UNIT I

INTRODUCTION TO
INFORMATION MANAGEMENT

K.SRIMATHI
ANNA UNIVERSITY
Topics covered….
• Data,
• Information,
• Intelligence,
• Information Technology,
• Information System, evolution, types based on functions and hierarchy,
• Functional Information Systems,
• DSS, EIS, KMS, GIS,
• International Information System.
Data
• Data is defined as basic or raw facts or figures, that's stored in
or used by a computer.

• Examples : weights, prices, costs, numbers of items sold,

employee names, product names, addresses, tax codes,
registration marks etc.,
Data…
• By data we mean the facts or figures representing an
object, place or the events occurring in the
organization.
• It is not enough to have data (such as statistics on the
economy).
• Data themselves are fairly useless, but when these data
are interpreted and processed to determine its true
meaning, they become useful.
Characteristics of Data
• They are facts obtained by reading, observation, counting, measuring and
weighing etc. which are then recorded.

• Data are derived from external and internal sources (activities with firm).

• Data may be produced as an automatic by-product of some routine but

essential operation such as the production of an invoice or alternative a special
counting or measuring procedure must be introduced and the result recorded.

• The source of data need be given considerable attention because if the sources
of the data flawed, any resulting information will be worthless.
Data Processing

• Data or processing systems perform the essential role of collecting and processing the
daily transactions of the organizations.

• Data processing is necessary to ensure that the day-to-day activities of the organization
are processed, recorded and acted upon.

• Files are maintained which provide both the current data for transaction, for example the
amount invoiced and cash received during the month for statement preparation, and which
also serve as a basis for operational and tactical control and for answering enquiries.
 Information
• By information, we mean that the data have been shaped into a meaningful form, which may be useful for human beings.

• So, when data are processed, interpreted, organized, structured or presented so as to make them meaningful or useful, they are
called information.

• Information provides context for data.

• Information is created from organized structured and processed data in a particular context, “information can be recorded as signs,
or transmitted as signals.

• Information is any kind of event that affects the state of a dynamic system that can interpret the information.

• Conceptually, information is the message(utterance or expression) being conveyed.

• Therefore, in a general sense, information is ‘knowledge communicated or received concerning a particular fact or circumstance”.

• Information simply means processed data which can be converted into meaningful and useful form for a specific user.

• Information is a stimulus that has meaning in some context for its receiver.
Information…
• These are difficult times for all organizations of all sizes and in all sectors.

• On the one hand, customers have ever-increasing expectations in terms of the speed and quality of
service they expect and, on the other resources are continually under pressure.

• This document sets out how effective information and records management can help any
organization to move forward in this challenging environment through,

• achieving cost and efficiency savings;

• making best use of information assets and

• Taking advantage of the opportunities offered by new technologies.

Characteristics of Good Information
Good information is that which is used and which create value. Experience and research shows that good

information has numerous qualities which are:

• 1. Relevance: Information must be relevant to the problem being considered. Too often reports, messages,
tabulations etc. contain irrelevant parts which most prevent the user of the information to get the actual meaning
of what the sender wants.

• 2. Accuracy: Information should be sufficiently accurate for it to be relied upon by the manager and for the
purpose for which it is intended.

• 3. Completeness: Ideally, all the information required for a decision should be available. However, in practice,
this is not often obtainable. What is required is that the information is complete in respect of the key elements of
the problem.This suggests that there should be interaction between information provides and users to ensure that
the key factors are identified.
Characteristics of Good Information

• 4. Confidence in the source: For information to have value it must be used. For it to be used managers must
have confidence in the source. Confidence is enhanced: Data Processes Output

• a. The source has been reliable in the past

• b. There is good communication between the information producer and the manager.

• 5. Communication to the right person: All persons have a defined sphere of activity and responsibility and
should receive information to help them carry out their designated tasks. In practice this is not always as easy
as it sounds. It is quite common for information to be supplied to the wrong level in the organization. A
superior may not pass it on the person who needs it whilst subordinates may hold onto information in an
attempt to make themselves seem indispensable.
Functions of Information
• a) Reduction of Uncertainty: Uncertainty exist where there is less than perfect knowledge. Rarely, if ever is
there perfect knowledge but relevant information help to reduce the unknown.

