MANAGEMENT INFORMATION
SYSTEMS
Lecturer
Henry O.Quarshie
Introduction
• Information systems can play a vital role in
business success. They can provide the
information a business needs for efficient
operations, effective management, and
competitive advantage.
• However, information systems can fail. If
information systems do not properly support
the strategic objective, business operations or
management needs of an organization, they
can seriously damage it’s prospects for
survival and success. So, the proper
management of information systems is a
major challenge for managers.
Definition
• Management information systems are typically
computer systems used for managing. The five
primary components: 1.) Hardware, 2.) Software,
3.) Data (information for decision making), 4.)
Procedures ( design, development and
documentation), and 5.) People (individuals,
groups, or organizations).
• Management information systems are distinct
from other information systems because they are
used to analyse and facilitate strategic and
operational activities.
• Academically, the term is commonly used to
refer to the study of how individuals, groups,
and organizations evaluate, design,
implement, manage, and utilize systems to
generate information to improve efficiency
and effectiveness of decision making,
including systems termed decision support
systems, expert systems and executive
information systems.
The components of Information
system
• People resources
Specialists-systems analysts, programmers,
computer operators.
End users- anyone else who uses information
systems.
• Hardware Resources
Machines- computers, video monitors, magnetic
disk drive, printers, optical scanners.
Media – floppy disks, magnetic tape, optical
disks, plastic cards, paper forms.
• Software Resources
Programs- operating system programs,
spreadsheet programs, word processing
programs, payroll programs.
Procedures- data entry procedures, error
correction procedures, pay check distribution
procedures
• Data Resources
Product description, customer records,
employee files, inventory databases.
• Information Products
Management reports and business documents
using text and graphics displays, audio
responses, and paper forms.
The Roles of Information
• Information technology has reshaped the
world of business. For this reason, you should
view information systems strategically, that is,
as vital competitive networks, as a means of
organizational renewal, and as a necessary
investment in technologies that help an
enterprise achieve its strategic objectives.
• Information systems perform three vital roles
in any type of organisation.
1: Support Business Operations,
2: Support Managerial decision making
3: Support Strategic competitive advantage.
The strategic Role of Information
Systems
Information technology can be used to implement a
variety of competitive strategies.
• 1: Improving Business Processes:
Investments in information technology can help make a
firm’s operational processes substantially more
efficient, and its managerial processes much more
effective. By making such improvements to its
business processes a firm may be able to:
• 1. Dramatically cut costs
• 2. Improve the quality and customer service
• 3. Develop innovative products for new markets
• Promoting Business Innovation
Investments in information systems technology
can result in the development of new
products, services, and processes. This can:
• 1. Create new business opportunities
• 2. Enable a firm to enter new markets
• 3. Enable a firm to enter into new market
segments of existing markets
3: Lock In Customers & Suppliers
• Investments in information technology can also allow a business to
lock in customers and suppliers (and lock out competitors) by
building valuable new relationships with them. This can be
accomplished by:
• 1. Deters both customers and suppliers from abandoning a firm
for its competitors or intimidating a firm into accepting less
profitable relationships.
• 2. Offer better-quality service to customers allows a company to
differentiate themselves from their competitors.
• 3. Create interorganizational information systems in which
telecommunications networks electronically link the terminals and
computers of businesses with their customers and suppliers,
resulting in new business alliances and partnerships.
4: Creating Switching Costs
• A major emphasis in strategic information
systems is to build switching costs into the
relationships between a firm and its customers or
suppliers. That is, investments in information
systems technology can make customers or
suppliers dependent on the continued use of
innovative, mutually beneficial
interorganizational information systems.
• 5: Raising Barriers to Entry
Investment in information technologies that
increase operational efficiency can erect barriers
to entry for new players in the industry, and can
discourage firms already in the market. This can
be accomplished by:
• 1. Increasing the amount of investment or the
complexity of the technology required to
compete in a market segment.
• 2. Discourage firms already in the industry and
deter external firms from entering the industry
6: Leveraging a Strategic IT Platform
Information technology enables a firm to build a
strategic IT platform that allows it to take
advantage of strategic opportunities. Typically,
this means acquiring hardware and software,
developing telecommunications networks, hiring
information system specialists, and training end
users. A firm can then leverage investment in
information technology by developing new
products and services.
