MANAGEMENT INFORMATION SYSTEMS Part 1 SOME DEFINITIONS AND WAYS OF INFORMATION SYSTEM DEVELOPMENT

1
MANAGEMENT INFORMATION SYSTEMS Part 1SOME
DEFINITIONS AND WAYS OF INFORMATION SYSTEM
DEVELOPMENT

• Prof. Witold Chmielarz, PhD ,
• Velimir Tasic MSc, Oskar Szumski, PhD
• Faculty of Management University of Warsaw

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Poland in the world
Warsaw
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COURSE OBJECTIVES

• Introduction of the main directions of the
  systems development, a new trends, and a new
  logical architectures of the systems
• Characteristics of the main management
  information systems, their components and
  features
• Presentation of the concepts and practical
  applications of various types of information
  systems in the business organizations
• Illustration how management information systems
  have been helpful in enhancing effectiveness of
  organizations
• Demonstration the use of IT in designing and
  implementing MIS
• Analyzing of e-business as one of the modern
  ideas of MIS
• Presentation of modern MIS applications in
  specific areas in Poland

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COURSE BRIEF CONTENTS (only part with WCH)
Sessions Coverage References
1 DEFINITIONS AND WAYS OF INFORMATION SYSTEM DEVELOPMENT Turban E., at al, Laudon K. C., Laudon J. P, Chmielarz W.
2 CHARACTERISTICS AND FEATURES OF MIS Turban E., at al, Laudon K. C., Laudon J. P
3 INTEGRATED ENTERPRISE SYSTEMS Turban E., at al, Laudon K. C., Laudon J. P
4 e-COMMERCE AND e-BANKING Laudon K. C., Laudon J. P, Chmielarz W.
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REFERENCES (textbooks)

• Main
• Turban E., at al Information Technology for
  Management. Transforming Organizations in the
  Digital Economy, John Wiley and Sons Inc. 6-th
  ed., 2011,
• Laudon K. C., Laudon J. P. Management
  Information Systems, Pearson Education Inc.,
  Prentice Hall, NY, 9-th ed. 2010.
• Internet http//www.wz.uw.edu.pl/wykladowcy,profi
  l,9,pliki,13.html
• Additionally
• Chmielarz W. Selected Problems of IT
  Development, Wydawnictwo Naukowe WZ UW, Warsaw,
  2005,
• Bocij P., Chaffey D., Greasley A., Hickie S.
  Business Information Systems, 2-nd ed., Prentice
  Hall, Harlow, 2003,
• Turban E., Lee J., King D., McKay J., Viehland
  D., Cheung C., Lay L. Electronic Commerce. A
  Managerial Perspective, Pearson Education, 4-th
  ed., 2008
• Wallace T., M. Kremzar M., H. ERP Making It
  Happen, The Implementers Guide to Success with
  Enterprise Resource Planning John Wiley Sons,
  Inc., New York, 2001

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...From Aphorismus Book...

• ...Wisdom is nontransferable. The sage
  knowledge which he try to transfere, sounds
  always like nonsense...
• (... Madrosci nie mozna przekazac. Wiedza, która
  próbuje przekazywac medrzec, brzmi zawsze jak
  glupota...),
• ...Study period is the time when you are
  instructing by somebody you dont want to know,
  about something you dont want to know...
• (... Okres nauki to czas gdy jestes pouczany
  przez kogos kogo nie chcesz znac, o czyms czego
  nie chcesz wiedziec ... )
• Knowledge is powerless unless it prepares you to
  do the right thing at the right time
• (Wiedza nic nie daje, jezeli nie przygotowuje
  cie do podjecia wlasciwej decyzji we wlasciwym
  czasie)

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Subject

• Management Information System refers to
  (means) a collection of computerized and net
  technologies whose objective is to support
  managerial work and especially decision making
• System designed to provide past, present, and
  future information appropriate for planning,
  organizing, and controlling the operations of
  functional areas in an organization
• (Turban E., at all IT for Management ... 2008)

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Some definitions (glossary)

• Data items refer to an elementary description
  of facts and figures relatively important for
  users, data item an elementary description of
  things, events, activities, and transactions,
  that are recorded, classified, and stored but not
  organized to convey any specific meaning can be
  numeric, alphanumeric, figures, sounds or images
• A database consists of stored data items
  organized for retrieval
• Information is processed, meaningful data data
  that have been organized, so they have meaning
  and value to the recipient
• Data items typically are processed into
  information by means of an application,
  represents a more specific use and a higher added
  value than simple retreieval and summarizing
  from a database
• Knowledge data and/or information that have
  been organized and processed to convey
  (distribute) understanding, experience,
  accumulated learning, and expertise (what to do
  with information)
• Wisdom the ability to make sensible (rational)
  decisions and give good advice because of the
  experience, intuition and knowledge that you have
  (how to use knowledge, how to do it in rational
  way)

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Some definitions (glossary)

• Data items a student first name, name, grade in
  a class, the number of hours an employe worked in
  a certain week, etc.
• Information a students grade point average
  (GPA), the application transforminf data in
  information might be a Web-based inventory
  management system, a univerity online
  registration, or e-commerce (internet-based
  buying and selling) system
• Knowledge GPA of a student applying to Erasmus
  Students Exchange can be compared with GPA of
  the other students applying to this sholarship
  and be over average of all students from faculty
  (average is only criteria of selection)
• Wisdom see above case inspite of level of GPA
  you know from your experience or partners
  knowledge that in Italy or Spain in most cases
  courses are in Italian or Spanish, so you first
  of all send there students speak these languages

