Lecture by:

Surendra Shrestha, PhD

Department of Electronics & Computer Engineering
Pulchowk Campus, Institute of Engineering, T.U.
 Foundation of Information Systems
 Introduction of information system in
business
 Fundamentals of information systems
 Solving business problems with information
systems
 Type of information systems
 Effectiveness and efficiency criteria in
information system
 An overview of MIS
 Definition of MIS
 MIS versus Data processing
 MIS & DSSs
 MIS and Information Resource Management
 End User computing
 Concept of an MIS
 Structure of a MIS
Objective: MIS is to provide information for decision
making on planning, initiating, organizing, and controlling
the operations of the subsystems of firm and to provide a
synergistic organization in the process.
What is a MIS?

 MIS as a combination of human and computer

based resources that result in collection, storage,
retrieval, communication and use of data for the
purpose of business management and for
business planning.

 MIS is viewed as a means of converting data into

information for decision making.

 MIS is the effective design, delivery, and use of

information system in organization.
NEED for MIS:
 To provide the required information support to
undertake managerial activities such as planning,
organizing, staffing, coordination, control and
decision making.

 To provide the right type of information at the

lowest cost and at the right time.

 To ensure that managerial activities are provided

adequate information support.

 To avoid information overload and also generating

redundant information.
MIS For Decision Support Systems:
 MIS support decision making in both structured and
unstructured problem environments.

 MIS support decision making at all levels of the

organization.

 MIS are intended to be woven into the fabric of the

organization, not standing alone.

 MIS support all aspects of decision making process.

 MIS are made of people, computers, procedures,

databases, interactive query facilities.
Information system to achieve Strategic business
objective:
 Operational excellence
 New products, services, and business
models
 Customer and supplier intimacy
 Improved decision making
 Competitive advantage
 Survival
Main advantages of using computer technology in MIS:

 Expanding scope for using information system.

 Enhancing speed of processing and retrieval of data.
 Widening the scope of analysis.
 Integrating different business information sub-
system.
 Increasing the effectiveness of information system
 Extending more comprehensive information to
business managers
Perspectives on Information systems:

Information can be defined as data that has been

transformed into a meaningful and useful context
for specific end users.
An information system is a set of
interrelated components that collect or
retrieve, process, store, and distribute
information to support decision making and
control in an organization. Information
systems can also be used to analyze problems,
visualize complex subjects, and create new
products.
Input captures or collects
raw data from within the
organization or from its
external environment.

Processing converts
this raw input into a meaningful form.
Output transfers the processed information to the
people who will use it or to the activities for which
it will be used.
Information System (IS), which are designed to produce
information and solve organizational problems, from the
computer technology and software that is typically used to
create and manage information systems.

The field of MIS tries to

achieve the broader
information systems
literacy (the understanding of IS, includes a behavioral
and technical approach to understanding the broader
organization, management, and IT dimension of systems
and their power to provide solutions).
The key elements of an organization are its people,
structure, business processes, politics, and culture.

Senior Management -
people occupying the
topmost hierarchy in an
organization who are
responsible for making
long-range decisions.

Middle Management - People in the middle of the

organizational hierarchy who are responsible for carrying
out the plans and goals of senior management.
Operational Management - People who monitor the day-
to-day activities of the organization.
Information Technology (IT) infrastructure:
Computer hardware, software, data, storage technology, and networks
providing a portfolio of shared IT resources for the organization.

Computer hardware: The physical equipment and

computing devices used for input, storage, processing,
output, and telecommunications.
Computer software: The detailed, preprogrammed
instructions that control and coordinate the computer
hardware components.
Data management software: The software governing
the organization of data on physical storage media.
Networking and telecommunications technology:
Physical devices and software that link various computer
hardware components and transfer data from one
physical location to another.
Network - The linking of two or more computers to share
data or resources, such as a printer.

Internet - Global network of networks using universal

standards to connect millions of different networks.

Intranet - An internal network based on Internet and

World Wide Web technology and standards.

Extranets - Private intranet that is accessible to

authorized outsiders.

