What is Information
- Meaning derived from data, and data are recorded facts and figures
- Data presented in a meaningful context (by summing, ordering, averaging, grouping, comparing etc.)
Flow: Data -> Information -> Knowledge
How is information subjective
- Information in one person’s context is just data in another person’s context
- This happens in Information Systems, when output from one system feeds another system as input
- Example: price of a shoe in the US is excl. sales tax, in Europe it’s incl. VAT
Dimensions of data and information quality
- Completeness (all necessary data present)
- Validity (data values are in reasonable range; e.g. worker age > 16 years)
- Accuracy (data represents real-world objects accurately)
- Consistency (no duplicate records)
- Integrity (table has all relevant attributes and relation between data are consistent)
- Timeliness (data is available when needed)
What is Information Technology (IT)
IT = hardware + software + data
-> IT drives the development of new information systems, consists of objects (products, methods, standards…)
What is an Information System (IS)
IS = IT + People + Procedures
-> You can buy IT, but you can never buy an IS, since people require training, need to be managed using the new system, and their resistance needs to be overcome
What is Management Information Systems (MIS)
MIS is the development and use of information systems that help businesses achieve their goals and objectives
Three key elements of MIS
- Components of an IS (five component framework)
- Development and use of information systems
- Achieving business goals and objectives
MIS Key Element 1: The five components of an IS
The concept consists of ACTORS, INSTRUCTIONS, BRIDGE
- Hardware (physical materials related to computers)
- Software (application, e.g. browser, website)
- Data (video, word doc, database entry)
- Procedures (business processes)
- People (all relevant stakeholders)
–> From top to bottom: Increasing difficulty to change, decreasing degree of automation
–> Data acts as a bridge between Computer Side and Human Side
MIS Key Element 2: Development and Use of IS
- YOU & ALL RELEVANT STAKEHOLDERS need to take an active role in the information system development
- specifying the system’s requirements
- Helping to manage the development project
- Using the Information System
- YOU ARE THE MOST IMPORTANT COMPONENT of an IS, as you are part of every IS you use and if you do not know what to do with your IS, you are wasting time and money
Steps of specifying an IS’ requirements
- Capability (know what to fix/create)
- Process (know how to fix/create it)
- Information (know inform. flow & information needed)
- Tools (know the tools to leverage)
Moore’s Law & its implications
“The number of transistors per square inch on an integrated chip doubles every 18 months, and as a result, the speed of a computer chip also doubles”
- dramatic reduction in price/performance ration of computers over the last 50 years!
- cost of data storage and communication are essentially zero!
- This has led to a flood of innovations (youtube, Facebook, twitter, pandora…) and to cost-effective business applications of Facebook and Twitter
Three primary reasons for using IS
- Gaining a competitive advantage
- Problem solving
- Decision making
IS for Competitive Advantage
Eight principles of competitive advantage:
- create new product or service
- enhance existing product or service
- differentiate products or services
- lock in customers and buyers
- lock in suppliers
- raise BTE
- establish alliances
- reduce costs
IS for Problem Solving
Problem = Difference between “as is” and “to be”
–> Problem statement should clarify current situation/method and desired situation/method
Examples of IS problem solving:
- CRM system is an IS that maintains customer data and helps to create better service
- KMS is an IS for storing and retrieving knowledge, create better service and operations
- Quality Control System: reduces need for customer service
IS for Decision Making
Decisions happen at three levels in organisations (y-Axis):
- operational (daily activities)
- Managerial (resource utilisation and allocation)
- Strategic (Executive Information Systems EIS)
And in two types of processes (x-Axis):
- structured
- unstructured
They require two types of IS:
- Augmented (aid decision making by humans, who do most of the work: top right corner)
- Automated (Humans just start the program, hardware & software to the work: bottom left corner)
