Management Information Systems

Prof. Rathnakar Acharya


Business in the information age must compete in a challenging market place;
It is rapidly changing Complex Global Hyper competitive Customer focused 

³Business drives the technology Technology drives the business´

Factors contributing the need for timely and accurate information;
Expanded market  

Wal-mart - vender managed inventor

Increased competition Shorter product life cycle Government regulation Increased cost pressure 

Canara Bank - iFlex

Critical question to answer during information strategy development;

What internal and external factors will affect the future success of the organization?

What source of information are available to monitor these factors? 3. How often should each of these factors be monitored? Daily, weekly, monthly quarterly, annually? 4. What for should report on these factors take? Written, oral, statistical, graphic and on-line visit? 5. Who should receive these reports?


Business pressures
Global competition for trade and for labor 2. Need for real time operations 3. Changing workforce 4. Customer orientation 5. Technological innovation and obsolescence 6. Information overload 7. Social responsibility 8. Government regulation and deregulation 9. Ethical Issues


Organization responses:
1. 2. 3. 4. 5. 6. 7.

Strategic systems Customer focus and service Continuous improvement efforts Business process reengineering Empowering employees and collaborative work Business alliances E-Commerce

Capabilities of IS
Provides fast and accurate transaction processing  Provides large capacity, fast access storage  Provides fast communication  Reduce Information overload  Provides support for decision making  Provides a competitive weapon 


MIS-it is a system that access, organizes and reports on organizational information, needed for repetitive decision making in functional areas, usually by middle managers. Provides information to the managers in the functional areas. ³MIS is the system which makes to available the right information to the right person, at the right place at the right time, in the right form and at the right cost´.

Need of MIS

Decision making  Strategic planning  Management control  Operational planning and control  Competative advantages 



Role of MIS 

To provide the information to the managers in the functional area. Required for the increased business complexity Qualitative decision making Making decision under uncertainty Proactive decision making Each MIS generates report in its functional area
Routine scheduled reports  Ad-hoc (demand) reports  Exception reports  

Streamline the operations

Misconception about MIS
1. 2. 3. 4.

MIS is a computer based information system More data leads to effective decision making Managers know their all information needs Managers do not have to understand how MIS works


Strategic role of MIS

2. 3. 4.

Precise development of strategic planning forecasting and monitoring Overall cost leadership and cost focus Product differentiation Focused differentiation
1. 2. 3. 4. 5. 6.

Becoming low cost producer Creating new products and services Focus on the market niche Linking with customers and suppliers Managing value chain Creating strategic alliances


Functional sub-systems of MIS:
Marketing Manufacturing Logistic Personal Finance & Accounting Information Processing Top Management Transaction processing Operational control Management control Strategic planning Sales forecasting, sales planning, customer and sales analysis Production planning and scheduling, cost control analysis Planning and control of purchasing, inventories and distribution Planning personal requirements Financial analysis, cost analysis, capital requirement, planning, income measurement IS planning, cost-effective analysis Strategic planning, resource allocation Processing of orders, shipments and receipts Scheduling of activities and performance report Formulation of budgets and resource allocation Formulation of objectives and strategic planning


Functional Aspects 

MIS is an integrated collection of functional information systems, each supporting particular functional areas.



An Organization¶s MIS Financial MIS

Business transactions

Transaction processing systems

Databases of valid transactions

Accounting MIS

Drill down reports Exception reports Demand reports

Marketing MIS

Key-indicator reports Scheduled reports

Business transactions

Databases of external data

Human Resources MIS Etc.



MIS functional Units

Porter-Millar Postulates 

It changes industry structure and, in doing so, alters the rule of competitions It spawns whole new business, often form within the company¶s existing operations It creates competitive advantage by giving companies new ways to out-perform their rivals.  


Change in industry structure 

Industry profitability is determined by five competitive forces; The bargaining power of the customers The bargaining power of suppliers Threat of new entrants in the firms market Pressure form substitute products or services Positioning of traditional industry competitors. 

IT can alter each of the five competitive forces and thereby help the firm gain competitive advantage.



New ways of doing things
Functional use  Strategic use 


Functional use: 

Lower the cost of value chain
Facilitating the product delivery Adding values to the quality Improved product and service quality Reduce the defects 


Information transfer 60:40 ± value addition Speed up the operation ± minimize the lead time Help to simplify;
Product Product process Production cycle time 

Helps in;
Meet benchmarking standards Improve customer service Improve quality and precision of design and product


Strategic use; 

Gives organizations new ways to out-perform their rivals Deal with competitive forces; customer value
Product differentiation Focused differentiation Developing right linkage to customers and suppliers Becoming a low-cost product (Dell¶s ± build on order)  


More precise development of strategies, planning, forecasting and monitoring For problem solving and decision making Helps to improve organizational abilities to co-ordination Think Globally ± Act Locally Used to acquire organizational flexibility

