MANAGEMENT INFORMATION SYSTEMS AN INSIDE
By Dr. Atanu Rakshit Email: atanu.rakshit@iimrohtak.ac.in atanu.raks@gmail.com
MANAGEMENT INFORMATION SYSTEMS (MIS)
Text Book:
Management
Information Systems: Managing the Digital Farm by Ken Laudon, Jane Laudon and Rajanish Dass, 11/e, Pearson Publication, 2010
Information Systems by James A ORrien, George M Marakas and Ramesh Behl, 9/e, McGraw Hill, 2010
Reference Material:
Management
MANAGEMENT INFORMATION SYSTEMS (MIS)
Reference Material (Contd.):
Managent
Information Systems by Mahadeo Jaiswal and Monika Mital, Oxford Univ. Press, 2011 Decision Support and Business Intelligence Systems by Efraim Turban, Ramesh Sharda and Dursun Delen, 9/e, Pearson Publication, 2011 Information Technology Management by Henry C. Lucas, Jr. Tata McGraw-Hill Publication, 2011 Harvard Business Publication
MANAGEMENT INFORMATION SYSTEMS (MIS)
Sessions Plan
Information system and its impact in business in todays scenarios Classification of types of information systems in an organization: Operational, MIS, DSS, ESS, ES Information Systems, Organizations and Strategies Emerging Technologies: Virtualization, Cloud Computing, SOA, BPM, Telecommunication and Wireless Technologies Enterprise Systems ERP, CRM, SCM, etc Data Management Systems: RDBMS, Data Warehousing, OLAP, Data Quality etc.
Information Systems and its Impact in Todays Business Scenarios
LEARNING OBJECTIVES
Explain why knowledge of information systems is important for business professionals and identify five key areas of information systems knowledge.
Give examples to illustrate how the IT Driven business applications can support a firms business processes, managerial decision making, and strategies for competitive advantage.
Information Systems in
Global Business Today
LEARNING OBJECTIVES
Understanding the effects of information systems on business and their relationship to globalization. Explain why information systems are so essential in business today. Define an information system and describe its management, organization, and technology components.
LEARNING OBJECTIVES (Continued)
Define complementary assets and explain how they ensure that information systems provide genuine value to an organization. Describe the different academic disciplines used to study information systems and explain how each contributes to our understanding of them. Explain what is meant by a sociotechnical systems perspective.
IPL Teams Strike Gold with Information Technology
Cricket is fast-paced, high-energy sport, high-stack with big business opportunity Each team in IPL pays their players ranging from 20 lakh to 2 crore per year Objective: Elegant performance for most of the players leads to more wins implies more money business opportunities for the team.
Problem: Lack of historical and statistical data match-wise, country-wise, player-wise hard data usable in decision-making processes, costly and competitive market.
IPL Team Strike Gold with Information Technology
A Company called Sport Mechanics providing the solution for requirement. Solutions: Developed a new system designed to collect and organize data using video clips of games.
Synergy Sports Technology tags video of each game with hundreds of descriptive categories and allows coaches and players to stream game footage from the Web.
Demonstrates ITs role in innovation and improving business processes. Illustrates how the Web has allowed businesses to use new tools to analyze critical data.
RECENT NEWS
ToI dated 02/01/2012
John
Chambers, Global Chairman and CEO, CISCO
Intelligent
IT Wave / Infrastructure IT and Communication resources are more Virtual, Visual, Social, Mobile and Video enabled than before
ToI dated 03/01/2012
IITs
have allowed MIT to use their Open Courseware through NPTEL (National Programme for Technology Enhanced Learning)
The Role of Information Systems in Business Today
How information systems are transforming business
Increase in wireless technology use, Web sites Resource Optimization (ERP and SCM) Shifts in media and advertising New federal security and accounting laws
Globalization opportunities Internet has drastically reduced costs of operating on global scale Presents both challenges and opportunities
The Role of Information Systems in Business Today
Information Technology Capital Investment
Information technology investment, defined as hardware, software, and communications equipment, grew from 32% to 51% between 1980 and 2008. Source: Based on data in U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 2008.
The Role of Information Systems in Business Today
In the emerging, fully digital firm
Significant business relationships with customers, suppliers and employees are digitally enabled and mediated Core business processes are accomplished through digital networks within or across organizations Key corporate i.e., IP, Financial, Human assets etc. are managed digitally
Digital firms offer greater flexibility in organization and management
Time shifting 24/7, space shifting Global work place
The Role of Information Systems in Business Today
Growing interdependence between ability to use information technology and ability to implement corporate strategies and achieve corporate goals Business firms invest heavily in information systems to achieve six strategic business objectives:
Operational excellence New products, services, and business models Customer and supplier intimacy Improved decision making Competitive advantage Survival
The Role of Information Systems in Business Today
Operational excellence:
Improvement of efficiency to attain higher profitability Information systems, technology an important tool in achieving greater efficiency and productivity Wal-Marts RetailLink system links suppliers to stores for superior replenishment system
The Role of Information Systems in Business Today
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: Apples iPod, iTunes, and iPhone, Netflixs Internet-based DVD rentals
The Role of Information Systems in Business Today
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 like room temperature, check-in time, frequent dialed number, television channels etc. and use to monitor and customize environment
Intimacy with suppliers allows them to provide vital inputs, which lowers costs
Example: J.C.Penneys information system which links sales records to contract manufacturer
The Role of Information Systems in Business Today
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: Verizons Web-based digital dashboard to provide managers with real-time data on customer complaints, network performance, line outages, etc.
