3. is for Management

7/30/2019 3. is for Management

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TOPIC 3

TYPES OF INFORMATION

SYSTEM

(MANAGEMENT)


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3 Information System for Management

People make decisions all the time. A decision is a selection among several courses of

action. For example, in the car buying decision, someone has to decide whether to buy a

Ford, a Honda, a Toyota or some other make of car. We need information while making

decision to help reduce the uncertainty. With better information, a decision maker is more

certain about the outcome of the decision. For example, if someone has information about

the repair records of the models of cars he or she considering, they can be more certain

about the reliability of the car the buy. With good information, uncertainty can be reduced

and the outcome from the decision is more likely to be satisfactory.

Information systems can improve the effectiveness of management decision-making by

providing decision makers with information related to the decisions for which they are

responsible. Such information systems can be used for personal as well as business

decisions. For example, if someone makes a car purchasing decision, he or she can use a

computerized library information system to search for articles and reviews of the cars inwhich they are interested. A business manager making a product-selection decision can

use a sales analysis information system to examine sales trends and a marketing

information system to look at marketing research data.

There are eight types of information system for management:

a. Office Automation System (OAS)

b. Knowledge Management System (KMS)

c. Expert System (ES)

d. Management Information System (MIS)

e. Decision Support System (DSS)

f. Executive Information System (EIS)

g. Business Intelligent (BI)

h. E-Business / E-Commerce


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3.1 Office Automation System(OAS)

OAS could also be considered as computer-based information system that collects,

process, store and transmit electronic message, document and other form of

communication among individual, work group and organizations.

OAS provides individuals effective ways to process personal and organizational data,

perform calculations, and create documents. e.g. word processing, spreadsheets, file

managers, personal calendars, presentation packages, electronic mail, desktop

publishing, telecommunication and document image processing. .

They are used for increasing personal productivity and reducing "paper warfare". OAS

software tools are often integrated (e.g. Word processor can import a graph from a

spreadsheet) and designed for easy operation.

OAS Subspecies:

a. Communication systems

helps people work together by sharing information in many different forms

Teleconferencing (including audio conferencing, computer conferencing,

videoconferencing), electronic mail, voice mail, fax

b. Groupware system

helps teams work together by providing access to team data, structuring

communication, and making it easier to schedule meetings. For sharing

information, controlling work flows, communication/integration of work

What are the effects of office automation?

Office automation reduces the number of clerical workers carrying out

routine tasks

Large firms no longer have to employ typists

Office employees become more flexible and as a result one person can nowdo the jobs of several people

Receptionists can spend more time with clients

Managers need not necessarily delegate typing, with the secretary's role

being redefined to include more Public Relations work


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Example of OAS

a. Document Imaging Processing (DIP)

Used in industry to convert printed documents into an electronic format so that

they can be stored, organized and retrieved more easily

b. Electronic Document Management System (EDMS)

Convert document into a digital format which allows storage, retrieval and

manipulation of the document on computer.

c. Workflow Management System (WMS)

System for the automation of the movement and processing of information in a

business according to a set of procedural rules.

Management level of OAS

Level of

Management

Activities

Operational Key in operational data

Convert data into computer format

Doing clerical work

Email to communicate with strategic level and

management level

Tactical

Convert data into computer format Email to communicate with client, strategic level,

operational level, etc

Memo for operational level

Strategic Email to communicate with business partner, client,

strategic level, operational level, etc

Audio conference and video conferencing with client,

business partner, etc.


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3.2 Knowledge Management System(KMS)

It is an information system that provides capabilities for organizing, storing, accessing

and sharing organizational knowledge. It provides capabilities for organizing, storing,

accessing and sharing organizational knowledge.

It also provides capabilities of using groupware to facilitate sharing of explicit and

implicit knowledge among employees. It may also use expert system to provide expert

knowledge.

Organization Knowledge

Knowledge is the understanding that a person has gained through education,

experience, discovery intuition and insight. Knowledge can be divided into 2:

Explicit knowledge It can be stated or written in a form someone else can

understand. For example an athletic store managers knowledge of what to

do when the quantity of shoes is too low.

Implicit knowledge It cannot be expressed easily but is understood by the

individual. For example an athletic shoe store managers knowledge that a

certain quantity of a particular type of shoe is too low.