World Wide Web - A system with universally accepted

standards for storing, retrieving, formatting, and displaying
information in a networked environment.
From a business perspective, information systems are part
of a series of value-adding activities for acquiring,
transforming, and distributing information that managers
can use to improve decision making, enhance
organizational performance, and ultimately increase firm
profitability.
Information technology investments cannot make
organizations and managers more effective unless
they are accompanied by complementary
assets: assets required to derive value from a
primary investment.

Complementary investments include :

Organizational assets: These include a supportive

business culture that values efficiency and effectiveness, an
appropriate business model, efficient business processes,
decentralization of authority, highly distributed decision
rights, and a strong information system (IS) development
team.
Managerial assets: These include strong senior
management support for change, incentive systems
that monitor and reward individual innovation, an
emphasis on teamwork and collaboration, training
programs, and a management culture that values
flexibility and knowledge.

Social assets: These are not made by the firm but

by the society at large, other firms, governments,
and other key market actors, such as the Internet,
educational systems, network and computing
standards, regulations and laws, and the presence
of technology and service firms.
Research indicates that firms that support
their technology investments with investments
in complementary assets, such as new business
processes or training, receive superior returns.
These investments in organization and
management are also known as
organizational and management
capital.

(Investments in organization and management

such as new business processes, management
behavior, organizational culture, or training.)
Contemporary Approaches to Information Systems

The study of information systems deals with issues and

insights contributed from technical and behavioral disciplines
A SOCIOTECHNICAL PERSPECTIVE ON
INFORMATION SYSTEMS

In a sociotechnical perspective, the performance of a system

is optimized when both the technology and the organization
mutually adjust to one another until a satisfactory fit is
obtained.
 Business Processes and Information Systems

Types:

• A functional
perspective

• A constituency
perspective

Information systems enhance business processes in primarily

two ways:
 Increasing the efficiency of existing processes
 Enabling entirely new processes that are capable of
transforming the business
Types of Business Information System
1. Sales and marketing information systems
Systems that help the
firm identify customers
for the firm's products
or services, develop
products and services
to meet their needs,
promote these
products and services,
sell the products and
services, and provide
ongoing customer
support.
Types of Business Information System
2. Manufacturing and production information systems

Systems that deal with the planning, development, and

production of products and services, and with controlling
the flow of production.
Types of Business Information System
3. Finance and accounting information systems

Systems
keep
track of
the firm's
financial
assets
and fund
flows.
Types of Business Information System
4. Human resources information systems

Systems that maintain employee records, track employee skills, job

performance and training, and support planning for employee
compensation and career development. customer support.
Types of Business Information System
from a constituency perspective:

1. Transaction processing systems (TPS)

2. Management information systems (MIS)

3. Decision support systems (DSS)

4. Executive support systems (ESS)

1. Transaction processing systems (TPS)
basic business systems that serve the operational
level of the organization by recording the daily
routine transactions required to conduct business,
such as payroll and sales receipts.

2. Management Information System (MIS)

serve middle managers' interests by providing current
and historical performance information to aid in
planning, controlling, and decision making at the
management level. MIS typically compress TPS data
to present regular reports on the company's basic
operations.
FIGURE : HOW MANAGEMENT INFORMATION SYSTEMS OBTAIN THEIR DATA
FROM THE ORGANIZATION’S TPS
SAMPLE MIS REPORT
3. Decision support systems (DSS)
or business intelligence systems, help managers with non-routine decisions
that are unique, rapidly changing, and not easily specified in advance. DSS
are more analytical than MIS, using a variety of models to analyze internal
and external data or condense large amounts of data for analysis.
4. Executive support systems (ESS)
provide a generalized computing and
communications environment that help senior
managers address strategic issues and identify long-
term trends in the firm and its environment. It
address nonroutine decisions requiring judgment,
evaluation, and insight because there is no agreed-
on procedure for arriving at a solution. ESS present
graphs and data from many internal and external
sources through an interface that is easy for senior
managers to use. Often the information is delivered
to senior executives through a portal, which uses a
Web interface to present integrated personalized
business content.
4. Executive support systems (ESS)
Systems that Span the Enterprise

Enterprise applications
----------------------------------------------
Systems that can coordinate
activities, decisions, and knowledge
across many different functions,
levels, and business units in a firm.
Include enterprise systems, supply
chain management systems, and
knowledge management systems.
major enterprise applications:

