Week 1

Introduction:
Organizations, Management,
Information Systems
Acknowledgement: All the original slides in this
course were prepared by Professor Peter
Wagacha Waiganjo of the School of Computing
and Informatics, University of Nairobi
LEARNING OBJECTIVES
 Analyse the role of information systems in business
environment
 Define information system, computer literacy,
information system literacy
 Explain how information systems transform
organization & management
 Computerized Organizations, e-commerce, e-
business, Internet
 Identify management challenges to building, using
information systems
MIS 2
MANAGEMENT CHALLENGES
 The following are management challenges
related to Information Systems that need to
be addressed:
 Why information systems?

 Contemporary approaches to information

systems
 Role of information systems

 Using information systems

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MANAGEMENT CHALLENGES
Aspects that Management has to grapple with:
 Design competitive & efficient systems
 Understand system requirements of global
business environment
 Create information architecture that supports
organization’s goals
 Determine business value of Information Systems
 Design Systems that people can control,
understand and use

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Management Realities
 Changing business environment
 Emergence of digital organizations

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THE CHANGING BUSINESS
ENVIRONMENT
This is seen through:
 GLOBALIZATION

 INDUSTRIAL ECONOMIES

 TRANSFORMATION OF
ORGANIZATIONS

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THE CHANGING BUSINESS
ENVIRONMENT
 GLOBALIZATION
 Management and Control
 Competition in world markets (Global
village)
 Global Work groups
 Global Delivery Systems

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THE CHANGING BUSINESS
ENVIRONMENT
 INDUSTRIAL ECONOMIES
 Knowledge-based economies
 Productivity
 New products & services
 Knowledge as an asset
 Time-based competition
 Shorter product life
 Turbulent environment
 Limited employee knowledge base
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THE CHANGING BUSINESS
ENVIRONMENT
 TRANSFORMATION OF
ORGANIZATIONS
 Flattening
 Decentralization
 Flexibility
 Location independence (anywhere, anytime)
 Low transaction costs
 Empowerment
 Collaborative work
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EMERGENCE OF DIGITAL
ORGANIZATION/FIRM
 Evidence of this:
 Digitally-enabled relationships with customers,
suppliers, employees
 Core business processes via digital networks
 Digital management of key assets
 Rapid sensing & responding to change

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SOME TERMINOLOGIES

 DATA

 INFORMATION

 SYSTEMS

 INFORMATION SYSTEMS
 ORGANIZATIONS

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DATA & INFORMATION
Definitions
 DATA:
 The values of the properties of the objects in the
environment
 Streams of raw facts representing events such as
business transactions
 INFORMATION:
 Useful, processed data that increases knowledge
 Clusters of facts meaningful & useful to human beings in
processes such as making decisions
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DATA VS. INFORMATION
 Data
 A “given” or fact: a number, a statement, or a
picture
 The raw materials in the production of information
 Information
 Data that have meaning within a context
 Raw data or data that have been manipulated

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DATA MANIPULATION
 Raw data
 Time-consuming to read
 Difficult to understand

 Manipulated Data
 Provides useful information

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SYSTEM

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What is a system?
 System: A set of components that work
together to achieve a common goal
 Subsystem: One part of a system where the
products of more than one system are
combined to reach an ultimate goal
 Closed system: Stand-alone system that has
no contact with other systems
 Open system: System that interfaces with
other systems

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INFORMATION SYSTEMS
 Why Do People Need Information?
 Individuals: Entertainment and enlightenment
 Businesses: Decision making and problem
solving
 Gathering/Collecting
 Storing
 Manipulating/Processing
 Disseminating
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Generating Information

 Raw data are

processed in an IS
to create final
useful information
 Process:
Manipulation of
data
 Computer-based
ISs: process data
to produce
information
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 Information: Important Resource

 Information
must be
useful
 Relevant
 Complete
 Accurate
 Current
 Cost
effective in
business
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FUNCTIONS OF AN
INFORMATION SYSTEM
ENVIRONMENT
Customers Suppliers

Regulatory Agency Stockholder Competitors

The environment within which the organization operates in

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COMPUTER-BASED
INFORMATION SYSTEMS (CBIS)
 They are:
 The are formal systems
 Have fixed definitions of data, procedures
 Are used in Collecting, storing, processing,
disseminating, using data