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Some definitions (glossary)

• System group of elements integrated with common
  purpose of achieving an objective (...) by
  transforming input resources to output
  resources
• Information system group of programs integrated
  in three areas programme, logical and
  technical, a physical process, that supports an
  organization in collecting, processing, storing
  nad analyzing data, and disseminating information
  to achieve organizational goals.
• Information Technology the technology component
  of an information system (a narrow definition),
  or the collection of the computing systems in an
  organization (the broad definition)
• Information infrastructure the physical
  arrangement of harware, software, databases,
  networks, and information management personnel
• Decision making a process of choosing among
  alternative courses of action for the purpose of
  attainings a goal or goals
• What should be done? When? How? Where? By whom?
  
• Model (in decision making) a simplified
  representation or abstraction of reality can be
  used to performs virtual experiments and analysis

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Some definitions (glossary)

• A computer-based information system is an
  information system that uses computer and net
  technology to perform some or all of its intnded
  tasks.
• The basic components of the system are hardware,
  software, database(s), telecommunication
  networks, procedures and people.
• Hardware is a set of devices that accept data and
  information, process them, and display or raport
  them.
• Software is a set of programs that enable the
  hardware to process data.
• A database is a collection of related files,
  tables, relations, and so on that stores data and
  the associations among them.
• A network is a connecting system (wireline 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 desire
  output.
• People (users or final users, maybe curtomers)
  are those individuals who work with the
  information system, interface with it, or use its
  outputs

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Some definitions (glossary)

• Information system
• Set of interrelated components
• Collect, process, store, and distribute
  information
• Support decision making, coordination, and
  control
• Information vs. data
• Data are streams of raw facts
• Information is data shaped into meaningful form

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Some definitions (glossary)

• Information system three activities produce
  information organizations need
• Input Captures raw data from organization or
  external environment
• Processing Converts raw data into meaningful
  form
• Output Transfers processed information to people
  or activities that use it
• Feedback
• Output returned to appropriate members of
  organization to help evaluate or correct input
  stage
• Computer/Computer program vs. information system
• Computers and software are technical foundation
  and tools

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Functions of an Information System
An information system contains information about
an organization and its surrounding environment.
Three basic activitiesinput, processing, and
outputproduce the information organizations
need. Feedback is output returned to appropriate
people or activities in the organization to
evaluate and refine the input. Environmental
actors, such as customers, suppliers,
competitors, stockholders, and regulatory
agencies, interact with the organization and its
information systems.
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Information Systems Are More Than Computers
Using information systems effectively requires an
understanding of the organization, management,
and information technology shaping the systems.
An information system creates value for the firm
as an organizational and management solution to
challenges posed by the environment.
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Organizational dimension of information systems

• Hierarchy of authority, responsibility
• Senior management
• Middle management
• Operational management
• Knowledge workers
• Data workers
• Production or service workers
• Separation of business functions
• Sales and marketing
• Human resources
• Finance and accounting
• Manufacturing and production
• Unique business processes
• Unique business culture
• Organizational politics

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Management dimension of information systems

• Managers set organizational strategy for
  responding to business challenges,
• In addition, managers must act creatively
• Creation of new products and services
• Occasionally recreating the organization

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Technology dimension of information systems

• Computer hardware and software
• Data management technology
• Networking and telecommunications technology
• (Networks, the Internet, intranets and extranets,
  World Wide Web)
• IT infrastructure provides platform that system
  is built on

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The Integration and Convergence Theory of
Information Systems Development

• The main objective of this part of course is to
  present the idea of the development of MIS
  consisting in the integration and convergence
  approach by the analysis of three main paths of
  development
• increasing complexity of logical systems
  architecture,
• functional integration of Information Systems,
  tailored to the current needs of the organization
  and the user within the organization,
• expansion of spatial network infrastructure.

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• Integration in the ideological sense consists
  in combining functional elements using by means
  of relations, so as to constitute specific
  structural components of the whole. Integration
  is here understood as a process of consolidation
  and merging of particular different-class
  characters and forms of interrelated elements in
  order to create a functional entity, resulting in
  the usefulness and efficiency which are greater
  than each of the parts acting separately
• Convergence in the development process consists
  in the formation of similar features with regard
  to construction, function and appearance of
  various groups of systems functioning under the
  same environmental conditions, regardless of
  adopted specific innovative solutions.

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1
Convergence
TSP/APD
1950 1960 1970 1980 1990 2000 2010
Integration
Year
22
1
Convergence
MIS
TSP/APD
1950 1960 1970 1980 1990 2000 2010
Integration
Year
23
1
Convergence
DSS
MIS
TSP/APD
1950 1960 1970 1980 1990 2000 2010
Integration
Year
24
1
Convergence
EIS/ESS
DSS
MIS
TSP/APD
1950 1960 1970 1980 1990 2000 2010
Integration
Year
25
1
Convergence
ES
EIS/ESS
DSS
MIS
TSP/APD
1950 1960 1970 1980 1990 2000 2010
Integration
Year
26
1
BIS
Convergence
ES
EIS/ESS
DSS
MIS
TSP/APD
Internal integration - just combine different
types of systemsConvergence - increasingly
sophisticated systems to ever higher level of
development
1950 1960 1970 1980 1990 2000 2010
Integration
Year
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Economic environment
MIS
Internet
Interior of organization
User
User interface
Database Management System
Ba
Database

• Applications
• accounting and finance,
• inventory control,
• production management,
• Human relations.

