Management Information Systems

1. Management Information Systems J.-S. Rayson Chou, P.E., Ph.D. Lecture 1: Introduction to MIS

2. Agenda • Overview and Concepts of IS • Doing Business in the Digital Economy • Information Systems: Definitions and Examples • Why Should You Learn About Information Technology? • System Architecture, Analysis, and Design • Applications of IS

3. Information System : Concepts and Definitions • Hardware • Software • Data • Network • Procedures • People An information system (IS) collects, processes, stores, analyzes, and disseminates information for a specific purpose “Application”. Application Hardware Software Data People

4. Information System Is A System

5. Information System • Data • Raw description of things, events, activities, and transactions that are recorded but alone do not to convey any specific meeting • Information • Data that has been organized so that they have meaning and value to the recipient • Knowledge • Information that has been organized and processed to convey understanding, experience and expertise as they apply to a current problem or activity

6. Information System • An information system (IS) collects, processes, stores, analyzes, and disseminates information for a specific purpose. Like any other system, an information system includes inputs(data, instructions) and outputs (reports, calculations). It processes the inputs by using technology such as PCs and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation. Control Input Process Feedback Output

7. Information System – Classification By Organizational Structure An information system (IS) can span departments, business units and corporations. • Departmental IS • Enterprise-Wide IS • Inter-Organizational IS Information systems are usually connected by means of electronic networks

8. Information System -Classification By Function (Department) • Operations • Accounting • Finance • Marketing • Human resources An information system (IS) support each department in a corporation. Point-of-Sale (POS) Transaction Processing Systems (TPS): Automates routine and repetitive tasks that are critical to the operation of the organization

9. Information System - Classification By Support Function • 5-year sales trend • Profit Planning • 5-year budget forecasting • Product development Executive Support System • Sales Management • Inventory Control • Annual budget • Production Scheduling • Cost Analysis • Pricing Analysis Management Information System Decision Support System Intelligent Support Systems • Simulation • Pgm coding • System support • Word Processing • Desktop Publishing Knowledge Management System Office Automation System • Order Processing • Fulfillment • Material Movement • A/R, A/P, GL • Payroll • POS Transaction Processing System

10. Transaction Processing System (TPS) • TPS automates routine and repetitive tasks that are critical to the operation of the organization, such as preparing a payroll, billing customers, Point-of-Sale and Warehouse operations. • Data collected from this operation supports the MIS and DSS systems employed by Middle Management • Primary purpose to perform transactions and collect data.

11. Management Information Systems (MIS) • These systems access, organize, summarize, and displayed information for supporting routinedecision making in the functional areas. Geared toward middle managers, MIS are characterized mainly by their ability to produce periodic reports such as: • (1) a daily list of employees and • (2) the hours they work, • (3) or a monthly report of expenses as compared to a budget • Typical uses would be in Replenishment, Pricing Analysis (Markdowns) and Sales Management • Primary purpose to process data into information

12. Decision Support Systems (DSS) • These systems support complex non-routine decisions. • Primary purpose to process data into information • DSS systems are typically employed by tactical level management whose decisions and what-if analysis are less structured. • This information system not only presents the results but also expands the information with alternatives. • Some DSS methodologies • Mathematical Modeling • Simulation • Queries • What-If (OLAP-Cubes) • Data mining

13. Decision Trees Clustering Time Series Naïve Bayes SequenceClustering Association Neural Net Data Analysis / Mining

14. Intelligent Support Systems (ISS) • Essentially, artificial intelligence (AI) these systems perform intelligent problem solving. • One application of AI is expert systems. Expert systems (ESs) provide the stored knowledge of experts to nonexperts, so the latter can solve difficult or time-consuming problems. • These advisory systems differ from TPS, which centered on data, and from MIS and DSS, which concentrated on processing information. • With DSS, users make their decisions according to the information generated from the systems. • With ES, the system makes recommended decisions for the users based on the built-in expertise and knowledge.

15. Executive Support Systems (ESS) • ESS systems or Enterprise Information Systems (EIS) originally were implemented to support Senior management. These systems have been expanded to support other managers within the enterprise. • At the senior management level they supportStrategic activities which deal with situations that significantly may change the manner in which business is done.

16. Office Automation Systems (OAS) • Electronic communication is only one aspect of what is now known as an office automation system (OAS). Other aspects include: • (1) word processing systems • (2) document management systems • (3) desktop publishing systems • (4) …and so forth • OAS systems are predominantly used by clerical workerswho support managers at all levels. Among clerical workers, those who use, manipulate, or disseminate information are referred to as data workers.

