INFORMATION SYSTEMS MANAGEMENT

BBA-305
BY Ms. Reema Alagh
UNIT-1
INTRODUCTION TO ISM-
1. Definition, Purpose, Objectives and Role of ISM in Business
Organization

2. Pre-requisites for effective ISM

3. Components of ISM

4. ISM Applications in Business

INFORMATION IN DECISION MAKING

1. Information-Meaning & Importance, Sources & Types
2. Information requirements with particular reference to
Management levels

3. Relevance of Information in decision making

DEFINITION(ISM):-

A computer based system that provides managers with the tools to

organize evaluate and efficiently manage departments within an
organization.

ISM is basically management of information system. It is basically

concerned with processing of data into information which is then
communicated to the various departments in an organization for
appropriate decision making. MIS is comprehensive in nature. It includes
transaction processing as well as information processing systems
designed mainly for decision making and control.

PURPOSE:-

Notes by Ms. Reema Alagh

 1. Decision making:-At each stage of decision making relevant
information is needed by the manager. Well-integrated MIS
provides relevant information to different categories of
managers.
2. Operational control and efficiency-Managers of an
organization needs various kinds of reports such as budgeted
figures, previous year’s figures etc. This analysis helps
managers in improving the efficiency of operations.
3. Facilitate summary information-MIS combines information
from multiple data resources into a structured report that
enables managers to monitor and organize its organization in a
better way.
4. Strategic support-Strategic support is essential for business
organizations to grow themselves. Computers can provide
financial statements and performance reports to facilitate
planning, monitoring and implementation of strategy.
5. Data Processing-The collected data is processed to convert it
into the required management information. Data processing is
done by activities such as calculating, comparing, sorting,
classifying and summarising.
6. Provides internal information-MIS generally focuses on
internal environment as the input to MIS is generally the internal
data. MIS mainly focus on the information needs of low to
middle level managers regarding current and past operations of
the enterprise.

ROLE OF ISM IN BUSINESS ORGANIZATION:-

1. MIS provides managers with timely and relevant information,

aiding strategic and operational decisions.
2. MIS facilitates communication and collaboration among different
departments and teams within an organization.
3. MIS supports competitive analysis which enables business
organizations to adapt to market changes and gain a
competitive edge.
4. MIS facilitates customer relationship management by managing
customer data, interactions and feedback.

Notes by Ms. Reema Alagh

 5. MIS helps in long-term planning and forecasting by providing
historical data and trends analysis.

PRE-REQUISITES FOR EFFECTIVE ISM:-

1. Clear-cut objective-Define the specific goals and objectives
that the MIS should support. This helps in designing &
implementing a system that aligns with the organizational
needs.
2. Data Quality-It must be ensured that the data input into the
system is accurate, complete and consistent.
3. Skilled Personnel-Employ or train the personnel who have
the required skills and knowledge to operate and manage MIS
effectively. This includes database administrators, data analysts
& IT Staff etc.
4. Adequate hardware & software to support the MIS.
5. Data Security-Implement robust security measures to protect
data from unauthorised access and data loss.
6. User Training-Provide training & on-going support to users in
order to ensure that they can effectively utilise the MIS for their
tasks and decision making.
7. Cost-Benefit Analysis-Continuous assessment of cost
effectiveness of MIS in terms of the value it delivers to the
organization.

COMPONENTS OF ISM:-

1. DATA-It refers to day to day business transactions of an

organization. Data base holds processed and organized data.
2. PEOPLE-People prepare and analyse MIS to achieve
organizational goals. People are required for the operation of all
the information systems. The ICT department usually has the
support staffs that ensure that the system is running properly.
3. HARDWARE-Input & Output devices like keyboard, mouse,
monitor etc. help in data input and display information. It
includes all physical devices and materials used in information
processing. Hardware speeds up the processing of data into
information.

Notes by Ms. Reema Alagh

 4. SOFTWARE-These are the programs that run on the hardware.
The software includes Systems software and Application
software. Application software refers to specialised software to
accomplish business tasks such as banking system, Payroll
programs etc.
5. PROCEDURE-These are the best practices that guide the
users and all other components on how to work efficiently.
These are the steps undertaken to achieve a goal.

ISM APPLICATIONS IN BUSINESS:-

1. MARKETING INFORMATION SYSTEM-Marketing MIS supports

activities throughout so many activities of marketing department. It
includes marketing research, product development, promotions,
advertising etc. The most common use of a marketing MIS is to
produce sales reports.
2. FINANCIAL INFORMATION SYSTEM-Financial MIS provides
financial managers to make daily decisions regarding operations
within the organization. A financial MIS can also be used to
prepare reports for third parties such as external auditors or
shareholders.
3. HR INFORMATION SYSTEM-It provides a number of solutions in
training, payroll, HR. It basically implies an intersection of human
resources & information technology through HR software.
4. MANUFACTURING INFORMATION SYSTEM-It is specifically
designed for use in a manufacturing environment. It plays the role
of supporting manufacturing operations by providing relevant &
timely information for decision making at different levels of a
business organization.

INFORMATION (MEANING):-
When data are processed, interpreted, organized, structured or
presented so as to make them meaningful or useful, they are called
information. Information provides context for data.

Information is processed data which helps in decision making and

also facilitates communication within an organization.

Notes by Ms. Reema Alagh

 Information provides answers to ‘who’, ’what’, ’where’, and ‘when’
questions.

