Management Information Systems

The Strategic Role of Information System

Delivered by:Tasawar Javed

Lecture 2

• Operational level systems– Info that monitor the elementary activities & transactions of

the organizations • Knowledge level systems

– IS that support knowledge and data workers in an organizations

• Management level systems– IS that support the monitoring, control, DM & Admin activities

• Strategic level systems– IS that support the long range planning activities of senior

management

Key System Applications in the Organization

• Transaction Processing Systems• Management Information Systems• Virtual Office Systems• Decision Support Systems• Enterprise Resource Planning Systems

The Evolution in Computer Applications

Transaction Processing Systems• The first computer based systems were called Electronic Data

Processing systems.• Later came to know as Accounting Information System.• To day the term

– TPS (Transaction Processing System) is common.• These systems share a common bond in that they process data that reflect

the activities of the firm.• Collection of people, procedure, software, database, devices• Records completed business transactions

• How it works??? Figure

• Operation level systems– Sales and marketing• Order tracking, Order processing

– Manufacturing• Machine control, plant schedule, Material Movement

Control

– Finance• Securities trading, Cash Management

– Accounting• Payroll, Accounts payables & receivable

– Human resource• Compensation, T&D, Employee record keeping

TPS

Transaction Processing SystemsType Info Input Processing Info Output Users

TPS Transactions, Events

Sorting, Listing, Merging, Updating

Detailed reports, lists, summaries

Operations personnel, supervisors

Transaction Processing Systems

Payroll SystemPayroll Master

File

Management reports

Online queries:

Employees data (all depts)

Employee Checque

Govt Docs

To General Ledger: wages & Salaries

Transaction Processing SystemsSales/ Mkt Systems

Manufacturing, production systems

Finance/Account systems

HR Systems Other types

Major Functions of System

Sales mgmt, MR, Promotion, Pricing, New products

Scheduling, purchasing, shipping/receiving, engineering, operations

Budgeting, general ledger, billing, cost accounting,

Personnel records, benefits, compensations, labor relations, training

Admissions, grade records, course records, alumni

Major Application Systems

Sales order IS, MR system, Pricing System

Material Resource planning systems, purchase order control systems, engineering systems, QA systems

General ledger, Account RA/PA; Budgeting, Funds Mgmt Systems

Payroll, Employee Records, Benefit systems, Career path systems, personnel planning systems

Registration system, student transcript system, curriculum class control system, alumni benefactor systems

Transaction Processing SystemsA Model

Management

Output physical resourceInput physical resource Transform

Environment

Data processingSoftware

Database

Transaction processingSystem

Environment

ENVIRONMENT

ENVIRONMENT

ENVIRONMENT

• Explanation– The Input, Transformation & Output elements of physical system of the firm are at

bottom– Data are gathered from throughout the physical system and the environment and

entered into the database– Data processing software transforms the data into information for the firm’s

management and for individuals and organizations in the firm’s environment– Information is processed data that is meaningful, it usually tells users something that

they did not already know

Transaction Processing Systems

• TPS will exhibit following characteristics– Rapid processing

• TPS systems are designed to process transactions virtually instantly to ensure that customer data is available to the processes that require it.

– Reliability• TPS systems are therefore designed to incorporate comprehensive safeguards and

disaster recovery systems. – Standardisation

• Transactions must be processed in the same way each time to maximise efficiency. – Controlled access

• Restricted access to the system ensures that employees who lack the skills and

ability to control it cannot influence the transaction process.

Transaction Processing Systems

• Virtual Office Systems• Decision Support Systems• Enterprise Resource Planning Systems

The Evolution in Computer Applications

Virtual Office Systems• 1964; IBM introduced an Electric Typewriter with a magnetic-

tape capability• It was capable of storing the typed data on magnetic tape and

retrieve the material when needed• The application was called Word processing• This was start of office automation, which is the use of

electronics to facilitate communication• In addition: e-mail, voice mail, electronic calendaring, audio

conferencing, videoconferencing, computer conferencing and facsimile (FAX) transmission

• Today, these applications account for a major portion of a firm’s use of the computer as a communications vehicle

• Personal productivity systems• Use this technology to self-manage and support

managers eg– To maintain calendar & address book that contain mailing

ID, e-mail address, phone numbers– PDA (personal Digital Assistants)Technology:

• Has not burdened managers with clerical tasks• To remove unnecessary obstructions to communicate between

managers & others• Has made managers more efficient• Rapid communication (made—check---send)

Virtual Office Systems

• Ability of the office automation applications to be performed anywhere gave birth to the concept a Virtual office;

• The performance of office activities independent of a particular physical location. For example, managers can engage in a videoconference without all gathering at the same physical location. Virtual office system have made managers more available to customers and to others with in the firm.

Virtual Office Systems

Managers as IS users– First users of computer output were clerical employees in the

accounting area.– When firm embraced the MIS concept, emphasis shifted from data to

info and from clerical employees to problem solvers.– Managers are individuals, their info needs vary widely.– Some useful framework have been developed that make it possible to

address the role of info in problem solving– High-quality info system cant be developed unless info systems

professionals and managers understood the managerial framework upon which modern organizations are based

Where managers are found• Management level

– Top– Middle & lower

Strategic planning levelManagement control levelOperational control level

• Business Areas– Marketing– Manufacturing– Finance– HR– IS services

What managers Do?• Management functions:– French management theorist Henri Fayol– Five major Management Functions

• Plan• Organize to meet the plan• Staff their organization (resources)• Direct them to execute plan• Control resources

• Managerial Role:– Henry Mintzberg gave detailed story about it and

presented 10 managerial roles such as; …………………………..

The Future of IT

• Future of IT will be driven by reduced cost and increased power of both computers and communication. Power is measured in processing speed, storage capacity, and the variety of input and output devices.

• Cell phones have browser, email, photo capability and editing features, wireless keyboards

• These advances indicate that in the future computing will be low cost, small in size, & mobile connected. To take advantage of that managers must learn to incorporate IS into decision making

• Thank you!!!• Q&A