What is an Information System?

Lets look at some different definitions and

then explore the context of an IS in the
organizational setting.
The contrasting definitions should provide a
variety of different perspectives.

Historical Background
The Data Processing Industry grew rapidly in the
1960s, however, the quantity of output, most
often, far outstripped the quality of output.
The growth of the 1960s and 1970s saw a shift
from computer orientation, to information
orientation.
The role of information resource manager in
the organization offered an opportunity to
migrate from the technocratic image of the past,
and establish an image as a business manager, a
general manager, an information manager.
Today this is the role of the CIO - Chief
Information Officer.

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John Diebold (1979) wrote:

Information, which in essence is the analysis
and synthesis of data, will unquestionably be
one of the most vital corporate resources in
the 1980s. It will be structured into models
for planning and decision-making. It will be
incorporated into measurements of
performance and profitability. It will be
integrated into product design and marketing
methods. In other words, information will be
recognized and treated as an asset.

Davis and Olson: (1985)

A management information system is:

an integrated user-machine system

for providing information
to support the operations, management, analysis,
and decision-making functions in an organization.
The system utilizes:

computer hardware and software

manual procedures
models for analysis, planning, control, and decision-making
a database

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IFIP/BCS (1985)
An information system is a system which
assembles, stores, processes, and delivers
information relevant to an organization (or to
society) in such a way that the information is
accessible and useful to those who wish to use it,
including managers, staff, clients, and citizens. An
information system is a human activity (social)
system which may or may not involve the use of
computer systems.
International Federation for Information
Processing/British Computing Society 1885
curriculum for information systems.

McNurlin and Sprague

(1989 & 1999)
The mission for information systems in
organizations is to improve the performance of
people in organizations through the use of
information technology.
The ultimate objective is performance improvement
- a goal based on outcomes and results rather than a
go-through-the-steps process goal.
The focus is the people who make up the
organization. Improving organizational performance
is by the people and groups that comprise the
organization.
The resource for this improvement is information
technology.

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Turban (1990)
A management information system is a
formal, computer-based (but need not be)
system intended to retrieve, extract, and
integrate data from various sources in order to
provide timely information necessary for
managerial decision-making.
An MIS is a business information system
designed to provide past, present, and future
information appropriate for planning,
organizing, and controlling the operations of
the organization.

Alter (1992)
An information system is a combination of
work practices
information
people, and
information technologies

organized to accomplish goals in an

organization.

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Zwass (1992)
A Management Information System is an
organized portfolio of formal systems for
obtaining, processing, and delivering
information in support of the business
operations and management of an
organization.

Laudon and Laudon (1995)

Information system - (definition) Interrelated
components that collect, process, store, and
disseminate information to support decisionmaking, control, analysis, and visualization in
an organization.

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Turban, McLean, Wetherbe (1996)

An information systems is a collection of
components that collects, processes, stores,
analyzes, and disseminates information for a
specific purpose.
The major components of a computer-based
information system (CBIS) can include (1)
hardware, (2) software, (3) a database (4) a
network (5 )procedures, and (6) people.
The system operates in a social context, and the
software usually includes application programs
which perform specific tasks for users.

Alter (1996)
An information system is a system that uses
information technology to capture, transmit,
store, retrieve, manipulate, or display information
that is used in one or more business processes.
A business process is a related group of steps or
activities that use people, information, and other
resources to create value for internal or external
customers. Business Processes consist of steps
related in time and place, have a beginning and
end, and have inputs and outputs.

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Lucas (1997)
Information systems may be described by five
of their key components:

Decisions
transactions and processing
information and its flow
individuals or functions involved
communications and coordination

Zwass (1998)
Information System - An organized set of
components for collecting, transmitting,
storing, and processing data in order to
deliver information for action.

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Turban, McLean, Wetherbe (1999)

An information system is a physical process
that supports an organizational system by
providing information to achieve
organizational goals.

Alter (1999)
A work system is a system that produces products
for internal and external customers through a
business process performed by human
participants with the help of information
technology.
An information system is a particular type of
work system that uses information technology to
capture transmit store, retrieve, manipulate, or
display information, thereby supporting one or
more other work systems.

