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ACS-1803 Introduction to Information Systems

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Title: ACS-1803 Introduction to Information Systems


1
ACS-1803Introduction to Information Systems
  • Instructor Kerry Augustine

Management Information Systems Frameworks Part
1 Lecture Outline 5
2
Learning Objectives
  1. Describe the characteristics that differentiate
    the operational, managerial, and executive levels
    of an organization
  2. Explain the characteristics of the three
    information systems designed to support each
    unique level of an organization Transaction
    Processing Systems (TPS), Management Information
    Systems (MIS), and Executive Information Systems
    (EIS)

3
The Nature of Managerial Work
Management   - the process of directing tasks
and directing resources to achieve
organizational goals   - management functions
planning, organizing, directing, motivating,
controlling...  
4
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

5
The Nature of Managerial Work
6
The Nature of Managerial Work
  • Control
  • Managers control activities by comparing plans to
    results.

7
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 managers activities
  • The more open the options
  • The more decision-making involved

8
The Nature of Managerial Work
  • Management by Exception
  • Managers review only exceptions from expected
    results that are of a certain size or type to
    save time.

9
The Organizational Pyramid
10
The Organizational Pyramid
  • Senior (Executive) Managers
  •  
  • - make long-term decisions about products /
    services to produce control direction
  •  
  •  
  • Middle Managers
  •  
  • they carry out programs and plans of senior
    managers control resources
  • budgeting, monthly scheduling, personnel plans

11
The Organizational Pyramid
  • Operational Managers
  •  
  • monitor firm's daily activities control
    activity
  • daily scheduling, inventory handling.
  •  
  • Managers need to make decisions, often under
    uncertainty each level of management has
    different information needs.
  • there is often a need for efficiency and
    effectiveness
  • - efficiency doing things right with minimum
    input
  • effectiveness doing right things, to satisfy
    main org. goal
  • killing mosquito with sledge hammer -
    effective, but not efficient

12
The Organizational Pyramid
Executive Level Strategic planning and
responses to strategic issues occur here.
Executive decisions are usually unstructured and
are made using consolidated internal and external
information
Managerial Level Monitoring and
controlling of operational activities and
executive information support occur here.
Managerial decisions are usually semistructured
and are made using procedures and ad hoc tools
Operational Level Day-to-day business
processes and interactions with customers occur
here. Operational decisions are usually
structured and are made using established
policies and procedures
13
New Realities in Business
  • more organizations are becoming
    information-based
  • more network-based, rather than hierarchical
    organizations
  • people drawn into process teams to accomplish
    projects
  • companies are beginning to pay more attention to
    customers and their preferences
  • instead of mass production, we have more
    customization

14
New Realities in Business
  • - Information technology (hardware and
    application software) makes customization
    possible on a larger scale
  • customer service is more critical
  • innovative approaches to competition based on
    increasing IT capability
  • - world-wide communication enable businesses to
    operate in global markets programmers in India
    work with project leaders in USA on large
    software development projects
  • business process re-engineering
  • radical redesign of how businesses carry out
    certain activities
  • - IT is a critical factor in changing business
    processes

15

A View of the Future
  • more organizations will function as networks of
    specialists
  • what constitutes "work" will require more
    high-ordered thinking and constant learning, and
    less of a "9 to 5 mentality
  • - especially needed will be the capacity for
    critical thinking and innovation will produce
    critical and innovative information systems

- more and more organizations are becoming
information-based - e.g., insurance, banking -
not as much factory work   - information
technology is playing a much more influential
(central) role in business
16
Information Systems Literacy
- the main way in which computers serve business
is through specifically designed computer-based
information systems which address the
information needs of different areas of
business - examples of information systems -
inventory control system in a warehouse -
airline reservation system - payroll system -
be SURE to have a good intuitive appreciation of
what Is an information system for a business
17
Management Information Systems (MIS)
  • Single set of hardware, software, databases,
    telecommunications, people, and procedures
  • That are configured to collect, manipulate,
    store, and process data into information
  • Technology infrastructure
  • Includes all hardware, software, databases,
    telecommunications, people, and procedures
  • Configured to collect, manipulate, store, and
    process data into information

18
Management Information Systems (continued)
19
Components of an Information-based System
  • Application components
  • - outer menu screens, input screens query
    screens, reports
  • - inner data files (on disk),
  • - programs (data-gtinformation)
  •  
  • - application components are most directly
    related to the business situation that the system
    supports

20
Components of an Information-based System
  • The Information System and the Database
  • The information system needs raw data which is
    stored on disk as a relational database
  • This database is managed by dbms software
  • The system calls the dbms (behind the scenes) and
    the dbms extracts data from the database
  • Programs which are part of the information system
    then transform the raw data to useful information

21
The Database System and MIS
  • The combination of the database, the DBMS, and
    the application programs that access the database
    is referred to as a database system.
  • The database system coupled with a set of
    hardware, software, telecommunications, people,
    and procedures makes up a management information
    system (MIS).

