Topic 2  Management Information Systems

In the exam you are expected to:

• Understand the difference between an information system and a data processing system.
• Understand the role and relevance of an information system in aiding decision making.
• Recall Definition of a management information system (MIS)
• Recall that an MIS is a system to convert data from internal and external sources into information. This is communicated in an appropriate form to managers at different levels, enabling them to make effective decisions for planning, directing and controlling activities for which they are responsible.
• Describe the development and life cycle of an information system
• Recognise the existence of formal methods, the need for clear time scales, agreed deliverables and approval to proceed.
• Describe the success or failure of a management information system
• Understand the factors influencing the success or failure of an information system, e.g. inadequate analysis; lack of management involvement in design; emphasis on computer system; concentration on low-level data processing; lack of management knowledge of ICT systems and capabilities; inappropriate/excessive management demands; lack of teamwork; lack of professional standards.

The five classical functions of a manager are:

1.     Planning – the direction a company takes e.g. diversifying, where to operate.

2. Organising - resources such as people, space, equipment and services.
3. Coordinating - the activities of various departments.
4. Decision-making - about the organisation, products or services made or sold, the employees, use of I.T.
5. Controlling - monitoring and supervising the activities of others.

The role of a management information system (MIS) is to provide a manager with sufficient information to make informed decisions to help him to carry out the above functions.  The best definition of an MIS is:

The role of a management information system is to convert data from internal and external sources into information that can be used to aid in making effective decisions for planning, directing and controlling.

We need to make the distinction between a data-processing system and an information system:

·        Data processing systems record day too day transactions, e.g. sale of a CD to a customer.

·        Operational Information systems read the collected data and do things like producing lists of items that need to be re-ordered.

·        The MIS will analyse the sales data to highlight sales trends of different product lines, to enable decisions to be made as to whether the product needs special promotion, or whether it should be discontinued.

The MIS deals with internal and external information.  The internal information can be got quite easily from the various systems on the company network, e.g. sales figures for each product line.  The external information is gathered from:

·        Intelligence about competitors’ activities.  This can come through reading articles in the press, leaks, or even industrial espionage.

·        Information about population shifts.  As the population gets older, the less likely they are to be interested in pop-music or customising cars, but are more likely to be interested in weight-loss products or holidays for the over 50s.

·        Economic and social factors.  Sales of cars would go down in an area where a major employer had just closed down a plant.

·        Government Legislation.  Financial forecasts would change if the minimum wage rose.

The MIS can be used to gather information from both formal and informal flows of information.

·        A formal flow of information is one in which a procedure is adopted, e.g. the downloading of sales figures from several branches first thing on a Monday morning.  External data can be collected using specialised data collection agencies such as Dun and Bradstreet who produce economic data for academic and commercial organisations.  Formal flows can also come from people working on the same document at several locations, or by use of e-mail, or by use of company intranets.

·        Informal information flows come from chance meetings, reading magazines or newspapers, or watching the news on TV.

 The MIS must produce information for managers on three levels:

·        Operational – day-to-day decisions such as ordering in more stock

·        Tactical – decisions that have a short to medium term effect, e.g. introducing a new product to a particular retail outlet;

·        Strategic – long term decisions that will affect the future of the organisation, e.g. whether to open a new store, or take over a rival concern.

In 1973 a study showed the following about the time taken by a manager on various different tasks:

·        Desk work – 22 %

·        Travel – 3 %

·        Unscheduled meetings – 10 %

·        Scheduled meetings (the practical alternative to work) – 59 %

·        Telephone calls – 6 %.

Some chief executives have to change their attention rapidly form one task to another.  In some cases, half their activities last less than nine minutes.

Types of Decision

A manager can make two kinds of decision:

·        Structured – which are repetitive and need a definite routine and procedure to deal with them, e.g. stock is below 15 %, so an order need to be place with a supplier.

·        Unstructured – require knowledge, insight, and evaluation.  They may well crop up without warning, and the right decision can be critical.

The manager may well go through the following stages when considering what decision to take:

1.     Recognise the problem.  The MIS may give information about the performance of the department, and where there is a problem.

2.     Consider the solution.  A spreadsheet could be used to consider “What if” scenarios.

3.     The solution is chosen using the manager’s experience as well as the information produced by the MIS.

4.     The solution is implemented and reviewed.  Again the MIS can provide the data on which the solution is evaluated.

Often solutions do not proceed smoothly and there may have to be backtracking from one stage to another.

Desirable features of an MIS

·        Be flexible - allowing for different ways of analysing data and evaluating information.

•  Be able to support a range of skills and knowledge.

·        Provide interpersonal communication with other people

in the organisation.

·        Not require extensive periods of concentration as managers switch between different tasks.

·       Make it easy to interrupt the work and return to it at a later time

·        Protect a manager, from information overload.

Systems Life Cycle

The construction of a specialist computer system often involves large teams of people, and it is absolutely critical that they are managed correctly.  If they are not, the project will be at best inefficiently run or at worst go belly-up.  There are a good number of sophisticated computer projects that have attracted publicity for all the wrong reasons, usually with the waste of many millions of euros of public money.

There are a number of ways that computer projects can be managed.  We will look at

·        the systems life cycle

·        the waterfall model

·        prototyping.

The systems life cycle was the traditional way in which projects were carried out.  Each stage was completed before the next was started.

You will have done something fairly similar with your project.  This system had its drawbacks, in that experience in a later stage could not inform work that had been done previously.

In the waterfall model, it is possible to rework earlier stages in the light of experience gained at a later stage.  Each stage is signed off and the next stage is proceeded with.  However the end user is rarely involved in the development stage, even though they may well be involved in signing off.  It is therefore critical that the analysts and the programmers understand the end-users’ requirements.  This can be quite difficult with the waterfall model.