Develop response profiles;
What will the competitors do in the future? What does the organization hold and advantage over its competitors? How will this change the organizational relationship with the competitors 

Answered by undertaking;
±competitor analysis, or restoring competitive Intelligence or B.I

Impact of IT Business @the speed of thought


IT capabilities and their organizational impacts
Capabilities Transactional Geographical Automational Analytical Informational Sequential Knowledge Tracking Dissemination Organizational impact/benefit Transform unstructured process into routines transactions Independent of distance Reduce the human labour Analytical method for a process Vast amount of detailed information Sequence of tasks in process and then simultaneously Capture and dissemination of knowledge Detailed tracking of task status, input and output Connect the parties-internally or externally

Use of IT for competitive advantage
Changing the balance of power between a firm and its competitors in the Industry in the firm¶s favor.  Product or services - that has the most added value to customers (Boeing)  Each sub-system must operate within the overall corporate goal/plan (policy)  The contemporary approach of Information System Development could be broadly categorized into: 

The technical approach The behavioral approach The socio-technical approach


Understanding a computer 

Computer system is a combination of;
Hardware Software Data/information


Characteristics of computers:
Automatic Speed Accuracy Diligence Versatility Reliability Storage No feelings/no emotions/no questions/ no intelligence

Components of a computer  CPU  Input device  Output device  Storage devices  Physical media to link various communication devices



Generations of computer 

First generation: (1946-56) 

Vacuum tubes
More storage space

ENIAC (Elelctronic Numercal Integrator and Calculator)  Vacuum tubes generate large amount of heat  Consumes more power  Storage: 2KB  Speed: 10,000 instructions per sec.  Language: Machine Language 



31 ‡containing over 17,000 vacuum tubes and over 500 miles of wires. 

Second generation: (1957-63) 

Uses transistors Lesser storage space Less power consumption Longer life Reliable Faster Storage: 32KB Speed: 2,00,000 to 3,00,000 instructions per month Usage of magnetic core memory Languages used: ALGOL, COBOL, FORTRAN and SNOBOL Applications: Payroll, inventory, production planning, marketing and accounting.


Third generation (1964-79)
IC Chips  Higher switching speed of transistors  Memory expandable up to 2MB  Speed: 5MIPS  Increased CPU capability  Time shared OS  Integrated DBMS  Application: dynamic production control system, airline reservation system, interactive query system 


Fourth Generation(1980 onwards) What we are using today  Uses VLSI chips  Over 2,00,000 to 2 million circuits per chip  Size and power consumption reduces  Memory size: 2GB  Speed: 200MIPS 


Forth generation of computers are instrumental in:
Making/possible or available extremely powerful PCs at low cost  Spreading computers from office to home  Decentralization of computer organization  Networked and distributed data processing  Usage of graphic systems  Providing impetus to CAD/CAM  Ushering in the computer culture 


Fifth generation
Use of parallel processing  Use of Artificial intelligence  Interactive mathematical models  A blend of voice, image and massive data from various devices  Natural interface 


Computer categories
Super computer  Main frame computer  Mini computer  Micro computer 


Data communication and ITES 

Software functions:
Manage the computer resource of the organization Provide tools for human beings to take the advantages of these resources Act as an intermediately between organization and stored information


Software categories
System software 

Process management; multiprogramming; time sharing;multiprocessing; virtual memory; fault tolerance; GUI

Language translators  Utility programs  Communication software 

Application software



Data organization or sequence;
Bits  Byte  Character  Fields  Records  Files  Database 


Data operations:
Capturing  Verifying  Classifying  Sorting/arranging  Summarizing  Calculating  Storing  Retrieving  Reproducing  Disseminating/communicating 


Data processing steps; 

Data collection Data collation Data conversion Data written in documents Data in machine readable form Input unit Memory, CPU Processed data in internal form Output unit Data transformed to a readable form

Transaction processing:
Transaction processing has relevance for the following reasons:
Information  Action  investigational 


Data processing modes:
Computers are used for the processing of data, analyzing it and getting the necessary information for facilitating decision making Batch processing On-line processing On-line real-time processing Distributed processing
Other data processing modes:
Time sharing Multi-programming Multi-processing


Data transmission
Data communication, which consists of data processing as well as data transmission generally requires:  Transmitter (source of information)  Converter at transmitting end  Transmission channel/carrier  Converter at the receiving end  Receiver (of transmitted information)


Transmission signal

Amplitude Phase Frequency



Communication channels:

Twisted pair Coaxial optical IR LOS microware signals RF/wireless transmission (AM/FM) Satellite



Characteristics of the communication channel:
Transmission speed (baud rate) Bandwidth Transmission mode (synchronous/ asynchronous) Transmission direction 

