management information system module3

MODULE 3

Management and Information & Decision Support Systems – Management Information Systems –

Expert systems – Examples, Executive Information Systems, Artificial Intelligence Technologies .

Management and Information

Management

It describes What managers do in the operation of their organization: Plan, organize, initiate and control operations

They plan by setting strategies and goals and selecting the best course of action to achieve the plan.

They organize the tasks necessary for the operational plan.

They Control the performance of work by setting performance standards and avoiding deviations from standard.

The most important task of managers is decision making.

Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal.

Information

Information consists of data that have been retrieved , processed or otherwise used for informative or inference purposes of decision making.

Information improves the quality of decision making.

Sources of Management Information

Schematic

Corporatedatabasesofinternaldata

Databasesofexternaldata

Databasesofvalidtransactions

Operationaldatabases

Transactionprocessingsystems

Managementinformationsystems

Decisionsupportsystems

Executivesupportsystems

Expertsystems

Businesstransactions

Input anderror list

Drill-down reportsException reports

Demand reportsKey-indicator reports

Scheduledreports

Employees

Corporateintranet

Applicationdatabases

Concept of Information

• Information, in its most restricted technical sense, is a sequence of symbols that can be interpreted as a message.

• Information can be recorded as signs, or transmitted as signals.

• The information has a value in decision making while data does not have.

• Information brings clarity and creates an intelligent human response in the mind.

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

Features or Characteristics of Information

• Improves representation of an entity• Updates the level of knowledge• Has a surprise value• Reduces uncertainty• Aids in decision making

Types of information:1. Primary (Think of this as Firsthand)

Primary information is comprised of original materials that were created first hand. This

type of information is from the time period involved and has not been filtered through interpretation.

Examples are:• Diaries• Interviews (legal proceedings, personal, telephone, email)• Letters• Original Documents (i.e. birth certificate or a trial transcript)• Patents• Photographs• Proceedings of Meetings, Conferences and Symposia.• Survey Research (such as market surveys and public opinion polls)• Works of Literature

Types of information (Contd….):2. Secondary (Think of this as Second Hand)

Secondary information is made up of accounts written after the fact with the benefit of hindsight. It is comprised of interpretations and evaluations of primary information. Secondary information is not evidence, but rather commentary on and discussion of evidence.

Examples are:• Biographies• Books• Commentaries• Dissertations• Indexes, Abstracts, Bibliographies (used to locate primary & secondary sources)• Journal Articles

Types of information(Contd….):

3. Tertiary (Think of this as Third Hand)

Tertiary information is a distillation and collection of primary and secondary information.

Examples are:• Almanacs• Encyclopedias• Fact books

ROLE OF INFORMATION IN DECISION MAKING

• The decision making process includes the following stages:

• Identification and structuring of problem: One needs information to identify a problem and put it in a structured manner.

• Putting the problem in a context: Without information about the context in which the problem has occurred, one cannot take any decision on it. In a way , the context defines the problem.

• Generation of alternatives: Information is a key ingredient in the generation of alternatives for decision-making.

• Choice of the best alternative: Based on the information about he suitability of the alternatives, a choice is made to select the best alternative.

PROCESS OF GENERATION AND COMMUNICATION

Data processing can be defined as the processing of data to make it more usable and meaningful and thus converting into information. It covers all activities required for generating information from data.

Steps in the process of generation and communication of information:

1. Origination:2. Input:3. Processing:4. Storing:5. Data retrieval:6. Production of documents:7. Data communication:



The main source of records used in data processing is sales orders, purchase orders or

employee time cards stored in magnetic tapes, disks and terminals.



The input of data stored on these source documents into the data

processing system. The data records stored in secondary devices is now fed into the computer for processing.



Computer and other electronic devices are used for processing data. Data should be sorted and verified before processing. Processing involves calculation, comparison, filtering and modification of data according to user’s requirements.



The result of processing of data must be kept for future reference. This function is called storage.



With the introduction of information technology users

will be able to search and retrieve files records on-line with direct access devices.



Copies of documents and reports are prepared as an output of the information system.



On-line transmission of information is possible in electronic data processing system.

