MANAGEMENT INFORMATION SYSTEM

Dr. Somnath Thigale

MBA-COM

Module 6

Syllabus:

• Concept of Information System, Components , Uses, of information System,
• Major roles of information systems,
• Types of Information Systems – TPS, MIS, OAS, DSS, ESS, ES, KWS,
• Relationship between different Information systems.

Dr. S.B.Thigale

Lets Explore:

Dr. S.B.Thigale

• An introduction to Information System
• Meaning of Management Information System
• Characteristic of MIS
• Components of MIS
• The aim of MIS
• Types of MIS
• Outputs of MIS
• Benefits of MIS

Meaning Of Information Systems

Dr. S.B.Thigale

• An information system is an organized combination of people, hardware, software, communications Networks and data resources that collects, transforms, and disseminates information in an organization.

Types Of Information System

Dr. S.B.Thigale

MANAGEMENT INFORMATION SYSTEM(MIS)

Dr. S.B.Thigale

• The MIS is defined as a system based on the database of the evolved for the purpose of providing information to

the people in the organization.

Dr. S.B.Thigale

• Management information systems are distinct from regular information systems in that they are used to

analyze other information systems applied in operational

activities in the organization. MIS involve three primary resources: technology, information, and people.

• Management information systems are regarded to be a subset of the overall internal controls procedures in a

business, which cover the application of people,

documents, technologies, and procedures used by management accountants to solve business problems such as costing a product, service or a business-wide strategy.

MIS:

MIS:

Management Information System (MIS) is a planned system of collecting, storing, and disseminating data in the form of information needed to carry out the functions of management. This tutorial covers the concepts related to information and provides a detailed coverage on MIS and other major enterprise-level systems. You will also learn how these systems help in the decision-making process, which is critical to any business enterprise.

Dr. S.B.Thigale

MIS:

Information can be defined as meaningfully interpreted data. If we give you a number 91-020-290-4700, it does not make any sense on its own. It is just a raw data. However if we say Tel: +91-020-290-4700, it starts making sense. It becomes a telephone number. If I gather some more data and record it meaningfully like −

Address: 350 Fifth Avenue, 34th floor Mumbai, MS INDIA Tel: +91-020-290-4700 It becomes a very useful information - the address office of Human Rights Watch, a non-profit, non-governmental human rights organization. So, from a system analyst's point of view, information is a sequence of symbols that can be construed to a useful message.

An Information System is a system that gathers data and disseminates information with the sole purpose of providing information to its users.

The main object of an information system is to provide information to its users. Information systems vary according to the type of users who use the system.

A Management Information System is an information system that evaluates, analyzes, and processes an organization's data to produce meaningful and useful information based on which the management can take right decisions to ensure future growth of the organization.

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Dr. S.B.Thigale

Dr. S.B.Thigale

The three components of MIS provide a more complete and focused definition, where System suggests integration and holistic view, Information stands for processed data, and Management is the ultimate user, the decision makers.

MIS can thus be analyzed as follows −

Management: Management covers the planning, control, and administration of the operations of a concern. The top management handles planning; the middle management concentrates on controlling; and the lower management is concerned with actual administration.

Information: Information, in MIS, means the processed data that helps the management in planning, controlling and operations. Data means all the facts arising out of the operations of the concern. Data is processed i.e. recorded, summarized, compared and finally presented to the management in the form of MIS report.

System: Data is processed into information with the help of a system. A system is made up of inputs, processing, output and feedback or control.

Definition

'MIS' is a planned system of collecting, storing, and disseminating data in the form of information needed to carry out the functions of management.

Dr. S.B.Thigale

Role Of MIS

Dr. S.B.Thigale

• The role of MIS in an organization can be compared to the

role of heart in the body.

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• The information is the blood and MIS is the heart. In the body the heart plays the role of supplying pure blood to all

the elements of the body including the brain.

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• The MIS plays exactly the same role in the organization.

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• The system ensures that an appropriate data is collected from the various sources, processed, and sent further to all

the needy destinations.

Dr. S.B.Thigale

• The system is expected to fulfill the information needs of an individual, a group of individuals, the management functionaries: the managers and the top management.

