MIS

During-class notes

Structure

Disruptive tech

5 basic

economic impacts

Turkish check system vs foreign check system

organizational and behavior impact

organizational resistance to change

low-cost leadership: a101, bim, pegasus

Demonstrate how Porter’s competitive forces model help businesses use

information systems for competitive advantage.

fiin-in-the-blanks, multiple choice, classic

Study Questions?
What is information system?

Components that work together to process data and produce information

These components are hardware, software, data, procedures, people
What is MIS?
MIS is an information system that evaluates, analyzes, and processes an
organization's data to produce useful information in order to management can take
right decisions and achieve its goals.
How does IS differ from IT?
In IS helps organizations to achieve its goals with combining the technology (the
hardware, software, and data) and people and procedure, while IT only concerns
the hardware, software and data components of an IS and does not help
organizations to achieve its goals. So the real difference between information
technology and information systems is that IS includes people.

How do successful business professionals use IS?

MIS 1
 Most people are able to use email, access web pages, use word processors and
spread-sheets but basic information systems like those is not important. So
successful business professionals use IS as an integral tool to gaining competitive
advantage in the workplace.
What is this class about?
This class make us understand what is business and technology as well as how can
we relate one to another. Also how MIS help businesses to achieve its goals.
Explain how enterprise applications promote business process integration and
improve organizational performance.
They provide a single information system for organization-wide coordination and
integration of business processes.

Help to unify the firm’s structure and organization

More efficient operations & customer-driven business processes

Demonstrate how Porter’s competitive forces model help businesses use information
systems for competitive advantage.

How does the value chain model differ from the Porter model?

—It offers more specific detail about what exactly to do to achieve competitive
advantages.

Chapter 1

What Is A System?
System is a group of components that work together to achieve goal or goals.

System

accepts input

processes input

produces output

There are 2 types of system:

1. Closed system: has no connections with other systems

2. Open system: interacts with other systems

Open systems are often a subsystem of a bigger system

Subsystems are always open.

MIS 2
 What Is an Information System?
Information system (IS): components that work together to process data and produce
information
What are these components?

1. Hardware (the computer, storage disk, keyboard, and monitor)

2. Software (Microsoft Word, or some other word-processing program)

3. Data (the words, sentences, and paragraphs in your report)

4. Procedures (the methods you use to start the program, enter your report, print it, and
save and back up your file)

5. People (you)

These five components exist in every information system, from the simplest to the most
complex.

The Purpose of Information Systems

Businesses use information systems;

to make sound decisions

to solve problems

Problem: any undesirable situation

Decision: arises when more than one solution exists for a problem
Both problem solving and decision making require information.

Keys to success in business;

Gathering correct information efficiently

Storing information

Using information

Purpose of information systems is gathering correct information and then storing and
using it to make sound decisions and solve problems.

Data vs Information

MIS 3
 Data is the raw material in the production of information.

can be number, statement or picture

hard to read to business

Information is facts or conclusions that have meaning within context.

generated from data that has been manipulated.

more useful and easy to read to business

Data manipulation

required for making useful information

Generating Information
Process: the manipulation of data

usually produces information

sometimes may produce more data

A piece of information (output of a process) in one context may be considered data (input
to a process) in another context.

Information in Context

MIS 4
 Not all information is useful. To be useful, information must be:

reliable

timely — it must be current and it must reach the users in time

relevant — it must be current and valid

accurate — it must be free of errors and mistakes, true and not deceptive

sufficient

unambiguous

complete

unbiased

explicit — it shouldn’t need any further information (açık)

comparable

reproducible — it should be input again

What Is MIS?
Management information system is

the development and use of information systems that help businesses achieve their
goals and objectives.

an information system that evaluates, analyzes, and processes an organization's

data to produce meaningful and useful information in order to management can
take right decisions.

