MANAGEMENT INFORMATION SYSTEMS SUMMARY( LECTURE NOTES 1 – Information Systems in Global Business Today) 1. Explain why Information Systems are so essential in business today. • Information Systems are fundamental for conducting Business today. • In many industries, survival and even existence is difficult without extensive use of Information Systems. • Information Systems have become essential for helping organizations operate in a global economy. • Organization are trying to become more competitive and efficient by transforming themselves into ‘Digital Firms’ where nearly all core business processes and relationship with customers, suppliers, and employees are digitally enabled. • Business today use Information Systems to achieve six major objectives: 1. Operational excellence 4. Improved Decision making 2. New product, Services & Business models 5. Competitive advantage 3. Customer / Supplier intimacy 6. Day-to-day survival
MANAGEMENT INFORMATION SYSTEMS 2. Define an Information System from both Technical and Business perspective From a Technical perspective: • An Information System collects, stores, and disseminates Information from an organization’s environment and internal operations to support organizational functions and decision making, communication, coordination, control, Analysis and visualization. • Information Systems transform raw data into useful Information through three basic activities: Input, Processing and Output From a Business perspective • An Information System provides a solution to a problem or challenge facing a firm and provides real economic value to the business.
MANAGEMENT INFORMATION SYSTEMS 3. Identify and describe the three dimensions of Information Systems An Information System represents a combination of Management, Organization, and Technology elements. • The Management Dimension involves: • Leadership, • Strategy, • Management behaviour. • The Organization Dimension involves: • Organization’s hierarchy, • Functional specialities, • Business Processes, • Culture, • Political interest groups • The Technology Dimension consists of: • Computer Hardware, • Software, • Data Management technology, • Network / Telecommunications technology (including the Internet.)
MANAGEMENT INFORMATION SYSTEMS 4. Asses the Complementary Assets required for I.T to provide value to a Business • An Information System is part of a series of ‘Value-adding activities’ for acquiring, transforming and distributing Information to improve Management decision making, enhance Organizational performance, and ultimately Increase firm profitability • IT cannot provide this Value unless it is accompanied by supportive changes in Organization and Management called Complementary Assets These Complementary Assets include: • New Business Models • New Business Processes • Supportive Organizational Culture • Incentives for Management Support and innovations • Training • Social Assets (Such as Standards, Laws and Regulations), • Telecommunications infrastructure. • Firms that make appropriate investments in these complementary Assets, also called Organizational and Management Capital, receive superior returns on their IT Investment.
MANAGEMENT INFORMATION SYSTEMS 5. Identify and describe contemporary approaches to the Study of Information Systems and distinguish between Computer Literacy and Information Systems Literacy. • The study of Information Systems deals with issues and insights contributed from Technical and Behavioural disciplines. • The Discipline that contributes to Technical approach are: • Computer Science • Management Science • Operational Research • The Discipline that contributes to Behavioural Approach are: • Psychology • Sociology • Economics • Information Systems Literacy requires an understanding of the Organizational and Management dimensions of Information Systems, as well as Technical dimensions addressed by Computer Literacy. • Information System Literacy draws on both Technical and Behavioural approaches to studying Information Systems. • The field of MIS promotes Information Systems Literacy by combining all of these disciplines with practical orientation towards developing System solutions to real world problems and managing IT resources.
MANAGEMENT INFORMATION SYSTEMS SUMMARY ( LECTURE NOTES 2 – How Business Use Information Systems?) 1. Define and describe Business Processes and their relationship to Information Systems. • A Business Process is a logically related set of activities that define how specific Business tasks are performed, and a Business can be viewed as a collection of Business Processes. • Business Processes are concrete flows of Material, Information and Knowledge • Business Processes represent unique ways in which organizations coordinate Work, Information, and Knowledge, and the ways to which Management chooses to coordinate work. • Managers need to pay attention to Business Processes because they determine how well the organization can execute its business, and thus be a potential source of strategic success or failure. • Each major Business functions has its own set of Business processes (such Processes for Production function) however there are many business processes which are cross-functional such as order fulfilment. • Information Systems can help organizations achieve great efficiencies by automating parts of these processes or by helping Organizations redesign and streamlining them. • Firms can become more flexible and efficient by coordinating their Business Processes closely, and in some cases, integrating thesePprocesses so they are focused on efficient management of resources and customer service.
