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What is an Information System?
Lets look at some different definitions andthen explore the context of an IS in theorganizational setting.
The contrasting definitions should provide avariety of different perspectives.
Historical Background
The Data Processing Industry grew rapidly in the1960s, however, the quantityof output, mostoften, far outstripped the qualityof output.The growth of the 1960s and 1970s saw a shiftfrom computerorientation, to informationorientation.The role of information resource managerinthe organization offered an opportunity tomigrate from the technocratic image of the past,
and establish an image as a business manager, ageneral manager, an information manager.Today this is the role of the CIO - ChiefInformation Officer.
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John Diebold (1979) wrote:
Information, which in essence is the analysisand synthesis of data, will unquestionably beone of the most vital corporate resources inthe 1980s. It will be structured into modelsfor planning and decision-making. It will beincorporated into measurements ofperformance and profitability. It will beintegrated into product design and marketing
methods. In other words, information will berecognized and treated as an asset.
Davis and Olson: (1985)
A management information system is:
an integrated user-machine system
for providing information
to support the operations, management, analysis,and decision-making functions in an organization.
The system utilizes:computer hardware and software
manual procedures
models for analysis, planning, control, and decision-making
a database
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IFIP/BCS (1985)
An information system is a system whichassembles, stores, processes, and deliversinformation relevant to an organization (or tosociety) in such a way that the information isaccessible and useful to those who wish to use it,including managers, staff, clients, and citizens. Aninformation system is a human activity (social)system which may or may not involve the use ofcomputer systems.International Federation for InformationProcessing/British Computing Society 1885curriculum for information systems.
McNurlin and Sprague(1989 & 1999)
The mission for information systems inorganizations is to improve the performance of
people in organizations through the use ofinformation technology.The ultimate objective is performance improvement- a goal based on outcomes and results rather than ago-through-the-steps processgoal.Thefocus is the people who make up theorganization. Improving organizational performanceis by the people and groups that comprise theorganization.The resource for this improvement is informationtechnology.
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Turban (1990)
A management information system is aformal, computer-based (but need not be)system intended to retrieve, extract, andintegrate data from various sources in order toprovide timely information necessary formanagerial decision-making.
An MIS is a business information systemdesigned to provide past, present, and futureinformation appropriate for planning,organizing, and controlling the operations ofthe organization.
Alter (1992)
An information system is a combination of
work practices
information
people, and
information technologies
organized to accomplish goals in an
organization.
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Zwass (1992)
A Management Information System is anorganized portfolio of formal systems forobtaining, processing, and deliveringinformation in support of the businessoperations and management of anorganization.
Laudon and Laudon (1995)
Information system - (definition) Interrelatedcomponents that collect, process, store, anddisseminate information to support decision-making, control, analysis, and visualization inan organization.
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Turban, McLean, Wetherbe (1996)
An information systems is a collection ofcomponents that collects, processes, stores,analyzes, and disseminates information for aspecific purpose.
The major components of a computer-basedinformation system (CBIS) can include (1)hardware, (2) software, (3) a database (4) anetwork (5 )procedures, and (6) people.
The system operates in a social context, and the
software usually includes application programswhich perform specific tasks for users.
Alter (1996)
An information system is a system that usesinformation technology to capture, transmit,store, retrieve, manipulate, or display informationthat is used in one or more business processes.
A business process is a related group of steps oractivities that use people, information, and otherresources to create value for internal or external
customers. Business Processes consist of stepsrelated in time and place, have a beginning andend, and have inputs and outputs.
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Lucas (1997)
Information systems may be described by five
of their key components:
Decisions
transactions and processing
information and its flow
individuals or functions involved
communications and coordination
Zwass (1998)
Information System - An organized set ofcomponents for collecting, transmitting,storing, and processing data in order todeliver information for action.
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Turban, McLean, Wetherbe (1999)
An information system is a physical process
that supports an organizational system by
providing information to achieve
organizational goals.
