MIS Module 1 - Lecture notes 1 PDF

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Information Systems Information system deals with data of the organizations. The purposes of Information system are to process input, maintain data, produce reports, handle queries, handle on line transactions, generate reports, and other output. These maintain huge databases, handle hundreds of queries etc. The transformation of data into information is primary function of information system. These types of systems depend upon computers for performing their objectives. A computer based business system involves six interdependent elements. These are hardware (machines), software, people (programmers, managers or users), procedures, data, and information (processed data). All six elements interact to convert data into information. System analysis relies heavily upon computers to solve problems. For these types of systems, analyst should have a sound understanding of computer technologies. In the following section, we explore three most important information systems namely, transaction processing system, management information system and decision support system, and examine how computers assist in maintaining Information systems COMPONENTS OF INFORMATION SYSTEM The 5 components that must come together in order to produce a Computer-Based Information system are:

ROLES OF IS An MIS is directed towards the managerial functions of planning, controlling and monitoring, and decision making. Planning Planning consists of five sequential and interactive steps. These are: Selecting objectives; identification of the activities which are required to achieve the stipulated objectives; detailing the resources - including the various skills - required to undertake the activities; determining the duration of each activity to be performed; and defining the sequence of the activities. The basic requirements during the planning process of most importance in designing and implementing an MIS for an organization are: providing the information required by the planner at each step of planning; establishing procedures for obtaining the information; arranging for storage of the approved plans, as these will provide the information requisite to monitoring and controlling; and evolving methods for communicating the plans to employees in the organization. Monitoring and controlling Controlling 'compels events to conform to plans’. It involves: establishes standards of performance in order to reach the objective; measuring actual performance against the set standards; and keeping actions on course by correcting deviations as they appear (mid-course corrections). The requirements for successful development of a control system are: defining expectations in terms of information attributes; and developing the logic for reporting deviations to all levels of management prior to the actual occurrence of the deviation.

Decision making Decision making is the process of selecting the most desirable or optimum alternative to solve a problem or achieve an objective. The quality and soundness of managerial decisions is largely contingent upon the information available to the decision-maker. Gorry and Scott Morton (1971) classified decision making on three levels of a continuum: Strategic decisions are future-oriented because of uncertainty. They are part of the planning activity. Tactical decision making combines planning activities with controlling. It is for short-term activities and associated allocation of resources to them to achieve the objectives. Technical decision making is a process of ensuring efficient and effective implementation of specific tasks. Management information system can be analyzed thus: 1. Management: management covers the planning, control, and administration of the operations of a concern. The top management handles planning; the middle management concentrates on controlling; and the lower management is concerned with actual administration. 2. Information: information, in MIS, means the processed data that helps the management in planning, controlling and operations. Data means all the facts arising out of the operations of the concern. Data is processed i.e. recorded, summarized, compared and finally presented to the management in the form of MIS report. 3. System: data is processed into information with the help of a system. A system is made up of inputs, processing, output and feedback or control. Thus MIS means a system for processing data in order to give proper information to the management for performing its functions.

TYPES OF INFORMATION SYSTEM

A management information system (MIS) is a computer-based system that provides the information necessary to manage an organization effectively. An MIS should be designed to enhance communication among employees, provide an objective system for recording information and support the organization's strategic goals and direction. There are four types of MIS that will be introduced in ascending order of sophistication. Information systems differ in their business needs and the information varies depending upon different levels in organization. Information system can be broadly categorized into following: •

Transaction processing system

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Management Information System

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Decision support system

The information needs are different at different organizational levels. Accordingly the information can be categorized into following: •

Strategic information

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Managerial information

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Operational information.

Transaction Processing Systems 1. It processes business transaction of the organization. Transaction can be any activity of the organization. For example, take a railway reservation system. Booking, canceling,

etc are all transactions. Any query made to it is a transaction. 2. This provides high speed and accurate processing of record keeping of basic operational processes and includes calculation, storage and retrieval. 3. Transaction processing systems provide speed and accuracy, and can be programmed to follow routines functions of the organization. 4. These systems are designed to handle a large volume of routine, recurring transactions. They were first introduced in the 1960s with the advent of mainframe computers. Transaction processing systems are used widely today. Banks use them to record deposits and payments into accounts. Supermarkets use them to record sales and track inventory. Most managers use these systems to deal with tasks such as payroll, customer billing and payments to suppliers. Operations Information Systems These systems were introduced after transaction processing systems. An operations information system gathers comprehensive data, organizes it and summarizes it in a form that is useful for managers. Most of these systems access data from a transaction processing system and organize it into a form usable by managers. Managers use operations information systems to obtain sales, inventory, accounting and other performance-related information. Management Information Systems 1. It assists lower management in problem solving and making decisions. They use the results of transaction processing and some other information also. 2. An important element of MIS is database. A database is a non-redundant collection of interrelated data items that can be processed through application programs and available to many users. Decision Support Systems 1. These systems assist higher management to make long term decisions. These type of systems handle unstructured or semi structured decisions. A decision is considered unstructured if there are no clear procedures for making the decision and if not all the factors to be considered in the decision can be readily identified in advance. 2. A decision support system must very flexible. 3. The user should be able to produce customized reports by giving particular data and

