Mis dss

Management Information
Systems

ITEC 1010 Information and Organizations

MIS Model


Management Information Systems (MIS)
 Management information system (MIS)
• An MIS provides managers with information and support for
effective decision making, and provides feedback on daily
operations
• Output, or reports, are usually generated through
accumulation of transaction processing data
• Each MIS is an integrated collection of subsystems, which are
typically organized along functional lines within an
organization
• A combination of computers and people that is used to
provide information to aid in making decisions and managing
a firm.


Managers and Information
 Generally, managers at different levels of an
organizational hierarchy:
 Make different types of decisions
 Control different types of processes
 Therefore, they have different information needs


Managers and Information


The Traditional Organizational Pyramid
 Many organizations follow pyramid model
 CEO at top
 Small group of senior managers, one level down
 Larger number of middle managers, reporting to senior managers
 Many more lower-level managers who report to middle managers
 Clerical and Shop Floor Workers
 Bottom of organizational pyramid
 Operational Management
 In charge of small groups of front-line workers


The Traditional Organizational Pyramid
 Tactical Management
 Also called middle managers
 Make decisions for subordinates, affecting the near
and somewhat more distant future
 Strategic Management
 Decisions affect entire or large parts of the
organization; “what to do” decisions


Characteristics of Information
at Different Managerial Levels
 Different management levels have different information
needs
 Information needed by different managerial and
operational levels varies in the time span covered, level of
detail, source, and other characteristics over a broad
spectrum


 Data Range
 Amount of data from which information is extracted
 Time Span
 How long a period the data covers
 Level of Detail
 Degree to which information is specific


 Source: Internal versus External
 Internal data: collected within the organization
 External data: collected from outside sources
• Media, newsletters, government agencies, Internet


The Nature of Managerial Work
 Planning
 Planning at different levels
• Long-term mission and vision
• Strategic goals
• Tactical objectives
 Most important planning activities
• Scheduling
• Budgeting
• Resource allocation



An example of a
mission statement,
strategic goals, and
tactical objectives for
an in-line skate
manufacturer



The main ingredients of planning



 Controlling
 Managers control activities by comparing plans to
results.

Figure 9.5 Examples of processes used to control projects


 Decision Making
 Both planning and control call for decision making
 The higher the level of management:
• The less routine the manager’s activities
• The more open the options
• The more decision-making involved


Sources of Management Information

Schematic


Employees

Corporate
Databases Corporate
databases
of intranet
of
external
internal
data
data Decision
support
systems

Transaction Databases Management Executive
Business processing of information Application support
transactions systems valid systems databases systems
transactions

Drill-down reports Expert
Exception reports systems
Demand reports
Operational Key-indicator reports
databases
Input and Scheduled
error list reports


Outputs of a
Management Information System
 Scheduled reports
• Produced periodically, or on a schedule (daily, weekly,
monthly)
 Key-indicator report
• Summarizes the previous day’s critical activities
• Typically available at the beginning of each day
 Demand report
• Gives certain information at a manager’s request
 Exception report
• Automatically produced when a situation is unusual or
requires management action

Scheduled Report Example

Daily Sales Detail Report
Prepared: 08/10/xx
Order Customer Sales Ship
# ID Rep ID Date Quantity Item # Amount
P12453 C89321 CAR 08/12/96 144 P1234 $3,214
P12453 C89321 CAR 08/12/96 288 P3214 $5,660
P12453 C03214 GWA 08/13/96 12 P4902 $1,224
P12455 C52313 SAK 08/12/96 24 P4012 $2,448
P12456 C34123 JMW 08J/13/96 144 P3214 $720


Key Indicator Report Example

Daily Sales Key Indicator Report

This Last Last
Month Month Year
Total Orders Month to Date $1,808 $1,694 $1,014

Forecasted Sales for the Month $2,406 $2,224 $2,608


Demand Report Example

Daily Sales by Sales Rep Summary Report
Prepared: 08/10/xx
Sales Rep ID Amount
CAR $42,345
GWA $38,950
SAK $22,100
JWN $12,350


