MANAGEMENT INFORMATION SYSTEM MANAGEMENT INFORMATION SYSTEM 50 Marks Course Content Information System IS (MIS-1) Management Info System

(MIS-2) Development of MIS ( Development_MIS) SCM & CRM (combined in SCM_CRM_MISLECT) SCM (crm_mis) CRM (CRMMIS) 5. Decision support system (MISDSSslide) 6. Managing Digital Firm (digitalfirmmis) 7. Executive System (EISMIS) 8. .Knowledge based system (KBS_mis) 9. Enterprise Resource Planning (misERP) 10. Transaction Processing System (TPS-mms) 11. Expert Support System (ESMIS) 1. 2. 3. 4. * NOTE Everything written in round brackets ( ) are the names of slide as uploaded in grp PAPER PATTERN 1. Q1.Compulsary (10mks) <may consist of sub-ques> 2. Q2toQ5.Any 4 out of 5 (10mks each) 3. Total 5 Questions to be answered BOOKS TO BE REFERED • Waman.S.Jawadekar • Obaran


MANAGEMENT INFORMATION SYSTEM Chapter 1 INFORMATION SYSTEMS Why Do People Need Information? Individuals - Entertainment and enlightenment Businesses - Decision making, problem solving and control Why Learn About Information Systems? Information systems used in most professions Sales reps Managers Corporate lawyers Indispensable for achieving career goals Introduction 1. INFORMATION SYSTEM (IS) A set of interrelated components that collect, manipulate, and disseminate data and information, and provide feedback to meet an objective Examples: ATMs, airline reservation systems, course reservation systems 2. DATA, INFORMATION AND SYSTEMS Data vs. Information Data A “given,” or fact; a number, a statement, or a picture Represents something in the real world The raw materials in the production of information Information Data that have meaning within a context Data in relationships Data after manipulation Information is one of an organization’s most valuable resources Information is different from data Information has value in Decision making 3. DATA MANIPULATION Example: customer survey Reading through data collected from a customer survey with questions in various categories would be timeconsuming and not very helpful. When manipulated, the surveys may provide useful information. INFORMATION What is information? Definition: Information is data that has been processed into a form that is meaningful to the recipient (USER) and is of real or perceived value in current or prospective actions or decisions. Processed data meaningful perceived value motivating action HAS SURPRISE VALUE HAS NEWS VALUE Presented facts active (it enables doing) business based (Domain based) transformed form data INFORMATION: A QUALITY PRODUCT Utility, satisfaction, error & bias 1. Utility has form, time, the access & possession facets. Improving utility means increasing cost. 2. Common key for measuring quality could be satisfaction of decision maker. 3. Error creeps due to • Incorrect data measurement. • Incorrect collection method • Improper data processing procedure • Loss of data/ incomplete data


MANAGEMENT INFORMATION SYSTEM • Poor data validation & control systems 4. Personal bias, organization bias & management bias may be reflected in the entire process of collection processing, & communicating inferencing. CLASSIFICATION OF INFORMATION • ACTION V/S NO ACTION INFORMATION - e.g out of stock – stock ledger • RECURRING V/S NON RECURRING INFORMATION - e.g. monthly sales, trial balance- financial analysis, market research • INTERNAL V/S EXTERNAL INFORMATION • Magazines - government reports • ACTION INFORMATION • RECURRING INFORMATION • INTERNAL INFORMATION CONTIRBUTE TO MIS ORGANIZATION AND INFORMATION

CLASSIFICATION OF INFORMATION BASED ON APPLICATION PLANNING INFORMATION- time std, operational std, design std CONTROL INFORMATION- informed through feedback it include a decision or action leading to control. KNOWLEDGE INFORMATION- power/ strength to organization Data, Information, and Systems Generating Information Computer-based ISs take data as raw material, process it, and produce information as output.


value of information might be measured in: Time required to make a decision Increased profits to company Data. Information. and Systems • What Is a System? System: A set of components that work together to achieve a common goal Subsystem: One part of a system where the products of more than one system are combined to reach an ultimate goal Closed system: Stand-alone system that has no contact with other systems Open system: System that interfaces with other systems SYSTEM 4 .MANAGEMENT INFORMATION SYSTEM Information in Context The Value of Information Value of information is directly linked to how it helps decision makers achieve their organization’s goals For example.

Information. and Systems Information and Managers Systems thinking Creates a framework for problem solving and decision making. Keeps managers focused on overall goals and operations of business.MANAGEMENT INFORMATION SYSTEM System Concepts System A set of elements or components that interact to accomplish goals Components of a system Input Processing Output Feedback System Performance and Standards Efficiency: measure of what is produced divided by what is consumed Effectiveness: extent to which system attains its goals System performance standard: a specific objective of the system Data. Manual and Computerized Information Systems An information system can be: Manual Computerized 5 .

store. and procedures that are configured to collect. and process data into information The Components of a Computer-Based Information System Components of an information system 6 . people.MANAGEMENT INFORMATION SYSTEM Figure: Qualities of humans and computers that contribute to synergy Computer-Based Information Systems Computer-based information system (CBIS) A single set of hardware. databases. software. telecommunications. manipulate.

etc. and other tools. 7 . statistical. intellectual property crime. 2. hate speech. consulting. Freedom of Speech IT increases opportunities for pornography. Social Inequality Less than 20% of the world’s population has ever used a PC. violating privacy and creating stress. telecommunications specialist. Data processing: Data is manipulated into information using mathematical. specialist in enterprise resource planning (ERP). and other intrusions. Why Study IS? Information Systems Careers Systems analyst. IT Professionalism No mandatory or enforced code of ethics for IT professionals--unlike other professions. prevention may abridge free speech.MANAGEMENT INFORMATION SYSTEM The Four Stages of Data Processing Input: Data is collected and entered into computer. Knowledge Workers Managers and non-managers Employers seek computer-literate professionals who know how to use information technology. Consumer Privacy Organizations collect (and sometimes sell) huge amounts of data on individuals. Employee Privacy IT supports remote monitoring of employees. Storage: Data and information are maintained for later use. less than 3% have Internet access. Computer Literacy Replacing Traditional Literacy Key to full participation in western society ETHICAL AND SOCIETAL ISSUES The Not-So-Bright Side 1. database administrator. Output: Information is displayed or presented.

MIS Definitions 1. performance & productivity. And simply – The MIS is defined as a Computer based information system 5. The MIS is defined as a system based on the database of the organisation evolved for the purpose of providing information to the people in the organisation. evaluating and Efficiently running their departments. administration & operations of an organization. In Short : MIS is a system to support the decision making function in the organization 8 . the management and the decision making function in the organisation 3. The MIS is defined as an integrated system of Man and Machine for providing the information to support the operations. The MIS is defined as system which provides information support for decision making 2. Creates impact on organizations’ functions. MIS plays important role in management. MIS refers to a class of software that provides managers with tools for organizing and evaluating their department. 4.MANAGEMENT INFORMATION SYSTEM Chapter 2 MANAGEMENT INFO SYSTEM What is a MIS MIS is short for Management Information System MIS refers broadly to a computer-based system that provides managers with the tools for organizing.

While analysing the data it relies on many academic disciplines. Environment turned competitive • concept was then evolved that the system should be capable of handling a need based exception reporting • calls for keeping all data together in such a form that it can be accessed by anyone & processed to suit his needs • concept is that data is one but can be viewed by individuals in different ways 5. 9 . It uses the concept of management control & relies heavily on the fact that the decision maker or manager is a human being. action or investigation • concept of exception handling was imbibed into the MIS 4. Initial concept • to process data from the organisation & present it in the form of reports at regular intervals • system was largely capable of handling the data from collection to processing 2. principles & concepts from • Management Science • Management Accounting • Operations Research • Organisational Behaviour • Engineering • Computer Science • Psychology • Human Behaviour Foundation of MIS is in the Principles & Practices of Management. This calls for analysis of a business.MANAGEMENT INFORMATION SYSTEM Understanding Information Technology MIS: CONCEPT 1. Concept was further modified • system should present information in such a form & format that it creates an impact on its user • provokes a decision. Concept of end-user computing emerged • lead to decentralization of the system • user becoming independent of the computer professionals 6. Current concept • has changed to that of a decision making system IN TODAY’S WORLD: MIS is a system • which handles the database • provides computing facilities to the end-user • gives a variety of decision making tools to the user of the system MIS gives information through data analysis. Including theories. Concept was modified when a distinction was made between data & information • MIS should be individually oriented • as each individual may have a different orientation towards information 3.