Simplex; Half Duplex; full-Duplex

Communication processors  Front end processor  Concentrators  Multi-plexer  Telecommunication software

Computer networks:
Node Access path Access Point Protocol File server Network OS Gateways Routers Bridge Switch brouters

Network topologies
Star tree Ring Bus Mesh Hybrid


Types of networks:



³A massive electronic and telecommunication network connecting the computers of business, consumers, government agencies, schools, and other organizations worldwide, which exchanges information seamlessly using open, nonproprietary standards and protocols´
Metcalf's law


Evolution of the Internet
1969 ± ARPANET (Advanced Research Project Agencies) from DoD  Packet switching network 

The goal of the project were to allow researchers to share computing resources and exchange information regardless of their location.


1980 ± ARPANET split into ± ARPANET and Milnet.
World wide UNIX communication network, USENET ( User¶s Network), Computer Science Network ( CSNET) BITNET ( for academic and research communities) 

1986 ± NSFNET- linked researchers across the country with five supercomputer centers.


Infrastructure of the Internet 

US government funding on internet Administrative processes such as standards development and the DNS ( domain name system), through contract with private organizations that perform these functions. Infrastructure is supplied by network service providers such as UUNET, MCI WorldCom company, GTE Internetworking, and Sprint.
ISP¶s ± Tier 1, Tier 2, and Tier 3 Backbone providers

Operation of Internet
Set the rules used to send and receive packets from one machine to another over the Internet - IP  Switching techniques 

IP ± operates at the seven layer ISO ± OSI model

To translate, encrypt and compress data

To allow access to network resources

Presentation Session
To establish manage and terminate sessions

To provide end to end message delivery

Transport Network
To move packets from source to destination; provide internetworking

To organize bits into frames; to provide node to node delivery

Data link
To transmit bits over a medium: to provide mechanical and electrical specifications


The system administered by Network Solution Inc.(NSI) to assign names to each site on the internet.
Com ± commercial edu ± educational mil ± military gov ± government net ± network org. org ± org. firm - business & firm store ± business offering goods for purchase info ± information service provider web ± entities related to www


Services provided by Internet 

Communication services E-mail Usenet newsgroup (forums) Usenet Networking TelNet Gopher Archive WAIS (wide area information service) WWW 


Chatting Instant messaging Internet Telephony Internet fax Streaming audio & video Real-time audio and video


Information Retrieval Services 

File Transport Protocol (FTP)
Enables user to access a remote computer and retrive file from it. 

A tool that allows user to search the files at FTP sites. It regularly monitors hundreds of FTP sites and update a database on software documents and data files available for downloading.


Most files and digital information that are accessible through FTP are also available through gopher. It is a computer client tool it enables user to locate the information stored on Internet gopher servers through a series of hierarchical menus.

Veronica ( Very Easy Rodent- Oriented Netwide Index to computer Archives)
Provides the capability of searching for text that appears in gopher menus.


WAIS ± Wide area information Servers
Allows the user to locate files around the internet. Most thorough way to locate a specific file, but it requires that users know the names of the databases they want to search


Web Services;

Retrieve, format and display information using hypertext links



Handles all types of digital information 1989 ±Timothy Berners-Lee proposed global network of hypertext documents Web is based on standard hyper text languageHTML Which formats and incorporates dynamic hypertext links to other documents stored on some or different computers.

HTML was discovered form Standard Generalized Markup Language ± SGML  Hypertext links  Navigation  Home page  URL 


Internet Benefits 

Reducing communication cost Enhancing communication and coordination Accelerating the distribution of knowledge Improving customer service and satisfaction Facilitating marketing and sales 

Internet problems:
Security Technological problem Lack of standards Legal issues The traditional internet culture

Intranet A private network that uses Internet software and TCP/IP protocols in essence a private Internet or group of private segments of the public Internet network.


Building Intranets 

To build an intranet, a company needs:
Web servers Browsers Web publishing tools Back-end databases TCP/IP networks (LAN or WAN) Firewalls


Architecture of an Intranet


Intranet Functionalities 

Intranet functionalities
Web-based database access for ease of use  Search engines, indexing engines, directories assisted by keyword search  Interactive communication²chatting, audio support, videoconferencing  Document distribution and workflow  Groupware  Conduit for computer-based telephony system 


Intranet application areas 

Search and access to documents Personalized information Enhanced knowledge sharing Individual decision making Software distribution 


Document management Project management Training Enhanced transaction processing Paperless information delivery Employees control their own information


An Extranet


ISDN ± Integrated service Digital Network  


International standard for transmitting voice data, image and video to support a wide range of services over the Public telephone network Developed by CCITT standard ISDN is digital; flexible; economy; lower power consumption and easy maintainability Basic rate and primary rate



Involves the offering of services from remote locations ITES based on web enabled services ± using telecom and data networks BPO ± ITES
The transfer of ownership of the process to the service providers  Control is exercised by defining very clear SLA 


ITES services
Animation BPO/Management Back office operation Collection service Customer care/interaction service Data organization Digital content development Legal database Market research E-Learning Transcription and translation service Website services GIS

GIS Applications: 

Advertising Archeology Education Cartography (map making) Election administration Insurance Routing/distribution network Oil/gas/mineral exploration Wilde life Government agencies Transportation and logistics Urban and regional planning Emergency response planning

Constraints of ITES

1. 2.

