Information Processing and

Management (MBAd 531)

Instructor: Asmamaw T. (PhD)

September, 2020
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 CHAPTER ONE
OVERVIEW OF INFORMATION SYSTEM

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1.1 Basic Concepts
MIS
It is combination of three words i.e.

Management,
Information and
System.

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 MANAGEMNET
• Koontz’s definition of Management:
 “Management is the art of getting things done
through and with the efforts of other people”
(Koontz, 1972) 
 However, a manager gets things done by performing
basic managerial functions. These functions are:
Planning,
organizing,
staffing,
directing and
controlling 4
• Management can be extremely a creative endeavor.
• Managers are not bureaucrats. They do more than just
keep the trains running on time.
• Managers can also give organizations a sense of
purpose and direction.
• As Wal-Mart's founder Sam Walton was fond of
saying, they can motivate
“ordinary people to do extraordinary things.”
• They can transform organizations; create new ways
of producing and distributing goods and services; and
change how the world works through their actions.
• Think about what some of the greatest managers of
this era have done.
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• Sam Walton built Wal-Mart from scratch into the
largest retailer in the world.
• Lou Gerstner repositioned IBM from a troubled
manufacturer of mainframe computers into the
dominant provider of computer software services in
the world.
• Jack Welch reenergized General Electric,
transforming a tired engineering conglomerate into an
efficient, vibrant, entrepreneurial enterprise that set
the standard for excellence in many industries in
which it competed.

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• Steve Jobs of Apple Computer gave the world the
first mass marketed, easy-to-use personal computers;
and today Apple is still driving innovation with its
iPod music player, iPhone , iPad and Apple Watch.
• Meg Whitman provided the leadership that helped
eBay become the world’s first and most successful
online auction house, revolutionizing the auction
industry.
• Mark Zukerberg built facebook
• Sergey Brin and Larry Page have built one of the
largest and most profitable online enterprises in the
world, Google.
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• To perform these functions, a manager has to take a
variety of decisions.
• Decision-making is a fundamental prerequisite for
reach of the foregoing processes.
• Peter Drucker, a management guru, has gone to the
extent of saying :
“Whatever a manager does, he does it through
decision making.”
• Decision making is the essence of management.
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• An organization or individual that identifies more than one way
to solve a problem or a dilemma must make a decision.

– The problem “2+2=?”does not require decision making

because it has only one solution.

• However, as a manager, you might face a dilemma such as

“Which is the best way to promote the company’s new car?”

• There are many potential ways to promote the new car—

television advertising, radio advertising, newspaper advertising,
Web advertising, auto shows, direct mail, or any combination of
these methods. This dilemma calls for decision making.
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• Robert B Anthony, a management thinker, described
three levels of business activities carried out in
operating an organization:
 Operational Control (Operating Management )

 Management Control (Middle management) and

 Strategic Planning (Top Management)

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• In general we can say that
 Management is the process of allocating an
organization's inputs, including human and economic
resources, by planning, organizing, directing, and
controlling for the purpose of producing goods or
services desired by customers so that organizational
objectives are accomplished.

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 INFORMATION

• It is the second component of ‘MIS’.

• Information is considered as a fifth important resources of
along with the traditional four resources of money,
materials, men, and machines.
• Information is a Resource because:
– It is scarce
– It has a cost
– It has alternative uses
– There is an opportunity cost factor involved if one does
not process information
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• Information is a data which is processed and presented to
decision makers and helps them in making decisions.
• Information, in MIS, means the processed data that helps the
management in planning, controlling and operations.
• Data means all the facts arising out of the operations of the
concern.
• Data is processed i.e. recorded, summarized, compared and
finally presented to the management in the form of MIS
report.

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 Example

• Supermarket checkout counters scan millions of pieces of

data from bar codes, which describe each product.
• Such pieces of data can be totaled and analyzed to provide
meaningful information, such as the total number of bottles
of dish detergent sold at a particular store, which brands of
dish detergent were selling the most rapidly at that store or
sales territory, or the total amount spent on that brand of
dish detergent at that store or sales region.

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 SYSTEM

• The word ‘System’ is a set of elements that are inter-related

and interdependent to achieve a common goal.

• Data is processed into information with the help of a system.