• b) An aid to monitoring and control: By providing information about performance and the extent of
deviations from planned level of performance, management are better able to control operation.

• c) As a means of communication: Managers need to know about developments, plans, forecasts, impending
changes and so on.

• d) As a memory supplement: By having historical information about performance, transactions, results of

past actions and decisions available for reference, personal memories are supplemented.

• e) As aid to simplification: By reducing uncertainty and enhancing understanding, problems and situations
are simplified and become more manageable.
Intelligence

• Intelligence has been defined in many different ways such as in terms

of one's capacity for logic, abstract thought, understanding, self-
awareness, communication, learning, emotional knowledge, memory,
planning, creativity and problem solving.
Knowledge

• Knowledge is a familiarity, awareness or understanding of someone or something, such as facts, information,

descriptions, or skills, which is acquired through experience or education by perceiving, discovering, or learning.
Knowledge can refer to a theoretical or practical understanding of a subject.

Importance:
• Learning Better

• Setting Goals As You Learn

• Learn Complex Things Faster

• Knowledge Helps You Solve Problems

• Understanding Yourself
Information Technology (IT)

• Information technology (IT) is the application of computers and

telecommunications equipment to store, retrieve, transmit and manipulate
data, often in the context of a business or other enterprise.
Need for IT

• • Education is a lifelong process therefore anytime anywhere access to it is the need

• • Information explosion is an ever increasing phenomena therefore there is need to get access to this information.

• • Education should meet the needs of variety of learners and therefore IT is important in meeting this need

• • It is a requirement of the society that the individuals should posses technological literacy

• • We need to increase access and bring down the cost of education to meet the challenges of illiteracy and poverty-IT
is the answer.
Importance of IT
• Access to variety of learning resources
• Immediacy to information
• Anytime learning
• Anywhere learning
• Collaborative learning
• Multimedia approach to education
• Authentic and up to date information
• Access to online libraries
• Teaching of different subjects made interesting
• Educational data storage
• Distance education
• Access to the source of information
• Multiple communication channels-e-mail, chat, forum, blogs, etc
• Access to open courseware
• Better accesses to children with disabilities
• Reduces time on many routine tasks
System

Definition:
A collection of components that work together to realize some
objective forms a system.

A system is an organized, interacting, interdependent and

integrated set of components.

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Major components in every system

• Input
• Processor
• Output
• Feedback
• Control

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 CONTROL

INPUT PROCESSOR OUTPUT

FEED BACK

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FEEDBACK MECHANISM
Feedback Mechanism: The mechanism, which provides a signal to the
system, about the quality of performance, favourable or adverse.
Positive
Feedback

Positive

Negative

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FEED BACK MECHANISM
PROCESS OUTPUT
INPUT

SENSOR

CHANNELS OF COMPARISON
CORRECTIVE
UNIT FEEDBACK UNIT

STANDARD

Sensor: the device that measures the output.

Comparison unit: Compares the output with the standard.
If the measured output compares well with the standard, the system provides a feedback to continue the operation. Otherwise a feedback is
provided to the system to stop the operation.
Corrective unit: An in-built mechanism which will decide, based on the feedback to stop, regulate or continue the system operations. It will act on
inputs and processes to bring the system under control.

Control: the process of measuring the output, comparing with the standard, sending the signal to the
corrective unit and the corrective unit acting upon it.
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How Feed back control works?

