The requirements for developing and managing a comprehensive Management Information system for an organization
Managing Information Systems
The aim of this assignment is to see the requirements for developing and managing a comprehensive Management Information system for an organization.
In today's business environment it is getting harder and harder for organization's to not only survive but to compete against other organizations. Information technology plays a big part in helping companies compete and survive. Companies that have branches or franchises need to make sure that they can communicate with the head office so that orders can be passed down. Most of a mangers time is spent
Passing information and ideas upwards to senior management to aid their decision making
2 Providing other department managers with information which will help them do their jobs more effectively
3 Passing information down wards to subordinates
4 Conveying attitudes or creating them
5 Receiving and interpreting facts and data
6 Communicating with people out sides the company e.g. suppliers.
The manager needs resources to aid him with the task mentioned above.
Management information systems and decision support systems are two such resources.
Computers and information systems play critical roles in the operation of most organizations. All organizations, from factories to banks, are highly dependent on information for their day-to-day operations. The vast quantity of information that large corporations and government agencies need to operate, and the speed with which that information is created and used, makes computer-based information systems critical to such operations.
What is a Management Information System?
There are different definitions of a management information system:
"Management Information system products produce information products that support many of the day-to-day decisions -making needs of management. Reports, displays, and responses produced by such systems provide information that managers have specified in advance as adequately meeting their information needs." Taken from Management Information Systems Third edition by James A. O'Brien PG 370
"Management information system can be defined as a network of computer based processing procedures that are integrated with manual and other procedures to provide timely, effective information to support managerial planning and control" Taken from Computers and Information Systems by O'Leary/Williams second edition pg 435.
"Management information systems at the management level of an organization that serve the functions of planning, controlling, and decision making by providing routine summary and exception reports" Taken from Management Information Systems 4th edition by Laudon, and Laudon
"Management information system is Interrelated components working together to collect, process, store and disseminate information to support decision making co-ordination, control, analysis and visualization in an organization" Taken from Laudon and Laudon, 1999, 'Essentials of Management Information Systems', 3rd edition, Prentice Hall.
From the above definition of a management information system the following overall conclusion can be reached:
A management information system is a collection of people; tasks, systems, software, and technology used to provide routine pre defined information that is available to all members of the organization that need to have access to it. Management information systems provide a variety of reports and displays to management. Management information systems (MIS) retrieve internal information about an organization, and share to those who require it.
What are the uses of a management information system? :
"Strategic-level systems help senior managers plan the firm's long term course of action.
· "Strategic-level systems help senior managers plan the firm's long term course of action.
· Tactical systems help the middle managers supervise and coordinate day-to-day business activities.
· Knowledge and data workers use knowledge systems to design products, streamline services, and to cope with paperwork,
· Operational systems deal with day to day production and service activities."
Taken from' Information Systems a Problem Solving Approach' Laudon and Laudon 1997
Taken from http://www.uark.edu/depts/cisqinfo/tcondren/w9f97/sld001.htm
What are the advantages of management Information System?
Regular reports help managers perform their duties for example a summary report of sales figures of a particular period in the year would allow managers to predict sales figures for the coming year and plan ahead. This would not only help the manager of the store but it would also allow the person in charge of purchasing stock, distribution, transportation, and finance to plan ahead of time as well. The head of stock would have an idea of how much raw materials to buy, distribution manager would have an idea of where to send it to the parts of the organization which are most likely to utilize it the most.
Characteristics of Management Information System
. Management Information Systems support structured and semi-structured decisions at the operational and management control levels.
2. They are generally reporting and control oriented. They are resigned to report on existing operations and there fore provide day-to0day control operations.
3. The systems also rely on existing corporate data and data flows.
4. However Management Information Systems have little analytical capability
5. On the other hand they generally aid in decision making using past and present data
6. Management Information Systems are relatively inflexible
7. The systems posses an internal rather than external orientation
8. Information requirements are known and stable
9. Overall Management Information Systems require a lengthy analysis and design process
A FRAMEWORK FOR MIS EFFECTIVENESS
Information systems are costly to purchase, deploy, and maintain. Therefore, in today's business where business enterprise is operated for value maximization according to the theory of rational choice, it is natural to suppose that MIS offers economic value and that this value overcomes the costs.
A measure often used to vale the effectiveness of MIS is based on the principle that if the system is being used it must be effective and the more it is used the greater the effectiveness.