Exception Report Example

Daily Sales Exception Report – ORDERS OVER $10,000
Prepared: 08/10/xx
Order Customer Sales Ship
# ID Rep ID Date Quantity Item # Amount
P12453 C89321 CAR 08/12/96 144 P1234 $13,214
P12453 C89321 CAR 08/12/96 288 P3214 $15,660
P12453 C03214 GWA 08/13/96 12 P4902 $11,224
… … … … … … …
… … … … … … …


Outputs of a Management
Information System
Earnings by Quarter (Millions)
Actual Forecast Variance
2ND Qtr 1999 $12.6 $11.8 6.8%
Drill Down Reports
Provide detailed data 1st Qtr 1999 $10.8 $10.7 0.9%
about a situation.
4th Qtr 1998 $14.3 $14.5 -1.4%
3rd Qtr 1998 $12.8 $13.3 -3.0%

Etc. See Figure 9.2


Characteristics of a Management
Information System
 Provides reports with fixed and standard
formats
 Hard-copy and soft-copy reports
 Uses internal data stored in the computer
system
 End users can develop custom reports
 Requires formal requests from users

Management Information Systems
for Competitive Advantage
 Provides support to managers as they work
to achieve corporate goals
 Enables managers to compare results to
established company goals and identify
problem areas and opportunities for
improvement


MIS and Web Technology
 Data may be made available from
management information systems on a
company’s intranet
 Employees can use browsers and their PC
to gain access to the data


Functional Aspects
 MIS is an integrated collection of
functional information systems, each
supporting particular functional areas.

Schematic


Internet
Internet An Organization’s
MIS

Financial
MIS
Business
transactions

Drill down reports
Accounting
Transaction Databases MIS Exception reports
processing of
Demand reports
systems valid
transactions Key-indicator reports
Marketing
MIS Scheduled reports

Business
transactions Databases Human
of
Resources Etc.
external
data MIS
Extranet
Extranet
Etc.

Figure 9.3

Financial MIS
 Provides financial information to all
financial managers within an organization.

Schematic


Databases of Financial
Databases of
internal data external data DSS

Business
transactions
Transaction Databases
processing of valid
Financial
systems transactions MIS Financial
for each applications
TPS databases

Business
transactions
Financial statements
Financial
Operational Uses and management ES
Internet or databases of funds
Internet or
Extranet
Extranet Financial statistics
for control

Business Customers,
transactions Suppliers
Figure 9.3

Inputs to the Financial
Information System
 Strategic plan or corporate policies
 Contains major financial objectives and often projects
financial needs.
 Transaction processing system (TPS)
 Important financial information collected from almost
every TPS - payroll, inventory control, order
processing, accounts payable, accounts receivable,
general ledger.
 External sources
 Annual reports and financial statements of competitors
and general news items.

Financial MIS Subsystems and
Outputs
 Financial subsystems
 Profit/loss and cost systems
 Auditing
 Internal auditing
 External auditing
 Uses and management of funds


Decision Support Systems


 Decision support systems (DSS)
 Offer potential to assist in solving both semi-
structured and unstructured problems


Decision Making as a Component of
Problem Solving
Intelligence

Decision
making Design

Problem
Choice solving

Implementation

Monitoring


Solution Types
 Optimization model
 Finding the best solution
 Satisficing model
 Finding a good -- but not necessarily the best
-- solution to a problem
 Heuristics
 Commonly accepted guidelines or procedures
that usually find a good solution


Problem Solving Factors
 Multiple decision objectives
 Increased alternatives
 Increased competition
 The need for creativity
 Social and political actions
 International aspects
 Technology
 Time compression

Characteristics of a DSS (1)
 Handles large amounts of data from
different sources
 Provides report and presentation flexibility
 Offers both textual and graphical
orientation


 Supports drill down analysis
 Performs complex, sophisticated analysis
and comparisons using advanced software
packages
 Supports optimization, satisficing, and
heuristic approaches


 Performs different types of analyses
 “What-if” analysis
• Makes hypothetical changes to problem and
observes impact on the results
 Simulation
• Duplicates features of a real system
 Goal-seeking analysis
• Determines problem data required for a given result


