ManagementInformation System Prof. Arathi S. Purohit
Basic Terminologies Data : Unstructured Raw Facts, Observations or unevaluated messages. Information : Finished Product Database : Finished Product laid in a systematic format. File : Logical Existence / name given Document : Textual Record
Stages in converting Data to Information Capturing Verifying Classifying Arranging / Sorting Summarizing Calculating Storing Retrieving Reproducing Communication
Classification of Information Action Information : Induces action Non – Action Information : Communicates the status Recurring : Regular Information Non – Recurring : Non repetitive Internal Information External Information
Types of Information Strategic Level For strategic decision making one needs strategic information. It needs more futuristic inputs. Tactical Level Tactical information used for medium and short term planning by middle level management. Operational Level It covers current happenings, information about specific product or task.
Introduction to MISAn MIS provides managers with informationand support for effective decision making, andprovides feedback on daily operations.MIS is a system, which makes available theRight Information to the Right Person at theRight place at the Right Time in the RightForm and at Right Cost.
Purpose & ScopeThe Purpose and Scope of MIS can be definedas “The combination of human and computerbased resources that results in the collection,storage, retrieval, communication and use ofdata for the purpose of efficient management ofoperations and for business planning”.
Expectations from MIS Handling of Corpus data Confirmation of validity of data Complex processing through Multi Dimensional analysis. Quick Retrieval Mass Storage Dynamic Timely Communication
MIS Reports Scheduled reportsProduced periodically, or on a schedule (daily, weekly, monthly) Key-indicator reportSummarizes the previous day’s critical activitiesTypically available at the beginning of each day Demand reportGives certain information at a manager’s request Exception reportAutomatically produced when a situation is unusual or requiresmanagement action Drill Down ReportsProvide detailed data about a situation.
Functional Systems Financial MIS Manufacturing MIS Marketing MIS Human Resource MIS Accounting MIS Geographic information systems
Financial Subsystems Financial information to all financial managers within an organization. Profit/loss and cost systems Auditing Internal auditing External auditing Uses and management of funds
Manufacturing Subsystems Product Designing Production scheduling Inventory control Manufacturing resource planning (Materials Requirement Planning with Capacity Requirements Planning) Just-in-time inventory and manufacturing (Toyota Processing System) Process control Quality control and testing
GIS Subsystems Measure (natural & human made phenomenon) Store (measurements in digital format) Analyze (to create more useful information) Depict ( in form of maps, graphs, lists) Case Study – Role of GIS in NHAI
Elements of Information Systems Hardware Software Data People Procedures
Types of Information Systems TPS MIS DSS EIS KS Note : Basically divided based on Strategic, Managerial & Operational levels.
Evolution of MIS KS / ES AI ESS / EIS DSS MIS OASTPS
Information as a Strategic Resource Achieving strategic competitiveness in the present competitive environment could be enhanced through capturing data, processing the same, analyzing & transforming into useable knowledge.
Contemporary Approaches to MIS Technical Approach – Based on Operation Research techniques Behavioral Approach – Based on user requirement/friendliness Socio – Technical Approach - Combination
Use of Information in Competitive Advantage Due to globalization business environment have become highly competitive and information - based. ”Competitive Advantage is about changing the balance of power between a firm and its competitors in the industry, in the firm’s favor”.Case Study: IS in RestaurantCase Study: IS in SystemX
Porter – Miller IT affecting competition Changes the Industry Structure Produces new business Creates competitive advantage by giving companies new ways to out – perform their rivals.
Changes the Industry Structure Bargaining power of customers Bargaining power of suppliers Threat from new entrants in the firm’s market Threat from substitute products or services Positioning of traditional industry competitors
Produces new business Information derived from the surveys and the analysis of the same may lead to birth of a new business in the existing one. Thus information confers competitive advantage to the firm as it can offer a bundle of goods / services.
New ways to out – perform Functional Uses Strategic Uses
Decision Making Models Classical Model Administrative Models Herbert Simon Model Rational Decision Making Bounded Vroom – Jago Six Step
Classical Model Decisions are in Best Interest of its organization
Administrative Model Decisions are in Best Interest of the Manager.