format specific to particular situations. A DSS is an interactive computer system that can be used by managers without help from computer specialists. A DSS provides managers with the necessary information to make intelligent decisions. Expert Systems and Artificial Intelligence These systems use human knowledge captured in a computer to solve problems that ordinarily need human expertise. Mimicking human expertise and intelligence requires that the computer (1) Recognize, formulate and solve a problem; (2) Explain solutions and (3) Learn from experience. These systems explain the logic of their advice to the user; hence, in addition to solving problems they can also serve as a teacher. They use flexible thinking processes and can accommodate new knowledge. Digital Firms The purpose of these technology platforms is to digitally enable seamless integration and information exchange within the organization to employees and outside the organization to customers, suppliers, and other business partners. Some examples of these technology platforms are Customer Relationship Management (CRM), Supply Chain Management (SCM), Enterprise Resource Planning (ERP), Knowledge Management System (KMS), Enterprise Content Management (ECM), and Warehouse Management System (WMS) among others. These digital networks are supported by enterprise class technology platforms that have been leveraged within an organization to support critical business functions and services. The Digital Firm is a general term for organizations that have enabled core business relationships with employees, customers, suppliers, and other external partners through digital networks. These information systems create opportunities for digital firms to decentralize operations, accelerate market readiness and responsiveness, enhance customer interactions, as well as increase efficiencies across a variety of business functions.

Digital firms place an emphasis on the digitization of business processes and services through sophisticated technology and information systems Additionally, digital enablement of core business functions and services provides an organization with opportunities to: ❖ Improve organizational productivity ❖ Enhance the management of customer relationships ❖ Drive efficiency improvements in inventory and supply chain ❖ Create business value from technology investments ❖ Adapt business strategies to meet market demands ❖ Operate business in a global workplace ("Space Shifting") ❖ Operate business continuously ("Time Shifting") Through digital networks and information systems, the digital firm is able to operate core business services and functions continuously and more efficiently. This digital enablement of business processes creates highly dynamic information systems allowing for more efficient and productive management of an organization.

Internet of Things(IoT) In a nutshell, the Internet of Things is the concept of connecting any device (so long as it has an on/off switch) to the Internet and to other connected devices. The IoT is a giant network of connected things and people – all of which collect and share data about the way they are used and about the environment around them. That includes an extraordinary number of objects of all shapes and sizes – from smart microwaves, which automatically cook your food for the right length of time, to self-driving cars, whose complex sensors detect objects in their path, to wearable fitness devices that measure your heart rate and the number of steps you’ve taken that day, then use that information to suggest exercise plans tailored to you. There are even connected footballs that can track how far and fast they are thrown and record those statistics via an app for future training purposes. How does it work? Devices and objects with built in sensors are connected to an Internet of Things platform, which integrates data from the different devices and applies analytics to share the most valuable information with applications built to address specific needs.

These powerful IoT platforms can pinpoint exactly what information is useful and what can safely be ignored. This information can be used to detect patterns, make recommendations, and detect possible problems before they occur. For example, if I own a car manufacturing business, I might want to know which optional components (leather seats or alloy wheels, for example) are the most popular. Using Internet of Things technology, I can: •

Use sensors to detect which areas in a showroom are the most popular, and where customers linger longest;

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Drill down into the available sales data to identify which components are selling fastest;

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Automatically align sales data with supply, so that popular items don’t go out of stock.

The information picked up by connected devices enables me to make smart decisions about which components to stock up on, based on real-time information, which helps me save time and money. With the insight provided by advanced analytics comes the power to make processes more efficient. Smart objects and systems mean you can automate certain tasks, particularly when these are repetitive, mundane, time-consuming or even dangerous. Let’s look at some examples to see what this looks like in real life. Scenario #1: IoT in your home Imagine you wake up at 7am every day to go to work. Your alarm clock does the job of waking you just fine. That is, until something goes wrong. Your train’s cancelled and you have to drive to work instead. The only problem is that it takes longer to drive, and you would have needed to get up at 6.45am to avoid being late. Oh, and it’s pouring with rain, so you’ll need to drive slower than usual. A connected or IoT-enabled alarm clock would reset itself based on all these factors, to ensure you got to work on time. It could recognize that your usual train is cancelled, calculate the driving distance and travel time for your alternative route to work, check the weather and factor in slower travelling speed because of heavy rain, and calculate when it needs to wake you up so you’re not late. If it’s super-smart, if might even sync with your IoT-enabled coffee maker, to ensure your morning caffeine’s ready to go when you get up.

Scenario #2: IoT in transport Having been woken by your smart alarm, you’re now driving to work. On comes the engine light. You’d rather not head straight to the garage, but what if it’s something urgent? In a connected car, the sensor that triggered the check engine light would communicate with others in the car. A component called the diagnostic bus collects data from these sensors and passes it to a gateway in the car, which sends the most relevant information to the manufacturer’s platform. The manufacturer can use data from the car to offer you an appointment to get the part fixed, send you directions to the nearest dealer, and make sure the correct replacement part is ordered so it’s ready for you when you show up. Trends and characteristics

Technology roadmap: Internet of things The IoT's major significant trend in recent years is the explosive growth of devices connected and controlled by the Internet. The wide range of applications for IoT technology mean that the specifics can be very different from one device to the next but there are basic characteristics shared by most. The IoT creates opportunities for more direct integration of the physical world into computer-based systems, resulting in efficiency improvements, economic benefits, and reduced human exertions....