Management Information Systems

1
Management Information Systems

• Information Systems in Global Business Today
• Lecture 2

2
The Organization and Its Systems

• Management
• Information
• Systems

3
What Are These Component Parts?

• Management
• In the context of understanding Management
  Information Systems, we have elected to focus on
  Organizations to conceptualize the
  understanding of the Management part.

4
What Are These Component Parts?

• Information
• To further understand Management Information
  Systems we must examine what is meant by
  Information when placed in an Organization.

5
What Are These Component Parts?

• Systems
• To round up this understanding of Management
  Information Systems we must be clear on what a
  system is and how it fits into an Organization
  then going to lower levels, how it fits these
  levels and how or whether it interacts with the
  higher levels.

6
Terminology - Management

• A business (or any Organization) will often be
  viewed as the Organization of skills. (The Human
  Resource view.)
• Each employee will be specialist in one or two
  skills required to operate within the
  Organization. That is, one or two of the many
  skills required to operate the Organization as a
  whole.
• It is this collective skill application which
  provides efficiency within an Organization.

7
Terminology - Management

• The Organizational problems faced by the people
  in a (business) Organization whether strategic,
  tactical, knowledge or operational - can quite
  often be resolved, in part, by well controlled
  information.
• Organizations, themselves, are usually dynamic.
  Organizational management is a method of
  containing some of that dynamism and projecting
  it in a useful, efficient, (profitable?) way.

8
Terminology - Management

• The information system of an Organization is an
  attempt to contain informational dynamism and to
  control the flow of information around the
  business or Organization.

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Terminology - Management

• It is necessary to structure an Organization no
  matter what its size.
• When structuring an Organization it is often
  helpful to apply the principles of Scientific
  Management, also known as 'Taylorism'. There are
  four
• 1. Find the 'one best way' of performing a task
  and standardize it.
• 2. Select the 'best people for the job' and train
  them if necessary.
• 3. Combine scientific method with the people on
  the job.
• 4. Take the responsibility for preparing the work
  away from the worker and give it to Management.

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Terminology - Management

• Most successful Organizations apply a top-down
  approach to structuring work.
• In such cases departments are set up within the
  Organization.
• With a top-down structure for an Organization it
  is usually easy to fit a top-down structured
  Information System on this design.
• By dividing the whole Organization into
  departments it becomes easier to co-ordinate
  activities which create or use information.

11
Terminology - Information

• Data are streams of raw facts representing events
  occurring in an Organization or its environment
  before they are arranged in a form that people
  understand and use.
• Information is data that has been shaped into a
  format that is meaningful and useful to human
  beings.

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Terminology - Information

• Knowledge
• New knowledge may be created from existing
  knowledge using logical inference.
• Information Data Meaning
• Knowledge Information Processing

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Information Pyramid
Wisdom
Knowledge
Information
Data
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Terminology - System

• A system is a set of inter-dependent components
  (some of which may be systems in their own right)
  which collectively accomplish certain objectives.
  

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Terminology - System

• An Information System (IS) is a set of
  interrelated components working together to
  collect, process, store, and disseminate
  information to support decision making,
  co-ordination, control and analysis in an
  Organization.
• An information system is a grouping of people,
  objects and processes that provides information
  about an Organization and its environment that is
  useful to its members and clients.

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Terminology - System

• What is the correct definition?
• For this context, an Information System provides
  whatever information is needed to carry out the
  activities of an Organization.

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Information System Activities

• Input
• Capture and collection of raw data from within an
  Organization or from its environment.
• Processing
• Conversion, manipulation and analysis into a
  meaningful format.

• Output
• Distribution of processed information to people
  or activities where it will be used.
• Feedback
• Output that is returned to the appropriate
  members of an Organization to help them evaluate
  or correct input.

18
Classification

• Information in an Organization is often either
  formal or informal.
• Formal
• Based on explicit rules and formalized
  procedures.
• Manual - paper based.
• Computer-based - using Information Technology
  (IT).
• Informal Information System
• Based on implicit agreements and un-stated rules
  of behavior.
• This course subject focuses on computer-based
  Information Systems.

19
What Examples of Information Systems Are There?

• Perhaps you use a computerized or
  non-computerized information system at work.
• Consider the type, frequency and quantity of
  information that those systems use/create.
• Consider where the data comes from, where it goes
  to after you have worked with it.

20
Computer-Based IS

• A computer-based information system is an
  interrelated set of elements that are viewed as a
  whole and designed to achieve a purpose.
• It usually comprises of
• software,
• hardware,
• documentation,
• method of operation,
• users and operators.

21
Information Technology (IT)

• Information Systems are the means of delivering
  information from person to person.
• Information Technology is the technology that
  enables this to be done.
• Information Technology is NOT the only factor to
  be considered to establish Information Systems in
  an Organization.