Herbert Simon Model Phases – Intelligence Intelligence, Design, Choice Org Choice Design
Rational Decision Making Bounded Vroom-Jago 5 processes and 7 questions AutocraticI(A1) – You AutocraticII(A2) – team you ConsultativeI(C1) – you – team ConsultativeII(C2) – team + you GroupII(G2) - team
Vroom-Jago Do you want High quality solution or best fit solution? Is information gathered sufficient to take your own decisions? Do you have structured problems? Do the members agreement towards the towards is mandatory to accomplish a task? Will your group accept your decision? Chances of Disagreement from the group Goal Congruence (Mgr & Group)
Six-Step Model Define the problem Identify decision criteria Weigh the criteria Generate alternatives Rate each alternative Compute the ultimate option
Decision Analysis What If Analysis Sensitivity Analysis Goal Seeking Analysis – Goal Seek Goal Achieving Analysis - Scenarios
Decision TablesTables may include both qualitative &quantitative bases for decisions based on thedecision rules.
Payoff MatrixIs a quantitative technique. It identifies thedegree of likelihood of the occurrence of anevent.EV – Expected value derived from possibleconsequences.EV= prob (possibility1) + prob(possibility2)
Queuing Models Queue – Is a line of waiting customers who require service from one or more service providers. Queuing System – Waiting + Customers + Service Providers
Types of Queues Single – Channel, Single – Phase (Clinic) Single – Channel, Multiphase (Dual window) Multi – Channel, Single – Phase (Bank) Multi – Channel, Multiphase (Registration Process) Parallel Single – Phase (Super Markets) Customer Discrimination (Insurance Co.) Converging Arrivals (Traffic Management)
Data Warehouse Every organization generates corpus data from their day-to-day operations. Such data is considered to be the most powerful asset of the company. The data collected in this way needs to be only in “update only” format. For this activity the organization would require high end databases.
Data WarehouseData Warehousing is a new technology thatprovides the users the tools to store thesummarized information from multiple, assorteddatabases in a single repository.A Data Warehouse is aSubject-Oriented,Integrated,Time-Varying,Non-Volatile collection of data.
Data Warehouse Structure Data Marts are usually smaller chunks extracted from Data Warehouse and focus on a particular subject or department. Data Farm is a location all the data storing servers and other computer systems are placed.
Components/Elements ofData WarehouseThe major components of a Data Warehouseare:Source of Data Warehouse: (Transactionalor Operational Database) from which the datawarehouse is populated.Processes involved in creating a datawarehouse:4.A process to extract data from the database,and bring it to data warehouse.
Components/Elements ofData Warehouse2. A process to cleanse the data, to ensure itsquality for decision making.3. A process to load the cleansed data into thedata warehouse database.4. A process to create any desired summariesof the data like pre-calculated totals, averagesetc which can be requested often.
Components/Elements ofData WarehouseMetadata: It is “data about data”.Query tools: include an end-user interface forasking questions to the database, in a processcalled On-Line-Analytical Processing (OLAP).They may also include automated tools calledas Data Mining.Users: Finally, there is User or Users for whomthe data warehouse exists and without whom itwould be useless.
Data Warehouse Benefits Time Quantity & Quality Decision Making Business Processes Business ObjectivesNote : Slice and Dice operations
Data Warehouse Tools Access Tools Retrieval Tools Database Reporting Tools Data Analysis Tools Data Mining Tools
Data Mining“Data Mining” or “Knowledge DiscoveryDatabases (KDD)”, is the non-trivial extraction ofimplicit, previously unknown and potentially usefulinformation from the data.
Synonyms of Data Mining Knowledge Discovery in Databases (KDD Knowledge Extraction Data Analysis Information Harvesting Data Fishing, Data Dredging Data Archaeology Information Discovery
Need of Data MiningThe massive growth of data is due to the wideavailability of data in automated form fromvarious sources as Web, Business, Researchetc.We are “Data Rich but Information Poor”Data is useless, if it cannot deliver knowledge.That is why data mining is gaining wideacceptance in today’s world.Data Mining is likely to emerge as animportant managerial decision making tool.
