Introduction to
Management Information Systems
(MIS)
Minder Chen, Ph.D.
Professor of Management Information Systems
Martin V. Smith School of Business and Economics
CSU Channel Islands
Email: Minder.Chen@csuci.edu
What is MIS?
• M: Management
– Business Functions/Processes, Organizations, and
Human Behaviors
• I: Information
– Contents: Data, Information, Knowledge
– Processes: Create, Gather/capture/elicit, Store,
Organize, Consolidate & Condense, Filter, Deliver, and
Share
• S: System (Information Systems/Information Technology)
– Input-Process-Output and Storage
– General Systems Theory (GST)
•
•
•
http://en.wikipedia.org/wiki/Management_information_system
http://en.wikipedia.org/wiki/Systems_thinking
http://en.wikipedia.org/wiki/Systems_theory
© Minder Chen, 1996-2013
MIS - 2
A System View of an Information System
Information System
Boundary
Environments
Information System (Producer)
Data
Providers
Input
Data
Sources/
Business
events
Process
Output
Main memory
Control
Data storage
Information
Destinations
•Consumers
•Users
•organization
units
Secondary storage
Procedure
What are the hardware options or Inputs, Outputs, Processing,
and Storages?
© Minder Chen, 1996-2013
MIS - 3
Characteristics of Good Information
•
•
•
•
•
Accurate
Timely
Relevant (provide context) to decisions
Just sufficient Information overloading
Worth its cost (to justify its benefits)
• Deliver just enough accurate, relevant, and timely
information to the right persons to make better
decisions.
• How much energy does a Google search consume?
 0.0003 kWh of energy per search; a Google search uses just
about the same amount of energy that your body burns in ten
seconds.
© Minder Chen, 1996-2013
MIS - 4
Information Quality (IA) and Categories
Source:
http://sloanreview.mit.edu/files/2008/12/3947-ex3-lo7.png
http://sloanreview.mit.edu/article/manage-your-information-as-a-product/
© Minder Chen, 1996-2013
MIS - 5
Presentation of Information
© Minder Chen, 1996-2013
MIS - 6
Another Version
© Minder Chen, 1996-2013
MIS - 7
A Picture Is Worth a Thousand Words
• 24 June – 14 December 1812
https://en.wikipedia.org/wiki/File:Napoleons_retreat_from_moscow.jpg
© Minder Chen, 1996-2013
MIS - 8
Managing Information as a Resource
• The resources of the industrial age were
tangible things (e.g., raw materials and
human resources) and easily understood.
• In the emerging post-industrial society,
there is little understanding of the
characteristics of information – the basic yet
abstract/intangible resource.
• Both physical resources and information
could be mined, processed, bought, sold,
and managed.
Harland Cleveland, "Information as Resource," The Futurist, December 1982, 34-39.
© Minder Chen, 1996-2013
MIS - 9
Information Life Cycle
Information
Data
Decision
Action
• Intelligence
• Design
• Choice
* http://faculty.csuci.edu/minder.chen/MIS310/Reading/20000905cleveland.pdf
© Minder Chen, 1996-2013
MIS - 10
Characteristic of Information
• Expandable: Information explosion*  Reduce
•
•
•
•
•
information overload to reduce uncertainty in decision
making.
Compressible: Sorting, categorizing, filtering,
aggregating, summarizing**, and consolidating.
Substitutable: Substitute with other resources via
productivity improvement.
Transportable: Data communications and networking.
Diffusive: Spreading (sharing) and leaking (Security &
privacy)
Sharable: Sharing information is a shared transaction
instead of an exchange transaction.
* Digital Universe: The world’s information is doubling every two years. In 2011
the world will create a staggering 1.8 zettabytes.
** Summly, a news-summarizing app acquired by Yahoo for $30 millions.
© Minder Chen, 1996-2013
MIS - 11
Even the Caveman Needs Knowledge to Survive
The information-knowledge-wisdom hierarchy. The
caveman has lots of information; he selects and organizes
useful information into knowledge, but he does not achieve
wisdom until he has integrated his knowledge into a whole
that is more than useful than the sum of its parts.
Source: Harlan Cleveland, "Information as a Resource," The Futurist, December 1982, 34-39.