• 7: Developing a Strategic Information Base
Information systems allow a firm to develop a strategic
information base that can provide information to support
the firm's competitive strategies. A firms’ database is
considered a strategic resource which is used to support
strategic planning, marketing, and other strategic
initiatives. These resources are being used by firms in such
areas as:
• 1. Strategic planning
• 2. Marketing campaigns
• 3. Erecting barriers to entry for competitors
• 4. Finding better ways to lock in customers and suppliers
Solving business problem with Information
System
• There are five main phases in System
Approach:• 1. Define the problem:Define a problem or opportunity using system
thinking.
• 2. Developing alternative solution: - In this we
find the alternative solution of the giving
problem. Source of alternative solutions are:• Experience.
• Advice of others.
• Recommendation of consultants.
• Suggestion of expert system.
• Help from software package.
3. Select the solution: - Evaluation has been
done to meet the best solution for business
and personal requirement.
• 4. Design and Implementation:• After selecting a solution is must be designed
and implemented.
• Design specifies the detailed characteristics and
capabilities of the people, hardware, software
and all resources.
• In implementing stage we specify the resources,
activities and time needed for proper
implementation.
• 5. Post implementation review:• Results of implementing a solution should be
monitored and evaluated.
• The objective is to check that the
implemented solution meet the objectives of
business or not.
Using Technology to Change Business
• Over the last 10 to 15 years, technology has
drastically changed the attitude and processes
of the workplace. More importantly, the
continued evolution of telecoms and IT
technology is fuelling the on-going
transformation of the business environment
to take advantage of available tools and
opportunities.
• In Africa, as in many developing countries,
there can still be a tension between the
traditional practices and the improvements
that can be realised through technology. One
of the reasons for this standoff might be that
decision makers still have not fully appreciated
the irrevocable changes that technology had
brought to the workplace. There are five key
ways in which technology is changing the way
we do business.
• 1. Productivity. One of the early driving forces
supporting the take up and use of computers
were assertions that increased productivity could
be realised, thus allowing us more time to attend
to do other things. Indeed, the use of computers
has transformed the workplace as we know it. It
has driven down the cost of data processing, and
the ease with which large volumes of data can be
manipulated by and transferred between various
units within the organisation.
• Moreover, this increasing processing power,
along with the broad range of off-the-shelf
and customised hardware and software that
are available, have resulted in changing
employer and client expectation of work
quality.
• 2. Collaboration. In situations where persons
might not be in office physically, e.g. due to
teleworking arrangements or offsite work
assignments, and even to interact with clients,
technology is offering a number of
connectivity options that facilitate continued
discussion and collaboration among work
teams.
• 3. Resourcing. It is also changing the way
businesses are resourced. Two key examples
of this are:
• cloud computing, which allows a broad range
of resources, such as software applications,
hardware and infrastructure requirements,
such as storage and processing power, to be
accessed online, and
• outsourcing, where, thanks to technology,
companies can devolve or delegate different
aspects of their business to either affiliate or
third parties, but still remain connected and
have critical inputs to processes that have
remained in-house.
• 4. Interaction and participation. This point is readily
evident through the impact of social media in business.
In addition to the providing organisations with another
platform for marketing and promotion, and to
disseminate information, social media offers
consumers and the public a large, a voice. Many
organisations are beginning to capitalise on the
opportunities to secure feedback on their products and
services, and even to use the collaborative
environment that technology now fosters for
crowdsourcing initiatives, such as crowdcreation,
crowdvoting and even crowdwisdom.
• 5. Cost management. Invariably, increasing
competition is fostering an ever-growing need to
manage cost and streamline operations. Once
again, technology is providing cost-effective
alternatives, such expertise/labour and
computing resource outsourcing, and also with
respect to in-house solutions that can improve
the efficiency, productivity and performance of
the individual employee, and ultimately, that of
the organisation.
BUSINESS VALUE OF THE INTERNET
• The internet is faster than the traditional
selling method, which take longer time to
complete.
• Information about product are readily
available.
• Products can be sold or ordered 24 hours a
day, 7 days a week, 365 days a year without
the need for support staff.
• It creates the atmosphere of a global selling
place.
• It offers you a wider audience for products
and services
• A very good source for promoting your
corporate image.
• It is the lowest and cheapest form of
advertising.
• It enables companies to:
– showcase their product and services,
– provide up-to-date information on their
activities and products/services,
• It provides customers the ability to compare
products, check inventory and shipping times
independently.
• It saves time and eliminates many of the extra
costs that are associated with ordering and
traveling.
BUSINESS VALUE OF
TELECOMMUNICATION
• Telecommunication is the exchange of
information in any form ( voice, data, text,
images etc.) over computer-based networks.