MANAGEMENT INFORMATION SYSTEMS SUMMARY 2. Describe the Information Systems supporting the major business functions At each level of Organization, Information Systems support the major Functional areas of the Business • Sales and Marketing Systems • Help the firm identify Customers for firm’s Products or Services, • Develop Products and Services to meet Customer's needs • Promote the Products and Services • Sell the Product and Services • Provide ongoing Customer support • Manufacturing and Production Systems • Deals with Production Planning • Development • Production of Products and Services • Control the flow of Production
MANAGEMENT INFORMATION SYSTEMS SUMMARY • Finance and Accounting Systems • Keeps firm’s Financial assets and fund flows • Human Resources Systems • Maintain Employee records • Track Employee skills, Job performance, and Training • Support planning for Employee compensation and career development
MANAGEMENT INFORMATION SYSTEMS SUMMARY 3. Evaluate the Role Played by System Serving the Various Levels of Management in Business and their relationship to each other. • There are four major types of Information Systems in contemporary organizations serving: • Operational Management • Middle Management • Senior Management 1. Transaction Processing Systems (TPS) Serve Operational Management . Such as Payroll or Order Processing Systems that track the flow of daily routine transactions necessary to conduct business. 2. Management Information Systems (MIS) Provide Middle management with reports and access to the organization’s current performance and historical records. Most MIS reports condense information from TPS and are not highly analytical.
MANAGEMENT INFORMATION SYSTEMS SUMMARY 3. Decision Support Systems (DSS) DSS supports Management decisions when these decisions are unique, rapidly changing, and not specified easily in advanced. DSS have more advanced Analytical models and Data analysis capabilities than MIS and often draw on information from external as well as internal sources. 4. Executive Support Systems (ESS) Support Executive Management by providing data of greatest importance to senior Management Decision makers, often in the form of graphs and charts delivered via portals. ESS have limited Analytical capabilities but can draw on sophisticated graphics Software and many sources of internal and external information.
MANAGEMENT INFORMATION SYSTEMS SUMMARY 4.Explain how Enterprise Applications and Intranets promotes Business Process Integration and improve organizational performance Enterprise Applications These Systems are designed to support organizational wide process coordination and integration so that the organization can operate efficiently; Such Enterprise Systemsare: • Enterprise Systems • Supply Chain Management Systems • Customer Relationship Systems • Knowledge Management Systems Enterprise Systems Span multiple functions and business processes and may be tied to the Business Processes of other organizations Enterprise Systems integrate the key internal Business Processes of a firm into a single Software System so that information can flow throughout the organization, improving Coordination, efficiency, and Decision making.
MANAGEMENT INFORMATION SYSTEMS SUMMARY Supply Chain Management Systems Help the firm manage its relationship with supplier to optimize the Planning, Sourcing, Manufacturing, and Delivering of Products and Services. Customer Relationship Management Uses Information Systems to coordinate all the Business Processes surrounding the firm’s interactions with its Customers to optimize firm’s Revenue and Customer satisfaction Knowledge Management Systems Enable firms to optimize the creation, sharing, and distribution of knowledge to improve Business Processes and Management decisions Intranets and Extranets both use Internet technology and standards to assemble information from various Systems and present it to the User in a Web page format. Extranets make portions of private corporate Intranets available to outside.
MANAGEMENT INFORMATION SYSTEMS SUMMARY 5. Asses the role of Information Systems Function in a Business The Information Systems Department is the formal Organizational unit responsible for IT Services. The IS Department is responsible for maintaining the Computer Hardware, Software, Data Storage, and Network that comprise the firm’s IT Infrastructure. The Department is consisted of Specialists, such as Software Engineers, Systems Analysts, Programmers, Project Web Designers, Project Managers, Systems Managers and is often headed by a Chief Executive Officer (CIO). Alternative ways of Organizing the IT Function • A very small company will not have a formal IS group. • Larger Companies will have a separate IS Department. • Each Functional Area of the Business may have its own IS Department, overseen by a CIO. • The IT function may be run as a separate Department similar to other Functional department • Very Large companies with multiple Divisions and Product Lines have an Information System department for each Division reporting to a high-level Central Information Systems group and CIO.
MANAGEMENT INFORMATION SYSTEMS SUMMARY(LECTURE NOTES 3 - Information Systems, Organizations and Strategies) 1. Identify and describe features of organizations that managers need to know about in order to build and use Information Systems successfully. Managers need to understand certain essential features to build and use Information Systems successfully. All modern Organizations are hierarchical, specialized, and, impartial, using explicit routines to maximize efficiency. All Organizations have their culture and Politics arising from differences in interest groups, and they are affected by their surrounding environment. Organizations differs in goals, groups served, social roles, leadership styles, incentives, types of tasks performed, and type structure. These features help explain differences in organization's use of Information Systems.
