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ITEC 1010 Information and Organizations
Management Information Systems
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ITEC 1010 Information and Organizations
MIS Model
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ITEC 1010 Information and Organizations
Management Information Systems (MIS)
Management information system (MIS)
• An MIS provides managers with information and support for effective decision making, and provides feedback on daily operations
• Output, or reports, are usually generated through accumulation of transaction processing data
• Each MIS is an integrated collection of subsystems, which are typically organized along functional lines within an organization
• A combination of computers and people that is used to provide information to aid in making decisions and managing a firm.
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ITEC 1010 Information and Organizations
Managers and Information
Generally, managers at different levels of an organizational hierarchy: Make different types of decisions Control different types of processes Therefore, they have different information needs
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ITEC 1010 Information and Organizations
Managers and Information
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ITEC 1010 Information and Organizations
The Traditional Organizational Pyramid
Many organizations follow pyramid model CEO at top Small group of senior managers, one level down Larger number of middle managers, reporting to senior managers Many more lower-level managers who report to middle managers
Clerical and Shop Floor Workers Bottom of organizational pyramid
Operational Management In charge of small groups of front-line workers
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ITEC 1010 Information and Organizations
Tactical Management Also called middle managers Make decisions for subordinates, affecting the near
and somewhat more distant future Strategic Management
Decisions affect entire or large parts of the organization; “what to do” decisions
The Traditional Organizational Pyramid
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ITEC 1010 Information and Organizations
Characteristics of Information at Different Managerial Levels
Different management levels have different information needs
Information needed by different managerial and operational levels varies in the time span covered, level of detail, source, and other characteristics over a broad spectrum
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ITEC 1010 Information and Organizations
Data Range Amount of data from which information is extracted
Time Span How long a period the data covers
Level of Detail Degree to which information is specific
Characteristics of Information at Different Managerial Levels
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ITEC 1010 Information and Organizations
Characteristics of Information at Different Managerial Levels
Source: Internal versus External Internal data: collected within the organization External data: collected from outside sources
• Media, newsletters, government agencies, Internet
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ITEC 1010 Information and Organizations
The Nature of Managerial Work
Planning Planning at different levels
• Long-term mission and vision• Strategic goals• Tactical objectives
Most important planning activities• Scheduling• Budgeting• Resource allocation
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ITEC 1010 Information and Organizations
The Nature of Managerial Work
An example of a mission statement, strategic goals, and tactical objectives for an in-line skate manufacturer
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ITEC 1010 Information and Organizations
The Nature of Managerial Work
The main ingredients of planning
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ITEC 1010 Information and Organizations
Figure 9.5 Examples of processes used to control projects
The Nature of Managerial Work
Controlling Managers control activities by comparing plans to
results.
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ITEC 1010 Information and Organizations
The Nature of Managerial Work
Decision Making Both planning and control call for decision making The higher the level of management:
• The less routine the manager’s activities
• The more open the options
• The more decision-making involved
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ITEC 1010 Information and Organizations
Sources of Management Information
Schematic
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ITEC 1010 Information and Organizations
Corporatedatabasesofinternaldata
Databasesofexternaldata
Databasesofvalidtransactions
Operationaldatabases
Transactionprocessingsystems
Managementinformationsystems
Decisionsupportsystems
Executivesupportsystems
Expertsystems
Businesstransactions
Input anderror list
Drill-down reports
Exception reports
Demand reports
Key-indicator reports
Scheduledreports
Employees
Corporateintranet
Applicationdatabases
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ITEC 1010 Information and Organizations
Outputs of a Management Information System
Scheduled reports• Produced periodically, or on a schedule (daily, weekly,
monthly)
Key-indicator report• Summarizes the previous day’s critical activities• Typically available at the beginning of each day
Demand report• Gives certain information at a manager’s request
Exception report• Automatically produced when a situation is unusual or
requires management action
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ITEC 1010 Information and Organizations
Scheduled Report Example
Daily Sales Detail Report
Prepared: 08/10/xx
Order#
CustomerID
Sales Rep ID
ShipDate Quantity Item # Amount
P12453 C89321 CAR 08/12/96 144 P1234 $3,214
P12453 C89321 CAR 08/12/96 288 P3214 $5,660
P12453 C03214 GWA 08/13/96 12 P4902 $1,224
P12455 C52313 SAK 08/12/96 24 P4012 $2,448
P12456 C34123 JMW 08J/13/96 144 P3214 $720
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ITEC 1010 Information and Organizations
Key Indicator Report Example
Daily Sales Key Indicator Report
ThisMonth
LastMonth
LastYear
Total Orders Month to Date $1,808 $1,694 $1,014
Forecasted Sales for the Month $2,406 $2,224 $2,608
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ITEC 1010 Information and Organizations
Demand Report Example
Daily Sales by Sales Rep Summary Report
Prepared: 08/10/xx
Sales Rep ID Amount
CAR $42,345
GWA $38,950
SAK $22,100
JWN $12,350
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ITEC 1010 Information and Organizations
Exception Report Example
Daily Sales Exception Report – ORDERS OVER $10,000
Prepared: 08/10/xx
Order#
CustomerID
Sales Rep ID
ShipDate Quantity Item # Amount
P12453 C89321 CAR 08/12/96 144 P1234 $13,214
P12453 C89321 CAR 08/12/96 288 P3214 $15,660
P12453 C03214 GWA 08/13/96 12 P4902 $11,224
… … … … … … …
… … … … … … …
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ITEC 1010 Information and Organizations
Outputs of a Management Information System
Earnings by Quarter (Millions)
Actual Forecast Variance
2ND Qtr 1999 $12.6 $11.8 6.8%
1st Qtr 1999 $10.8 $10.7 0.9%
4th Qtr 1998 $14.3 $14.5 -1.4%
3rd Qtr 1998 $12.8 $13.3 -3.0%
Etc. See Figure 9.2
Drill Down ReportsProvide detailed data about a situation.
