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Weeks 4-5: Internal Information Systems. MIS 2101: Management Information Systems. Based on material from Information Systems Today: Managing in the Digital World , Leonard Jessup and Joseph Valacich, Pearson Prentice Hall, 2007

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Weeks 4-5: Internal Information Systems

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Weeks 4-5: Internal Information Systems

MIS 2101: Management Information Systems

Based on material from Information Systems Today: Managing in the Digital World, Leonard Jessup and Joseph Valacich, Pearson Prentice Hall, 2007

Also includes material by David Schuff, Paul Weinberg, and Cindy Joy Marselis.

Learning Objectives

Learning Objectives

Decision-Making Levels of an Organization

Operational Level

Day-to-day business processes

Interactions with customers

Information systems used to:

Automate repetitive tasks

Improve efficiency




Can often be automated using IS


Managerial Level

Functional managers

Monitoring and controlling operational-level activities

Providing information to executive level

Midlevel managers

Focus on effectively utilizing and deploying resources

Goal of achieving strategic objectives

Managers’ decisions


Contained within business function

Moderately complex

Time horizon of few days to few months


Executive Level

The president, CEO, vice presidents, board of directors


Long-term strategic issues

Complex and nonroutine problems

Unstructured decisions

Long-term ramifications



Comparison of Decision-Making Levels

Learning Objectives

General Types of Information Systems

Input-process-output model

Basic systems model

Payroll system example

Transaction Processing System

Operational level


Processing of business events and transactions

Increase efficiency


Lower costs

Increased speed and accuracy


Payroll processing

Sales and order processing

Inventory management


Architecture of a TPS

Architecture of a TPS: Inputs

Source Documents

Different data entry methods

Architecture of a TPS: Processing

Online processing

Immediate results

Batch processing

Transactions collected and later processed together

Used when immediate notification not necessary

Architecture of a TPS: Outputs

Counts, summary reports

Inputs to other systems

Feedback to systems operator

Summary of TPS Characteristics

Management Information Systems

Managerial level


Produce reports

Support of midlevel managers’ decisions


Sales forecasting

Financial management and forecasting

Manufacturing, planning and scheduling

Inventory management and planning


Architecture of an MIS

Architecture of an MIS: Processing



Architecture of an MIS: Outputs

Summary of MIS Characteristics

Executive Information Systems

A.k.a. Executive support system

Executive level


Aid in executive decision-making

Provide information in highly aggregated form


Monitoring of internal and external events and resources

Crisis management


Architecture of an EIS

Architecture of an EIS: Inputs

Hard data

Facts and numbers

Generated by TPS & MIS

Purchased data

Soft data

Nonanalytical information

Web-based news portals


Delivery to different media

Architecture of an EIS: Processing


Graphical interpreting

Architecture of an EIS: Outputs

Summary reports



EIS Output: Digital Dashboards

Digital dashboard

Presentation of summary information

Information from multiple sources

Ability to drill down if necessary

Summary of EIS Characteristics


So what’s the trend as you go down the list/up the pyramid?

  • Executive Information Systems

    • Highest level summary of information

  • Management Information Systems

    • Aggregate and collect data

  • Transaction Processing Systems

    • Collect data

Summary: Types of Information Systems





Controls and Security


Operations Staff



Source: Business Driven Technology, by Haag, Baltzan, Phillips, McGraw Hill, 2006 (with modifications)

Summary: Decision Levels

Decision Level



Type of Information


Competitive advantage

Market leader

Long term

New products

that change

the industry

External events,

rivals, sales, costs

quality, trends.


Improve operations

without restructuring

New tools to

cut costs or imp-

rove efficiency


schedules, sales

models, forecast


Day-to-day actions

keep company running



placing orders.



HRM, inventory

Learning Objectives

Information Systems Today: Managing in the Digital World


Seven Information Systems that Span Organizational Boundaries

1. Decision Support Systems

Decision making support for recurring problems

Used mostly by managerial level employees (can be used at any level)

Interactive decision aid

What-if analyses

Analyze results for hypothetical changes

Architecture of a DSS

Common DSS Models

Information Systems Today: Managing in the Digital World


Using DSS to Buy a Car

Selling price – $22,500

Down payment – $2,500

Monthly payment – about $400

Interest rate information from the bank

2. Intelligent Systems

Artificial intelligence

Simulation of human intelligence

Reasoning, learning, sensing, hearing, walking, talking, etc.

Intelligent Systems

Three types

Expert systems

Neural networks

Intelligent agents

Expert Systems

Use reasoning methods

Manipulate knowledge rather than information

System asks series of questions

Inferencing/pattern matching

Matching user responses with predefined rules

If-then format

Neural Network System

Approximation of human brain functioning

Training to establish common patterns

Past information

New data compared to patterns

E.g., loan processing

Example: Neural Network System

Loan processing system relying on a neural network


Intelligent Agent Systems

Program working in the background

Bot (software robot)

Provides service when a specific event occurs

Intelligent Agent Types

Buyer agents (shopping bots) – search for best price

User agents – perform a task for the user

Monitoring and sensing agents – keep track of key information

Data-mining agents – analyze large amounts of data

Web crawlers (web spiders) – browse the Web for specific information

Destructive agents – malicious agents designed by spammers

3. Data Mining and Visualization Systems

Application of sophisticated statistical techniques

What-if analyses to support decision making

Capabilities can be embedded into a large range of systems


Display of complex data relationships using graphical methods

Visualization of a weather system

Text Mining

Extraction of information from textual documents

Web crawlers used to extract information from Internet

4. Office Automation Systems

Developing documents, scheduling resources, communicating


Word processing

Desktop publishing

Electronic calendars


5. Collaboration Technologies

Increased need for flexible teams

Virtual teams – dynamic task forces

Forming and disbanding as needed

Fluctuating team size

Easy, flexible access to other team members

Need for new collaboration technologies

Video Conferencing

Costs – few thousand dollars to $500,000

Dedicated videoconferencing systems

Located within organizational conference rooms

Highly realistic


Enables more effective team work

Distinguished along two dimensions

Benefits of Groupware

6. Knowledge Management Systems

Generating value from knowledge assets

Collection of technology-based systems

Knowledge assets

Skills, routines, practices, principles, formulas, methods, heuristics and intuition

Used to improve efficiency, effectiveness and profitability

Documents storing both facts and procedures


Databases, manuals, diagrams, books, etc.

Benefits and Challenges of Knowledge Based Systems

7. Functional Area Information Systems

Cross-organizational-level IS

Support specific functional area

Focus on specific set of activities

Business Processes Supported by Functional Area Information Systems



Personalized greeting

Memory for recent purchases

Targeted “gold box” offers and bargains

Fraud protection

Shipping vs. billing address comparison

Method of shipment checks

Credit card sources checks

“One-click” shopping

  • 35 million customers worldwide

  • Innovations leading to satisfaction

The Growing Blogosphere

One of the fastest growing phenomena in the digital world

Too Much Technology? RFID and Privacy

RFID tags

Latest in technological tracking devices

Information imprinted on a tag

Tag generates signature signal

Special RFID reader interprets signal

Use of RFID tags

Pharmaceutical industry

Tracking of medication from factory to pharmacy

Retail businesses

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