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• The MIS satisfies the diverse needs through a variety of systems such as Query Systems, Analysis Systems, Modeling Systems and Decision Support Systems.

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• The MIS helps in Strategic Planning, Management Control, Operational Control and Transaction Processing.

Role Of MIS

Characteristics of MIS

Dr. S.B.Thigale

• Management-oriented: The basic objective of MIS is to provide information support to the management in the

organization for decision making.

• Management directed: When MIS is management- oriented, it should be directed by the management because

it is the management who tells their needs and requirements more effectively than anybody else.

• Integrated: It means a comprehensive or complete view of all the subsystems in the organization of a company.

Dr. S.B.Thigale

• Common data flows: The integration of different subsystems will lead to a common data flow which will further help in avoiding duplicacy and redundancy in data

collection, storage and processing.

• Heavy planning-element: The preparation of MIS is not a one or two day exercise. It usually takes 3 to 5 years and

sometimes a much longer period.

• Subsystem concept: When a problem is seen in 2 sub parts, then the better solution to the problem is possible.

Characteristics of MIS

Dr. S.B.Thigale

• Common database: This is the basic feature of MIS to achieve the objective of using MIS in business

organizations.

• Computerized: MIS can be used without a computer. But the use of computers increases the effectiveness and the

efficiency of the system.

• User friendly/Flexibility: An MIS should be flexible.
• Information as a resource: Information is the major

ingredient of any MIS.

Characteristics of MIS

Dr. S.B.Thigale

1. It should be based on a long-term planning.
2. It should provide a holistic view of the dynamics and the structure of the organization.
3. It should work as a complete and comprehensive system covering all interconnecting sub-systems within the organization.
4. It should be planned in a top-down way, as the decision makers or the management should actively take part and provide clear direction at the development stage of the MIS.
5. It should be based on need of strategic, operational and tactical information of managers of an organization.
6. It should also take care of exceptional situations by reporting such situations.

Characteristics of MIS

Dr. S.B.Thigale

7. It should be able to make forecasts and estimates, and generate advanced information, thus providing a competitive advantage. Decision makers can take actions on the basis of such predictions.

8. It should create linkage between all sub-systems within the organization, so that the decision makers can take the right decision based on an integrated view.

9. It should allow easy flow of information through various sub-systems, thus avoiding redundancy and duplicity of data. It should simplify the operations with as much practicability as possible.

10. Although the MIS is an integrated, complete system, it should be made in such a flexible way that it could be easily split into smaller sub-systems as and when required.

11. A central database is the backbone of a well-built MIS.

Characteristics of MIS

Dr. S.B.Thigale

The following diagram shows the nature and scope of MIS

Features of MIS

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• Timeliness
• Accuracy
• Consistency
• Completeness
• Relevance

Components of MIS

1) Marketing Research System (MRS)

Marketing research can be seen as the systematic and objective search for and analysis of data and information relevant to the identification and solution of any problem in the field of marketing.

Dr. S.B.Thigale

The process of acquiring and analyzing information in order to understand the market (both existing and potential customers); to determine the current and future needs and preferences, attitudes and behavior of the market; and to assess changes in the business environment that may affect the size and nature of the market in the future.

Dr. S.B.Thigale

2) Marketing Intelligence System (MIS)

Marketing managers rely on internal reports on orders, sales, prices, costs, inventory levels, receivables, payables, and so on. By analyzing this information, they can spot important opportunities and problems.

Dr. S.B.Thigale

3) Internal Record System (IRS)

A decision support system (DSS) is a computer-based information system that supports business or organizational decision-making activities. DSSs serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance.

Dr. S.B.Thigale

4) Decision Support System(DSS)

Aim of Management

Information System

Dr. S.B.Thigale

• The main aim of MIS is to inform management and help them make informed decisions about management and the

way the business is run.

Types Of MIS

Dr. S.B.Thigale

• Transaction processing systems: These systems process a large volume of routine, recurring transactions.
• Operations information systems: These systems gather comprehensive data, organize it and summarize it in a form that is useful for managers.
• Decision support systems: These systems help mangers with the necessary information to make intelligent decisions.
• Expert systems: They are meant to mimic humans in making decisions in a specific field.

