Management of Information Systems - Assignment Example

Information systems report Name Institution Executive summary Management of any company or business enterprise is responsible for the kind of decisions that are made by their leaders. However, sometime human error leads to these managers making some poor decisions that have a high negative impact upon the company’s operations. To prevent this, managers have opted to seek assistance of information management systems. Information management systems have been credited with stability and reliability. The systems have been tested and proven to be fast, efficient and consistent. As shall be found out in this report, the usage of the information management system is very helpful in that it allows managers to make informed decisions pertaining to the operations of their company. Managers need to know about the possible repercussions of decisions they make, which decision to apply in the mid of a number of them and the consequences of favoring one decision to the other. There are a number of information management systems that have been discussed here namely Management Information System (MIS), Decision Support System (DSS), Executive Information System (EIS), Expert System (ES) and Enterprise Resource Planning Systems (ERP). All these systems have different functions as shall be found out in this report. Contents Executive summary 2 Contents 3 Management information systems (MIS) 4 Decision Support System (DSS) 6 Operation mechanism of the DSS 7 Executive Information System (EIS) 8 Expert System (ES) 9 Enterprise Resource Planning Systems (ERP) 10 Conclusion 10 References 11 Management information systems (MIS) Tesic (2003, p. 3) and Harsh (nd, p.1) explain the concept of management information systems as being one that shows how people use systems to generate and create information designed for the improvement of the effectiveness and efficiency of operations in an organization. Management information systems can be used by individuals as well as institutions. Management of a certain company, organization or business utilizes this concept to generate crucial information and data that they use to make certain informed decisions affecting their businesses. Management utilizes this data in a number of formats to make specific decisions regarding the operations of their businesses. Management information systems provide intrinsic details of a business in all avenues and tenets of a business venture. For instance, management information systems provide information regarding sales, inventories, and other relevant data in a business. There are many management information systems that are available in the market for pick by managers. These systems come in form of softwares that adeptly examine data in a company and generate results. These results are then used in assisting management in making decisions that affect the way their businesses are operated. Initially, management information systems were just narrowed down to sales, inventories and other basic aspects of business. With time, this concept of management information systems has evolved to encompass other avenues of business operations such human resource departments, operations departments, performance management among other business acumen. Management information systems provide intrinsic details concerning the performance of a business. As such there are a number of advantages that are accrued to using these management information systems to a company as shall be described in the ensuing paragraph. One of the notable advantages of management information systems on a basic level is the ability of systems to deliver information that is useful for the organizations. Such information regarding the inventories allows the management to track down how the inventories are behaving. It allows the management to note when the volumes are low, prompting restocking. In this form, the company will always have a sense of how the stock is moving, see which stock is not moving and make informed decisions pertaining to this matter. Management information systems also allow management to figure out how sales volumes of business are behaving. For instance, the system tracks down how inventories are sold. This allows management of a business to note how goods are being sold and calculate profit margin automatically. On another level, through skimming the comprehensive reports that the management information systems deliver, management of a particular company is able to note strengths as well as weaknesses of a business. This is done through reports on revenues, performance track records of employees in a company as well as the effectiveness of supply chain management. Management is then placed in a position where it can improve on strengths and find means to take care of weaknesses in a business. Reports that management information systems give could also be used by potential investors to evaluate financial standing of a company. Through the use of the reports generated by the MIS, the investors would be in a position to make informed choices regarding whether they shall invest in the company or not. On other levels, some management systems even offer data concerning the customer. The data is important in that it allows the management to evaluate the trends and the customer tastes. This information is vital in that it allow management of a company to predict consumer behavior and as such make informed decisions pertaining to the products that they should avail to their customers. To this regard, management can be able to promote their products in a way that appeals to these customers and increase their revenue positions. Decision Support System (DSS) Decision Support System is also another form of management system that assists management to gain useful information that helps them make useful decisions pertaining to the way the planning and operations in a business are conducted. According to Sprague (1980, p. 2), Decision Support Systems provide an avenue for gathering information, building business models, analysis, evaluation and decision implementation. The Decision Support System offers a systematic format to follow when conducting this mode of analysis in a business. It is imperative to note here that Decision Support System can be computer aided or through the human effort. In some instances, Decision Support System is a combination of both computerization as well as human efforts (Mohamed et al 2010, p. 35). Just like in management information systems, Decision Support Systems also utilize softwares in their capacity to create these avenues of decision nodes. Decision Support Systems software is comprised of three nodes; the knowledge level, which is the actual database where the information is synthesized, the model of the Decision Support System and the user interface. The model section describes the criteria and decision contexts of the system and the user interface allows the management to operate this system with ease. The three nodes must go hand in hand. Decision Support System allows management to make a certain decision aimed at rectifying a particular problem in a certain area. Operation mechanism of the DSS Decision Support System operates in a very basic format. However, for the system to be effective, a number of components must be applied in the system. Diamond & Khemani (2005, p. 7) stipulate that a Decision Support System should have four main components. These are named as inputs that a user feeds into the system, the expertise of the user, the output expected and the decisions to be made based on these outputs. The inputs could be in the form of figures, numbers, characters, symbols and factors among others depending on the user’s needs. Then the user must have the knowledge desired to be able to analyze