The waterfall model has disadvantages, which can be overcome using prototyping, in which a model of the system is developed in partnership with the end-user.  The features are worked out with the end user using a prototype, and the end user can have a considerable input into the development of a project.  The approach is shown below:

Benefits are:

·        Misunderstandings are detected at early stages

·        the user will notice any missing functions, incomplete or inconsistent requirements.

·        can be built quickly to demonstrate systems

·        it can be used for training before the system is finished

Drawbacks are:

·        Project management can be discoordinated or even sloppy.

·        Meetings with end users can become time consuming.

·        The final result could be completely different to what was requested in the first place.

There are several different ways of prototyping:

·        Piloting – Test the feasibility of the design proposal

·        Modelling – building to develop an understanding of the user’s requirements

·        Throw-away prototyping – Pilot and modelling are throw away types – once they achieve their purpose the real system is built.

·        Evolutionary prototyping – each prototype built is a step closer to solution.

What Prompts a New System?

1.                 The current system may not do what it should.

2.                 Technological developments may have made the current system outdated.

3.                 The current system may be too inflexible or expensive to maintain.

Feasibility Study

The scope and objectives of the system are specified.  The aim is to understand the problem and see if it is worth continuing.  A feasibility report is produced by the systems analyst which considers the five main factors which are (TELOS):

• Technical feasibility – investigating if the technology exists to implement the system
• Economic Feasibility – establishing the cost-effectiveness of the system – do the benefits outweigh the costs?
• Legal Feasibility – Is there any conflict with system and legal requirements e.g. Data Protection Act
• Operational Feasibility – are work practices and procedures able to support new system. Also considers social factors e.g. how will it affect working lives.
• Schedule feasibility – How long it will take to develop and if it can be done in specified time frame.

Telos is a Greek word meaning a target.

Once the feasibility study concludes that the project is viable, it proceeds to the requirements analysis.  This involves:

• Interviewing staff at all levels of the organisation to get their views on exactly what they want.
• Sending out questionnaires which need to be carefully constructed to avoid ambiguous responses.
• Examining all the documentation, from the most day-to-day to those used by the most senior of the managers.
• Observation of current procedures and practices.

All of this is carried out by systems analysts who produce data flow diagrams to picture the company’s operations.  Click HERE to see a DFD.

The analysts also consider the costs and benefits implications.  They also consider the way the project will be implemented:

• Will it be done in-house or using consultants;
• What hardware would be used;
• What software could be used?

Finally a report is written with a recommendation to proceed or abandon the project.

The next stage is the system design:

• Hardware profile, including the technical data of the machines on which the programs will be run.
• Software profile, including the programming language, packages, and database management systems;
• Inputs, including entry screens;
• Outputs, such as reports;
• The user interface.
• The modular design structure for the program.  The program is built up in discrete sub-units and put together;
• Test plan and data;
• Conversion plan;
• Documentation, including a user manual.

You will have done much of this in your Module 3 project (didn’t you?).

Then there’s the implementation, where the system is coded and tested.  Also Hardware is installed, ready to convert from the old system to the new.

• Hardware is installed, which may need extensive work on cabling and/or redesigning offices;
• Users are trained;
• Conversion of master files, or creation of new master files.

There are several ways of conversion:

• Direct changeover, in which the old is topped and the new is introduced.  Usually this is over a weekend or some other slack time.  The advantage is that there is a minimum of duplication.  The drawback is there can be serious disruption if the new system has errors in it.
• Parallel conversion where the two systems are run alongside each other, minimising disruption due to errors.  However this does involve duplication of the work.
• Phased conversion where bits of the new system are introduced, one at a time.
• Pilot conversion where the system is implemented initially in a few branches.

Once the system is up and running, there is a post-implementation review.  It is usually in the first few weeks and months that errors become apparent.  

So system maintenance may be needed:

• Perfective maintenance – although the system is running well, there may be room for improvement;
• Adaptive maintenance – where new functions are added to take into account the changing needs of the company;
• Corrective maintenance to get rid of errors.

Why an MIS Might Fail

MIS systems are complex and expensive pieces of software, and many people are involved with the design both within the organisation and from outside.  Often they are built by software houses to the precise requirements of the organisation.  So the client organisation needs to be very clear as to what it wants, and the software house analysts need also to be very clear about the requirements.

MIS failures can be expensive and bring bad publicity to all parties.  They can arise due to:

• Inadequate analysis  - problems, needs and constraints aren’t understood in the early stages.
• Lack of management involved in the design – wrong expectations of a new system / no-one understands the system.
• Emphasis on the computer system – Need procedures for handling input and output / select the right hardware and software
• Concentration on low-level data processing – Information must be easily accessible and understood
• Lack of management knowledge of ICT systems and capabilities – managers know what they want from the system but don’t understand the technology
• Lack of teamwork – An ICT manager must co-ordinate the accounts, marketing, sales etc. departments and help everyone understand the benefits of the system
• Lack of professional standards – All systems need clear documentation that all users can understand (not just the ICT literate)

Organisations can judge how successful the implementation of an MIS system has been by applying the following evaluations:

• High level of use - Is it actually used? Some systems don’t become operational for reasons such as it taking too long to enter  data.
• High level of user satisfaction - Do users like the systems?
• Accomplishment of original objectives  - Have the objectives specified in the analysis stage been achieved?
• Appropriate nature of use  - Is the software being correctly used?

Has proper training been given?

• Institutionalisation of the system - Has it been taken on board enthusiastically?

Questions

Now try the Topic Quiz.

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