• A system is made up of inputs, processing, output and

feedback or control.

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• A system is an integrated set of components, or entities,

that interact to achieve a particular function or goal.

• Systems have characteristics such as

– boundaries,

– outputs and inputs,

– methods of converting inputs into outputs, and

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 Systems Have Three Components or Functions
 Input:
 involves capturing & assembling elements that enter the
system to be processed.
 Processing:
 involves transformation process that convert input into
output.
 Output:
 involves transferring elements that have been processed
by the transformation process to their ultimate
destination. 17
 What is Cybernetic System?
• All systems have input, processing and output

• A cybernetic system, a self-monitoring, self-regulating

system, adds feedback and control
 Feedback:
 is data about the performance of a system
 Control:
 involves monitoring and evaluating feedback to
determine whether a system is moving towards the
achievement of its goals.
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 Example- Cybernetic system

1. A familiar example of self-monitoring, self-regulating

system is the thermostat-controlled heating system found
in many homes,
 which automatically monitors and regulates itself to
maintain a desired temperature on the basis of
feedback it gets from the environment.

2. Another example is the human body,

 which can be regarded as a cybernetic system that
automatically monitors and adjusts many of its

01/25/2021
functions, such as temperature, heartbeat, and19
 1. A business also has many control activities. For example,
 Computers may monitor and control manufacturing
processes,
 Accounting procedures help control financial systems,
 Data entry displays provide control of data entry
activities, and
 Sales quotas and sales bonuses attempt to control sales
performance.

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• In general, systems are composed of interrelated and
interdependent sub-systems.
• Examples of systems are all around us-in fact; an excellent
example is your class.

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• A business is also a system. A business uses resources such
as people, capital, materials, and facilities to achieve the
goal of making a profit.
• Business procedures, such as order handling, marketing
research, financial planning, and manufacturing, are the
interactions that need to be managed to achieve this
objective.

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 AABusiness
Businessas
asaaSystem
System
The Community Competitors

Control

Management
Government Customers
Agencies

Feedback
Information
Systems

Economic Resources:
•People
•Money Goods & services
•Material Business Processes: •Products
•Machinery •Production •Services
•Land •Marketing •Payments
Suppliers
•Facilities •Finance •Contributions Stockholders
•Energy •Personnel •Information
•Information •Other processes •Other effects

Input Processing Output

Financial Institutions Labor Unions

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 MANAGEMENT INFORMATION SYSTEM (MIS)

• A system which consists of people, machines, procedures,

databases and data models as its components is known as
Management Information System.
• This system collects data from external and internal sources
of an organization, analyzes it and supplies management
information to managers and helps them in making
decisions.

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• MIS is the system, which makes available the right
information
– to the right person,
– at the right place,

– at the right time,

– in the right form and
– at the right cost.

• According to G.B. Davis, “MIS is a man or machine that

provides information to support management in decision
making process.”
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• Management Information System or 'MIS' is a planned

system of collecting, storing, and disseminating data in the

form of information needed to carry out the functions of

management.

• It is the study of information systems focusing on their use

in business and management.

• MIS is defined as a system which provides information

support for decision making in the organization.

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• MIS is defined as a Computer – based Information System.
• MIS involve three primary resources: technology,
information, and people.
• MIS provides managers with information and support for
effective decision making, and provides feedback on daily
operations.

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 Outputs of Management Information System

• Scheduled reports
• Produced periodically, or on a schedule (daily, weekly,
monthly)
• Key-indicator report
• Summarizes the previous day’s critical activities
• Typically available at the beginning of each day
• Demand report

• Gives certain information at a manager’s request

• Exception report
• Automatically produced when a situation is unusual or
requires management action 29
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 Objectives of MIS

• Capturing Data: Capturing contextual data, or operational

information that will contribute in decision making from

various internal and external sources of organization.

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• Processing Data: The captured data is processed into
information needed for planning, organizing, coordinating,
directing and controlling functionalities at strategic, tactical
and operational level. Processing data means:
– making calculations with the data
– sorting data
– classifying data and
– summarizing data

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• Information Storage: Information or processed data need
to be stored for future use.
• Information Retrieval: The system should be able to
retrieve this information from the storage as and when
required by various users.
• Information Propagation (dissemination): Information or
the finished product of the MIS should be circulated to its
users periodically using the organizational network.