22
Components of an Information-based System
  • B. Technical components
  • - hardware, system software, telecommunication
    technology
  • - these "house" the application components
  •   
  • C. Organizational components
  • who does what where and how with this system, in
    the organization?
  • e.g., when an order is phoned in to a warehouse,
    who does what

23
Levels of the Organization
24
Basic Systems Model
25
Who, What, Why Organizational Level
26
A Framework for Information Systems
- different organizational levels require
different kinds of information system support
  Operational Systems (TPS)  - collect,
validate, and record transactional data what
does this mean??   e.g., order is accepted by a
warehouse (on credit)   - record data about what
was ordered (order entry) - adjust inventory
level - produce packing slip and shipping
label - generate an invoice to be sent to
customer
27
A Framework for Information Systems
Characteristics of Operational Systems   -
repetitiveness - predictability - emphasis on
past - very detailed data - accuracy of data
input is very high (checking) - data come
entirely from internal sources - format of data
input and information output is highly
structured Apply the above to a familiar
situation   Operational systems are often used by
clerical workers and low level management
28
System Description Transaction Processing Systems
TPSs are a special class of information system
designed to process business events and
transactions
  • Architecture Components
  • Source Documents these contain the event or
    transaction information to be processed by system
  • Data Entry Methods
  • Manual a person entering a source document by
    hand
  • Semiautomated using a capture device to enter
    the source document (e.g. a barcode scanner)
  • Fully Automated no human intervention, one
    computer talks or feeds another computer (e.g.
    automatic orders from inventory systems)
  • Processing transactions can be either
  • Online processed individually in real-time
  • Batch grouped and processed together at a later
    time

29
System Example Payroll System (TPS)
30
System Architecture Transaction Processing System
31
Who, What, Why Managerial Level
Tactical /
32
A Framework for Information Systems
Tactical Systems (MIS, MRS)  - in operational
systems, transaction data are captured and stored
(in a database) - here, transaction data are
summarized, aggregated, and analyzed
for additional insight for middle managers   -
generate a variety of reports - summary
reports totals, averages, key data - total
regular and overtime hours worked for each plant
for the week, by job classification what
resource will this info. help to control?
33
A Framework for Information Systems
- list of weekly sales , by salesperson, by
product and by sales region such information
would be difficult to produce without a
computer   - exception reports warn managers
when results from a particular operation exceed
or do not meet an organizational standard   -
list of all plants that have logged more
overtime hours than expected for the week   -
list of all sales personnel whose sales fall in
the top and bottom 10 of the organization
34
A Framework for Information Systems
  • ad hoc reports "spur-of-the-moment" unplanned
  • needed by manager to solve a unique problem
  • a list of the total number of employees absent
    during the week, arranged by plant and by job
    title, along with the hours or days missed
  • - if an exception report has shown high overtime
    earnings at some plants, then a manager might ask
    for a report showing the production record of
    each plant for the week to help investigate why
    there was an overtime problem.

35
A Framework for Information Systems
  • - may ask for ad hoc reports / queries to
    investigate if there may be a relationship
    between family income and credit difficulty or
    between age and credit difficulty extra
    insight
  • periodic nature info. from such systems is
    sometimes produced periodically e.g., a branch
    credit manager may receive a weekly
    report showing the total dollar amount of
    accounts
  • gt 60 days overdue
  • gt 90 days overdue
  • - in hands of collection agency

36
A Framework for Information Systems
- can use data from other branches or from
previous periods for comparison - is situation
normal or does situation warrant special
management actions?   - may produce unexpected
findings - people in certain types of
positions with certain types of employers have
more credit difficulty   e.g., oil industry is
laying off power engineers   - look at how many
such people are our customers - how can we
assist their credit difficulties?
37
A Framework for Information Systems
 - information from such systems is often
comparative rather than just descriptive   -
e.g., compare actual bad debts with standard   -
output from such systems is more flexible a
manager can choose what query (on the screen) he
/she wants and in what format  
38
A Framework for Information Systems
- some of the information produced by such
systems come not from internal, but external
sources (on-line subscriptions?)   - compare
overdue account information of our company with
that of the entire industry   Tactical
information systems differ from operational
information systems in that their purpose is not
to support the execution of operational tasks,
but to help the manager control these
operations   can you give your own example
and explain it clearly enough?
39
A Framework for Information Systems
  • Tactical information systems differ from
    operational information systems in the
  • - the amount of detail produced as output
  • the comparative nature of the information
  • the rigidity of the structure of the information
  • regularity with which information is produced
    (e.g. ad hoc)