3. 4.


Relatively poor quality infrastructure DoT regulations hampering sufficient/unrestricted inter-connectivity Non-granting of industry status Insufficient regulations in the area of data protection security Undue emphasis on financial services


Management and Decision making 

Management is a process by which goals are achieved through the use of resources 

People, money, materials, space, time 

Appropriate use of resources require managers to make decisions in planning, organizing staffing and control.
These resources are considered as inputs and the attainment of the goals is know as output.  Ratio between the two indicates the productivity 


Decision making  

Decision is a choice out of several options made by the decision maker to achieve some objective in a given situation. Decisions made at different levels Characteristics of decision making;
Sequential nature Exceedingly complex due to risk and trade offs Influenced by personal values Made in institutional settings and business environment context


Decision making environment 

Ambiguity,certainty, uncertainty, and risk Decision types: Programmed decisions Non-programmed decisions


Programmed decisions:  Routine/structured  Repetitive/short term  Definite procedure is to be followed  There are certain norms  Situations are known  Taken at the lower/operational level of the org.


Techniques used for making programmed decisions; Habit SOP DOP Org. hierarchy or structure OR IT

Non-programmed decisions; Innovative New/complex situations important and critical Strategic Long term


Techniques used for taking non-programmed decisions;  Judgment  Intuition  Business intelligence  Creativity  Complex/specifically designed computer programs  Training the executives



Decision making process 

the existing problems and/or opportunities  Generate alternative course of action  Analyze/choose/select a course of action  Implement the course of action  Monitor, follow-up and initiate coursecorrective action


Support for Various Decision-Making Levels


Decision Support System (DSS) 

Managers primary function is decision making Decision makers must have data information and knowledge The quality of these decisions are consequently the welfare of the organization Many organizations describes themselves as information corporations Web technologies and digitization are increasing the creation, dissemination, storage and use of information for decision makers.


Serve the management level of the org.
Helps managers to make decisions that are unique, rapidly changing and not easily specified in advance.  DSS uses internal information from TPS and MIS and also from external sources ± current stock price or product price of the competitors. 

Designing it requires analytical power than other systems Built explicitly with a variety of models to analyze data



³A computer based information system that combines models and data to provide support for decision makers in solving semi-structured or interdependent problems with extensive user involvement´.

Management level Inputs: Low volume data Processing: Interactive Outputs: Decision analysis Users: Professionals, staff

How IT supports in decision making? 

Includes K.M, DSS, Data warehousing, Business Intelligence, Data Mining, and electronic document management. 

The resources considered for decision making is known as input, attainment of the managers goal is output. 

Managers success is based on the ratio of inputs and outputs ± Productivity


Manager has to do many roles: 1. Interpersonal roles ± figurehead, leader, liaison 2. Informational roles ± monitor disseminator, spokes person 3. Decisional roles ± entrepreneur, disturbance handler, resource allocator, navigator


Characteristics of DSS
1. 2. 3. 4. 5. 6. 7. 8.

It is designed and run by managers It contains a database drawn from internal files and external environment It focuses on decision processes rather than on transaction processing It permits managers to test the probable result of alternative decisions It supports decision making usually in solving semi-structured complex problems It helps in refining managerial judgment applied to problem solving It improves managerial decision and their by managers effectiveness The decision maker retains control over decisions through out the decision process


Decision making tools 

Pay of matrix Decision tree Queuing model Distribution model Inventory model Game theory


Decision making models:
Classical model
Collect all the information

Administrative model
Make the decision in the best interest of the Manager

Herbert Simon model


When making decision, the decision maker typically goes through a fairly systematic process; Intelligence Design

Herbert Simon s Decision model



Intelligence Phase:
Where reality is examined and problem is defined 

Organizational objectives Search and scanning procedures Data collection Problem identification Problem classification Problem statement Objectives


Design phase:
A model or simplified representation of reality
Formulate a model  Set criteria for choice  Search for alternatives  Predict and measure outcomes 


Choice phase:
Involves the selection of best solution
Solution of the model  Sensitivity analysis  Selection of the best alternative  Plan for implementation  Design of a control system 


Successful implementation results in resolving the original problem



Decision-Making Process


Components of DSS:
1. 2. 3. 4. 5. 6.