Another measure to define the effectiveness of the management information system is to measure it as the degree to which the business goals, for which the MIS was deployed, are actually achieved.
How ever the best way to measure its effectiveness would be to get the opinion of the mangers/workers that actually use the system. While satisfaction scores ...
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A measure often used to vale the effectiveness of MIS is based on the principle that if the system is being used it must be effective and the more it is used the greater the effectiveness.
Another measure to define the effectiveness of the management information system is to measure it as the degree to which the business goals, for which the MIS was deployed, are actually achieved.
How ever the best way to measure its effectiveness would be to get the opinion of the mangers/workers that actually use the system. While satisfaction scores and opinions can be useful in comparing two systems within the same user/developer community, they make inter-firm comparisons difficult. These difficulties convinced many researchers to abandon the questionnaire approach and make direct observations of accounting and economic variables that would be indicative of the achievement of business goals taken from Bakos, J. Yannis, "Dependent Variables for the Study of Firm and Industry Level Impacts of Information Systems", Proceedings of the Fifth International Conference on Information Systems, 1985, pp. 10-23
Three dimensions of effectiveness can be identified and explored. These are the dimension of scope, the dimension of measurement, and the dimension of social paradigm.
THE DIMENSIONS OF EFFECTIVENESS
The dimension of scope describes how broadly the concept of effectiveness is to be applied. In the narrowest sense it is applied to a single implementation of a specific application program. This can be expanded to include multiple implementations of the same program or to an entire class of applications. We can refer to these as the application level and we may interpret the effectiveness measure in terms of the design, usability, and usefulness of the system in question.
One can consider the impact of IS on an entire firm regardless of application. At the firm level the effectiveness measure can be related to the firm's MIS organization, policy, budget, as well as attitudes and opinions.
THE DIMENSION OF MEASUREMENT
The dimension of measurement addresses the type of data to be collected, the method of their collection, and the way it is interpreted. Questionnaires, visual (field) observations can be used as well as primary (new data) and secondary (data collected from a previous study) The field observation level of use of the MIS and performance measures are obtained from business records or through visual or electronic inspection and are therefore independent of personal opinions and attitudes.
THE DIMENSION OF SOCIAL PARADIGM
The third dimension of MIS effectiveness uses the organizational paradigms described by Burrell and Morgan and adapted to information systems by Hirschheim. This dimension adds generality to the analysis by allowing for the possibility that not all activities of business enterprises are interpretable as if they were rational organizations objectively seeking to maximize the wealth of the owners. Other paradigms of business organizations exist in which managers may take action to increase their utility rather than the owners' wealth and where various degrees of conflict exist between managers, workers, and stakeholders.
Decision Support Systems
Decision Support Systems are an organized collection of people, procedures, software, databases, and devices used to support problem-specific decision-making.
Text books state:
"Decision Support Systems are often said to be a natural progression from management information systems. Decisions Support Systems are interactive, computer based information systems that use decisions models and specialized databases to assist the decision-making processes of managerial end users." Taken from Management Information Systems Third edition by James A. O'Brien PG 52
"Decision Support Systems is a computer system at the management level of an organization that combines data, sophisticated analytical models, and user-friendly software to support semi structured and unstructured decision making" Taken from Management Information Systems 4th edition by Laudon, and Laudon
A Decision Support System is a set of computer programs and hard ware that helps managers arrange information from various sources in different ways. Managers use DSS for analysis and research and also for help with decision-making. The system allows the manager to obtain data through an interactive computer terminal.
Decision Support Systems are interactive as a result of this they are designed for large computer systems that can process and store large amounts of data quickly and efficiently.
A good Decision support system should have certain components to aid the manger in the decision making process.
. Search facility: to allow the search for fact's and figures
2. Specifying and computing are helped by computational models, such as spread sheets
3. Assimilating drawing inferences and deciding are helped by computer graphics and word processing
4. Communication is given a boost with telecommunications, such as teleconferencing with other managers about a problem.
A Decision Support System is different from a management information system. MIS provide managers with information that has already been chosen, which helps the managers to make more effective structured decisions. A decision support system
Characteristics of A Decisions Support System
. A Decision Support System offers users flexibility, adaptability, and a quick response.