MANAGEMENT INFORMATION SYSTEMS SUMMARY 2. Evaluate the impact of Information Systems on Organizations Information Systems and the Organizations in which they are used interact with and influence each other. The introduction of a new Information System will affect Organizational Structure, goals, Work design, values, Competition between interest groups, Decision making, and day-to-day behaviour. At the same time, Information Systems must be designed to serve the needs of important organizational groups and will be shaped by the organization’s structure, tasks, goals, culture, Politics, and Management. IT can reduce transaction and agency costs, and such changes have been accentuated in Organizations sing the Internet. Information Systems are closely intertwined with an organization’s structure, Culture, and Business Processes. New Systems disrupts established patterns of work and power relationships. So there is often considerable résistance to them when they are introduced. The complex relationship between Information Systems, Organizational performance, and Decision making must be carefully managed.
MANAGEMENT INFORMATION SYSTEMS SUMMARY 3. Demonstrate how Porter’s Competitive Forces Model and the Value Chain Model help Businesses use Information Systems for Competitive Advantage. The Strategic position of the firm, and its strategies, are determined by competition with its traditional direct competitors but also they are greatly affected by: • New market entrants, • Substitute products and services, • Suppliers, • Customers. Information Systems help companies compete by maintaining low cost, differentiating products or services, focusing on market niche, strengthening ties with Customer and Suppliers, and increasing barriers to market entry with high levels of Operational excellence. The Value Chain Model highlights specific activities in the business where Competitive strategies and Information Systems will have the greatest impact.
MANAGEMENT INFORMATION SYSTEMS SUMMARY The Porter’s Competitive Forces Model views the firm as a series of primary and support activities that add value to a firm’s products or services. Primary activities are directly related to production and distribution, whereas support activities make the delivery of primary activities possible. A Firm’s Value Chain can be linked to that value chains of its Suppliers, Distributors, and Customers. A Value Web consist of Information Systems that enhance competitiveness at the Industry level by promoting the use of standards and industry-wide consortia, and by enabling businesses to work more efficiently with their value partners.
MANAGEMENT INFORMATION SYSTEMS SUMMARY 4. Demonstrate how Information Systems help Business use Synergies, Core Competences, and Network-based Strategies to achieve Competitive Advantages. Because firms consists multiple business units, Information Systems achieve additional efficiencies or enhanced services by trying together the operations of disparate business units. Information Systems help businesses leverage their core competences by promoting the sharing of knowledge across business units. Information Systems facilitate Business Models based on large Networks of Networks to link to other firms so that a company can use the capabilities of other companies to together to deliver value to the customer. Information Systems support a dense Network of interactioms among the participating firms.
MANAGEMENT INFORMATION SYSTEMS SUMMARY 5. Asses the challenges posed by Strategic Information Systems and Management solutions. Implementing Strategic Systems often requires extensive organizational change and a transition from one Sociotechnical level to another. • Such changes are called Strategic Transitions and are often difficult and painful to achieve. Moreover, not all Strategic Systems are profitable, and they can be expensive to build. Many Strategic Information Systems are easily copied by other firms so that strategic advantage is not always sustainable. A strategic Systems Analysis is helpful.
MANAGEMENT INFORMATION SYSTEMS SUMMARY (LECTURE NOTES 4 – Foundations of Business Intelligence) 1. Evaluate Tools and Technologies for providing Information from Databases to improve Business Performance and Decision making. Powerful tools are available to analyze and access the Information in Databases. A Data warehouse consolidates current and historical data from many different Operational Systems in a central Database designed for reporting and Analysis. Data Warehouse support multidimensional data analysis, also known as Online Analytical Processing (OLAP). OLAP represents relationships among data as a multidimensional structure, which can be visualized as cubes of data and cubes within cubes of data, enabling more sophisticated Data Analysis. Data Mining analyzes large pools of data, including the contents of Data Warehouses, to find patterns and rules that can be used to predict future behaviour and Decision making. Conventional Databases can be linked via Middleware to the Web or a Web interface to facilitate user access to an organization’s internal data, .
MANAGEMENT INFORMATION SYSTEMS SUMMARY 2. Asses the role of Information Policy, Data Administration, and Data quality assurance in the Management of Organizational Data resources. Developing a Database environment requires Policies and Procedures for managing Organizational data as well as a good Data Model and Database Technology. A formal Information Policy govern the Maintenance, Distribution, and use of Information in the organization. In a large corporations, a formal Data Administration function is responsible for Information Policy, as well as for data Planning, Data Dictionary development, and monitoring data usage in the firm. Data that are inaccurate, incomplete, or inconsistent create serious Operational and Financial problems for business because they may create inaccuracies in Product pricing, Customer accounts, and Inventory data, and leads to inaccurate decisions about the actions that should be taken by the firm. Firms must take special steps to make sure they have a high level of Data quality. These include using Enterprise-wide Data Standards, Databases designed to minimize inconsistent and redundant data, Data Quality Audits, and Data Cleansing Software.
MANAGEMENT INFORMATION SYSTEMS SUMMARY(LECTURE NOTES 5 – IT Infrastructure and Emerging Technologies) 1.