D.T. • information that points out exceptions. theories & practices of • Management • Information • Systems giving rise to a single product known as Management Information Systems (MIS) In order to provide past.P. present and prediction information. It uses Theory of Communication • to help evolve a system design • capable of handling data inputs. MAJOR TYPES OF SYSTEMS • Executive support systems (ESS) • Decision support systems (DSS) • Management information systems (MIS) • Knowledge work systems (KWS) • Office automation systems (OAS) • Transaction processing systems (TPS) INTERRELATIONSHIPS AMONG SYSTEMS 10 . process & outputs • with the least possible noise (distortion) • in transferring information from source to destination Thus the concept is a blend of principles. the department responsible for computer systems is sometimes called the MIS department Other names for MIS include • I. This is possible only when it is conceptualized as a system with an appropriate design. • The Hardware resources of a system. and • any other computerized processes that enable the department to run efficiently Within companies and large organizations. • People Management and • Project Management applications. • Decision Support Systems.MANAGEMENT INFORMATION SYSTEM management views & policies. • Data resources such as databases. an MIS can include: • Software that helps in decision making. (Electronic Data Processing) The Management Information System has to be tailored to specific needs and may include routine information such as: • monthly reports. and • Information necessary to predict the future. (Information Services) • I. (Information Technology) or • E.S. MIS thus relies heavily on Systems Theory. organizational culture & management style.

MANAGEMENT INFORMATION SYSTEM Information Individual dependent and difficult to conceive the information as a well-defined product for the organization For better information processing. it is necessary to have a formal system which should take care of the following points: • Handling of voluminous data • Confirmation of the validity of data and transaction • Complex processing of data and multidimensional analysis • Quick search and retrieval • Mass storage • Communication of the information system to the user on time • Fulfilling the changing needs of the information ROLE OF MIS MIS satisfies the diverse needs through variety of systems such as: • Query System • Analysis system • Modeling system & • Decision support system 11 .

controlling the business functions. status of records and various references Providing operation data for planning. • Problem identification & • Helps in the process of decision making Type of people Clerical Personnel Junior Management Middle Management MIS helps in: Transaction processing. Information about probable trends Helps in forecasting. perspective • Understanding how ones work affect the entire organisation • Better sense of responsibility MIS calls for: • Systemization of Business Operations: • Streamlines the operations 12 . The functional Managers are informed about: • The progress • The achievement & • Shortfall MIS brings High degree of professionalism &Creates • a structural database • Knowledge base • Information Bank All this information is made easily available: • Saves Time & Money Better Understanding of business: • Common terminology • Common terms • Wider view. Decision making at operational level Short term planning. Use of management tools of planning and control.MANAGEMENT INFORMATION SYSTEM MIS helps • Strategic planning • Management control • Operation Control & • Transaction Processing The MIS plays the role of: • Information generation • Communication. Goal setting. scheduling & control. evolving the business plans and their implementation Top Management IMPACT OF MIS MIS creates an impact on: • Organisation functions • Performance & • Productivity With MIS support management of: • Marketing • Finance • Production & Personnel Becomes more effective The tracking and monitoring of functional target becomes easy. answers to queries. Target setting. strategic planning.

MANAGEMENT INFORMATION SYSTEM • • Everybody to follow system and procedure Thus Better discipline Removes • Drudgery of clerical work • Laborious work • Repeated work Large Overheads are clerical: • Earlier time was spend in clerical job • brings unnecessary fatigue • Time can be better utilized • More productive work • Timely reports improves the decision making ability considerably MIS creates: Information-based work culture. MIS provides Action Oriented Information MIS & COMPUTER Let us quickly glance at the salient features • Massive storage capacity • Phenomenal speed • No mathematical or logical mistake • Thus more reliable • GIGO • Networking. Personal factors in MIS: • Bias • Mental block • Thinking with fixed frame of reference • Risk aversion • Strengths • Weaknesses 13 . Connectivity • Security • Accessibility • Diligence • Graphics • Quick and accurate Processing • User friendly system Easy Availability of good software in market MIS & ACADEMICS Established Branches of Management • Operation Research (OR) • Inventory Control • Queuing Theory • Resource Programming • The network theory • CPM / PERT • Accounting Principles BK • Different Mathematical Techniques It is not only the Hardware + software + connectivity that matters. • Internet. These are only tools The Principles and Practices of Management and the organizational behaviour has a key role to play.

psychology. • Knowledge of business & secrets is known to too many people! MIS makes the data easily available. True. ROLE OF MIS MIS satisfies the diverse needs through variety of systems such as: • Query System 14 .D. MIS is based on databases & uses it for information generation. MIS AS A TOOL The recent major technological advances: • Easy Communication • Multimedia • Imaging • Graphical user Interface • Internet & Web • Platform independence • Manipulative capability is considerably increased. methods. communication theory. • Availability of information of desk top / lap top • With the latest use of P. business management. But at the same time it would be more accessible to the competitors too! Fear of challenge & exposure because the facts are known to everyone! Overcome by training & counseling. and decision support systems in designing applications. the information is more portable and effective. MIS can make business more competitive. mathematics.MANAGEMENT INFORMATION SYSTEM • • MIS uses knowledge from management. MIS & -VE IMPACT At clerical Level: • Sense of insecurity • Work vacuum in clerical jobs • The importance of a person is lost • Fear of non-recognition At middle Management Level: • Since machine can do the job of data manipulation & Integration people doing it manually are now redundant • Sense of being neglected At Top Management Level • Since Analysis of data is available at finger tips the skills and abilities to conclude becomes mechanical. accounting. bring about the organizational transformation through integration.A. operation research & probability theory for building processes. MIS can make organisation seamless by removing all communication barriers.

MANAGEMENT INFORMATION SYSTEM • • • Analysis system Modeling system & Decision support system MIS helps • Strategic planning • Management control • Operation Control & • Transaction Processing The MIS plays the role of: • Information generation • Communication. • Problem identification & • Helps in the process of decision making ROLE OF MIS • MIS satisfies the diverse needs through variety of systems such as: • Query System • Analysis system • Modeling system & • Decision support system MIS helps • Strategic planning • Management control • Operation Control & • Transaction Processing The MIS plays the role of: • Information generation • Communication. • Problem identification & • Helps in the process of decision making 15 .

making them more competitive. Create information architecture that supports organization’s goals 4. Determine business value of information systems 5. resources. Design systems people can control. methods and authority Providing a power manpower complement Choosing a method from the various methods of directing the efforts in the organisation.MANAGEMENT INFORMATION SYSTEM Steps in Management Planning Organisation Staffing Direction Coordinating Controlling Decisions in Management A selection from various alternatives – strategies. Imaging GUI. industrial economies 3. Understand system requirements of global business environment 3. A selection of combination out of several combinations of the goals. thus bringing about a organizational transformation through integration A Good MIS makes the organization a seamless (smooth) by removing all the communication barriers MANAGEMENT CHALLENGES 1. Design competitive & efficient systems 2. understand & use in a socially. Internet. transformation of the enterprise GLOBALIZATION • management & control • competition in world markets • global work groups • global delivery systems 16 . people. resources. globalization 2. methods etc. Choice of the tools and the the techniques for coordinating the efforts for optimum results A selection of the exceptional conditions and the decision guidelines Advantages • Time and energy is applied for productive work • With analytical & knowledge can improve position in the organization • Recent trends like Multimedia. Web have made MIS a attractive proposition Through MIS information can be used as a strategic weapon to counter threats to business. ethically responsible manner THE CHANGING BUSINESS ENVIRONMENT 1.

it calls upon the management to plan for it and control its appropriate use in the organisation EARLIER • Financial resources spent on computers purely to expedite the activity of data collection & processing • Computers are used mainly for computing & accounting the business transactions & have not been considered as a tool for information processing for management actions & decisions SINCE LATE 80’s • Computers became more versatile. we need a MIS flexible enough to deal with the changing information needs of the organisation • It should be conceived as an open system continuously interacting with the business environment with a built in mechanism to provide the desired information • Designing such a system is a complex task. intelligence & language • Became user-friendly • Communicate across any distance. objectives.MANAGEMENT INFORMATION SYSTEM Chapter 3 SCM & CRM DEVELOPMENT OF LONG RANGE PLANS OF THE MIS • Any kind of business activity calls for long range plans for success. consistent to the business goals & objectives Information strategy for the business plan implementation playing a supportive role Architecture of the Management Information system to support decisions System development schedule. it is necessary that the business plan – states the information needs • The information needs are then Contents Of The MIS Plan Business Plan Business goals & objectives Business plan & strategy Strategy planning & decisions Management plan for execution & control Operation plan for the execution MIS Plan Management information system. markets & the account balances • Query processing should not exceed more than 3 seconds • Focus of the system will be on the end user computing & access facilities • Information support will be the first in the strategic areas of management such as marketing or service or technology 17 . matching the plan execution Hardware & Software plan for the procurement & implementation MIS Goals & Objectives The MIS goals & objectives will consider • Management philosophy • Policy constraints • Business risks • Internal & external environment of the business Typical statements of the goals are: • Provide an online information on the stocks. information is recognised as a major resource * If this resource is to be managed well. storage. the plan of the business organisation • The plan of the MIS is concurrent to the business plan of the organisation • To ensure this. decision making & action • It should support the needs of all levels of management • It should provide support to the changing needs of business management In short. and it can be achieved only if the MIS is planned. keeping in view. use & disposal as per the business needs for meeting the business objectives • Thus it is conceived as a system which deals with management information and not data processing alone • It should provide support for management planning. in the functions of storage. the same being true for MIS • The plan for development & its implementation is a basic necessity for MIS * In MIS. communications. and share data. information resources • Tool for information processing • Storing a large database or knowledge base ADVANCEMENT OF TECHNOLOGY • Possible to recognize information as a valuable resource • Necessary to link its acquisition.