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 Features of Management Information System

• Provides reports with fixed and standard formats

– Hard-copy and soft-copy reports
• Uses internal data stored in the computer system
• End users can develop custom reports
• Requires formal requests from users

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 Components of MIS

1. People: play roles in developing software and hardware,

and implementing them into their work routines.

2. Hardware

3. Software: set of instructions

4. Database/Data warehouse: the repository of organizational

data from within and outside the organization

5. Network:
6. Processes: includes business processes, procedures and
policies of the organization.
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 Information System and Information Technology
• Information systems are combinations of hardware,
software, and telecommunications networks that people
build and use to collect, create, and distribute useful data,
typically in organizational settings.”
• Information systems are made up of different components
that work together to provide value to an organization.
• Information systems are made up of six components:
 hardware, software, data, communication technologies
people, and Process.
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• The first four, fitting under the technology category.
• But the last two, people and process, are really what
separate the idea of information systems from more
technical fields, such as computer science.
• In order to fully understand information systems, students
must understand how all of these components work together
to bring value to an organization.

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 The Evolution and Features of the Information Age
• Agricultural Age: The period up to the 1800s, when the
majority of workers were farmers whose lives revolved
around agriculture.
• Industrial Age: The period from the 1800s to 1957, when
work processes were simplified through mechanization and
automation.

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• Information Age: The period that began in 1957, in which
the majority of workers are involved in the creation,
distribution, and application of information.
• Knowledge Workers: Workers involved in the
creation, distribution, and application of information.

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The Evolution of the Information Age

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 The Features of the Information Age

• An information-based society has arisen.

– Information Society: A society in which more people
work at handling information than at agriculture and
manufacturing combined.
• Businesses depend on information technology to get their
work done.

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• Work processes are being transformed to increase
productivity.
– Work Processes: The combination of activities that
workers perform, the way they perform those activities,
and the tools they use.
– Productivity: The relationship between the results of an
activity (output) and the resources used to create those
results (inputs).

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• Information technology provides the means to
rethink/recreate/reengineer usual business processes.
• Success in business is largely determined by the
effectiveness with which information technology is used.
• Reengineering efforts to attain greater productivity:
– Industrial Age - Division of Labor: Separation of work
process into component task, with different workers
specializing in each of the tasks.
– Information Age – Teamwork, Interconnection, and
Shared Information.

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 Data, Information, Knowledge and Wisdom

• The DIKW pyramid, also known as the DIKW

hierarchy, wisdom hierarchy, knowledge
hierarchy, information hierarchy, and the knowledge
pyramid.
• It shows the relationships between data, information,
knowledge and wisdom.
• Information is defined in terms of data, knowledge in terms
of information, and wisdom in terms of knowledge.
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DIKW Pyramid

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 Data
• The word data is the plural of datum , though
data commonly represents both singular and plural
forms.
• Data are raw facts or observations, typically about
physical phenomena or business transactions.
• People often use the terms data and information
interchangeably.
• However, it is better to view data as raw material
resources that are processed into finished information
products.
• Then we can define information as data that have been
converted into a meaningful and useful context for
specific end users. 46
• Example: Names, quantities, and dollar amounts
recorded on sales forms represent data about sales
transactions. However, a sales manager may not regard
these as information.
• Only after such facts are properly organized and
manipulated can meaningful sales information be
furnished and specify,
• For example, the amount of sales by product type,
sales territory,
or salesperson.

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• Data: Unorganized and unprocessed facts; static; a set of
disconnected facts about events.
• Data comprises facts, observations, or perceptions
• Data represents raw numbers or assertions.
• Data are raw facts and figures that on their own have no
meaning.
• These can be any alphanumeric characters i.e. text, numbers,
symbols.
Data Examples
• Yes, Yes, No, Yes, No, Yes, No, Yes
• 42, 63, 96, 74, 56, 86
• 111192, 111234
• None of the above data sets have any meaning until they are
given a CONTEXT and PROCESSED into a useable form.
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 Data into Information

• To achieve its aims the organisation will need to process

data into information.
• Data needs to be turned into meaningful information and
presented in its most useful format.
• Data must be processed in a context in order to give it
meaning.

