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MANAGEMENT INFORMATION
SYSTEMS
Unit 1 : Lesson - 1
Information Systems in Business
Unit 1: INFORMATION SYSTEMS IN BUSINESS
Information system – Systems concepts - Classification and Types of
Information Systems – Information Systems components:
Hardware, Software, Network, Database, People and Procedure –
Translating business objectives into Information System
Architecture.
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Principles and Learning Objectives
Principles Learning Objectives
The value of information is directly linked to • Distinguish data from information and
how it helps decision makers achieve the describe the characteristics used to
organization’s goals. evaluate the quality of data.
Models, computers, and information systems are • Name the components of an information
constantly making it possible for system and describe several system
organizations to improve the way they characteristics.
conduct business. • Identify four basic types of models and
explain how they are used.
Knowing the potential impact of information • Identify the basic types of business
systems and having the ability to put this information systems and discuss who uses
knowledge to work can result in a them, how they are used, and what kind of
successful personal career, organizations benefits they deliver.
that reach their goals, and a society with a
higher quality of life.
System users, business managers, and • Identify the major steps of the systems
information systems professionals must development process and state the goal of
work together to build a successful each.
information system. • Discuss why it is important to study and
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understand information systems.
Information Concepts
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Information systems and their role in a
business enterprise
The objective of any management is to achieve the
organizational goal, in the process we will be
utilizing the scarce resources viz. men, material,
machines, money; effectively and efficiently.
Information System
An Information System is a collection of
components that work together to provide
information to help in the operations and
management of an organization.
Information Technology is the integration of
computers, communications equipment, and
other technology used in information
systems.
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Data vs. Information
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Information: Important Resource
Characteristics of Valuable Information
Accurate, timely, relevant information is the key
for good decision making
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The Characteristics of Valuable
Information
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The value of information is directly linked to • Distinguish data from information and
how it helps decision makers achieve the describe the characteristics used to evaluate
organization’s goals. the quality of data.
System users, business managers, and • Identify the major steps of the systems
information systems professionals must development process and state the goal of
work together to build a successful each.
information system. • Discuss why it is important to study and
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understand information systems.
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System and Modeling
Concepts
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System
A set of elements or components that
interact to accomplish goals
Input
Processing mechanism
Feedback
Output
System boundary
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Components of a System
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System Concepts
A system is a set of related elements that
collectively work together to achieve some
common purpose or goal.
A system is an interrelated set of business procedures used
within one business unit, working together for some purpose
for example - Inventory systems keeps track of purchases and
supplies. The systems takes input from outside, process it and
sends the resulting output back to its environment.
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key features of System
• Components
• Interrelation
• Boundary
• Purpose
• Environment
• Interfaces
• Constraints
• Input
• Output
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Systems Classification
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Systems thinking
Viewing organization in terms of
suborganizations or subsystems
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Notes : Systems
A typical system is arranged or configured within a system boundary
thus distinguishing it from its environment. It is normally classified
along numerous dimensions and among these are:
Simple or Complex
Open or Closed
Stable or Dynamic
Adaptive or Nonadaptive
Permanent or Temporary
What Is An Information
System?
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What is an Information System?
An Information System is a collection of
components that work together to
provide information to help in the
operations and management of an
organization.
Thus it is a set of interrelated components
that collect (input), manipulate (process)
and disseminate data and information
(output) and provide feedback mechanism
to meet an objective.
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Notes : Information System
An information system is a set of interrelated elements or components that
collect (input), manipulate (process), and disseminate (output) data and
information, and provide a feedback mechanism to meet an objective.
Input refers to the act of gathering and capturing raw data. It can be a
manual or automated process but regardless of the method used, the
accuracy of the input is critical in order to achieve the desired output.
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The Benefits of Human-
Human-Computer Synergy
Synergy: combined
resources produce
output exceeding the
sum of the outputs of
the same resources
employed separately
Translates human
thought into efficient
processing of large
amounts of data
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Components of an Information System
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Notes : Computer based Information
System
The term hardware is used to describe the physical computer
equipment used in a CBIS while software is defined as the set
of programs that govern the operation of the computer.