• Available for decision maker
• knowledge,
• intuition,
• education,
• data.

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Economic environment
DSS
Internet
Interior of organization
User
User interface
Database System Management
Model Base System Management
Ba
Database
Model Base

• Available for decision maker
• knowledge,
• Intuition,
• education,
• data,
• models, methods.

• Applications
• accounting and finance,
• inventory control,
• production management,
• Human relations.

Base of Procedures
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Economic environment
EIS/ESS
Internet
Interior of organization
User
User interface
Database System Management
Model Base System Management
Ba
Database

• Available for decision maker
• knowledge,
• Intuition,
• education,
• data,
• models, methods.
• prezentation, vizualization, extension.

Model Base

• Applications
• accounting and finance,
• inventory control,
• production management,
• Human relations.

Base of procedures
30
Economic environment
ES
Internet
Interior of organization
User
User interface
Database System Management
Model BaseSystem Management
Ba
Knowlede Base System Management
Database
Model Base

• Applications
• accounting and finance,
• inventory control,
• production management,
• Human relations.

Ba

• Available for decision maker
• intuition,
• education,
• data,
• models, methods,
• prezentation, vizualization, extension,
• knowledge.

Knowledge Base
Base of Procedures
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Economic environment
BIS
Internet
Interior of organization
User
Mechanizms of data wholesale management
Mechanizms Business Analytics
User interface
Database System Management
Model Base System Management

• Applications
• accounting and finance,
• inventory control,
• production management,
• Human relations.

Knowledge Base System Management
Model Base
Database
Ba
Marts branch wholesale
Knowledge Base
Base of Procedures
Decison maker has at his disposal more then he
needs!!!
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Economic environment
BIS
Internet
Interior of organization
User
Mechanizms of data wholesale management
Mechanizms Business Analytics
User interface
Database System Management
Model Base System Management

• Applications
• accounting and finance,
• inventory control,
• production management,
• Human relations.

Knowledge Base System Management
Model Base
Database
Ba
Marts branch wholesale
Knowledge Base
Base of Procedures
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Types of decision

• Structured decisions are repetitive and routine
  (strictly determined), and they involve a
  definite procedure for handling them so that they
  do not have to be treated each time as if they
  were new.
• Unstructured decisions are those in which the
  decision maker must provide judgment, evaluation,
  and insight to solve the problem (probablistic,
  undetermined). Each of these decisions is novel,
  important, and non routine, and there is no
  well-understood or agreed-on procedure for making
  them.
• Many decisions have elements of both types of
  decisions and are semistructured, where only part
  of the problem has a clear-cut answer provided by
  an accepted procedure. In general, structured
  decisions are more prevalent at lower
  organizational levels, whereas unstructured
  problems are more common at higher levels of the
  firm.

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INFORMATION REQUIREMENTS OF KEY DECISION-MAKING
GROUPS IN A FIRM
35
STAGES IN DECISION MAKING

• Intelligence consists of discovering,
  identifying, and understanding the problems
  occurring in the organization - why a problem
  exists, where, and what effects it is having on
  the firm
• Design involves identifying and exploring various
  solutions to the problem
• Choice consists of choosing among solution
  alternatives
• Implementation involves making the chosen
  alternative work and continuing to monitor how
  well the solution is working

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Six elements in business intelligence environment

• Data from the business environment Businesses
  must deal with both structured and unstructured
  data from many different sources, including
  mobile devices and the Internet. The data need to
  be integrated and organized so that they can be
  analyzed and used by human decision makers
• Business intelligence infrastructure The
  underlying foundation of business intelligence is
  a powerful database system that captures all the
  relevant data to operate the business. The data
  may be stored in transactional databases or
  combined and integrated into an enterprise-data
  warehouse or series of interrelated data marts
• Business analytics toolset A set of software
  tools are used to analyze data and produce
  reports, respond to questions posed by managers,
  and track the progress of the business using key
  indicators of performance

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Six elements in business intelligence environment

• Managerial users and methods Business
  intelligence hardware and software are only as
  intelligent as the human beings who use them.
• Managers impose order on the analysis of data
  using a variety of managerial methods that define
  strategic business goals and specify how progress
  will be measured.
• These include business performance management and
  balanced scorecard approaches focusing on key
  performance indicators and industry strategic
  analyses focusing on changes in the general
  business environment, with special attention to
  competitors.
• Without strong senior management over-sight,
  business analytics can produce a great deal of
  information, reports, and online screens that
  focus on the wrong matters and divert attention
  from the real issues.
• You need to remember that, so far, only humans
  can ask intelligent questions.

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Six elements in business intelligence environment

• Delivery platform - MIS, DSS, ESS. The results
  from business intelligence and analytics are
  delivered to managers and employees in a variety
  of ways, depending on what they need to know to
  perform their jobs. MIS, DSS, and ESS, deliver
  information and knowledge to different people and
  levels in the firmoperational employees, middle
  managers, and senior executives. In the past,
  these systems could not share data and operated
  as independent systems. Today, one suite of
  hardware and software tools in the form of a
  business intelligence and analytics package is
  able to integrate all this information and bring
  it to managers desktop or mobile platforms.
• User interface Business people are no longer
  tied to their desks and desktops. They often
  learn quicker from a visual representation of
  data than from a dry report with columns and rows
  of information. Todays business analytics
  software suites emphasize visual techniques such
  as dashboards and scorecards. They also are able
  to deliver reports on Blackberrys, iPhones, and
  other mobile handhelds as well as on the firms
  Web portal. BA software is adding capabilities to
  post information on Twitter, Facebook, or
  internal social media to support decision making
  in an online group setting rather than in a
  face-to-face meeting.

