Session 1-2

Dr. Manojit Chattopadhyay

Associate Professor
Outline

 What is an Information System

 Role of MIS in Business

 MIS-Business Relationship

 MIS in an Organization

 The Right Mindset for Managing IT

 Conclusion
What is an Information System?
Definition

 InformationSystem: A set of interrelated components that

collect (or retrieve), process store, and distribute
information to support decision making and control in an
organization.

 Information
Technology: All hardware and software that a
firm needs to use in order to achieve its business
objectives
 Hardware: Computer machines, storage devices, mobile devices
 Software: Operating systems, application software etc.
What is an Information System?
Data Vs Information

 Data Vs Information
 Data are streams of raw facts
 Information is data shaped into meaningful form

Input Process Output

 A Framework for Information Sytems
Operational Systems (primary concern is to collect,
validate, record transactional data describing the acquisition
or disbursement of corporate resources) e.g., payroll system
 Characteristics are:
Repetitiveness, predictability, emphasis on past, detailed
nature, internal, structured form, great accuracy
Tactical Systems (provide middle level managers with the
information they need to monitor and control operations and
to allocate their resources effectively. In this system
transaction data is summarised, aggregated or analysed and
generate a number of reports)
 Following are the types of reports:

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 A Framework for Information Sytems
 Following are the types of reports:
 Summary reports (weekly sales by month by each
product), Exception report (warn managers when results
do not meet a standard e.g. list of all plants having more
overtime than in a week), ad hoc report (managers need
usually quickly that may never be required again,
presents information that managers use for specific
solution, managers may ask for such report when
exception occurs)
 The tactical and operation IS differ in that the purpose of
tactical IS is not to support execution of operational task
but to help managers controlling these operations.
 Thus the characteristics are:

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 A Framework for Information Sytems
 Thus the characteristics are:
Periodic in nature, unexpected findings, comparative nature,
summary form, both internal and external sources
 Strategic Planning Systems (are designed to provide top
managers with information that assist them in making
long range planning decisions.). The difference between
tactical and strategic system is not always clear because
both of them may use same data.
 The characteristics are:
ad hoc basis, unexpected information, predictive nature,
summary form, external data, unstructured format,
subjectivity

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 A comparison of IS in operational, tactical and
strategic planning systems
Characteristics Operational Tactical Strategic planning

Frequency Regular, repetitive Mostly regular Often ad hoc

Dependability of Expected results Some surprise may Results often contained
results occur surprise
Time period overhead The past Comparative Predictive of the future

Level of detail Very detailed Summarises of data Summarises of data

Source of data Internal Internal and Mostly external
external
Nature of data Highly structured Some unstructured Highly unstructured
Accuracy Highly accurate Some subjective Highly subjective data
data data
Typical user First line supervisor Middle managers Top management
Level of decision Task oriented Oriented toward Goal oriented
control and
resource allocation
  A MIS is:
• Integrated user-machine system
• For providing information
• To support the operation,management, analysis and
decision making functions
• In an organisation

 This system utilises

• Computer h/w & s/w
• Manual procedures
• Models for analysis, planning, control and decisions
making &
• A database
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Quality of Information:

Timeliness, accuracy,
relevance,(Whs), adequacy,
completeness, explicit exception
based

Utility Approach:
Form: form vs requirement
Time: in time value
Place: access/deliver
Possession: owner influence
 MIS as evolving concept
 MIS is envisioned as a single, highly integrated system
bringing together processing of all the functions.
 Itis also designed CBIS to support management planning and
decision making functions like strategic plan.
 Highly integrated system is difficult to implement
 MIS is now considered as federation of sub system developed
& implemented as needed but conforming to overall plan,
standard and procedures for MIS
 Thus instead of single global MIS an organisation may have
many related IS that served managerial need in various ways.
 MIS still continues to evolve

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Role of MIS in Business
 How information systems are transforming business
 Increase in wireless technology use, Web sites

 Shifts in media and advertising

 New security and accounting laws ITC

e-Choupal
 Globalization opportunities
 Internet has drastically reduced costs of operating on global scale
 Presents both challenges and opportunities
UPS
 Emergence of Digital Organizations
 Significant business relationships are digitally enabled and mediated

 Core business processes are accomplished through digital networks

 Key corporate assets are managed digitally

 Digital firms offer greater flexibility in organization and

management (Time shifting, space shifting)
 India ranks 91 on the Networked Readiness Index (NRI) 2016, a key
component of the World Economic Forum’s The Global Information
Technology Report 2016.

