CHAPTER TWO:

FOUNDATIONAL CONCEPTS IN
MIS

What Is A
System?
 2.0 Introduction
“A system is defined as a set of interrelated

components, with a clearly defined boundary,

working together to achieve a common set of
objectives by accepting inputs and producing
outputs in an organized transformation process
• “An information system is an
organized combination of people,
hardware, software, communication
networks, and data resources that
collects, transforms and
disseminates information in an
organization.”-
 INFORMATION SYSTEM
 “Information System (IS) - A system that creates,
processes, stores, and retrieves information”
 The IS receives the inputs of the data and the
instructions, processes the data according to the
given instructions, and gives the output of the
processed results.
 Information system contains information about
significant people, places, and things within the
organization or in the environment surrounding it.
 INFORMATION SYSTEM RESOURCES
• Information system consists of five major
resources:
1. People
2. Hardware
3. Software
4. Data, and
5. Networks
1. People Resources
 Specialists-system analysts, software developers, system operators.

 End Users-anyone else who uses information system.

2. Hardware Resources
 · Machines- computers, video monitors, magnetic disk drivers,

 printers, optical scanners, optical disks

3. Software Resources
 · Programs-operating system programs, spreadsheet programs, word

processing programs, payroll programs.

4. Data Resources

 Product descriptions, customer records,

employee files, inventory database.

5. Network Resources

 ·Communications media, communications

processors, network access and control software.

 Information System Activities
1. Input: Optical scanning of bar-coded
tags on products.
2) Processing: Calculating employee pay,taxes, and
other payroll deductions.
3) Output: Producing reports and displays about sales
performance.
4) Storage: Maintaining records on customers,
employees, and products.
5) Control: Generating audible signals to indicate
proper entry of sales data.
 DIFFERENCES BETWEEN INFORMATION SYSTEM AND
INFORMATION TECHNOLOGY

An Information System is a tool that creates,

processes, stores, and disseminates information
to help managers make decisions.
Information Technologies on the other hand,
are technologies that support the design and
development of information system.
 2.1 Business and Management Functions
Business is an economic activity that involves the
exchange, purchase, sale or production of goods and
services with a motive to earn profits and satisfy
customers' needs.
A business is defined as an organization or
enterprising entity engaged in commercial, industrial,
or professional activities.
Businesses can be profit or non-profit organizations
that function to gain profits or achieve a social cause
 Business sector
• Agricultural sector
• Manufacturing Sector
• Health care Sector
• Education and Training Sector
• Food processing
• Tourism sector
• Textiles sector
• Beverage sector
• Energy sector
• Telecommunication sector
• Constriction sector
• Business management is the process of planning,
organizing, directing, and controlling the activities of
a business or organization to achieve its goals and
objectives.
• It involves overseeing all aspects of a business, from
finance and operations to marketing and human
resources.
 Business management skills
• Interpersonal skills
• Communication and motivation
• Delegation Skills
• Forward planning and strategic thinking
• Problem solving and decision-making
• Mentoring and evaluation skills
• Budget management skills
• Conflict resolution skills
• project management skills
 What is the d/b Management and MIS
 Focus:

 Management deals with overseeing and optimizing organizational

processes, resources, and people to achieve goals.

 MIS is centered around the technological and systematic facilitation of

information to aid management in decision-making.

 Nature:

 Management is a broader concept involving planning, organizing, leading,

and controlling.

 MIS is a specialized field focusing on the use of technology and systems to

manage information for managerial decision-making.

 Function:

 Management involves making strategic decisions, setting objectives, and ensuring the

organization operates efficiently.

 MIS deals with handling information, processing data, and providing relevant, timely,

and accurate information to support managerial decision-making.

 Scope:

 Management covers a wide range of activities, including human resources, finance,

operations, marketing, etc.

 MIS specifically focuses on the efficient management of information and technology

to support managerial decision-making across various organizational functions.

