Introduction to Management Information Systems (MIS) Minder Chen, Ph.D. Professor of Management Information Systems Martin V. Smith School of Business and Economics CSU Channel Islands Email: Minder.Chen@csuci.edu

What is MIS? M: Management I: Information Business Functions/Processes, Organizations, and Human Behaviors I: Information Contents: Data, Information, Knowledge Processes: Create, Gather/capture/elicit, Store, Organize, Consolidate & Condense, Filter, Deliver, and Share S: System (Information Systems/Information Technology) Input-Process-Output and Storage General Systems Theory (GST) http://en.wikipedia.org/wiki/Management_information_system http://en.wikipedia.org/wiki/Systems_thinking http://en.wikipedia.org/wiki/Systems_theory http://en.wikipedia.org/wiki/Systems_theory

A System View of an Information System Information System Boundary Environments Information System (Producer) Data Providers Input Process Output Data Sources/ Business events Information Destinations RFID in the CSUCI library Consumers Users organization units Main memory Data storage Control Secondary storage Procedure What are the hardware options or Inputs, Outputs, Processing, and Storages?

Characteristics of Good Information Accurate Timely Relevant (provide context) to decisions Just sufficient Worth its cost (to justify its benefits) Information overloading http://googleblog.blogspot.com/2009/01/powering-google-search.html Deliver just enough accurate, relevant, and timely information to the right persons to make better decisions. How much energy does a Google search consume? 0.0003 kWh of energy per search; a Google search uses just about the same amount of energy that your body burns in ten seconds.

Information Quality (IA) and Categories Source: http://sloanreview.mit.edu/files/2008/12/3947-ex3-lo7.png http://sloanreview.mit.edu/article/manage-your-information-as-a-product/

Presentation of Information http://overthought-thoughts.blogspot.com/2008/12/charts-i-heart-part-ii.html

Another Version https://www.mtholyoke.edu/courses/rschwart/hist151/French%20Revolution%20II/album/slides/Napoleon_invasion_Russia.html

A Picture Is Worth a Thousand Words 24 June – 14 December 1812 https://en.wikipedia.org/wiki/File:Napoleons_retreat_from_moscow.jpg

Managing Information as a Resource The resources of the industrial age were tangible things (e.g., raw materials and human resources) and easily understood. In the emerging post-industrial society, there is little understanding of the characteristics of information – the basic yet abstract/intangible resource. Both physical resources and information could be mined, processed, bought, sold, and managed. In terms of greenhouse gases, one Google search is equivalent to about 0.2 grams of CO2. The current EU standard for tailpipe emissions calls for 140 grams of CO2 per kilometer driven, but most cars don't reach that level yet. Thus, the average car driven for one kilometer (0.6 miles for those in the U.S.) produces as many greenhouse gases as a thousand Google searches. Harland Cleveland, "Information as Resource," The Futurist, December 1982, 34-39.

Information Life Cycle Data Decision Intelligence Design Choice Action * http://faculty.csuci.edu/minder.chen/MIS310/Reading/20000905cleveland.pdf

Characteristic of Information Expandable: Information explosion*  Reduce information overload to reduce uncertainty in decision making. Compressible: Sorting, categorizing, filtering, aggregating, summarizing**, and consolidating. Substitutable: Substitute with other resources via productivity improvement. Transportable: Data communications and networking. Diffusive: Spreading (sharing) and leaking (Security & privacy) Sharable: Sharing information is a shared transaction instead of an exchange transaction. * Digital Universe: The world’s information is doubling every two years. In 2011 the world will create a staggering 1.8 zettabytes.  ** Summly, a news-summarizing app acquired by Yahoo for $30 millions.

Even the Caveman Needs Knowledge to Survive Expandable Compressible Substitutable Transportable Diffusive Shareable The information-knowledge-wisdom hierarchy. The caveman has lots of information; he selects and organizes useful information into knowledge, but he does not achieve wisdom until he has integrated his knowledge into a whole that is more than useful than the sum of its parts. Source: Harlan Cleveland, "Information as a Resource," The Futurist, December 1982, 34-39.