MIS 5
 How Does IS Differ from IT?
IT IS

refers to methods, inventions, is a system of hardware, software,

standards, and products data, procedures, and people that
produces information
refers raw technology
will help organization only when the
concerns only the hardware, software
technology (the hardware, software,
and data components of an IS
and data) is combined with the
will not help organization achieve its people and procedure components
goals and objectives

So the real difference between information technology and information systems is that IS
includes people.

How Do Successful Business Professionals Use IS?

Most people are able to use email, access web pages, use word processors and spread-
sheets, create presentations with PowerPoint, talk on a cell phone, and use instant
messaging.

However, the ability to use such basic information systems doesn’t give anyone a
competitive advantage in the workplace.

Chapter 2

Information Systems in the Enterprise

Major Types of Systems in Organizations
Different Kinds of Systems

3 main categories of information systems serve different organizational levels:

1. Operational-level systems: support operational managers, keeping track of the

elementary activities and transactions

2. Management-level systems: serve the monitoring, controlling, decision-making,

and administrative activities

3. Strategic-level systems: help senior management address strategic issues

MIS 6
 The Four Major Types of Information Systems

1. Transaction Processing Systems (TPS)

Basic business systems that serve the operational level

A computerized system that performs and records the daily routine transactions

The principal purpose of systems at this level is to answer routine questions and
to track the flow of transactions through the organization

Managers need TPS to monitor the status of internal operations and the firm’s
relationship with its external environment

2. Management Information Systems (MIS)

Inputs: High volume transaction level data

Processing: Simple models

Outputs: Summary reports (about performance)

Users: Middle managers

Example: Annual budgeting

Middle management use to help with monitoring, controlling, decision-making

and administrative activities.

Serves weekly, monthly, and yearly results, — daily or hourly data if required.

While MIS have an internal orientation, DSS use data from external sources.

MIS 7
 DSS supports “what-if” analyses rather than a long- term structured analysis
like in MIS systems.

MIS are generally not flexible and provide little analytical capabilities. In
contrast, DSS are designed for analytical purposes and are flexible

3. Decision-Support Systems (DSS)

Inputs: Transaction level data

Processing: Interactive

Outputs: Decision analysis

Users: Professionals, staff

Example: Contract cost analysis

Decision-support systems (DSS) support non-routine decision-making for

middle managers.

DSS provide sophisticated analytical models and data analysis to support

semistructured and unstructured decision-making activities.

DSS are designed so that users can work with each other, and include
interactive, user-friendly software

DSS use data from TPS, MIS, and external sources, allowing decision makers
to perform “what-if” analysis.

Unique and rapidly changing problems

4. Executive Support Systems (ESS)

Inputs: Aggregate data

Processing: Interactive

Outputs: Projections

Users: Senior managers

Example: 5 year operating plan

Executive support systems help senior managers address strategic issues and
long-term trends, both in the firm and in the external environment.

There is no agreed-on procedure for arriving at a solution.

ESS are designed for ease-of-use and rely heavily on graphical presentations of
data

MIS 8
 For top level management, ties CEO to all levels, very expensive to keep up,
extensive support staff

Systems from Functional Perspective

Sales and marketing systems
Major functions of systems: sales management, market research, promotion, pricing,
new products
Major application systems: sales order info system, market research system, pricing
system

Manufacturing and production systems

Major functions of systems: Scheduling, purchasing, shipping, receiving, engineering,
operations

Major application systems: Materials resource planning systems, purchase order

control systems, engineering systems, quality control systems

MIS 9
 Financing and accounting systems
Major functions of systems: Budgeting, general ledger, billing, cost accounting

Major application systems: General ledger, accounts receivable, accounts payable,

budgeting, funds management systems

Human resources systems

Major functions of systems: Personnel records, benefits, compensation, labor relations,

training
Major application systems: Payroll, employee records, benefit systems, career path
systems, personnel training systems

MIS 10
 Business Processes and Information Systems
Business Processes:

the way work is organized, coordinated, and focused to produce a valuable product
or service

concrete work flows of material, information, and knowledge

Examples of business processes:

1. Manufacturing and production: Assembling product, checking quality, producing

bills of materials

2. Sales and marketing: Identifying customers, creating customer awareness, selling

3. Finance & accounting: Paying creditors, creating financial statements

4. Human resources: Hiring employees, evaluating performance

Cross-Functional Business Processes:

Different departments work together to achieve a common goal.