Elements of MIS

Dr. S.B.Thigale

1. Hardware 2.Software
3. Control
4. Databases and application programs 5.People

6.Telecommunications and Networks

Outputs Of a MIS

Dr. S.B.Thigale

• Scheduled reports which are produced periodically, or on a

Schedule (daily, weekly, monthly).

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• Key-indicator report which summarizes the previous day’s critical activities and also it is

typically available at the beginning of each day.

Dr. S.B.Thigale

• Demand report which gives certain information at a manager’s request.

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• Exception report which is automatically produced

when a situation is unusual or requires management action.

Benefits of MIS

Dr. S.B.Thigale

• It improves personal efficiency.
• It expedites problem solving(speed up the progress of problems solving in an

organization).

• It facilitates interpersonal communication
• It promotes learning or training.
• It increases organizational control.

Dr. S.B.Thigale

• It generates new evidence in support

of a decision.

• It creates a competitive advantage over competition.
• It encourages exploration and discovery on the part of the decision

maker.

• It reveals new approaches to thinking about the problem space.
• It helps automate the Managerial

processes.

Benefits of MIS

Classification of Information Systems

Dr. S.B.Thigale

• Organisational Hierarchy

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• Organisational Levels

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• Information Systems

Information System from business perspective

Types of system Groups Served

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STRATEGIC LEVEL

SENIOR MANAGERS

MANAGEMENT LEVEL

MIDDLE MANAGERS

OPERATIONAL

LEVEL

KNOWLEDGE LEVEL

KNOWLEDGE &

DATA WORKERS

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OPERATIONAL

MANAGERS

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ACCOUNTING HUMAN

RESOURCES

SALES &

MARKETING

MANUFACTURING FINANCE

& ENGINEERING

Information System from business perspective

Types of system Groups Served

Dr. S.B.Thigale

STRATEGIC LEVEL

SENIOR MANAGERS

MANAGEMENT LEVEL

MIDDLE MANAGERS

OPERATIONAL

LEVEL

OPERATIONAL

MANAGERS

KNOWLEDGE LEVEL

KNOWLEDGE &

DATA WORKERS

HUMAN

RESOURCES

SALES &

MARKETING

MANUFACTURING FINANCE ACCOUNTING

& ENGINEERING

Horizontal information flows

Vertical information flows

Management Structures and Information Requirements

Dr. S.B.Thigale

• Higher up the pyramid, the less structured the decision
• Less defined
• External orientation
• More summarized information
• Future oriented
• Less frequent
• Less accurate
• Lower down the pyramid, the more structured the decision
• More defined
• Internal orientation
• More detailed information
• Historical
• More frequent
• More accurate

Four General Kinds of IS

Dr. S.B.Thigale

• Operational-level systems
• support operational managers by monitoring the day-to-day’s elementary activities and transactions of the organization. e.g.TPS.

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• Knowledge-level systems
• support knowledge and data workers in designing products, distributing

information, and coping with paperwork in an organization. e.g. KWS, OAS

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• Management-level systems
• support the monitoring, controlling, decision-making, and administrative activities of

middle managers. e.g. MIS, DSS

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• Strategic-level systems
• support long-range planning activities of senior management. e.g. ESS

A Framework for IS

Dr. S.B.Thigale

• Executive Information Systems (EIS)
• Management Information Systems (MIS)
• Decision Support Systems (DSS)
• Knowledge Work Systems (KWS)
• Office Automation Systems (OAS)
• Transaction Processing Systems (TPS)

Executive Information System�

Dr. S.B.Thigale

Transaction Processing Systems (TPS)

Dr. S.B.Thigale

Computerized system that performs and records the daily routine transactions necessary to conduct the business; these systems serve the operational level of the organization

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• TYPE: Operational-level
• INPUTS: transactions, events
• PROCESSING: updating
• OUTPUTS: detailed reports
• USERS: operations personnel, supervisors
• DECISION-MAKING: highly structured

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EXAMPLE: payroll, accounts payable

Transaction Processing System

What is TPS?