manually what kind of information is supposed to be fed into this system. Once this has been done, the system will generate results in accordance to the inputs that were fed into it. Then after results are generated, Decision Support System provides certain predefined decisions based on these results. Decisions made are achieved through a direct combination and matching of the results. Giving a typical example, let’s assume that the management of a company ABC wishes to make some strategic decisions in the organizations. The decisions that they need to make is whether the company should expand through an acquisition or not. To do so, they must first evaluate the level of the company as it is currently and figure out the capability of the company expanding or vice versa. The management decides to apply the usage of a Decision Support System to be able to come up with a comprehensive, effective and exhaustive decision. Two decision nodes have to be made here. The first decision is to expand. However, the expansion policy will only be taken if the system proves that the company has the capacity to do so. The input figures should be the revenue figures, the turnover ratios and the debt/equity figures. The Decision Support System evaluates the debt extent of the company through use of debt/equity ratios and the cash flow of the company through use of the revenue generations. If the Decision Support System finds that the debt/equity ratio of the company is stable and that the cash flow is also stabilized, chances are that Decision Support System will give decision that favors the expansion policy. The management will analyze this decision and act accordingly. On the other hand, if the Decision Support System does not favor the expansion by analyzing the company and finding it incapable of supporting this policy, it will give a decision that will make the management review their policy. Thus stated, it can be noted that the Decision Support System has a number of distinct advantages as shall be highlighted in the following discussion. Decision Support System improves the level of efficiency and speed of making decisions in a company. Once decisions are made fast and efficiently, their effectiveness could be easily felt. The system also allows for good organizational control in that the managerial processes and decision making avenues are automated. The system will offer comprehensive report in support as to why a certain decision has been generated in favor of another. This gives management team chance to reevaluate some decisions and understand where a particular problem could be present. Executive Information System (EIS) This is also another type of a management system that assists the top level management system in their decision making processes. Kaniclides & Kimble (1994, p.1) state that an Executive Information System is similar to a decision support system in some aspects. The difference lies in that the Executive Information System is dedicated to assist the senior-most managerial platforms in conducting their duty. Put in other words, the Executive Information System assists the executive body to monitor their performance and identify problems that affect them through an analysis, comparison and valuation of the important trends in the company. Just like in decision information systems, Executive Information System has four components similar to those of the decision information systems. They could be both in software and even human effort. The differentiation comes in that the Executive Information System incorporates the communication modes allowing free and fast flow of information between the top level management and the other employees of the company. Executive Information System gives these executives the options of presentations using graphics and other form. This makes work of these personnel easier and more efficient. Another advantage is that the system allows for timely delivery of the information of the company in a manner that is easy to understand and apply. Expert System (ES) This is a form of artificial intelligence computer system that mimics capability of human beings to make decisions. The difference between an expert system is that the expert system does not follow the protocol outlined in a programmer’s language and base like other systems; rather, it solves complicated problems through deductive reasoning on natural knowledge basis (Todd, 1992, p. 4). In other words, the computer system emulates a human mind by making decisions in the same capacity and capability as a normal human being would. The advantage of the system is that it can synthesize a large amount of data with a high speed and with a very high degree of accuracy compared to a human being. The system is also reliable in the sense that it will always provide same output for same input given and variations with different. However, the system has a major flaw in that it relies heavily upon the original rules and methods that the developer created. With this new age where technology changes rapidly, chances are that the systems would become redundant with time and continued usage would give unclear and even inaccurate information (Anjaneyulu, 1998, p. 48). Enterprise Resource Planning Systems (ERP) Enterprise Resource Planning Systems are the widest form of management system in that they encompass the all the business factions of the business. It facilitates and opens up the communication channels between the intrinsic operations of the business as well as that of the outsiders and the stakeholders of the business (Shehab et al 2004, p. 359). The Enterprise Resource Planning Systems works out the transactions of the business, the connection between the stakeholders of the business and other avenues of this business. This system works seamlessly with other management based information systems to deliver information and assist the management of the company in running this company. Conclusion From the discussion offered above, it can be observed that management information systems are very vital for the operations of a business enterprise. The management of a company is responsible in deciding which particular type of a management system it should use so as to achieve the desired goals and results. In conclusion, the management information systems help the company’s management achieve results in a much harmonized format and in a fast and efficient manner. References Anjaneyulu, K.S., 1998. ‘Expert Systems: An Introduction’, Resonance, pp. 46-58. Diamond, J & Khemani, K., 2005. Introducing Financial Management Information Systems in Developing Countries, working paper, draft, October, Retrieved February 6, 2013 from http://www.imf.org/external/pubs/ft/wp/2005/wp05196.pdf Harsh, S., nd. ‘Management information systems,’ Retrieved February 6, 2013 from http://departments.agri.huji.ac.il/economics/gelb-manag-4.pdf Kaniclides, T & Kimble, C., 1994. Executive Information Systems: A framework for their development and use. Retrieved February 6, 2013 from http://www.cs.york.ac.uk/ftpdir/reports/94/YCS/247/YCS-94-247.pdf Mohamed et al 2010. ‘Decision Support Systems (DSS) in Construction Tendering Processes’, International Journal of Computer Science Issues, Vol. 7, No. 2, pp. 35-42. Shehab et al 2004. ‘Enterprise resource planning’, Business Process Management Journal, Vol. 10, No. 4, pp. 359-386. Sprague, R.,1980. ‘A framework for the development of decision support systems’, MIT Quarterly, pp. 1-26. Tesic, B., 2003. ‘Process Management and Success Factor Analysis of Management Information System of Budget Accounting of Local Treasuries,’ Management Information Systems, Vol. 7, No.2, pp. 03-012. Todd, B., 1992. ‘An introduction to expert systems’, Retrieved February 6, 2013 from http://www.cs.ox.ac.uk/files/3425/PRG95.pdf Read More