Information Systems for Managers

Smitha Ramachandran

Units 5 – 6

Management Information Systems (MIS)

Defined as an integrated system of man and machine for providing the information to support the operations, the management and the decision-making function in the organizationDeals with information that is systematically and routinely collected in accordance with a well-defined set of rulesInformation provided by an MIS assists managers in planning, organizing, staffing,coordinating,directing and controlling the operations of an organization

Unit:5

Connective Actions

Planning

Control

Operations

Plan & Targets

Management Control Systems

•MIS is concerned with planning and control

•Has large amount of data as its integral part that is stored and managed by a data base management system

Features

Must be capable of handling voluminous data. The data and transactions must be validatedMust be able to perform operations on the data irrespective of the complexity of the operationsShould facilitate quick search and retrieval of information. Must support mass storage of data and informationInformation must be communicated to the receipt in time

IS uses in Functional Areas

Finance and Accounting To forecast revenue and business activity To determine the best sources and uses of funds To manage cash and other financial resources and

analyzing investment To check the financial health of an organization

Sales and Marketing Product Analysis: Used to develop new goods and

services Site Analysis: to determine the best location for

production and distribution facilities Promotion Analysis: to determine the best advertising

and sales approaches Price Analysis: to set product prices to get the highest

total revenuesContd…

Manufacturing To process customer orders Develop production schedules Control inventory Monitor product quality

Service industry To serve the customer better and

maximize their profit

Banks and other investment firms To make good investments and sanction

sound loans

Contd…

•An organization

• must respond to market forces, competition, to environmental and technological changes

•Must do long term planning

•Different Methodologies for Strategic Planning are available

•According to the model suggested by Robert Anthony Strategic Planning plays an important role in planning and control system

Framework of Business Planning and Control

Strategic Planning

Management Control

Operation Control

Planning and

Control Systems

•Strategic Planning: the process of the organization, determining the possible shift in objectives, deciding on the resources used to attain their objectives and the policies that govern the acquisition, use and disposition of there resources

•Management Control: the process by which managers assure that the resources are obtained and used effectively and efficiently to attain the objectives of the organization

•Operational Control: the process of assuming that specific task are carried out effectively and efficiently

Planning and Control Activities in Different Functional Areas

Strategic Planning

Management Control

Operational Control

Production

Location of new factory

Determine the product mix

Scheduling specific jobs on specific machines in a shift

Marketing

Entering the export market

Media Planning for advertising expenditure

Planning sales contacts to be made in the next week

Finance Raising capital by issuing new shares

Determining maximum levels of credit for customers

Determining what action to take against on payment by a specific customer

Personal Deciding on changes to be made in the organization Structure

Determining who will be promoted to fill a vacated post at middle or lower level,in the organization

Determining which workers will be on each shift

Anthony’s Framework: Differences in Information Required for three types of Planning and Control Process

Information characteristic

Strategic planning

Management Control

Operational Control

Volume Low Intermediate High

Levels of Aggregation

High Intermediate Low

Frequency of use of particular type of data

Low Intermediate High

Currency Requirement

Low Intermediate High

Accuracy Low Intermediate High

Scope Wide Intermediate High

Source Significant amount from external sources

Mostly Internal Entirely internal

Predictability with user

Low Fairly high Very high

Variability with user High Intermediate Low

Distance of user from sources within organization

Fair Fairly close close

Simon’s Framework

Broken down the process of decision making into three stages Intelligence: stage in which decision

maker recognizes that there is a problem or opportunity that requires him to make a decision

Design: decision maker determines the alternatives that are available to him to resolve the problem

Choice: finalizes from the alternatives. The selection process requires feasibility analysis or cost-benefit analysis

The three major classes of decisions with Simon’s framework

Programmed decisions: All stages are handled by following a preset well-defined

procedure Decisions are repetitive and routine that arise often Mathematical model can be made in their entirety Eg: inventory-ordering decisions

Non-programmed decision: Difficult to structure in logical-mathematical terms Cannot be handled by following preset or well-defined

procedures Not repetitive in nature and require fresh intelligence,design

and choice phases to be executed Eg: setting up of a factory or new product

Semi-programmed decision: At least one or maximum of two can be handled by preset

well-defined procedures

Zani’s model for MIS design

Important determinants in the MIS design: Opportunities and risk Company strategy Company structure Management and decision-making

process Available technology Available information sources

Factors Facilitating Implementation of MIS

Involvement of top management in the computerization effort, in defining the purpose and goals of computers within the organizationSelection of an EDP manager who has political skills to involve managers in choosing application areas, identifying information needs and designing reportsA computer staff, who has interdisciplinary skills in computers, management and operations managementA balanced expenditure in hardware and software

Organization and IS: A 2-way relationship

An organization is an open system that adjust according to the changing environmentWhile designing MIS for an organization the requirements to be kept in mind: MIS should be designed viewing organization as a system Should give weightage to human side of the organization

and its culture Should give reports to main decision maker Should give control information to the higher

management, if organization follow hierarchy with a high degree of centralization

should give functional design if the organization is structure on a functional basis

If the organization works on a standard system where rules, policies, systems and procedures have been laid down, then these becomes part of MIS

Unit 6:

Information Systems Economics

Data Raw material

Information Processed data Defied as data that have been put into a

meaningful and useful context and communicated to a recipient who uses it to make decisions. It reduces uncertainty, reveals additional alternatives or helps eliminate irrelevant or poor ones

Data-Information-Knowledge

DATA

CONTEXT INDEPENDENCE

UNDERSTANDING

INFORMATION

KNOWLEDGE

WISDOM

understanding relations

understandingpatterns

understandingprinciples

Desired characteristics of Information•Accurate

•Complete

•Economical

•Flexibility

•Reliable and verifiable

•Relevant

•Simple

•Timely

•Accessible and Secure

Generate Manipulate

Synthesize

Sort

store

RetrieveStore

Destroy

Utilize

Data Life Cycle

IS: Success and Failures•A project is success

•If it is completed within time and budget

•It must meet needs of its users and organization

Over a period of time the success and failure factors identified are:•Project scope: should be stable and well understood

•An MIS project that aims for BPR are of high-risk but at the same time have high potential for

major benefits

•Technology development platform and development language exposure

•Support from the management

•Objective of MIS must be in tune with that of the organization

•System should be user friendly and the response time should be reasonable

•MIS should be developed with a clear objective and that must be documented before the implementation

•Data policy should be formulated

•Quality control plan must be in place

•concerned people must be adequately trained

•System should be properly documented so that attrition does not affect MIS adversely

Thank You