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 Information
• Information means the words, numbers, graphics that are
displayed or printed as the basis for making decisions.
• Information is the result derived by processing data.
• Information is processed data.
• Information is a subset of data, only including those data
that possess context, relevance and purpose.
• Information involves manipulation of raw data.
• Aggregation of data that makes decision making easier.
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• Information is created by analyzing relationships and
connections between the data.
• It is capable of answering simple “Who/What/Where/How
many/When/Why is” style questions

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 Characteristics of Information

Now, let us discuss about the characteristics of good

information
1. Timeliness: Information must reach the user in a timely
manner, just when it is needed; not too early, because by
the time it is used it would be out-of-date; not too late
because the user will not be able to incorporate it into
his/her decision-making.

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2. Appropriateness: Information must be relevant to the
person who is using it.
• It must be within the sphere of his/ her activities so that it
can be used to reduce uncertainty in his/her decision-
making.

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3. Accuracy: We don’t always need 100% accurate
information so long as we know the degree of accuracy it
represents (eg: + or - 5%).

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4. Conciseness: (Level of detail)- Information should always
contain the minimum amount of detail that is appropriate
for the user.
• Too much detail causes information overload.

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5. Frequency: Frequency is related to timeliness. Too often
the information presented is linked to the calendar (end of
the week, beginning of the month); its frequency should be
synchronized with the timing of the decision making of the
user.

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6. Understandability: The format and presentation of
information are very important. Some people prefer tabular
information, whereas others may need it in a graphical form.
• Also the use of colors enhances the understandability of
what is presented.

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7. Relevant: It pertains to the particular problem. What data
is relevant depends on the decision-making model used.
E.g. university admissions officials may choose to consider the
results of some high-school test irrelevant, if they believe
that it does not improve the chances of some applicant later
becoming a successful student.

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8. Complete: All the relevant parts are included. E.g.
marketing data about household incomes may lead to bad
decisions, if not accompanied by consumption habits of the
target population.

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9. Current: Decisions are often based on the latest information
available.

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10. Economical: The costs of gathering information should be
justified by the overall benefits.

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 Knowledge

• Knowledge is the understanding of rules needed to interpret

information
“…the capability of understanding the relationship
between pieces of information and what to actually do
with the information”
• Knowledge represents a pattern that connects and generally
provides a high level of predictability as to what is
described or what will happen next.
• Example: If the humidity is very high and the temperature
drops substantially the atmospheres is often unlikely to be
able to hold the moisture so it rains.

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• Knowledge is facts, information, and skills acquired through
experience or education; the theoretical or practical
understanding of a subject.
• Education and experience create knowledge in humans.
• In some cases, this knowledge can be transferred to
specialized.

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Example
Data
• chocolate, strawberry, vanilla, strawberry, vanilla,
vanilla, strawberry, vanilla, vanilla
• Information - this is a list of flavor of ice cream sales
yesterday.
• The data now has some context and so make sense. A bit of
analysis is useful to glean more information.
For example, the most popular flavor of ice cream sold
yesterday is vanilla.
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Knowledge
• The shop manager can see that vanilla is the most
popular ice-cream flavor. Next time he places an order,
he will ask for five times as much vanilla ice-cream than
chocolate ice-cream.

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For example
• Data: movie listings giving the times and locations of
all movies being shown today —I download the
listings.
• Information: For example, I can’t leave before 5, so I
will go to the 7 pm show at the cinema near my office.
• Knowledge: At that time of day, it will be impossible
to find parking. I remember the last time I took the
car, I was so frustrated and stressed because I thought
I would miss the opening credits. I’ll therefore take
the commuter train. But first, I’ll check with John. I
usually love all the movies he hates, so I want to make
sure it’s worth seeing!
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 Wisdom
• Wisdom is more difficult to define but represents the ability
to learn from experience and adapt to changing conditions.
• Wisdom enables a manager to spot trends, identify potential
problems, and develop new techniques to analyze the data.
• Knowledge, is “information gained through experience,
reasoning.” Knowledge can exist without wisdom, but not
the other way around. One can be knowledgeable without
being wise.