MANAGEMENT INFORMATION SYSTEM Strategy for the Plan Achievement The designer has to make a number of strategic decisions for the achievement of goals & objectives Architecture of the MIS Plan • Architecture of the MIS Plan provides a system & subsystem structure & their input.the overall information requirement of the system . coupling & decoupling of subsystems The System Development Schedule • A schedule is made for the development of the system • Schedule must give due regard to .the logical development of the system • Development schedule is to be weighed against the time scale for achieving a certain information requirement Hardware & Software Plan A Model of the MIS Plan 18 . output & linkages • Also provides a way to handle the systems or subsystems by way of simplification.

requirement versus availability. turnover Purchases. Competitors information. outstandings. products. stocks. and consumptions in the form of planned versus actual. receivables. type of business. Non-moving inventory. decision parameters & decision methodology Determine through experimentation Not able to determine in probabilistic terms (very risky) High (Total uncertainty) Middle & Top management Top management 19 . services. USER Many users at all levels Functional Functional heads Knowledge Trends in sales. purchase. dispatches. profitability standard. industry & business information plan performance & target. Capability constraint of the human being as an information processor. statutory information payables. Nature & variety of information 3. budgets. norms. Quantitative information on the business status. sales. sales. such as utilization. targets. The information for monitoring of execution schedules Middle & Top management Decision Support Middle management & operations management Operational Operational & management supervisors DETERMINING THE INFORMATION REQUIREMENT Purpose of the MIS • Produce information that will reduce the uncertainty in a given situation Difficulty to determine a correct & complete set of information is on account of 1. overdue payments & receivables Information on the production.MANAGEMENT INFORMATION SYSTEM ASCERTAINING THE CLASS OF INFORMATION INFORMATION CLASS Organisational EXAMPLE Number of employees. methods of decision making & problem solving Determine through the critical success factors. production. and its analysis Status information on a particular aspect. a problem solver & decision maker 2. Information for problem solving & modeling. locations. Ability of the decision makers to specify the information Methods of Handling Uncertainty Level of Uncertainty Low (Near certainty) Precise probabilistic knowledge (risk) Level of Management Operations management Middle management Method Question asked: What do you need? Determine from existing systems. Reluctance of decision makers to spell out the information for political & behavioral reasons 4. production technology. Deviations from budgets.

MANAGEMENT INFORMATION SYSTEM DEVELOPMENT & IMPLEMENTATION OF THE MIS Prototype Approach • Progressively ascertaining the information needs • developing methodology • trying it out on a smaller scale • with respect to the data & complexity • ensuring that it satisfies the needs of the users • assessing the problems of development & implementation • Process identifies problem areas • Inadequacies in the prototype • Designer then takes steps to remove the inadequacies Life Cycle Approach • Many systems or subsystems in the MIS that have a life cycle • They are very much structured & rule-based • Clarity of inputs and their sources • Definite set of outputs in terms of contents & formats • Details remain more or less static from the day the system emerges. if any 20 . for significant modification. remains in static mode for a long time • Such systems therefore have a life • They can be developed in a systematic manner • Can be reviewed after a year or two.

Ensure that overall system effort has the managements acceptance 11. Not forget his role is to offer a service 3. System remains valid for a long time with no significant change. Designer should respect the demands of the user 4.MANAGEMENT INFORMATION SYSTEM Comparison PROTOTYPING APPROACH Open system with a high degree of uncertainity about the information needs Necessary to try out ideas. Enlist users participation from time to time 12. Impress upon the user the global nature of the system design which is required to meet the current & prospective information need 6. Not challenge the application of information in decision making 7. Ensure that the problems in the organisation are resolved first before the system is taken for development 16. Hence. Change can occur in a number of ways – Lewin’s model is 21 . Design remains stable. Impress upon the user that the quality of information depends on the quality of information provided 8. Not mix up technical needs with information needs 5. must be prepared to change the system specification and even design 14. Not question beyond the information needs of the user 2. Realize that the user is the best guide on the complex development path 13. Ensure that the user commits to all the requirements & specifications 10. Impress upon the user that change is not that easy in a computer system 15. Conduct periodical user meetings where you get to know their difficulties 17. application & efficiency of the information as a decision support Necessary to control cost of the design & development before the scope of the system & its application is fully determined User of the system wants to try out the system before he commits the specification & the information requirements System & application is highly custom oriented LIFE CYCLE APPROACH Closed systems with little or no uncertainity about the information needs. No need to try out the application of information as it is already provided Scope of the design & application is fully determined with clarity User is confident & confirms the specifications & information needs System & application is universal & governed by principles & practices Guidelines for successful implementation 1. Train the user in computer appreciation and system analysis Implementation of the MIS in an organisation is a process where organisational transformation takes place. Impress upon the user that he must contribute to the development 9. Not expect perfect understanding & knowledge from the user.

system must consider human behavioural factors 7. Systems are developed with a standard specification of design & development 11. Also adequate development resources are provided & human and organisational barriers removed 2. Belief that a computerised MIS can solve all the problems of planning & control of the business 9. Back-up of the data & files are taken to safeguard against corruption or loss of data 8. MIS cannot provide perfect information to all the users in the organisation 22 . MIS recognises that the manager is a human being & therefore. MIS has a basic potential capability to meet new needs of information quickly 10. All the input is processed & correct 2. MIS does not meet certain critical & key factors of its users 8.MANAGEMENT INFORMATION SYSTEM 1. Education 2. procedures & relevant data Should be relevant to the decision maker Information on sales. It sets clear objectives to ensure that the MIS focuses on major issues of the business. System modifications are approved 10. Participation MANAGEMENT OF QUALITY IN THE MIS Parameter of Quality Example Complete data of all transact All invoices & vouchers of the month Valid transactions & input data Only correct transaction types are permitted in the system. All updating & corrections are completed before the data processing begins 3. 2. quality is high Information should be received on time Incomplete information may lead to erroneous inferences Quality of parameters is ensured by the following: 1. Adequate attention is not given to the quality control aspects of the inputs. Lack of administrative discipline in following standards 10. Underestimating the complexity of business systems and not recognising it in the system design 4. Inputs are subject to validity checks 4. so that the design can be modified according to the changing information needs 5. 3. MIS is kept under continuous surveillance. MIS is conceived as a data processing & not an information processing system 2. The MIS is oriented. Access to the data files is protected & secured through an authorisation scheme 5. the process & the outputs leading to insufficient checks & controls in the MIS 5. Persuasion 3. MIS is developed without streamlining the transaction processing systems in the organisation 6. MIS does not provide the information that the management needs 3. Lack of training of the users 7. Due attention is given to proper file selection 7. MIS concentrates on mission critical applications serving the needs of top management Factors contributing to failure 1. pending position Production information reported in correct terms Comments Achieves integrity of data over a time period Ensures validity of data & in turn validity of information Accuracy & precision Relevance to the user Timely information Meaningful & complete Assures that results are accurate and precisely correct If relevance is appropriate. MIS is integrated into the managerial functions. Data which meets with the design specifications Correct use of formula . Intermediate processing checks are introduced 6. System audit is conducted from time to time 9. It recognises that there are different information needs depending on the objectives to be met 8. defined & designed in terms of the user’s requirements 4. Computer system processing is controlled MIS: THE FACTORS OF SUCCESS & FAILURES Factors contributing to success 1. MIS focuses on the results & goals 6. therefore the design of the MIS has features that make it user-friendly 9. An appropriate information processing technology required to meet the data processing & analysis needs of the users is selected 3. Resistance to change Factors internal to the users of information Factors inherent in the design of the system Factors arising out of interaction between the user & the system Handled through 1. MIS is easy to operate.


payment schedules. that flow along the chain. money. or manufacturing take place • Downstream. and schedules. shipments. and services from raw material suppliers.MANAGEMENT INFORMATION SYSTEM Enterprise Application Architecture SUPPLY CHAIN MANAGEMENT (SCM) Definitions • Supply chain: The flow of materials. The concepts of materials flows include reverse flows-returned products. where packaging. supplies. 24 . includes the organizations and processes involved. through factories and warehouses to the end customer. frequently by external distributors • Supply chain also include the movement of a product or a service and the organizations and individuals involved. The Flows in the Supply Chain • Materials flows: These are all physical products. assembly. credit card information and authorization. recycled products and disposal of materials or products. • Information flows: All data related to demand. payments. organizing and coordinating of all supply chain’s activities. raw materials. where sourcing or procurement from external suppliers occur • Internal. are part of the chain as well. • Financial flows: All transfers of money. Structure and Components of Supply Chains The supply chain involves three segment: • Upstream. • E-supply chain: A supply chain that is managed electronically usually with Web-based software. orders. • Supply chain management (SCM): The planning. epayments and credit related data. where distribution or dispersal take place. and so forth. returns. information.


