Designing Management Information Systems

Designing a MIS using the Merise Method

Merise is a systemic design method, which has a matrix structure:

Levels

Conceptual

Logical or
Organisational
Physical or
Operational

Level
Conceptual
Logical or
Organisational
Physical or
Operational

Views

Process

CCM

Data
CDM

Conceptual
Communication
Model

Conceptual
Data
Model

Conceptual
Processing
Model

LCM

LDM

LPM

Logical
Communication
Model

Logical
Data
Model

Logical
Processing
Model

Communication

PCM

Physical
Communication
Model

PDM

Physical
Data
Model

CPM

PPM

Physical
Processing
Model

Concern
What do you want to do
Who does what, where, when, how
By what means

Obiectives of MIS
The objectives of MISare immediate and long-term goals to improve activity of the
company, to improve leadership activities to raise the level of information timely for
organizational structures, to improve methods and technical processes and management
information for ensure maximum efficiency of the beneficiary company.
System objectives require solving problems with synthetic character in a systematic
manner using IT support. These objectives have general and specific characteristics that
depend on the legal and regulatory framework, endowment with computers and
economic development requirements of the company
These objectives can be grouped into the following categories:
- management objectives, aimed to restoring permanent economic assets, development
of management activities to ensure a global optimum of all activities, fundamnnting the
management decisions, strategic, tactic and operational decision based on information
obtained as a result of processing system, relieving routine management's decision-making

Designing Management Information Systems

processes;
- functional objectives, fundamentally dependent on the specific company activity.
Exemple:
MIS objective for banking activity:

opening bank accounts;

opening and update bank deposits;
Payment and Settlement in RON or foreign currency;
granting and reimbursement of bank loans;
closing a banking day.

Inputs and outputs of MIS

For each type of business and management or operational objective are identified
outputs and inputs of MIS.For this purpose we take into account various criteria:
- the specificityof the company;
- the information requirements of the management of the institution or of the
functional departments;
- managerial and functional objectives of MIS;
- the legislation, rules and regulations issued by the Ministry of Finance;
- the demand for measuring amplitude and dynamics of financial and monetary
phenomena.
Inputs and outputs of a standard MIS are established and according to the
specifications of CCM were used to determine the types of entities, relationships and
attributes of CDM.
Inputs are reflected in MIS through the documents, while outputs are presented in the
MIS output reports.

Conceptual designing
Conceptual Communication Model (CCM)
CCM provides a graphical representation of the process under computerization.
An incomplete or erroneous image/operation will result in errors in function of the the
final product.
CCM must meet certain rules:
- meet standards and legislative requirements;
- comply with company regulations and procedures (internal regulations, job
descriptions);
- detail the whole process, from the onset until the last specific elements
CCM uses actors and information flows.
Actors can be internal or external actors actors (belong to the internal or external
structure of MIS).
In the frame of economic activity, internal actors are identified with the institution or
department(eg. credit inspector, account officer, director, accountant).

Designing Management Information Systems

External actors may be corresponding monetary-financial institutions, banks, NBR,

insurance companies, private customers or companies.
Sometimes, due to the developing business activity, it is possible that an external actor
to become internal actor.
Exemple:
The brokerage companies had the role of customer (external actors)at a certain time,
which enters in relationship with the bank in settlement process. With the development of
brokerage exchanges, the company is assimilated/absorbed by the bank, become entity
within the financial group and will be treated as internal actor. In this case, it is necessary
to adapt the flow of documents of the brokerage company/department to the flow of
bank documents.
Players change information as information flows.
The flow diagrams are graphical representations that reflect the links between actors.
Typically, these flows are translated into input-output system documents, or to/from
subsystems. Documents can be standardized or non-standardized.
In terms of use of different messages between actors is better to associate itsformal
documents. Such documents may be accounting notes, internal memos or notices. The
importance of these documents is that it can reveal the stage reached in the development
process and, in the same time, it can be determined the responsibilities especially when
malfunction occurs.
The information flows are represented in the form of arcs directed from issued actor
to destination actor. The arc using a numeric notation, which correspond to the sequence
encoding processes and documents, as objects of the information flow.
Making CCM can be considered as an iterative process if the analyzed economic
phenomenon is complex. Thus, CCM developed in the first phase globally can drill
several core activities of CCM for financial and banking unit.
CCM creates fully premises to realize a correct conceptual processingmodel (CPM).
Example: CCM for credits/loans.
Detailing of financial flows is as follows:
1 agreement client-bank guarantor
/endorser forendorsement credit
agreement
2 credit demand
3 credit file documents
4 credit analysis report
9 contract signed
10 withdrawal document + cash
11 withdrawal document signed
12 payment document + cash