40
A Framework for Information Systems
Where are most of the raw data used for tactical
systems usually captured?   Sometimes,
operational systems are "extended" with tactical
system components things are not always as
'clear cut' in real life   Tactical information
systems are used mostly by middle management
41
System Description Tactical Information Systems
  • Tactical Information Systems or Management
    Information Systems (MISs) are used by managerial
    employees to support recurring decision making in
    managing a function or the entire business
  • Supported Activities
  • Scheduled Reporting - the system produces
    automatically based on a predetermined schedule.
    Some include
  • Key Indicator High-level summaries to monitor
    performance (e.g. Monthly Sales Report)
  • Exception Highlights situations where data is
    out of normal range (e.g. Monthly Late Shipments)
  • Drill Down Provides lower-level detail
    aggregated in a summary report (printed only if
    needed)
  • Ad Hoc Reporting unscheduled reports that are
    usually custom built to answer a specific
    question (e.g. sales data by person report to
    identify issues)

42
System Architecture Management Information System
Tactical /
43
Who, What, Why Executive Level
44
A Framework for Information Systems
  • Strategic Systems/ Executive Information Systems
  • - provide top managers with information that
    assists them in making long-range planning
    decisions for the organization
  • used to set long-term organizational goals
  • middle managers then need to allocate resources
    to meet these organizational goals
  • - produced regularly, but more often on ad hoc
    basis

45
Strategic Systems / Executive Information Systems
 - may have "drill down" capacity  - may produce
considerable graphic output
46
System Description Strategic/ Executive
Information Systems
  • Strategic Systems, also called Executive
    Information Systems (EIS) or Executive Support
    Systems (ESS) or, are special purpose information
    systems to support executive decision-making
  • System Details
  • These systems use graphical user interfaces to
    display consolidated information and can deliver
    both
  • Soft Data - textual news stories or
    non-analytical data
  • Hard Data facts, numbers, calculations, etc.
  • Supported Activities
  • The activities supported by these kinds of
    systems include
  • Executive Decision Making
  • Long-range Strategic Planning
  • Monitoring of Internal and External Events
  • Crisis Management
  • Staffing and Labour Relations

47
System Architecture Executive Information Systems
Strategic /
48
System Example Executive Reporting Drill-down
(EIS)
Second Level Data Drill Down
First Level Graphical Summary
49
IS and Business Strategy
  • Which information systems should a business
    develop?
  • Those that match the organizations strategy

50
  • Business Strategy

Business Strategy
Improve Profitability Reduce Costs
Reach Global Markets
Solidify Business Relationships/ Improve Customer
Service
Maximize Technology Benefits
Streamline Business Processes
51
Executive Information Systems (EIS)
Questions What kind of tactical information
would be useful to a branch manager of a
Coca-Cola or Pepsi distributorship? (sample
answer) Sales - by product line - this year vs
last year - comparative analysis of sales by
account for last 5 years    
52
Executive Information Systems (EIS)
What kind of strategic information would be
useful to the president of a four-year liberal
arts college? - demographic data - no. of 18-year
olds who are planning to enter college over the
next 10 years Other - age distributions of the
overall population - characteristics of student
population - gender, socio-economic status
53
Executive Information Systems (EIS)
  •  Categorize each decision as strategic planning,
    tactical or operational
  • Rejecting credit for a company with an overdue
    account
  • (Operational)
  • Analyzing sales by product line within each
    geographic region, this year to date vs. last
    year to date
  • (Tactical)
  • Using a simulation model to forecast
    profitability of a new product, using projected
    sales data, competitive industry statistics, and
    economic trends
  • (Strategic)
  • Comparing planned vs. actual expenses for
    department staff
  • (Tactical)
  • Allocating salespeople's time to the highest
    potential market prospects
  • (Tactical)

54
The more detailed the data the closer it is to
the data from which it is derived - less
processing is involved in generating it - e.g.,
daily total sales in the shoe dept. vs annual
total for an entire chain of stores- internal
vs external data internal data collected within
organization, e.g. through Transaction processing
systems external data comes from sources
outside org.
Executive Information Systems (EIS)
55
Executive Information Systems (EIS)
Structured and Unstructured Data - structured
numbers and facts that can be conveniently stored
in files and databases (Often from
transactions) - unstructured meeting notes,
textual, graphical, - the higher the manager,
the less structured the decisions
56
Executive Information Systems (EIS)
  • Characteristics of Effective Information
  • tabular vs. graphical (may depend on
    personality)
  • certain info better grasped when presented
    graphically (trends, pie chart proportions
  • - when trying to solve complex problems, many
    prefer tabular data so they can extract what info
  • they deem necessary
  • many systems allow users to set their
    preferences
  • can also have graphs within tables etc.

57
Executive Information Systems (EIS)
- can bring vast amounts of detailed information
into a process years of past expenditure data
can assist with next year's budget   - allows
the tracking of task status, inputs and outputs
project management reporting system   - can
connect two parties without an intermediary
ordering through the Web   (not exhaustive)
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