MANAGEMENT INFORMATION SYSTEMS (M0892)

SCHOOL OF INFORMATION SYSTEM BINA NUSANTARA UNIVERSITY 2012

Copyright 2006 John Wiley & Sons, Inc.

Introduction
Managing and Using Information Systems: A Strategic Approach by Keri Pearlson & Carol Saunders

Introduction
How effective can a business manager be
when they are not involved in the IS decisions of their organizations?

Should managers rely on experts to make

these decisions?

What risks is management making when it

permits others to make critical IT decisions for the organization?
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Real World Examples

Amazon.com has garnered a leadership position in the online world by leveraging their new business model. See www.amazon.com

Expanded market offerings. Increased customization and personalization Smarter storage Cost cutting.

Google has become the leader in the search engine market through innovation, simplicity, and by adding new features.

See www.google.com Their mission statement can be found at http://www.google.com/corporate/

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THE CASE FOR PARTICIPATING IN DECISIONS ABOUT INFORMATION SYSTEMS

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Participating in Information Decisions

Business managers must be involved in information decisions. Figure I.1 describes reasons why. IS

is a critical resource. enables change in how people work together. is integrated with almost every aspect of business. enables business opportunities and new strategies. can be used to combat business challenges from competitors.

Technology is ubiquitous.
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A Business View
IT is a critical resource. IT is over 50% of capital goods dollars spent in the US.

Over $3,800 a year per capita. High growth firms invest more in IT.

Business managers decide resource allocation.

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People and Technology

People and Technology work together.

Technology is critical. Workers rely heavily on technology.

Examine long-term and short-term consequences. Manage change carefully.

Managers must know how to mesh both.

Technology changes rapidly.

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WHAT IF A MANAGER DOESNT PARTICIPATE?

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Think About IT
What risks does a manager take if they are NOT involved in IS decisions? If IS directly impacts profitability of a business then how can non-participation hurt the bottom-line? How does making the wrong decision impact business goals and organizational systems?
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Business Goals
IS must support business goals.

It is not an end but a means to an end. Support and strategic focus.

Must meet user needs. Must be able to support business transactions.

Toys R Us IT debacle.

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Organizational Systems
IT must support organizational systems

The people, work processes, and structure.

Carefully consider the consequences of making an IS change.

How will this impact the way work is done? Will the people accept this new technology? What changes may need to be made in the structure of the organization?
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WHAT SKILLS ARE NEEDED TO PARTICIPATE EFFECTIVELY IN INFORMATION TECHNOLOGY DECISIONS?

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Basic Skills Needed

Myth - technical expertise is not needed to participate. Managerial role and skills needed (Fig I.2):

Visionary creativity, curiosity, confidence, focus on business solutions, flexibility. Informational and Interpersonal communication, information gathering, interpersonal skills. Structured project management, analytical skills, organizational skills, planning skills.
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BASIC ASSUMPTIONS
Managers must know about both using and managing information. Managers must be knowledgeable participants in IS decisions.

The general manager must have a basic understanding of the business and technology issues related to IS.

Technology of today is different from the technology of yesterday.

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 The role of the general manager and IS manager are distinct.

The GM must have a basic understanding of IS to make decisions that may have significant implications for the business. The IS manager must have general business knowledge and a more in depth knowledge of IS to support its function.

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Management Assumptions
Four key activities of the classic view of management (Fig I.3).

Planning Organizing Leading Controlling

Classic view is seen as more of a tactical approach to management.

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Mintzberg Model
The Mintzberg model describes management in behavioral terms (Fig I.4).

Interpersonal Informational Decisional

Managers work in a chaotic environment. Quality information is crucial. More of a strategic view of management.
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Business Assumptions
Internal Model

Understanding of what constitutes a business. Managers use to make sense of the chaotic business environment in which they function. Functional and process views of business.

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Functional View
Functional View of the business

Based on the functions people perform. Information flows vertically in the organization. Sometimes information flows across the organization. Accounting, Operations, Marketing, Sales and Support. Executive Management receives the information and distributes as need arrives. Let see Figure I.5

Let see chap. 1 and 2 Konsep Sistem Informasi

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Figure I.5 Hierarchical View of the firm.

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Process View
This model sees the business by the processes it performs to achieve its goals. Porter describes business in terms of its primary and support activities.

Primary inbound and outbound logistics, operations, marketing and sales. Support HR, technology, procurement, infrastructure.

Activities are linked together to form a chain the value chain (fig I.6).
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Figure I.6 Process View of the Firm: The Value Chain

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Information Hierarchy
Data, Information, and Knowledge are not interchangeable terms.

Data set of specific objective facts or observations (inventory contains 100 widgets). Information data endowed with relevance and purpose (75% of widgets were purchased by customers in December) let see fig I.8. Knowledge - information that has been synthesized and contextualized to provide value.
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Top Management

Middle Management Medium: weeks, months, years Summarized Integrated Often financial Primarily internal with limited external Relatively judgmental

Supervisory & Lower-Level Management Short: day to day

Time Horizon Long: years

Level of Detail

Highly aggregated Less accurate More predicted Primarily external

Very detailed Very accurate Often nonfinancial Internal

Orientation

Decision

Extremely judgmental Uses creativity and analytic skills

Heavy reliance on rules

Figure I.8 Information Characteristics across Hierarchical Levels

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Data
Definition Simple Observations of the sate of the world
Easily

Information
Data endowed with relevance and purpose
Requires

Knowledge
Info from the human mind (includes reflection, etc)
Hard

Characteristic

structured captured transferred Often quantified Mere facts Daily inventory reports of all inventory items sent to CEO of large manufacturing company

unit of

analysis Data that has been processed Human mediation necessary Daily inventory report of items below economic order quantity levels sent to inventory manager (IM)

to structure Difficult to capture on machines Often tacit Hard to transfer IM knows which items need to be reordered in light of related potential problems

Example

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System Hierarchy
Information systems are comprised of three main elements:

Technology People Process

Infrastructure everything that supports the flow of processing information Hardware, software, data, and components. Architecture strategy implicit in these components. Let see Chap. 1 Konsep Sistem Informasi
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Management

Information Systems

People

Technology

Process

Figure I.9 System Hierarchy

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SUMMARY

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Summary

Business managers must be involved in information decisions. Technology is ubiquitous. IT is a critical resource. People and Technology work together. Certain key skills are needed. Data, Information, and Knowledge are distinct.
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Copyright 2006 John Wiley & Sons, Inc.

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