Management Information Systems Midterm

What is an Information System

A set of interrelated components that collect, process, store, and distribute information

3 Dimensions of information system

Organization, Management, Technology

The 4 Activities of an IS (The loop)

Input → processing → Output → Feedback

IT Infrastructure

The shared technology resources that provide the platform for a firm’s specific information system application

Business Processes

The manner in which work is organized, coordinated, and focused to produce a valuable product or service

Organization Dimension include?

The hierarchy, functional specialties, business processes, culture, and political interest groups

Management Dimension include?

Setting organizational strategy, allocating resources, and providing leadership to create new products/services.

Technology Dimension Include?

Computer hardware, software, data management technology, and networking/telecommunications technology.

Operating system (OS)

System software that manages computer hardware and software resources (eg. windows, linux, macos)

Enterprise Resource Planning (ERP)

Systems that integrate core internal business processes into a single software system to improve coordination and decision making, Internal focus

Customer relationship management (CRM)

Systems used to manage relationships with customers, tracking internactions from marketing to sales and services, external focus

Supply Chain Management (SCM)

Systems that manage the flow of goods, data, and finances from the supplier to the manufacturer to the retailer

Business Intelligence (BI)

Tools for data analysis and reporting that turn massive amounts of data into actionable insights for managers

Linux best used for

Servers, cloud infrastructure, enterprise back end systems

Windows best used for

Corporate environments and office admin work due to high compatibility and user friendliness

Data Management

Software governing the organization of data on physical storage media (eg. SQL databases)

MACOS best used for

In creative and technology focused roles

ERP is best used for

complex cross department operations and data consistency and process standardization is crucial

CRM best used for

customer experience is a competitive priority, and sales and marketing teams need shared customer data

SCM best used for

Operations depend on complex supplier networks and inventory optimization is essential

BI best used for

The firm collects large volumes of data and decisions must be data driven, and performance monitoring and forecasting is important

Networking and telecommunications

Provides the connectivity and allows systems, employees, and locations to communicate

Internet platforms

Enable organizations to deliver services and applications over the internet

Levels of management information systems

1. Operational management

2. Middle Management

3. Senior management

Operational management focuses on

Day to day tasks, efficiency, and correctness

Middle management focuses on

Monitoring performances, controlling specific areas, making non routine decisions

What system does operational management use

Transaction processing systems (TPS)

What system does middle management use?

Decision support systems (DSS)

Senior management focuses on

Long term strategic goals and external environment

What system does senior management use

Executive support systems (ESS)

Transaction processing systems (TPS)

Systems that record the daily routine transactions necessary to conduct business (eg. payroll, shipping records)

Management information systems (MIS)

Systems that provide reports on the organizations current performance based on data from TPS

Decision support systems (DSS)

Systems that support non routine decision making using what if analysis

Executive support systems (ESS)

Systems designed for senior leaders to address strategic issues and long term trends

Business processes

The collection of activities required to produce a product or service

Organizational culture

The shared values, beliefs, and practices it guides technology adoption

Managers challenge for organizational culture

Move beyond the strategic choice to invest in technology and address the underlying beliefs that drive employee actions

What problem do managers face when implementing a new IS

It changes how departments interact, so disagreements over ownership or budget can lead to prolonged decision making and abandonment

Successful IS deployment is often a matter of

Environmental fit, managers must monitor external trends and ensure their internal systems are resilient

Structure of an organization

Dictates how information flows and how well processes are performed

Low cost leadership strategy

Uses IS to achieve the lowest operational costs and lowest prices ex. walmart

Product differentiation strategy

Uses IS to enable new products/services or greatly change the customer convenience ex. Nike/apple

Focus on market niche

Use IS to analyze data for a specific target market better than competitors

Customer and supplier intimacy

Uses IS to develop strong ties and loyalty ex. amazon

Primary

If the activity touches the physical product (making,moving selling)