Definition:A Transaction Processing System (TPS) is a type of information system that collects, stores, modifies and retrieves the data transactions of an enterprise.

e.g.; airline reservation systems, electronic transfer of funds, bank account processing systems.

Designed to process routine business transactions

Seeks time and cost efficiency by automating repetitive operations in large volumes.

What is a Transaction?

Transaction:

• A business activity between seller and buy to exchange an asset for payment.
• Basic business operations such as customer orders, purchase orders, receipts, time cards, invoices, and payroll checks in an organization.

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Types of Transactions:

• InternalTransactions:

Those transactions, which are internal to the company and are related with the internal working of any organization. For example Recruitment Policy, Promotion Policy, Production policy etc.

• ExternalTransactions:

Those transactions, which are external to the organization and are related with the external sources, are regarded as External Transaction. For example sales, purchase etc.

FeaturesofTransactionProcesingSystems

• Rapid response – Fast performance with a rapid response time is critical. Transaction processing systems are usually measured by the number of transactions they can process in a given period of time.

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• Continuous Availability – The system must be available during the time period when the users are entering transactions. Many organizations rely heavily on their TPS. A breakdown will disrupt operations or even stop the business.

FeaturesofTransactionProcesingSystems

• Data Integrity – The system must be able to handle hardware or software problems without corrupting data. Multiple users must be protected from attempting to change the same piece of data at the same time, for example two operators cannot sell the same seat on an airplane.
• Ease Of Use – Often users of transaction processing systems are casual users. The system should be simple for them to understand, protect them from data-entry errors as much as possible, and allow them to easily correct their errors.

ComponentsofaTransactionSystem

•

Theuserof the information system is the person belonging to the organization that owns the transaction system.

•

Participantsare the people who conduct the information processing.

•

Peoplefrom the environment become

participants of the system as they directly enter transactions and perform validation.

ComponentsofaTransactionSystem

TypesofTPS

•

•

• Example:Payment by cheque, Credit card transactions, etc.

Batch Processing system

Batch processing is where the information is collected and stored as a batch but not processed immediately.

Batch processing is useful for enterprises that need to process large amounts of data using limited resources.

BatchProcesingSystem

TypesofTPS

On-linetransactionprocesing(OLTP):

A system whereby each transaction is processed immediately, without the delay of accumulating transactions into a batch.

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Real-timetransaction

^–Mostly in Online shopping

^–Uses PCI cards (Payment Card Industry):

^–PayPal or World Pay, We Pay, e-Way, ICEPAY, ATM’s.

Real-Time Processing System

DataProcesingCycle

Collecting and capturing transactions No longer manual:

• Old technologies : Bar Codes, Magnetic Strips (credit cards)
• New technologies : RFID, Smart Cards,

1.DataEntry

•

Schematic View

Corporate

databases

of internal data

Databases

of

external data

Databases of

valid

transactions

Operational Databases

(CRM)

Transaction processing systems

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MIS

Decision support systems

Executive support

systems

Expert systems

Business transactions

Input and error list

Drill-down reports Exception reports

Demand reports

Key-indicator reports

Scheduled

reports

Employees

Corporate

intranet

Application databases

DataProcessingCycle

2.DatabaseMaintenance

• TPS helps ensure the databases are up-to-date and correct.
• Multiple databases (internal & external)

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3.Document/ReportGeneration

• Examples
• purchase orders
• pay checks
• sales receipts
• invoices
• bank statements

DataProcessingCycle

4.InquiryProcessing:

• Examples
• when was a purchase made
• does a customer have any credits on their account
• was an item scheduled for delivery
• was a package signed for

DataProcessingCycle

Typical Applications of TPS

Dr. S.B.Thigale

Office Automation Systems (OAS)

Dr. S.B.Thigale

Computer system, such as word processing, electronic mail system, and scheduling system, that is

designed to increase the productivity of data workers in the office.

scheduling, communication

• TYPE: Knowledge-level
• INPUTS: documents, schedules
• PROCESSING: document management,
• OUTPUTS: documents; schedules
• USERS: clerical workers

EXAMPLE: document imaging system

OFFICE AUTOMATION SYSTEM(OAS)

• What is office automation?
• What is OAS?
• Functions of OAS?
• Advantages & disadvantages of OAS.