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Business Intelligence and Analytics for Decision
Support
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Business Intelligence Users
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1
BIS
Convergence
ES
EIS/ESS
2
DSS
MIS
TSP/APD
IC
1950 1960 1970 1980 1990 2000 2010
Integration
Year
43
1
BIS
Convergence
ES
EIS/ESS
2
DSS
MIS
TSP/APD
MRP
IC
1950 1960 1970 1980 1990 2000 2010
Integration
Year
44
1
BIS
KConvergence
ES
EIS/ESS
2
DSS
MIS
TSP/APD
MRP II
MRP
IC
1950 1960 1970 1980 1990 2000 2010
Integration
Year
45
1
BIS
Convergence
ES
EIS/ESS
2
DSS
MIS
TSP/APD
ERP
MRP II
MRP
IC
1950 1960 1970 1980 1990 2000 2010
Integration
Year
46
Functional integration - more and more utility
functionsConvergence - in each, next step newer
technology and better adjust to needs of
userDiffusion patterns between tracks
1
BIS
Convergence
ES
EIS/ESS
2
DSS
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
MRP
IC
1950 1960 1970 1980 1990 2000 2010
Integration
Year
47
1
BIS
Convergence
ES
EIS/ESS
2
DSS
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
MRP
IC
1950 1960 1970 1980 1990 2000 2010
Integration
Year
48
Inventory balance
IC
49
Production balance
Inventory balance
IC
MRP
50
Production Balance
Financial Balance
Inventory Balance
IC
MRP
MRP II
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Production Balans
Service Balans
Financial Balans
Inventory Balance
IC
MRP
MRP II
ERP
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Production Balance
Service Balans
Financial Balance
Inventory Balance
IC
MRP
MRP II
ERP
Logistic Balans, specializations and mutations
ERP II
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CommunicationBalans
Production Balance
Service Balans
Financial Balance
Inventory Balance
IC
MRP
MRP II
ERP
Logistic Balans, specializations and mutations
eERP
ERP II
54
1
BIS
Convergence
ES
EIS/ESS
2
DSS
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
3
MRP
IC
Private, corporate nets
1950 1960 1970 1980 1990 2000 2010
Integration
Year
55
1
BIS
Convergence
ES
EIS/ESS
2
DSS
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
3
MRP
IC
Commercial nets
Private, corporate nets
1950 1960 1970 1980 1990 2000 2010
Integration
Year
56
Integration - the traditional systems and other
networksConvergence - the expansion of the
subsequent users, connected with increasing
availability and ease of use
1
BIS
Convergence
ES
EIS/ESS
2
DSS
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
3
MRP
IC
Internet
Commercial nets
Private, corporate nets
1950 1960 1970 1980 1990 2000 2010
Integration
Year
57
1
BIS
Convergence
ES
EIS/ESS
2
DSS
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
3
MRP
IC
Internet
Commercial nets
Private, corporate nets
1950 1960 1970 1980 1990 2000 2010
Integration
Year
58
Corporate solutions based on EDI standards, huge
organizations Corporate networking
Private, corporate nets
59
Commercial solutions for large and medium-sized
companiesOrganizational nets
Commerce nets
Corporate solutions based on EDI standards, huge
organizations Corporate networking
Private, corporate nets
60
Commercial solutions for large and medium-sized
companiesOrganizational nets
Comprehensive and global solution for all
(organizations, customers, society)Social nets
Commerce nets
Corporate solutions based on EDI standards, huge
organizations Corporate networking
Internet
Private, corporate nets
61
Corporate Platform
1
BIS
Convergence
ES
EIS/ESS
2
DSS
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
3
MRP
IC
Internet
Commercial nets
Private, corporate nets
1950 1960 1970 1980 1990 2000 2010
Integration
Year
62
Conclusions

• The solution which under the conditions of the
  development of internet systems started to be
  applied in lieu of internal integration was
  external integration through external corporate
  portals.
• A corporate portal is a platform which
  integrates systems and information technology,
  data, information and knowledge in an
  organization and its environment in order to
  provide users with a personalised and convenient
  access to data, information and knowledge, in
  accordance with the needs, at any time and in any
  place, in a secure manner and through a unified
  web interface .
• The main objective of a corporate portal are
  improvements with regard to access to data,
  information and knowledge and their sources
  according to user requirements regardless of
  time and location of the web interface, and in a
  secure manner.
• The main feature of corporate platforms is the
  integration of data from internal resources with
  external data, their conversion into common and
  jointly processed formats integration of
  heterogeneous applications integration of
  communication between particular users and
  providing them with personalized information and
  knowledge.