Alter (1999)
A work system is a system that produces productsfor internal and external customers through abusiness process performed by humanparticipants with the help of informationtechnology.
An information system is a particular type of
work system that uses information technology tocapture transmit store, retrieve, manipulate, ordisplay information, thereby supporting one ormore other work systems.
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Information Systems TodayThe early focus on IS was for the support ofoperations, management, analysis and decision-making in organizations.A significant emphasis was on models of planningand control.The late 1980s and early 1990s saw IS expand fromthe support not only of decision-making, but but forimproved communication supportas well. Socialimpacts began to be recognized.The explosion of the Web has added the importantcharacteristic of providing information access.Today the emphasis in organizations is on thesupport of business processes.
Terminology
In many textbooks and contexts, the termsManagement Information Systems (or MIS) andInformation Systems (IS) are used interchangeably.However, in other contexts, ManagementInformation Systems are considered as a subset ofthe more general Information Systems. MIS areconsidered to be information systems whichprovides information specifically for managing anorganization generally at a tactical or middlemanagement level. Information Systems would be a
more general term that can include other systems(e.g. group communication systems). We willgenerally follow this convention.
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Types of Information Systems
Transaction Processing Systems (TPS).
Management Information Systems (MIS).
Decision Support Systems (DSS).
Expert Systems (ES).
Executive Information Systems (EIS).
Office Automation Systems (including documentmanagement systems).
GroupWare, Computer-Supported Cooperative
Work (CSCW), and other communication systems.and much more .
The Early History of IS with otherdisciplines
IS and Managerial Accounting
IS and Operations Research
IS and Management and Organization Theory
IS and Computer Science
IS and Cognitive Psychology
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Information Systems vs. ComputerScience
Computer Science has its concentration in thestudy of algorithms, computation, software,and data structures.
Information Systems is an extension ofmanagement and organization theory thatapplies technical capabilities and solutionsinitially developed by computer science, totasks in organizations.
Information Technology
Information Technology (IT) sometimes refersto the technology component of aninformation system.
However, the concept is often used by manyto describe the collection of all informationsystems in organization.
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Putting Things in Context - I
Information Technology- the hardware, software,and networks that make Information Systemspossible.
Information System - a system that usesinformation technology to capture, transmit,store, retrieve, manipulate, and displayinformation.
Business process - a related group of steps oractivities that use people, information, and other
resources, to create value for internal or externalcustomers.
Putting Things in Context - II
Firm (or organization) - consists of a largenumber of interdependent business processesthat work together to generate products ofservices in a business environment.
Business environment- includes the firm andeverything else that affects its success, such as
competitors, suppliers, customers, regulatoryagencies, and demographic, social, andeconomic conditions.
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Frameworks for Understanding IS
Aframeworkis a brief set of ideas fororganizing a thought process about aparticular type of thing or situation. Anyuseful framework helps make sense of theworlds complexity by identifying topics thatshould be considered and showing how thesetopics are related.
We will consider two such frameworks:The Gorry Scott-Morton Framework for MIS
The Work-Centered Analysis (WCA) Framework by Alter.
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The Gorry and Scott-MortonFramework for Management
Information Systems
Note: This framework was first discussed in 1971. The termManagement Information Systems refers to the broad category we
now refer to simply as Information Systems.
The Gorry and Scott-MortonFramework for MIS
At the time, (1971), the framework provided amuch needed perspective on the role of MIS inorganizations.It is more a framework on managerial activitiesand a way of looking at decisions in anorganizations. The framework helps usunderstand the role of MIS in organizations.Focuses on the nature and characteristics ofmanagerial decisions made at different levels inan organization.Also Focuses on the characteristics ofinformation that pertains to the decisions madeat these levels.
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Structural Outline
Combines the works of Robert Anthony andHerbert Simon
Robert Anthonys taxonomy for ManagerialActivity (1965).
Herbert Simons Categorization of DecisionTypes (1960).
The works of Anthony and Simon are
important foundations of OrganizationalTheory today.