Input Process Output

Standards COMPARE samples

Leave the
Does not process alone
Confirms to
confirm to standards
standards
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Model of a Business System
CONTROL
Policies
Plans
Standards

INPUT PROCESSOR OUTPUT

Men Product
Materials Organization Services
Machines Profit/ Loss
Facilities
Information

Feed Back
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 SYSTEM

Definition
System is defined as a set of elements arranged
in an orderly manner to accomplish an objective. –
Davis and Olson

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SYSTEM (Example)
Computer System
Elements
Input process & Output process,
OS, Compliers, DBMS, etc.
Common Objective
To process the data and provide information.
Day to day examples of SYSTEM
1. Traffic System
2. Education System
3. Business System etc.
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System Concept
The features which define and delineate a system form its boundary.

The system is inside the boundary and the environment is outside the
boundary.

A system is composed of subsystems

The interconnections and interactions between the subsystems are the

interfaces.

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Concept of a System
• A System is a group of interrelated components working together toward a common goal by accepting inputs and
producing outputs in an organized transformation process.

The concepts of a system are Technology, Application, Development and Management.

• a. Technology.

• Computer networks are systems of information processing components that are a variety of hardware, software and
telecommunication technology.

• b. Application.

• That electronic business and commerce application involves interconnected business information system

• c. Development.

• That developing way to use IT in business includes designing the basic component of information system.

• d. Management.

• Managing IT emphasize the quality, strategic business value and security of an organization in information system.
System

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 Characteristics
1. They have specific objectives
The very existence & everything that the system
does and everything that happens within the system
is for the purpose of fulfilling the objective.
When does a system perform satisfactorily?
If the system achieves its objective it could be said to
be performing satisfactorily.
If not, it is termed a system malfunction.

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Characteristics (contd.)

2. Systems are composed of elements and these

elements can be systems within themselves
Eg. Transport system:
Subsystems: Road Transport System, Rail Transport System, Air
Transport System, and Water Transport System.
They posses the characteristics of a system

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Characteristics (contd.)
3. Elements can be common to several systems at the
same time
A single element may be a part of several systems at
the same time.
Eg: Human Body
Element –Skin is a part of the body’s defense system; it
is part of the input system.
Business system
Element- Sales is a part of marketing system, also it is a
part of the accounting system.
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Characteristics (contd.)

4. Elements in a system are interrelated

Eg: In a business system, marketing, finance, manufacturing etc are
related to each other.
They may work differently from each other and have
different short-term goals, but they eventually
have the same goal, which is to make the business
profitable.

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Characteristics (contd.)

5. Elements in a system are interdependent

They depend on each other for various inputs and are
responsible for directing their output to each other.
6. Systems have a defined structure
The flow of materials, feedback mechanisms etc is possible
because the interactions and interdependency work
within a predefined structure.

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 Characteristics (contd.)
7. Systems react with the environment
Almost all the systems have some form of reaction to the environment in which
they function. This is called as the system behaviour. The behaviour may be
in the inputs the system receives from the environment, the output it gives
to the environment and the measures it takes to protect itself in threat
from the environment.
8. All systems have a life cycle
Life cycle denotes the birth, evolution, decay and death of a
system.
9. All systems have boundaries
Boundaries define the limits of the system.
Interface
• The interconnections and interactions between the subsystems are termed
interfaces.
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 TYPES OF SYSTEMS
Classification based on the output and degree of information exchange with
the environment.
Deterministic Vs Probabilistic
• When the inputs, the process and the outputs are known with
certainty the system is called Deterministic system.
• It operates in a predictable manner i.e, you can predict the o/p with
certainty.
• Here, if one has a description of the state of the system at a certain
point plus a description of operation, the next state of the system may
be given exactly, without error.

• When the output can be predicted in probabilistic terms the system is

called a Probabilistic system.
• Its behaviour is not predictable. Here, a certain degree of error is
always attached to the prediction of what the system is doing.

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Open Vs Closed
• If a system has exchange of information, material or energy with the
environment including random and undefined inputs then it is called
Open system.
• Eg: organizational system (marketing, communication, forecasting) and
biological system.
• They tend to have form and structure to allow them to adapt changes in
their environment in such a way as to continue their existence. They have
‘self organizing’ ability i.e. to change their organization in response to
changing conditions.
• Generally, open systems are same as of probabilistic systems as they are
complex in every aspect. Therefore they do considerable amount of
checking and controlling of the system behaviour.
• Eg: pricing system.
• If a system does not have any change with the environment nor is it
influenced by the environmental changes then such a system is called as
Closed system.
• These systems are based on rules and principles.