63

• The emergence of corporate portals is connected
  with the development of internet network
  technologies, and the portals operate mainly in
  an intranet corporate environment. Through this
  environment web interface - they are
  distributed to users, as required information and
  knowledge.
• The impression is that a corporate platform is
  both an integration instrument and at the same
  time a convergence tool - on the level,
  cooperation of both complementary and parallel
  systems is possible.
• The author believed that this tendency was a
  process of intensifying of a previously examined
  complexity of the logical architecture structure
  in particular types of the systems, and therefore
  it does not require further analysis.
• Also, the author did not illustrate the
  development of particular internet tools in such
  a great detail as in the article, assuming that
  they are still developing very intensively.
• Nevertheless, there is a clearly visible -
  possible thanks to a corporate platform -
  tendency to connect everything with everything
  (multi-dimensional integration) in terms of
  transmissivity of the idea of interaction between
  various information systems on all presented
  development paths.

64
Thank you very much for your attention!
Witold Chmielarz Questions - vitec_at_post.pl
65
MANAGEMENT INFORMATION SYSTEMS Part
2CHARACTERISTICS AND FEATURES OF MIS

• Prof. Witold Chmielarz, PhD ,
• Oskar Szumski, PhD
• Faculty of Management University of Warsaw

66
Characteristics and Features of MIS Towards
Knowledge Based Systems
67
Knowledge in MIS
68
LEARNING OBJECTIVES

• Assess the role of knowledge management and
  knowledge management programs in business
• Describe the types of systems used for
  enterprise-wide knowledge management and
  demonstrate how they provide value for
  organizations
• Describe the major types of knowledge work
  systems and assess how they provide value for
  firms
• Evaluate the business benefits of using
  intelligent techniques for knowledge management
• Analyzing of the concept of knowledge management
  application

69
A brief content

• Basic definitions
• Intro to Knowledge Management (KM)
• Approaches to KM
• Problems with KM implementation

70

• Management Information System refers to a
  collection of computerized and net technologies
  whose objective is to support managerial work and
  especially decision making
• (Turban E., at al IT for Management ... 2008)

71
Some basis definitions

• System group of elements integrated with common
  purpose of achieving an objective (...) by
  transforming input resources to output
  resources
• Information system group of programs integrated
  in three areas programme, logical and technical
• An application program a set of computer
  instructions written in a programming language,
  the purpose of which is to provide functionality
  to a user

72
Some basic definitions

• Decision making a process of choosing among
  alternative courses of action for the purpose of
  attainings a goal or goals
• What should be done?
• When?
• How?
• Where?
• By whom?

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Intro to Knowledge Management (KM)

• A process that helps organizations identify,
  select, organize, disseminate, and transfer
  important information and expertise that are part
  of the organizations memory and that typically
  reside within the organization in an unstructured
  manner
• Creating of knowledge enables effective and
  efficient problem solving, dynamic learning,
  strategic planning and decision making
• Focus on identyfing knowledge, explicating it in
  formal manner and exploiting by reuse,
• For success of organization must be exchangable
  among persons, and able to grow
• E.Turban et al. Information Technology for
  Management

74
Knowledge Management (KM)

• Knowledge management Set of business processes
  developed in an organization to create, store,
  transfer, and apply knowledge
• Knowledge management value chain each stage adds
  value to raw data and information as they are
  transformed into usable knowledge
• Knowledge acquisition
• Knowledge storage
• Knowledge dissemination
• Knowledge application
• (Laudon, Laudon, Chapt 11)

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• Knowledge acquisition
• Documenting tacit and explicit knowledge
• Storing documents, reports, presentations, best
  practices
• Unstructured documents (e.g., e-mails)
• Developing online expert networks
• Creating knowledge
• Tracking data from TPS and external sources
• (Laudon, Laudon, Chapt 11)

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• Knowledge storage
• Databases
• Document management systems
• Role of management
• Support development of planned knowledge storage
  systems
• Encourage development of corporate-wide schemas
  for indexing documents
• Reward employees for taking time to update and
  store documents properly
• (Laudon, Laudon, Chapt 11)

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• Knowledge dissemination
• Portals
• Push e-mail reports
• Search engines
• Collaboration tools
• A deluge (dissemination, too) of information?
• Training programs, informal networks, and shared
  management experience help managers focus
  attention on important information
• (Laudon, Laudon, Chapt 11)

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• Knowledge application
• To provide return on investment, organizational
  knowledge must become systematic part of
  management decision making and become situated in
  decision-support systems
• New business practices
• New products and services
• New markets
• (Laudon, Laudon, Chapt 11)

79
The Knowledge Management Value Chain
Knowledge management today involves both
information systems activities and a host of
enabling management and organizational
activities.
80
New organizational roles and responsibilities

• Chief knowledge officer executives
• Dedicated staff / knowledge managers
• Communities of practice (COPs)
• Informal social networks of professionals and
  employees within and outside firm who have
  similar work-related activities and interests
• Activities include education, online newsletters,
  sharing experiences and techniques
• Facilitate reuse of knowledge, discussion
• Reduce learning curves of new employees
• Establish paths of carrier

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Relations data information knowledge -
wisdom

• Data are a collection of facts, measurements,
  and statistics
• Information is organized or processed data that
  are timely and accurate (ready for use),
• Knowledge is information that is contextual
  (connected with particular conditions), relevant
  (closely connected with situation) and actionable
  (supported by cases), shows how to use
  information and data under current, given,
  defined situation in effective, acceptable formal
  (visible knowledge) way,
• Wisdom abbility to make sensible decisions and
  good advice because of the experience and
  knowledge, how to use knowledge and information
  in reasonable (optimal) way (hidden knowledge,
  too)

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Wisdom Knowledge triangle
83
Charactristics of knowledge

• Extraordinary and increasing results knowledge
  is not subject to diminishing results. When it is
  used, it is not consumed. Its consumers can add
  to it, thus increasing its value.
• Fragmentation, leakage and need to refresh
  knowledge is dynamic, it is information in
  action. Thus an organization must continually
  refresh its knowledgebase to maintain it as a
  source of competitive advantage,
• Uncertain value its difficult to estimate the
  impact of an investment in knowledge. There too
  many intengible aspects
• Uncertain value of sharing its difficult to
  estimate the value of sharing knowledge, or even
  who will benefit most,
• Rooted in time the utility and validity of
  knowledge may change with time.