17. Knowledge Management Systems (KMS) • An additional level of staff support now exists between top and middle management. These are professional people such as: • financial and marketing analysts that act as advisors and assistants to both top and middle management. • They are responsible for finding or developing new knowledge (External Content) for the organization and integrating it with existing knowledge (Internal Content). • KMS that support these knowledge workers range from • (1) Internet search engines • (2) expert systems, • (3) to Web-based computer-aided design • (4) and sophisticated data management systems

18. Information Systems Function Information Infrastructure • Hardware • Software • Networks & communication facilities • Databases • IS personnel

19. Inter-Organizational Systems (IOS) Two or more organizations

20. The Drivers of change • Business Pressures on an Organization. Market Society Technology

21. The Systems Development Life Cycle (SDLC) • Traces history (life cycle) of an information system • Provides “big picture” within which database design and application development can be mapped out and evaluated

22. The Systems Development Life Cycle (SDLC) (Cont’d) • Divided into five phases • Planning • Analysis • Detailed systems design • Implementation • Maintenance • Iterative rather than sequential process

23. The Systems Development Life Cycle (SDLC)

24. Planning • Yields general overview of the company and its objectives • Initial assessment made of information-flow-and-extent requirements • Must begin to study and evaluate alternate solutions • (1) Technical aspects of hardware • (2) software requirements • (3) System cost

25. Analysis • Problems defined during the planning phase are examined in greater detail during analysis • A thorough audit of user requirements • Existing hardware and software systems are studied • Goal is better understanding of system’s functional areas, actual and potential problems, and opportunities

26. Logical Systems Design • Must specify appropriate conceptual data model, inputs, processes, and expected output requirements • Might use tools such as data flow diagrams (DFD), hierarchical input process output (HIPO) diagrams, or entity relationship (ER) diagrams • Yields functional descriptions of system’s components (modules) for each process within database environment

27. Detailed Systems Design • Designer completes design of system’s processes • Includes all necessary technical specifications • Steps are laid out for conversion from old to new system • Training principles and methodologies are also planned

28. Implementation • Hardware, DBMS software, and application programs are installed, and database design is implemented • Cycle of coding, testing, and debugging continues until database is ready to be delivered • Database is created and system is customized by creation of tables and views, and user authorizations

29. Maintenance • Three types: • Corrective maintenance in response to systems errors • Adaptive maintenance due to changes in the business environment • Perfective maintenance to enhance the system • Computer-assisted systems engineering • Make it possible to produce better systems within reasonable amount of time and at a reasonable cost

30. The Database Life Cycle (DBLC)

31. The Database Initial Study • Overall purpose: • Analyze the company situation • Define problems and constraints • Define objectives • Define scope and boundaries • Interactive and iterative processes required to complete the first phase of the DBLC successfully

32. Summary of Activities in the Database Initial Study

33. Analyze the Company Situation • Analysis • “To break up any whole into its parts so as to find out their nature, function, and so on” • Company situation • General conditions in which a company operates, its organizational structure, and its mission • Analyze the company situation • Discover what the company’s operational components are, how they function, and how they interact

34. Define Problems and Constraints • Managerial view of company’s operation is often different from that of end users • Designer must continue to carefully probe to generate additional information that will help define problems within larger framework of company operations • Finding precise answers is important • Defining problems does not always lead to the perfect solution

35. Define Objectives • Designer must ensure that database system objectives correspond to those envisioned by end user(s) • Designer must begin to address the following questions: • What is the proposed system’s initial objective? • Will the system interface with other existing or future systems in the company? • Will the system share data with other systems or users?

36. Define Scope and Boundaries • Scope • Defines extent of design according to operational requirements • Helps define required data structures, type and number of entities, and physical size of the database • Boundaries • Limits external to the system • Often imposed by existing hardware and software

37. Database Design • Necessary to concentrate on the data • Characteristics required to build database model • Two views of data within system: • (1) Business view of data as information source • (2) Designer’s view of data structure, its access, and the activities required to transform the data into information

38. Two Views of Data: Business Manager and Designer

39. Procedure Flow in the Database Design

40. Conceptual Design • Data modeling used to create an abstract database structure that represents real-world objects in the most realistic way possible • Must embody a clear understanding of the business and its functional areas • Ensure that all data needed are in the model, and that all data in the model are needed • Requires four steps (go next page)

41. Data Analysis and Requirements • First step is to discover data element characteristics • Obtains characteristics from different sources • Must take into account business rules • Derived from description of operations • Document that provides precise, detailed, up-to-date, and thoroughly reviewed description of activities that define an organization’s operating environment

42. Entity Relationship (ER) Modeling and Normalization • Designer must communicate and enforce appropriate standards to be used in the documentation of design • Use of diagrams and symbols • Documentation writing style • Layout • Other conventions to be followed during documentation

43. Developing the Conceptual Model Using ER Diagrams

44. A Composite Entity

45. Data Redundancies in the VIDEO Table

46. ER Modeling Is an Iterative Process Based on Many Activities

47. Conceptual Design Tools and Information Sources

48. Data Dictionary • Defines all objects (entities, attributes, relations, views, and so on) • Used in tandem with the normalization process to help eliminate data anomalies and redundancy problems

49. Data Model Verification • Model must be verified against proposed system processes to corroborate that intended processes can be supported by database model • Revision of original design starts with a careful reevaluation of entities, followed by a detailed examination of attributes that describe these entities • Define design’s major components as modules: • An information system component that handles a specific function

50. The ER Model Verification Process