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Human–Machine Systems (User-machine systems)

Information systems are generally human- machine systems in that

both perform some of the activities in the accomplishment of
a goal. The machine elements are relatively closed and
deterministic, whereas the human elements of the system
are open and probabilistic. Various combinations of human
and machine are possible.

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Information System

An information system is an arrangement of components that interact

to support the operations, management and decision making
information needs of an organization.

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Resources of IS
• Resources of People
• Hardware
• Software
• Data
• Networks

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IS Activities
• Input of data resources
• Processing of data into information
• Output of information product
• Storage of data resources
• Control of system performance
• Information quality

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Importance of IS…
• 1. To control the creation and growth of records
Despite decades of using various non-paper storage media, the amount of paper in our offices continues to
escalate. An effective records information system addresses both creation control (limits the generation of
records or copies not required to operate the business) and records retention (a system for destroying useless
records or retiring inactive records), thus stabilizing the growth of records in all formats.
• 2. To reduce operating costs
Recordkeeping requires administrative dollars for filing equipment, space in offices, and staffing to maintain an
organized filing system (or to search for lost records when there is no organized system).It costs considerably
less per linear foot of records to store inactive records in a Data Records Center versus in the office and there is
an opportunity to effect some cost savings in space and equipment, and an opportunity to utilize staff more
productively - just by implementing a records management program.
• 3. To improve efficiency and productivity
Time spent searching for missing or misfiled records are non-productive. A good records management program
(e.g. a document system) can help any organization upgrade its recordkeeping systems so that information
retrieval is enhanced, with corresponding improvements in office efficiency and productivity. A well designed
and operated filing system with an effective index can facilitate retrieval and deliver information to users as
quickly as they need it. Moreover, a well managed information system acting as a corporate asset enables
organizations to objectively evaluate their use of information and accurately lay out a roadmap for
improvements that optimize business returns.
Importance of IS…
• 4. To assimilate new records management technologies
A good records management program provides an organization with the capability to assimilate new
technologies and take advantage of their many benefits. Investments in new computer systems whether this is
financial, business or otherwise, don't solve filing problems unless current manual recordkeeping or
bookkeeping systems are analyzed (and occasionally, overhauled) before automation is applied.
• 5. To ensure regulatory compliance
In terms of recordkeeping requirements, China is a heavily regulated country. These laws can create major
compliance problems for businesses and government agencies since they can be difficult to locate, interpret and
apply. The only way an organization can be reasonably sure that it is in full compliance with laws and
regulations is by operating a good management information system which takes responsibility for regulatory
compliance, while working closely with the local authorities. Failure to comply with laws and regulations could
result in severe fines, penalties or other legal consequences.
• 6. To minimize litigation risks
Business organizations implement management information systems and programs in order to reduce the risks
associated with litigation and potential penalties. This can be equally true in Government agencies. For example,
a consistently applied records management program can reduce the liabilities associated with document disposal
by providing for their systematic, routine disposal in the normal course of business.
Importance of IS…
• 7. To safeguard vital information

Every organization, public or private, needs a comprehensive program for protecting its vital records and information from catastrophe or disaster, because
every organization is vulnerable to loss. Operated as part of a good management information system, vital records programs preserve the integrity and
confidentiality of the most important records and safeguard the vital information assets according to a "Plan" to protect the records. This is especially the
case for financial information whereby ERP (Enterprise Resource Planning) systems are being deployed in large companies.

• 8. To support better management decision making

In today's business environment, the manager that has the relevant data first often wins, either by making the decision ahead of the competition, or by
making a better, more informed decision. A good management information system can help ensure that managers and executives have the information they
need when they need it. By implementing an enterprise-wide file organization, including indexing and retrieval capability, managers can obtain and
assemble pertinent information quickly for current decisions and future. business planning purposes. Likewise, implementing a good ERP system to take
account of all the business‘ processes both financial and operational will give an organization more advantages than one who was operating a manual based
system.