Making decisions involves the use of both explicit and implicit knowledge.

Knowledge Management

Knowledge management is the process of managing organizational knowledge. It

involves several activities:

An organization must determine what knowledge it has and acquire the

knowledge that it is lacking.

Explicit knowledge needs to be organized and recorded in a way that makes it

usable by others in the organization that does not have that knowledge.

Knowledge needs to be communicated to those who need it and share among

the employees in an organization.


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Knowledge Management Software

The software used in Knowledge Management System are as following:

Groupware

Wincite

Grapevine

KnowledgeX

Example of KMS

a. Knowledge Management Practices at Toyota Motors

The case discusses the various Knowledge Management (KM) practices at

Toyota Motors, the world's most profitable automobile company. It also

describes how Toyota enables wide knowledge sharing not just within the

organization but also across its supply chain. It details the practices that make

Toyota a true learning organization. It further explores the role of traditional

organizational practices in the company's KM efforts. The case concludes with

a discussion on how KM has contributed to Toyota's exemplary performance

Level of Management for KMS

Level of

Management

Activities

Operational Handle content and knowledge management

Using the knowledge

- Messaging

- Computer-mediated collaboration

- Electronic task management

- Video conferencing & visualization

- etc

Tactical Finding and creating knowledge

- Data mining

- Web browsing

- Search and retrieval

Strategic Packaging Knowledge

- Documents management

- Intelligent agents


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3.3 Expert System(ES)

It gives expert advice to the decision maker. An expert system mimics the way a human

expert would analyze a situation and then recommend a course of action. The system

accomplishes task by incorporating human expert knowledge and by using this

knowledge to analyze specific problems. ES consists of hardware and software that

stores knowledge and makes inferences, similar to those of a human expert

Expert systems use techniques from the artificial intelligence (AI) to mimic human

intelligence by using a computer. Artificial Intelligence System include people,

procedures, hardware, software, data and knowledge needed to develop computer

systems and machines that demonstrate the characteristics of intelligence.

Characteristics of intelligent behavior:

The ability to learn from experiences and apply knowledge acquired from

experience

Handle complex situation

Solve problems when important information is missing

Determine what is important

React quickly and correctly to a new situation

Understand visual images

Process and manipulate symbols

Be creative and imaginative

Use heuristics

Expert Advice

People are experts in particular area due to the formal education or specialized

training.

Expert advice is used in all levels of a business but it is required for structured

problems at the operational and tactical levels.


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Component of Expe

a. Knowledge bas

A component of a

and relationships

application.

Some tools & tec

Assemblinsimilar ex

Using fuz

conditions

likelihood

Using rule

or outcom

rt System

n ES that stores all relevant information, data,

used by the ES. Must be developed for each u

Structure of knowledge base

niques that can be used to create a knowledg

g human experts integrate the knowledge of iertise

y logic help computers evaluate the imperfec

they encounter and make educated guesses

or probability of correctness of the decision

s conditional statement that links given condi

es.

ules, cases

ique

base:

individuals with

t or imprecise

based on the

ions to actions


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Using cases use cases in developing a solution to a current problem or

situation.

b. Inference engine

Part of ES that seeks information and relationships from the knowledge base

and provides answers, predictions and suggestions the way a human expert

would.

c. Explanation facility

Allow user or decision maker to understand how the ES arrived at certain

conclusions or results

d. Knowledge base acquisition facility

Provides convenient and efficient means of capturing and storing all the

components of the knowledge base.

e. User interface

To make the development and use of an ES easier for users and decision

makers

Level of Management for ES

Level of

Management

Activities

Operational Short term decision making (day-to-day operations)

Tactical Short term and long term decision making

Strategic Long term Decision making


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3.4 Management Information System(MIS)

Management information system (MIS) is a system or process that provides information

needed to manage organizations effectively. Management information systems are

regarded to be a subset of the overall internal controls procedures in a business, which

cover the application of people, documents, technologies, and procedures used

by management accountants to solve business problems such as costing a product,

service or a business-wide strategy. MIS are distinct from regular information systems

in that they are used to analyze other information systems applied in operational

activities in the organization

It supports management decision-making by providing information in the form of reports

and responses to queries to managers at different levels of an organization.