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• Knowledge is knowing how to use a gun; wisdom is
knowing when to use it and when to keep it holstered.
• Knowledge is gathered from learning and education, while
most say that 
• wisdom is gathered from day-to-day experiences and is a
state of being wise.

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Knowledge:
• Knowing or understanding something, especially about a
particular subject
• Having awareness of facts and/or truths
• Something that can be known, information

Wisdom:
• The state of being wise
• The ability to use knowledge and/or experience intelligently
• Capable of determining what is wise vs. what is unwise

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 A Sequential Process of Knowing

Understanding supports the transition from one stage to the

next, it is not a separate level in its own right

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 Rate of Motion towards Knowledge
• What is this (note the point when you realise what it is but do
not say)
 I have a box.
 The box is 3' wide, 3' deep, and 6' high.
 The box is very heavy.
 When you move this box you usually find lots of dirt
underneath it.
 Junk has a real habit of collecting on top of this box.
 The box has a door on the front of it.
 When you open the door the light comes on.
 You usually find the box in the kitchen.
 It is colder inside the box than it is outside.
 There is a smaller section inside the box with ice in it.
 When I open the box it has food in it.
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• It was a refrigerator
• At some point in the sequence you connected with the
pattern and understood
• When the pattern connected the information became
knowledge to you
• If presented in a different order you would still have
achieved knowledge but perhaps at a different rate

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 Knowledge Management

• Are you and your company actively managing

knowledge? (Photo credit: Microsoft Free Clip
Art)

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• In an economy where the only certainty is uncertainty,
the one sure source of lasting competitive advantage is
knowledge. I. Nonaka (1995)

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• Although knowledge is increasingly being viewed as a
commodity or an intellectual asset, it possesses some
paradoxical characteristics that are radically different
from those of other valuable commodities.
• These knowledge characteristics include the
following:
– Use of knowledge does not consume it.
– Transferrable of knowledge does not result in losing
it.
– Knowledge is abundant, but the ability to use it is
scarce.
– Much of an organization’s valuable knowledge
walks out the door at the end of the day.
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• Knowledge Management, (KM) is a concept and a term that
arose approximately two decades ago, roughly in 1990.
• Very early on in the KM movement, Davenport (1994)
offered the still widely quoted definition:
• "Knowledge management is the process of capturing,
distributing, and effectively using knowledge."

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• Gartner Group created another second definition of KM, which
is perhaps the most frequently cited one (Duhon, 1998):
– "Knowledge management is a discipline that promotes an
integrated approach to identifying, capturing, evaluating,
retrieving, and sharing all of an enterprise's information
assets.
– These assets may include databases, documents, policies,
procedures, and previously un-captured expertise and
experience in individual workers."

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• Knowledge management (KM) is the process of creating,
sharing, using and managing the knowledge and information
of an organization. 
• It refers to a multi-disciplinary approach to achieving
organizational objectives by making the best use of
knowledge.
• Knowledge management refers to the set of business
processes developed in an organization to create, store,
transfer, and apply knowledge.
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• Knowledge management increases the ability of the
organization to learn from its environment and to
incorporate knowledge into its business processes.
• Knowledge management efforts typically focus on
organizational objectives such as
– improved performance, 
– competitive advantage, 
– innovation,
– the sharing of lessons learned,
– integration, and 
– continuous improvement of the organization. 

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 Types of Knowledge

1. Tacit knowledge
2. Explicit knowledge
Let us discuss one by one:
1. Tacit Knowledge
• Knowledge residing in the minds of employees that has not
been documented is called tacit knowledge.
• Tacit knowledge (knowing-how): knowledge embedded in
the human mind through experience and jobs. Know-how
and learning embedded within the minds of people.
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2. Explicit Knowledge
• Knowledge that has been documented is called explicit
knowledge.
• It is knowledge codified and digitized in books, documents,
reports, memos, etc.
• Documented information that can facilitate action.
• Knowledge what is easily identified, articulated, shared and
employed.
• Knowledge can reside in e-mail, voice mail, graphics, and
unstructured documents as well as structured documents.
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• Knowledge is generally believed to have a location, either in
the minds of humans or in specific business processes.