Robert Anthonys Taxonomy forManagerial Activity
You can divide the entire managementhierarchy along the following levels:
Operations Control
Management Control
Strategic Planning
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Organizational Members
Operational Control
Management Control
StrategicPlanning
,
Anthonys
Management
Hierarchy
Operational Control
concerned with carrying out the tasksnecessary and that need to be performed
lower level of the organizational hierarchy
performed by supervisors of small work unitsconcerned with planning and control of short-term (a week to six months) budgets and
schedules.
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Management Control/TacticalManagement
concerned with the utilization andmanagement of resources to achieveorganizational objectives.
concerned with effective and efficientperformance.
Performed by middle managers (e.g.department heads, plant managers).
set out for one to three years.
Strategic Planning Level
focuses on decisions on the objectives for theorganization as a whole and also on the wayto achieving them
typically involves a small number of high levelpeople
Carried out by top corporate executives andcorporate boards responsible for setting and
monitoring long-term directions for theorganization three or more years into thefuture
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Information Requirements
Gorry and Scott Morton were concerned withthe information requirements at the thesethree levels
They noted that the requirements forinformation at these levels were verydifferent.
The next slide shows these differing
requirements
Information Requirements byManagement Level
Characteristics
of Information
Operational
Control
Management
Control
Strategic
PlanningSource Largely Internal Internal and
Largely External
Scope Well defined,
narrow
Very wide
Level of
AggregationDetailed Aggregate
Time Horizon Historical Future
Currency Highly current Need not be up to
the minute
Required
AccuracyHigh Lower, Estimates
are acceptable
Frequency of Use Very frequent Infrequent, ad-hoc
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Simons Categorization
concerned with the manner in which humanssolve problems in an organization
differentiated betweenprogrammedandnonprogrammeddecisions
Simons Programmed Decisions
they are repetitive and routine
follow a preset definite procedure each timethey occur
programmable is a better concept
Gorry and Scott Morton call it structured
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Simons Nonprogrammed Decisions
they are novel, unstructured
no cut-and-dried method for handling theproblem exists
calls for intelligent, adaptive, problem-oriented action
nonprogrammable is a better concept
Gorry and Scott Morton call it unstructured
Structured vs. Unstructured
They are not bipolar concepts
decisions range in a continuum fromstructured to unstructured ..
In between you might have decisions calledsemi-structured.
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Combined = A Framework
Gorry and Scott Morton combined the twoconcepts of Simons Decision Making withAnthonys Decision Making Levels and providethe following Framework for Decision-Making
(See next slide)
A FRAMEWORK FOR DECISION MAKING
Type of
Decision/Task
Operational
Control
Management
Control
Strategic Planning Support Needed
Structured
1
Inventory reordering
2
Budget Analysis,
short-term forecasting,
Make or Buy Analysis
3
Plant Location,
Financial
Management
(investment),
Distribution Systems.
Clerical, MIS, OR
Models, Transaction
Processing Systems
Semi-
structured
4
Bond trading,
Production Scheduling
5
Credit Evaluation,
Budget Preparation,
Plant Layout, Project
Scheduling, Reward
Systems Design
6
Building New Plant,
Mergers &
Acquisitions, New
Product Planning,
Compensation
Planning, Quality
Assurance Planning
Decision Support
Systems
Unstructured7Selecting a Cover for a
Magazine, ApprovingLoans, Buying Software
8Negotiating, Recruiting
Executives, Lobbying
9R & D Planning,
New Technology
Development, Social
Responsibility
Planning
Human Intuition,
Expert Systems,Executive Support Systems
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A FRAMEWORK FOR DECISION MAKING
Type of
Decision/Task
Operational Control Management
Control
Strategic Planning Support Needed
Structured
1Inventory reordering
2Budget Analysis,
short-term
forecasting, Makeor Buy Analysis
3Plant Location,
Financial
Management(investment),
Distribution
Systems.