 The report assesses the state of networked readiness of 139 economies

using the NRI and examines the role of information and communication
technologies (ICTs) in driving innovation.

 The NRI is thus a key tool in assessing a country’s preparedness to reap

the benefits of emerging technologies and capitalize on the opportunities
presented by the digital transformation.
Role of MIS in Business
 Smart Phones Changing the Shape of Businesses

 Increased web-presence

 Online transactions and purchases

 Fast supply chains (Push to demand pull)

 Hear my voice, please (Blogging and Voicing)

 Online campaigning and Canvassing (Anna’s Threat)

 New ways of advertising through social media

 Online marketplaces (www.metaljunction.com)

MIS-Business Relationship
 Interdependence between organizations and information technology

In contemporary systems there is a growing interdependence between a firm’s information

systems and its business capabilities. Changes in strategy, rules, and business processes
increasingly require changes in hardware, software, databases, and telecommunications. Often,
what the organization would like to do depends on what its systems will permit it to do.
MIS-Business Relationship

Operational
excellence

New products,
Survival services, and
business models
MIS and
Business
Customer and
Competitive supplier
advantage intimacy
Improved
decision making
MIS-Business Relationship
 Operational excellence:
 Improvement of efficiency to attain higher profitability

 Information systems, technology an important tool in achieving

greater efficiency and productivity
 Wal-Mart’s Retail Link system links suppliers to stores for superior
replenishment system

 New products, services, and business models:

 Business model: describes how company produces, delivers, and
sells product or service to create wealth
 Information systems and technology a major enabling tool for new
products, services, business models
 Examples: Apple’s iPod, iTunes, and iPhone, Netflix’s Internet-
based DVD rentals
MIS-Business Relationship

 Customer and supplier intimacy:

 Serving customers well leads to customers returning, which raises
revenues and profits
 Example: High-end hotels that use computers to track customer
preferences and use to monitor and customize environment
 Intimacy with suppliers allows them to provide vital inputs, which
lowers costs
 Example: J.C. Penney’s information system which links sales
records to contract manufacturer
MIS-Business Relationship

 Improved decision making

 Without accurate information:
 Managers must use forecasts, best guesses, luck

 Leads to:

 Overproduction, underproduction of goods and services

 Misallocation of resources
 Poor response times

 Poor outcomes raise costs, lose customers

 Example: Verizon’s Web-based digital dashboard to provide

managers with real-time data on customer complaints, network
performance, line outages, etc.
MIS-Business Relationship
 Competitive advantage
 Delivering better performance
 Charging less for superior products
 Responding to customers and suppliers in real time
 Example: Toyota and TPS (Toyota Production System) enjoy a
considerable advantage over competitors – information systems are critical
to the implementation of TPS

 Survival
 Information technologies as necessity of business
 May be:
 Industry-level changes, e.g. Citibank’s introduction of ATMs
 Governmental regulations requiring record-keeping
 Examples: Toxic Substances Control Act, Sarbanes-Oxley Act
MIS in an Organization
Infrastructure (IT
Hardware, Network
components)

IT
Data (Text,
Organization
(People that MIS Audio, Video
and Images)
use IT)