Management Information Systems Structure

The users of MIS are managers at each levels of decision-making. The user then

request information from the system and the information returned in the form ofreports and query. The data in MIS comes from both internal and external. The

MIS software consists of application software to manipulate data in database.


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Level of Management for MIS

Level of

Management

Activities

Operational provide evidence of business transactions

enable effective and efficient utilization of resources

information for routine decision making, problem

solving, and service delivery

Tactical identify and manage risks

support research and development

support consistent and rapid decision making

evaluation of resources usage

project scheduling

problem solving

operational planning

Strategic Evaluate and document quality, performance and

achievements.

external factors that influence the direction

strategic planning and policy

information for strategically positioning the

organization


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3.5 Decision Support System(DSS)

Decision-support systems ("DSS") are specifically designed to help management make

decisions in situations where there is uncertainty about the possible outcomes of those

decisions. It helps managers make decisions by analyzing data from a database and

providing the results of the analysis to the manager. It is being used for making

decisions at the tactical and strategic level management.

Function of Decision Support System

a. DSS should provide support for decision making, but in particular semi-

structured and unstructured decisions.

b. DSS should focus on every levels of management decision making - it should

integrate across all levels in recognition of the overlap between operational,

tactical and strategic decisions.c. DSS should support all phases of decision making process outlined above.

Management Decision Support

A DSS includes several ways of analyzing data. Manager can select the form of

analysis that she or he wants as following

a) Statistical Calculation

Data is manipulated to determine the characteristics of the data or to draw

conclusions from the data. For example a manager has data about different

types of shoes sold for each of the past five years. He or she can calculate

the average yearly sales for each type, which is one way of characterizing the

data.

b) Mathematical Modeling

A model is a representation of reality. The models are used for decision-

making to stimulate the real world by using sets of the mathematical

equations. For example an inventory flow simulation so that a manager can

try different inventory reordering decisions. By trying different strategies, a

manager can use the model to determine the least expensive inventory

reordering policy.


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Decision Support System Structure

The users of a DSS are managers (Tactical and strategic level). The users

requests analysis of data from the system.

The DSS database contains data that is analyzed to produce the output. It

comes from both internal and external sources.

The DSS model base contains the mathematical models and statistical

calculation routines that used to analyze data from the database.

The DSS software provides capabilities to access data in the database and to

use models from model base to analyze the data.

Level of Management for DSS

Level of

Management

Activities

Operational Promotes learning or training

Generates new evidence in support of a decision

Tactical support the solution of problems that require judgment

by the problem solver

Helps automate the managerial processes

Strategic Analyze, compare, and highlight trends in important

variables so that they can monitor performance and

identify opportunities and problems.

Reveals new approaches to thinking about the problem

space

Users (Decision

Makers) DSS Software

DSS

database

DSS model base


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3.6 Executive Information System(EIS)

It is a system specifically designs for the information needs of strategic managers. It

provides information and support that is most appropriate and useful for top level

managers.

EIS also known as an Executive Support System (ESS), it provides executives

information in a readily accessible, interactive format. They are a form of MIS intended

for top-level executive use. An EIS/ESS usually allows summary over the entire

organization and also allows drilling down to specific levels of detail. EISisdesigned to

help senior management make strategic decisions. It gathers, analyses and

summarizes the key internal and external information used in the business.

Features of Executive Information System

Provide summary information to enable monitoring of business performance Used mainly for strategic decision making, but may also provide features that

relate to tactical decision making

Provide a drill-down feature which gives a manager the opportunity to find out

more information necessary to take a decision or discover the source of a

problem.

Provide analysis tools

Must be integrated with other facilities to help manage the solving of problems

and the daily running of the business

Integrate data from a wide variety of information sources, including company

and external sources such as market and competitor information

Designed according to the needs of managers who do not use computers

frequently.

Executive Information Needs

Manager at strategic level need summarized and not detailed information.

However, they also need to focus on the details of particular aspects ofinformation. The manager can get detailed information through a process called

drilling down. Drilling down is the process of finding detailed information that is

used to produce summary information. Managers at the highest level need both

internal information and external information.