Clerical, MIS, OR
Models, Transaction
Processing Systems
Semi-structured
4
Bond trading, Production
Scheduling
5
Credit Evaluation,
Budget
Preparation, Plant
Layout, Project
Scheduling,
Reward Systems
Design
6
Building New
Plant, Mergers &
Acquisitions, New
Product Planning,
Compensation
Planning, Quality
Assurance
Planning
Decision Support Systems
Unstructured
7
Selecting a Cover for a
Magazine, Approving
Loans, Buying Software
8
Negotiatin g,
Recruiting
Executives,
Lobbying
9
R & D Planning,
New Technology
Development,
Social
Responsibility
Planning
Human Intuition,
Expert Systems,
Executive
Information/Support
Systems
Support Needed MIS
Management Science
OR Models
Management
Science
DSS,
EIS, ES
EIS,
Neural Networks,
Executive Mental
Models
Framework Comments
The original framework has been augmented withthe right-most column and bottom row showingsome typical support systems available. Theseare meant be be illustrative and not inclusive.
The framework shows the need for informationsystems to support all cells.
The figure as well as the characteristics of
systems shows that the information requirementsvary considerably from among managementlevels in an organization.
The information requirements are also diverse.
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Implications: Total MIS is a myth
Gorry and Scott Morton showed that theprevalent concept (at that time, 1971) of atotally-integrated-management-information-systemwas a myth.Since we can not have a single total MIS, weneed the concept of what David and Olsen calledafederation of integrated information systems.Today technology provides appropriate toolswhich gives the appearance of information beingtotally integrated.This is the basic reasoning for the separation of
todays data warehouses from systems tosupport current operations.
Concepts of MIS
MIS Structure
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Strategic
Planning
Management
Control
O/P Control
TP
Unique Sub
system
Unique toapplication
Model base
Common
Application
S/W
Common to many toapplication
DBMS
Common Data base
Information subsystem for a function like Marketing/Production
Strategic
Planning
Manageme
nt Control
O/P
Control
TP
Sales&Mktg
Data Base
Information subsystem for a function like Marketing/Production
Model base
Common
application
DBMS
Production
HR
Finance
Common
program
Unique files
Common
data files
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Information Systems for OperationalControl
Operational Control: process of ensuringoperational activities are carried outeffectively and efficiently.
Processing support:Transaction processing
Report processing
Inquiry processing
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A Short Sidebar.
Transaction Processing Systems
vs.
Management Information Systems
presented now since this is an important distinction, so letsget it right early!
Transaction Processing Systems
A transaction is an elementary activity conductedduring business operations (e.g. merchandisesale).Earliest Information Systems in organizations.Support the monitoring, collection, storage,processing, and dissemination of theorganizations basic business transactions.Provides backbone for many other applications
involving other support systems.On-line systems called OLTP vs. batchRoutine, repetitive tasks.
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Business Transactions in a Factory
Payroll: employee time cards, employee pay anddeductions, payroll checks.Purchasing: purchase orders, deliveries,payments (accounts payable)Sales: sales records, invoices and billing,accounts receivable, sales returns, shippingManufacturing: production reports, quality-control reportsFinance and Accounting: financial statements,tax records, expense accountsInventory management: materials usage,inventory levels
Transaction Processing Systems - 3
In addition to processing the routine criticalorganizational activities, transaction processingsystems also provide the source data for manyother type of information systems used at thetactical and strategic levels in the organization.
Recall that tactical and strategic levels useaggregateddata, over multiple time periods. TPS
are often the source of this information. TPSoften populate data warehouses which provideon-line analytical processing (OLAP).
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TPS Data Entry Screen
Management Information Systems
Systems that convert TPS data into information formonitoring performance and managing anorganization.The MIS provides periodic information to functional(operational) and mid-level (tactical) managers onroutine matters such as operational efficiency,effectiveness, and productivity.Example: An HRIS can provide the HR manager withpercentages of people who are on vacation or call insick. It can compare actual to forecasted values, or
to an industry average.MIS are used for planning, monitoring, and control.
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Sample MIS Management Report