A database is an organized collection of facts and information,
and most managers and executives believe that it is one of the
most valuable and important parts of a CBIS.
Telecommunications is the electronic transmission of signals
for communications and enables organizations to carry out
their processes and tasks through effective computer
networks.
People are called the most important element in a CBIS
because they manage, run, program, and maintain the system.
Finally, the term procedures refer to the strategies, policies,
methods, and rules for using the CBIS.
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The value of information is directly linked to • Distinguish data from information and
how it helps decision makers achieve the describe the characteristics used to evaluate
organization’s goals. the quality of data.
Models, computers, and information systems are • Name the components of an information
constantly making it possible for system and describe several system
organizations to improve the way they characteristics.
conduct business. • Identify four basic types of models and
explain how they are used.
Knowing the potential impact of information • Identify the basic types of business
systems and having the ability to put this information systems and discuss who uses
knowledge to work can result in a them, how they are used, and what kind
successful personal career, organizations of benefits they deliver.
that reach their goals, and a society with
a higher quality of life.
System users, business managers, and • Identify the major steps of the systems
information systems professionals must development process and state the goal of
work together to build a successful each.
information system. • Discuss why it is important to study and
32
understand information systems.
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Business Information Systems
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Types of ISs:
Types of ISs are distinguished from each other
on the basis of what the system does or by the
technology used to construct the systems. You
will work with at least four classes of information
systems.
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Types of ISs
Transaction Processing Systems (TPS)
Automates the handling of data about business
activities or transactions. For example, a bank’s TPS
would capture information about withdrawals from
and deposits to customer accounts.
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Types of ISs
Decision Support Systems (DSS)
is designed to help decision makers with decisions.
Operations that often answer “what if?” questions.
Whereas an MIS produce a report, a DSS provides an
interactive environment in which decision makers can
quickly manipulate data and models of business
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19
The geographical locations,
population density,
culture of people,
areas served,
competitor existence,
distance from warehouse,
location of production centers and warehouse,
shortest routes to move products from one center to another etc are all
going to be seen in Maps rather than tables to visualize the situation better.
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Payroll Transaction Processing
System
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Management Information Systems (MIS)
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MIS Outputs
Scheduled reports
Demand reports
Exception reports
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Decision Support Systems (DSS)
DSS- A decision support system is an organized
collection of people, procedures, software,
databases, and devices used to support
problem-specific decision making.
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Special--Purpose Business Information
Special
Systems
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Virtual Reality
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Data Glove
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Notes : Business Information Systems
Businesses utilize information systems to improve their operations at all levels. Nearly all
workers, from top management to production line employees, come in contact with
computerized systems on a daily basis. This results in a variety of systems functioning in
different areas.
First one of business information systems is the transaction processing system (TPS).
This is used to manage and facilitate common business transactions such as sales to
customers, and payments to employees and suppliers. Related to the TPS are workflow
systems, which are rule-based, management software used to direct, coordinate, and
monitor the execution of an interrelated set of tasks arranged to form a business
process. Also related to TPSs are enterprise resource planning (ERP) systems. These
are a set of integrated programs that are capable of managing a company’s vital
business operations for an entire multisite, global organization. Although the scope of an
ERP system may vary from company to company, most provide integrated software to
support the manufacturing and finance business functions of an organization.
The information collected using a TPS can be transformed into routine information for
managers and decision-makers through the use of a management information system
(MIS). These systems are designed to provide a variety of reports including scheduled
and demand reports. Decision support systems (DSS) use the data collected by a TPS to
support problem-specific decision-making. A DSS operates from a managerial
perspective and is often designed to take managerial decision-making styles into
consideration. Whereas an MIS helps an organization "do things right," a DSS helps a
manager "do the right thing."