DSS Database Model Base DSS software system Hardware The user interface The analysis tools


DSS database:
A collection of current or historical data from a number of applications or groups.
Easily accessible  Precision  Accurate 


Model driven DSS:
Primarily stand alone system that uses some type of model to perform what if and other kind of analysis.
Model is a simplified representation of reality  Simplification is required, because the reality is too complex to copy exactly 


Behavioral model

Management science Model

Operations Models


Behavioral Model ± for understanding the
behavior/trends amongst the variables 

Trend analysis, Forecasting, co-relation, regression 

Management Science Model ± developed
based on the principles of management, management Accounting and Economics 

Inventory management, Cost accounting, Capital budgeting


OR models ± mathematical models, represents real life problems
Linear model  ABC Analysis  Material Requirement Planning (MRP) 


Model Driven DSS

Iconic Models

Analog Models

Mathematical Models

Mental Models


Iconic (Scale) model:
Physical replica of the system  Based on a different scale from the original  Iconic models may be 2D or 3D  2D ± photographs  3D ± models of car, bridges, airplane, production line 


Analog model:
Does not look like real system but behaves like it  It could be a physical model, but the shape of the model differ from that of the actual system  Ex: - organizational chart, blue print of the machine or building 


Mathematical (QT) Model: 

Most DSS analysis is executed numerically using mathematical, statistical, financial, or other QT models


Mental model: 

People frequently use a behavioral mental model Mental model presents a description of how a person thinks about a situation It includes ± beliefs, assumptions, relationships and flow of work as perceived by the individual Mental model determines the information we use and the manner in which people interpret information Developing mental model is the first step in decision making


Data driven DSS:
Helps in generating useful information's from huge quantity of data in organizational databases, data warehouses and websites Data from TPS, OLAP and data mining Mines customers data from the web site Data from the enterprise system



‡ Components ‡Data management ‡ user interface ‡ model management ‡Knowledge management

DSS Applications in different Management levels 

DSS for operational Management:
For day-to-day operations
Material requirement planning  Linear programming  Queuing theory  Analysis of variances  Correlation analysis  Descriptive statistics like mean median etc. 


DSS for tactical planning and Management control:
Regression analysis  Correlation analysis  Factor analysis  Multidimensional scaling  Game theory  Non-linear programming  Network analysis 


DSS tools for strategic planning:
Expert systems  Natural language systems 


Some of the major capabilities are;
1. 2. 3. 4. 5.

What if analysis Sensitivity analysis Risk analysis Goal seeking analysis Exception reporting analysis


What if analysis:
When a model is solved the results depends on the assumptions, which are frequently subjective made by one or more peoples.  What if analysis attempt check the impact of a change in the assumptions (input data) on the proposed solutions.  

Ex: what will happen if the total inventory cost if the originally assumed cost of the carrying inventories is not 10% but 12%.


Sensitivity analysis: 

Is the investigation of the effect that changes if one or more parts of a model have on other parts of the model.
Variation in input results in the variation in the output. 

A sensitive model means that small changes in conditions dictates a significant different solution.
The chances for a particular solution to succeed are very high in non-sensitive model  Two types of sensitivity analysis are: 1. What if 2. Goal seeking analysis 

Goal seeking analysis:
Represents ³backward´ solution approach  It attempts to find the value of the inputs necessary to achieve a desired level of output 


Risk analysis:
To assess the risk involved  Probability of risk 


Exception reporting analysis: 

Tracks exceptions like;
over due accounts Production runs that results in more power consumption than estimated Sales man who could not meet sales target


Factors influencing success and failure in DSS
1. 2. 3. 4. 5. 6. 7.

User training and involvement User experience Familiarity (length of use) Top management support Orientation towards the top management Novelty of applications ROI


Comparison between MIS & DSS
MIS Structured task Identifies the information requirement Data storage Indirect access to data Based on computer experts Cannot be used for decision making Emphasis on efficiency DSS Semi/unstructured task Establishes tools to be used for decision process Data manipulation Direct access to data Based on managerial judgment Used for decision making Emphasis is on effectiveness

Types of DSS
1. 2. 3. 4. 5.

Status enquiry system Data analysis system Information analysis system Accounting system Model based system


Decisions and type of system required
Decision Selection of vendor Procurement Pricing Selection of vendor based on price, quality, performance Selection of capital asset Inventory rationalization Type of system required Inquiry system Inquiry system Data analysis Information analysis ROI analysis system Valuation of inventory and accounting system

Management of inventory within various Inventory optimization financial and stocking constraints model


³An interactive computer based system that facilitates the solution of the semi-structured and unstructured problems by a group of decision makers, either by speeding up the decision making processor or by improving the quality of the resulting decisions or both´.