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Information Systems Today

The early focus on IS was for the support of
operations, management, analysis and decisionmaking in organizations.
A significant emphasis was on models of planning
and control.
The late 1980s and early 1990s saw IS expand from
the support not only of decision-making, but but for
improved communication support as well. Social
impacts began to be recognized.
The explosion of the Web has added the important
characteristic of providing information access.
Today the emphasis in organizations is on the
support of business processes.

Terminology
In many textbooks and contexts, the terms
Management Information Systems (or MIS) and
Information Systems (IS) are used interchangeably.
However, in other contexts, Management
Information Systems are considered as a subset of
the more general Information Systems. MIS are
considered to be information systems which
provides information specifically for managing an
organization generally at a tactical or middle
management level. Information Systems would be a
more general term that can include other systems
(e.g. group communication systems). We will
generally follow this convention.

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Types of Information Systems

Transaction Processing Systems (TPS).

Management Information Systems (MIS).
Decision Support Systems (DSS).
Expert Systems (ES).
Executive Information Systems (EIS).
Office Automation Systems (including document
management systems).
GroupWare, Computer-Supported Cooperative
Work (CSCW), and other communication systems.
and much more .

The Early History of IS with other

disciplines

IS and Managerial Accounting

IS and Operations Research
IS and Management and Organization Theory
IS and Computer Science
IS and Cognitive Psychology

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Information Systems vs. Computer

Science
Computer Science has its concentration in the
study of algorithms, computation, software,
and data structures.
Information Systems is an extension of
management and organization theory that
applies technical capabilities and solutions
initially developed by computer science, to
tasks in organizations.

Information Technology
Information Technology (IT) sometimes refers
to the technology component of an
information system.
However, the concept is often used by many
to describe the collection of all information
systems in organization.

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Putting Things in Context - I

Information Technology - the hardware, software,
and networks that make Information Systems
possible.
Information System - a system that uses
information technology to capture, transmit,
store, retrieve, manipulate, and display
information.
Business process - a related group of steps or
activities that use people, information, and other
resources, to create value for internal or external
customers.

Putting Things in Context - II

Firm (or organization) - consists of a large
number of interdependent business processes
that work together to generate products of
services in a business environment.
Business environment - includes the firm and
everything else that affects its success, such as
competitors, suppliers, customers, regulatory
agencies, and demographic, social, and
economic conditions.

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Frameworks for Understanding IS

A framework is a brief set of ideas for
organizing a thought process about a
particular type of thing or situation. Any
useful framework helps make sense of the
worlds complexity by identifying topics that
should be considered and showing how these
topics are related.
We will consider two such frameworks:
The Gorry Scott-Morton Framework for MIS
The Work-Centered Analysis (WCA) Framework by Alter.

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The Gorry and Scott-Morton

Framework for Management
Information Systems
Note: This framework was first discussed in 1971. The term
Management Information Systems refers to the broad category we
now refer to simply as Information Systems.

The Gorry and Scott-Morton

Framework for MIS
At the time, (1971), the framework provided a
much needed perspective on the role of MIS in
organizations.
It is more a framework on managerial activities
and a way of looking at decisions in an
organizations. The framework helps us
understand the role of MIS in organizations.
Focuses on the nature and characteristics of
managerial decisions made at different levels in
an organization.
Also Focuses on the characteristics of
information that pertains to the decisions made
at these levels.

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Structural Outline
Combines the works of Robert Anthony and
Herbert Simon
Robert Anthonys taxonomy for Managerial
Activity (1965).
Herbert Simons Categorization of Decision
Types (1960).
The works of Anthony and Simon are
important foundations of Organizational
Theory today.

Robert Anthonys Taxonomy for

Managerial Activity
You can divide the entire management
hierarchy along the following levels:
Operations Control
Management Control
Strategic Planning

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Anthonys
Management
Hierarchy
Strategic
Planning
Management Control

Operational Control

Organizational Members

Operational Control
concerned with carrying out the tasks
necessary and that need to be performed
lower level of the organizational hierarchy
performed by supervisors of small work units
concerned with planning and control of shortterm (a week to six months) budgets and
schedules.

