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

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A System View of an Information System

Information System
Boundary

Environments

Information System (Producer)

Data
Providers
Data
Sources/
Business
events

Data
Visualization

Input
Input

Process
Process

Output
Output
Main memory

Control
Control

Data
Data storage
storage
Procedure
Procedure

Secondary storage
(database)

Information
Destination
sConsumers
Users
organization
units

What are the hardware options or Inputs, Outputs, Processing,

and Storages?
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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

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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/

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Presentation of Information

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Another Version

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A Picture Is Worth a Thousand Words

24 June 14 December 1812

https://en.wikipedia.org/wiki/File:Napoleons_retreat_from_moscow.jpg
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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.

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Information Life Cycle

Information
Information

Decision
Decision

Data
Data

Information is processed
data that is organized,
meaningful, and useful.

Action
Action

Intelligence
Design
Choice

http://faculty.csuci.edu/minder.chen/MIS310/Reading/20000905cleveland.pdf
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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 worlds 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.

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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.
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 Minder Chen, 1996-2013

Source: IBM Academic Program course materials

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The Knowledge Value Chain: Data

Source: IBM Academic Program course materials

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The Knowledge Value Chain: Information

Source: IBM Academic Program course materials

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The Knowledge Value Chain: Knowledge

Minder Chen, 1996-2013

Source: IBM Academic Program course materials

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Knowledge Is Not Enough

Source: IBM Academic Program course materials

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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
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Happening/Doing
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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
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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

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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 Strateg
y
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.
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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 salespersons commission.
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WWW
invented
1990

Britannica Sales

Netscape
1995

Google Inc.
incorporated,
1999

Google IPO,
2004

Encarta
discontinue
d 2008

Source: http://hbr.org/2013/03/encyclopaedia-britannicas-president-on-killing-off-a-244-year-old-product/ar/1

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The Rise of Wikipedia

up
r
s
Di

Minder Chen, 1996-2013

e
it v

rc
o
f

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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.
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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
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huMan, Market, Money, Method, Machine, Material, Message

Business environments
Market demands
Technology development
Social trends
Locations/Localization

Man: Human Resource, Employees

Market: Customers

Who?

Message:

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

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Organizational Hierarchy and Information

Aggregated

Operation

source

Control

Level of Detail

Planning

Detail
Internal

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Processing

OLAP

External

OLTP
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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

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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

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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
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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)

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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.

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IT, IS and IM

Minder Chen, 1996-2013

Source: Competing with Information: A Manager's Guide to Creating Bus

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Key Frameworks

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Information Systems Applications in a Firm

Customer Relationship Management (CRM)

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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
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COBITs 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.

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COBITs 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. (SarbanesOxley Act)

Reliability relates to the provision of appropriate

information for management to operate the entity
and exercise its fiduciary and governance
responsibilities.

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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
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Information System Applications

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 Minder Chen, 1996-2013

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Extracting
Value from
Information
Chaos
(link)

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