The Role of Information Systems in Business Today
Operational excellence:
Improvement of efficiency to attain higher profitability Enabled by technology Serving customers raises revenues and profits Better communication with suppliers lowers costs More accurate data leads to better decisions
New products, services, and business models:
Customer and supplier intimacy:
Improved decision making
The Role of Information Systems in Business Today
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
The Role of Information Systems in Business Today
Survival
Information
technologies as necessity of
business May be:
Industry-level
changes, e.g. Citibanks introduction
of ATMs Governmental regulations requiring record-keeping
Examples: Toxic Substances Control Act, SarbanesOxley Act
The Role of Information Systems in Business Today
The Interdependence Between Organizations and Information Technology
In contemporary systems there is a growing interdependence between a firms 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.
EMBEDDED INFORMATION SYSTEM
Implement Business Strategies to obtain Business Goal Business Operation for optimize resources and performances Extended Business Operation for customer support and increase profitability & loyalty Business Analytics for smarter and predictive business
Perspectives on Information Systems
Information system:
Set of interrelated components Collect, process, store, and distribute information Support decision making, coordination, control operations, analyze problems, new product ans services
Information vs. data
Data are streams of raw facts Information is data shaped into meaningful form
Perspectives on Information Systems
Data and Information
Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as the total unit sales of dish detergent or the total sales revenue from dish detergent for a specific store or sales territory.
Perspectives on Information Systems
Information system: Three activities produce information organizations need
Input:
Captures raw data from organization or external environment
Processing:
Converts raw data into meaningful form
Transfers processed information to people or activities that use it
Output:
Perspectives on Information Systems
Feedback:
Output returned to appropriate members of organization to help evaluate or correct input stage
Computer/Computer program vs. information system
Computers and software are technical foundation and tools, similar to the material and tools used to build a house
Perspectives on Information Systems
Functions of an Information System
An information system contains information about an organization and its surrounding environment. Three basic activitiesinput, processing, and outputproduce 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.
Perspectives on Information Systems
Information Systems Are More Than Computers
Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems. An information system creates value for the firm as an organizational and management solution to challenges posed by the environment.
Perspectives on Information Systems
Organizational dimension of information systems
Key elements of organization are people, structure, business processes, politics and culture Hierarchy of authority, responsibility
Senior
management Middle management Operational management Knowledge workers Data workers Production or service workers
Perspectives on Information Systems
Levels in a Firm
Business organizations are hierarchies consisting of three principal levels: senior management, middle management, and operational management. Information systems serve each of these levels. Scientists and knowledge workers often work with middle management.
Perspectives on Information Systems
Organizational dimension of information systems (cont.) Separation of business functions
Sales and marketing, Human resources, Finance and accounting, Manufacturing and production etc.
Unique
business processes Unique business culture fundamental sets of
assumptions, values, way of doing things
Organizational
politics People occupy different
positions with different specialties, concerns and perspective. Leads to diverge viewpoints of resources, rewards and punishments - conflicts
Perspectives on Information Systems
Management dimension of information systems
Make decisions, formulate action plan Managers set organizational strategy for responding to business challenges Allocates all resources and coordinate work for success In addition, managers must act creatively:
Creation of new products and services Occasionally re-creating the organization
Perspectives on Information Systems
Technology dimension of information systems
Computer hardware and software
Data management technology Networking and telecommunications technology
Networks, the Internet, intranets and extranets, World Wide Web
IT infrastructure: provides platform that system is built on Cloud Computing
CASE STUDY ON UPS
UPS Competes Globally with Information Technology
Perspectives on Information Systems
What are the inputs, processing, and outputs of UPSs package tracking system?
Inputs: The inputs include package information, customer signature, pickup, delivery, time-card data, current location (while en route), and billing and customer clearance documentation. Processing: The data are transmitted to a central computer and stored for retrieval. Data are also reorganized so that they can be tracked by customer account, date, driver, and other criteria. Outputs: The outputs include pickup and delivery times, location while en route, and package recipient. The outputs also include various reports, such as all packages for a specific account or a specific driver or route, as well as summary reports for management.
