Chapter Nine
Management Information Systems
Learning Objectives
⦿ Get an overview on data, information and
information system
⦿ Know why information systems and
information technology are so important for
running and managing a business today
⦿ Get idea about Enterprise Resource
Planning (ERP), Customer Relationship
Management (CRM), Decision Support
System (DSS), Business Intelligence
System(BIS)and Supply Chain Management
(SCM).
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MIS–Management Information System
If we want to understand MIS, we have to
understand what is
- Management?
- Information?
- System?
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What is Management?
⦿ Effective utilization of human and material
resources to achieve the enterprise objective.
(Man, Material, Machine, Money, Method)
⦿ It is a process consisting of the five
basic functions:
o Planning
o Organizing
o Staffing
o Directing
o Controlling
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Data and Information
Data:
Data are streams of raw facts representing events
occurring in organizations or the physical
environment before they have been organized
and arranged into a form that people can
understand and use.
Information:
When data is processed, organized, structured or
presented in a given context, to make it useful
then it is called information.
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What is System?
⦿ System- Set of components or subsystems that work
together to achieve a common goal.
Ex. Education System
Political System
National System
Information System
⦿ Subsystem- one part of a system where the products
of more than one system are combined to reach an
ultimate goal.
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Management Information System
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What is MIS?
⦿ Management Information System (MIS) is an
information system that evaluates, analyzes and
processes an organization's data to produce
meaningful and useful information on which the
management will take right decision to ensure
future growth of the organization.
⦿ The purpose of MIS is the smooth running of the
business by providing information about the
organization. Employees from different levels
will then evaluate this information so that
decisions can be made to ensure that the
business remains competitive and successful.
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Information System
An information system can be defined technically as a set
of interrelated components that collect (or retrieve),
process, store, and distribute information to support
decision making and control in an organization.
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Components of Information System
⦿ Hardware is a device such as a processor, monitor,
keyboard or printer
⦿ Software is a program or collection of programs that
enable hardware to process data.
⦿ Database is a collection of related files or tables
containing data.
⦿ Network is a connecting system (wired or wireless) that
permits different computers to share resources.
⦿ Procedures are the set of instructions about how to
combine the above components in order to process
information and generate the desired output.
⦿ People are those individuals who use the hardware and
software, interface with it, or use its output.
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Role of Information System in Business
⦿ Information systems are a foundation for
conducting business today.
⦿ In many industries, survival and the ability to
achieve strategic business goals are difficult
without extensive use of information technology.
⦿ Businesses today use information systems to
achieve six major objectives:
• operational excellence
• new products, services, and business models
• customer/supplier intimacy
• improved decision making
• competitive advantage and
• day-to-day survival.
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Information Technology
⦿ Information technology (IT) consists of all the
hardware and software that a firm needs to
use in order to achieve its business
objectives.
⦿ This includes not only computer machines,
storage devices, and handheld mobile
devices, but also software, such as the
Windows or Linux operating systems and the
many thousands of computer programs.
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Major Enterprise Applications
⦿ Enterprise applications are specifically designed for the
sole purpose of promoting the needs and objectives of the
organizations.
⦿ These applications provide business-oriented tools
supporting electronic commerce, enterprise
communication and collaboration and web-enabled
business processes both within a networked enterprise and
with its customers and business partners. Most commonly
used enterprise applications are:
1) Enterprise Resource Planning (ERP)
2) Customer Relationship Management (CRM)
3) Decision Support System (DSS)
4) Business Intelligence System (BIS)
5) Supply Chain Management (SCM)
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Enterprise Resource Planning (ERP)
⦿ Enterprise resource planning - often
called ERP, ERP system, or ERP software -
can be defined as a system that helps
organizations manage their financials,
supply chain, manufacturing, operations,
reporting, and human resources.
⦿ Most ERP systems can be deployed
on-premises or in the cloud, to improve
and automate the core parts of your
business.
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Customer Relationship Management (CRM)
⦿ Firms use customer relationship management
(CRM) systems to maintain their relationships
with their customers.
⦿ CRM systems provide information to coordinate
all of the business processes that deal with
customers in sales, marketing, and service to
optimize revenue, customer satisfaction, and
customer retention.
⦿ This information helps firms identify, attract, and
retain the most profitable customers; provide
better service to existing customers and
increase sales.
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Decision Support System (DSS)
⦿ Decision support systems are interactive software-based
systems intended to help managers in decision making by
accessing large volume of information generated from
various related information systems involved in
organizational business processes, like, office automation
system, transaction processing system etc.
⦿ DSS uses the summary information, exceptions, patterns
and trends using the analytical models.
⦿ Decision Support System helps in decision making but
does not always give a decision itself.
⦿ The decision makers compile useful information from raw
data, documents, personal knowledge, and/or business
models to identify and solve problems and make decisions.
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Business Intelligence System (BIS)
⦿ Business Intelligence System is a contemporary
term for data and software tools for organizing,
analyzing, and providing access to data to help
managers and other enterprise users make more
informed decisions.
⦿ The goal of BIS is to allow for the easy
interpretation of the large volumes of data.
⦿ Identifying new opportunities and implementing
an effective strategy based on insights can
provide businesses with a competitive market
advantage and long-term stability.
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Supply Chain Management (SCM)
⦿ Supply chain management (SCM) systems help to manage
relationships with their suppliers.
⦿ These systems help suppliers, purchasing firms,
distributors, and logistics companies to share information
about orders, production, inventory levels, and delivery of
products and services so that they can source, produce, and
deliver goods and services efficiently.
⦿ The ultimate objective is to get the right amount of their
products from their source to their point of consumption in
the least amount of time and at the lowest cost.
⦿ These systems increase firm profitability by lowering the
costs of moving and making products and by enabling
managers to make better decisions about how to organize
and schedule sourcing, production, and distribution.
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Exercise
1. What is MIS? Write down the purpose of MIS.
2. Why we need Enterprise Resource Planning (ERP)?
3. How do customer relationship management systems help
firms to achieve customer intimacy?
4. What are the characteristics of Business Intelligence System?
5. What are the objectives of Supply Chain Management (SCM)?
6. Differentiate between data and information.
7. Why information systems are so important in business today?
8. What are main components of an information
system?
9. What is decision support system?
10. Define IS and IT.
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Thank You
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