2. The Systems also allows users to initiate and control the input and out put
3. The Support Systems provide users operate with little or no assistance from professional programmers
4. A Decision Support System supplies support for decisions and problems whose solutions cannot be specified in advance
5. Overall the Decision Support Systems use sophisticated analysis and modeling tools.
In a decision support system the emphasis is on providing capabilities to answer questions and reach decisions. Four core capabilities of the system should be
. Representations
2. Operations
3. Memory aids
4. Control Aids
Examples of a Decision Support System are listed as follow:
American airlines Price and route selection
Champlin Petroleum Corporate planning and forecasting
Equico Capital Corporation.Investment evaluation
Frito-lay, Inc. Price advertising and promotion section
General dynamics Price evaluation
Juniper Lumber Production optimization
Kmart Price evaluation
National Gypsum Corporate planning and forecasting
Southern Railway Train dispatching and routing
United air lines Flight scheduling
U.S. department of Defense Defense contract analysis
Difference between Decision support system and a Managing information system
Dimension Decision support system managing information system
Philosophy Provide integrated tools, data, models, and language to users Provide structured information to end users
System analysis Establish what tools are used in the decision process Identify information requirements
Design Iterative process Deliver system on frozen requirements
Concerns
Security
The main concern about the two systems mentioned above is:
Privacy
Privacy is primarily a personal concern: it is the assurance to individuals that personal information will be used properly, is accurate, and is protected against improper access.
Security
Security is primarily an organizational concern, it is a system of safe guards designed to protect a computer system and data from deliberate or accidental damage or access by unauthorized persons. Security is concerned with preserving hardware, software, and information against fire, theft (computer time, programs data and passwords), sabotage and espionage.
Computer crime is a growing threat caused by computer experts and end uses who take advantage of the wide spread use of information systems by organizations.
The Data Processing Association defines computer crime as
. Including the unauthorized use, access or modification, and destruction of hardware, software, data, or network resources,
2. The unauthorized release of information
3. The unauthorized copying of software
4. Denying an end user access to his or her hardware, software, data or network resources
5. Using or conspiring to use computer resources to illegally obtain information or tangible property.
Data being transferred within an organization is very important to it, and would be very valuable to its competitors. For example if the weekly sales figures or stock intake of a clothing company were made available to its rivals then they would be able to change its prices, stock intake to hinder that of its rivals. Its whole business strategy could then be based on that of its rival provided it had received the information at an early time in order for it to change its policies.
Health
The constant or heavy use of information technology in work places can cause a number of health issues such as job related stress, damaged arms and neck muscles, eye strain radiation exposure.
Case Study:
After the analysis of both a Managing information system and decision support systems it is time to see how they are implemented with an organization.
The company picked was first sport in Brent cross.
First sport is a sports retailing store with branches all over England. They sell sports equipment and merchandise.
It is important
I was given the number of the IT department and when contacted I was provided with allot of valuable help and information.
A1. Management Monitoring and Control Systems
A generic model of a monitoring and control system is shown in Figure 1.
Figure 1: Monitoring and Control System Model
This monitoring and control system consists of four main elements:
· A process. At the core of the system is some kind of process that turns inputs into outputs. Let us take the example of a public sector training project that seeks to provide new skills for the unemployed. This project turns inputs of money, equipment and staff labor into outputs of skilled people who are trained via processes of training delivery.
· A monitoring mechanism. This mechanism gathers information about the outputs from the process. For example, it would gather information about the number of people trained and the extent of their new skills in the training project.
· A comparison mechanism. This compares the information gathered about current performance with information on previously set plans, benchmarks, targets, etc. These two types of information represent the information needs of the monitoring and control system. For example, this mechanism would compare information on actual skills gained with skill gain targets. This part of the system is often known as the 'evaluation mechanism'
· A control mechanism. This decides upon and then ensures implementation of corrective action based on the output of the comparison. For example, where skill levels produced by training were lower than expected, changes to the method or location of training might be decided upon and implemented.
The Information system used with-in First sport allows
· Outputs that can be measured,
· A monitoring mechanism that does measure the outputs,
· A monitoring mechanism that produces information on the outputs that is accurate, timely, relevant, and complete,
· A comparison mechanism,
· Targets against which to compare,
· A control and implementation mechanism, and
· An overall feedback loop that does not take too long to be effective.
The system needs to be able to measure how much stock is sold, when it is sold the exact item that is sold, right down to the size and color of the product, from the largest sports jacket to the smallest needle used to pump footballs.
The place of management information systems in the model is indicated in Figure 1. As shown, MIS can be of two different types:
· Monitoring MIS: these MIS merely gather information about output performance and present it to the manager, who will then do the comparison him/herself.