and inventory costs • Network of organizations and business processes PROCESS VIEW OF SUPPLY CHAIN Customer Product Sales Inventory Production Supplier Transporters Marketing Supply Chain INFORMATION LIST FOR SCM preference. drawing and Design information Analysis by Region/segment/class of customer comparative analysis by period/projections ABC analysis by product/sales/order item.warehouse. schedule.MANAGEMENT INFORMATION SYSTEM Supply Chain Management (SCM) • Integrates supplier. Objective & Analysis Delivery period. Warehousing. capability. internal units and business partners Solution to Supply Chain Problems • Vertical integration: the upstream part of the supply chain with the internal part. store. purchase history and credit history. • Major Supply Chain Functions are Marketing. Carrier Type. Procurement. Such sharing can be facilitated by EDI. redundant effort. Cost Schedule. Price & Rating Fleet Capacity. Quality. retailer and customer. • Using inventories: The most common solution used by companies to solve supply chain problems is building inventories as an “insurance “against supply chain uncertainties. and groupware technologies. manufacturer . plan History. Distribution and Customer Service. availability. • Reduces time. Inventory. and move • Rapidly communicate orders • Track the status of orders • Check inventory availability and monitor inventory levels • Reduce inventory. Solutions to SC Problems cont… • Information sharing: sharing information along the supply chain can improve demand forecasts. typically by purchasing up. in order to ensure availability of supplier. the inventory levels of their products in the retailors’ stores and to replenish inventory when needed. Lead time. store location. Choice. transportation. transporter.steam suppliers. 26 . inventory cost & value capacity. extranets. distributor. service. and warehousing costs • Track shipments • Plan production based on actual customer demand • Rapidly communicate changes in product design SUPPLY CHAIN PROBLEMS AND SOLUTIONS Problems along the supply chain from two sources: • Uncertainties • Need to coordinate several activities. Quality. Operations. analysis. manufacturing. buying Pattern Specification. • Vendor-managed inventory (VMI): allowing suppliers to monitor. Total Cost & inventory BENEFITS FROM SUPPLY CHAIN MANAGEMENT SYSTEMS HELPS FIRMS: • Decide when and what to produce.

extract. Application clusters in CRM Approaches to CRM 27 . • Provides strategic business value to company & major customer value to its customers. order management. invoice /billing and sale/marketing automation and management. Type of CRM • Operational CRM: activities involving customer services. interpret.MANAGEMENT INFORMATION SYSTEM Customer Relationship Management (CRM) • An enterprise wide effort to acquire and retain customers often supported by IT. and report customer data in a corporate. • Analytical CRM: activities that capture. product services that integrate with company’s customers. • Manages all ways used by firms to deal with existing and potential new customers • Provides end.end customer care . • Consist of various s/w modules that perform business activities involved in front office processes.Consolidates customer data from multiple sources and provides analytical tools for answering questions • CRM is major customer centric business strategy • It uses IT to create cross functional enterprise system that integrates & automates many customer serving processes in sales. process.Provides a unified view of customer across the company . • Collaboration CRM: deals with all the necessary communication coordination and collaboration between vendors and customers. store.

Revenue analysis .OLAP(In-Line Analytical Processing) • On-line data • Customised analysis • Organise data on several dimensions • Deal with query • Customer Segmentation • Data Mining • Analysis Techniques used by OLAP: .Regression .E-Business.Customer Segmentation .Link analysis .Deviation Detection 28 .MANAGEMENT INFORMATION SYSTEM Data Driven CRM Model Process Driven CRM Model Analytical CRM • Process Driven CRM • Enhance the value of CRM system • Data Source:• Enterprise System such as .Service Channel Analysis .SCM.Classification .Customer Value management .Control • Processes: .Customer Classification . . .Analysis of Market Campaign • Analysis: .ERP.Customer Satisfaction Analysis . .Finance and .Segmentation .

Electronic Hubs Compared to Traditional Intermediaries SCM. CRM. ERP VENDORS • SAP AMERICA • BAAN • PEOPLE SOFT & ORACLE 29 .MANAGEMENT INFORMATION SYSTEM Classification of CRM Application • Customer-facing applications • Customer-touching applications • Customer-centric intelligence applications • Online networking applications • E-CRM: The use of web browsers. the Internet and other electronic touch points to manage customer relationships.

potential problems and /or opportunities are identified and defined • In the design stage. the implementation of the solution is evaluated to determine if the anticipated results were achieved and modify the process What Kind of Decisions we Make? • Programmed decisions are the ones that are made using a rule. • Heuristics are guidelines or procedures that usually find a good solution by using “rules of thumb”. to say that inventory should be ordered when inventory levels drop to 100 units is to adhere to a rule.presentation of resulting data for ‘best’ solutions 30 . but at those that are likely to give good results. For example. alternative solutions to the problem are developed • In the choice stage. determining the appropriate training program. databases.find how many products an organization should produce to meet a profit goal. • Satisficing is finding a good. • Non programmed decisions deal with unusual or exceptional situations. procedure or quantitative method. procedures. Satisficing is a good decision method because it is sometimes too expensive to analyze every alternative to get the best solution. Optimization. For example. In many cases these decisions are difficult to quantify. and devices used to support problem-specific decision making when faced with unstructured or semi-structured business problems [Ralph Stair] • A Decision Support System (DSS) is an interactive computer based information query and collection from the knowledge base . action is taken to put the solution into effect • In the monitoring stage.decision models . West Publishing Company. example . 1988] DSS: Concept & Philosophy • A highly flexible & interactive support system that utilizes a . and Heuristic • Optimizing is finding the best solution and is usually best fit for problems that can be modeled mathematically with a low degree of estimation risk.when you have to select a location for a new plant. solution. Problem solving begins with decision making. Readings in Information Systems. Satisficing does not look at all possible solutions. example.knowledge base .a decision maker’s own thoughts in order to create “what-if” scenarios that support decision-making when problems are unstructured • Used in order to analyse business data and present it so that users can make business decisions more easily in unstructured decision making situations • Typical information that a DSS application might gather & present are: . but not necessarily the best.analysis of data against decision models .MANAGEMENT INFORMATION SYSTEM Chapter 5 DECISION SUPPORT SYSTEMS Decision Making and Problem Solving • Problem solving is the most critical activity a business organization undertakes. Satisficing. a course of action is selected • In the implementation stage. which helps decision makers utilize data and models to solve unstructured problems [Ralph Sprague Jr. software.projected revenue figures based on sales assumptions . • In the intelligence stage.comparative sales figures between fiscal quarters .consequences of different decision alternatives in ‘what-if’ scenarios using past experience • Decision support system features include: . What is a DSS? • A Decision Support System (DSS) is an organized collection of people.

.e. but where the decision maker’s insight and judgment are needed to control the process 3. The computer must SUPPORT the manager but not replace his judgment 2. Effective problem solving is INTERACTIVE and is enhanced by a dialog between the user & system 31 . tactical-level decisions and strategic decisions Characteristics of DSS • DSS is based on several assumptions about the role of the computer is effective decision making 1. The main payoff of computer support is for SEMISTRUCTURED problems – parts of the problems can be systematized for the computer. how much inventory to purchase this week) • One-of-a-kind decisions are handled by an ad hoc DSS • Repetitive decisions are handled by institutional DSS • Support for different problem structures ranging from high structured and programmed to unstructured and nonprogrammed • Support for various decision-making levels including operational-level decisions.. design. merging with another company) to repetitive (i.MANAGEMENT INFORMATION SYSTEM Capabilities of a DSS • Support for problem-solving phases including the intelligence.e. choice. implementation and monitoring • Support for different decision frequencies that range from one-of-a-kind (i.

science and engineering and also the tools & techniques of management The data in DSS is drawn from the Information System developed by the company. • • • • • • The DSS are developed by the user and system analysts jointly The DSS system uses the principles of economics.MANAGEMENT INFORMATION SYSTEM Types of D.S.S. The DSS are developed in isolation and form independent system subset of Management Information System The most common use of the decision support system is to test the decision alternatives and also to test the sensitivity of the result to the change in the system and assumptions The data and information for the DSS are used from the internal sources such as database & also from external sources 32 .