© Minder Chen, 1996-2013
MIS - 12
© Minder Chen, 1996-2013
©Source: IBM Academic Program course materials
MIS - 13
The Knowledge Value Chain: Data
Source: IBM Academic Program course materials
© Minder Chen, 1996-2013
MIS - 14
The Knowledge Value Chain: Information
Source: IBM Academic Program course materials
© Minder Chen, 1996-2013
MIS - 15
The Knowledge Value Chain: Knowledge
© Minder Chen, 1996-2013
Source: IBM Academic Program course materials
MIS - 16
Knowledge Is Not Enough
Source: IBM Academic Program course materials
© Minder Chen, 1996-2013
MIS - 17
DIKW (Information) Hierarchy
Wisdom
Know why
Integrating: Connect the dots
Knowledge
Know how
Learning: Derive rules/policies
through experiences & patterns
Information
Know what
Analyzing: To support
decision making
Data
Know nothing
Observing: Description of events
Event
© Minder Chen, 1996-2013
Happening/Doing
MIS - 18
DIKW Hierarchy: version 2
• T: Tacit knowledge
• E: Explicit knowledge
© Minder Chen, 1996-2013
http://en.wikipedia.org/wiki/DIKW_Pyramid
http://en.wikipedia.org/wiki/File:DIKW.png
MIS - 19
Moving Up the DIKW Hierarchy
• Where is the Life we have lost in living?
• Where is the wisdom we have lost in
knowledge?
• Where is the knowledge we have lost in
information?
T.S. Eliot, Choruses from “The Rock”, 1934
© Minder Chen, 1996-2013
MIS - 20
Information as Products/Services
• CarFax: CARFAX - Vehicle History Reports and VIN number
check - http://www.carfax.com (1 CARFAX Report $39.99)
• Britannica*: http://www.britannica.com/
– Blown to Bits: How the New Economics of Information Transforms
Strategy
– The printed version was blown away by three disruptive forces
– A comeback act? (iPad app)
– Why Britannica matter? No printed version, 2012.
• Information as services
– Google: Searching for information (Google would provide
“access to the world's information in one click”)
– Facebook: Social networking ("Facebook's mission is to give
people the power to share and make the world more open and
connected." )
*Source: Jorge Cauz, “Encyclopaedia Britannica's President on Killing Off a
244-Year-Old Product,” Harvard Business Review, Mar 01, 2013.
© Minder Chen, 1996-2013
MIS - 21
CD-ROM based Encyclopedia
• Encarta (1993), Grolier, and Compton, list for
$50 to $70; usually bundled with a new PC for
free.
• Content quality and distribution channel
• Cost:
– With a marginal manufacturing cost of $1.50 per
copy, the CD-ROM as freebie makes good
economic sense.
– The marginal cost of Britannica, in contrast, is
about $250 for production plus about $500 to $600
for the salesperson’s commission.
© Minder Chen, 1996-2013
MIS - 22
WWW
invented
1990
Britannica Sales
Netscape
1995
Google Inc.
incorporated,
1999
Google IPO,
2004
Encarta
discontinued
2008
Source: http://hbr.org/2013/03/encyclopaedia-britannicas-president-on-killing-off-a-244-year-old-product/ar/1
© Minder Chen, 1996-2013
MIS - 23
The Rise of Wikipedia
© Minder Chen, 1996-2013
MIS - 24
Britannica vs. Wikipedia
Characteristic
Britannica
Wikipedia
Price
Content
generation/Editorial
Update frequency
Revenue stream
Quality of the content
Wiki is an open source content management system (CMS).
Wikipedia uses wiki as a development tool.
© Minder Chen, 1996-2013
MIS - 25
Information Systems Components
Computers
• Server
• PC
• Mobile
Networking
Information
System SW,
Application
SW
Data,
Information,
Knowledge
Source: adapted from Using MIS 3e
© Minder Chen, 1996-2013
Manual
Procedures
and Business
Process
Individuals,
Groups,
Departments,
Enterprise-wide,
Customers,
Trading partners
MIS - 26
huMan, Market, Money, Method, Machine, Material, Message
Business environments
• Market demands
• Technology development
• Social trends
• Locations/Localization
 
Message:
Man: Human Resource, Employees
Market: Customers
Who?
People
Information
Processes
Vision  Why?
How, When?
Goals/Objectives/
Performance measures
Method:
Technique, Process,
Project, Task
© Minder Chen, 1996-2013
Things
$$$
Money:
Accounting,
Finance,
Investment
What?