AUTOMATION

• The word automation refers to a method of using a wide range of computer and machine aided task to improve productivity and create easier ways to do business.

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• Automation can be defined as the technology by which a process or procedure is performed without human assistance.

OFFICE AUTOMATION

Office automation refers to the varied computer machinery and software used to

• digitally create,
• collect, store, manipulate, and
• relay office information needed for accomplishing basic tasks.
• Raw data storage, electronic transfer, and the management of electronic business information comprise the basic activities of an office automation system.
• so office automation refers to the application of computer and communication technology to office functions

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OFFICE AUTOMATION SYSTEM

• OAS is an information system which is computer based that collects, processes, stores and transmits electronic messages.
• OAS are the combination of networked computer hardware and software and also people in information systems.
• A variety of OAS are now applied to business and communication functions that used to be performed manually or in multiple locations of a Organization, such as preparing written communications and strategic planning.

Functions of OAS

Types of functions integrated by OAS include

• Electronic publishing
• Electronic communication
• Electronic collaboration
• Image processing
• Office management

1. Electronic publishing

• Electronic publishing systems include word-processing and desktop publishing.
• Word-processing software, (e.g., Microsoft Word, Corel Word-Perfect) allows users to create, edit, revise, store, and print documents such as letters, memos, reports, and manuscripts.

2.Electronic communication

• Electronic communication systems include electronic mail (e-mail), voicemail, facsimile (fax), and desktop videoconferencing

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3.Electronic Collaboration

• Electronic collaboration is made possible through electronic meeting and collaborative work systems and teleconferencing.
• which is conducted without face-to-face interaction among individuals or members of virtual teams engaged in a common task using information and communication technologies
• It allow teams of co-workers to use networks of micro computers to share information, update schedules and plans, and cooperate on projects regardless of geographic distance.

4.Image processing

• Image processing systems include electronic document presentation graphics, and multimedia systems.

• Imaging systems convert text, drawings, and photographs into digital form that can be stored in a computer system. This digital form can be manipulated, stored, printed, or sent via a modem to another computer.

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• Imaging systems may use scanners, digital cameras, video capture cards, or advanced graphic computers.
• Companies use imaging systems for a variety of documents such as insurance forms, medical records, dental records, and mortgage applications.

5. Office management

• Office management systems include electronic office accessories, electronic scheduling, and task management.
• These systems provide an electronic means of organizing people, projects, and data.
• Business dates, appointments, notes, and client contact information can be created, edited, stored, and retrieved. Projects and tasks can be allocated, subdivided, and planned.
• All of these actions can either be done individually or for an entire group.
• Computerized systems that automate these office functions can dramatically increase productivity and improve communication within an organization.

OAS ADVANTAGES

• Manipulation and storage of data:
• Management of data:
• Exchanging data:
• Saves more time and even more resources:
• Reduces all costs

DISADVANTAGES

• Make employee lazy
• Eye strains
• Back pain
• Older staff members may have a harder time adjusting to new technology and will be unable to use it efficiently
• Expense: The more complex the system , the more costly the hardware , personnel planning developing and monitoring.

Decision Support Systems (DSS)

Decision support systems (DSS) are interactive software-based systems intended to help managers in decision-making by accessing large volumes of information generated from various related information systems involved in organizational business processes, such as office automation system, transaction processing system, etc.

DSS uses the summary information, exceptions, patterns, and trends using the analytical models. A decision support system helps in decision-making but does not necessarily give a decision itself. The decision makers compile useful information from raw data, documents, personal knowledge, and/or business models to identify and solve problems and make decisions.