MANAGEMENT INFORMATION SYSTEM Deterministic system Components of DSS • • • • The data subsystem includes the Database that allows the DSS to tap into information stored in the corporate database and the External Database Access that allows the use of external data sources. it allows users to interact with the DSS to obtain information. The model base can include the model management software (MMS) that coordinates the use of models in a DSS. the action language that tells the DSS what is required and pass the data to the DSS and the presentation language that transfers and presents the user results. The user interface. interacting with the database. The user interface requires two capabilities. The DSS generator acts as a buffer between the user and the other DSS components. also called the dialog management facility. The model base gives decision makers access to a variety of models and assist them in decision making. 33 . the model base and the user interface.

34 . the value of only one variable is changed repeatedly. and the resulting changes on other variables are observed • Thus it a case of sensitivity analysis involving repeated changes to only one variable at a time • Used when decision makers are uncertain about the assumptions made in estimating the values of certain key variables Goal-Seeking Analysis • Reverses the direction of the analysis done in What-If and sensitivity analysis • Instead of observing how changes in a variable affect other variables.Mathematical Model .MANAGEMENT INFORMATION SYSTEM DSS Database • Collection of current and historical data from a number of applications • It may be a small database residing on a PC that contains a subset of corporate data that has been downloaded and possibly combined with external data • Alternatively it may be a massive data warehouse that is continually updated by a major organisational TPS • Data in databases are generally extracts or copies of production databases so that using the DSS does not interfere with other critical operational system DSS Software System • Contains the software tools that are used for data analysis • May contain various OLAP tools.Verbal Model Using DSS Using a DSS involves an interactive analytical modeling process which may be What-If Analysis • An end-user makes changes to variables or relationships among variables and observes the resulting changes in the values of other variables • If you are using a spreadsheet.Physical Model . data mining tools or a collection of mathematical and analytical models that can easily be made accessible to the DSS user Model • Abstract representation that illustrates the components or relationships of a phenomenon • A model can be a . you might change a revenue amount (a variable) or a tax rate formula (a relationship among variables) • Then you could command the spreadsheet to instantly recalculate all affected variables in the spreadsheet • Managerial user would be very interested in observing and evaluating any changes that would occur to the values in the spreadsheet • This type of analysis would be repeated until the manager was satisfies with what the results revealed about the effects of various possible decisions Sensitivity Analysis • Is a special case of What-If analysis • Typically.

subject to the specified constraints until the best values for the target variables have been discovered • Example: You could try to determine the highest possible figure of profits that could be achieved by varying the values for selected revenue sources & expense categories.2 lac is achieved This form of modeling thus helps answer the question “How can we achieve Rs. Changes to such variables could be subject to constraints such as limited capacity of production processes or limits to available financing GDSS: Group Decision Support Systems So much work is accomplished in groups within organisations that a special category of systems called GDSS has been developed to support group & organisational decision making Definition • A GDSS is an interactive computer-based system to facilitate the solution of unstructured problems by a set of decision makers working together as a group • GDSS provides tools and technologies geared explicitly toward group decision making and were developed in response to a growing concern over the quality and effectiveness of meetings • • • • • • • • • Electronic Questionnaires Electronic Brainstorming Tools Idea Organisers Questionnaire Tools Tools for voting or setting priorities Stakeholder identification & analysis tools Policy formation tools Group Dictionaries People 35 . one or more other variables are changed repeatedly.2 lac for net profit after taxes for a business venture. given certain constraints • Then. Then you could repeatedly change the value of the revenue or expenses in a spreadsheet model until the result of Rs.MANAGEMENT INFORMATION SYSTEM • • • Goal-seeking analysis sets a target for a variable and then repeatedly changes other variables until the target is achieved Example: Specify a target of Rs.2 lac in net profit after taxes?” Optimisation Analysis • Is a more complex extension of goal seeking analysis • Instead of setting a specific target for a variable. the goal is to find the optimum value for one or more target variables.

MANAGEMENT INFORMATION SYSTEM The Group Decision Support System The Group Decision Support System (GDSS) is a CBIS that provides support in group decision-making settings. analyzing potential solutions and ranking alternatives • Word processing and text manipulation allowing group members to access common files • Database and file manipulation allowing access to several types of databases and DBMSs • Spreadsheet capabilities to allow calculations and analysis in group meetings • Communications facilities that support teleconferencing and videoconferencing often called electronic meeting systems (EMS) Overview of Management Information Systems Applications 36 . Characteristics of a GDSS: • • • • • • • Special design of software packages called groupware to allow two or more individuals in a group to effectively work together Easy to use eliminating complexities that will make the system unusable Flexible to allow two or more decision makers working on the same problem utilize their decision-making styles and preferences Specific and general support capabilities Anonymous input to foster objective and unbiased decision making Reduction of negative group behavior that is counterproductive or harmful to effective decision making Support of positive group behavior Capabilities of a GDSS • Decision-making aids include computer programs that assist in listing alternatives.

• Emergence of internet into full blown international communications system reduced cost of operation on global scale.MANAGEMENT INFORMATION SYSTEM Chapter 6 MANAGING DIGITAL FIRM MIS • An 'MIS' is a planned system of the collecting. technological foundations of the old economy. more than ever. societal. The Old Economy Business Model in the Digital Economy The Internet is revolutionizing the economic. • MIS combines tech with business to get people the information they need to do their jobs better/faster/smarter. Doing Business in the Digital Firm • Business in the digital economy using Web-based systems on the Internet and other electronic networks. BUSINESS RELATIONS IN DIGITAL FIRM Role of IT/ IS The New Economy VS. storing and disseminating data in the form of information needed to carry out the functions of management. 37 . Information is the life blood of all organizations . • Electronic integrated business processes makes company much more agile & adaptive to changing environment.

any time.Financial info system . software and electronic devices). Core business processes are done through digital technologies (computers.Production info system . suppliers and employees are digitally enabled and mediated. • Allow quick and inexpensive access to vast amount of information. magazines. services and business models 38 . and extranets) and other telecommunication technologies Extended Features of Digital Firm • Time Shifting-24x7 • Space Shifting. • Store huge amounts of information in an easy-to-access. anywhere. including digital networks (the Internet .289 stores worldwide. intranets. e-mail. Sales > $ 28 per sq. handhelds. Wal-Mart Largest retailer Power of IS coupled with brilliant business practices & supportive management. • Automate both semiautomatic business processes and manual tasks. TV and radio programming. numerical computation. online conferencing and teleconferencing over the internet become essential tools of business. worldwide.Global Workshop Why Information Technology The collection and management of computing systems used by an organization is done with the help of various information systems. Like • Executive info system (EIS) • Decision Support system (DSS) • Management info system (MIS) . • Increase the effectiveness and efficiency of people working in groups in one place or in several locations. anywhere in the world • Consumers and firm conducting financial transaction digitally-through digital currencies or financial tokens carried via networked computers and mobile devices • Physical goods such as home appliances and automobiles that are embedded with microprocessors and networking capabilities. Digital networking and Business Transformation • More wireless cell phone accounts were opened in 2005 than telephone land lines installed.Material info system Major Capabilities of Information System • Perform high-speed. foot 5. and software which are delivered over the digital infrastructure anytime. • Federal Security. health laws and occupational laws require many businesses to keep email messages for 5 years.g. accurate. Digital networking and communications infrastructures • A vast array of digitizable product -data bases.MANAGEMENT INFORMATION SYSTEM • • • 40 million business registered dot. Cell phones. electronic games. write blogs and read blogs. 5 exabyte of digital information Internet advertising gained popularity. • New Products. yet small space. movies. IS • • • • • • operational excellence competitive advantage survival new product /services/ business model customer supplier intimacy improved decision making Strategic Business objectives of Information System • Operational Excellence in 2005. Digital Firm The firm in which nearly all of the organisation’s significant business relationships with customers. musical CDs. news and information. books. • E-commerce and internet advertising are blooming. • Provide fast. • Newspapers readership continue to decline. spurring the growth of digital information now estimated to be 5 exabytes annually. • Facilitate the interpretation of vast amounts of data • Enable communication and collaboration anywhere.Personnel info system . and inexpensive communication within and between organizations.Marketing info system . more than 35 million people receive their news online. high-volume. laptops.

MANAGEMENT INFORMATION SYSTEM E.g. Apple - IPod innovations, including original iPod, to iPod Nano, iTunes music service, iPod video player. Video rental business with internet enabled business, e.g. Netflix Customer and Supplier intimacy E.g. Mandarin Hotels, JC pemnny- Tal apparel Improved Decision Making E.g. Verizon Corporation- bell operating company uses web based dashboards to serve customers. Competitive advantage E.g. Dell Computers- customization Survival E.g. ATM banking

• • • •

Different perspectives of Information System Information System can be technically defined as a set of interrelated components that collect, process, store and distribute info to support decision making and control in an organisation. It contains info about people, places and things within the organisation or in the environment. Three activities in the information system produce the information needed to make decisions, control operations, analyse problems and create new products or services. Input – Process - Output • • IS transform raw data into useful information through 3 basic activities i/p, process and o/p From business perspective IS provides solution to problem or challenges and provides real economic value to business.