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Management Control/Tactical
Management
concerned with the utilization and
management of resources to achieve
organizational objectives.
concerned with effective and efficient
performance.
Performed by middle managers (e.g.
department heads, plant managers).
set out for one to three years.

Strategic Planning Level

focuses on decisions on the objectives for the
organization as a whole and also on the way
to achieving them
typically involves a small number of high level
people
Carried out by top corporate executives and
corporate boards responsible for setting and
monitoring long-term directions for the
organization three or more years into the
future

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Information Requirements
Gorry and Scott Morton were concerned with
the information requirements at the these
three levels
They noted that the requirements for
information at these levels were very
different.
The next slide shows these differing
requirements

Information Requirements by
Management Level
Characteristics
of Information

Operational
Control

Source

Largely Internal

Scope

Well defined,
narrow
Detailed

Level of
Aggregation
Time Horizon

Management
Control

Strategic
Planning
Internal and
Largely External
Very wide
Aggregate

Historical

Future

Currency

Highly current

Required
Accuracy
Frequency of Use

High

Need not be up to
the minute
Lower, Estimates
are acceptable
Infrequent, ad-hoc

Very frequent

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Simons Categorization
concerned with the manner in which humans
solve problems in an organization
differentiated between programmed and
nonprogrammed decisions

Simons Programmed Decisions

they are repetitive and routine
follow a preset definite procedure each time
they occur
programmable is a better concept
Gorry and Scott Morton call it structured

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Simons Nonprogrammed Decisions

they are novel, unstructured
no cut-and-dried method for handling the
problem exists
calls for intelligent, adaptive, problemoriented action
nonprogrammable is a better concept
Gorry and Scott Morton call it unstructured

Structured vs. Unstructured

They are not bipolar concepts
decisions range in a continuum from
structured to unstructured ..
In between you might have decisions called
semi-structured.

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Combined = A Framework
Gorry and Scott Morton combined the two
concepts of Simons Decision Making with
Anthonys Decision Making Levels and provide
the following Framework for Decision-Making
(See next slide)

A FRAMEWORK FOR DECISION MAKING

Type of
Decision/Task

Operational
Control

Management
Control

Strategic Planning

Structured

1
Inventory reordering

2
Budget Analysis,
short-term forecasting,
Make or Buy Analysis

3
Plant Location,
Financial
Management
(investment),
Distribution Systems.

Semistructured

4
Bond trading,
Production Scheduling

5
Credit Evaluation,
Budget Preparation,
Plant Layout, Project
Scheduling, Reward
Systems Design

7
Selecting a Cover for a
Magazine, Approving
Loans, Buying Software

8
Negotiating, Recruiting
Executives, Lobbying

6
Building New Plant,
Mergers &
Acquisitions, New
Product Planning,
Compensation
Planning, Quality
Assurance Planning
9
R & D Planning,
New Technology
Development, Social
Responsibility
Planning

Unstructured

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Support Needed

Clerical, MIS, OR
Models, Transaction
Processing Systems

Decision Support
Systems

Human Intuition,
Expert Systems,
Executive Support Systems

A FRAMEWORK FOR DECISION MAKING

Type of
Decision/Task
Structured

Semi-structured

Unstructured

Support Needed

Operational Control

Management
Control

Strategic Planning

1
Inventory reordering

2
Budget Analysis,
short-term
forecasting, Make
or Buy Analysis

3
Plant Location,
Financial
Management
(investment),
Distribution
Systems.

4
Bond trading, Production
Scheduling

5
Credit Evaluation,
Budget
Preparation, Plant
Layout, Project
Scheduling,
Reward Systems
Design

7
Selecting a Cover for a
Magazine, Approving
Loans, Buying Software

8
Negotiating,
Recruiting
Executives,
Lobbying

6
Building New
Plant, Mergers &
Acquisitions, New
Product Planning,
Compensation
Planning, Quality
Assurance
Planning
9
R & D Planning,
New Technology
Development,
Social
Responsibility
Planning

MIS
Management Science
OR Models

Management
Science
DSS,
EIS, ES

Support Needed

Clerical, MIS, OR
Models, Transaction
Processing Systems

Decision Support Systems

Human Intuition,
Expert Systems,
Executive
Information/Support
Systems

EIS,
Neural Networks,
Executive Mental
Models

Framework Comments
The original framework has been augmented with
the right-most column and bottom row showing
some typical support systems available. These
are meant be be illustrative and not inclusive.
The framework shows the need for information
systems to support all cells.
The figure as well as the characteristics of
systems shows that the information requirements
vary considerably from among management
levels in an organization.
The information requirements are also diverse.