Group employees from different functional specialties to complete a piece of work

For example; marketing, manufacturing and sales works together

For example, Order Fulfillment Process

Systems for Enterprise-Wide Process Integration

Enterprise systems (applications), also known as enterprise resource planning (ERP)
systems, provide a single information system for organization-wide coordination and

MIS 11
 integration of key business processes.
Consist of :

Enterprise systems

Supply chain management systems

Customer relationship management systems

Knowledge management systems

Benefits of Enterprise Systems

Help to unify the firm’s structure and organization

Firm wide knowledge-based management processes

More efficient operations & customer-driven business processes

Challenges of Enterprise Systems

Difficult to build

Require complex pieces of software, large investment

Centralized organizational coordination and decision making: Not the best way for
the firms to operate

1. Supply Chain Management (SCM)

Close coordination of activities involved in buying, making, and moving a product

Integrates supplier, manufacturer, distributor, and customer logistics time

Helps in procurement of materials, transformation of raw materials into intermediate

and finished products

Helps in distribution of the finished products to customers

2. Customer Relationship Management (CRM)

Provides end-to-end customer care

Provides a unified view of customer across the company

Consolidates customer data from multiple sources and provides analytical tools for
answering questions

3. Knowledge Management Systems

Collects relevant knowledge and make it available wherever and whenever it is needed.

MIS 12
 Chapter 3

Organizations and Information Systems

Information technology and organizations influence each other.
This complex two-way relationship is influenced by;

managers decisions

organizational culture

structure

politics

business processes

environment.

What is an organization?
Technical definition:

Formal social structure that processes resources from environment to produce

outputs.

A formal legal entity with internal rules and procedures, as well as a social structure.

Behavioral definition: A collection of rights, privileges, obligations, and responsibilities

that is delicately balanced over a period of time through conflict and conflict resolution.

Features of organizations:

Use of hierarchical structure

Accountability, authority in impartial decision making

Loyalty to principle of efficiency

Routines and business processes

Organizational politics, culture, environments, and structures

Organizational culture:

Consist of assumptions that define goal and product

What products the organization should produce

How and where it should be produced

MIS 13
 For whom the products should be produced

Organizational environments:

Organizations and environments have a two way relationship;

organizations are open to, and dependent on, the social and physical
environment.

Organizations can influence their environments.

Environments generally change faster than organizations.

Information systems can be instrument of environmental scanning, act as a lens.

Disruptive technologies

Technology that brings about sweeping change to businesses, industries, markets

Examples: personal computers, word processing software, the Internet, the

PageRank algorithm

First movers and fast followers

First movers — inventors of disruptive technologies

Fast followers — firms with the size and resources to benefit from that
technology

5 basic kinds of organizational structure

1. Entrepreneurial: Small start-up business

2. Machine bureaucracy: Midsize manufacturing firm

3. Divisionalized bureaucracy: Fortune 500 firms

4. Professional bureaucracy: Law firms, school systems, hospitals

5. Adhocracy: Consulting firms

How Information Systems Impact Organizations and Business

Firms
Economic impacts

IT affects the cost and quality of information and changes economics of information

IT can reduce transaction costs (the cost of participating in markets)

Information systems is a factor of production, like capital and labor

MIS 14
 Organizational and behavioral impacts

IT flattens organizations

Decision making is pushed to lower levels.

Fewer managers are needed (IT enables faster decision making and increases
span of control).

