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History
Business Management
Information System
Lecture 2
A Little History

U.S. passed from the industrial era to the
information era as early as 1957
 The
number of U.S. employees whose jobs were
primarily to handle information surpassed the number
of industrial workers

In the late ’50s / ‘60s IT to support “information
work” = largely non-existent (except telephone)
 Information
work = mostly done in general offices
without much support from technology

People factories?
IBM hosted conference stated that:
“The advances that have taken place in calculating
equipment and methods make it possible to determine
the relationship between ultimate yields, time of harvest
and climatic conditions during the growing season.
Relationship between the perspective and actual yields
and changing prices can be established. With such
information at hand the farmer should be in a position to
make a decision on his prediction with a high degree of
certainty at mid-season regarding his yield and income
at harvest time.”
This statement, made in 1963, reflects the
optimism that prevailed with respect to
information systems. Even though there was
much enthusiasm related to these early systems
they basically concentrated on accounting
activities and production records.
 Examples include the TelFarm electronic
accounting system at Michigan State University
and DHIA for dairy operations.

A Little History cont.
 Accounting
activities and production
records has been understood by farm
management economists.
 Financial and production records have
long been used by these Economists as
an instrument to measure and evaluate
the success of a farm business
 Increased enthusiasm for information
systems to enhance management decision
processes
A Little History cont.
The model base component of the system
has decision models that relate to
operational, tactical and strategic
decisions.
 The database/model base management
system is the bridge between database
and model base components.

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The user interface, one of the more critical
features of the system, is used to assist
the decision maker in making more
efficient and effective use of the system.
 The decision maker must have the skills
and knowledge on how to correctly use
these systems to address the unique
problem situation at hand.

Decision Support System
Continue..
The international conference that followed
in France focused on the low adaption rate
of management information systems.
 The use of geographic information
systems (GIS) in conjunction with
geographic positioning systems (GPS) to
record and display data regarding
cropping operations (e.g., yields obtained)
and to control production inputs (e.g.,
fertilizer levels).

(…)
By the mid 1960s it became clear that the
accounting systems were fairly effective in
supplying descriptive and diagnostic
information but they lacked the capacity to
provide predictive and prescriptive
information
 A new approach was needed – a method
of doing forward planning or a
management information system that was
more model oriented

Universities
As an example, Kuhlmann, Giessen
University, developed a very robust and
comprehensive whole farm simulation
model (SIMPLAN) that executed on a
mainframe computer
 the “Top-Farmer Workshops” developed
by Purdue University.

Computer
technology
continued
to
advance at a rapid pace, new
communication systems were evolving
and the application of this technology to
agriculture was very encouraging
 Information for the data oriented systems
often did not match the data needed for
the model oriented systems e.g a cash
flow production model

A Little History cont.
A Little History cont.

70s = it all ‘started’ with many of the foundations
of IT today invented and costs starting to fall
 Typewriters,

fax, ‘smaller’ computers
1980s = number of US information workers
surpassed the number in all other sectors
(>50%)
A Little History cont.

Information Technology:
 Initially
used to perform existing information work
more quickly and efficiently
 Then
= used to manage work better
= well into the 3rd stage of technology
assimilation
 Now

IT makes pervasive changes in the structure and operation
of:





Work
Business practices
Organizations
Industries
The ‘Global Economy’ (=enabler?)

The Data Processing Industry grew
rapidly in the 1960’s, however, the
“quantity” of output, most often, far
overshadow the “quality” of output.

The growth of the 1960’s and 1970’s saw
a shift from “computer” orientation, to
“information” orientation
Shift from Data storage to organized information systems
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 1980’s. 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.”
John Theurer Diebold (June 8, 1926 – December 26, 2005)
was an early champion of widespread use of computing
and automated technology.

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 1985 curriculum
for information systems.
International Federation for Information Processing/
British Computer Society: Founded 1957
McNurlin and Sprague (1989 & 1999)
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-thesteps process” goal.

“The
Cont…
 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.
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.
Steven Alter (1992)


An information system is a combination of
 work practices
 information
 people, and
 information technologies
organized to accomplish goals in an organization.
Vladimir 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.
Ken Laudon and Jane Laudon
(1995)

Information
system
(definition)
Interrelated components that collect,
process,
store,
and
disseminate
information to support decision-making,
control, analysis, and visualization in an
organization.
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.
Cont….
The system operates in a social context, and
the software usually includes application
programs which perform specific tasks for
users.
The Early History of IS with other
disciplines
Information systems have been used with variety
of different subject areas, including
 IS
and Managerial Accounting
 IS and Operations Research
 IS and Management and Organization Theory
 IS and Computer Science
 IS and Cognitive Psychology
A management information system (MIS)
is a system or process that provides the
information necessary to manage an
organization effectively.
 MIS and the information it generates are
generally considered essential
components of prudent and reasonable
business decisions.

The importance of maintaining a
consistent approach to the development,
use, and review of MIS systems within the
institution must be an ongoing concern of
both bank management and OCC
examiners.
 MIS should have a clearly defined
framework of guidelines, policies or
practices, standards, and procedures for
the organization.

MIS is viewed and used at many levels by
management.
 It should be supportive of the institution's
longer term strategic goals and objectives.
 Financial accounting systems and
subsystems are just one type of
institutional MIS.