Each element of the IT

framework is vital for
Applications generating market-viable
(Computer products and services
Programs and
Other software)
MIS in an Organization
Functions
An information system
contains information about
an organization and its
surrounding environment.
Three basic activities—input,
processing, and output—
produce the information
organizations need.
Feedback is output returned
to appropriate people or
activities in the organization
to evaluate and refine the
input. Environmental actors,
such as customers, suppliers,
competitors, stockholders,
and regulatory agencies,
interact with the organization
and its information systems.
MIS in an Organization
Dimensions
Computer Hardware

Computer Software

Data Management
Technology

Networking and
Communications Technology

Formulate Create new

Scanning Decision Recreate
Action products
Environment Making organization
Plans and services
The Right Mindset for Managing IT

 Usual complaints about IT in US / Europe

 IT Investments are unrelated to Business
 Payoff from IT Investments is inadequate
 There too much ‘technology for technology’s sake’
 Relations between IT users and IT specialists are poor
 Systems designers do not consider users’ preferences and habits
The Right Mindset for Managing IT

 Why is there such Confusion?

On the one hand, managers insist on elevating IT to the

level of strategy; on the other, they recognize that
integrating IT with business goals is only marginally
easier than reaching the summit of Everest. It can be
done, but it’s difficult – and the cost of failure is high.
The Right Mindset for Managing IT

 Why is there such Confusion?

People think that IT Well, it doesn’t.

needs special tools, Technology should
special strategies, be managed –
and a special controlled, even –
mindset. like any other
competitive weapon
in a manager’s
arsenal
The Right Mindset for Managing IT
Japanese Vs Western Outlook
Issue Western Framing Japanese Framing

How to decide on what Strategic Alignment – Develop IT Strategic Instinct – Org. goals drive
is our business needs? that aligns with business strategy IT investment
How to know whether Value for Money – Capital budgeting Performance Improvement –
IT investment is process to manage and evaluate IT Judgment is based on operational
worthwhile? investments performance improvement
When trying to Technology Solutions – Assuming Appropriate Technology – Identify
improve a business that technology offers the smartest a performance goal and select
process, how does and cheapest way to improve technology that help achieve it in a
technology fit into our performance way that supports the people doing
thinking? the work
How should IT users IS user relations – We teach Organizational bonding –
and IT specialists specialists about business goals and Encourage integration by rotating
connect in our org.? develop technically adept, business manages through IT function,
savvy CIOs. colocating specialists and users.
How to design systems Systems Design – We design the Human Design – Design the system
that improves org. most technically elegant system to make use of the tacit and explicit
performance? possible and ask employees to adapt knowledge that employees already
to it possess
The Right Mindset for Managing IT
 Sometimes the most advanced form of IT makes sense;
sometimes simpler forms will do. Sometimes high tech
should cohabit with low tech.

 Theintegration between IT function and IT users should be

from top to bottom and systemic and not structural
 The bridges will collapse as long as there is one IT culture and another
business culture.
 Principle of organizational bonding will keep them strong and stable.

 The role of culture in business practices cannot be ruled out

and therefore, it is better to focus on best principles rather
than best practices or benchmarking. Companies must learn
to adapt best principles to their business culture.
Conclusion

 MIS is not just about technology, but it encompasses

people, culture, the organization and business practices.

 MIS and Business should complement each other.

 ITshould not be seen as a panacea. It should be inducted

into a company according to the need of the business.

 Japanese way of managing IT provides and excellent

foundation for implementing IT in an organization.
Videocase

UPS 1.21:..\Video Case\UPS Package Flow Technology—DIAD.mp4

UPS 3.21:..\Video Case\UPS’s Next-Generation Mobile Devices Are

Here.mp4

UPS 4.58:..\Video Case\UPS Tour—That’s UPS.mp4

Walmart: 7.13 ..\Video Case\Walmart’s Retail Link Supply Chain.mp4

Sanfrancisco CRM: ..\..\PGP2_2014\MIS2015-17 Lecture

Notes\VideoCasesMIS\L3Case2SFGTV Customer Relationship
Management CRM San Francisco.mp4

GE 10.49:..\Video Case\GE’s Jeff Immelt on digitizing in the industrial

space McKinsey.mp4