2. Objectives
System
Data vs. Information
Strategic role of information in management
Organization as an information system
TPS
MIS
DSS
ESS
OAS
Networking concepts
Telecommunications networks
3. System
What Is a System?
System: A set of components that work together to achieve a
common goal
Subsystem: One part of a system where the products of more
than one system are combined to reach an ultimate goal
Closed system: Stand-alone system that has no contact with
other systems
Open system: System that interfaces with other systems
5. Information System
An information system (IS)- is any combination
of information technology and people's activities that support
operations, management and decision making.
In a very broad sense, the term information system is
frequently used to refer to the interaction between people,
processes, data and technology. In this sense, the term is
used to refer not only to the information and communication
technology (ICT) that an organization uses, but also to the
way in which people interact with this technology in support
of business processes.
8. Information
Why Do People Need Information?
Individuals - Entertainment and enlightenment
Businesses - Decision making, problem solving
and control
9. Data vs. Information
Data Information
raw facts data with context
no context processed data
just numbers and text value-added to data
summarized
organized
analyzed
10. Data vs. Information
Data: 51007
Information:
5/10/07 The date of your final exam.
$51,007 The average starting salary of an accounting major.
51007 Zip code of Bronson Iowa.
11. Data Manipulation
Example: customer survey
Reading through data collected from a customer survey
with questions in various categories would be time-
consuming and not very helpful.
When manipulated, the surveys may provide useful
information.
12. Data vs. Information
Data Information
6.34 SIRIUS SATELLITE RADIO INC.
6.45
6.39 $7.20
6.62 $7.00
6.57 $6.80
6.64 Stock Price
$6.60
6.71
$6.40
6.82
$6.20
7.12
7.06 $6.00
$5.80
1 2 3 4 5 6 7 8 9 10
Last 10 Days
13. Data Information Knowledge
Data
Summarizing the data
Averaging the data
Selecting part of the data
Graphing the data
Adding context
Adding value
Information
14. Data Information Knowledge
Information
How is the info tied to outcomes?
Are there any patterns in the info?
What info is relevant to the problem?
How does this info effect the system?
What is the best way to use the info?
How can we add more value to the info?
Knowledge
16. Information Systems (TSP and PCS)
Data doesn’t just appear,
Capturing Data is really the first step
These systems help capture data but they also have
other purposes (goals):
1. Transaction Processing Systems
(TPS)
2. Process Control Systems (PCS)
17. Capturing Data
What are some examples of real TPS’s?
What kind of data is being capture?
How is this data transformed into Information?
18. Data Processing
Recall that a basic system is composed of 5 components
Input, Output, Processing, Feedback, Control
Typically processing helps transform data into information.
Input Output
Processing
Raw Data Information
20. Processing: Great Example
Navigation System
Specialized Geographic Information System
Input: Maps, Addresses, Points of Interest,
“Yellow Pages”
Processing:
Computing Shortest Paths;
Finding the Nearest Chinese Restaurant
Output:
Directions (each turn + a map with arrows)
List of nearby Chinese Restaurants (sorted by dist.)
21. Analysis – Navigation System
Recall that Information Systems have five more specific
components:
People, Data, Communication Network, Hardware, Software.
In a Navigation System…
what is the Communication Network?
what is the Hardware?
who are the People?
24. Executives
24
ESS
Senior
DSS Managers
MIS
KWS
Transaction Processing System Workers
Fig 2.1: Types of Information Systems
25. Transaction Processing
System
A TPS support the monitoring, collection, storage, processing and
dissemination of the organization’s basic business transitions.
It also provides the input data for many applications involving
support systems such as DSS.
Some times several TPSs exit in one company
The TPS are considered critical to the success of any organization
since they support core operations such as purchasing of materials,
billing customers, preparing a payroll and shipping goods to
customers
26. Routine Business
Transactions in a
Manufacturing Company
Payroll Sales
Employee time cards Sales records
Employee pay and deductions Invoices and billings
Payroll checks Accounts receivable
Sales returns
Shipping
Purchasing Production
Purchase orders Production reports Quality-
Deliveries control reports
Payments (accounts payable)
Finance and accounting Inventory management
Financial statements Material usage
Tax records Inventory levels
Expense accounts
27. Management Information
System
It is also popularly known as the Information system, the Information and Decision
system, the computer based Information system
Definitions of MIS:
The MIS is defined as a system which provides information support for decision-
making in the organization
The MIS is defined as an integrated system of man and machine for providing
the information to support the operations, the management and the decision-
making function in the organization.