• 9. To preserve the corporate memory

An organization's files, records and financial data contain its institutional memory, an irreplaceable asset that is often overlooked. Every business day, you
create the records, which could become background data for future management decisions and planning.

• 10. To foster professionalism in running the business

A business office with files, documents and financial data askew, stacked on top of file cabinets and in boxes everywhere, creates a poor working
environment. The perceptions of customers and the public, and "image" and "morale" of the staff, though hard to quantify in cost-benefit terms, may be
among the best reasons to establish a good management information system.
Some examples of information systems include the following.
• Airline reservations (seat, booking, payment, schedules, boarding list,
special needs, etc.).
• Bank operations (deposit, transfer, withdrawal) electronically with a
distinguish payment gateways.
• Integration of department with the help of contemporary software’s like
ERP.
• Logistics management application to streamline the transportation system.
Uses of IS
• Information system and technology including E-business and
E-commerce technology and application has become vital
component of successful business and organization.

• It is a study of business administration and management.

• For a manager or a business professional it is just as

important to have basic understanding of information system
and any other functional area in business.
 MIS as a multi – disciplinary subject

Monitoring &controlling
Data storage, processing, organizational performance
manipulation, retrieval etc. & initiating course-actions
whenever/wherever
Mgmt required
Computer
Accounting
Science
Explains the
dynamics of
Operations Mgmt
decision making
Use of Research MIS
Science/Theory process
mathematical &
statistical
techniques (for
Organizational Behavioural
Model building, Helps MIS
Theory
creating scenarios, Science professional to
forecasting): helps understand org, their
in decision-making types, cultures &
behaviour.
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 Organizations and Information Systems

• Information technology and organizations

influence one another
• Complex relationship influenced by organization’s
structure, business processes, politics, culture,
environment, and management decisions
 Organizations and Information Systems

The Two-Way Relationship Between Organizations and

Information Technology

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.
Figure 3-1
 Organizations and Information Systems

• What is an organization?
• Technical definition:
• Stable, formal social structure that takes resources
from environment and processes to produce outputs.
• A formal legal entity with internal rules and
procedures, as well as a social structure
• Behavioral definition:
• A collection of rights, privileges, obligations, and
responsibilities that is delicately balanced over a
period of time through conflict and conflict resolution
 Organizations and Information Systems

The Technical Microeconomic

Definition of the Organization

In the microeconomic definition of organizations, capital and labor

(the primary production factors provided by the environment) are
transformed by the firm through the production process into
products and services (outputs to the environment). The products
and services are consumed by the environment, which supplies
additional capital and labor as inputs in the feedback loop.
Figure 3-2
 Organizations and Information Systems

The Behavioral View of Organizations

The behavioral view of organizations emphasizes group relationships,

values, and structures. Figure 3-3
 Organizations and Information Systems

• Features of organizations
• All modern organizations share some
characteristics, such as:
• Use of hierarchical structure
• Accountability, authority in system of impartial
decision-making
• Adherence to principle of efficiency
• Other features include: Routines and business
processes and organizational politics, culture,
environments and structures
 Organizations and Information Systems

• Routines and business processes

• Routines (standard operating procedures)
• Precise rules, procedures, and practices
developed to cope with virtually all expected
situations
• Business processes: Collections of routines
• Business firm: Collection of business
processes
 Organizations and Information Systems

Routines, Business Processes, and Firms

All organizations are composed of

individual routines and behaviors, a
collection of which make up a business
process. A collection of business processes
make up the business firm. New
information system applications require
that individual routines and business
processes change to achieve high levels of
organizational performance.

Figure 3-4
Roles of IS in business
• An Information system supports the business Organizations in the following ways.
• a) Support the Business Process: Treats inputs as a request from the customer and outputs as services to
customer. Supports current operations and use the system to influence further way of working.