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Transforming information into knowledge

• To transform information into knowledge, firm
  must expend additional resources to discover
  patterns, rules, and contexts where knowledge
  works
• Wisdom Collective and individual experience of
  applying knowledge to solve problems - involves
  where, when, and how to apply knowledge
• Knowing how to do things effectively and
  efficiently in ways other organizations cannot
  duplicate is primary source of profit and
  competitive advantage that cannot be purchased
  easily by competitors
• (Laudon, Laudon, Chapt. 11)

85
Introduce the concept of organizational learning
(selflearning), which describes the process of
gathering, creating, and applying knowledge

• Organizational learning
• Process in which organizations learn
• Gain experience through collection of data,
  measurement, trial and error, and feedback
• Adjust behavior to reflect experience
• Create new business processes
• Change patterns of management decision making

86
Some additional definitions

• Intellectual capital (or intellectusl assets)
  the valuable knowledge of employees, evolves with
  time and experience, which puts connections among
  new situations and events in context.
• Tacit knowledge usually in the domain of
  subjective, cognitive and experimental learning
  (personal and difficult to formalize). The
  cumulative store of an experiences, expertise,
  know-how, trade secrets, skill sets, usually
  localized in the brain of individual
• Explicit knowledge deals with more objective,
  rational, and technical knowledge (date,
  procedures, software, documents). Codyfied
  knowledge (documented) in the form can be
  distributed to others or transformed into process
  without interpersonal interaction (can leave
  person leaky knowledge)
• Organizations now recognize the need too
  integrate explicit and tacit knowledge in formal
  information systems
• (taken from Laudon, Laudon, Chapt. 11)

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Important dimensions of knowledge

• Knowledge is a firm asset
• Intangible
• Creation of knowledge from data, information,
  requires organizational resources
• As it is shared, experiences network effects
• Knowledge has different forms
• May be explicit (documented) or tacit (residing
  in minds)
• Know-how, craft, skill
• How to follow procedure
• Knowing why things happen (causality)
• (taken from Laudon, Laudon, Chapt. 11)

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Important dimensions of knowledge

• Knowledge has a location
• Cognitive event
• Both social and individual
• Sticky (hard to move), situated (enmeshed in
  firms culture), contextual (works only in
  certain situations)
• Knowledge is situational
• Conditional Knowing when to apply procedure
• Contextual Knowing circumstances to use certain
  tool
• (see Laudon, Laudon Dass, Chapt. 11)

89
Approaches to KM

• Process approach attempts to codify
  organizational knowledge through formalized
  controls, processes and technologies, frequently
  involves the use of information technologies to
  enhance the quality and speed of knowledge
  creation and distribution in the organizations
• Practice approach assumes that a great deal of
  organizational knowledge is tacit in nature and
  that formal controls, processes and technologies
  are not suitable for transmitting this type of
  understanding. The focus of this approach is to
  build the social environments or communities
  necessary to the sharing of tacit knowledge.
• (see Laudon, Laudon, Chapt. 11)

90
Approaches to KM

• Best practices the activities and methods that
  the most effective organizations use to operate
  and manage various functions. They include
• A good idea that is not yet proven, but makes
  intuitive sense,
• A good practice, an implemented technique,
  metodology, procedure, or process that has
  improved business results,
• A local best practice, a best approach for all or
  a large part of the organization based on
  analysing hard data. The scope within
  organization of the best practice is identified
  can be used only in a single department or
  geographical region, or across the organization.
• Hybrid approaches in reality involve both
  process and practice approaches.
• (see Laudon, Laudon, Chapt. 11)

91

• Three major types of knowledge management
  systems
• Enterprise-wide knowledge management systems
• General-purpose firm-wide efforts to collect,
  store, distribute, and apply digital content and
  knowledge
• Knowledge work systems (KWS)
• Specialized systems built for engineers,
  scientists, other knowledge workers charged with
  discovering and creating new knowledge
• Intelligent techniques
• Diverse group of techniques such as data mining
  used for various goals discovering knowledge,
  distilling knowledge, discovering optimal
  solutions

92
Major Types of Knowledge Management Systems
There are three major categories of knowledge
management systems, and each can be broken down
further into more specialized types of knowledge
management systems.
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• Three major types of knowledge in enterprise
• Structured documents
• Reports, presentations
• Formal rules
• Semistructured documents
• E-mails, videos
• Unstructured, tacit knowledge
• 80 of an organizations business content is
  semistructured or unstructured

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• Enterprise-wide content management systems
• Help capture, store, retrieve, distribute,
  preserve
• Documents, reports, best practices
• Semistructured knowledge (e-mails)
• Bring in external sources
• News feeds, research
• Tools for communication and collaboration

95
An Enterprise Content Management System
An enterprise content management system has
capabilities for classifying, organizing, and
managing structured and semistructured knowledge
and making it available throughout the enterprise
96