Support

If the activity is about hiring, buying, or fixing

Enterprise resource planning (ERP)

A suite integrated software modules and a common centralized database that supports core internal business processes

The silo problem

When data is trapped in separate departments leading to inefficiency

What is the solution to the silo problem

ERP solves it by integrating data

Beyond just organization ERP provides

Business intelligence (BI) because all the data is one place

If your internal workflows are chatoic

An ERP will only automate chaos, must fix the business process first

When you should use ERP

• Dataset jungle

• Bad customer experience

• Monthly close takes weeks

• Inventory Blindness

• Regulatory needs

Cloud ERP

The software runs on the providers servers and is accessed via a web browser

Local ERP

The software is installed on the company’s own local servers

Hybrid ERP

Some data stays on site for security while other functions are handled on the cloud

Supply chain management (SCM)

Systems that manage the flow of products, information, and finances among the network of suppliers, manufacturers and distributors

Goal of a SCM

To get the right amount of their products from their source to the point of consumption in the least amount of time at the lowest cost

Upstream supply chain

Organizations relationships with its suppliers, information systems here focus on procurement, supplier performance, tracking, and sourcing raw materials

Internal supply chain

MIS tools like ERP systems coordinate production schedules, quality control and internal inventory levels

Downstream supply chain

Focuses on the path to the customer systems manage distribution, warehouse logistics, and CRM to ensure the right product reaches the right buyer

Bullwhip effect

Small fluctuations in retail demand cause larger fluctuations in demand upstream

What is the cause and solution of the bullwhip effect

Lack of information sharing and communication between supply chain partners

solution: use SCM systems to share real time data

SCM Transforms data into actionable insights across 3 distinct levels

Strategic, Tactical, Operational

Strategic decisions (Long term)

High stakes decisions made by executives that define the shape and capability of the supply chain this includes;

• Network design

• Outsourcing vs Insourcing

• Supplier partnerships

Tactical decisions (Medium term)

These decisions bridge the gap between high level strategy and daily work, often handled by middle management this includes;

• Demand planning

• Inventory Policy

• Sourcing contracts

Operational decisions

Automatic decisions that keep the business running smoothly every hour this includes;

• Routine optimization

• Production scheduling

• Automated reordering

Customer relationship management (CRM)

Systems that capture and integrate customer data from all over the organization to manage and analyze customer interactions

Operational CRM

Customer facing application ex. tools for sales force automation, call center

Analytical CRM

Applications that analyze customer data generated by operational CRM apps to improve business performance

Push based model (Build to Stock)

Production schedules are based on forecasts or best guesses of demand

Pull Based Model (Demand Driven)

Production is triggered by actual customer orders

Cross-Selling

Marketing complementary products to customers

Unsupervised machine learning

Identifies hidden patterns and structures in unlabeled data

Clustering

Aims at categorizing a set of data points into groups such that data points within the same group are similar to each other

Dimensionality reduction

Decrease a datasets features while preserving information

• Used for feature engineering

• Saves the cost of training, maintaining, BI functions

Supervised machine learning

Learns and identifies hidden patterns and structure using labeled data

2 Types of supervised machine learning tasks

• Regression: Predicting actuals values

• Classification: Predicting the category

Reinforcement learning

Aims at developing algorithms that can continuously observe environment and make decisions to achieve a long term optimal performance

Decision tree model

used for classification and regression tasks

Random Forest (RF)

an ensemble machine learning method that builds many decision trees during training and merges their results

Support Vector Machine (SVM)

Finds the optimal hyperplanes to separate data with maximizing the margin for better generalization

Artificial neural network (ANN)

A neural network is composed of hidden layers of interconnected units called neurons

ANN Philosophy

Any complex relationship between input and output can be mapped as a function represented by ANN’s as long as many non-linear activation functions and layers is introducted

Use recall when

You need safety first, it is better to have false positives than false negatives

Use precision when

You need cost efficiency