 Management Functions
• Management has been defined as a process of
getting things done through others.
• This processing is identified in a set of functions
performed by managers to accomplish the goals.
• A manager is thus someone who defines, plan,
guides, helps out and assesses the work of others.
• The following mentioned management functions
will involves creative problem solving
 1. Planning

• When you think of planning in a management

role, think about it as the process of choosing
appropriate goals and actions to pursue and
then determining what strategies to use, what
actions to take, and deciding what resources
are needed to achieve the goals.
 2. Organizing

This process of establishing worker relationships allows

workers to work together to achieve their
organizational goals.
3. Leading: This function involves articulating a vision,
energizing employees, inspiring and motivating people
using vision, influence, persuasion, and effective
communication skills.
 3. Staffing
Recruiting and selecting employees for positions
within the company (within teams and
departments)

4. Directing/ Leading – it is a process of

influencing, direct and motivating others/
employees to reach goals
5. Controlling is an integral part of the
management process, providing a mechanism
for managers to ensure that plans are being
executed effectively and the organization is
moving towards its intended goals.
 2.4 Information Needs of Managers
• Strategic Information: High-level executives need
information related to long-term planning, market
trends, industry analysis, and competitive intelligence.
• Tactical Information: Middle managers require
information that helps in implementing strategies,
coordinating between departments, and optimizing
processes.
• Operational Information: Frontline managers need
real-time and day-to-day information on tasks,
production schedules, inventory levels, and customer
feedback.
• Financial Information: Managers at all levels need
financial data, including budgets, cash flow
statements, and financial forecasts, to make informed
decisions about investments, cost-cutting, and
resource allocation.
• Human Resources Information: Information about
workforce performance, training needs, staffing
levels, and employee satisfaction is crucial for
managing personnel effectively.
• Market and Customer Information: Managers need
insights into customer preferences, market trends,
and feedback to develop products, create marketing
strategies, and improve customer service.
 Sources of Information for Managers:
• Internal Sources: Information generated
within the organization, such as reports,
databases, performance metrics, and
communication channels like meetings,
memos, and internal systems.
• External Sources: Information obtained from
outside the organization, including market
research reports, industry publications,
government statistics, competitor analysis,
and news sources.
• Government and Regulatory Sources:
Information from government agencies,
regulatory bodies, and industry associations
regarding legal, compliance, and industry-
specific regulations.
• Financial Statements and Reports: Annual
reports, financial statements, and market
analyses from financial institutions.
 2.5 A Framework for Information Systems

• A comprehensive framework for Information Systems (IS)

provides a structured approach to understanding,

developing, and managing various components that

comprise an organization's information system.

• widely used framework is the Information Systems

Framework that includes several key components:

 1. Technology
• Hardware: Physical devices and equipment used
to process data.
• Software: Applications and programs that enable
data processing and manipulation.
• Networks: Infrastructure that facilitates data
transmission and communication.
2. Data:
• Data Management: Processes and systems for
organizing, storing, and retrieving data.
• Databases: Structured collections of data used by
applications and systems.
 3. Processes:

• Business Processes: Organizational workflows and

procedures that dictate how data is used and
transformed to achieve specific objectives.
• Information Systems Processes: Procedures and
protocols governing the use and management of
information systems.
4. People:
• Users: Individuals interacting with information
systems to perform tasks or access information.
• IS Specialists: Professionals responsible for
designing, implementing, and maintaining
information systems.
 5. Information
• Information Flow: The movement of data and its
transformation into meaningful information for
decision-making.
• Information Quality: Ensuring data is accurate,
timely, relevant, and reliable.
6. Organizational Structure and Strategy:
• Alignment: Ensuring that IS aligns with
organizational goals and strategies.
• Governance: Policies and procedures governing
the use, management, and security of information.
 7. External Environment:
• Business Partners: Relationships with external
entities (suppliers, customers) impacting IS.
• Regulatory Environment: Compliance with legal
and regulatory requirements related to data and
information management.
8. Security and Risk Management:
• Security Measures: Policies and tools to protect
data and information systems from threats.
• Risk Assessment: Identifying potential risks and
vulnerabilities to information assets.
 9. Ethical and Social Issues:

