensure proper conduction of specific operational tasks as
planned/intended. Various operator specific, machine specific
and shift specific jobs for quality control checks comes under
this category.
14

Characteristics of Information
efRelevant
efEconomicalefUpdatedefAccurate
efComplete
15

System
System: A set of components that work together to achieve a
common goal. Computer-based Information Systems take data as
raw material, process it, and produce information as output.
16

MIS : Definition
“Computerised business processing system generating
information for the people in the organisation to meet the
needs for decision making to achieve corporate objectives of
the organisation” .
• Integrated system for man & machine for providing information support to
operations, management & decision making.
• System based on database of organisation evolved for the purpose of
providing information to the people of organisation.
• MIS : “To the People, For the People , By the People” 17

Meaning Of Information
Systems
• An information system is an organized combination of
people, hardware, software, communications Networks
and data resources that collects, transforms, and
disseminates information in an organization.
18

MIS: Concept
• The concept of MIS is to process data from the organisation and
to present it in the form of reports at regular intervals.
• MIS gives information through data analysis & the analysis
relies on many academic disciplines.
• Theories , principles & concepts from Management science,
Management accounting, Operations Research, Engineering etc.
• These principles are used in designing the MIS for any organisation.
The concept is a blend of principles, theories & practices
of management , Information & Systems giving rise to
single product “MIS” 19

Components of Information System
21

• Operational-level systems support operational managers
by keeping track of the elementary activities and
transactions of the organization, such as sales, receipts,
cash deposits, payroll, credit decisions, and the flow of
materials in a factory.
• Management-level systems serve the monitoring,
controlling, decision-making, and administrative
activities of middle managers. The principal question
addressed by such systems is this: Are things working
well?
• Strategic-level systems help senior management tackle
and address strategic issues and long-term trends, both
in the firm and in the external environment. 25

Need of MIS
❖ To handle voluminous data
❖Complex processing of data and multidimensional analysis
(OLAP-Online Analytical Processing).
❖Quick search & retrieval.
❖Mass storage
❖Fulfilling the dynamic needs of people & organisation.
❖Increasing impact of information processing for organizational
decision making.
❖Dependency of services sector including banking, financial
organization, health care, entertainment, tourism and travel,
education and numerous others on information.
❖Changing employment scene world over, shifting base from
manual agricultural to machine-based manufacturing and
other industry related jobs. 26

❖Information revolution and the overall development
scenario.
❖Growth of IT industry and its strategic importance.
❖Strong growth of information services fuelled by
increasing competition and reduced product life cycle.
❖Need for sustainable development and quality life.
❖Improvement in communication and transportation
brought in by use of information processing.
27

Role of MIS
• The role of MIS in an organization can be compared to
the role of heart in the body.
• The information is the blood and MIS is the heart. In the
body the heart plays the role of supplying pure blood to
all the elements of the body including the brain.
• The MIS plays exactly the same role in the organization.
• The system ensures that an appropriate data is collected
from the various sources, processed, and sent further to
all the needy destinations.
28

• The system is expected to fulfill the information needs of
an individual, a group of individuals, the management
functionaries: the managers and the top management.
• The MIS satisfies the diverse needs through a variety of
systems such as Query Systems, Analysis Systems,
Modeling Systems and Decision Support Systems.
• The MIS helps in Strategic Planning, Management
Control, Operational Control and Transaction Processing.
29

Outputs of MIS: MIS Reports
1. Scheduled reports
These are reports that are generated regularly with respect to time.
They are in the nature of daily report, weekly report or monthly
report. They contain information that is of recent origin and help the
manager to understand and analyze the information from the context
of the recent past. These reports are the first line of reports which
normally show the first signs of problems or opportunities that can be
understood through the data.
30

2. On-demand reports
These types of reports are unscheduled in nature and are created
based on the need of the managers for such reports. They help in
analyzing a particular issue in greater degree of granularity. These
reports are generally the result of a reaction to any event. These
reports give certain information at a manager’s request
31

3. Exception reports
In management, exceptions warrant greater attention than any
normal event. Exception reports are special reports that indicate to
the manager that some control needs to be exercised to bring an
issue under control. For example, if in a company the average
absenteeism is two per cent and in the last week, the average
absenteeism is twenty percent then an exception report is generated
to make the concerned manager aware that something is amiss and
needs attention. Exception report which is automatically produced
when a situation is unusual or requires management action.
32

4. Key-indicator report which summarizes the previous day’s critical activities
and also it is typically available at the beginning of each day.
5. Predictive reports
These are special reports that give the manager a sneak preview of the future.
These reports give a scenario of the future and are very useful for planning.
6. Summary reports
These are general reports that aggregates data and provides summarized
information to the manager so that he may get a macro view of an issue.
33