An institution's MIS
Enhance communication among
employees.
 Deliver complex material throughout the
institution.
 Provide an objective system for recording
and aggregating information.

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Reduce expenses related to laborintensive manual activities.
 Support the organization's strategic goals
and direction.

It should always be sufficient to meet an
institution's unique business goals and
objectives.
 MIS is a critical component of the
institution's overall risk management
strategy.

MIS should be used to recognize, monitor,
measure, limit, and manage risks.
 Risk management involves four main
elements:
 Policies or practices.
 Operational processes.
 Staff and management.
 Feedback devices.


The MIS represents the electronic
automation of several different kinds of
counting, tallying, record-keeping, and
accounting techniques of which the by far
oldest, of course, was the ledger on which
the business owner kept track of his or her
business.
Computing-Tabulating-Recording Company
Automation emerged in the 1880s in the
form of tabulating cards which could be
sorted and counted.
 These were the punch-cards still
remembered by many: they captured
elements of information keyed in on
punch-card machines; the cards were then
processed by other machines some of
which could print out results of tallies.

Each card was the equivalent of what
today would be called a database record,
with different areas on the card treated as
fields.
 World-famous IBM had its start in 1911; it
was then called Computing-TabulatingRecording Company

C-T-R. Punch cards
C-T-R. Punch cards were used to keep
time records and to record weights at
scales.
 The U.S. Census used such cards to
record and to manipulate its data as well.

World War II punch-card systems

When the first computers emerged after
World War II punch-card systems were
used both as their front end (feeding them
data and programs) and as their output
(computers cut cards and other machines
printed from these)
In 1970s, 80s, and 90s

Waves of innovation spread the
fundamental virtues of coherent
information systems across all corporate
functions and to all sizes of businesses in
the 1970s, 80s, and 90s.
Major functional areas developed
Often these were not yet connected:
engineering, manufacturing, and inventory
systems developed side by side
sometimes running on specialized
hardware.
 Personal computers ("micros," PCs)
appeared in the 70s and spread widely in
the 80s

21st century
The first decade of the 21st century the
narrowly conceived idea of the MIS has
become somewhat fuzzy.
 Systems are available for computer
assisted design and manufacturing (CADCAM); computers supervise industrial
processes in power, chemicals,
petrochemicals, pipelines, transport
systems, etc.

Systems manage and transfer money
worldwide and communicate worldwide.
 Virtually all major administrative functions
are supported by automated system.
 Many people now file their taxes over the
Internet and have their refunds credited (or
money owning deducted) from bank
accounts automatically.

MIS was thus the first major system of the
Information Age. At present the initials IT
are coming into universal use.
 "Information Technology" is now the
category to designate any and all
software-hardware-communications
structures that today work like a virtual
nervous system of society at all levels.

The mid-sixties IS was already forging its
way into business mainstream.
 Computers remained out of reach for most
businesses, telecommunications made its
mark with the TELEX machine.
 This step gave businesses the ability to
communicate within its own organization
anywhere in the world at any time and
effectively pass instructions and
information.

The use of computer in business and
industry usually started off in the
accounting departments.
 a number of business school began
developing Management Information
System (MIS) programs to meet the
growing need of IS managers

During the seventies more upper
management recognized the importance
of IS and the flexibility it was bring to
business
 The TELEX became the standard of
information transfer and the mainframe
computer became the standard for
database creation.


IS begins to receive its own autonomy and
large budgets in corporations, many
technical savvy managers of these new
departments begin spending huge amount
of money on systems and software at their
own discretion and many time out spend
all other departments without any returns
to the business
These were troubling and risky times for
CEO's deciding to direct the business into
IS based systems.
 The systems and software were complex,
continually changing, and the people that
knew the systems tended have their own
agendas

Mainframes Vs PCs

This new rush in what is now referred to
as e-mail, was brought about by the
invention of the mini and micro computer,
which could put and entire system on an
executives desk for a very low price
compared to mainframes and the ability to
have an autonomous system with out pay
huge amounts of money to process
information

Once again turmoil enters the
relationships of IS and businesses, where
software and hardware vendors begin
making demands on businesses to switch
there style of business to fit the computer
systems

There was little standardization of software
and hardware with many start up
companies that went under there after
leaving business with out any technical or
system support, resulting in spending
above budgets to install entirely new
systems

The desire to support different
departments of a corporation with IS and
the new affordability of hardware and
software each department began to put IS
programs together independently of MIS
department
Quality Initiatives in IS
Development
The mid-eighties were the time most
manufacturing companies began to shift to
IS to forecast sales, take orders, and
manage distribution of products.
 Time Berners-Lee developed the World
Wide Web in 1989

This protocol HTML used over the existing
Internets that had been constructed
opened up a new era of EDI the world had
never seen.
 The mid-1990's it became apparent that
there is no way for a corporation to
efficiently do business without a solid
functioning IS setup inside its own walls as
well as connected with its supply-chain
vendors and distributors


EDI once known as Electronic Data
Processing (EDP) have now brought profit
margins so low that any business that
does not prepare itself will be out of
business in the next five years.
Summary
 Historical
background of information system
 Information system today.
 Terminology related to MIS and IS
 Types of Information Systems
Early history of IS with other disciplines