Features of GDSS:
Anonymous inputs without identifying the source of inputs to enable group decision makers to concentrate on the merits of the input without considering who give it.  Parallel communication to enable every group members to address issues or make comments suggestions simultaneously.  Automated record keeping by anonymously recording each comment that is entered into the PC by the group member for further review and analysis. 


Success factors of GDSS:
Depends upon the quality of meeting, effective and efficient use of time and ability of the group members. 

Improved preplanning Increased participation Open, collaborative meetings atmosphere Criticism-free idea generation Idea organization and evaluation Setting priorities and making decisions accordingly Documentation/record keeping of meetings Access to external information, if and when required Preservation of organization memory

Executive Support System (ESS or EIS) 

³Information system that provides top executives with rapid access to timely information and direct access to management reports, especially exception reports drill down reports´.


Internal and external factors for EIS 

Internal factors
Need for timely information Need for improved communication Need for access to operational data Need for corporate database Identification of historical trends 

External factor:  


Increasing and intensifying global competition Rapidly changing business environment Need to be more proactive Increasing government regulation


EIS characteristics 

Informational characteristics
Flexibility and ease of use  Timely information  Produce correct, validated and relevant information  

User-interface characteristics
User friendly system ± GUI  Access from many places  Provides secure, reliable and confidential access  customized 


Managerial characteristics
Provides support for defining the overall vision, mission and strategy ± strategic or futuristic oriented  Can help with higher degree risk  Linked with value added business process  Support the need for the access of external database  Performance oriented 


Capabilities of ESS 

Capabilities and benefits:
Drill down ± provides details behind any given information Critical success factors and key performance indicators (KPI) Status access Trend analysis Ad hoc analysis Exception reporting

Office Automation System (OAS)  

It is an information system, collect, process, store and transmit electronic message, document and other forms of communications among the individuals, workgroups and organization. Increases the productivity of managerial end users
Office publishing system ± word processing, DTP Image processing system- document management and interactive video Electronic communication systems ± electronic meeting, teleconferencing


Other publishing systems:
Word processing system Desktop publishing Electronic Meeting System (EMS)-IP telephony Teleconferencing Telecommuting Multimedia

Enterprises Resource Planning (ERP) 

An integrated process of planning and managing all major business process with a strategic client/server architecture in real time including contacts with business partners and with customers.


Old Dream of Total Integration
Integration is Geographic (multiple sites in USA, Europe & Asia 

Unification of all key operational systems

for many large firms)
Functional, with modules for 

Logistics Financial Human Resources And more specialized areas, such as SCM, CRM


Major Suppliers
SAP Oracle J.D Edwards PeopleSoft Siebel Systems


SAP Today 

Biggest ERP supplier 55% global share, and rising fast One of world¶s most successful software firms Huge web of connections More than 1,000 ³partners´ More than 12,000 customers More than 10 million licensed users 22 versions tailored to specific industries Web offering called ³´
1979: SAP /R2 for mainframes 1992: SAP /R3

Benefit: Operational Efficiency 

Lower cost Data entered only once, used by all processes and departments Better customer service Current data accessible to all participants
E.g. customer service rep can see stock levels in other divisions, progress on order. 

Allows management of processes across organizational boundaries


CRM Software 

Customer Relationship Management Idea: centralize all processes and data related to interaction with customers Often offered by ERP suppliers


Expert Systems 

³ n expert system is a computer A

program that is designed to hold the accumulated knowledge of one or more domain experts´


Capabilities of ES

Capturing expertise's  Codifying the expertise's  Duplicating and transferring expertise's  Saving the human experts time  Saving on maintenance and updating of knowledge base 


Characteristics of ES 

Ability to explain reasoning or suggested decision Ability to display intelligent behavior Ability to draw conclusion Ability to deal with certainty Limited to relatively narrow problems Inability to deal with mixed knowledge Difficult to maintain

Applications of Expert Systems
Medical system for diagnosis of respiratory conditions

PROSPECTOR: Used by geologists to identify sites for drilling or mining

Applications of Expert Systems
MYCIN: Medical system for diagnosing blood disorders. First used in 1979

DESIGN ADVISOR: Gives advice to designers of processor chips

Applications of Expert Systems
DENDRAL: Used to identify the structure of chemical compounds. First used in 1965

LITHIAN: Gives advice to archaeologists examining stone tools

Components of an Expert System   

The knowledge base is the collection of facts and rules which describe all the knowledge about the problem domain The inference engine is the part of the system that chooses which facts and rules to apply when trying to solve the user¶s query The user interface is the part of the system which takes in the user¶s query in a readable form and passes it to the inference engine. It then displays the results to the user.


Why use Expert Systems?  