• b) Support Operation of a Business Organization: An IS supports operations of a business organization by

giving timely information, maintenance and enhancement which provides flexibility in the operation of
organizations.
• c) Support Decision Making: An IS supports the decision making by employee in their daily operations. It
also supports managers in decision making to meet the goals and objectives of the organization. Different
mathematical models and IT tools are used for the purpose evolving
• strategies to meet competitive needs.
• d) Strategies for an Organization: Today each business is running in a competitive market. An IS supports
the organization to evolve appropriate strategies for the business to assent in a competitive environment
 Evolution of IS…
• The first business application of computers (in the mid- 1950s) performed repetitive, high-volume, transaction-
computing tasks. The computers‖ crunched numbers‖ summarizing and organizing transactions and data in the
accounting, finance, and human resources areas. Such systems are generally called transaction processing systems
(TPSs).
• Management Information Systems (MISs): these systems access, organize, summarize and displayinformation for
supporting routine decision making in the functional areas
• Office Automation Systems (OASs): such as word processing systems were developed to support office and clerical
workers.
• Decision Support Systems: were developed to provide computer based support for complex, non routine decision. „ End-
user computing: The use or development of information systems by the principal users of the systems‘ outputs, such as
analysts, managers, and other professionals.
• Intelligent Support System (ISSs): Include expert systems which provide the stored knowledge of experts to non experts,
and a new type of intelligent system with machine- learning capabilities that can learn from historical cases. „
• Knowledge Management Systems: Support the creating, gathering, organizing, integrating and disseminating of
organizational knowledge.
• Data Warehousing: A data warehouse is a database designed to support DSS, ESS and other analytical and end-user
activities. „
• Mobile Computing: Information systems that support employees who are working with customers or business partners
outside the physical boundaries of their company; can be done over wire or wireless networks.
Four General Kinds of IS

◼ Operational-level systems
• Support operational managers by monitoring the day-
to-day‘s elementary activities and transactions of the
organization. e.g. TPS.

◼ Knowledge-level systems
• Support knowledge and data workers in designing
products, distributing information, and coping with
paperwork in an organization. e.g. KWS, OAS

◼ Management-level systems
• Support the monitoring, controlling, decision-making,
and administrative activities of middle managers. e.g.
MIS, DSS
❑ Executive Support Systems (ESS)
◼ Strategic-level systems ◼ Management Information Systems (MIS)
• Support long-range planning activities of senior ◼ Decision Support Systems (DSS)
management. e.g. ESS ◼ Knowledge Work Systems (KWS)
◼ Office Automation Systems (OAS)
◼ Transaction Processing Systems (TPS)
Information system based on hierarchy
 Employee
Corporate
Database
Database
of external
of internal
data
data
Corporate
Intranet

ESS
Databases
Business TPS MIS Application
of valid
Transactions transactions Databases DSS

ES
Operational Input & error Scheduled
Databases list reports

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 FUNCTIONAL INFORMATION SYSTEM
Supports a functional area by increasing its internal effectiveness and efficiency. Typically found for:

• • Finance (FIN): provide internal and external professional access to stock, investment and
capital spending information.

• • Accounting (ACC): similar to financial MIS more related to invoicing, payroll, receivables.

• • Marketing (MKT): pricing, distribution, promotional, and information by customer and

salesperson.

• • Operations (OPS): regular reports on production, yield, quality, inventory levels. These
systems typically deal with manufacturing, sourcing, and supply chain management.

• • Human Resources Management (HR): employees, benefits, hiring‘s, etc.