• Knowledge network systems
• Provide online directory of corporate experts in
  well-defined knowledge domains
• Use communication technologies to make it easy
  for employees to find appropriate expert in a
  company
• May systematize solutions developed by experts
  and store them in knowledge database
• Best-practices
• Frequently asked questions (FAQ) repository

97
An Enterprise Knowledge Network System
A knowledge network maintains a database of firm
experts, as well as accepted solutions to known
problems, and then facilitates the communication
between employees looking for knowledge and
experts who have that knowledge. Solutions
created in this communication are then added to a
database of solutions in the form of FAQs, best
practices, or other documents.
98

• Major knowledge management system vendors
  include powerful portal and collaboration
  technologies
• Portal technologies Access to external
  information
• News feeds, research
• Access to internal knowledge resources
• Collaboration tools
• E-mail
• Discussion groups
• Blogs
• Wikis
• Social bookmarking

99

• Learning management systems
• Provide tools for management, delivery, tracking,
  and assessment of various types of employee
  learning and training
• Support multiple modes of learning - CD-ROM,
  Web-based classes, online forums, live
  instruction, etc.
• Automates selection and administration of courses
• Assembles and delivers learning content
• Measures learning effectiveness

100

• Knowledge work systems
• Systems for knowledge workers to help create new
  knowledge and ensure that knowledge is properly
  integrated into business
• Knowledge workers
• Researchers, designers, architects, scientists,
  and engineers who create knowledge and
  information for the organization
• Three key roles
• Keeping organization current in knowledge
• Serving as internal consultants regarding their
  areas of expertise
• Acting as change agents, evaluating, initiating,
  and promoting change projects

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• Requirements of knowledge work systems
• Substantial computing power for graphics, complex
  calculations
• Powerful graphics, and analytical tools
• Communications and document management
  capabilities
• Access to external databases
• User-friendly interfaces
• Optimized for tasks to be performed (design
  engineering, financial analysis)

102
Requirements of Knowledge Work Systems
Knowledge work systems require strong links to
external knowledge bases in addition to
specialized hardware and software.
103

• Examples of knowledge work systems
• CAD (computer-aided design) Automates creation
  and revision of engineering or architectural
  designs, using computers and sophisticated
  graphics software
• Virtual reality systems Software and special
  hardware to simulate real-life environments
• E.g. 3-D medical modeling for surgeons
• VRML Specifications for interactive, 3D modeling
  over Internet
• Investment workstations Streamline investment
  process and consolidate internal, external data
  for brokers, traders, portfolio managers

104

• Intelligent techniques Used to capture
  individual and collective knowledge and to extend
  knowledge base
• To capture tacit knowledge Expert systems,
  case-based reasoning, fuzzy logic
• Knowledge discovery Neural networks and data
  mining
• Generating solutions to complex problems Genetic
  algorithms
• Automating tasks Intelligent agents
• Artificial intelligence (AI) technology
  computer-based systems that emulate human behavior

105
Management Information Systems characteristics
and features
106
Transactional Systems Processing (TSP)

• Definition
• Transaction Processing Systems (TSP) - perform
  the frequent routine external and internal
  transactions that serve the operational level of
  organisation
• An information system that processes an
  organizations basic business transactions such
  as purchasing, billing and payroll
• Previously based on batch processing where
  processes inputs at fixed intervals as a file and
  operates on it all at once interactive
  processing operates on a transaction as soon as
  it occurs

107
Transactional Systems Processing (TSP)

• Data processing manipulation or transformation
  numbers and letters for the purpose of increasing
  their usefulness
• data gathering,
• data manipulation
• classifying,
• sorting,
• selecting etc).
• TSP, D(data) PS or A(analytic)IS the first
  single simple systems made mainly for gathering
  and processing data not for decision making,
  operating separately in the frames of the firm
  in the beginning often without common database

108
Transactional Systems Processing (TSP)

• System tended to grow independently, and not
  according to some grand plan.
• Each functional area tended to develop systems in
  an isolation from other functional areas.
• Accounting, finance, manufacturing, human
  resources, and marketing all developed their own
  systems and data files.
• Each application, of course, required its own
  files and its own computer program to operate.
• For example, the human resources functional area
  might have a personnel master file, a payroll
  file, a medical insurance file, a pension file
  and so forth until tens, perhaps hundreds, of
  files and programs existed.
• In the company as a whole, this process led to
  multiple master file created, maintained, and
  operated by separate divisions or departments.

109
Transactional Systems Processing (TSP)

• These were undoubtedly the first attempts of
  creating a tool which indirectly could be used to
  support business management.
• The basic advantage of such a tool was the speed
  of performing simple, standard large-scale
  operations.
• The basic problem which occurred then was the low
  level of technological development, which caused
  the fact that processing, before it could take
  place, entailed a number of complicated steps and
  procedures connected with the imperfection of the
  existing hardware and software.
• Additionally, this process was accompanied by
  considerable costs. The lack of reliability and
  failure rate reached in total 80 of the total
  working time of such a machine.
• Designing and processing of the program which
  operated on the data which were entered in the
  computers memory data was very complex.