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INFORMATION SYSTEMS

Organization
Technology

Information
Systems

Management

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ORGANIZATIONS
 PEOPLE:
 Managers, knowledge workers, data workers,
production or service workers
 STRUCTURE:
 Organization chart, groups of specialists,
products, geography

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ORGANIZATIONS
 OPERATING PROCEDURES:
 Standard Operating Procedures (SOP), rules for
action
 POLITICS:
 Power to persuade, influence, get things done
 CULTURE:
 Customs of behaviour

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Major Business Functions
 SALES & MARKETING
 MANUFACTURING
 FINANCE
 ACCOUNTING
 HUMAN RESOURCES

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 The Benefits of Human-Computer
Synergy
 Synergy: combined
resources produce
output exceeding the
sum of the outputs of
the same resources
employed separately
 Translates human
thought into efficient
processing of large
amounts of data

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Information Systems in
Organizations
 Data
 Hardware
 Storage
 Software
 People
 Procedures
 Communications
 Networks

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Trends
 High computational power; low prices
 Increase in programming variety and
ingenuity
 Internet access, available, faster and more
reliable, getting cheaper
 Internet growth resulting in opportunities
 Increasing ratio of computer-literate workforce

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Trends (contd.)
 The Internet – opportunities/ possibilities
 Communicate
 Collaborate
 Access Information
 Discuss
 Obtain information
 Entertainment
 Transact Business
 Unethical/Antisocial use and practice

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The Four Stages of Data
Processing
 Input: Data are collected and entered into
computer
 Data processing: Data are manipulated
into information using mathematical,
statistical, and other tools
 Output: Information is displayed or
presented
 Storage: Data and information are
maintained for later use
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ISs: From Recording Transactions
to Providing Expertise
 Transaction Processing Systems (TPS)
 Record data and perform basic processing
 Point-of-Sale Terminals, ATMs, Mobile phone call logs

 Management Information Systems (MIS)

 Recorded transactions and other data produce
information for problem solving and decision
making

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Types of MISs
 Decision Support Systems (DSS)
 Contain models, or formulas, that manipulate data into
information
 Often answer “what if?” questions

 Group Decision Support Systems (GDSS)

 Generate ideas, establish priorities, and reach
decisions in group environment
 Executive Information Systems (EIS)
 Can gather information from vast amounts of data for
high-level executives
 Highly useful in control and planning

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Types of MISs (cont.)
 Expert Systems (ES)
 Programmed with human expertise

 Can help solve problems of unstructured nature

 Geographic Information Systems (GIS)

 Represents local conditions or features

 Allows planning, decision-making, and monitoring of

local conditions or activities
 On-demand Output
 Managers can obtain reports tailored to their needs at
any time

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ISs in Functional Business
Areas
 Accounting
 Record business transactions, produce periodic
financial statements, & create reports required by law
 Finance
 Organize budgets, manage the flow of cash, analyze
investments, and make decisions that could reduce
interest payments and increase revenues
 Marketing
 Analyze demand for various products in different
regions and population groups
 Human Resources
 Help with record keeping and employee evaluation
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ISs in Different Business
Sectors
 Manufacturing
 Allocate resources such as personnel, raw material, & time
 Control inventory, process customer orders, prepare
production schedules, perform quality assurance, and
prepare shipping documents
 Service
 ISs are often the backbone of service organizations
 Retail
 Some retail stores (e.g., Nakumatt, Uchumi) are now linked to
communication networks by satellite, wireless
 Management can determine which items move quickly and
which do not
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ISs in Different Business Sectors
(Cont.)
 New Businesses
 ISs have made new products and services
possible, such as credit reports and shipment
tracking
 Government
 Tax authorities, national insurance and welfare
agencies, defense departments, economic
organizations, immigration authorities

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e-Commerce
 Business-to-business and business-to-
consumer transactions done electronically via
networks

 Database management on-line makes

information cheaper to distribute

 e-commerce is now synonymous with “doing

business on the Internet”

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System interdependence
 The Reality today for organizations

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New options for organizational
design
 Driving design:
 Flattening organizations
 Separating work from location
 Reorganizing work-flows
 Increasing flexibility
 Redefining organizational boundaries

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Exercises

 Define the terms: data, information, system,

information system
 Describe the impact of current realities on
organizations
 Describe the various types of information
systems in organizations
 Describe ICT trends
 Describe how systems depend on each other
 Discuss new options for organizational design
MIS Week 1 40