Newer technologies and specialized systems are also used by businesses. Among these
are artificial intelligence (AI) systems, which attempt to take on the characteristics of
human intelligence. 51
The value of information is directly linked to • Distinguish data from information and
how it helps decision makers achieve the describe the characteristics used to evaluate
organization’s goals. the quality of data.
Models, computers, and information systems are • Name the components of an information
constantly making it possible for system and describe several system
organizations to improve the way they characteristics.
conduct business. • Identify four basic types of models and
explain how they are used.
Knowing the potential impact of information • Identify the basic types of business
systems and having the ability to put this information systems and discuss who uses
knowledge to work can result in a them, how they are used, and what kind of
successful personal career, organizations benefits they deliver.
that reach their goals, and a society with a
higher quality of life.
System users, business managers, and • Identify the major steps of the systems
information systems professionals must development process and state the goal of
work together to build a successful each.
information system. • Discuss why it is important to study and
52
understand information systems.
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Systems Development
Systems development is the act of creating or
modifying existing business systems.
Developing information systems to meet
business needs is highly complex, so much so
that it is common for information systems
projects to overrun budgets and exceed
scheduled completion dates. System
development can be viewed as a series of
steps as described in the next slide.
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Systems Development
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Information Systems in Functional
Areas of Business
Accounting
Finance
Marketing
Production
Human Resource Management
Other functions
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Benefits of Information
Systems
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Benefits of Information Systems
Better information
information system process data and they produce information,
which is the basis for good decision making.
Improved service
computer information system operates at any time of the day or
night and process data faster than humans
“Your Holiday is our working day” (MAS)
Increased productivity
With computer information system people can do more in a
period of time than they would be able to do if they did not have
such systems.
Reduced cycle time (video)
Source of Substainable Competitive Advantage
"customer integration" (Dell)
help the business to reduce the cost of production
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Notes : Why Learn About Information Systems?
Studies have shown that the involvement of managers and decision makers in all aspects of
information systems is a major factor for organizational success, including higher profits and
lower costs. A knowledge of information systems will help you make a significant contribution on
the job and will also help you advance in your chosen career or field.
You must acquire both computer literacy and information systems literacy in order to be able to
use information systems to meet personal and organizational goals. Computer literacy refers to
knowledge of computer systems and equipment and the ways they function. It stresses
equipment and devices (hardware), programs and instructions (software), databases, and
telecommunications.
Information systems are used in all functional areas and operating divisions of business. In
finance and accounting, information systems are used to forecast revenues and business activity,
determine the best sources and uses of funds, manage cash and other financial resources,
analyze investments, and perform audits to make sure the organization is financially sound and
that all financial reports and documents are accurate. In sales and marketing, it is used to
develop new goods and services (product analysis), determine the best location for production
and distribution facilities (place or site analysis), determine the best advertising and sales
approaches (promotion analysis), and set product prices to get the highest total revenues (price
analysis)
Information systems are used in almost every industry or field. The airline industry employs
Internet auction sites to offer discount fares and increase revenue. Investment firms use
information systems to analyze stocks, bonds, options, the futures market, and other financial
instruments, as well as to provide improved services to their customers. Banks use information
systems to help make sound loans and good investments. The transportation industry uses
information systems to schedule trucks and trains to deliver goods and services at the least cost.
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Summary
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Annexure
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Management Information Systems (MIS)
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Intelligent Support Systems (ISS)
Essentially, artificial intelligence (AI) these systems
perform intelligent problem solving.
One application of AI is expert systems. Expert systems
(ESs) provide the stored knowledge of experts to
nonexperts, so the latter can solve difficult or time-
consuming problems. These advisory systems differ from
TPS, which centered on data, and from MIS and DSS,
which concentrated on processing information. With DSS,
users make their decisions according to the information
generated from the systems. With ES, the system makes
recommended decisions for the users based on the built-
in expertise and knowledge. 65
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Office Automation Systems (OAS)
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What characteristics of an Information System make it
Management Information Systems
or
Define MIS
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