Dimensions of Information System

Dimension • Management -Involves leadership, strategy & management behavior. • Technology- consists of computer h/w, s/w, data management technology, networking/ telecommunications technology (internet). • Organization- Organization’s hierarchy, functional specialties, business processes, culture, & political interest groups. Business Perspective on Information System

• •

IS is part of series of value adding activities for acquiring, transforming, and distributing information to improve management decision making, enhance organizational performance, & ultimately increase profitability. IT requires supportive changes in organization & management (complementary assets)


MANAGEMENT INFORMATION SYSTEM Complementary assets • New business models • New business processes • Supportive organizational culture • Incentives for management support & innovation • training • Social assets - stds, laws & regulations, telecommunications infrastructure • Investment called- Organizational & management capital Contemporary Approaches to Information System • Study of IS deals with issues & insights contributed from technical & behavioral disciplines. • Technical disciplines – CS, management science, OR. • Behavioral disciplines- psychology, sociology & economics. Contemporary Approaches to Information System

New Opportunities with Technology • Computing Environment - The way in which an organization’s information technologies ( hardware, software, and communications technology) are organized and integrated for optimal efficiency and effectiveness. • Distributed Computing - Computing architecture that divides the processing work between two or more computers, using a network for connection, also called distributed processing. e.g. Load balancing between computers • Client / server architecture - A type of distributed architecture that divides distributed computing units into two major categories, clients and servers, connected by a network • Enterprise wide computing - Computing environment in which each client/ server architecture is used throughout an organization. • Peer - to – Peer (P2P) - A distribute computing network in which each client/ server computer shares files or computer resources directory with others but not through a central service (as in traditional client/ server architecture). • Web based systems - Applications or service that are resident on a server that is accessible using a web browser and is therefore accessible from anywhere via the internet. • Information Superhighway - A national fibre-optic- based network and wireless infrastructure that will connect all internet users in a country • World Wide Web - An application that uses the transport functions of the Internet; has universally accepted standards for storing, retrieving formatting, and displaying information via a client/server architecture Intranet - A private network, usually within one enterprise that uses web technologies such as browsers and internet protocols separated from the Internet by a security gateway such as a firewall Extranet - A secured network that connects several intranets via the Internet; allows two or more enterprise to communicate and collaborate in a controlled fashion. Corporate Portals - Web site that provide the gateway to corporate information from a single point of access. Web-Based E-Commerce Systems • Electronic Storefront - The web- equivalent of a show room or a physical store through which an e-business can display and/or sell its products,.e.g. Barnes and Noble • Electronic market - A network of interaction and relationships over which information, products service and payments are exchanged, e.g. eBay, Orkut, etc. • Mobile commerce - The buying and selling of goods and services in a wireless environment. • Location based commerce- M–commerce transaction targeted to customers in specific locations at specific times. • Web services - Universal, prefabricated business process software modules, delivered over the Internet that users can select and combine through almost any device enabling disparate system to share data and services.


MANAGEMENT INFORMATION SYSTEM Chapter 7 EXECUTIVE INFORMATION SYSTEMS Overview of Management Information Systems Applications

Capabilities of an EIS • Support for defining the overall vision • Support for strategic planning • Support for strategic organizing and staffing • Support for strategic control • Support of crisis management EIS: Executive Information Systems Definition & Example • An EIS is a MIS tailored to the strategic needs of top management • Goal of a computer-based EIS is to provide top management with that are critical to accomplishing a firm’s strategic objectives • EIS provide information about the current status and the projected trends for key factors selected by top executives • It combines many of the features of the MIS and DSS • Example: Executives of a department store chain would probably consider factors such as its sales promotion efforts and its product line mix to be critical to its survival and success Information Sources

Information Presentation Presented in a form tailored to the preferences of the executives using the system


MANAGEMENT INFORMATION SYSTEM Ability to DRILL DOWN. mainframe systems and networks • Perform sophisticated data analysis including "what-if" and goal-seeking analysis as related to executive decisions • Offer a high degree of specialization allowing the decision maker to accurately see the "big picture" of the organization. and competitors • Provide flexibility because the decision making environments can change rapidly • Provide comprehensive communications abilities with other managers around the world • Support all aspects of decision making 42 .DSS . the economy. easy-to-use ways to provide executives with the information they need • Resulting in: EIS spreading into the ranks of middle management More executives coming to recognise their feasibility and benefits • Resulting in: More features .Web browsing . which allows executives to quickly retrieve displays of related information is another important capability Information System specialists have capitalised on advances in computer technology to develop attractive.Electronic mail .Expert System capabilities Being added to make the EIS more useful to managers The Executive Support System The Executive Support System (EIS) is a CBIS used to assist senior-level executives within the organization Characteristics of a GDSS: • Easy to use eliminating complexities and saving time for decision makers who are often not technically oriented • Offer a wide range of computing resources including personal computers.Groupware tools .

distributing. or 3. • Collaborative commerce ( c-commerce): E –commerce in which business partners collaborate electronically • Business-to-Consumers (B2C): E-commerce in which the sellers are organizations and the buyers are individual also known as e-tailing.the transformation from physical to digital. and the delivery agent are all digital. • Consumer-to-Consumer (C2C): E-commerce in which an individual sells products or services to other individuals. the product (service) sold. • If there is at least one digital dimension. A broader definition of EC.MANAGEMENT INFORMATION SYSTEM Chapter 8 KNOWLEDGE MANAGEMENT SYSTEMS • • • • Collects relevant knowledge and make it available wherever and whenever it is needed Support business processes and management decisions Also link the firm to external sources of knowledge Support processes for acquiring. it is a complex task to understand which systems are truly necessary and productive with high returns on investment Solution Guidelines: • Inventory the firm’s information systems: Develop a list of firm-wide information requirements to give a 360-degree view of the most important information needs of the firm. The process of buying. • Employee and management education: Ensure that you understand how much training is required. the process.involved. including buying and selling of goods and services.and-mortar organizations. • Virtual organization: Organization in which the product. and/or information via computer networks. 43 . Overview of E-Business and E-Commerce • Electronic commerce (e-commerce. storing. transferring. including the Internet. and the delivery agent are all physical. Organization in which the product. Accounting for the cost of systems: Given the large number of different types of systems in a firm. CHALLENGES. Types of E-Commerce Transactions • Business-to-Business (B2B): E-commerce in which both the sellers and the buyers are business organizations. AND SOLUTIONS Management Opportunities: There are extraordinary opportunities to use information systems to achieve business value. • Account for the costs and benefits: Develop an accounting system for information services firm. • Government-to–business (G2B): E-commerce in which a government does business with other governments as well as with businesses. 2. Management and employee training: Training a large number of employees on many systems in a large organization involves commensurately large investments. the process. 3. the delivery agent (or intermediary). • Brick. also called pure – play organization • Click and mortar: Organization in which the product. and applying knowledge MANAGEMENT OPPORTUNITIES. EC). Integration and the whole firm view: Given the different interests and perspectives within a firm. • Intra-business (intra-organizational) commerce: E-commerce in which an organization uses EC internally to improve its operations. and increase profitability Management Challenges: 1. • Mobile Commerce (m-commerce): E-commerce conducted in a wireless environment. and conducting electronic transactions within an organization. we consider the situation partial EC.wide. selling. the process. • E-business. it is difficult to achieve consensus about the need for the "whole firm" viewpoint. Pure versus partial EC • Electronic commerce can take several forms depending on the degree of digitization. • In pure EC all dimensions are digital. and the delivery agent may be physical or digital. 2. and also servicing customers collaborating e-learning. • Government–to–Citizens (G2C): E-commerce in which a government provide services to its citizen via EC technologies. services. or exchanging products. • B2E (business to employees) EC: A special case of intra-business e-commerce in which an organization delivers product or services to its employees. and the large number of people involved with using them. The degree of digitization can relate to: 1. the process.