1. Enterprise systems

2. Supply chain management systems

3. Customer relationship management

systems

4. Knowledge management systems

Enterprise applications automate processes that span multiple business
functions and organizational levels and may extend outside the organization.
Enterprise systems integrate the key business processes of an entire firm
into a single software system that enables information to flow seamlessly
throughout the organization. These systems focus primarily on internal
processes but may include transactions with customers and vendors.
Customer orders, shipping notifications, optimized
shipping plans, and other supply chain information
flow among Haworth’s Warehouse Management
System (WMS), Transportation Management System
(TMS), and its back-end corporate systems.
Customer relationship management
(CRM) systems

Information systems that track all

the ways in which a company
interacts with its customers and
analyze these interactions to
optimize revenue, profitability,
customer satisfaction, and
customer retention.
Knowledge Management Systems

Systems that support the

creation, capture, storage, and
dissemination of firm expertise
and knowledge.
Intranets:

typically present information to employees through

a private portal that provides a single point of
access to information from several different
systems and to documents using a Web interface.
Corporate portals often feature e-mail,
collaboration tools, and tools for searching for
internal corporate systems and documents.
Companies can connect their intranets to internal
company transaction systems, enabling employees
to take actions central to a company's operations,
such as checking the status of an order or granting
a customer credit.
Extranets:
Extranets expedite the flow of information between
the firm and its suppliers and customers. They can
allow different firms to work collaboratively on
product design, marketing, and production.

Electronic business :
The use of the Internet and digital technology to
execute all the business processes in the enterprise.
Includes e-commerce as well as processes for the
internal management of the firm and for coordination
with suppliers and other business partners.
electronic-commerce:
The process of buying and selling goods and
services electronically involving transactions
using the Internet, networks, and other digital
technologies.

E-government:
Use of the Internet and related technologies to
digitally enable government and public sector
agencies’ relationships with citizens,
businesses, and other arms of government.
The Information Systems Function in Business
Information system department:

The formal organizational unit that is

responsible for the information systems
function in the organization.

1. Programmer
2. System analyst
3. Information system manager
Organization & Information system:

This complex two-way relationship is mediated by many factors, not the least
of which are the decisions made - or not made - by managers. Other factors
mediating the relationship include the organizational culture, structure,
politics, business processes, and environment.
Organization & Information system:

Environments shape what organizations can do, but organizations can

influence their environments and decide to change environments altogether.
Information technology plays a critical role in helping organizations perceive
environmental change and in helping organizations act on their environment.
IT infrastructures & Emerging technology:
IT infrastructures & Emerging technology:
1. Electronic accounting machine era
(1930-1950)

2. General-Purpose Mainframe and

minicomputer era (1959-present)

3. Personal computer era (1981-

present)

4. Client server era (1983-present)

5. Enterprise Internet (1992-present)

Moore's Law and Microprocessing Power:
Moore's Law and Microprocessing Power:

Moore's law stated in 1965 that

microprocessing power doubles every two
years. Variations of this law assert that

1. Microprocessing power doubles every 18

months

2. Computer power doubles every 18 months

3. The price of computing every 18 months.

From 1980 to 1990, hard disk drive capacities
for PCs grew at the rate of 25% annual
compound growth, but after 1990, growth
accelerated to more than 65% each year.
One reason for the growth in the Internet population is the rapid
decline in Internet connection and overall communication costs.
The cost per kilobit of Internet access has fallen exponentially
since 1995. Digital Subscriber Line (DSL) and cable modems
now deliver a kilobit of communication for a retail price of less
than 2 cents.
IT infrastructures components:
Software platform & Emerging technology:

•Linux and open-source software

•Java

•Enterprise software

•Web services and service-oriented architecture

•Software outsourcing
U.S. firms spent nearly $340 billion on software in 2006.
Management Issues:

How much should our firm spend on IT infrastructure?

 Data is usually not useful until subjected to a
value added process where:

• Its form is aggregated, manipulated

and organized

• Its content is analyzed and

evaluated

• It is placed in a proper context for

human user