Source: IBM Academic Program course materials

The Knowledge Value Chain: Data Source: IBM Academic Program course materials

The Knowledge Value Chain: Information Source: IBM Academic Program course materials

The Knowledge Value Chain: Knowledge Source: IBM Academic Program course materials

Knowledge Is Not Enough Source: IBM Academic Program course materials

DIKW (Information) Hierarchy Wisdom Know why Integrating: Connect the dots Knowledge Know how Learning: Derive rules/policies through experiences & patterns Information Know what 1934 Eliot wrote in "The Rock"[3]: Where is the Life we have lost in living? Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information? http://go.webassistant.com/wa/upload/users/u1000057/webpage_10248.html The Origin of the Data Information Knowledge Wisdom Hierarchy By Nikhil Sharma [Updated: 11/01/2004]   Source: "Information as a Resource", Harlan Cleveland The Hierarchy The Data Information Knowledge and Wisdom Hierarchy (DIKW) is commonly referred to by many names. In most of the "Knowledge Management" literature the hierarchy is referred to as the "Knowledge Hierarchy", while the information science domain refers to the same hierarchy as "Information Hierarchy" for obvious reasons. Sometimes it is also referred to as the "Knowledge Pyramid". There is a lot of literature on the hierarchy, but this page is devoted to the origin of that hierarchy. To read more about the hierarchy please refer to some of the References. The Domains While the domains of Information Science and Knowledge Management (KM) both refer to DIKW, they usually do not cross-reference. Thus there are two separate threads that lead to the origin of the hierarchy. In the domain of KM, Prof. Russell Ackoff is often cited as the initiator of the DIKW hierarchy. His 1988 Presidential Address to ISGSR is widely considered to be the earliest to mention the hierarchy in the KM literature. This address was printed in a 1989 article "From Data to Wisdom" [2]. It does not cite any earlier sources of the hierarchy. However in response to this webpage I was made aware of an article by Milan Zeleny [7] which details out the DIKW hierarchy in 1987. Zeleny builds the DIKW hierarchy by equating Data, Information, Knowledge and Wisdom to “know-nothing”, “know-what”, “know-how” and “know-why” respectively. Zeleny’s 1987 mention of the hierarchy is earlier than Ackoff’s 1989 address, and he does not cite any earlier sources of the hierarchy. It can thus be argued that Zeleny was the first to mention the hierarchy in the field of KM. But the “Information Science” domain mentions the hierarchy as early as 1982, when Harlan Cleveland [2] wrote about it in a Futurist article. The article mentions the Information-Knowledge-Wisdom hierarchy in detail giving an example (see figure above). This article itself is not the origin of the hierarchy, but points to the origin. The Origin Interestingly the first ever mention of the hierarchy came from neither the KM field, nor the Information Science domain, but in poetry. In his Futurist article, Cleveland cites T.S. Eliot as the person who suggested the hierarchy in the first place- calling it "the T.S. Eliot hierarchy". The poet T.S. Eliot was the first to mention the "information hierarchy" without even calling it by that name. In 1934 Eliot wrote in "The Rock"[3]: This is the first vague mention of the hierarchy that was expanded by Cleveland, and later by others to add a layer of "Data". Beyond DIKW- Building on the Hierarchy In his futurist article [2], Harlan Cleveland concedes that information scientists are “still struggling with the definitions of basic terms”. He uses Elliot’s hierarchy as a starting point to explain the basic terms. He also agrees that there are many ways in which the elements of the hierarchy may be defined, but there is no need for universal agreement on them. While Cleveland himself doesn’t add ‘Data’ to Eliot’s hierarchy he mentions Yi-Fu Tuan’s and Daniel Bell’s version of the hierarchy in the article which includes data. Regarding ‘data’, Tuan says that data to become useful “they have to be linked to another rung or category of data” [2]. In the information field others like Lucky [5] have detailed out their own versions of the hierarchy. Russell Ackoff’s version of the hierarchy has another category of “Understanding” built in. Thus Ackoff’s hierarchy is Data-Information-Knowledge-Understanding & Wisdom. According to him, understanding “requires diagnosis and prescription”. The DIKW hierarchy can also have many dimensions. One dimension of Ackoff’s hierarchy is temporal. He says that while information “ages rapidly”, knowledge “has a longer life-span” and only understanding “has an aura of permanence”. It is wisdom that he considers to be “permanent”. Zeleny himself proposes to add “enlightenment” on top of the familiar DIKW framework [7]. Enlightenment, according to Zeleny (personal communication, October 29, 2004) “is not only answering or understanding why (wisdom), but attaining the sense of truth, the sense of right and wrong, and having it socially accepted, respected and sanctioned.” References 1. Ackoff, R.L. "From Data to Wisdom", Journal of Applied Systems Analysis, Volume 16, 1989 p 3-9. 2. Cleveland H. "Information as Resource", The Futurist, December 1982 p 34-39. 3. Eliot, T.S. "The Rock", Faber & Faber 1934. 4. Cleveland Harland, “The Knowledge Executive: Leadership in an Information Society” (New York: Truman Talley Books, 1985) 21-23; 5. Robert W. Lucky, Silicon Dreams: Information, Man and Machine (New York: St. Martin’s Press, 1989) 19-20. 6. Gene Bellinger, Durval Castro, Anthony Mills: Data, Information, Knowledge, & Wisdom, http://www.systems-thinking.org/dikw/dikw.htm 7. Zeleny, M. "Management Support Systems: Towards Integrated Knowledge Management," Human Systems Management, 7(1987)1, pp. 59-70. Contact me for comments & suggestions nsharma@umich.edu, Nikhil Sharma, Doctoral Student, School Of Information, University of Michigan, Ann Arbor. Analyzing: To support decision making Know nothing Data Observing: Description of events Happening/Doing Event