Postindustrial organizations

Organizations flatten because in postindustrial societies, authority increasingly

relies on knowledge and competence rather than formal positions.

The Internet and organizations

The Internet increases the accessibility, storage, and distribution of information and
knowledge for organizations.

The Internet can greatly lower transaction and agency costs.

Organizational factors in planning a new system:

Environment

Structure

Hierarchy, specialization, routines, business processes

Culture and politics

Type of organization and style of leadership

Main interest groups affected by system; attitudes of end users

Tasks, decisions, and business processes the system will assist

Using Information Systems to Achieve Competitive Advantage

Why do some firms become leaders in their industry?
Michael Porter’s competitive forces model

It provides general view of firm, its competitors, and environment

Five competitive forces shape fate of firm:

Traditional competitors

New market entrants

Substitute products and services

MIS 15
 Customers

Suppliers

Four generic strategies for dealing with competitive forces, enabled by using IT:

1. Low-cost leadership

Produce products and services at a lower price than competitors

For example, BIM

2. Product differentiation

Enable new products or services that can greatly change customer convenience
and experience

Nike, Apple, Google

Mass customization

3. Focus on market niche

Use information systems to enable a focused strategy on a single market niche;

specialize

For example; Hilton Hotels

4. Strengthen customer and supplier intimacy

Use information systems to develop strong ties and loyalty with customers and
suppliers

Increase switching costs

For example; Netflix, Amazon

Value chain model

Series of activities that add value to products or services

Highlights activities where competitive strategies can best be applied

Primary activities vs. support activities

At each stage, determine how information systems can improve operational

efficiency and improve customer and supplier intimacy

Utilize benchmarking, industry best practices

Core competencies

Activity for which firm is world-class leader

MIS 16
 Relies on knowledge, experience, and sharing this across business units

Example: Procter & Gamble’s intranet

Virtual company strategy

A network-based strategy

Virtual company uses networks to ally with other companies to create and distribute
products without being limited by traditional organizational boundaries or physical
locations

For example; Li & Fung manages production, shipment of garments for major
fashion companies, outsourcing all work to more than 7,500 suppliers

Summary

1. System is a group of components that work together to achieve goals.

System accepts and processes input and produce output.
There are 2 types of systems: closed and open
Closed system has no connections with other systems
Open system interacts with others and often are a subsystem of a bigger system.

2. Information system: Components that work together to process data and produce
information
These components are hardware, software, data, procedures, people

3. Purpose of information systems is gathering correct information and then storing

and using it to make sound decisions and solve problems.

4. Data is the raw material, hard to read to business.

Information is conclusions that have meaning within context. It is generated from
data that manipulated. Easy to read an useful.

To be useful, information must be: reliable, timely, relevant, accurate, sufficient,

unambiguous, complete, unbiased, explicit, comparable and reproducible.
Data manipulation is the process of making data to a useful information.

5. MIS is an information system that evaluates, analyzes, and processes an

organization's data to produce useful information in order to management can take
right decisions and achieve its goals.

6. IS vs IT: IS helps organizations to achieve its goals with combining the technology
(the hardware, software, and data) and people, while IT only concerns the hardware,

MIS 17
 software and data components of an IS, and does not help organizations to achieve
its goals. So the real difference between information technology and information
systems is that IS includes people.

7. Most people are able to use email, access web pages, use word processors and
spread-sheets but basic information systems like those is not important. So
successful business professionals use IS as an integral tool to gaining competitive
advantage in the workplace.