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ESS may include any of the following capabilities:

a) On line access to reports

b) The ability to query the MIS database for information not usually received in

reports

c) The ability to access external database

d) The ability to analyze and summarized data from reports and queries, and to

view the results of the analysis graphically.

e) The ability to drill down to detailed information

f) Electronic mail (e-mail) to communicate with employees.

g) An electronic appointment calendar

h) Basic word processing capabilities for writing notes, memos, and another

simple communications.

Level of Management for EIS

Level of

Management

Activities

Operational control focuses on day-to-day operations, and the central

idea of this process is effectiveness and efficiency

Tactical Provide strong reporting and drill-down capabilities.

Provides timely delivery of company summary

information

Offers efficiency to decision makers

evaluation of vendors and buyers, the evaluation of

purchased materials and parts, and analysis of critical

purchasing areas

Strategic Identify where a problem or opportunity exists

Providing easy access to both internal and external

information relevant to meeting the strategic goals of the

organization.

Provides timely delivery of company summary

information

make judgments about risk and uncertainty of a project

and its impact on the company in short term and long

term


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3.7 Business Intelligent(BI)

Business Intelligence (BI) refers to computer-based techniques used in spotting,

digging-out, and analyzing business data, such as sales revenue by products and/or

departments or associated costs and incomes. Business Intelligence often aims to

support better business decision-making.

Business Intelligence also is a process for increasing the competitive advantage of a

business by intelligent use of available data in decision making. This process is pictured

below.

The five key stages of Business Intelligence:

1. Data Sourcing

2. Data Analysis

3. Situation Awareness

4. Risk Assessment5. Decision Support

Extracting electronic information from text documents,

databases, images, media files and web pages.

Synthesising useful knowledge from collected data using

data mining, text understanding and image analysis

techniques.

Linking the useful facts and inferences and filtering out

irrelevant information.

Identifying reasonable decisions or courses of action

based on the expectation of risk and reward.

Employing semi-interactive software to identify good

decisions and strategies.


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Level of Management for BI

Level of

Management

Activities

Operational clerk recorded customer features

Managerial Data Encompasses Hard and Soft Data

Tactical Measures the operational reliability for meeting a

customer request

Technology enables organizations to transform data

stored in core business systems into useful information

Analyzing the vast amount of internal transaction data

and external data about customers and competitors to

track performance and manage the business more

effectively

Strategic Provide statisticians and Corporate Analysts

Ensure the payoff of investments in BI systems by

making the masses accountable for data-driven action

and results. - Accountability could be in the form of

rewards, penalties Or simply, a mandated workflow

Support better business decision-making


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3.8 E-Business / E-Commerce

Electronic Commerce (e-commerce) is the use of networks especially the internet to

promote and sell goods and services.

An Electronic Commerce (e-commerce) system is an information system that provides

e-commerce capabilities for an organization.

Types of Electronic Commerce

There are several types of e commerce:

a) Business to Consumer (B2C) Electronic Commerce

It involves a business selling its goods or services electronically to the final

consumer, which is usually an individual. B2C e commerce companies

operate in several ways as following:

Direct marketers sell the products they produce

Indirect marketers Use other companies to sell their products

Full cybermarketers Only sell their products electronically

Partial cybermarketers Sell their products traditionally and

electronically

Electronic Distributor Fill the orders they take from their own stock

Electronic Brokers Send the orders they receive to manufacturers orwholesalers that fill the orders

Normally involves the use of internet and the World Wide Web


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b) Business to Business (B2B) Electronic Commerce

It involves one business selling its goods or services electronically to other

businesses. There are several types of B2B:

Supplier Oriented Marketplace A supplier company provides e

commerce capabilities for other businesses to order its products.

Buyer Oriented Marketplace The business that wants to purchase

the products request quotation or bids from other companies and the

buyer will select the winning supplier from the submitted bids.

Intermediary Oriented Marketplace A third business will acts as

intermediary between the supplier and buyer. It will provides e

commerce capabilities for suppliers and buyers.

B2B use the public Internet or it may use a private extranet set up by

company.

c) Consumer Consumer (C2C) Electronic Commerce

One consumer sells a product or service to another consumer through an

intermediary e commerce business. The intermediary will provides a

website for consumer to advertise the products.

d) Intrabusiness or Organizational Electronic Commerce

Involves transactions between departments, regions, subsidiaries or other

unit of business. The transactions are using the intranet.

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