DIKW Hierarchy: version 2 T: Tacit knowledge E: Explicit knowledge http://en.wikipedia.org/wiki/DIKW_Pyramid http://en.wikipedia.org/wiki/File:DIKW.png

Moving Up the DIKW Hierarchy Where is the Life we have lost in living? Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information? T.S. Eliot, Choruses from “The Rock”, 1934 Where is the knowledge we have lost in information? (Information overloading) Where is the wisdom we have lost in knowledge? (Not able to see the holistic picture) Where is the life we have lost in living? (Live without a meaningful purpose)

Information as Products/Services CarFax: CARFAX - Vehicle History Reports and VIN number check - http://www.carfax.com (1 CARFAX Report $39.99) Britannica*: http://www.britannica.com/ Blown to Bits: How the New Economics of Information Transforms Strategy The printed version was blown away by three disruptive forces A comeback act? (iPad app) Why Britannica matter? No printed version, 2012. Information as services Google: Searching for information (Google would provide “access to the world's information in one click”) Facebook: Social networking ("Facebook's mission is to give people the power to share and make the world more open and connected." ) http://www.businessweek.com/stories/2008-05-16/the-escalator-pitchbusinessweek-business-news-stock-market-and-financial-advice http://online.wsj.com/article/SB10001424052970204226204576598870117070318.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsFifth The Britannica, however, isn't going away, or ignoring the digital world. It has long had a paid website. When it comes to school research, it is often trusted by many teachers and parents over less rigorously vetted sources. And now, it is about to launch a slick iPad app containing its entire content at a greatly reduced price: $2 a month, or $24 a year, versus $70 a year for the Web version and about $1,400 for the venerable print version. (People who pay for the Web version also get access to the iPad app at no extra cost.) hbr.org/products/877X/877Xp4.pdf “The most venerable can prove the most vulnerable.” Britannica sells for $1,500 to $2,200 per set Encarta, Grolier, and Compton list for $50 to $70. Microsoft had licensed the text for its encyclopedia from Funk & Wagnalls, whose third-rate, nearly defunct product, surviving as a periodic promotional item in the aisles of supermarkets, was perceived to be a brand so pathetic that Microsoft dropped its name in favor of the ad agency coinage Encarta a parable about the dangers of complacency. It illustrates what we will call the new economics of information : how the evolving technological capabilities for sharing and using information can transform business definitions, industry definitions, and competitive advantage. CD Encyclopedia: Encarta --- then the fundamental competitor is not Encarta, it is the PC. Internet Directory and search engine Wikipedia The first is obvious: the most venerable can prove the most vulnerable. The second point is a bit less obvious: the history, the myths, the shared values, and the unreflective presuppositions that define a strong corporate culture can blind business leaders to events that do not fit into their collective mental framework. There is a third lesson: even if the executives of established businesses fully grasp the impact of new technologies, and even if they can reason their way beyond their corporate myths and assumptions, they still face a massive competitive disadvantage arising precisely because they are incumbents. Incumbents are saddled with legacy assets—not just clunky mainframe systems, but sales and distribution systems, bricks and mortar, brands and core competencies. Competing in the face of the new economics of information requires cannibalizing those assets, perhaps even destroying them. one-third of the cost of health care in the United States—some $350 billion—consists of the cost of capturing, storing, processing, and retrieving information: patient records, cost accounting, and insurance claims. 1 By that measure, health care is a larger information industry than the “information” industry. *Source: Jorge Cauz, “Encyclopaedia Britannica's President on Killing Off a 244-Year-Old Product,” Harvard Business Review, Mar 01, 2013.