22
Reminder!

• Organizations depend on information to operate at
  all.
• The necessity of complete and accurate
  information for any Organization makes
  information and Information Systems of paramount
  importance.
• Information Systems allow for the storage and
  transmission of the most complete and accurate
  information required for vital management
  decisions.

23
Reminder!

• The Information System of an Organization is an
  attempt to contain informational dynamism and to
  control the flow of information around the
  business or Organization.
• The use of system structure on information is an
  attempt to contain and control information.

24
Organizational Strategy

• Strategy A broad-based formula for how an
  Organization (such as a business) is going to
  compete, what its goals should be, and what plans
  and policies will be needed to achieve those
  goals.
• Strategy is also about making decisions about
  what not to do.

25
Organizational Strategy

• Strategy is focused on questions about
• Organizational fit
• trade-offs
• profitability (or efficiency)
• value

26
Organizational Strategy

• Strategic planning tools might include the SWOT
  analysis.
• SWOT analysis A methodology that surveys
  external opportunities and threats and relates
  them to internal strengths and weaknesses.
• Strengths
• Weaknesses
• Opportunities
• Threats

27
Organizational Strategy

• The process of strategy
• Initiation
• Formulation
• Implementation
• Assessment

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Organizational Strategy
Strategy Formulation
Begin
Strategy Implementation
Strategy Initiation
Repeat
Strategy Assessment
The Strategic Planning Process
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Organizational Strategy

• Strategic planning process
• Strategy initiation The initial phase of
  strategic planning in which the Organization
  examines itself and its environment.
• Value proposition The benefit that an
  Organization such as a business - products or
  services provide to customers the consumer need
  that is being filled.

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Organizational Strategy

• Outcomes from the strategy initiation phase
• Company analysis reporting on where the
  Organization is in terms of value, with a value
  proposition.
• Core competencies what the company is good at
  (Example, is it providing a quality product or an
  affordable product (cheap!)?)
• Forecasts what the Organization can expect to
  happen,
• Competitor (industry) analysis.

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Organizational Strategy

• Strategy formulation The development of
  strategies to exploit opportunities and manage
  threats in the business environment - in light of
  corporate strengths and weaknesses.

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Organizational Strategy

• Specific activities and outcomes from the
  strategy formulation phase
• Business opportunities (identified)
• Cost-benefit analysis
• Risk analysis, assessment and management

33
Organizational Strategy

• Strategy implementation
• The development of detailed, short-term
  plans for carrying out the projects or actions
  agreed upon in strategy formulation.

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Organizational Strategy

• Specific activities and outcomes from strategy
  implementation phase
• Business planning
• Resource allocation
• Project management

35
Organizational Strategy

• Strategy assessment
• The continuous evaluation of progress toward
  the Organizations strategic goals, resulting in
  corrective action and, if necessary, strategy
  reformulation.

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Organizational Strategy

• Strategy Assessment is a look at whether the
  strategy had any positive effects. It might
  include these
• Competitor analysis grid A strategic planning
  tool that highlights points of differentiation
  between competitors and the home Organization.
• Scenario planning A strategic planning
  methodology that generates plausible alternative
  futures to help decision makers identify actions
  that can be taken today to ensure success in the
  future.

37
Organizational Strategy

• Return on investment (ROI) A ratio of required
  costs and perceived benefits of a project or an
  application.
• Balanced scorecard An adaptive tool that
  assesses Organizational progress toward strategic
  goals by measuring performance in a number of
  different areas.

38
Issues in Strategy Formulation

• Issues in strategy formulation examples among
  MANY
• How to handle conflict in the Organizational
  structure example are peoples jobs affected?
• How to handle conflict between the off-line and
  online processes example are internal
  strategies affecting suppliers or sibling
  Organizations?
• Pricing strategy. Example for a producing
  Organization do we need to raise prices or can
  we reduce price and attract custom?

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Managerial Issues

• What is the strategic value of new plans to the
  Organization?
• What are the benefits and risks of new plans?
• How should we measure success/failure?
• What staffing is required more, less,
  different..?

40
Managerial Issues

• How can we expand if we need to?
• Can we learn to deal with smallness if we need
  to downsize?
• Is the new strategy always going to be beneficial?

41
Information Technology Strategy

• The previous slides have given examples of
  Organizational strategy from a structural
  perspective.
• Information Technology (IT) will have its own
  strategies that either follow the Organizations
  structure or will restructure the Organization
  because of those technological strategies.

42
IT Strategy Mapped to Organizational Structure

• Information systems may need to fit onto the
  Organization according to a defined structure.
• The structural choice may be between for
  example - centralized, decentralized or
  distributed systems. The decision is usually made
  on the basis of user demands for services or the
  type of equipment installed.
• It should be the task of Organizational
  management to decide what structure exists in the
  Organization and to re-evaluate that structure to
  determine whether it is useful for providing
  information services and Information Systems.