5 file for approval

6 analysis + final decision
7 credit file returned to credit
officer
8 opening an account and credit the
account
13 payment document + signature
14 payment document + cash
15 payment document + signature

Designing Management Information Systems

Giranti

2
3

Servicii credite

14

Client

15
6

13

10
12

11

Casa

Comitet de acordare
a creditelor

If the financial and monetary system is highly complex, but are relatively independent
functional modules, these modules can be treated separately at the conceptual level and
connect modules within a single application finally.
1.1.1 Conceptual Data Model (CDM)
CDM sets out the conceptual entity types, their attributes and associations required for
MIS, no matter of storage data devices and the data access mode.

Methods of determination for CDM:

a) The input-output method

This method ensure the inclusion of the properties/attributes in the CCM depending
on objectives of MIS taken from the input system/documents, independent of the system
outputs.
After the analyzing of the information content of the input document it will set the
attributes of the new system.
This method is bet to best used for open systems. It enables further processing and
determining a set of parameters that are not sufficiently analyzed in the early stages of
MIS analysis. But we must not exaggerate the creation of sets of input variables that will
not be processed and will take up the system resources.

b) The output-input method

The method starts from MIS outputs (indicators, reports) in relation to the objectives
of the system and follows to determine the set of attributes. This set will contain
attributes based on algorithms and elementary/uncalculated attributes.

Designing Management Information Systems

This method is used if we have limited resources in terms of collection, storage and
data processing. This fact will cause a minimum but sufficient number of input variables
which will ensure, through processing , the output parameter determination. Such a MIS
is easier developed in steps further, due adequacy of input variables.

c) The mixed method

The method will determine the set of attributes used for both incoming and output of
the system based on input documents, output of the new system (indicators, reports and
outputs to other systems) correlated with the objectives of the MIS.
This set will contain elementary attributes, calculated attributes and mathematical
operands. Thus, these attributes will be included in the type of entities and properties.
This method ensure the optimum among the set of input variables that need to be
processed in order to achieve output variables and situations. MIS can be developed into
a simpleway, the unused input variables providing good information support.
The conceptual data modeling includes the following steps:
a) Determination of the basis of attributes;
b) Establishing conceptual entities in the MCD;
c) Determination the associations between conceptual entities in MCD;
d) Establish cardinality for associations.
a) Determination of the basis of attributes
Study the information structure of specific inputs and outpus of MIS, in terms of
semantics, type, maximum length, the methods of calculation. It will be present the
calculation algorithm and primary operands neededfor each type of attribute.
It will be determined the attributes of entities based on primary documents from
which information flows were found in CCM.
The attributes will be encoded respecting following requirements:
- unique codes - establishing a unique symbol for each attribute of the information
database;
- stability codes - use a single type of code to describe an attribute on the lifetime of
the system;
- usability codes - codes must be easily understood and applied;
- brevity codes - is given by using an adequate number of characters (minimum but
enough).
b) Establishing the conceptual entities in CDM
The attributes defined for database attributes (the attributes dictionary) are grouped
into conceptual entities complying with normalization.
Grouping is done taking into account different criteria:
- grouping attributes can be done based on documents (payment or withdrawal, credit
contracts);