CD-ROM based Encyclopedia Encarta (1993), Grolier, and Compton, list for $50 to $70; usually bundled with a new PC for free. Content quality and distribution channel Cost: With a marginal manufacturing cost of $1.50 per copy, the CD-ROM as freebie makes good economic sense. The marginal cost of Britannica, in contrast, is about $250 for production plus about $500 to $600 for the salesperson’s commission.

Google Inc. incorporated, 1999 Britannica Sales WWW invented 1990 Netscape 1995 Google Inc. incorporated, 1999 Google IPO, 2004 Encarta discontinued 2008 Source: http://hbr.org/2013/03/encyclopaedia-britannicas-president-on-killing-off-a-244-year-old-product/ar/1

The Rise of Wikipedia Disruptive force

Britannica vs. Wikipedia Characteristic Britannica Wikipedia Price Content generation/Editorial Update frequency Revenue stream Quality of the content Wiki is an open source content management system (CMS). Wikipedia uses wiki as a development tool.

Information Systems Components Computers Server PC Mobile Networking Information You are part of every information system that you use. Even if you have the perfect information system, if you do not know what to do with the information that it produces, you are wasting your time and money. Your quality of thinking is a large part of the quality of an information system. Substantial cognitive research has shown that you cannot increase your basic IQ. You can dramatically increase the quality of your thinking by changing the way you have programmed your brain to work. Individuals, Groups, Departments, Enterprise-wide, Customers, Trading partners System SW, Application SW Data, Information, Knowledge Manual Procedures and Business Process Source: adapted from Using MIS 3e

huMan, Market, Money, Method, Machine, Material, Message Business environments Market demands Technology development Social trends Locations/Localization Man: Human Resource, Employees Market: Customers People   Message: Information Who? $$$ Money: Accounting, Finance, Investment Processes Things Vision  Why? Goals/Objectives/ Performance measures How, When? What? Machine: Property, Facility, Technology Material: Raw material, Product Method: Technique, Process, Project, Task

Organizational Hierarchy and Information Aggregated Executives Middle-Level Managers Operational Employees External OLAP Planning Control Operation Level of Detail The structure of a typical organization is similar to a pyramid Organizational activities occur at different levels of the pyramid People in the organization have unique information needs and thus require various sets of IT tools (see Figure) At the lower levels of the pyramid, people perform daily tasks such as processing transactions Moving up through the organizational pyramid, people (typically managers) deal less with the details (“finer” information) and more with meaningful aggre­gations of information (“coarser” information) that help them make broader decisions for the organization Granularity refers to the extent of detail in the information (means fine and detailed or “coarse” and abstract information) source Processing Detail Internal OLTP

Information Systems Triangle Operational Database Data Warehouse Data Mart Enterprise Workflow OLAP Online Analytical Processing BI DSS EIS OLTP Online Transaction Processing Business Process Workflow Data Information Messaging Systems Knowledge Workflow, Collaboration, Groupware

Classification of Information Systems Transaction Processing System Online transaction processing system (OLTP) Batch, Online, real-time Management support system Decision support system (DSS), Executive information system (EIS), and Digital Dashboard Data warehouse, Business intelligence (BI), and Online Analytical Processing (OLAP) Units involved Individual, group, and departmental, enterprise-wide, inter-organizational, and social networking systems Strategic Information Systems Based on IT Platforms Traditional desktop/client-server applications Web-based applications (e.g., Electronic Commerce) Mobile applications http://en.wikipedia.org/wiki/Strategic_information_system http://en.wikipedia.org/wiki/OLTP