110
Transactional Systems Processing (TSP)

• The limitations were numerous
• the problem connected with entering the programme
  and the data to be processed by the computer,
• processing of the data and saving the results,
• distribution of the results among the engaged
  individuals etc. (processing speed, memory
  capacity, problems with design and construction
  of software, etc.).
• Each of the constructed systems was separate,
  which sometimes resulted in entering the same
  data within an organization in a multiple way and
  frequently in different formats.
• Other difficulties were using unreliable input
  media with the long-term processing and
  separating the user from processing the data on a
  computer which he could only prepare.
• The systems were effective in the case of mass
  numerical calculations whose findings were
  interpreted manually. Their usefulness in
  supporting management was reduced to speeding up
  numerical calculations.

111
Transactional Systems Processing (TSP) -
summarizing

• Transaction processing systems
• Perform and record daily routine transactions
  necessary to conduct business (examples sales
  order entry, payroll, shipping)
• Allow managers to monitor status of operations
  and relations with external environment
• Serve operational levels
• Serve predefined, structured goals and decision
  making

112
Transactional Systems Processing (TSP) -
contemporary definition and interpretation as a
part of ERP

• Definition a Transactional Processing system
  (TPS) supports the monitoring, collection,
  storage, processing, and dissemination of the
  organizations basic business transactions.
• It also provides the input data for other
  information systems. Sometimes several TPSs exist
  in one company.
• TPSs are considered critical to the success of
  the organization since they support core
  operations, such as purchasing of materials,
  billing customers, preparing a payroll and
  shipping goods to customers.
• Examples in retail stores, data flows from POS
  (point-of-sale) terminals to a database where
  they are aggregated.
• When a sale is completed, an information
  transaction reduces the level of inventory on
  hand, and the collected revenue from the sale
  increases the companys cash position.
• Now this is very similar now to a part of MIS
  category

113
A Payroll TPS
A TPS for payroll processing captures employee
payment transaction data (such as a time card).
System outputs include online and hard-copy
reports for management and employee paychecks.
114
How Management Information Systems Obtain Their
Data from the Organizations TPS
In the system illustrated by this diagram, three
TPS supply summarized transaction data to the MIS
reporting system at the end of the time period.
Managers gain access to the organizational data
through the MIS, which provides them with the
appropriate reports.
115
Management Information Systems

• Management Information Systems from the very
  beginning of their existence were designed for
  record keeping of past and current routine
  information for planning, organizing and
  controlling operations in functional areas of a
  businesss activities.
• Management Information Systems are defined by R.
  M. Stair as ... an organized collection of
  people, processing procedures, databases, and
  applications used to provide standardized
  information for managers and decision makers ...
  
• According to E.Turban "... Management Information
  System is a formal, computer system, created in
  order to ensure a selection and integration of
  distributed information from various sources to
  provide timely data needed for decision making in
  management. They are the most effective in
  routine, structured systems, where there are
  predictable types of decisions ...
• These systems have had so far the greatest
  influence on the formation of management
  information systems.

116
Management Information Systems

• The basic logical architecture structure of MIS
  consisted of
• end-user with interface - the collection of
  programmes, usually of an operation system,
  responsible for communication with a user, which
  imposes certain standards of perception and use
  of other software,
• databases with the database management system
  collection of data stored according to certain
  organizational principles, interrelated, linked
  by certain defined dependencies, stored in a
  strictly defined way in the structures
  corresponding to a certain assumed data model.
• the software which helps to define, construct,
  manipulate and share database for applications
  and users is called a database management system.
  
• an additional element of the software may be a
  query language facilitating the communication
  with a database in terms of accepting queries,
  its formalization and making its result available
  to the decision-maker,
• applications subsystems, application software
  consisting of a collection of instructions, whose
  task is to provide a user with a defined
  functionality (financial and accounting
  subsystem, warehouse subsystem, production
  control subsystem, etc.).

117
The main elements of MIS some definitions

• A database (DB) is a collectionof files serving
  as a data resource for computer based information
  systems (MIS),
• A batabase management system (DBMS) is a software
  program (or group of programs) that managesand
  provides access to a database
• Data warehouse is a repository of historical
  data (millions of records), subject oriented and
  organized, integrated from various sources, that
  can easily be accessed and manipulated for
  decision support for example by data mining
  process of searching for unknown information or
  relationships in large databases using tools as
  neural computing or case-based reasoning (so,
  sometimes only mechanizms of data mining are
  treated as kind of intelligence see products of
  SAS Institute, nothing more)
• An application program a set of computer
  instructions written in a programming language,
  the purpose of which is to provide functionality
  to a user

117
118
Management Information Systems

• This simple construction of logical architecture
  has found its application in tens of thousands of
  systems operating on the market, and it became
  the basis for building more complex systems, both
  in terms of adding new elements and handling a
  number of new features
• The user who is making a decision a manager
  aided by means of systems of such kind has
• professional knowledge,
• qualifications and skills,
• intuition of an economist
• access to gathered, structured, specific data
  obtained from the documents which were used in
  the course of conducting business activity.

119
Management Information Systems

• The way to access, handle and distribute the
  resulting information is still relatively simple,
  but in order to use it we need IT knowledge
• information used in the decision-making process
  is obtained in the form of reports (processed
  documents),
• the way of presentation and deep analyses leading
  to their selection and initial processing
  depends on the programming language and the
  database management system,
• in order to obtain the information with a
  specific cross-section and with a specified range
  you need at least basic knowledge about the
  structure of a database,
• there is a relative redundancy of the basic
  information obtained from a database in relation
  to the data required in order to make a
  managerial decision based on the information,
• there are no direct mechanisms of processing the
  information obtained from the database into the
  patterns which could be used as the basis for
  taking a decision.

S