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Dr. S.B.Thigale

Attributes of a DSS�

1. Adaptability and flexibility
2. High level of Interactivity
3. Ease of use
4. Efficiency and effectiveness
5. Complete control by decision-makers
6. Ease of development
7. Extendibility
8. Support for modeling and analysis
9. Support for data access
10. Standalone, integrated, and Web-based

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Dr. S.B.Thigale

Characteristics of a DSS�

• Support for decision-makers in semi-structured and unstructured problems.
• Support for managers at various managerial levels, ranging from top executive to line managers.
• Support for individuals and groups. Less structured problems often requires the involvement of several individuals from different departments and organization level.
• Support for interdependent or sequential decisions.
• Support for intelligence, design, choice, and implementation.
• Support for variety of decision processes and styles.
• DSSs are adaptive over time.

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Dr. S.B.Thigale

Benefits of DSS�

1. Improves efficiency and speed of decision-making activities.
2. Increases the control, competitiveness and capability of futuristic decision-making of the organization.
3. Facilitates interpersonal communication.
4. Encourages learning or training.
5. Since it is mostly used in non-programmed decisions, it reveals new approaches and sets up new evidences for an unusual decision.
6. Helps automate managerial processes.

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Dr. S.B.Thigale

Decision Support Systems (DSS)

Dr. S.B.Thigale

Information system at the management level of an organization that combines data and sophisticated analytical models or data analysis tools to support semi-structured and unstructured decision making.

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• TYPE: Management-level
• INPUTS: low volume data
• PROCESSING: simulations, analysis
• OUTPUTS: decision analysis
• USERS: professionals, staff managers
• DECISION-MAKING: semi-structured

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EXAMPLE: sales region analysis

Characteristics of Decision-Support Systems

Dr. S.B.Thigale

1. DSS offer users flexibility, adaptability, and a quick response.
2. DSS operate with little or no assistance from professional programmers.
3. DSS provide support for decisions and problems whose solutions cannot be specified in advance.
4. DSS use sophisticated data analysis and modelling tools.

Management Information Systems

Dr. S.B.Thigale

Information system at the management level of an organization that serves the functions o planning, controlling, and decision making by providing routine summary and exception reports.

• TYPE: Management-level
• INPUTS: high volume data
• PROCESSING: simple models
• OUTPUTS: summary reports
• USERS: middle managers
• DECISION-MAKING: structured to semi-structured

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EXAMPLE: annual budgeting

Characteristics of MIS

Dr. S.B.Thigale

1. MIS support structured decisions at the operational and management control levels. However, they are also useful for planning purposes of senior management staff.
2. MIS are generally reporting and control oriented. They are designed to report on existing operations and therefore to help provide day-to-day control of operations.
3. MIS rely an existing corporate data-and data flows.
4. MIS have little analytical capability.
5. MIS generally aid in decision making using past and present data.
6. MIS are relatively inflexible.
7. MIS have an internal rather than an external orientation.

Executive Support Systems (ESS)

Dr. S.B.Thigale

Information system at the strategic level of an organization that address unstructured decision making through advanced graphics and communications.

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TYPE: Strategic level

• INPUTS: aggregate data; internal and external
• PROCESSING: interactive
• OUTPUTS: projections
• USERS: senior managers
• DECISION-MAKING: highly unstructured

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EXAMPLE: 5 year operating plan

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Executive Support System

(Executive Information System)

Scenario

How do you make business decisions?

Scenario

If you’re like most

executives, then you probably have one of those enormous Excel spreadsheets, a dozen tabs

wide, with data from various departments.

Scenario

• It is painstaking to build and update a spreadsheet with figures from every department of your organization.
• The data always needs to fit together nicely and there is a high risk for human error.
• Even if all the numbers are keyed in correctly, when analyzing the data, the sharpest CEO will often miss a reoccurring pattern or red flag amongst their KPIs.
• The opportunity costs of this kind of manual process are also staggering.
• Crunching numbers in spreadsheets leaves executives, or the

staff developing these reports, with very little time and energy to then analyze that data and create forecasts that positively influence business decisions.

Definition

• ESS is also known as Executive Information System (EIS).
• An Executive Support System (ESS) is

software that allows users to transform enterprise data into quickly accessible and executive-level reports, such as those used by billing, accounting and staffing departments. An ESS enhances decision making for executives.

Components

Hardware

Software

User Interface

Telecommunication

Architecture of ESS

Where is ESS?

