MANAGEMENT INFORMATION SYSTEMS
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Session Objectives
At the end of this session students should : • Understand what a business process is. • Process Symbols (BPMN Standard)
• Identify the components of a business process • Explain role of Information in Business Process • Understand how Information Systems support
business processes.
Business Defined
Formal organization that makes products or
provides a service in order to make a profit.
Process: A particular course of action intended to achieve a result.
Business Process Defined
• A business process is a network of
activities, roles, resources, repositories,
and data flows that interact to accomplish a business function.
• Such as: buying & managing inventory,
making sales to customers, paying bills, collecting revenue, and hundreds of other business functions
Components of Business
• Activities – Transform resources and
information of one type into another type • Decisions – A question that can be
answered Yes or No
• Roles – Sets of procedures
• Resources – People, or facilities, or computer programs assigned to roles • Repository – Collection of business
Business Process Management and
Notation (BPMN)
Business Process
Management and Notation
(BPMN) is a graphical representation for
specifying business
processes in a business process model.
Using Information Systems to Improve
Process Quality
When a business process activity is automated, work formerly done by people following procedures has been moved to computers that perform the work by following instructions in software.
Thus, the automation of a process activity consists of moving work from the right-hand side to the left.
Dimension of Process Quality
Effectiveness: Business process enables
organization to accomplish its strategy.
Efficiency:
Ratio of benefits to costs
Information Reviewed
1. Knowledge derived from data, where data is defined as recorded facts or figures.
2. Data presented in a meaningful context
3. Processed data, or data processed by summing, ordering, averaging, grouping, comparing, or other similar operations.
Data Characteristics Necessary for
Quality Information
Accuracy
• Information that is based on correct and complete data, and it has been processed correctly as expected.
• Accuracy is crucial; managers must be able to rely on the results of their information systems.
• The IS function can develop a bad reputation in the organization if a system is known to produce inaccurate information. Hence IS becomes a waste of time and money
Timely
• Timely information is information that is produced in time for its intended use.
• A monthly report that arrives 6 weeks late is most likely useless. The information arrives long after the decisions have been made that needed that information.
Relevance
• Relevant information is information that
directly pertains to both the context and
to the subject it references.
• Considering context, you, the CEO, need information that is summarized to an appropriate level for your job.
Just Barely Sufficient
• Just barely sufficient information is information that is sufficient for the purpose for which it is generated, but only so.
• We live in an information age; one of the critical decisions that each of us has to make each day is what information to ignore.
• The higher you rise into management, the more information you will be given, and because there is only so much time, the more information you will need to ignore.
Worth Its Cost
• Information is not free. There are costs for developing an information system, costs of operating and maintaining that system, and costs of your time and salary for reading and processing the information the system produces.
• For information to be worth its cost, an appropriate relationship must exist between the cost of information and its value.
Information system Reviewed
An information system (IS) is an assembly of computer hardware, software, data,
procedures, and people that interact to collect, process, store, and provide as output the information needed to support
Types of Information Systems
• Executive Support Systems (ESS)
• Management Information Systems (MIS) • Decision Support Systems (DSS)
• Knowledge Management Systems (KMS) • Transaction Processing Systems (TPS) • Office Automation Systems (OSS)
Executive Support Systems (ESS)
• An Executive Support System ("ESS") is designed to help senior management make strategic decisions. It gathers, analyses and summarizes the key internal and external information used in the business.
• ESS typically involve lots of data analysis and modeling to help strategic decision-making
Management Information Systems
(MIS)
• A management information system is mainly concerned with internal sources of information. MIS usually take data from the transaction processing systems and summarizes it into a series of management reports.
• MIS reports tend to be used by middle management and operational supervisors.
Decision Support Systems (DSS)
• Decision-support systems ("DSS") are specifically designed to help management make decisions in situations where there is uncertainty about the possible outcomes of those decisions. DSS comprise tools and techniques to help gather relevant information and analyze the options and alternatives. DSS often involves use of complex spreadsheet and databases to create "what-if" models.
Knowledge Management Systems
(KMS)
Knowledge Management Systems exist to help businesses create and share information. These are typically used in a business where employees create new knowledge and expertise - which can then be shared by other people in the organization to create further commercial opportunities. Good examples include firms
KMS are built around systems which allow efficient categorization and distribution of knowledge. For example, the knowledge itself might be contained in word processing documents, spreadsheets, PowerPoint presentations. internet pages or whatever. To share the knowledge, a KMS would use group collaboration systems such as an intranet.
Transaction Processing Systems
• As the name implies, Transaction Processing Systems ("TPS") are designed to process routine transactions efficiently and accurately. A business will have several (sometimes many) TPS; for example:
- Billing systems to send invoices to customers - Systems to calculate the weekly and monthly payroll and tax payments
- Production and purchasing systems to calculate raw material requirements
Office Automation Systems (OSS)
• Office Automation Systems are systems that try to improve the productivity of employees who need to process data and information.
• Perhaps the best example is the wide range of software systems that exist to improve the productivity of employees working in an office or systems that allow employees to work from home or whilst on the move.
Information Systems usage Levels
Strategic Level
Tactical Level
Enterprise Application Systems
Systems that span functional areas, focus on executing business processes across the business firm, and include all levels of management.
Four major applications: • Enterprise systems
• Supply chain management systems • Customer relationship management
Enterprise Systems
• Enterprise systems, also known as enterprise resource planning (ERP) systems, are systems that collect data from various key business processes in such as manufacturing and production, finance and accounting, sales and marketing, and human resources and stores the data in a single central data repository.
• This makes it possible for information that was previously fragmented in different systems to be shared across the firm and for different parts of the business to work more closely together
Supply Chain Management systems
• SCM systems are used in businesses to manage relationships with their suppliers.
• These systems provide information to help suppliers, purchasing firms, distributors, and logistics companies share information about orders, production, inventory levels, and delivery of products and services so that they can source, produce, and deliver goods and services efficiently.
• The ultimate objective is to get the right amount of their products from their source to their point of
Customer Relationship Management
Systems
• Customer relationship management (CRM) systems are used by firms to manage their relationships with their customers.
• CRM systems provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention.
• This information helps firms identify, attract, and retain the most profitable customers; provide better service to existing customers; and increase sales.
References
• David M. Kroenke (2012) Experiencing MIS. 3rd Edition, Prentice Hall.
• David M. Kroenke (2010) MIS Essentials. 2nd Edition, Prentice Hall.
• Kenneth C. Laudon and Jane P. Laudon (2009). Essentials of Management Information Systems. 8th Edition, Pearson Prentice Hall.
Next Lecture
Organizational Strategy, Information Systems and Competitive Advantage