• Expensive accessibility Non-technological Limitations • A perception that EC is insecure. and product to people in cities. • Insufficient telecommunication bandwidth. 2. Benefit to society: • The ability to deliver information. Benefit to customer: • The access to a vast number of products and services. A framework for e-commerce 44 . and retrieving information. around the clock. • A lack of a critical mass of sellers and buyers. 3. ranging from browsers to multimedia. and also by five support areas. services. software. Benefits to organization: • The availability of natural and international markets. and networks.MANAGEMENT INFORMATION SYSTEM The Scope of EC EC applications are supported by an infrastructure that includes hardware. • Unresolved legal issue. • People • Public Policy • Marketing and advertising • Support services • Business Partnerships Benefits of E-commerce 1. in rural areas and in developing countries. Technological Limitations • The lack of universally accepted security standards. distributing. • The decreased cost of processing.

business partners and suppliers of government entities. and electronic exchanges • Sell-side marketplace: B2B model in which organizations sell to other organizations from their own private emarketplace and/or from a third-party site • Buy-side marketplace: B2B model in which organizations buy needed products or service from other organizations electronically often through a reverse auction. government-to-citizens (G2C). and those working in public sector. and government-to– government (G2G). E-commerce support services Electronic Payments • Electronic Checks • Electronic Credit Cards • Purchasing Cards • Electronic Cash • Electronic Bill Payments • Paying Bills at ATMs. • E-procurement: Purchasing by using electronic support. sellers. Electronic catalogues consist of a product database.A market mechanism by which sellers place offers and buyers make sequential bids. and transactions involve only organizations • The major models are: sell-side marketplaces. B2B Applications • In business to business (B2B) applications.The exchange of goods or services without a monetary transaction. the buyers. • Electronic battering . buy-side marketplaces. and prices are determined dynamically by competitive bidding. government–to–business (G2B). directory and search capabilities and a presentation function. 45 .Electronic catalogues on CD-ROM and the Internet have gained popularity. • E-government: The use of e-commerce to deliver information and public services to citizens. E-government application can be divided into three major categories. • Electronic Auctions (E-auction) .MANAGEMENT INFORMATION SYSTEM Major EC Mechanism • Electronic Catalogues .

Legal Issues Specific to E-Commerce • Fraud on the internet • Domain names • Taxes and other fees. Look for seals of authenticity such as prices are too good to be true.back guarantees. • Integrity: It is necessary to ensure that data and information transmitted in EC. • Safety: Customers want to be sure that it is safe to provide a credit card number on the • Check consumerworld. too. 46 . are not accidentally or maliciously altered or destroyed during transmission. or between an individual and a business. • Check out the vendor with the local chamber of commerce or better business bureau ( for a listing of useful resources. • Ask friends what they Payment: A form of e-cash that enables the transfer of funds between two individuals. customers need protection against merchant’s unjustified denial of payment made. • Smart card: A form of e-cards that contains a microprocessor (chip) that enables the card to store a considerable amount of information and to conduct processing. and Amazon. Before purchasing. • Nonrepudiation: Merchants need protection against the customer’s unjustified denial of placing an order. the amount is reduced each time the card is used. • Find out what your rights are in case of a dispute. make sure that the site is authentic by entering the site directly and not from an unverified link • Search any unfamiliar selling site for the company’s address and phone and fax numbers. without the use of a credit card. • Virtual credit card: A payment mechanism that allows a buyer to shop with an ID number and a password instead of with a credit card number. Find testimonials and endorsements in community sites and well –known bulletin boarder. and service agreements. Call up and quiz the employee about the seller. Security Protection • E-wallets (digital wallets): Mechanisms that combine security measure and convenience in EC purchasing. Security in Electronic Payment • Authentication: The buyer. • Compare price to those in regular stores. are called repudiation) • Privacy: Many customers want their identify to be secured.value money card: A form of e-cash on which a fixed amount of prepaid money is • Stored . warranties. • Investigate how secure the seller’s site is by examining the security procedure and by reading the posted privacy notice • Examine the money.MANAGEMENT INFORMATION SYSTEM Three forms of electronic cash • Person . and the paying institution must be assured of the identity of the parties with whom they are dealing. of both types. (such denials. On the other hand. the seller. and some ‘’catch ‘’ is probably involved. • copyright Tips for Safe Electronic Shopping • Look for reliable brand names at sites like Wal-Mart online. Consult consumer protections agencies and the national fraud information center (fraud.

MANAGEMENT INFORMATION SYSTEM Electronic Hubs Compared to Traditional Intermediaries Electronic Data Interchange (EDI) • EDI is a communication standard that enables the electronic transfer of routine documents between business partners. Major Components of EDI • EDI translators • Business transactions messages • Data formatting standards The Benefits of EDI • Data entry errors are minimized • The length of the message can be shorter • The messages are secured • EDI fosters collaborative relationships • Reduced cycle time • Better inventory management • Increased productivity • Enhanced customer service • Minimized paper usage and storage • Increased cash flow 47 .

Enterprise Resource Planning Software – sometimes called Enterprise Applications / Packages / Suites / Systems – connects all of the information which flows through a company to a single integrated set of systems – implemented in modules which can be integrated (all at once or at a later date) e. It is generic in nature . HR – may work with a wide variety of databases. and operating systems Business demands • Paperless operation • Wireless communication • Transparent & automated operations • Decision support • Integration & coordination ERP solution • Availabe on UNIX. Oracle) Legacy Systems Many firms have limited to no integration across geographic areas functional areas (v-chain) products. supposed to incorporate the best business practices . • • • It is package encompassing all major functions of the business. marketing. schedules • Drill down and context sensitive help ERP architecture • Two tier -Three tier • CLIENT/ SERVER 48 . distribution • Manufacturing • Stores management • Finance • Personnel • Maintenance • Purchase . followed in most companies ERP .MANAGEMENT INFORMATION SYSTEM Chapter 9 ENTERPRISE RESOURCE PLANNING (Leading Vendors. Financials. Windows platform • Solution is structured in modular fashion to cover the entire business operation • It can have following modules • Sales. events. inventory • Planning and control Features • Report writer • Authorization • OS security & additional design features • Referencing • Communication technology support • User friendly flexible design • Define alerts. Logistics. plants. hardware.g.SAP. & business units.

Each has its own peculiarities in terms of design. thereby offering enterprise wide management support. • Choice is based on ERP fit for organization. • Not all ERP solutions are appropriate for all the organizations. coverage of business scope. COMPONENTS OF EMS SYSTEMS • ERP • EDI • CAD/CAM/CAE • AMS • DMS • CMS • SMS ERP • • • • • Plays the role of front running system.MANAGEMENT INFORMATION SYSTEM ERP/ EMS • Offers integrated solution out of all available technologies. Major decision making & its execution takes place here System that manages all functions. and technology. ERP in Action 49 . functions & features. architecture. handles operational system Provide input to planning & control system for middle management Provide decision support information for strategic planning & control to top management. functions and features.

g. • Provides text edit . customer & other associated institutions of the organization. data warehouses. e. The Risks • Tied to a single vendor • Flexibility limited by options offered by the vendor – may inappropriately force generic processes 50 . • It is equipped with data base management facilities & there database act as back up support to ERP AMS • Employee attendance and presence management for the role management or data capture systems on floors. editing. manufacturing & engineering functions. in stores. etc. • Helps to execute strategies.) • Package upgrading and new technology development is handled by vendor • Speed of deployment (possibly) EDI • For commerce. • Provides support to ERP by clearing the situation to act further. text management. document transfer. documenting for transaction handling. • these systems are part of ERP ERP system • Deals with planning and use of resource like (finance. copying & mixing the information & sending to various destinations CMS • Used for tracking important resource for action • Resources are located. manufacturing capability.) – Broad selection of add-on packages (e. and advised to act from the location where they are. altered. at gates etc. purchase & inspection functions. plans. • Entities movement. ind. designs information to ERP in its execution of a manufacturing. DMS • Keep imaging. CAD/CAM/CAE • Handle design. • ERP uses CMs as tool for all its communication needs of recording an event. • It keeps track of employees’ related info for personnel planning. updating. dispatching document DBMS • Keep important documents in database for viewing. • Provide drawings. copying.enterprise data model – squeeze out waste & enable strategies • Standard software enables – Inter-organizational systems (easier if buyers & suppliers use the same system. monitored. reporting across functions. data manipulation facility • Used for cross checking the key information. • Six systems support ERP • All these systems are extensively used for main purpose for which ERP is installed • Each system operates on their native system and is interfaced to ERP through the gateway by using specific software. decisions & actions in time bound manner. SMS • Handles security. • Provides methodology of assessing the resource needs for given business plan to achieve business objectives. materials. communication & action • It assist ERP in connecting 2 systems electronically for e-mail.g. & guarded for security & safety. • Provides Static and dynamic info. • Handles document access. sending message. petrochem. data transfer etc. confirm the authenticity of transaction. entry access requirement of business operation. availability and scheduling. • Acts as gateway to interact with the vendor. • Provides support system in TPS.MANAGEMENT INFORMATION SYSTEM ERP Benefits • Systems integration . • Handle commercial functions of the business so called e commerce. availability and access is tracked. human resource) used in business.