Experts are not always available. An expert system can be used anywhere, any time. Human experts are not 100% reliable or consistent Experts may not be good at explaining decisions Cost effective 

ES increases productivity in Automobile


Problems with Expert Systems
Limited domain  Systems are not always up to date, and don¶t learn  No ³common sense´  Experts needed to setup and maintain system 


Knowledge Engineers
Tasked with working with the expert to extract expertise and codify in a set of rules.  Has training in the development of expert systems, but not necessarily in the application domain.  Know the capabilities of the technology and knows how to apply it.  

Autonomic computing

Artificial Intelligence

³The study of thought process of human and representation of those process via machines´  Three objectives of AI: 

Make the machine smarter  To understand what intelligence is  To make the machine more useful 


What is an intelligence behavior? 


Learning or understanding from experience Making sense of ambiguous or contradictory messages Responding quickly and successfully to a new situation Using reasoning to solve problems and direct actions effectively Dealing with complex situations Understanding and inferring in ordinary, rational ways Apply knowledge to manipulate the environment Recognizing the relative improvement of different elements in a situation


Comparing AI with NI: 

AI is more permanent AI can be less expensive AI is consistent and thorough AI can be documented AI offers ease of duplication and dissemination
NI is creative NI enables peoples to benefit from and directly use sensor experiences NI enables people to recognize relationships between things to sense qualities and spot patterns that explain how various items interrelate. Human reasoning is making use of wide context of experience

Commercial AI systems: 

Expert systems Natural language technology Speech (voice) understanding Robotic and sensory systems Computer vision and science recognition Intelligent compute assisted instruction Machine learning Handwriting recognition Intelligent agents


AI applications; 

Manufacturing/production planning and schedule Project management Factory management Sales, distribution and field services Diagnosis and trouble shooting Financial management Portfolio management Asset and liability management Criminology geology Nuclear science

System Analysis and Design 

Types of systems: 

Conceptual and empirical systems
Theoretical,explanatory and provides clarifications 

Natural and artificial systems
Rivers, mountains,minerals 

Open and closed systems
Always interacting with the environment and exchanges information 

Probabilistic and deterministic systems
In a deterministic system the interaction of elements is known and hence the outcome predictable

Other systems are;
Social and machine system  Physical and abstract system  Permanent and temporary system  Stationary and non-stationary system 

All systems must have:
Goals, components/sub-systems, structure, behavior, life cycle, boundaries


System characteristics:
System receives inputs by way of information, energy or materials  System process the inputs and produces/gives output/results  System has a structure ±organized in a particular way  System interdependent 


What is control?
³The process by which manager assures that resources are obtained and used effectively in the accomplishment of an organization¶s objectives´  It is one of the major functions of management along with planning, organizing, directing and leading. 


Control systems
Closed  Open loop system  Cybernetic system (communication) 


Control may result;  Performance of group/individuals  Characteristics of group/individuals  Characteristics or value of a variable within prescribed limit. 

Control will be;
Setting standards of performance Measuring performance against standard Taking corrective action to reduce deviation from standards

Control cycle;
1.Determine goals goals achieved with the goals desired

2. Plan

7.Compare actual and budgeted performance

Control process cycle

3. Determine the work load

6. Perform work

4. Find the required resources

5.acquire the authority to use resources



Law of requisite variety
Murphy¶s law ± ³if things can go wrong it will go wrong and it will go wrong at the time you least expect it to go wrong´ 

System theory has an appropriate mechanism to ensure that their malfunctioning is detected and also corrected



SDLC stands for
Systems Development Life Cycle 

SDLC - refers to the development stage of the system¶s life cycle.

All systems have a life cycle or a series of stages they naturally undergo.  The number and name of the stages varies, but the primary stages are conception, development, maturity and decline.



Basic concept of system development
The definition stage The development stage The installation and operation stage  System analysis
System design Programming Testing conversion Implementation Maintenance (starting Maturity) 

System Implementation

The definition stage;
Proposal definition (SRS)  Feasibility assessment 

Technical Economical Operational Motivational schedule


Information requirement analysis
Input and output data for report Functional requirements User interface requirements 

Conceptual design
Documenting flow of activities and processing General description/concepts on inputs/output Functions expected to be performed General outlines and regards different manuals (operating/users/training) Follow up/audit/control procedures


Development stage:
Physical system design Physical database design Program development Procedure development (user manual/deliverbles)


Installation and operation stage
Parallel  Direct  Pilot  phased 

Operation and maintenance Post audit


System analysis:
Complete understandings of important business activities  Understanding the user requirements 


System design:  

To ensure that the system meets organizational objectives promotes integration of activities and facilitate control as the emphasis in system design. Major activities:
Specify data element, records and files Specify input performance and data preparation formats Specify system output Develop feedback and control mechanism Develop program specification Develop operation specification Identify personnel who will complete these activities Plan the resources Schedule:  Switch over to new system  User training  Parallel operation  System review

A good system design should posses the six important characteristics:
Acceptability  Decision facilitating ability  Economy  Flexibility  Reliability  Simplicity 


Phases of the Systems Development Life Cycle

Project Identification and Selection
Two Main Activities 

Identification of need Prioritization and translation of need into a development schedule

Helps organization to determine whether or not resources should be dedicated to a project.

