Information Systems and Organisations

a)Understand the difference between an information system and a data processing system. b)Understand the role and relevance of an information system in aiding decision making. c)Definition of a Management Information System d)Recall that a MIS is a system to convert data from internal and external sources into information. This is communicated in an appropriate form to managers at different levels to enable them to make effective decisions for planning, directing and controlling the activities for which they are responsible.

Information Flow When an organisation is small, information flows are limited. As an organisation grows, the owner of the company will be unable to deal with every piece of information. This usually means setting up different functional areas.

Information Systems and Organisations Management information is the lifeblood of any business or organisation. – This can vary from a simple report outlining the profitability of goods – To a large document outlining the profitability of all areas according to region.

Information Systems and Organisations Most often management information is obtained by processing the data and information from day to day transactions.

Three Major Levels in an Organisation Operational Tactical Strategic

Information Systems and Organisations Not all computer systems supply management information: – Data Processing Systems – Information Systems – Management Information Systems

Three Major Levels in an Organisation Operational – Data processing system Tactical – Information processing system Strategic – Management information system

Data Processing Systems/Transaction Processing Systems Process the day-to-day data generated by an organisation during its normal operations (order processing, stock control, routine billing etc). Usually unable to supply management directly with information on which to make tactical or strategic decisions. Mainly used by operational level of staff.

Information Systems Supply information on which decisions can be based.

A Management Information System is: a system to convert data from internal and external sources into information. This is communicated in an appropriate form to managers at different levels to enable them to make effective decisions for planning, directing and controlling the activities for which they are responsible.

Management Information Systems It is important that this information is in an appropriate form:

Every month I have to sift through thousands of figures to extract what I need!

This information would have been really useful if I’d had it at my meeting yesterday!

This information tells me all sorts of things I have no use for but it doesn’t tell me what I really need to know!

I’ll never get the hang of this software!

What do Managers do? Planning Organising Coordinating Decision-making Controlling

Management Information Systems must be designed to support managers in as many of these functions as possible, at the different levels (operational, tactical, strategic) of an organisation.

Types of Decision Management decisions can be classified into two types: – Structured repetitive, routine and involve a definite procedure for handling them. – Unstructured decisions which require judgement, insight and evaluation. They are often important decisions and there is not set procedure for making them.

What Prompts a New System? The current system may no longer be suitable for its purpose. Technological developments may have made the current system redundant or outdated. The current system may be too inflexible or expensive to maintain.

Recipe for Failure…. Lack of management involvement in design emphasis on computer system concentration on low-level data processing lack of management knowledge of ICT systems and their capabilities inappropriate/excessive management demands lack of teamwork lack of professional standards.

A successful MIS is one that can be PICKED AT! Professional standards are adopted by all involved Involvement of management is a key part of design Computer system is kept in balance and perspective Knowledge of IT systems and their capabilities is good amongst managers Excessive management demands are not made Data processing at a low level is not over-emphasised Analysis is carried out thoroughly at the start of the process Team work is successful

Sample Question A large chain of supermarkets makes use of data processing systems and information systems. – (a)With the use of suitable examples, identify the difference between a data processing system and an information system. (4) – (b)Describe, with an example of each, the role of an information system in decision making for the following levels of supermarket management: (4) (i)Tactical (ii)Strategic. – (c)Give an example of how a data processing operation in a supermarket might provide data for a company-wide information system. (2)

(a)Describe what is meant by a management information system (MIS). (4) (b)Explain why an organisation would implement an MIS. (3)