Internal Information Systems MIS 2101: Management Information Systems Based on material from Information Systems Today: Managing in the Digital World, Leonard Jessup and Joseph Valacich, Pearson Prentice Hall, 2007 Also includes material by David Schuff, Paul Weinberg, and Cindy Joy Marselis.

2 Learning Objectives

3

4 Decision-Making Levels of an Organization

5 Operational Level Day-to-day business processes Interactions with customers Information systems used to: Automate repetitive tasks Improve efficiency Decisions: Structured Recurring Can often be automated using IS Examples?

6 Managerial Level Functional managers Monitoring and controlling operational-level activities Providing information to executive level Midlevel managers Focus on effectively utilizing and deploying resources Goal of achieving strategic objectives Managers’ decisions Semi-structured Contained within business function Moderately complex Time horizon of few days to few months Examples?

7 7-7 Executive Level The president, CEO, vice presidents, board of directors Decisions Long-term strategic issues Complex and nonroutine problems Unstructured decisions Long-term ramifications Examples?

8 Comparison of Decision-Making Levels Operational Level Managerial Level Executive Level Who Foreman or supervisorMidlevel managers and functional managers Executive-level managers What Automate routine and repetitive activities Automate the monitoring and controlling of operational activities Aggregate summaries of past organizational data and projections of the future Why Improve organizational efficiency Improve organizational effectiveness Improve organizational strategy and planning IS Transaction Processing Systems (TPS) Management Information Systems (MIS) Executive Information Systems (EIS)

9 Learning Objectives

10 General Types of Information Systems Input-process-output model Basic systems model Payroll system example

11 Transaction Processing System Operational level Purpose: Processing of business events and transactions Increase efficiency Automation Lower costs Increased speed and accuracy Examples Payroll processing Sales and order processing Inventory management Etc.

12 Architecture of a TPS

13 Architecture of a TPS: Inputs Source Documents Different data entry methods

14 Architecture of a TPS: Processing Online processing Immediate results Batch processing Transactions collected and later processed together Used when immediate notification not necessary

15 Architecture of a TPS: Outputs Counts, summary reports Inputs to other systems Feedback to systems operator

16 Summary of TPS Characteristics

17 Management Information Systems Managerial level Purpose: Produce reports Support of midlevel managers’ decisions Examples Sales forecasting Financial management and forecasting Manufacturing, planning and scheduling Inventory management and planning Etc.

18 Architecture of an MIS

19 Architecture of an MIS: Processing Aggregation Summary

20 Architecture of an MIS: Outputs

21 Summary of MIS Characteristics

22 Executive Information Systems A.k.a. Executive support system Executive level Purpose Aid in executive decision-making Provide information in highly aggregated form Examples Monitoring of internal and external events and resources Crisis management Etc.

23 Architecture of an EIS

24 Architecture of an EIS: Inputs Hard data Facts and numbers Generated by TPS & MIS Purchased data Soft data Nonanalytical information Web-based news portals Customizable Delivery to different media

25 Architecture of an EIS: Processing Summarizing Graphical interpreting

26 Architecture of an EIS: Outputs Summary reports Trends Simulations

27 EIS Output: Digital Dashboards Digital dashboard Presentation of summary information Information from multiple sources Ability to drill down if necessary

28 Summary of EIS Characteristics

29 Summary Executive Information Systems Highest level summary of information Management Information Systems Aggregate and collect data Transaction Processing Systems Collect data So what’s the trend as you go down the list/up the pyramid?

30 Summary: Types of Information Systems Operations Staff Transaction Processing EIS MIS TPS Stronger Weaker Controls and Security Source: Business Driven Technology, by Haag, Baltzan, Phillips, McGraw Hill, 2006 (with modifications)

31 Summary: Decision Levels Competitive advantage Market leader Long term Improve operations without restructuring Day-to-day actions keep company running New products that change the industry External events, rivals, sales, costs quality, trends. Executive Management Operations New tools to cut costs or imp- rove efficiency Scheduling employees, placing orders. Expenses, schedules, sales models, forecast Transactions, accounting, HRM, inventory Decision LevelDescriptionExample Type of Information

32 Information Systems Today: Managing in the Digital World 7-32 Learning Objectives

33 Seven Information Systems that Span Organizational Boundaries

34 1. Decision Support Systems Decision making support for recurring problems Used mostly by managerial level employees (can be used at any level) Interactive decision aid What-if analyses Analyze results for hypothetical changes

35 Architecture of a DSS

36 Information Systems Today: Managing in the Digital World 7-36 Common DSS Models

37 Using DSS to Buy a Car Selling price – $22,500 Down payment – $2,500 Monthly payment – about $400 Interest rate information from the bank

38 2. Intelligent Systems Artificial intelligence Simulation of human intelligence Reasoning, learning, sensing, hearing, walking, talking, etc.

39 Intelligent Systems Three types Expert systems Neural networks Intelligent agents

40 Expert Systems Use reasoning methods Manipulate knowledge rather than information System asks series of questions Inferencing/pattern matching Matching user responses with predefined rules If-then format

41 Neural Network System Approximation of human brain functioning Training to establish common patterns Past information New data compared to patterns E.g., loan processing

Example: Neural Network System Loan processing system relying on a neural network

43 Intelligent Agent Systems Program working in the background Bot (software robot) Provides service when a specific event occurs

44 Intelligent Agent Types 1.Buyer agents (shopping bots) – search for best price 2.User agents – perform a task for the user 3.Monitoring and sensing agents – keep track of key information 4.Data-mining agents – analyze large amounts of data 5.Web crawlers (web spiders) – browse the Web for specific information 6.Destructive agents – malicious agents designed by spammers

45 3. Data Mining and Visualization Systems Application of sophisticated statistical techniques What-if analyses to support decision making Capabilities can be embedded into a large range of systems

46 Visualization Display of complex data relationships using graphical methods Visualization of a weather system

47 Text Mining Extraction of information from textual documents Web crawlers used to extract information from Internet

48 4. Office Automation Systems Developing documents, scheduling resources, communicating Examples Word processing Desktop publishing Electronic calendars

49 5. Collaboration Technologies Increased need for flexible teams Virtual teams – dynamic task forces Forming and disbanding as needed Fluctuating team size Easy, flexible access to other team members Need for new collaboration technologies

50 Video Conferencing Costs – few thousand dollars to $500,000 Dedicated videoconferencing systems Located within organizational conference rooms Highly realistic

51 Groupware Enables more effective team work Distinguished along two dimensions

52 Benefits of Groupware

53 6. Knowledge Management Systems Generating value from knowledge assets Collection of technology-based systems Knowledge assets Skills, routines, practices, principles, formulas, methods, heuristics and intuition Used to improve efficiency, effectiveness and profitability Documents storing both facts and procedures Examples Databases, manuals, diagrams, books, etc.

54 Benefits and Challenges of Knowledge Based Systems

55 7. Functional Area Information Systems Cross-organizational-level IS Support specific functional area Focus on specific set of activities

56 Business Processes Supported by Functional Area Information Systems

57 Cases

58 Amazon.com Personalized greeting Memory for recent purchases Targeted “gold box” offers and bargains Fraud protection Shipping vs. billing address comparison Method of shipment checks Credit card sources checks “One-click” shopping 35 million customers worldwide Innovations leading to satisfaction

59 The Growing Blogosphere One of the fastest growing phenomena in the digital world

60 Too Much Technology? RFID and Privacy RFID tags Latest in technological tracking devices Information imprinted on a tag Tag generates signature signal Special RFID reader interprets signal Use of RFID tags Pharmaceutical industry Tracking of medication from factory to pharmacy Retail businesses