The Extended Enterprise Buy Make/Add Value Sell E-Commerce B2B E-Commerce B2C or B2B Back Office Front Office Customers Suppliers E-Business: Virtual and Dynamic Enterprise Monolithic architecture Constituting a monolith: a monolithic sculpture. Massive, solid, and uniform: the monolithic proportions of Stalinist architecture. Constituting or acting as a single, often rigid, uniform whole: a monolithic worldwide movement. Mention Documentation-centric view Opportunity Integrate the virtual company Multi-system, multi-company, multi-audience Rapidly adapt to changing business Improve developer productivity, time to market Challenge: Lack of infrastructure Interoperability an afterthought Expensive, hard, time-consuming, brittle Deployment, management, scalability, security Current model can’t keep up with business Warehousing Logistic/Transportation Order Fulfillment Manufacturing Finance/Accounting Engineering HR Marketing Sales Support/Service Supply Chain Back Office Integration Demand Chain Enterprise Resource Planning Supply Chain Management Customer Relationship Management

Other Resources: HR, Money, Material, etc. As Products or Services MIS Management BY Information Systems Management OF Information Systems Resources Other Resources: HR, Money, Material, etc. Information Information Systems Manages As Products or Services Managing Information as a Resource (i.e., Inventory Info. System) Selling Information as Products (i.e., CarFax) Offering Information/IS as Services (i.e., Facebook, Google)

Summary What information does one may need to obtain to do his/her works? What kinds of information systems/technologies may be the best to manage such information? Be sensitive to the information, IS, and IT. Know how to apply conceptual frameworks introduced this module in understanding information needs, but start with the analysis of decisions and/or business processes.

IT, IS and IM Source: Competing with Information: A Manager's Guide to Creating  Business Value with Information Content 

Key Frameworks

Information Systems Applications in a Firm Customer Relationship Management (CRM) Teaching Notes This slide visually illustrates front- and back-office applications and highlights the following: Many organizations purchase their back-office systems in the form of enterprise resource planning (ERP) products such as SAP, PeopleSoft, and Oracle. The ERP industry is trying to expand into the front-office applications. It might be noted that electronic commerce and business extensions are being added to both front- and back-office applications in order to streamline interfaces to both customers and suppliers. E-commerce is being driven by the Internet (and private extranets). E-business is being enabled by intranets.

Information as: Product vs. By-Product http://sloanreview.mit.edu/article/manage-your-information-as-a-product/ http://sloanreview.mit.edu/files/2008/12/3947-ex1-lo7.png

COBIT’s Information Criteria (I) Effectiveness deals with information being relevant and pertinent to the business process as well as being delivered in a timely, correct, consistent and usable manner. Efficiency concerns the provision of information through the optimal (most productive and economical) use of resources. Confidentiality concerns the protection of sensitive information from unauthorized disclosure. (Sony PlayStation Network hacked) Integrity relates to the accuracy and completeness of information as well as to its validity in accordance with business values and expectations. http://arstechnica.com/gaming/news/2011/04/sonys-black-eye-is-a-pr-problem-not-a-legal-one.ars

COBIT’s Information Criteria (II) Availability relates to information being available when required by the business process now and in the future. It also concerns the safeguarding of necessary resources and associated capabilities. Compliance deals with complying with the laws, regulations and contractual arrangements to which the business process is subject, i.e., externally imposed business criteria as well as internal policies. (Sarbanes–Oxley Act) Reliability relates to the provision of appropriate information for management to operate the entity and exercise its fiduciary and governance responsibilities.

Exercise – 20-minute break and 5-minute presentation Describe your background and experiences Company name and the industry it belongs to Position and general responsibility Three major decisions Pick the most important decision involved in this position and find out the following: Characteristic of the decision: Operational vs. Strategic; Structured vs. Unstructured; Routine vs. Non-routine What information is current used to support the decision What kind of source data should be collected to generate the information needed Under which task is this decision performed What is the broader business process that this task belongs. What additional improvements can be made from the perspectives of information systems and decision making

Information System Applications Teaching Notes It may be useful to walk through this diagram in class. The textbook coverage included numbered annotations that highlight portions of this diagram. Remind students that any given information system may include many instances of each of these IS application processes and databases.