The MIS is defined as Computer based Information system
28. MIS
MIS is an information system, which processes data and
converts it into information. A management information
system uses TPS for its data inputs. The information
generated by the information system may be used for control
of operations, strategic and long-range planning. Short-range
planning, management control, and other managerial
problem solving. It encompasses processing in support of a
wide range of organizational functions & management
processes. MIS is capable of providing analysis, planning &
decision making support. The functional areas of a business
may be marketing, production, human resource, finance and
accounting.
29. Characteristics of MIS
They are flexible, allowing for many different ways of
analyzing data and evaluating information;
They are capable of supporting a range of skills and
knowledge;
They help managers get things done through interpersonal
communication with other members of the organization;
Because managers are busy people who switch rapidly
between different tasks, they should not
require extensive periods of concentration;
They should make it easy to interrupt the work and return to
it at a later time;
They should protect a manager, as far as possible, from
information overload.
30. Case study:
Case study: Buying a new car
If you want to purchase a new car from a Ford dealer, chances are that the make and model you
want, in the right colour with the right accessories, is not in stock. It’s just too expensive to have
cars with every possible combination of options sitting in the parking lot waiting for a customer. In
the past, it’s been almost impossible for dealers to track down exactly the model that a customer
wants.
With the new information system, the dealer can type the details of the required car into a terminal
connected to the main Ford plant at Dagenham. The information will then come back to tell the
dealer whether there are any cars available of that specification, and exactly where they are. They
may be on the Ford parking lot, or there may be only two available, one at a dealer's in Perth and
the other in Bournemouth. There may be none available – in which case Ford will make one for
you, though this may take some time.
Plant production managers are also connected to the system, and so they know exactly what cars
have
been ordered and can adjust production to reflect demand every day.
Discussion: This is an example of a management information system. How does it help
– the dealer?
– the customer?
– the manufacturer?
31. Discussion:
Discussion: A car company gathers information about its
customer base through many sources, including market
research surveys. One company has discovered that it has
relatively fewcustomers in the 18-30 age range. How can this
information be used by the company to improve
its sales?
32. Decision Support System
Gorry and Scott-Morton coined the phrase ‘DSS’
in 1971: “A DSS is an interactive computer based system
that helps decision makers utilize data and models to solve
unstructured problems.”
A decision support system (DSS) is a computer-based
information system that supports business or organizational
decision-makingactivities. DSSs serve the management,
operations, and planning levels of an organization and help
to make decisions, which may be rapidly changing and not
easily specified in advance. Decision support systems can
be either fully computerized, human or a combination of both.
A decision support system may present information
graphically and may include an expert system or artificial
intelligence (AI). It may be aimed at business executives or
some other group of knowledge workers.
33. Typical information gathered by
DSS are:
Comparative sales figures between one week and the next
Projected revenue figures based on new product sales
assumptions
The consequences of different decision alternatives, given
past experience in a context that is described
34. Benefits of DSS
Improves personal efficiency
Speed up the process of decision making
Increases organizational control
Encourages exploration and discovery on the part of the
decision maker
Speeds up problem solving in an organization
Facilitates interpersonal communication
Promotes learning or training
Generates new evidence in support of a decision
Creates a competitive advantage over competition
Reveals new approaches to thinking about the problem
space
Helps automate managerial processes
Create Innovative ideas to speed up the performance
35. In 1987, Texas Instruments completed development of the
Gate Assignment Display System (GADS) for United Airlines.
This decision support system is credited with significantly
reducing travel delays by aiding the management of ground
operations at various airports, beginning with O'Hare
International Airport in Chicago and Stapleton Airport
in Denver Colorado
36. DSS EXAMPLES:
MSN Autos - http://autos.msn.com/Default.aspx
Big Charts -- http://bigcharts.marketwatch.com/
Databeacon Demos -- http://www.storydata.com
Documentum eRoom - http://www.documentum.com
elaws Family and Medical Leave Act Advisor -
http://www.dol.gov/elaws/fmla.htm
Fidelity Calculators -
http://www.401k.com/401k/tools/tools.htm
Inspire - http://interneg.carleton.ca/inspire/
Pinnacor - http://finance.pinnacor.com/
Principal Financial -
http://www.principal.com/calculators/index.htm
WATERSHEDSS - http://www.water.ncsu.edu/watershedss/
Categorization and Evaluation Exercise
37. Group Decision Support
Systems
A GDSS is an interactive computer based system that
facilitates the solution of semi structured and unstructured
problems when made by a group of decision makers. The
objective of a GDSS is to support the process of arriving at a
decision.
Case study: See Page 555 [Virtual meeting at the world
Economic Forum] by Wiley Edition authored by Turban,
Mclean and Wetherbe
38. GDSS Example:
EX 1:
Internal Revenue Service, which used a one-room GDSS to
implement its quality-improvement programs based on the
participation of a number of its quality teams.
The GDSS was helpful in identifying problems, generating and
evaluating ideas and developing and implementing solutions.