Perspectives on Information Systems
What technologies are used by UPS
Technologies include handheld computers (DIADs), barcode scanning systems, wired and wireless communications networks, desktop computers, UPSs central computer (large mainframe computers), and storage technology for the package delivery data. UPS also uses telecommunication technologies for transmitting data through pagers and cellular phone networks. The company uses in-house software for tracking packages, calculating fees, maintaining customer accounts and managing logistics, as well as software to access the World Wide Web.
Perspectives on Information Systems
How are these technologies related to UPSs business strategy?
UPS has used the same strategy for over 90 years. Its strategy is to provide the best service and lowest rates. One of the most visible aspects of technology is the customers ability to track his/her package via the UPS Web site. However, technology also enables data to seamlessly flow throughout UPS and helps streamline the workflow at UPS. Thus, the technology described in the scenario enables UPS to be more competitive, efficient, and profitable. The result is an information system solution to the business challenge of providing a high level service with low prices in the face of mounting competition.
Perspectives on Information Systems
What problems do UPSs information systems solve?
Some problems this information system solves relate directly to logistics and supply chain activities, not just for itself, but also for other companies. These services include supply chain design and management, freight forwarding, customs brokerage, mail services, multimodal transportation, and financial services, in addition to logistics services.
Because of the advanced integration of its technology, UPS can provide these services cheaper and more efficient than most companies can create them in-house.
Perspectives on Information Systems
What are the key elements for the success of UPS systems? Barcoded package information also ensure data quality User friendly handheld computing device (Delivery Information Acquisition Device (DIAD)) Most efficient delivery route for each driver considering traffic condition, weather conditions and location for each stop Saves 28 million truck travelling and 3 million gallons of fuels in each year Effective workflow systems seamless with business process
Perspectives on Information Systems
What are the key elements for the success of UPS systems? Customer can also know the status through tracking system Customer self service capabilities Seamless integration of the tracking systems with back end application and also with devices System provides the complete tracking data for effective control and improvement Customers view UPSs technology as value-added services as opposed to increasing the cost of sending packages
Perspectives on Information Systems
Dimensions of UPS tracking system
Organizational:
Procedures for tracking packages and managing inventory and provide information
Management:
Monitor service levels and costs
Technology:
Handheld computers, bar-code scanners, networks, desktop computers, etc.
Perspectives on Information Systems
Business perspective on information systems:
Information system is instrument for creating value Investments in information technology will result in superior returns:
Productivity
increases Revenue increases Superior long-term strategic positioning
Business information value chain
Raw data acquired and transformed through stages that add value to that information Value of information system determined in part by extent to which it leads to better decisions, greater efficiency, and higher profits
Perspectives on Information Systems
The Business Information Value Chain
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.
Perspectives on Information Systems
Investing in information technology does not guarantee good returns Considerable variation in the returns firms receive from systems investments Factors:
Adopting the right business model Supportive values, structures and behavior pattern Investing in complementary assets (organizational and management capital)
Perspectives on Information Systems
Complementary assets:
Assets
required to derive value from a primary investment like for Automobiles requires investment in highway, roads, petrol pump, service points etc. Firms supporting technology investments with investment in complementary assets receive superior returns E.g.: invest in technology and the people to make it work properly
Perspectives on Information Systems
Complementary assets include:
Organizational investments, e.g.
Appropriate business model Efficient business processes
Managerial investments, e.g.
Incentives for management innovation Teamwork and collaborative work environments
Social investments, e.g.
The Internet and telecommunications infrastructure Technology standards
Perspectives on Information Systems
Contemporary Approaches to Information Systems
The study of information systems deals with issues and insights contributed from technical and behavioral disciplines.
Contemporary Approaches to Information Systems
Technical approach Emphasizes mathematically based models Computer science, management science, operations research
Behavioral approach Behavioral issues (strategic business integration, implementation, etc.) Psychology, economics, sociology
Contemporary Approaches to
Information Systems
Management Information Systems Combines computer science, management science, operations research and practical orientation with behavioral issues
Four main actors Suppliers of hardware and software Business firms Managers and employees Firms environment (legal, social, cultural context)
Contemporary Approaches to
Information Systems
Approach of this book: Sociotechnical view Optimal organizational performance achieved by jointly optimizing both social and technical systems used in production Helps avoid purely technological approach
NEW IN MIS
Change Technology
Cloud Computing Growth of SaaS Mobile Digital Platform Dynamic and Agile Business Need Effective Business Model Solution Penetrations
Business Impact
Management
Online Collaboration and Social Networking BI
Mobile Tools Smartphones, Mobile Internet Devices
Effective user involvement Intelligent and Smart Decisions
Accuracy, Speed and richness
Improving Collaboration and Decision making
Virtual Meeting
Organization
Web 2.0 Collaboration and Online Community
Outsourcing Production
Telework in the workplace
Reduce production and service cost
Work from home enhance productivity
Q&A