Functioning of Data MiningThe cyclical functioning of Data Mining consistsof the following:Understand the situationBuilding/Developing (suitable) model/sUndertaking analysis based on the model/sInitiating appropriate actionMeasuring the resultsIterations/Repetition
Technologies used in DataMining Decision rules Decision Trees Generic Algorithms Non-Linear Regression Methods – Dependencies are checked Case Based Reasoning – Closest past similarities of the present situation. Neural Networks: An Artificial Neural Network (ANN) is an information processing paradigm that is inspired by the way biological nervous systems, such as the brain, process information.
Advantages of Neural Networks Adaptive learning Self-Organization Real Time Operation Fault Tolerance via Redundant Information Coding
Data Mining Applications Marketing Finance Human Resources / Personnel Manufacturing Services Retail
Data Mining – Banking CaseCustomers apply for a loan / credit card.Information such as age, income, employmenthistory, education, bank accounts, existingdebts etc. is provided.The bank does further verification and furtherdecides whether to issue the loan / credit card.
Trends affecting Data MiningGrossman has identified five external trendswhich affect Data Mining. They are:Data Trends - avoid dumping of data.Hardware Trends – speedy processNetwork Trends – New protocols & languagesScientific Computing Trends - SimulationBusiness Trends - predict opportunities andrisks
DSS DSS are interactive information systems, that rely on an integrated set of user-friendly hardware & software tools to produce and present information that is targeted to support the management in the decision making process.
Components of DSS Database Model Base Behavioural model Trend Analysis, Forecasting Management Science Model PPM-OB (Budgets) Operations Research Model Mathematics (MRP) DSS Software System
Components of DSS Program Model Base Model Management Dialogue Management Data Management(DSS Database) (Enterprise Data) (External Data Source)
Types of DSS Status Inquiry Systems – Searching the available vendors, products availability, procurement, stocks Data Analysis System – Pricing, Promotional activities, positioning Information Analysis System – selection of vendor/product/services based on price, performance, quality etc. Accounting Systems – ROI, Payables, Receivables could be calculated
Decision Support Systems GDSS – User Interactive computer based systems which facilitates the solution by set of decision makers in a group. EIS / ESS – It can handle any type of new situations from which summaries/snapshots can be generated for assisting the top management in effective decision-making. ES – Expert Systems are computer programs that represents the knowledge of some subject specialist with a view to solvig problems or giving advice.
Decision Support Systems KBES – Knowledge based expert systems AI - Artificial Intelligence is a technology which helps the application of computers to the areas that require knowledge, perception, reasoning, understanding which distinguish the human behaviour from computers.
Issues in MIS Security and Control – External Threats – through internet connection without a firewall. Dial-up connections Internal Threats Passwords Employee Discrimination Access Ids disclosed to unauthenticated user Authorization levels
Issues in MIS Quality Assurance – Quality indicates the degree of excellence of a product or service. Factors: Scale (Measurement Tool), Test (Implement), Worst (The least acceptable value) , Plan (Desired Values), Best (Best Fit value that a system is capable of), Now (the actuals derived) Models : Quality Profile Model, Constructive Quality Model, TickIT Initiative
Issues in MIS Ethical and Social Dimensions Ethics means system or code of conduct. Ethical & Social Dimension Obligation to Management Obligation to Society Obligation to Employer Obligation to Country
Issues in MIS IPR in ITInformation or related products such as process, code ofconduct, business models, diagrams, layouts can be classifiedas intellectual property which can be viewed, copied & shared.In this process it may loose its original identity. Suchinformation requires protection provisions from:7. Trade Secrets,8. Copyright9. Patents Managing Global Information Systems
Issues in MIS Managing Global Information Systems A Global Information Systems architecture consists of basic information systems required by organizations to coordinate worldwide trade and other tasks. A business driver is an environmental force to which businesses must respond and that influence a business’s direction