Systems Approach & Framework for Management Information Systems Dr. Ashok Agarwal

Management Information Systems A system to provide Relevant Information : Right time in Right time Right format in Right format all levels of the organizations to all levels of the organizations support the Decision Making Process to support the Decision Making Process MIS-DSS/AKA

System Essential characteristics of a system are “composed of interacting parts, each one having interest of its own.” (R Ackoff) Set of components that interact to accomplish some purpose Sub-systemsInterfaces Goal MIS-DSS/AKA

Some Examples University : Components : Students, Faculty, Staff, Administration Building, Equipment, Ideas and Procedures. Goals: * Educating Student * Producing Research * Providing service to community Business Organizations : Components : Marketing, Productions, Sales, Research, Finance Etc. Goals : * Stake holders return * Social objective (?) MIS-DSS/AKA

The System and its Environment Inputs Raw materials costs Resources Processes Procedures Programs Tools Activities Decisions Outputs Performance Consequences Finished Products Services delivered Decision maker System boundary Environment Stockholders Banks Vendors Competitors Government Customers Weather conditions Feedback MIS-DSS/AKA

 System Boundary : System separate from environment Physical (walls) Non-physical (Time)  Type of Systems : Open : System Interacting with its environment. Closed : No interactions MIS-DSS/AKA Systems Characteristics

 Control : A standard for acceptable performance. A procedure to measure performance. Comparison actual : Acceptable Feedback  System Efficiency Efficiency : Measure of I/O Ratio Effectiveness : Degree to which goals are achieved. Peter Drucker: Effectiveness doing Right things. Efficiency doing things Right. MIS-DSS/AKA Systems Characteristics contd…

Decision Process (H. Simon) Programmed Non-programmed Decisions * Routine * Fuzzy * Repetitive* Complex non-repetitive * Standard Solution Exist* No standard solution MIS-DSS/AKA

Decision Making Process (H. Simon) Intelligence:Searching for conditions that call for decisions. Design:Development and Evaluation of alternative courses of Action. Choice :Selection of a Course of Action. MIS-DSS/AKA

Reality Implementation of solution Simplification Assumptions Verification, testing of proposed solution Choice Phase Solution to the model Sensitivity analysis Selection of best (good) alternative(s) Plan for implementation Design Phase Formulate a model Set criteria for choice Search for alternatives Predict and measure outcomes Validation of the model Intelligence Phase Organizational objectives Search and scanning procedures Data collection Problem identification Problem ownership Problem classification Problem statement Alternatives Solution MIS-DSS/AKA

Planning & Control Systems : A Framework for Analysis (R.Anthony) Management activity classified into three categories ; Each one different to require distinctive Planning & Control Systems. Strategic Planning : Defining objectives. Resource needed. Policies relating to acquisitions, use and deposition of resources. Typically top management-innovation/creativity Management Control : Getting and using resources efficiently & effectively to accomplish objectives. Involves significant interpersonal interaction. Operational Control : Process of assuring specific tasks are efficiently & effectively done. BOUNDARIES QUITE OFTEN VAGUE MIS-DSS/AKA

Information Characteristics ParametersStrategic Planning Management Control Operational Control AccuracyLowHigh Level of DetailAggregateDetailed Time HorizonFuturePresent Frequency of useInfrequentFrequent SourceExternalInternal Type of Information QualitativeQuantitative Age of Information OlderCurrent MIS-DSS/AKA

Factors Affecting Decision Making FactorTrendResults TechnologyIncreasing Information/computersIncreasing Structural complexityIncreasing CompetitionIncreasing International marketsIncreasing Political stabilityDecreasing ConsumerismIncreasing Government interventionIncreasing Changes, fluctuationsIncreasing More alternatives to choose from Larger cost of making errors More uncertainty regarding the future Need for quick decisions MIS-DSS/AKA

Decision Support Systems Assist managers in their decision making processes. RATHER Support RATHER than replace managerial judgment. Improve the effectiveness of decision making rather than efficiency. Utilize technology to : MIS-DSS/AKA

A Framework for MIS (Gorry & Scott Morton) Type of Decision Operational Control Management Control Strategic Planning Support Needed StructuredInventory recording Linear programming for manufacturing Plant location Clerical, EDP or OR models SemistructuredBond tradingSetting market budgets for consumer products Capital acquisition analysis DSS UnstructuredSelecting a cover for Time magazine Hiring managersR&D portfolio development Human intuition MIS-DSS/AKA

Implications for Design & Implementation : The people involved in building DSS for semi-structured decisions need to be different in terms of skills and attitudes compared to those building systems for structured Decisions. Technology supporting ill-structured problems uses computer power – differently – from large data processing operations. Models supporting managers decisions may differ from optimization algorithms. THAN Process by which DSS are constructed – ongoing evolutionary service THAN Delivery of final product. A MUST Managers participation A MUST MIS-DSS/AKA

Global Organizations Evolving Technology Internet/Networked structures Seamless dataflow across the company Linkage with External entities (customer-suppliers) Changing Business Environment Flattening organizational structure Location independence Ability to operate Globally Business function distributed globally (design, mfg, customer support) 24x7 operations Communications with Suppliers/Distributors. MIS-DSS/AKA

Individual economy :knowledge & Information based economies. Hierarchical/centralized : Flattened / Decentralized Formal Plans :Informal Communication Network Global Organizations MIS-DSS/AKA

Digital Firm All significant business processes and relationships with customers, suppliers and employees are digitally enabled and key corporate assets are managed digitally (Intellectual property, core competencies, financial & human assets) MIS-DSS/AKA