43
IT Strategy Is a New Organizational Structure
Needed?

• Future Organizational plans should be
  incorporated in such re-evaluation. For example,
  do executives plan on keeping tight managerial
  control on Organizational activities or will they
  allow divisions with autonomous control - i.e. is
  there an emphasis on centralised or decentralised
  control? Which Organizational framework is most
  conducive to envisioned goals and strategies? If
  making structural changes, what would the
  restructure cost in terms of people and equipment?

44
IT Strategy - Is a New Organizational Structure
Needed?

• If restructuring is needed then users might
  evaluate implementation methods such as
• custom developed software systems,
• off-the-shelf application packages,
• user-developed systems.
• Important managerial issues at this point of
  systems development might include the options of
• replacing current computers,
• using outside resources for development,
• using alternative design considerations.

45
IT Strategy Strategic Advantage

• The 1990's and this decade have seen the
  realization of an information economy and a
  post-industrial society where information
  processing activities and knowledge skills are
  critical to industry.
• In this context Information Technology (IT) is
  already being used by Organizations for strategic
  advantage. In this case strategic change is
  important to Organizations.

46
IT Strategy Organizational Challenges

• If information management is difficult, it is
  because not all Organizations face an identical
  challenge. Their sector contexts differ, the
  competitive forces they combat vary, their
  histories differ and they make different
  strategic choices.
• It is quite crucial that each Organization
  understands the nature of the strategic change it
  must make, works out the pace of change required
  and adopts appropriate change strategies.

47
IT Strategy Management Awareness of IT Strategy

• When making management more aware of IT
  strategies, the following issues are often raised
  at an Organizational level
• We are not really sure of our needs.
• What IT/strategy/training designs are relevant to
  our Organization?
• How do you persuade top managers to give up time
  to learn about IT and its strategy?
• This type of education of managers might cause
  problems for the IT function. For example, it
  might cause high and/or unrealistic expectations
  for IT.

48
IT Strategy Business Advantage

• In businesses, IT is capable of achieving
  strategic business impact and improving business
  operations.
• To exploit IT properly, substantial management,
  Organizational and business change is required.
• Responsibility for information systems is often
  devolved to end-users. (Sometimes this is good,
  sometimes bad.)

49
IT Strategy - Business Advantage

• Capability in information management is important
  to enterprise success.
• For the reasons already mentioned, it is
  increasingly important for Organizational
  management to understand IT.

50
The Information Resource

• Information is a resource for Organizations. It
  is potentially a strategic resource. IT
  applications cannot only support business
  strategies but also create strategic
  opportunities and options. Thus a major concern
  is how to strategically manage IT.
• Strategy can be formulated for IT and information
  systems. This sort of strategy is often affected
  by emerging technologies in IT.

51
IT Strategy Decentralization is Often a Good
Option

• End-user computing and decentralization is seen
  as a key to efficient Organization of IT
  activities.
• Management control of IT activities and the
  responsibilities connected to them are complex
  matters but very important to Organizations.
• Funding, appraising, taking responsibility for
  and evaluating IT needs widespread management
  involvement.

52
IT Strategy Example Strategies

• Managing Information Technology might require the
  following example strategies to be adopted
• Encourage line management to take the lead.
• Uncouple strategic IT from IT strategy.
• Invest and build on IT infrastructure.
• Devolve IT activities to users wherever possible.
• Build a partnership between the IT function and
  users.
• Create a hi-tech culture.
• Adopt loose-tight management.
• Tackle Organizational development now.

53
IT Strategy - Example Strategies

• An action plan for managing information resources
  starts with participating with top management in
  setting corporate goals and objectives,
  identifying strategies to meet corporate goals
  and compiling the information needed to execute
  the strategies.
• This is followed with the capture and processing
  of the necessary information and providing it to
  senior management this is beginning to look a
  lot like Systems Analysis.

54
IT Strategy - Methodology

• Methodology is required for monitoring progress
  and ensuring quality in these information tasks.
• It is a senior management responsibility to
  ensure that a highly efficient, computerised
  corporation comes into existence.

55
Organizational Size and Structure and IT

• Large Organizations often need the flexibility
  and responsiveness of small Organizations in
  order to compete.
• Although corporate structures often inhibit
  communications and co-operation, information
  technology can help overcome the barriers.

56
IT Strategy For Success

• Organizational success stories are not just about
  technology. They are about attitudes,
  Organization, employee involvement and shifts
  toward closer employer-worker relations.
• Progress often requires leading edge technology,
  reorganization, training and autonomy.

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What Next?

• Strategy within the Organization sometimes
  contains IT strategy, other times is affected by
  IT strategy from outside.
• Getting control of IT strategies to make them
  fit Organizational strategy requires analysis
  perhaps including a view of Information Systems
  concepts.

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End of Lecture 2

• Coming up next
• Modeling Information Systems concepts!