Quality and Value of information

• The quality and value of information can be described as how it contributes for effective decision making.

• The quality of information is high, if it creates managerial impact leading to attention, decision and action.

Quality and Value of information (Contd……)

Value of Information:

• Timeliness• Presentation• Accuracy• Context• Expectation


The quality of information can be measured on the four dimensions:

utility,satisfaction,error,bias.


1)The utility Dimension:-

The utility dimension has four components namely the form, the time, the access and the procession.

If the information is presented in the form of manager requires, then its utility increases.

If it is available(time) when needed, the utility is optimized. If the information is easily and quickly accessible through the

online access system, its utility gets an additional boost. If the information is processed by the manager who needs it,

then its utility is the highest.


2)Satisfaction Dimension:-

The degree of satisfaction would determine the quality of the information.

If the organization has a high degree of satisfaction, then one can be safe in saying that information systems are designed properly to meet the information needs of the managers at all the levels.


3)Error Dimension:-

The error creep in on account of various reasons, namely:• An incorrect data measurement• An incorrect collection method.• Failure to follow the prescribed data processing procedure.• Loss of data or incomplete data.• Poor application of data validation and control systems.• A deliberate falsification. The data should be avoided of errors, care should be taken that the

information is processed after ensuring the correctness of the data in terms of time and the number of document, and the transactions in the period.


4. Bias Dimension:-The procedure of communicating the

information should be such that the system is able to detect the degree and the nature of the bias and correct the information accordingly.

Sources of Management Information

Schematic

Corporatedatabasesofinternaldata

Databasesofexternaldata

Databasesofvalidtransactions

Operationaldatabases

Transactionprocessingsystems

Managementinformationsystems

Decisionsupportsystems

Executivesupportsystems

Expertsystems

Businesstransactions

Input anderror list

Drill-down reportsException reports

Demand reportsKey-indicator reports

Scheduledreports

Employees

Corporateintranet

Applicationdatabases

Structure of MISOrganization and Management1

. Behavioral Science Technique2

. Quantitative Technique3

. Decision Technique4

. Experience Rule Technique of Management Function of ManagementP

lanningOrganizationDirectingStaffingC

ontrollingResource FlowsManP

ower Money Material M/c FacilitiesMIS

Organization and Management

Technique of Management

Function of Management

1. Behavioral Science Technique2. Quantitative Technique

3. Decision Technique

4. Experience Rule

Planning Organization Directing Staffing Controlling

Man Power Resource Flows Money, Material M/c Facilities

MIS

Structure of MIS

Structure of MIS::

MIS structure be described by following a variety of different approaches:

• Physical components,• Information system processing functions,• Decision support• Levels of management activities• Organizational functions

MIS Structure Based on Physical components:

Structure of MIS may be understood by looking at the physical components of the information system in an organization.

• Hardware: Hardware refers the physical data processing equipment and peripheral devices.

• Software: software is broad term given to the instruction or program that direct the operation of the hardware.

• Database: the data base consist of all data utilized by application software.

• Input and output: various physical input and output from the information system, existing in the form like printout, report etc.

Information system processing functions:

Information system structure can also be understood in term of its processing functions. The main processing functions of information system are described below:

• To Process Transactions: Information systems process transaction may be defined as an activity taking place in an organization.

• To Maintain Master files: Information systems create and maintain master files in the organization. A master file stores the historical data about the organization.

• To Produce Reports: Reports are significant products of an information system. Many reports are produces on a regular basis, which are called scheduled reports.

• To Process Interactive Support Applications

Decision Support:

Decision vary with respect to the structure that can be provided for making them. A highly structured decision can be pre-planned. A structured decision, because of its well defined nature can be said to be programmable.

Level of management activities:• The structure of an information system can be categorized in

terms of level of the management activities.

• Strategic planning deals with long-range considerations. The decisions include the choice of business directions, market strategy, product etc.

• Management control level includes acquisition and organization of resource, structuring of work and training of personnel.

• Operational control is related to short-term decision for current operations. Pricing, ,inventory level etc

Organizational functions:

• The structure of management information system can also be described in terms of the organizational functions.

management information system module3

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