• Production systems
• Materials – purchase, stores
• Research and Development
Production Management
• The following type of information is needed in production management:
• Strategic Information:
• 1) Yearly and monthly production quotas and alternate schedules
• 2) Policies on machine replacement, augmentation and modernization.
• 3) Identifying best product mix.
• Tactical Information
• 1) Identifying and controlling areas of high cost.
• 2) Identifying critical bottlenecks in production.
• 3) Identifying alternate production schedules based on tools, machines etc.
• 4) Performance measures of machines to decide replacement.
• Operational Information
• 1) Monitoring up to date production information by examining assemblies,
• detecting likely shortages and giving early warning.
• 2) Scheduling better production dynamically.
• 3) Preventive maintenance schedules.
• 4) Monitoring tool, machine and personnel availability
Marketing Management
• The following type of information is needed in Marketing Management:
• Strategic Information:
• 1) Search for new markets and marketing strategies.
• 2) Analysis of competitor’s strategy
• 3) Technology and demographic forecasts and product changes
• Tactical Information:
• 1) Advertising techniques and analysis of their impact.
• 2) Customer preference surveys.
• 3) Correlation of prices and sales.
• 4) Sales force deployment and targets.
• 5) Exploring alternate marketing channels.
• 6) Timing of special sales campaigns.
• Operational Information:
• 1) Sales analysis by regions, customer class, sales person.
• 2) Sales target versus achievement.
• 3) Market share and trends.
• 4) Seasonal variations.
• 5) Effect of model changes.
• 6) Performance of sales outlets
• 7) Costs of campaigns and benefit.
Material Management
• The following type of information is needed in Materials Management:
• Strategic Information:
• 1) Developing vendors for critical items
• 2) Determining optimal levels of inventory
• 3) Determining proportion of material needed
• 4) Reducing varieties of inventory
• Tactical Information:
• 1) Developing vendor performance measures.
• 2) Determining optimal reorder levels.
• 3) Determining issues of items to shops versus
• 4) Standard needs.
• 5) Controlling high value of inventory.
• 6) Determining impact on material cost and
• 7) Procurement with design changes and new
• 8) Product introduction.
• Operational Information:
• 1) List of excess & deficient items received.
• 2) List of items rejected.
• 3) Critical items received.
• 4) Stores in transit and in inspection.
• 5) Value of inventory in hand.
• 6) Goods received, rejected and issued.
Finance Management
• The following type of information is needed in Finance Management:
• Strategic Information:
• 1) Methods of financing.
• 2) Pricing policies
• 3) Tax planning.
• Tactical Information:
• 1) Variations between budget and expenses.
• 2) Large outstanding payments/Receipts.
• 3) Credit and payment status.
• 4) Cost increases and pricing.
• 5) Impact of taxation on pricing
• Operational Information:
• 1) Periodic financial report.
• 2) Budget status to all functional managers.
• 3) Tax returns.
• 4) Share transfers.
• 5) Profit and loss account.
• 6) Payments and receipts.
• 7) Payroll, provident fund accounts
Human Resource Management
• The following type of information is needed in Human Resources Management:
• Strategic Information:
• 1) Long range human resource requirements at different levels.
• 2) Policies on human resource development and training
• 3) Policies on personnel welfare and facilities
• Tactical Information:
• 1) Performance appraisal.
• 2) Demographic make-up of personnel and its impact on retirement.
• 3) Production incentives.
• 4) Morale of personnel.
• 5) Absentee reduction.
• 6) Leave and overtime policies.
• 7) Personnel deployment policies.
• Operational Information:
• 1) Routine assessment.
• 2) Skills inventory.
• 3) Loan/advances and recoveries.
• 4) Leave record.
DECISION SUPPORT SYSTEMS
ATTRIBUTES OF DSS
CHARACTERISTICS OF DSS
BENEFITS OF DSS
COMPONENTS OF DSS
CLASSIFICATION OF DSS
TYPES OF DSS
How Decisions Are Supported
Phases of Decision-Making Process
• Humans consciously or sub consciously follow a systematic decision-
making process - Simon (1977)
1) Intelligence
2) Design
3) Choice
4) Implementation
5) (?) Monitoring (a part of intelligence?)
Simon’s Decision-Making Process
How Decisions Are Supported
• Support for the Intelligence Phase
• Enabling continuous scanning of external and internal
information sources to identify problems and/or
opportunities
• Resources/technologies: Web; ES, OLAP, data
warehousing, data/text/Web mining, EIS/Dashboards,
KMS, GSS, GIS,…
• Business activity monitoring (BAM)
• Business process management (BPM)
• Product life-cycle management (PLM)
How Decisions Are Supported
• Support for the Design Phase
• Enabling generating alternative courses of action,
determining the criteria for choice
• Generating alternatives
• Structured/simple problems: standard and/or special models
• Unstructured/complex problems: human experts, ES, KMS,
brainstorming/GSS, OLAP, data/text mining
• A good “criteria for choice” is critical!
How Decisions Are Supported
• Support for the Choice Phase
• Enabling selection of the best alternative given a
complex constraint structure
• Use sensitivity analyses, what-if analyses, goal seeking
• Resources
• KMS
• CRM, ERP, and SCM
• Simulation and other descriptive models
How Decisions Are Supported
• Support for the Implementation Phase
• Enabling implementation/deployment of the selected
solution to the system
• Decision communication, explanation and justification
to reduce resistance to change
• Resources
• Corporate portals, Web 2.0/Wikis
• Brainstorming/GSS
• KMS , ES
New Technologies
to Support Decision Making
• Web-based systems
• m-Commerce
• PDA, Cell phones, Tablet PCs
• GSS with visual/immersive presence
• RFID and other wireless technologies
• Faster computers, better algorithms, to process “huge” amounts of
heterogeneous/distributed data
EXECUTIVE SUPPORT SYSTEMS (EIS)
EXAMPLES
ADVANTAGES OF ESS
DISADVANTAGES OF ESS
KNOWLEDGE MANAGEMENT SYSTEM(KMS)