Goal Seeking Example
 You know the desired result
 You want to know the required input(s)
 Example:
 Microsoft Excel’s “Goal Seek” and “Solver”
functions


Excel
demo


Capabilities of a DSS (1)
 Supports
 Problem solving phases
 Different decision frequencies

Merge with How many
another widgets
company? should I order?

low high
Frequency

Capabilities of a DSS (2)
 Highly structured problems
 Straightforward problems, requiring known
facts and relationships.
 Semi-structured or unstructured problems
 Complex problems wherein relationships
among data are not always clear, the data may
be in a variety of formats, and are often
difficult to manipulate or obtain

Decision Making Levels

Strategic Strategic-level managers
involved with long-term
decisions
Tactical
Operational-level
managers involved with
Operational daily decisions
High Low

Decision Frequency


Integration of
TPS, MIS, and DSS
 In many organizations they are integrated
through a common database
 Separation of DSS transactions in the
database from TPS and MIS transactions
may be important for performance reasons


Web-Based
 Web-based decision support systems
 Decision support system software provides
business intelligence through web browser
clients that access databases either through the
Internet or a corporate intranet


Components of a DSS
 Model management software (MMS)
 Coordinates the use of models in the DSS
 Model base
 Provides decision makers with access to a
variety of models
 Dialogue manager
 Allows decision makers to easily access and
manipulate the DSS


Database Model base

DBMS MMS

Access to the
internet, networks, External database External
and other computer access databases
systems

Dialogue manager


Model Base
 Model Base
 Provides decision makers with
access to a variety of models and
assists them in decision making
 Models
 Financial models
 Statistical analysis models
 Graphical models
 Project management models

Advantages and Disadvantages
of Modeling
 Advantages
• Less expensive than custom approaches or real systems.
• Faster to construct than real systems
• Less risky than real systems
• Provides learning experience (trial and error)
• Future projections are possible
• Can test assumptions
 Disadvantages
• Assumptions about reality may be incorrect
• Accuracy of predications often unreliable
• Requires abstract thinking


Group Decision Support System
 Group Decision Support System (GDSS)
 Contains most of the elements of DSS plus
software to provide effective support in group
decision-making settings


Databases

Model base GDSS processor GDSS software

Access to the internet
and corporate intranet,
Dialogue External database External
networks, and other manager access databases
computer system

Users


Characteristics of a GDSS (1)
 Special design
 Ease of use
 Flexibility
 Decision-making support
 Delphi approach (decision makers are geographically
dispersed)
 Brainstorming
 Group consensus
 Nominal group technique


Characteristics of a GDSS (2)
 Anonymous input
 Reduction of negative group behaviour
 Parallel communication
 Automated record keeping
 Cost, control, complexity factors


Components of a GDSS and
GDSS Software
 Database
 Model base
 Dialogue manager
 Communication capability
 Special software (also called GroupWare)
 E.g., Lotus Notes
 people located around the world work on the same
project, documents, and files, efficiently and at the
same time


GDSS Alternatives
high
Local area Wide area
Decision frequency

decision network decision network

Decision
Teleconferencing
room
low
close distant
Location of group members

Decision Room
 Decision Room
 For decision makers located in the same geographic
area or building
 Use of computing devices, special software,
networking capabilities, display equipment, and a
session leader
 Collect, coordinate, and feed back organized
information to help a group make a decision
 Combines face-to-face verbal interaction with
technology-aided formalization

Wide Area Decision Network
 Characteristics
 Location of group members is distant
 Decision frequency is high
 Virtual workgroups
• Groups of workers located around the world
working on common problems via a GDSS


Executive Support System
 Characteristics Board of directors

 A specialized DSS that
includes all the hardware, President
software, data, procedures,
and people used to assist
Function area
senior-level executives vice presidents
within the organization
Function area
managers


Characteristics of ESSs
 Tailored to individual executives
 Easy to use
 Drill down capabilities
 Support the need for external data
 Help with situations with high degree of
uncertainty
 Futures orientation (predictions, forecasting)
 Linked with value-added business processes

Capabilities of an ESS
 Support for
 defining overall vision
 strategic planning
 strategic organizing and staffing
 strategic control
 crisis management


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