· Monitoring and comparison MIS: for these MIS, the pre-set standards for output performance have been entered onto the computer system
Features of Management Information Systems used
In order to explain the features of the MIS used, two further elements must be described: the link to data-gathering systems and the production of reports.
Link to Data-Gathering Systems
MIS often rely on monitoring data produced by a corporate database. In many cases, the division between the two systems is not obvious. For example, many users merely perceive that they have a payroll system that collects payroll data, produces both operational payroll information and management reports, and is used for both operation and monitoring/control of the payroll system.
Reports, Reports, Reports
Central to its monitoring and control roles, an MIS produces reports. This is mainly what managers perceive about an MIS since these are its tangible outputs. Reports come in many forms, as described below. They can be differentiated in two main ways: by content and by schedule.
i. Differentiation by content
MIS reports fall into three main categories of content:
· Detail report. This contains all relevant information on the report topic. For example, a detailed payroll report might give the following information for all staff: employee number, name, wage/salary rate, standard monthly earnings, standard tax payable, and each individual monthly payment for the year to-date.
· Summary report. This contains a summarization of information on the report topic. For example, the total number of staff in each store, each store's total payroll bill for this year and last year, and the percentage change between the two. Some summaries may be recognized performance indicators. For example, one measure of a store's performance might be its total actual payroll bill as a proportion of the total budgeted payroll bill.
· Exception report. This filter out information to provide only what is deemed to be most important, according to pre-set criteria. It may be summarized or detailed. For example, a report could include employee name, total individual payroll payments this and last year, and percentage change between the two, only for those staff whose pay rose by more than 10 per cent.
The reports do not have to be about pay role, they can also be about stock levels, a number of hours a member of staff has worked for during the week or month, sales figures, staff turn over. e.t.c.
These reports may find themselves combined. For example, a report might:
· Provide information on unit salary and income tax payment totals (summary),
· For only those units where the total was more than 5 per cent above last year's total (exception), and
· Allow the manager to break this down into individual staff salaries and tax payments if required (detail).
ii. Differentiation by schedule
MIS reports fall into three main categories of schedule:
· Periodic report. This is produced at regular intervals: daily, weekly, monthly, quarterly, etc. For example, a report of organizational unit salary totals produced every month after staff has been paid. This helps to sort out any pay disputes workers might have
· Event-triggered report. This is produced in response to a particular event or set of conditions. An example is the start of a nation wide sale with in all the stores
· Request report. This is produced as and when required in response to an ad hoc request. For example, a payroll report on all staff in who have received pay rises in the last quarter of the year.
The Role of Reports
Periodic summary and detailed reports are the 'bread and butter' of management information systems. The reports can take a substantial monitoring workload from managers (exception-triggered report). Managers know that the computer system is 'watching out' for certain problems and will alert them if these problems arise. Examples could include alerting reports when:
· An unusually large amount of cash is involved in a transaction in a short period of time
· There is a sudden increase in recorded thefts at a branch
· A substantial increase in stock being requested by branches
· A substantial decrease in sale out put of a particular branch
· An increase in customer complaints.
Reports with just exception contents provide no redundant information, but just focus the manager on problem areas that require corrective action. This therefore helps managers cope with the problem of information overload. Exception reports have a wide variety of applications and can provide, for example:
· The names of those staff that have been absent more than five times during the past month.
Benefits of MIS Computerization to first sport
The creation of a monitoring and control system produces, by definition, greater understanding of the organization and a greater ability to manage organizational resources and their performance. Within these systems, and by comparison with manual systems, creation of a computerized, rationally-functioning. MIS produce a number of organizational benefits. These include:
· Faster decision-making and control through provision of timely information. For example, the MIS described by Anthes (1993 cited in Laudon & Laudon, 1995) provided an early warning of performance problems in bulk buying of inputs by branches, as a result of this branches were each allocated a monthly level of stock which they were sent, and had no say as to how much or how little stock they received (request could be made for more stock or a reduction of stock to be delivered during the course of the month) Faster decision making released time that would otherwise be tied up on monitoring.
· Better decision-making and control through provision of relevant information. The area mangers had a much better understanding of what was going on in their area thanks to the introduction of an MIS. They also had more detailed information which allowed them to provide store mangers with a better set of instruction and directions, and make better use of available resources.
Different types of Management Information Systems used within the organization.