Machine:
Property, Facility,
Technology
Material:
Raw material,
Product
MIS - 27
Organizational Hierarchy and Information
Aggregated
Control
Middle-Level
Managers
Operation
Operational
Employees
© Minder Chen, 1996-2013
source
Executives
Level of Detail
Planning
Processing
OLAP
External
Detail
Internal
OLTP
MIS - 28
Information Systems Triangle
Operational
Data Warehouse
Data Mart
Database
Enterprise
Workflow
OLAP
Online
Analytical
Processing
OLTP
Online Transaction
Processing
Data
Information
BI
DSS
EIS
Business
Process
Workflow
Messaging Systems
Knowledge
© Minder Chen, 1996-2013
Workflow, Collaboration, Groupware
MIS - 29
Classification of Information Systems
• Transaction Processing System
–
–
Online transaction processing system (OLTP)
Batch, Online, real-time
• Management support system
–
–
Decision support system (DSS), Executive information system
(EIS), and Digital Dashboard
Data warehouse, Business intelligence (BI), and Online Analytical
Processing (OLAP)
• Units involved
– Individual, group, and departmental, enterprise-wide,
inter-organizational, and social networking systems
• Strategic Information Systems
• Based on IT Platforms
–
–
–
Traditional desktop/client-server applications
Web-based applications (e.g., Electronic Commerce)
Mobile applications
© Minder Chen, 1996-2013
MIS - 30
The Extended Enterprise
Buy
Back
Office
Front
Office
Sell
B2C or B2B
E-Commerce
B2B
E-Commerce
Suppliers
Make/Add Value
Customers
E-Business: Virtual and Dynamic Enterprise
Warehousing
Manufacturing
Logistic/Transportation Finance/Accounting
Order Fulfillment
Engineering
HR
Marketing
Sales
Support/Service
Demand Chain
Supply Chain Back Office Integration
Enterprise Resource Planning
Customer Relationship Management
Supply Chain Management
© Minder Chen, 1996-2013
MIS - 31
MIS
• Management BY Information Systems
• Management OF Information Systems
Resources
Information
Systems
Information
Manages
Other
Resources:
HR, Money,
Material,
etc.
As Products or Services
• Managing Information as a Resource (i.e., Inventory Info. System)
• Selling Information as Products (i.e., CarFax)
• Offering Information/IS as Services (i.e., Facebook, Google)
© Minder Chen, 1996-2013
MIS - 32
Summary
• What information does one may need to obtain to
do his/her works?
• What kinds of information systems/technologies
may be the best to manage such information?
• Be sensitive to the information, IS, and IT.
• Know how to apply conceptual frameworks
introduced this module in understanding
information needs, but start with the analysis of
decisions and/or business processes.
© Minder Chen, 1996-2013
MIS - 33
IT, IS and IM
© Minder Chen, 1996-2013
Source: Competing with Information: A Manager's Guide to Creating
Business Value with Information Content
MIS - 34
Key Frameworks
© Minder Chen, 1996-2013
MIS - 35
Information Systems Applications in a Firm
Customer Relationship Management (CRM)
© Minder Chen, 1996-2013
MIS - 36
Information as: Product vs. By-Product
http://sloanreview.mit.edu/article/manage-your-information-as-a-product/
http://sloanreview.mit.edu/files/2008/12/3947-ex1-lo7.png
© Minder Chen, 1996-2013
MIS - 37
COBIT’s Information Criteria (I)
• Effectiveness deals with information being
relevant and pertinent to the business process as
well as being delivered in a timely, correct,
consistent and usable manner.
• Efficiency concerns the provision of information
through the optimal (most productive and
economical) use of resources.
• Confidentiality concerns the protection of
sensitive information from unauthorized
disclosure. (Sony PlayStation Network hacked)
• Integrity relates to the accuracy and
completeness of information as well as to its
validity in accordance with business values and
expectations.
© Minder Chen, 1996-2013
MIS - 38
COBIT’s Information Criteria (II)
• Availability relates to information being available
when required by the business process now and in
the future. It also concerns the safeguarding of
necessary resources and associated capabilities.
• Compliance deals with complying with the laws,
regulations and contractual arrangements to which
the business process is subject, i.e., externally
imposed business criteria as well as internal
policies. (Sarbanes–Oxley Act)
• Reliability relates to the provision of appropriate
information for management to operate the entity
and exercise its fiduciary and governance
responsibilities.
© Minder Chen, 1996-2013
MIS - 39
Exercise – 20-minute break and 5-minute presentation
• Describe your background and experiences
–
–
–
Company name and the industry it belongs to
Position and general responsibility
Three major decisions
• Pick the most important decision involved in this position
and find out the following:
–
–
–
–
–
Characteristic of the decision: Operational vs. Strategic;
Structured vs. Unstructured; Routine vs. Non-routine
What information is current used to support the decision
What kind of source data should be collected to generate the
information needed
Under which task is this decision performed
What is the broader business process that this task belongs.
• What additional improvements can be made from the
perspectives of information systems and decision making
© Minder Chen, 1996-2013
MIS - 40
Information System Applications
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MIS - 41
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