Designing Management Information Systems

- grouping attributes can be done based on their significance, for example, based on
classifications (types of deposits that can be opened, types of loans that can be granted).
The attributes used by MIS are of two types: taken or compound.
The taken attributes are in the same form as they are in the primary documents.The
compound attributes comply the calculation algorithms and do not occur in conceptual
entities. The algorithms will be detailed up to the level of primary operands.
The attributes that occur in the conceptual entities must comply with the following
rules:
- the attributes will have a unique nameto describethe properties while running the
application;
- the taken attributes occur in conceptual entitiesonly;
- the attributes are elementary;the compound attributes are decomposes up to
elementary attribute level;
- the same attribute can not occur in two different conceptual entities;
- the list of attributes must be non-redundantand without synonymous or
homonymousattributes.
It can be set certain restrictions to the atributes reffered to their evolution, the field
values that can be taken (range or list). These conditions of validation can be classified as
simple, compound, static and dynamic, local or global, depending on variables
(static/dynamic).
The simple conditions are determined by the nature of attribute, range/list of values
etc.
Exemple:
ID_cli<> ;
No_doc>0; date_doc>={01.01.2013};
type_currency ={LEI, USD, EUR,YEN}
The compound conditions are determined by using operators (mathematical, logical,
relational) and are dependent on the semantic attribute nature, range/list of values etc.
Exemple :
mathematical operators: +, -, *, /, ( )
logical operators: AND, OR, NOT, ( ), etc.
relational operators: =, <, >, <=, >=, #, $, = =
condition of validation for a primary document:
(no_doc>0 AND no_doc<99999) AND (date_doc NOT empty() and
date_doc>{01.01.2013} )

Designing Management Information Systems

For the credit activity, we take into account the following compound attributes
[FRAT98].
Attribute

Formula

rulaj lunar debitor

rulld(c) =

31

soldzd(c, z)
z 1

rulaj lunar creditor

rullc(c) =

31

soldzc(c, z)
z 1

sold zilnic final debitor

soldz_fd(c) = soldzd(c) + rulzd(c)

sold zilnic final creditor

soldz_fc(c) = soldzc(c) + rulzc(c)

rata lunar

rata_l(c) = round(valimp/nrrate)

dobnda lunar

dob_l(c) = suma_ram(c) * proc_dob /100/12

rata total

rata_t(c) = rata_l(c) + dob_l(c)

suma platit

suma_pl(c) = suma_pl(c + rata_l(c)

suma rmas de
rambursat

suma_ram(c) = suma_ram(c) - rata_l(c)

rulaj zilnic debitor

rulzd(c) = rulzd(c) + suma(c)

rulaj zilnic creditor

rulzc(c) = rulzc(c) + suma(c)

It use the following notation in the table:

Notation

Meaning

Holder's account number

Day of banking operation

soldzd

Debit daily balance

soldzc

Credit daily balance

valimp

Value of the loan/credit

nrrate

Number of rate

suma_ram

Ammount remaining to be reimbursed

proc_dob

Interest rate

suma

Daily ammount

Some attributes within entities will act as an identifier.

The entity identifier is that attribute which uniquely identifies a record (member of its
population). The identifier can be a single attribute or can be determined by several
attributes (multiple identifier). Graphically, the identifier is undelined in the entity.

Designing Management Information Systems

Rules for settings identifiers:

- identifier must be nonempty;
- identifier must consist of a minimum number of attributes;
- if you can choose different identifiers for the same entity, but different, you will prefer
those which have a minimum number of attributes and are easier to handle.
Example:
In the entity Clients, the identifier may be the attribute CNP or a multiple identifier
ID_series and ID_number. Take into account that CNP occurs on all customer
identification documents (identity cardor passport) is indicated for use as an identifier of
the entity Client.
c) Determination theassociations between conceptual entities in CDM
We can determine associations between conceptual entities based on functional
dependencies between attributes from information database.
Associations are relationships that are established between conceptual entities. An
association does not have an independent existence. An association exist only if the
achievements of entities linked exist. The associations can have their own attributes.
The cardinalityexpress the participation of the achievements of the entities to the
associations.Cardinality is minimal (0,1;1,1) or maximal (0, n; 1, n). The associations of
type mnare resolved through two joint 1,n and 1,m (1,n).
The collection of an association is given by the participating entities.
The dimension of the association is given by the number of participating entities.
A special case is generated by the reflexive associations. These associations are
associations that occur between different achievements of the same entity. In this case,
you would specify the roles they play in the association, the roles that show the entity's
participation in association. In the banking system such associations are uncommon.
Exemple:
guarantor client

Client
CNP
Name
First_Name
Address
..