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83
 The Knowledge Creation Process

• Knowledge creation consists of a social process between

individuals in which knowledge transformation is not
simply a unidirectional process but it is interactive and
spiral.
• According to Nonaka and Takeuchi, there are four modes
of knowledge conversion that constitute the “engine” of
the entire knowledge-creation process.

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 Knowledge Conversion
There are four modes of knowledge conversion:
1. From tacit knowledge to tacit knowledge: the process
of socialization.
2. From tacit knowledge to explicit knowledge: the
process of externalization.
3. From explicit knowledge to explicit knowledge: the
process of combination.
4. From explicit knowledge to tacit knowledge: the
process of internalization.

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86
• Tacit-to-tacit (socialization) - individuals acquire knowledge
from others through dialogue and observation
• Tacit-to-explicit (externalization) - the articulation of
knowledge into tangible form through elicitation and
documentation
• Explicit-to-explicit (combination) - combining different forms
of explicit knowledge, such as that in documents or databases
• Explicit-to-tacit (internalization) - such as learning by doing,
where individuals internalize knowledge into their own mental
models from documents.

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 Knowledge management Systems

• Knowledge management system consists of acquisition,

storing, disseminating and applying knowledge.

Acquire
Store Disseminate Apply

Knowledge Knowledge Intranet Portals

Discovery Databases Search Engines
Social Networks

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1. Knowledge Acquisition
• Organizations acquire knowledge in a number of ways,
depending on the type of knowledge they seek.
It includes:
• Corporate repositories of documents, reports, presentations,
and best practices.
• Unstructured documents (such as e-mail).
• Organizations can also create new knowledge by discovering
patterns in corporate data or by using knowledge workstations
where engineers can discover new knowledge.
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2. Knowledge Storage
• Once they are discovered, documents, patterns, and expert
rules must be stored so they can be retrieved and used by
employees.
• Knowledge storage generally involves the creation of a
database.

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3. Knowledge Dissemination
• Portals, e-mail, instant messaging, social networks, social
business tools, and search engines technology have added to
an existing array of collaboration tools for sharing
calendars, documents, data, and graphics.

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4. Knowledge Application
• Regardless of what type of knowledge management system
is involved, knowledge that is not shared and applied to the
practical problems facing firms and managers does not add
business value.
• To provide a return on investment, organizational knowledge
must become a systematic part of management decision
making and become situated in systems for decision support.

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 The importance of Knowledge Management

Why knowledge management is important to the success of a

company?

Three key reasons why actively managing knowledge is important

to a company’s success are:

1. Facilitates Decision-Making Capabilities

2. Builds Learning Organizations by Making Learning Routine

3. Stimulates Cultural Change and Innovation

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1. Facilitates Decision-Making Capabilities
• Data can offer managers a wealth of information but
processing overwhelming amounts can get in the way of
achieving high-quality decisions.
• While information overload or needing knowledge from
people in other parts of the company for decision-making can
handicap managers, putting in place knowledge management
systems can facilitate better, more informed decisions.

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2. Builds Learning Organizations by Making Learning
Routine
• A learning organization is an organization that
encourages and facilitates learning in order to continually
transform itself to survive and excel in a rapidly changing
business environment. 
• Author David Garvin (2000) notes that “To move ahead,
one must often first look behind”.
• Learning organizations created a culture where everyone
continuously assesses themselves, their units, and their
organization, looking for ways to improve.
• This approach to capturing learning from experience
builds knowledge that can then be used to streamline
operations and improve processes.
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3. Stimulates Cultural Change and Innovation
• Actively managing organizational knowledge can also
stimulate cultural change and innovation by encouraging the
free flow of ideas.
• In this complex, global business environment, knowledge
management programs can help managers embrace change
and encourage ideas and insight, which often lead to
innovation.

