History Business Management Information System Lecture 2

1. History Business Management Information SystemLecture 2

2. A Little History • U.S. passed from the industrial era to the information era as early as 1957 • The number of U.S. employees whose jobs were primarily to handle information surpassed the number of industrial workers • In the late ’50s / ‘60s IT to support “information work” = largely non-existent (except telephone) • Information work = mostly done in general offices without much support from technology • People factories?

3. IBM hosted conference stated that: “The advances that have taken place in calculating equipment and methods make it possible to determine the relationship between ultimate yields, time of harvest and climatic conditions during the growing season. Relationship between the perspective and actual yields and changing prices can be established. With such information at hand the farmer should be in a position to make a decision on his prediction with a high degree of certainty at mid-season regarding his yield and income at harvest time.”

4. This statement, made in 1963, reflects the optimism that prevailed with respect to information systems. Even though there was much enthusiasm related to these early systems they basically concentrated on accounting activities and production records. • Examples include the TelFarm electronic accounting system at Michigan State University and DHIA for dairy operations.

5. A Little History cont. • Accounting activities and production records has been understood by farm management economists. • Financial and production records have long been used by these Economists as an instrument to measure and evaluate the success of a farm business • Increased enthusiasm for information systems to enhance management decision processes

6. A Little History cont. • The model base component of the system has decision models that relate to operational, tactical and strategic decisions. • The database/model base management system is the bridge between database and model base components.

7. Continue.. • The user interface, one of the more critical features of the system, is used to assist the decision maker in making more efficient and effective use of the system. • The decision maker must have the skills and knowledge on how to correctly use these systems to address the unique problem situation at hand.

8. Decision Support System

9. Continue.. • The international conference that followed in France focused on the low adaption rate of management information systems. • The use of geographic information systems (GIS) in conjunction with geographic positioning systems (GPS) to record and display data regarding cropping operations (e.g., yields obtained) and to control production inputs (e.g., fertilizer levels).

10. (…) • By the mid 1960s it became clear that the accounting systems were fairly effective in supplying descriptive and diagnostic information but they lacked the capacity to provide predictive and prescriptive information • A new approach was needed – a method of doing forward planning or a management information system that was more model oriented

11. Universities • As an example, Kuhlmann, Giessen University, developed a very robust and comprehensive whole farm simulation model (SIMPLAN) that executed on a mainframe computer • the “Top-Farmer Workshops” developed by Purdue University.

12. Computer technology continued to advance at a rapid pace, new communication systems were evolving and the application of this technology to agriculture was very encouraging • Information for the data oriented systems often did not match the data needed for the model oriented systems e.g a cash flow production model

13. A Little History cont.

14. A Little History cont. • 70s = it all ‘started’ with many of the foundations of IT today invented and costs starting to fall • Typewriters, fax, ‘smaller’ computers • 1980s = number of US information workers surpassed the number in all other sectors (>50%)

15. A Little History cont. • Information Technology: • Initially used to perform existing information work more quickly and efficiently • Then = used to manage work better • Now = well into the 3rd stage of technology assimilation • IT makes pervasive changes in the structure and operation of: • Work • Business practices • Organizations • Industries • The ‘Global Economy’ (=enabler?)

16. The Data Processing Industry grew rapidly in the 1960’s, however, the “quantity” of output, most often, far overshadow the “quality” of output.

17. The growth of the 1960’s and 1970’s saw a shift from “computer” orientation, to “information” orientation Shift from Data storage to organized information systems

18. John Diebold (1979) wrote: • “Information, which in essence is the analysis and synthesis of data, will unquestionably be one of the most vital corporate resources in the 1980’s. It will be structured into models for planning and decision-making. It will be incorporated into measurements of performance and profitability. It will be integrated into product design and marketing methods. In other words, information will be recognized and treated as an asset.” • John Theurer Diebold (June 8, 1926 – December 26, 2005) was an early champion of widespread use of computing and automated technology.

19. IFIP/BCS (1985) • An information system is a system which assembles, stores, processes, and delivers information relevant to an organization (or to society) in such a way that the information is accessible and useful to those who wish to use it, including managers, staff, clients, and citizens. An information system is a human activity (social) system which may or may not involve the use of computer systems. • International Federation for Information Processing/British Computing Society 1985 curriculum for information systems. International Federation for Information Processing/ British Computer Society: Founded 1957

20. McNurlin and Sprague (1989 & 1999) • “The mission for information systems in organizations is to improve the performance of people in organizations through the use of information technology.” • The ultimate objective is performance improvement - a goal based on outcomes and results rather than a “go-through-the-steps process” goal.

21. Cont… • The focus is the people who make up the organization. Improving organizational performance is by the people and groups that comprise the organization. • The resource for this improvement is information technology.

22. Turban (1990) • A management information system is a formal, computer-based (but need not be) system intended to retrieve, extract, and integrate data from various sources in order to provide timely information necessary for managerial decision-making. • An MIS is a business information system designed to provide past, present, and future information appropriate for planning, organizing, and controlling the operations of the organization.

23. Steven Alter (1992) • An information system is a combination of • work practices • information • people, and • information technologies • organized to accomplish goals in an organization.