Project Initiation and Planning
Two Activities 

Formal preliminary investigation of the problem at hand Presentation of reasons why system should or should not be developed by the organization

Alternative Approaches
Building a scaled-down working version of the system Steps in prototyping:
Identify the user basic requirements 2. Develop the initial working prototype 3. Use the prototype for further refinement 4. Review and enhance prototype Approaches to developing prototype systems: a. non-functional prototype systems b. partially functional prototype system c. fully functional prototype system



Users are involved in design Captures requirements in concrete form Ability to try out ideas without incurring large/huge cost The ability to get a functioning system into the hand of the user quickly Reduced application development time to achieve a functional system Effective utilization of scare resources It can help reduce maintenance Most useful when there is uncertainties It enables user to react immediately Minimizes the development cost


Better suited for small modular applications  Performance may be rather inefficient 


Approaches to developing prototype systems 

Non- functional prototype systems 

User interface Data entry display System output Operational level 

Partially functional prototype systems 

Fully functional prototype systems 

To see the expected result


CASE tools 

Computer Aided Software Engineering Using software packages to accomplish and automate many of the IS development work Promote standardization Amount of the repetitive work can be reduced
planning Design (system design, database design) Programming (coding) integration Testing Documentation

Object oriented system Development 

Approaches of system development 

Top-down, structured, procedure oriented, bottom to-up, modular, object oriented. 

Procedure oriented
Sequence of actions  Reading  Calculating  printing 


Characteristics of procedure oriented
Emphasis on algorithms Division of large program into smaller programs known as functions Data moves between function to function Top-down approach in program design


OOP approach:
Emphasis on data rather than procedure Programs divided into objects Data is hidden and cannot be accessed by external functions Object can communicate each other Bottom-to-up approach


OOPs concepts:
Objects Classes Data abstraction and encapsulation Inheritance Polymorphism Dynamic binding Message passing

OOSD advantages System development is mainly modular  System design and development becomes easier  System maintenance is simpler  System objects can be modified by less disrupting to rest of the program  Program security is much higher 


Database management systems File management system  Database management system 


Database is a huge repository for structured data Data are retrieved form database for processing them into Information. Series of operations ± to generate Information 

Types of operations;
1. 2. 3.

Aggregation Summation Calculation


Nature of the data;
Text  Image  Audio  Video  Animation 


Characteristics of DBMS

Shared  Persistence  Validity/integrity/correctness  Security  Non-redundancy  Independence 


DBMS components:
Transaction management Concurrency control Recovery management Security management Language interface Storage management Database catalog management



Components of DBMS: Data Model Data Definition Language Data Manipulation Language Data Dictionary


Data Model
Defines the way data are conceptually structured.
Ex.  Hierarchical  Network  relational 


Data Definition Language:
Defines what types of information are there in the database and how they will be structured DDL defines each data element as it appears in the database before that data element is translated into the form required by the applications. It defines the logical and physical view of the database

Data Manipulation language:
DML allows user to store, retrieve, sort, display and delete the contents of a database.


Data Dictionary:
Stored definition of the data elements and data characteristics such as individuals, business functions, programs and reports, that uses data elements as well as physical representation, responsible parties in the organization ( Data Ownership) and security.


Advantages of DBMS to the organization:
Improved strategic use of corporate data Reduced complexity of the organization's information system environment Reduced data redundancy and inconsistency Enhanced data integrity Application data independence Improved security Reduced application development and maintenance cost Improved flexibility of information system Increased access and availability of data and information

Disadvantages of Database:
Higher data processing cost Increased Hardware and software cost Data insecurity and integrity Insufficient database expertise.


Data warehousing and data mining


Information Security 

Why to break IT systems?
Revenge Money The challenge of doing it.


External threats
Internet connection  Remote access  Telecommuting 


Internal threats 

Un- authorised access


Routine maintenance  Software updates  Audit trails 


Information system Quality

Software used for research and military applications  RTT  Software QA provides the degree of confidence 


Need for software quality assurance
Avoiding legal liability if the software fails Documents for best practice quality technique Marketing the software products Making software development cost effective Customer satisfaction; delight and customer loyalty


Software quality criteria
Quality factor Software quality criteria

correctness Reliability Efficiency Integrity Usability Maintainability Portability

Traceability, constancy, completeness Error tolerance, consistence, accuracy Execution efficiency, storage efficiency Access control, access audit Operability, training, communicativeness, I/O Simplicity, modularity, self descriptive Machine independent, system independence




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