strong information technology person and persons from corporate planning function headed by CEO • Selected vendors are handed over document & allowed to study organization and business • Product presentation & demonstration • ERP implementation follows water fall model 51 . EDI. precision in results • ERP solution architecture and technology • Study of organization in terms of business focus. • ERP is tool to change business management and requires through understanding of • Business • Business issues • Management criticalities • Socio-cultural factors ERP implementation is 2-3 yrs. report writers. • ERP SELECTION • Market offers number of ERP packages. communication. • Three dimensions to make buy decision 1. imaging. ERP solution evaluation • ERP fit for business of the organization in terms of functions.particularly regarding mapping and standardizing processes across the organization. ERP selection • Committee consisting of important functional heads. sensitive business process etc. screen painter & batch processor • Support system technologies like barcoding. reliability. • Object orientation in design & implementation 3.MANAGEMENT INFORMATION SYSTEM – may inappropriately force org. features . Technology evaluation • h/w s/w configuration management • Use of case tool. Vendor evaluation • Business strength of vendor • Product share in total business of vendor • R &D investment in the product • Future plans of vendor • Market reach & resource strength of vendor 2. network • Handling of server and client based data and application logic. screen generators. critical application. structure changes Complexity . buyer has choice to make. project. ERP solution will sustain & be adequate for current & future business needs for 7-8 yrs. response and integration • Product quality in terms of security. and processes • Ease of use – to learn. implement and train • Flexible design • Rating on performance .

success at Owens Corning. stop maintaining old systems) • Leadership – from the highest levels (e..g. clients • Execute with proven methodologies 52 . training payback agreements) – experienced consultants . failure at Westinghouse) • Staffing – largely from business. end of deployment bonuses.MANAGEMENT INFORMATION SYSTEM Make vs.g.g.check refs. Buy Successful Deployment of Large Scale Systems • Business Case – benchmark. cost justify (e. not IT (users know the process) – ‘compensation handcuffs’ (e.

building. day-to-day activities that occur in the normal course of business and help a company add value to its products and services. bills would not be paid. Without it. correctness & completeness of data. correctness & consistency of data values & for validity of transaction for acceptance. – Explain some key control and management issues associated with TPSs. HISTORY 53 . – Identify the basic activities and business objectives common to all TPSs.MANAGEMENT INFORMATION SYSTEM Chapter 10 TRANSACTION PROCESSING SYSTEM TYPES OF INFORMATION SYSTEMS TRANSACTION PROCESSING • Defined as one of the basic processing functions • TPS is vital to the operations of the organisation. • An organization’s transaction processing system (TPS) must support the routine. sales orders would not be filed. transaction processing was performed manually or with mechanical machines • Computer based processing has altered the speed and complexity of transaction processing TPS • Transaction is processed for adherence to business rules. manufacturing parts would not be ordered • Prior to computers. and operating their TPSs. • 3 aspects check individual data entities process for confirmation of rules Confirm internal consistency. – Identify the challenges multinational corporations must face in planning.

inventory control. and the general ledger. MIS/DSS. accounts receivable. accounts payable.MANAGEMENT INFORMATION SYSTEM STEPS IN TRANSACTION PROCESSING TRANSACTION PROCESSING CYCLE METHODS OF PROCESSING TRANSACTIONS An Overview of Transaction Processing Systems • Provide data for other business processes: – Management information system/decision support system (MIS/DSS) – Special-purpose information systems • Process the detailed data necessary to update records about the fundamental business operations • Include order entry. and Special Information Systems in Perspective 54 . Transaction Processing System TPS. payroll.

data storage. and document production • Data Processing Activities Common to TPSs Data collection – Should be collected at source 55 . data manipulation. data correction. without the delay of accumulating transactions into a batch Batch versus Online Transaction Processing Transaction Processing Activities • TPSs – Capture and process data that describes fundamental business transactions – Update databases – Produce a variety of reports • Transaction processing cycle: the process of data collection. data editing.MANAGEMENT INFORMATION SYSTEM TRADITIONAL TRANSACTION PROCESSING METHODS AND OBJECTIVES • Batch processing system: method of computerized processing in which business transactions are accumulated over a period of time and prepared for processing as a single unit or batch • Online transaction processing (OLTP): computerized processing in which each transaction is processed immediately.

MANAGEMENT INFORMATION SYSTEM – Should be recorded accurately. in a timely fashion Data editing Data correction Data manipulation Data storage Document production and reports • • • • • Basic TPS Applications Systems That Support Order Processing Order Processing Systems • Order entry • Sales configuration • Shipment planning • Shipment execution • Inventory control • Invoicing • Customer relationship management • Routing and scheduling Purchasing and Accounting Systems • Purchasing transaction processing systems include: – Inventory control – Purchase-order processing – Receiving 56 .

MANAGEMENT INFORMATION SYSTEM – Accounts payable Accounting transaction processing systems include: – Budget – Accounts receivable – Payroll – Asset management – General ledger • 57 .

and operating their TPSs – Different languages and cultures – Disparities in IS infrastructure – Varying laws and customs rules – Multiple currencies 58 . building.MANAGEMENT INFORMATION SYSTEM A Symbolic Representation for a Payroll TPS TPS Control and Management Issues Business continuity planning: identification of the business processes that must be restored first in the event of a disaster and specification of what actions should be taken and who should take them to restore operations Transaction Processing System Audit • Does the system meet the business need for which it was implemented? • What procedures and controls have been established? • Are these procedures and controls being used properly? • Are the information systems and procedures producing accurate and honest reports? International Issues Issues that multinational corporations face in planning.

apply old rules to new situations an at times.MANAGEMENT INFORMATION SYSTEM Chapter 11 EXPERT SUPPORT SYSTEM AI: ARTIFICIAL INTELLIGENCE AI is the effort to develop computer based systems – both hardware & software – that behave as humans Such systems would be able to Learn natural language Perform coordinated physical tasks Use a perceptual apparatus that informs their physical behavior and languages Emulate human expertise & decision making Such systems would exhibit Logic Reasoning Intuition Common sense qualities that we associate with human beings Elements of the AI family Human Intelligence • Key factor that distinguishes human beings from other animals is their ability to develop associations and to use metaphors and analogies such as ‘like’ and ‘as’ • Using metaphors and analogies. concepts of a lower order such as breakfast. dinner. are all imposed on the world by human beings • Thinking in terms of these concepts and acting on them are central to human behaviour 59 . humans create new rules. lunch. act intuitively and/or instinctively without rules • It also includes a unique ability to impose a conceptual apparatus on the surrounding world • Meta-concepts such as cause-and-effect and time.

physically or mentally dangerous to humans Eliminates routine or unsatisfying jobs held by people Generates solutions to specific problems that are too massive or complex to be analysed by humans in a short period of time Capturing Knowledge: EXPERT SYSTEMS DEFINITION Information Systems that solve problems by capturing knowledge for a very specific and limited domain of human expertise are called EXPERT SYSTEMS WORKING OF EXPERT SYSTEMS The Expert System KNOWLEDGE BASE • Knowledge base of an expert systems contains FACTS about a specific subject area o (Example: John is an analyst) HEURISTICS (Rules of thumb) that express the reasoning o procedures of an expert on the subject o (Example: IF John is an analyst 60 .MANAGEMENT INFORMATION SYSTEM Why Business is interested in AI? Store information in an active form in organisational memory Create a mechanism that is not subject to human feelings Enhance Organisational Knowledge Creates an organisational knowledge base Employees can examine this base Expertise can be preserved System is not subject to fatigue and worry Useful when jobs are environmentally.

IF(condition) THEN(conclusion) SOFTWARE RESOURCES • An expert system software package consists of an inference engine and other programs for refining knowledge and communicating with users • The INFERENCE ENGINE program processes the knowledge related to the specific problem • It then makes associations and inferences resulting in recommended courses of action for a user • USER INTERFACE programs for communicating with end users are also needed. occurrences and experiences • FRAME-BASED KNOWLEDGE .Knowledge represented as a network of objects.Representing in the form of cases – examples of past performance. DESIGN / CONFIGURATION 5.Knowledge represented in the form of a hierarchy or network of frames. SELECTION / CLASSIFICATION 6. A frame is a collection of knowledge about an entity consisting of a complex data package of data values describing its attributes • OBJECT-BASED KNOWLEDGE .Knowledge represented in the form of rules and statements of fact. Typically take the form of a premise and a conclusion. PROCESS MONITORING / CONTROL KNOWLEDGE ENGINEERING • A knowledge engineer is a professional who works with experts to capture the knowledge (facts & rules of thumb) that they possess • The knowledge engineer then builds the knowledge base using an iterative. An object is a data .MANAGEMENT INFORMATION SYSTEM THEN he needs a workstation) There are many ways in which this knowledge can be represented in the system • Methods of Representation • CASE-BASED REASONING . including an explanation program to explain the reasoning process to the user is requested APPLICATION CATEGORIES 1. MAINTENANCE / SCHEDULING 4. prototyping process until the expert system is acceptable BENEFITS • Captures the expertise of an expert or group of experts in a computerized form • Faster and more consistent • Does not get tired or distracted • Helps preserve and reproduce the knowledge of experts • Expertise can be shared • Effective use allows a firm to significantly improve the efficiency of its business LIMITATIONS • Limited focus • Inability to learn • Maintenance problems • Development costs • Fail in problem solving that requires a large knowledge base 61 . DECISION MANAGEMENT 2. DIAGNOSTIC / TROUBLESHOOTING 3.element that includes both data and the methods or processes that act on those data • RULE-BASED KNOWLEDGE .

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