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ITEC 1010 Information and Organizations
Characteristics of a Management Information System
Provides reports with fixed and standard formats Hard-copy and soft-copy reports
Uses internal data stored in the computer system
End users can develop custom reports Requires formal requests from users
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ITEC 1010 Information and Organizations
Management Information Systems for Competitive Advantage
Provides support to managers as they work to achieve corporate goals
Enables managers to compare results to established company goals and identify problem areas and opportunities for improvement
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ITEC 1010 Information and Organizations
MIS and Web Technology
Data may be made available from management information systems on a company’s intranet
Employees can use browsers and their PC to gain access to the data
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ITEC 1010 Information and Organizations
Functional Aspects
MIS is an integrated collection of functional information systems, each supporting particular functional areas.
Schematic
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ITEC 1010 Information and Organizations
An Organization’sMIS
FinancialMIS
MarketingMIS
HumanResources
MIS
Etc.
AccountingMIS
Drill down reports
Exception reports
Demand reports
Key-indicator reports
Scheduled reports
Databasesof
externaldata
Databasesof
validtransactions
Transactionprocessing
systems
Businesstransactions
Businesstransactions
ExtranetExtranet
InternetInternet
Figure 9.3
Etc.
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ITEC 1010 Information and Organizations
Financial MIS
Provides financial information to all financial managers within an organization.
Schematic
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ITEC 1010 Information and Organizations
Financial statements
Uses and managementof funds
Financial statisticsfor control
Operationaldatabases
Databasesof valid
transactionsfor each
TPS
Transactionprocessing
systems
Businesstransactions
Businesstransactions
Internet orExtranet
Internet orExtranet
Figure 9.3
FinancialMIS
Businesstransactions
Databases ofexternal data
Databases ofinternal data
FinancialDSS
FinancialES
Financialapplications
databases
Customers,Suppliers
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ITEC 1010 Information and Organizations
Inputs to the Financial Information System
Strategic plan or corporate policies Contains major financial objectives and often projects
financial needs. Transaction processing system (TPS)
Important financial information collected from almost every TPS - payroll, inventory control, order processing, accounts payable, accounts receivable, general ledger.
External sources Annual reports and financial statements of competitors
and general news items.
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ITEC 1010 Information and Organizations
Financial MIS Subsystems and Outputs
Financial subsystems Profit/loss and cost systems Auditing Internal auditing External auditing Uses and management of funds
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ITEC 1010 Information and Organizations
Decision Support Systems
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ITEC 1010 Information and Organizations
Decision Support Systems
Decision support systems (DSS) Offer potential to assist in solving both semi-
structured and unstructured problems
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ITEC 1010 Information and Organizations
Decision Making as a Component of Problem Solving
Intelligence
Design
Choice
Implementation
Monitoring
Problemsolving
Decisionmaking
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ITEC 1010 Information and Organizations
Solution Types
Optimization model Finding the best solution
Satisficing model Finding a good -- but not necessarily the best
-- solution to a problem Heuristics
Commonly accepted guidelines or procedures that usually find a good solution
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ITEC 1010 Information and Organizations
Problem Solving Factors
Multiple decision objectives Increased alternatives Increased competition The need for creativity Social and political actions International aspects Technology Time compression
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ITEC 1010 Information and Organizations
Characteristics of a DSS (1)
Handles large amounts of data from different sources
Provides report and presentation flexibility Offers both textual and graphical
orientation
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ITEC 1010 Information and Organizations
Characteristics of a DSS (2)
Supports drill down analysis Performs complex, sophisticated analysis
and comparisons using advanced software packages
Supports optimization, satisficing, and heuristic approaches
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ITEC 1010 Information and Organizations
Characteristics of a DSS (3)
Performs different types of analyses “What-if” analysis
• Makes hypothetical changes to problem and observes impact on the results
Simulation• Duplicates features of a real system
Goal-seeking analysis• Determines problem data required for a given result
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ITEC 1010 Information and Organizations
Goal Seeking Example
You know the desired result You want to know the required input(s) Example:
Microsoft Excel’s “Goal Seek” and “Solver” functions
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ITEC 1010 Information and Organizations
Exceldemo
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ITEC 1010 Information and Organizations
Capabilities of a DSS (1)
Supports Problem solving phases Different decision frequencies
Frequencylow high
Merge withanother
company?