0,n

guarantee
client which is
guaranted

0,n

Designing Management Information Systems

A client can be guarantor/endorser for another client of the bank. In this case, the
roles are "guarantor client" and "client which is guaranted/endorsed".
The integrity constraints are rules that must be followed by the elements (attributes,
associations, entities) and their inclusion in the early stages of design leads to a faster
troubleshooting errors that occur in running applications.
The integrity constraints are:
- structural integrity constraints;
- entity constraints;
- referential constraints;
- integrity of roles constraints;
- integrity of association constraints;
- semantic integrity constraints.
Structural integrity constraints imposed conditions relate to the concepts used in
modeling.
Integrity entity constraintsemploys a unique identifier for each entity nonempty.
Exemple:

For entity Contract{No_contr, Date_contr, Value_contr, IR_contr, Per_contr}, the

identifier of the entity is No_contr and cannot take empty values. The entity has
registered loansonly.
Referential constraints implies the existence of association that is determined only by
the existence of the achievements participating entities in the association.
Example:

Clients
CNP
Name
..

1,n

1,1
Sign

Contracts
No_contr
Date_contr
..

Th association Sign exists if there is an achievement of the entity Client and an

achievement of the correspondent entity Contract only.
Integrity of roles constraints refer to the roles played by an entity in various
associations and have three forms: inclusion, equality and exclusion of roles.
Semantic integrity constraintsaremanagement rules enforce to attributes. It occur as
static or dynamicconstraints.
The static constraints concern attributes, regardless of their evolution in time.

Designing Management Information Systems

Example:
For entity Contract, we can set the static constraints.
Contracts
No_contr
Date_contr
Value_contr
IR_contr
Per_contr

Static constraints:
No_contr > 0
Date_contr > 01.01.2013
Suma_contr > 100.000 (lei)
IR_contr > 0
Per_contr < 60 (months)

The dynamic constraintstake into account the evolution in time of data.

Exemple:
For entity Contract, we can set the dynamic constraints.
Dob_contr attribute is updated periodically by the bank, depending on the prevailing
market interest rate finance and banking. For credit agreements already concluded, the
interest rate is updated according to the following rule: if market interest rates rise, the
interest rate for the loan agreement shall be increased accordingly, if market interest rates
fall, the interest rate remains constant related to the credit agreement.

CDM description is made using a table (example for credit activity)

Description of types of entities
Type of
Type of feature
entity
Nature, length
Identifier
Clients

Contracts

Payments

Description of types of associations

Type of
CardiCollection
nality
association
Identifier
conclude

CNP_cl, N,13
Name_cl, T,20
First_name_cl, T, 10
Addr_city,_cl, T, 10
No_contr, N, 6
Date_contr, D, 8
Amount_contr, N, 9
IR_contr, N, 3
Per_contr, N, 3
Type_doc, T, 10
No_doc, N, 6
Date_doc, D, 8
Amount_doc, N, 9
Expl_doc, T, 10

perform

conclude
guarantee
generate
perform
generate
pay

1,n
1,1
1,n
1,1

CLIENTS
CONTRACTS
CLIENTS
PAYMENTS

1,1
1,n
1,n
1,n
1,n
1,1
1,1
1,n
1,1
1,n
1,1
0,n

CONTRACTS
CLIENTS
CONTRACTS
GUARANTORS
CONTRACTS
PAYMENTS
PAYMENTS
CLIENTS
PAYMENTS
CONTRACTS
PAYMENTS
GIRANTI

Designing Management Information Systems

Guarantors

guarantee
CNP_g, N,13
Name_g, T,20
First_name_g, T,20
District_g, T,10
City_gl, T, 10
Addr_city_g, T, 10

pay

1,n
1,n
0,n
1,1

GUARANTORS
CONTRACTE
GUARANTORS
CONTRACTE

Based on these elements is proposed CDM simplified for loans.