SOURCES OF INFORMATION:-
The sources of information may be classified into 2 categories:-

1. EXTERNAL SOURCES:-It implies obtaining information from

the external environment. Every organization interacts with its
environment. Information is one of the key inputs that every
organization takes from the environment. Such information may
be related to economic environment, political-legal environment,
technological environment etc.
 External documentary Information-
1. Information from market research agencies
2. Publications collecting relevant information from various
types of publications related to business operations.
 External Non-documentary Information-
1. Verbal information from customers, suppliers, distribution
channels etc. Higher level managers mainly rely on the
verbal information.
2. Business organizations obtaining verbal confidential
information from the customers, suppliers of the competitors.
Although it is not legal but many organizations resort to this
method.

2. INTERNAL SOURCES OF INFORMATION-This source of information

lie within an organization which every business organization generate
from their business operations. The internal information is very important
for the successful management of a business organization.

 Internal documentary Information-The business organization

keeps records of various activities which are performed in different
functional areas such as marketing, finance, human resources etc.
Relevant information is collected from these records. It includes-
1. Marketing & Sales information on revenues, market shares
etc.

Notes by Ms. Reema Alagh

 2. Production & operational information on assets, quality
standards etc.
3. Financial information on profits, costs, investments etc.

 Internal Non-documentary Information-It includes discussions

with colleagues, visitors, participants of seminars or conferences
etc. The main disadvantage of these sources is that these are
costly when the distance between people is large and it also
demands the use of highly sophisticated techniques.

TYPES OF INFORMATION:-
A. ON THE BASIS OF NATURE OF INFORMATION:-
1. Action Information-The information which induces action.
For example-No stock report calling a purchase action is action
information.
2. No-action information-The information which only states
the status of a situation is called no-action information. For
example-stock ledger showing the store transactions and the
stock balances.
3. Recurring information-The information which is generated
at regular intervals is called recurring information. For example-
monthly sales reports, the trial balance etc.
4. Non-recurring information-The information which is not
generated at regular intervals such as the financial analysis or
the report on the market research study.
5. Documentary information-Information which is available
in documentary form either in some written form or on micro
films, magnetic tapes, floppy discs etc.
6. Non-documentary information-Information which is not
documented.
7. Internal information-It is generated form the normal
operations of a business organization such as policies, financial
plans, sales forecasts etc.

Notes by Ms. Reema Alagh

 8. External information-This information is gathered from
outside the organization. It includes environmental information
such as government policies, technological environment,
economic trends etc. and also competitive information such as
industry demand, firm demand, competition etc.
B. ON THE BASIS OF MANAGEMENT:-
1. Strategic Information-strategic information is required
to formulate organizational vision, mission and long-
term objectives. Such information is also required for
strategic control which tries to evaluate the whether the
strategies chosen by an organization is being
implemented effectively and the organization is
progressing in right direction.
2. Tactical Information-At the tactical level chosen
strategies are put into action. Tactical information is
required to formulate tactics and short term plans. This
information is mostly generated from internal sources.
3. Operational Information-At this level the short-term
plans which were formulated at the tactical level are
implemented. Here information is required for
immediate actions and ensuring that these actions have
been taken properly. Such information is generated
from internal sources of information.

Notes by Ms. Reema Alagh

INFORMATION REQUIREMENTS WITH PARTICULAR REFERENCE
TO MANAGEMENT LEVELS:-

Information requirements vary across different management

levels in an organization. These levels typically include
operational, tactical and strategic management. Each level
requires distinct information.

Notes by Ms. Reema Alagh

 1. OPRATIONAL LEVEL OF MANAGEMENT-
 Information at this level is highly detailed and focused on
day to day activities.
 Managers require information related to routine tasks and
immediate problem solving.
 Examples-Sales figures, inventory levels and employee
schedules.
2. TACTICAL LEVEL OF MANAGEMENT:-
 Tactical managers need information that supports
medium-term decisions and planning.
 Data is often aggregated and analysed to identify trends
and patterns.
 Information may be related to resource allocation,
departmental performance and market analysis.
 Examples-Quarterly sales reports, budget forecasts and
market segmentation data.
3. STRATEGIC LEVEL OF MANAGEMENT:-
 Strategic managers require high-level long-term
information for overall organizational direction.
 Data is typically summarized and focuses on achieving the
organization’s vision and mission.
 Information encompasses market trends, competitive
analysis and potential growth opportunities.
 Examples-Long-term financial forecasts, market research
and competitive intelligence.

CONCLUSION:-Operational managers need real-time data for

daily tasks. Tactical managers need medium-term insights for
planning and strategic managers need long-term high-level
information to guide the organization’s strategic direction.

Notes by Ms. Reema Alagh

 RELEVANCE OF INFPORMATION IN DECISION
MAKING:-
Information is the lifeblood of effective decision-making across all
facets of life. Here are the key reasons why information is crucial
for decision making:-
1. Information provides the foundation for making informed choices.
Information provides data; facts and insights which help individuals
and organizations evaluate different options and potential
outcomes.
2. Decision makers in an organization can assess risks and
uncertainties associated with various choices when they have
access to relevant information.
3. Data and information minimises the influence of personal biasness
and emotions which ensures that decisions are based on rational
analysis.
4. Information assists in problem-solving by providing a clear
understanding of the issue, its root causes and potential solutions
which facilitates effective decision making.
5. Timely and relevant information facilitates competitive advantage
for a business organization.
6. Relevant information also plays a vital role in ethical decision
making.
7. Decisions related to resource allocation effectively also rely on
relevant information.

CONCLUSION:-
Information is the cornerstone of sound decision making. It
empowers business organizations to make well-informed, objective
and effective choices across various domains.

X-X-X

Notes by Ms. Reema Alagh

Notes by Ms. Reema Alagh