8. 3 main categories of IS:

operational-level systems: support operational managers, track of elamentary
activities

management-level systems: serve the monitoring, controlling, decision-making, and

administrative activities
strategic-level systems: help senior management for strategic issues

9. 4 major types of IS

Transaction Processing Systems (TPS)

Serve as operational level

Records daily routines

Management Decision-Support Executive Support

Information System System (DSS) Systems (ESS)
(MIS) Inputs: Transaction Inputs: Aggregate data
Inputs: High volume level data Processing: Interactive
transaction level data Processing: Interactive Outputs: Projections
Processing: Simple Outputs: Decision
models Users: Senior managers
analysis
Outputs: Summary Example: 5 year
Users: Professionals, operating plan
reports staff
Users: Middle managers There is no agreed-on
Example: Contract procedure
Example: Annual cost analysis
budgeting Graphical presentations
Use data from external of data
Internal orientation What-if analyses Long-term trends
Long-term structured Non-routine decision-
analysis Expensive
making for middle

MIS 18
 managers

10. Business process is the way work is organized, coordinated, and focused to produce
a valuable product or service.
Example of business process for finance; paying creditors, creating financial
statements.

11. Cross-functional business process means different departments work together to

achieve a common goal.

12. Enterprise systems

Supply chain Customer relationship Knowledge management

management (SCM) management (CRM) systems (KMS)
Coordination of activities Provides end-to-end Collects relevant
involved in buying, customer care knowledge and make it
making, and moving a Enterprise resource available wherever and
product planning (ERP) whenever it is needed
Procurement of materials
Transformation of raw to
finished
Distribution of products

13. How enterprise applications promote business process integration and improve
organizational performance? They provide a single information system for
organization-wide coordination and integration of business processes.
Help to unify the firm’s structure and organization
More efficient operations & customer-driven business processes

14. What is this class about? This class make us understand what is business and
technology as well as how can we relate one to another. Also how MIS help
businesses to achieve its goals.

15. Demonstrate how Porter’s competitive forces model help businesses use
information systems for competitive advantage.
Porter's competitive forces model helps companies determine what they need to do
to be more productive by comparing what their competitors are doing. It also
reduces costs and improves efficiency for companies by using MIS.

MIS 19
 16. How does the value chain model differ from the Porter model?
It offers more specific detail about what exactly to do to achieve competitive
advantages.
The Value Chain model focuses on a company's internal activities and their
contribution to competitive advantage and customer value, while Porter's Five
Forces model examines the external industry structure.

17. Value-chain model

Improve customer and supplier intimacy
Utilize benchmarking
The value chain model identifies key activities in a business where competitive
strategies can be applied and where information systems can have a strategic impact.
These activities are categorized into two groups: primary and support.

18. Features of organizations

Use of hierarchical structure
Accountability, authority in impartial decision making

Loyalty to principle of efficiency

Routines and business processes
Organizational politics, culture, environments

19. 5 basic kinds of organizational structure

Entrepreneurial: Small start-up business

Machine bureaucracy: Midsize manufacturing firm
Divisionalized bureaucracy: Fortune 500 firms
Professional bureaucracy: Law firms, school systems, hospitals
Adhocracy: Consulting firms

20. Impacts of IS
Can reduce transaction costs
Flattens organizations (push decision making to lower levels, fever managers
needed)

21. Four generic strategies (for dealing with competitive forces) enabled by using
IT:

MIS 20
 Low-cost leadership: lower price than competitors, BİM
Product differentiation
Focus on market niche: specialize
Strength customer and supplier intimacy

22. Core competencies

Activity for which firm is world-class leader
Relies on knowledge, experience, and sharing this across business units
Example: Procter & Gamble’s intranet

23. Virtual company strategy

Network-based strategy
For example; Li & Fung manages production, shipment of garments for major
fashion companies, outsourcing all work to more than 7,500 suppliers.
No physical location

FINAL STARTS FROM HERE

Chapter 4

E-Business and E-Commerce

E-commerce: Process of buying, selling, transferring, or exchanging products,
services, and information via computer networks, Internet.
E-business: Broader of EC. In addition, servicing customers, collab with partners and
conducting e-learning and electronic transactions within an organization.