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Bottom Line
• Fortune 500 companies lose roughly “$31.5 billion a year by
failing to share knowledge”, a very scary figure in this global
economy filled with turbulence and change.
• Actively managing knowledge can help companies increase their
chances of success by facilitating decision-making, building
learning environments by making learning routine, and
stimulating cultural change and innovation.
• By proactively implementing knowledge management systems,
companies can re-write the old saying,
“Change is inevitable, growth is optional” to “Change is
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inevitable, growth is intentional.”
 TYPES
TYPESOF
OFIS
IS
INFORMATION
SYSTEMS

Operations Support systems Management Support Systems

Transaction Process Enterprise Management Decision Executive

Processing Control Collaboratio Information Support Information Specialized
Systems Systems n Systems Systems Systems Systems Processing
Systems
Specialized
Processing
Knowledge Strategic
Systems Expert Functional Business
Management Information
Systems Systems
Systems Systems

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 Types
Typesof
ofIS…
IS…

1. Operations Support Systems

What are they?
Efficiently process business transactions
Control industrial processes
Support office communications and collaborations
Update corporate databases

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Types of Operations Support Systems-

I. Transactions Processing Systems:

 Record and process data from business transactions
 Examples: sales processing, inventory systems, accounting
systems

II. Process Control Systems:

 Monitor and control physical processes
 Example: In a petroleum refinery use sensors to monitor
chemical processes

III. Enterprise Collaboration Systems:

 Enhance team and workgroup communications
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 Example: e-mail, videoconferencing
Two ways to Process Transactions
 Batch Processing:
 Accumulate transactions over time and process periodically
 Example: a bank processes all checks received in a batch at night

 Online Processing:
 Process transactions immediately
 Example: a bank processes an ATM withdrawal immediately

2. Management Support Systems

 What are they?

 Provide information, and
 Support for effective decision making by managers

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 Types of Management Support Systems

I. Management Information Systems (MIS):

 Provide reports and displays to managers
• Example: Daily sales analysis reports

II. Decision Support Systems (DSS):

 Provide interactive and ad hoc support for decision making
 Example: A what-if-analysis to determine where to spend
advertizing dollars

III. Executive Information Systems (EIS):

 Provide critical information for executives and managers
 Example: Easy access to actions to competitors
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 3) Specialized Information Systems

4) Expert Systems:
 Uses knowledge about a specific area to provide expert
advice to users
 Example: Credit application advise

5) Knowledge Management Systems:

 Support creation, organization and dissemination of
business knowledge throughout company
 Example: Intranet access to best business practices

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Measuring Success of an IS
Efficiency:
 Minimize cost, time and use of information resources

Effectiveness:
 Support business strategies
 Enable business processes
 Enhance organizational structure and culture
 Increase the customer and business value

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 2.2. Developing
DevelopingIS
ISSolutions
Solutions
is a major responsibility of today’s managers

They are responsible for proposing or developing new or

improved information systems for their organizations
This section helps to show how information system
solutions that meet the business needs of end users and
their organizations can be developed.

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 The
TheSystems
SystemsDevelopment
DevelopmentLife
LifeCycle
Cycle
 When the systems approach to problem solving is applied to the
development of information system solutions to business
problems:
 It’s called information systems development or application
development.
 When the systems approach is applied to the development of
information system solutions, a multiple process or cycle emerges
 Frequently called the systems development cycle, or
systems development life cycle (SDLC)

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 The
TheProcess
Processof
ofDeveloping
DevelopingInformation
InformationSystem
SystemSolutions
Solutions
 Steps-
1. Investigate

Developing 2. Analysi
5. Maintain Information s
Systems
Solutions
3. Design
4. Implement

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1. Systems Investigation
 the 1st stage in the systems development process.
 preliminary study of proposed IS solutions to business
problems.
 Activities
 Determine whether a business problem or opportunity exists.
 Conduct a feasibility study to determine whether a new or
improved information system is feasible solution.
 Develop a project management plan and obtain management
approval.
 Product
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 Feasibility Study 108
 2. Systems Analysis- is in detail study of end user information
needs.
Activities
 Analyze the information needs of end users, the
organizational environment, and any system presently
used.
 Develop the functional requirements of a system that can
meet the needs of end users.
Product
 Functional Requirements
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 3. Systems Design
Activities
 Develop specifications for the hardware, software, people,
and data resources, and the information products that will
satisfy the functional requirements of the proposed system.
Product:
 System Specification

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 4. Systems Implementation
Activities
 Acquire (or develop) hardware and software.
 Test the system, and train people to operate and use it.
 Convert to the new system

Product:
 Operational System

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 5. Systems Maintenance
Activities:
 Use a post-implementation review process to monitor,
evaluate, and modify the system as needed.
Product:
 Improved System

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