. Accounting MIS: on monitoring how much has been spent; on comparing this with budget; and on controlling expenditure to bring it in as close as possible to budget at year-end.
Typical reports include:
· Statements of account: month-end, year-end, year-to-date, etc
· Warnings of budget head over- or under-spend against target; variance from planned budget can be shown either in absolute or in percentage terms.
· Statements of cash requirements in the month ahead based on payments still owed within accounts payable data
2. Human resources MIS
Management information systems are used in the entire human resource lifecycle from recruitment to termination or retirement. Reports include:
· Vacancies: for example, a detailed report on all vacant posts in the organization.
· Recruitment and selection: for example, a summary reports on the ethnic origin and sex of all job applicants and recruits for use in equal opportunities monitoring.
· Staff performance: for example, an exception report on only those staff who consistently fail to meet their sales targets
· Training: for example, an ad hoc report on all those staff that has received training in benefits of certain footwear, company policy or sales techniques.
· Staff promotion: for example, a detail report on all performance assessments for a potentially-promo table member of staff.
· Staff departure: for example, a comparative report on turnover rates and reason for departure in the information systems and accounting departments.
· Pensions: for example, a summary report on recent annual pension funds growth rates.
· Other: for example, a comparative report on workplace accident rates on different days of the week.
Operational Hardware and Software used in first sport
· The Computer
· The Monitor
· The keyboard and Credit Card reader
· The Receipt and Cheque Printers
· The Hand Held Barcode reader
· The Customer display pole
· The Modem
Conclusion
In today's business world Management information systems are essential to the running of an organization. Large organizations and those with different branches tend to benefit the most from Information systems.
Using all the data collected from the research done the following conclusion can be met about DSS and MIS systems:
· Monitoring and control is central; the focus is therefore mainly on information about what has happened (or is happening) rather than, as with planning, what will happen.
· Reports are generally based on relatively simple analysis techniques.
· MIS normally feed into some human decision-making, based on their reports; such decision-making is usually structured or semi-structured.
· MIS are mainly targeted at operational and tactical management levels.
· Unless custom-written, MIS are often based on a database system, because of the superior query and reporting capabilities of database management systems.
· A Decision Support System offers users flexibility, adaptability, and a quick response.
· The Systems also allows users to initiate and control the input and out put
· The Support Systems provide users operate with little or no assistance from professional programmers
· A Decision Support System supplies support for decisions and problems whose solutions cannot be specified in advance
REFERENCES
Laudon and Laudon "Management Information Systems
James A. O'Brien "Management Information Systems managing information Technology in the networked enterprise"
O'Leary/Williams "Computers and Information Systems "
Ralph M Stair George W. Reynolds "Principles of Information Systems"
Francis J Bergin "practical Communication"
Janice Burn and Mike O'Neil "Information Analysis"
Martin Beirne and Harvie Ramsay "Information Technology and Work place Democracy.
Bakos, J. Yannis, "Dependent Variables for the Study of Firm and Industry Level Impacts of Information Systems", Proceedings of the Fifth International Conference on Information Systems, 1985, pp.
Barki, H. and S.L. Huff, "Implementing Decision Support Systems: Correlates of User Satisfaction and System Usage", INFOR, Vol. 28 No. 2, May 1990, pp. 89-101
Burrell, G. and G. Morgan, "Sociological Paradigms and Organizational Analysis", Heinemann Press, London,
Chismar, William G. and Charles H. Kriebel, "A Method for Assessing the Economic
Gallagher, Charles A., "Perceptions of the Value of a Management Information System", Academy of Management Journal, Vol. 17 No. 1, 1974
Hirschheim, Rudy and Heinz K. Klein, "Four Paradigms of Information System Development",
King, William R. and Jaime I. Rodriguez, "Evaluating Management Information Systems", MIS Quarterly, September
Lee, Allen S., "A Scientific Methodology for MIS Case Studies", MIS Quarterly, March
Lucas, Henry C., "Performance and the Use of an Information System", Management Science, Vol. 21 No. 4, April 1975, pp. 908-918
Melone, Nancy Paule, "A Theoretical Assessment of the User Satisfaction Construct in Information Systems Research",
Srinavasan, A., "Alternative Measures of System Effectiveness: Associations and Implications", MIS Quarterly, September
Weill, Peter, and Margrethe H. Olson, "Managing Investment in Information Technology: Mini Case Examples and Implications", MIS Quarterly, March