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quick access to business information
reduced traveling costs
better contact with vendors
better contact with customers
better information about prices
reduces physical risks of traveling
enables local businesses to be reached (via
communication centres)
HARDWARE AND SOFWARE
EVALUATION FACTORS
• When an organization or an individual wants
to purchase a hardware or software its needs
to evaluate them before purchase. The
following are the steps to follow.
HARDWARE EVALUATION FACTORS
• 1: Performance: What are its speed, capacity,
and output.
• 2: Reliability: what are the risks of malfunction
and maintenance requirements?
• 3: Cost: what is its lease or purchase price?
What is its maintenance cost?
• 4: Availability: When is the firm delivery date?
• 5: Compatibility: Is it compatible with existing
hardware and software?
• 6: Modularity: Can it be expanded and
upgraded by acquiring modular “add on”
units?
• 7: Technology: Does it use a new untested
technology or run the risk of obsolescence?
• 8: Connectivity: Can it easily be connected to a
wide area and local area network of different
types of computers and peripherals?
• 9: Scalability: can it handle the processing
demands of a wide range of end-users,
transaction, queries etc ?
• 10: Software: Is the system and application
software available that can best use the
hardware?
SOFTWARE EVALUATING FACTORS
• 1: Efficiency: Is the software a well-developed
system of computer instructions or objects
that does not use much memory capacity or
CPU time?
• 2: Flexibility: Can it handle its processing
assignments easily without major
modification?
• 3: Security: Does it provide control procedures
for error, malfunctions, and improper use?
• 4: Language: Is it written in a programming
language that is used by our own computer
programmers?
• 5: Documentation: Is the software well
documented? Does it include helpful user
instruction?
• 6: Hardware: Does existing hardware have the
features required to best use the software?
• 7: Other factors: What are the its performance,
reliability, availability, compatibility, technology,
modularity, cost etc
Evaluation of Information system
services
1: Performance: What has been their past
performance in view of their past promises?
2: System development. Are systems analysis and
programming consultants available?
3: Maintenance: Is equipment maintenance
provided? What is its quality and cost?
4: Conversion: What systems development,
programming and hardware installation services
will they provide during the conversion period?
5: Training: Is the necessary training of
personnel provided? What is its quality and
cost?
6: Backup: Are several similar facilities available
for emergency backup?
7: Accessibility: Does the vendor have a local or
regional office that offers after sales services?
8: Business position: Is the vendor financially
strong with good industry market prospects?
Creating a Virtual Company
• A virtual company is an organization that uses
information technology to link people, assets, and
ideas. Six basic characteristics of successful virtual
companies include:
• 1. Adaptability
• 2. Opportunism (opportunity-exploiting organization)
• 3. Excellence
• 4. Technology
• 5. Borderless
• 6. Trust-based
• Forming virtual companies have become an important
competitive strategy in today’s dynamic global
markets. Information technology plays an important
role in providing computing and telecommunications
resources to support the communications,
coordination, and information flows needed.
• Managers of a virtual company depend on IT to help
them manage a network of people, knowledge,
financial, and physical resources provided by many
business partners to quickly take advantage of rapidly
changing model opportunities.
• Business strategies of virtual companies
include:
• 1. Share infrastructure and risk
• 2. Link complementary core competencies
• 3. Reduce concept to cash time through
sharing.
• 4. Increase facilities and market coverage.
• 5. Gain access to new markets and share
market or customer loyalty
• 6. Migrate from selling products to selling
solutions.
The Challenges of Strategic Information
Systems
• The IS function can help managers develop competitive
weapons that use information technology to
implement a variety of competitive strategies to meet
the challenges of the competitive forces that confront
any organization.
• Successful strategic information systems are not easy
to develop and implement. They may require major
changes in the way a business operates, and in their
relationships with customers, suppliers, competitors,
internal and external stakeholders, and others.
• Success and sustain ability depends on many
environmental and fundamental business
factors, and especially on the actions and
strategies of a company’s management team.
Sustained success in using information
technology strategically seems to depend on
three sets of factors:
• The Environment: a major environmental
factor is the structure of an industry.
• Foundation Factors - unique industry position,
alliance, assets, technological resources, and
expertise are foundation factors that give a
company a competitive edge in the market.
• Management Actions and Strategies
• - a company’s management must develop and initiate
successful actions and strategies that shape how
information technology is actually applied in the
marketplace. Examples include:
a. Preempting the market by being first and way ahead of
competitors in a strategic business use of IT.
b. Creating switching costs and barriers to entry
c. Developing strategies to respond to the catch-up moves of
competitors
d. Managing the business risks inherent in any strategic IT
initiatives
•