• Ethical Use: Ensuring responsible and ethical

use of information.
• Social Implications: Addressing societal
impacts of information systems.
 2.6 Business Systems
• Business Systems refer to the integrated set of
processes, tools, technologies, and people
within an organization that work together to
achieve specific business objectives or
functions.
• These systems are designed to streamline
operations, improve efficiency, and support
decision-making across various departments
and functions. :
Components of Business Systems:
• Processes: Workflows, procedures, and methods that
define how tasks are executed and how data flows
within the organization.
• Technology and Tools: Hardware, software applications,
databases, and information systems used to automate
processes, manage data, and support operations.
• People: Employees, stakeholders, and users who
operate within the system and contribute to its
functioning and success.
• Data: Information generated, collected, stored, and
used by the business systems to support decision-
making and operations.
 Types of Business Systems:
• Enterprise Resource Planning (ERP) Systems:
– Integrates core business processes such as finance, HR,
supply chain, manufacturing, and customer relationship
management into a centralized system.
• Customer Relationship Management (CRM) Systems:
– Manages interactions with current and potential
customers, focusing on sales, marketing, and customer
service to improve relationships and retention.
• Supply Chain Management (SCM) Systems:
– Coordinates the flow of goods, information, and finances
across the supply chain, optimizing sourcing, production,
and distribution.
• Human Resource Information Systems (HRIS):
– Handles HR-related functions including payroll,
employee information, performance management, and
recruitment.
• Business Intelligence (BI) Systems:
– Gathers, processes, and analyzes data to provide insights
for better decision-making and strategic planning.
• Content Management Systems (CMS):
– Manages digital content creation, storage, and
publishing for websites or internal use.
• E-commerce Systems:
– Supports online transactions, sales, and customer
interactions for businesses operating in the digital space.
 Importance of Business Systems:
• Efficiency and Productivity: Streamlines processes,
reducing manual work and enhancing productivity.

• Data-Driven Decision Making: Provides access to

accurate, timely data for informed decision-making.

• Integration and Collaboration: Facilitates

communication and collaboration across departments.

• Improved Customer Service: Enhances customer

experience through better service and engagement.
 2.6.1 E-Business
• E-business, short for electronic business, refers
to conducting business activities using the
internet or electronic networks.
• It encompasses a wide range of business
processes and operations that leverage digital
technologies to facilitate various aspects of
commerce, including buying and selling goods
and services, managing relationships with
customers and partners, and conducting
transactions electronically.
 The key components and aspects of
E-business are
1. Online Commerce:
• E-commerce: Buying and selling products or
services online through websites or online
platforms.
• Online Marketplaces: Platforms that connect
buyers and sellers, facilitating transactions
between multiple parties.
• Digital Payments: Electronic payment methods
such as credit/debit cards, digital wallets, and
online payment gateways
 2. Digital Marketing:
• Online Advertising: Advertising products or services
through digital channels like social media, search
engines, and display ads.
• Email Marketing: Using email campaigns to reach and
engage with customers or prospects.
3. Customer Relationship Management (CRM):
• Customer Support: Providing customer service and
support through online channels like chat bots, emails,
and helpdesk systems.
• Customer Engagement: Building and maintaining
relationships with customers through online
interactions and feedback mechanisms.
 4. Supply Chain Management:
• Online Procurement: Purchasing goods or services
online from suppliers and managing the supply chain
digitally.
• Inventory Management: Tracking and managing
inventory levels using digital systems.
5. Online Presence and Branding:
• Website Development: Creating and maintaining
websites to showcase products/services and engage with
customers.
• Social Media Presence: Using social media platforms to
build brand awareness, engage with audiences, and drive
traffic.
6. Data Analytics and Business Intelligence:

• Data Collection and Analysis: Gathering and

analyzing data from online interactions to derive
insights for decision-making and strategy
formulation.
• Business Reporting: Generating reports and
dashboards to track online performance and
business metrics.
 Importance of E-Business:
• Global Reach: Allows businesses to reach a global
audience without geographical limitations.
• Cost Efficiency: Reduces operational costs compared
to traditional brick-and-mortar businesses.
• Improved Customer Experience:

• Provides convenience and accessibility to customers.

• Data-Driven Decision Making: Enables businesses to

collect and utilize data for better decision-making.
 THE END OF
CHAPTER TWO
 Self cake questions
1. What is MIS ?
2. What are the Function of MIS ?
3. What are the role of MIS in management ?
4. Components of a system ?
5. What are the Component of MIS
6. What is the Aim of MIS
7. What are the benefits of MIS
8. What is The Role of Information Systems in Business
9. What is the impact of information systems on
organizations