Range of ESS

ESS mainly deals with data related to key departments like

billing, accounting, scheduling, st

affing etc. In addition to

understanding of the various possible outcomes depending upon the changes in input data.

Range(Cont’d)

ESS thus saves valuable time of the executives in digging the huge pile of information to identify the critical data and helps them spend more time on brainstorming and decision making by providing only the required data. ESS can be used to view and analyse both the present data and predicted future data.

(Range)Cont’d

ESS can be customized to suite the user requirements and its functioning is solely dependent on the skills of the developer.

Features

• Contemporary ESS bring together data from all parts of the firm and enable managers to

select, access, and tailor them as needed using easy-to-use desktop analytical tools and online

data displays.

• Through their ESS, many managers have access to public data, such as news services, financial market databases, and economic information.
• ESS has the ability to drill down, moving from a piece of summary data to lower and lower levels of detail.
• Well-designed ESS also has some facility for environmental scanning.

Features()Cont’d

• A key information requirement of managers at the strategic level is the ability to detect signals of problems in the organizational environment that indicate strategic threats and opportunities.
• Ability to analyze, compares, and highlight trends.

Advantages

• Improved personal efficiency
• Increased organizational control
• Competitive advantage over competitors
• Automation of the managerial

processes.

If there is no ESS/EIS?

Without ESS: A Re-Active Business Decision

• A CEO receives a call from an online advertising company offering an incredible rate on pay-per- click ads, but for a limited time.
• Now it’s up to the CEO to quickly figure out which products will yield the most return on the advertising investment.
• First the executive logs into an online advertising dashboard to compare costs, response rates and return from previous campaigns.
• Then he gets on the phone with a warehouse account manager, or logs into an inventory management database.

If there is no ESS/EIS?

• From the warehouse, he finds out the cost to ship each product, the list price of each product and which products have been sitting on the shelves the longest or accruing the most storage fees.
• With all of this data and information in place, the executive can figure out which product will likely yield the highest return and finally respond to the advertising offer before the deadline expires.

What will happen when we use ESS/EIS inside an organization?

With ESS: A Pro-Active Business Decision

• The ESS sends an alert to the company CEO that product “X” was stored for “X” number of days, or that the warehouse storage costs for product “X” have exceeded a certain total dollar amount.
• Working from that report, the executive alerts his sales and marketing employees to research the most cost-effective ways to move product “X” off the shelves.
• Here the CEO is not scrambling to reply to an outside call from an advertising company
• The ESS alert put him in the driver’s seat and gave the sales

and marketing team lead time to find the best

Screenshots

Screenshots(Cont’d)

Future of ESS

• Toolbox for customized systems
• Multimedia support
• Better access (via PDFs and cell phones)
• Virtual Reality and 3-D Image Displays
• Merging of analytical systems (OLAP / multidimensional analysis)) with desktop publishing
• Client/server architecture
• Web-enabled EIS
• Automated support and intelligent assistance
• Integration of EIS and Group Support Systems
• Global EIS
• Integration and deployment with ERP products

Knowledge Work Systems (EWS)

A knowledge management system is not radically different from all these information systems, but it just extends the already existing systems by assimilating more information. As we have seen, data is raw facts, information is processed and/or interpreted data, and knowledge is personalized information.

What is Knowledge?

• Personalized information
• State of knowing and understanding
• An object to be stored and manipulated
• A process of applying expertise
• A condition of access to information

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Dr. S.B.Thigale

Knowledge Management System

(KMS)

“The systematic process of creating, maintaining and nurturing an organization to make the best use of knowledge to create business value and generate

Knowledge Management Fundamentals

• Data: Facts, numbers or individual entities without context or purpose.
• Information: Data that has been organized into a meaningful context (to aid decision making).
• Knowledge: The human capacity (potential & actual ability) to take effective action in varied and uncertain situations

Forms of Knowledge

• Concepts, methodologies
• Facts, beliefs, truths & laws
• Know what, Know how, Know why
• Judgments, expectations and insights
• Relationships, leverage points
• Intuition & feelings
• Meaning and sense making

Benefits of Good Business Knowledge Management

• The foundation of the enterprise
• Increases when shared
• Snowball effect when shared (innovation)
• Creates value through efficiency (process knowledge)
• Reduces uncertainty/ increases time of response (environment knowledge)
• Enhances the current value of products (customer knowledge)

Difficulties of Managing Corporate Knowledge Management

• Usually exists in the minds of individuals
• Buried in old reports
• Knowledge Hoarding
• Often leaves the organization with the employee

Why is KMS important?