EX 2:
European automobile industry which used a one-room GDSS
to examine the competitive automotive business environment
and make ten-year forecasts, needed for strategic planning.
39. Executive Information System / Executive
Support System
EIS
An executive information system (EIS) is a type
of management information system that facilitates and
supports senior executive information and decision-making
needs. It provides easy access to internal and external
information relevant to organizational goals. It is commonly
considered a specialized form of decision support system
(DSS)
ESS
An ESS is a comprehensive support system that goes beyond
EIS to include analysis support, communications, office
automation and intelligence support.
40. Executives’ information needs
Prompt, easy-to-use information (quick response time,
simple user interface)
Presentation should fit his style
High degree of summarisation
Details on demand
Critical success factors
Exceptions
External and internal sources
41. Features of an EIS
Access to internal and external data
What-if analysis
Ad hoc queries
Drill down
Project tracking
Colour business graphics
Network connections, e-mail access
High security
42. Advantages of EIS
Easy for upper-level executives to use, extensive computer
experience is not required in operations
Provides timely delivery of company summary information
Information that is provided is better understood
EIS provides timely delivery of information. Management can
make
decisions made promptly.
Improves tracking information
Offers efficiency to decision makers
43. Disadvantages of EIS
System dependent
Limited functionality, by design
Information overload for some managers
Benefits hard to quantify
High implementation costs
System may become slow, large, and hard to manage
Need good internal processes for data management
May lead to less reliable and less secure data
44. Types of EIS software
Prewritten EIS, e.g.
Command Center – Pilot Software, Inc.
Commander - Comshare
Executive Edge – Execucom
Custom EIS, e.g.
MIDS at Lockheed-Georgia
46. TO SUPPORT MANAGERIAL
DECISION MAKING
MIS - (FUNCTIONAL) MANAGEMENT INFORMATION SYSTEM
DSS - DECISION SUPPORT SYSTEM
GDSS - GROUP DECISION SUPPORT SYSTEM
EIS - EXECUTIVE INFORMATION SYSTEM
ESS - EXECUTIVE SUPPORT SYSTEM
ES - EXPERT SYSTEM
48. INTEGRATED BUSINESS
SOFTWARE
Integrates all business functions and processes:
Accounting and Controlling
Finance and Investment
Inventory Control
Materiel Management
Human Resource Management
Production
Sales and Distribution
Project Management
Plant Maintenance
etc.
49. Major integrated enterprise
solution providers world
wide:
SAP (R/3 system)
PeopleSoft
Oracle
JDEdwards (OneWorld)
BAAN
etc.
Megatrend (Infosys) Hungarian company
50. EXPERT SYSTEMS
AI – Artificial Intelligence
Use of computers to perform tasks that normally
require high-level human intelligence
- Humans acquire & input data to their brains through
their five senses (vision, hearing, smell, taste & touch)
- Computers must have a way of mimicking one or
more of these sensing capabilities (computer vision or
“hearing”)
51. AI areas
Robotics (primary areas of research & applications);
Computer vision (image processing – recognize & interpret
high level patterns & make them meaningful – e.g. defective
product, smart weapons);
Speech recognition (recognizing spoken words – e.g.
dictation);
Natural language processing (derive the meaning of a
sentence);
Neural networks (like brains – learning);
Expert systems (attempt to reach the same conclusions
about a problem as the best human expert would)
wide variety of potential applications in business.
52. Expert System (ES)
Other examples of Experts Systems
Diagnosis of bacteriological diseases in patients
Diagnosis of malfunctions in diesel electronic
locomotives
Configuration of a computer system based on a
customer’s anticipated application workload
Quality control of products
53. Advantages of ES
Can replace expensive or non-available experts;
Can merge knowledge of many experts
(preserving, replicating & distributing expert
knowledge);
Decision making is consistent;
Decision making is faster;
ES can work under difficult or dangerous situation (wars)
Reasoning is explained and documented
(insight into the decision making process – explain the
rationale by which they reached the decision);
ES can be integrated to other type of information
systems like DSS or EIS.
54. Disadvantages of ES
Narrow focus (very narrow domains of applications)
Expensive to develop and maintain
Difficult to test (impossible to present all the possible cases)
Expert’s knowledge is difficult to obtain and put to the
computer’s knowledge base
Communication capabilities are poorer (no vague questions!!!)
EIS emphasizes graphical displays and easy-to-use user interfaces. They offer strong reporting and drill-down capabilities. In general, EIS are enterprise-wide DSS that help top-level executives analyze, compare, and highlight trends in important variables so that they can monitor performance and identify opportunities and problems. EIS and data warehousing technologies are converging in the marketplace. In recent years, the term EIS has lost popularity in favor of business intelligence (with the sub areas of reporting, analytics, and digital dashboards).