Types of E-Commerce Transactions

1. B2B

only organizations

used for forming e-relationship with partners (distributors, resellers, suppliers)

allow companies to restructure supply chains and partner relationship

2. Collaborative commerce (c-commerce)

allow business partners collab electronically

frequently occurs between business partners along the supply chain

MIS 21
 3. Business-to-consumers (B2C)

sellers are organizations, buyers are individuals

4. Consumers-to-businesses (C2B)

consumers express their desire for a product and suppliers compete to meet that
demand

5. Consumer-to-consumer (C2C)

both buyers and sellers are individual

best-known C2C are auctions

6. Intrabusiness (intraorganizational) commerce

an organization use EC internally to improve its operations

7. Government-to-citizens (G2C)

government provides services to citizens via EC

8. Government-to-business G2B

Governments can do business with other governments as well as with

businesses

9. Mobile commerce (m-commerce)

e-commerce is done in a wireless environment

EC applications are supported by

Infrastructure and

1. People — sellers, buyers etc

2. Public policy — legal and regulations

3. Marketing and advertising — especially important for B2C

4. Support services — payments, order delivery

5. Business partnership — joint ventures, e-marketplaces

Benefits of EC
to organizations; to customers;

expands a company’s marketplace to less expensive products

national and international

MIS 22
 with min capital outlay a company gives more choices in selecting
can find more customer, best supplier products and vendors
etc.
enables consumers to get customized
procures material rapidly and less products
costly than competitors
enables to shop 24 hours a day, from
allows lower inventories by ease everywhere
pull-type supply c.

to society;

allows remote work, reducing travel

with lowering both road traffic and
air pollution

enables goods to be sold at lower

prices, improving people's standard
of living

bring access to people who live in

rural areas to enjoy products and
services

eases delivery of public services

Limitations of E-Commerce
Technological Non-technological

lack of universally accepted unresolved legal issues

standards
lack of international government
insufficient telecommunications regulations and industry standards
bandwidth.
sellers and buyers wait for EC to
difficulties in integrating Internet stabilize before getting involved
and EC applications with existing
ones

Chapter 5

ENTERPRISE RESOURCE PLANNING (ERP)

It’s for managing supply chains

MIS 23
 Control all major business processes with a single software architecture

Allow to manage all resources and their use in the entire enterprise

Supports all core business processes (sales orders, inventory management,

production planning, distribution, and finance)

Main objective of ERP is to integrate all departments and functions across a

company onto a single computer system

The leading ERP software is SAP R/3 and other firms are:

Oracle

J.D. Edwards

PeopleSoft

Features of ERP
accommodating variety

seamless integration

resource management

supply chain management

Scope of ERP
finance

logistics

human resource

supply chain

work flow

Advantages of ERP
reduce lead time

reduce cycle time

better customer satisfaction

increase quality and efficiency

improve resource utilization

MIS 24
 Disadvantages of ERP
expense and time in implementation

difficulty in integration with other system

difficulty in implementation change

risk of implementation failure

risk in using one vendor

Chapter 7

Decision Support Systems

Help solving both semi-structured and unstructured problems

Handles large amounts of data from different sources

Provides report and presentation flexibility

Offers both textual and graphical orientation

Supports drill down analysis

Performs what-if, simulation and goal-seeking analysis

Components of a DSS
Model management software (MMS): Coordinates the use of models in the DSS

Modal base: Gives decision-makers access to various models

Dialogue manager: Allows decision makers to easily access and manipulate the
DSS

Group Decision Support System (GDSS)

Contains most of DSS plus software

Characteristics:

anonymous input

reduction of negative group behavior

parallel communication

automated record keeping

MIS 25
 Executive Support System
A specialized DSS for assisting senior-level executives

Questions
Give example for e-commerce transactions.

An example of an e-commerce transaction is purchasing a book online through a

website, where the buyer selects the book, adds it to the cart, provides payment
information, and completes the transaction electronically.

MIS 26