24. Vladimir Zwass (1992) • A Management Information System is an organized portfolio of formal systems for obtaining, processing, and delivering information in support of the business operations and management of an organization.

25. Ken Laudon and Jane Laudon (1995) • Information system - (definition) Interrelated components that collect, process, store, and disseminate information to support decision-making, control, analysis, and visualization in an organization.

26. Turban, McLean, Wetherbe (1996) • An information systems is a collection of components that collects, processes, stores, analyzes, and disseminates information for a specific purpose. • The major components of a computer-based information system (CBIS) can include (1) hardware, (2) software, (3) a database (4) a network (5 )procedures, and (6) people.

27. Cont…. The system operates in a social context, and the software usually includes application programs which perform specific tasks for users.

28. The Early History of IS with other disciplines Information systems have been used with variety of different subject areas, including • IS and Managerial Accounting • IS and Operations Research • IS and Management and Organization Theory • IS and Computer Science • IS and Cognitive Psychology

29. A management information system (MIS) is a system or process that provides the information necessary to manage an organization effectively. • MIS and the information it generates are generally considered essential components of prudent and reasonable business decisions.

30. The importance of maintaining a consistent approach to the development, use, and review of MIS systems within the institution must be an ongoing concern of both bank management and OCC examiners. • MIS should have a clearly defined framework of guidelines, policies or practices, standards, and procedures for the organization.

31. MIS is viewed and used at many levels by management. • It should be supportive of the institution's longer term strategic goals and objectives. • Financial accounting systems and subsystems are just one type of institutional MIS.

32. An institution's MIS • Enhance communication among employees. • Deliver complex material throughout the institution. • Provide an objective system for recording and aggregating information.

33. Continue.. • Reduce expenses related to labor-intensive manual activities. • Support the organization's strategic goals and direction.

34. It should always be sufficient to meet an institution's unique business goals and objectives. • MIS is a critical component of the institution's overall risk management strategy.

35. MIS should be used to recognize, monitor, measure, limit, and manage risks. • Risk management involves four main elements: • Policies or practices. • Operational processes. • Staff and management. • Feedback devices.

36. The MIS represents the electronic automation of several different kinds of counting, tallying, record-keeping, and accounting techniques of which the by far oldest, of course, was the ledger on which the business owner kept track of his or her business. 

37.  Computing-Tabulating-Recording Company • Automation emerged in the 1880s in the form of tabulating cards which could be sorted and counted. • These were the punch-cards still remembered by many: they captured elements of information keyed in on punch-card machines; the cards were then processed by other machines some of which could print out results of tallies. 

38. Each card was the equivalent of what today would be called a database record, with different areas on the card treated as fields. • World-famous IBM had its start in 1911; it was then called Computing-Tabulating-Recording Company

39. C-T-R. Punch cards • C-T-R. Punch cards were used to keep time records and to record weights at scales. • The U.S. Census used such cards to record and to manipulate its data as well.

40. World War II punch-card systems • When the first computers emerged after World War II punch-card systems were used both as their front end (feeding them data and programs) and as their output (computers cut cards and other machines printed from these)

41. In 1970s, 80s, and 90s • Waves of innovation spread the fundamental virtues of coherent information systems across all corporate functions and to all sizes of businesses in the 1970s, 80s, and 90s. 

42. Major functional areas developed • Often these were not yet connected: engineering, manufacturing, and inventory systems developed side by side sometimes running on specialized hardware. • Personal computers ("micros," PCs) appeared in the 70s and spread widely in the 80s

43. 21st century • The first decade of the 21st century the narrowly conceived idea of the MIS has become somewhat fuzzy. • Systems are available for computer assisted design and manufacturing (CAD-CAM); computers supervise industrial processes in power, chemicals, petrochemicals, pipelines, transport systems, etc.

44. Systems manage and transfer money worldwide and communicate worldwide. • Virtually all major administrative functions are supported by automated system. • Many people now file their taxes over the Internet and have their refunds credited (or money owning deducted) from bank accounts automatically.

45. MIS was thus the first major system of the Information Age. At present the initials IT are coming into universal use. • "Information Technology" is now the category to designate any and all software-hardware-communications structures that today work like a virtual nervous system of society at all levels.

46. The mid-sixties IS was already forging its way into business mainstream. • Computers remained out of reach for most businesses, telecommunications made its mark with the TELEX machine. • This step gave businesses the ability to communicate within its own organization anywhere in the world at any time and effectively pass instructions and information.

47.  The use of computer in business and industry usually started off in the accounting departments. • a number of business school began developing Management Information System (MIS) programs to meet the growing need of IS managers

48.   During the seventies more upper management recognized the importance of IS and the flexibility it was bring to business • The TELEX became the standard of information transfer and the mainframe computer became the standard for database creation.

49. IS begins to receive its own autonomy and large budgets in corporations, many technical savvy managers of these new departments begin spending huge amount of money on systems and software at their own discretion and many time out spend all other departments without any returns to the business

50.  These were troubling and risky times for CEO's deciding to direct the business into IS based systems. • The systems and software were complex, continually changing, and the people that knew the systems tended have their own agendas