Management Information Systems - MIS - A system used to collect, organize, and display information for workers and managers in an organization to support them in making decisions. Users of Information Systems in Organizations: The managers and some workers are users of information systems - draw a pyramid. executive managers middle managers supervisors information workers - analysts/programmers/accountants service workers - provide sales or services goods workers - assemble products Executive managers/senior managers - Responsible for long- range planning, setting the goals of an organization. Determining where new markets will be. Strategic planning or strategic decision making. What will the organization be doing in the next 5 years? Use information systems for decision support. middle managers - Responsible for designing strategies to achieve the goals formulated by executive managers. How to deploye the firm's human, physical, and financial resources. Tactical planning. Also use information systems for decision support - to help in evaluating different strategies. Supervisors - responsible for day-to-day operations. Schedule and monitor workers and processes. Use computers to assist with these tasks. information workers - programmers, systems analysts, accountants, writers, secretaries - use computers directly in their work - for word processing, calculations, program development. Kinds of Problems Solved by MIS Structured problems - clearly defined problems, procedures are known for solving them, and information needed for solution is easy to identify. Can usually be solved using information and tools available in an information system. Kinds of problems solved by information workers and supervisors. Example: determining the cost of an across the board 5% wage. Semi-structured problems are less routine than structured problems. The procedure for solving such a problem may involve some subjective judgement. Some of the information needed may not be available. Example: designing a worker incentive program which will boost productivity and thereby maintain equal or better profit margins compared to current profit margins. Don't know for sure whether workers will respond to incentives and what the boost in their productivity will be. Unstructured problems require human intution as the basis for decision making. Relevant information may be missing and there are no models to analyze for help in making the decision. Example: Whether to develop a new product line for an overseas market. Information systems provide lesser degrees of help as we move from structured to unstructured problems. Sources of Information for MIS internal information - generated by the organization. Examples are inventory levels, cash flow, customers, orders, personnel, sales. Entered into system by keyboard operators or through the use of scanners. external information - information about market trends, the economy, competitors, mailing lists of potential customers.. Available from news sources, company publications, industry magazines, and increasingly through the world wide web. Not stored permanently in a company's MIS. Kinds of Information Systems transaction processing system - collects and displays the information regarding individual transactions and stores it as a record in a transaction file. For example, a point of sales transaction system collects the id number, price, and quantity of each item sold and calculates total amount due for a sale. The data from a POS system may be passed to an inventory control system which deletes the quantity sold of each item. If inventory falls below reorder point, generates a reorder record for reorder file. If order cannot be filled, generates an out-of-stock record. A general accounting system is a transaction system that records the financial status of a business by keeping track of all payments received from customers, amounts billed to customers, payments issued to vendors or creditors, amounts owed to vendors and creditors. A MIS (Management Information System) manipulates data collected by a transaction processing to generate reports that workers and managers can use to make routine decisions in response to structured problems. Kinds of reports: detail reports - lists all transactions or inventory items, summary reports - condenses information in a detail report, control line report - groups data and provides subtotals by category, exception report - calls attention to values that are outside of normal or acceptable ranges. Generally these reports are produced on a scheduled basis (e.g., daily, weekly). Decision support system (DSS) allows users to manipulate data directly and produce on-demand reports. These reports help managers and workers make non-routine decisions or solve semi-structured problems. A decision support system is used to make a decision model of a real-life situation which can then be manipulated to provide data used in making a decision. A decision query is a formulation of the data that needs to be collected to make a decision. Decision support system supports the process of decision making by the manager or worker - it does not make decisions. Incorporates modeling tools such as spreadsheets which allow the user to examine effects of changing parameters (what happens if market share increases from 5% to 7%, or if costs of supplies goes up 10%). Also incorporates statistical tools so managers can study trends. Should be able to access internal data in the company's transaction systems and external data. Expert system - a computer system that mimics the behavior of a human expert in a particular arena to actually make decisions. An expert system contains a knowledge base of facts and rules which are developed by studying the human expert. It contains an inference engine which follows the rules in the knowledge base to analyze data for a particular task and make a recommendation. Expert systems have been designed for medical diagnosis - diagnose particular illnesses and recommend treatments, troubleshooting electronic equipment, making loan decisions, underwriting insurance policies, etc. Expert system shell is a software tool used for entering the rules and facts into the knowledge base for a particular expert system.