How many widgets
should I order?
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ITEC 1010 Information and Organizations
Capabilities of a DSS (2)
Highly structured problems Straightforward problems, requiring known
facts and relationships.
Semi-structured or unstructured problems Complex problems wherein relationships
among data are not always clear, the data may be in a variety of formats, and are often difficult to manipulate or obtain
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ITEC 1010 Information and Organizations
Decision Making Levels
Operational-levelmanagers involved withdaily decisions
Strategic-level managersinvolved with long-term
decisions
LowHigh
Decision Frequency
Strategic
Tactical
Operational
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ITEC 1010 Information and Organizations
Integration ofTPS, MIS, and DSS
In many organizations they are integrated through a common database
Separation of DSS transactions in the database from TPS and MIS transactions may be important for performance reasons
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ITEC 1010 Information and Organizations
Web-Based Decision Support Systems
Web-based decision support systems Decision support system software provides
business intelligence through web browser clients that access databases either through the Internet or a corporate intranet
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ITEC 1010 Information and Organizations
Components of a DSS
Model management software (MMS) Coordinates the use of models in the DSS
Model base Provides decision makers with access to a
variety of models Dialogue manager
Allows decision makers to easily access and manipulate the DSS
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ITEC 1010 Information and Organizations
Database Model base
External databaseaccess
Access to theinternet, networks,and other computersystems
Dialogue manager
DBMS MMS
Externaldatabases
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ITEC 1010 Information and Organizations
Model Base
Model Base Provides decision makers with
access to a variety of models and assists them in decision making
Models Financial models Statistical analysis models Graphical models Project management models
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ITEC 1010 Information and Organizations
Advantages and Disadvantagesof Modeling
Advantages• Less expensive than custom approaches or real systems.• Faster to construct than real systems• Less risky than real systems• Provides learning experience (trial and error)• Future projections are possible• Can test assumptions
Disadvantages• Assumptions about reality may be incorrect• Accuracy of predications often unreliable• Requires abstract thinking
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ITEC 1010 Information and Organizations
Group Decision Support System
Group Decision Support System (GDSS) Contains most of the elements of DSS plus
software to provide effective support in group decision-making settings
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ITEC 1010 Information and Organizations
Databases
Model base GDSS processor GDSS software
Dialoguemanager
External databaseaccess
Users
Access to the internetand corporate intranet,
networks, and othercomputer system
Externaldatabases
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ITEC 1010 Information and Organizations
Characteristics of a GDSS (1)
Special design Ease of use Flexibility Decision-making support
Delphi approach (decision makers are geographically dispersed)
Brainstorming Group consensus Nominal group technique
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ITEC 1010 Information and Organizations
Characteristics of a GDSS (2)
Anonymous input Reduction of negative group behaviour Parallel communication Automated record keeping Cost, control, complexity factors
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ITEC 1010 Information and Organizations
Components of a GDSS and GDSS Software
Database Model base Dialogue manager Communication capability Special software (also called GroupWare) E.g., Lotus Notes
people located around the world work on the same project, documents, and files, efficiently and at the same time
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ITEC 1010 Information and Organizations
GDSS Alternatives
Local areadecision network
Wide areadecision network
Decisionroom
Teleconferencing
Location of group members
close distant
high
low
Dec
isio
n fr
eque
ncy
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ITEC 1010 Information and Organizations
Decision Room
Decision Room For decision makers located in the same geographic
area or building Use of computing devices, special software,
networking capabilities, display equipment, and a session leader
Collect, coordinate, and feed back organized information to help a group make a decision
Combines face-to-face verbal interaction with technology-aided formalization
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ITEC 1010 Information and Organizations
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ITEC 1010 Information and Organizations
Wide Area Decision Network
Characteristics Location of group members is distant Decision frequency is high Virtual workgroups
• Groups of workers located around the world working on common problems via a GDSS
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ITEC 1010 Information and Organizations
Executive Support System
Characteristics A specialized DSS that
includes all the hardware, software, data, procedures, and people used to assist senior-level executives within the organization
Board of directors
President
Function areavice presidents
Function areamanagers
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ITEC 1010 Information and Organizations
Characteristics of ESSs
Tailored to individual executives Easy to use Drill down capabilities Support the need for external data Help with situations with high degree of
uncertainty Futures orientation (predictions, forecasting) Linked with value-added business processes
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ITEC 1010 Information and Organizations
Capabilities of an ESS
Support for defining overall vision strategic planning strategic organizing and staffing strategic control crisis management