WHAT IS KNOWLEDGE?
4.6 Knowledge Management
• Knowledge management (KM) is a process that helps organizations
manipulate important knowledge that is part of the organization’s
memory, usually in an unstructured format.
• Knowledge is information that is contextual, relevant and actionable;
information in action.
• Intellectual capital (or intellectual assets) is another term often used
for knowledge.

Copyright 2007 John Wiley & Sons, Inc. Chapter 4 98

Knowledge Management (Continued)
• Explicit knowledge deals with more objective, rational and technical knowledge.
• Tacit knowledge is the cumulative store of subjective or experiential learning.
• Knowledge management systems (KMSs) use modern information technologies
– Internet, intranets, extranets, data warehouses - to systemize, enhance and
expedite intrafirm and interfirm knowledge management.
• Best practices are the most effective and efficient ways of doing things, readily
available to a wide range of employees.

Copyright 2007 John Wiley & Sons, Inc. Chapter 4 99

Knowledge Management System Cycle
• Create knowledge. Determine new ways.
• Capture knowledge. Identify as valuable.
• Refine knowledge. Make it actionable.
• Store knowledge. Store in a reasonable format.
• Manage knowledge. Verify it is relevant, accurate.
• Disseminate knowledge. Made available.

Copyright 2007 John Wiley & Sons, Inc. Chapter 4 101

SOURCES OF KNOWLEDGE OF AN
ORGANIZATION
PURPOSE OF KMS
ACTIVITIES IN KNOWLEDGE MANAGEMENT
4.5 Data Visualization Technologies
• Geographic Information Systems (GIS) is a computer-based system
for capturing, integrating, manipulating and displaying data using
digitized maps.
• Find locations for new restaurants.
• Emerging GIS applications integrated with global positioning systems (GPSs).
• Virtual Reality is interactive, computer-generated, three-dimensional
graphics delivered to the user through a head-mounted display.

Copyright 2007 John Wiley & Sons, Inc. Chapter 4 105

GEOGRAPHIC INFORMATION SYSTEM (GIS)

GIS TECHNIQUES AND TECHNOLOGY

DATA REPRESENTATION
DATA CAPTURE
GIS DATA MINING
INTERNATIONAL INFORMATION SYSTEM
Data Life Cycle
THANK YOU