Lecture 2 MGMT © 2012 Houman Younessi What ARE Information Systems?

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information Data Information Insight Facts Knowledge Wisdom Although Information Systems are called “information” systems, they have to operate at the “data” level also, AND they are being set up and used at the “insight” level. TAGGTCCGGAAGTC Patient TAGGCCCGGAAGTC Normal This is the XXX region of the SUR1 gene This patient is a carrier of Familial Hyperinsulinism Perhaps he/she wishes to think hard about having a child with another FHI patient

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management System A system is an integrated set of parts that produces emergent properties. A systems may be: Natural A Concept An automaton A human activity Any mix of the four above An information system is a mix of concepts, human activities and potentially automation

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information System An information system does not need to involve (certainly not electronic) computers. It is important to distinguish between Information Systems and Information Technology Information Technology is the technology that supports an information system when the latter includes automation. It provides the “automation”.

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information System When Information Systems are used as a persistent component of achieving organizational aims, they are often called Management Information Systems. The term “management” refers to the activity of leading an organization to its objectives and not to individuals at higher levels of organizational hierarchy with bigger desks. So a “Management Information System” may help on the factory floor, on the loading docks, in the research laboratory or anywhere else where such systems assist the attainment of organization objective. It will be of such an information system that we will speak.

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information System No information or insight, therefore no knowledge or wisdom will be possible without initially gathering data to secure facts. The obtaining, retaining, organizing, manipulating, presenting, archiving and discarding data however is a very labor intensive task that lends itself very well to automation. Automation has become a progressively important and remains an almost integral part of any modern “Management Information System” We will concentrate on information systems that are significantly supported by automation (i.e. information technology)

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information System So, a strategic management information system is a system that uses a formalized set of inter-related procedures, technologies and concepts (e.g. a system) to provide the organization potentially (where used) at all levels and all functions with appropriate information (and progressively, insight) based on data from both internal and external sources, to enable timely and effective decision making for planning, directing or controlling the organization towards its strategic goal.

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information System Thus all information systems may be “strategic” or not. That an information system is strategic is NOT a feature of the system itself but of how it is used. If the link between how the system as used and the goal of the organization as intended is obscure, the system is likely not being used in (an at least efficiently) strategic fashion Example: Production of an invoice The relationship of producing an invoice to the overall strategic goal of the system may be obscure (as it usually is), as such it cannot be used as a strategic tool. It becomes an operation and, as such, the invoice production system becomes an operation information system. Once we know clearly how it relates to the strategic aims, we can control how, when, to whom, where etc. the invoice may be addressed. This may (or may not be), strategically important.

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information System So, an information system is strategic if the relationship between its function and the overall goal of the organization is clear. But how clear, is clear? One important function (perhaps the most important function) of information systems are to make this link as clear as possible. This does not mean that the CEO will look at individual invoices every day. But it does mean that there should be a clear and easily traceable way for information of interest to the CEO (say next quarter’s revenue forecasts) and invoices in the pipeline (if that is what is needed).

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information System Despite volumes written in the literature claiming the contrary, Information Systems CANNOT give you a strategic edge People (Decisions) Can People who:  Champion and commission them,  Design them,  Operate them,  “Client” them Therefore it is ABSOLUTELY CRITICAL to understand the human aspects of an information system (even before we understand the technology side)

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information System Any human activity system, including all information systems have at most the following three categories of stakeholders: Owners, Actors, Clients Those who can initiate or stop the system Those who design or operate the system The beneficiaries or the victims of the system

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information System At the highest level of a typical strategic information system Owners: Board/CXO Clients: users, customers, suppliers, government, etc. Actors: the IS department Organization (the Strategic IS System) but looks can be deceiving

Lecture 2 MGMT © 2012 Houman Younessi Owners: Board/CXO Policy on priorities Budget Monitoring Clients: Needs Preferences Reaction Economic influence Actors: The IS department Options Designs Cost/benefit Operation Organization (the Strategic IS System) Strategic INFORMATION SYSTEMS Management Information System

Lecture 2 MGMT © 2012 Houman Younessi Owners: Board/CXO Ill-Informed about IS Uneasy and uncertain Reluctant to get involved Clients: Impatient Expectations to high Unwilling (or too eager) to participate Technology mismatch (incompatible technology between us and them) Actors: The IS department Operational outlook (lack of strategic vision) Defensive (of the IS department) Conservative (not willing to explore new technology) Organization (the Strategic IS System) Strategic INFORMATION SYSTEMS Management Information System Difficult to Initiate and manage

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information System Main Critical Success Factors are:  Vision, commitment and backing of OWNERS  Patience and cooperation of CLIENTS  Competence, vision and courage of ACTORS Let us take a plunge

Lecture 2 MGMT © 2012 Houman Younessi Strategic INFORMATION SYSTEMS Management Information System This course discusses not only how Information Systems can assist organizations in achieving their strategic goals, but also how to formulate and execute strategies of effectively managing them.