DECISION MAKING
Decision making
• Developing concepts leading to the selection of a course of action
among variations. Every decision making process produces a final
choice.
• It can be an action or an opinion. It begins when we need to do
something but we do not know what
• e.g. Decision to raise a Purchase Order
Decision making in business and management :
Several decision making models or practices for business include:
1. SWOT Analysis
2. Cost-Benefit Analysis

SWOT Analysis
SWOT Analysis is a useful technique for understanding
your Strengths and Weaknesses, and for identifying
both the Opportunities open to you and the Threats
you face.
36

Business SWOT Analysis
• What makes SWOT particularly powerful is that, with a
little thought, it can help you uncover opportunities that
you are well-placed to exploit. And by understanding the
weaknesses of your business, you can manage and
eliminate threats that would otherwise catch you
unawares.
• By looking at yourself and your competitors using the
SWOT framework, you can start to craft a strategy that
helps you distinguish yourself from your competitors, so
that you can compete successfully in your market.
37

How to Do a SWOT Analysis ?
• You can use it in two ways – as a simple icebreaker helping
people get together to "kick off" strategy formulation, or in a
more sophisticated way as a serious strategy tool.
Tip: Strengths and weaknesses are often internal to your
organization, while opportunities and threats generally relate to
external factors. For this reason, SWOT is sometimes called
Internal-External Analysis and the SWOT Matrix is sometimes
called an IE Matrix.
38

The Cost-Benefit Analysis Process
• The first step in the process is to compile a
comprehensive list of all the costs and benefits
associated with the project or decision.
• Costs should include direct and indirect costs, intangible
costs, opportunity costs, and the cost of potential risks.
• Benefits should include all direct and indirect revenues
and intangible benefits, such as increased production
from improved employee safety and morale, or
increased sales from customer goodwill.
39

• The analyst should then apply a common unit of monetary
measurement to all items on the list, taking special care not
to underestimate costs or overestimate benefits.
• A conservative approach with a conscious effort to avoid
any subjective tendencies when calculating estimates is
best suited when assigning a value to both costs and
benefits for a cost-benefit analysis.
40

• The final step is to compare the results of the aggregate costs
and benefits quantitatively to determine if the benefits
outweigh the costs.
• If so, then the rational decision is to go forward with the
project. If not, the business should review of the project to see
if it can make adjustments to either increase benefits or
decrease costs to make the project viable. Otherwise, the
company may abandon the project.
41

Herbert Simon Model of Decision
Making
42
• Intelligence which deals with the
problem identification and the data
collection on the problem.
• Design which deals with the
generation of alternative solutions
to the problem at hand.
• Choice which is selecting the 'best'
solution from amongst the
alternative solutions using some
criterion

• Intelligence
• Problem Identification & Formulation
• Information gathering
• Design
• Alternatives identified and assessed
• Choice
• Choosing the best alternative
43

Types of Decisions
• Unstructured/ Non-programmed :Unstructured decision rely
on knowledge and/or expertise and often require data ,
human judgement and models to solve .
• Structured/ Programmed : Structured decisions have a well
defined methodology for finding a solution and have the data
to reach a decisions. They are usually straight forward and
made on a regular basis.
• Semi-structured : A semi structured decision has some, but
not all, structured phases where standardized procedures may
be used in combination with individual judgment.

InformationRequirementsofKeyDecision-MakingGroupsinaFirm

S.No. Structured Unstructured
1. These kind of decisions are taken by
Operational-level managers.
These kind of decisions are taken by
Strategic-level managers.
2. Structured decisions are made in the
situations which are fully understood
Unstructured decisions the situations
are uncertain and unclear.
3. Structured decisions are generally
made for routine tasks, for instance
the hiring of new IT specialists in a
firm
Unstructured decisions are made for a
sudden one-shot kind of situations, for
instance, dealing with a labor strike in
a factory
4. They are usually straight forward and
made on a regular basis.
Unstructured decision rely on
knowledge and/or expertise and often
require data and models to solve
5. Decision-making phase have
standardized procedures, clear
objectives & clearly specified input
and output. There exists a procedure
for arriving at the best solution.
An unstructured decision is one where
not all of the decision-making phases
are structured and human intuition
plays an important role. 46

Unit 1 Introduction to MIS, MIS & Data Mining , MIS & Decision Making

More Related Content

What's hot

Similar to Unit 1 Introduction to MIS, MIS & Data Mining , MIS & Decision Making

Recently uploaded

Unit 1 Introduction to MIS, MIS & Data Mining , MIS & Decision Making