• Companies can...
• Sustain knowledge regarding their products and services
• Connect employees with knowledge they otherwise wouldn't have
• Encouraging innovation and ideas
• Creating better business decisions
• Expedite projects due to less wait time of information

How can this be done?

• Actively managing knowledge in a database or repository
• Creating incentives for employees for providing and updating and using knowledge
• Experts of the field providing information that will help others better accomplish their jobs
• Use of Wiki’s, Software solutions

Difference between Data, Information, and Knowledge

Knowledge

Data

Information

Data interpretation

Elaboration

Learning

Interpreted symbol structures

• used to interpret data, elaborate on information, and learn
• used withun the decision steps

Interpreted symbols and symbol structures

• input to a decision step
• output from a decision step

Observed uninterpreted symbols

- signs, character sequences, patterns

Aamodt A., Nygārd M. Different roles and mutual dependencies of data, information and knowledge - An AI

perspective on their integration. Data &Knowledge Engineering, 1995.

From data administration to KMS

KMS components

From the point of view of knowledge flow

​

• The flow of knowledge
• Knowledge cryptography
• Communities of knowledge workers
• Knowledge repositories and libraries

KMS components

From the technical viewpoint

​

• Software interface
• Access and authentication tools
• Collaborative intelligence tools
• Application level software
• Transport level software
• Middleware and legacy integration software
• Repositories

Tools for knowledge internalization

Case base

Sen^{ds attributes}

^Retrieves

^matching cases

c1

c3

c2

Matching cases

^{Delivers similar c}ases

Adds the ^{new case}

^Selects the

^appropriate

^case

1

Describes the problem

Problem description

​

2

3

Searches for

similar cases

4

5

6

KM system

Knowledge

KM life

cycle

KM system

Relation of terms: knowledge, KM life cycle, KMS

is used in

is supported by

KM system Seven layers architecture

Interface layer

Access and authentication layer Collaborative intelligence and filtering

Application layer Transport layer

Middleware and legacy integration layer Repositories

Knowledge Types

Example: KMS Software

Tacit Active Net

• Helps to find people
• Initiate and manage collaboration
• Coordinate your activities automatically with those of other

people across the enterprise

• Automatically learns about people's activities and focus, and identifies who should be talking or working together
• Makes it easy to locate and share files, find answers to

questions, or find the online conversations you should join

KM - Impact on businesses

According to a survey conducted by E&Y in 2012on business intelligence, 87% of companies, whatever their industry is believe that they are knowledge based business.

• Promotes many “healthy” business activities
• The recording of knowledge artefacts
• Quality management of knowledge
• Leveraging lessons learned from past decisions and experiences
• The sharing of best practices and the building of consistent processes

KM Impact on businesses cont’

• Knowledge management involves stewards (those

accountable for knowledge)

• Knowledge management eliminates the risks associated with attrition.
• knowledge management system promotes getting a good understanding of the knowledge, information, and data needs of employees
• A knowledge management portal provides 24x7 access to ALL recorded knowledge

The Challenge of Knowledge Management

Not only of how to develop new knowledge,

BUT

​

• how to locate and acquire others’ knowledge
• how to diffuse knowledge in your organisation
• how to recognize knowledge interconnections
• how to embody knowledge in products
• how to get access to the learning experiences of customers

However, the world is not that straight forward

• A single software package like Microsoft Office or even an application like Microsoft Excel could be classified as any or all of the following: DSS,TPS, MIS, or ESS (albeit, a trivial ESS, DSS, etc.)
• When considering classification, consider how the tool is used, not what it could be used for.
• A tools meets a need posed by the enterprise
• A service is provided by the tool is a solution.

Dr. S.B.Thigale