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Implications: Total MIS is a myth

Gorry and Scott Morton showed that the
prevalent concept (at that time, 1971) of a
totally-integrated-management-informationsystem was a myth.
Since we can not have a single total MIS, we
need the concept of what David and Olsen called
a federation of integrated information systems.
Today technology provides appropriate tools
which gives the appearance of information being
totally integrated.
This is the basic reasoning for the separation of
todays data warehouses from systems to
support current operations.

Concepts of MIS
MIS Structure

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Information subsystem for a function like Marketing/Production

Unique to
application

Common to many to
application
Model base

Strategic
Planning
Management
Control
O/P Control

Common
Application
S/W

TP
Unique Sub
system

DBMS
Common Data base

Common
program

Finance

HR

Production

Sales & Mktg

Information subsystem for a function like Marketing/Production

Strategic
Planning
Model base

Manageme
nt Control

DBMS
O/P
Control

Common
application

TP

Unique files
Common
data files

Data Base

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Information Systems for Operational

Control
Operational Control: process of ensuring
operational activities are carried out
effectively and efficiently.
Processing support:
Transaction processing
Report processing
Inquiry processing

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Information Systems for Management

Control
Management Control: Information that is required
by managers of departments, profit centers, etc. to
measure performance, decide on control actions,
formulate new decision rules to be applied by the
operational personnel and allocate resources.
Processing support:
Planning and budget models to assist managers in
finding problems and preparing plans and budgets.
Variance reporting programs; Exception Reports
Problem analysis models
Decision models to analyze a problem situation and
provide solutions
Inquiry models to assist in responding to queries.

Information Systems for Strategic

Planning
Systems that are designed to help managers
perform the strategic planning function
This function has the responsibility of developing
strategies to achieve objectives and goals
Such systems might have to provide information
on:

economic outlook
political environment
competitive environment
impact analysis of alternative strategies, etc.

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A Short Sidebar.
Transaction Processing Systems
vs.
Management Information Systems

presented now since this is an important distinction, so lets

get it right early!

Transaction Processing Systems

A transaction is an elementary activity conducted
during business operations (e.g. merchandise
sale).
Earliest Information Systems in organizations.
Support the monitoring, collection, storage,
processing, and dissemination of the
organizations basic business transactions.
Provides backbone for many other applications
involving other support systems.
On-line systems called OLTP vs. batch
Routine, repetitive tasks.

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Business Transactions in a Factory

Payroll: employee time cards, employee pay and
deductions, payroll checks.
Purchasing: purchase orders, deliveries,
payments (accounts payable)
Sales: sales records, invoices and billing,
accounts receivable, sales returns, shipping
Manufacturing: production reports, qualitycontrol reports
Finance and Accounting: financial statements,
tax records, expense accounts
Inventory management: materials usage,
inventory levels

Transaction Processing Systems - 3

In addition to processing the routine critical
organizational activities, transaction processing
systems also provide the source data for many
other type of information systems used at the
tactical and strategic levels in the organization.
Recall that tactical and strategic levels use
aggregated data, over multiple time periods. TPS
are often the source of this information. TPS
often populate data warehouses which provide
on-line analytical processing (OLAP).

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TPS Data Entry Screen

Management Information Systems

Systems that convert TPS data into information for
monitoring performance and managing an
organization.
The MIS provides periodic information to functional
(operational) and mid-level (tactical) managers on
routine matters such as operational efficiency,
effectiveness, and productivity.
Example: An HRIS can provide the HR manager with
percentages of people who are on vacation or call in
sick. It can compare actual to forecasted values, or
to an industry average.
MIS are used for planning, monitoring, and control.

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Sample MIS Management Report

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