UNIT-I

INFORMATION SYSTEM (IS)

An information system (IS) is an organized system for the collection, organization, storage and
communication of information. More specifically, it is the study of complementary networks that people
and organizations use to collect, filter, process, create and distribute data.

WHY IS?

The implementation of information system can benefit a lot in businesses and helps in controlling the
internal and external processes. Business Information System makes it simple to store operational data,
revision histories, communication records and documents.

WHY INFORMATION SYSTEMS ARE IMPORTANT TO BUSINESS?

1) Operational Excellence – businesses can constantly improve their efficiency of their operations in
order to achieve higher profitability. They can do this by constantly having the correct amount of stock in
store so consumers can always get want they want.

2) New product services and business models – I.S systems play a major role for businesses in creating
new products and services. New business models can be created and these can describe how a company
produce, create and sell there products.

3) Customer and Supplier intimacy – the better services a company provides its consumers with more
likely they are too come back to them and as result the more they will buy off the supplier therefore
creating a good relationship with both parties.

4) Improved decision making – I.S systems make it possibly for managers to use real time data when
making a decision to therefore make better decisions and not have to waste time looking for
information.

5) Competitive advantage – if companies achieve any of these 6 reasons to use I.S they will generally
create a competitive advantage over their rivals.

6) Day to Day survival – business invest in these systems to make their jobs as easy as possibly. an
example is Citibank introduced the first ATM machine to make it easier for customers to access their
money and to cut down queues in their banks.

FUNDAMENTALS OF IS

The component that helps organizations achieve their goals, such as increasing profits or improving
customer service

Input
– Gathering and capturing raw data

• Processing

– Converting or transforming data into useful outputs

• Output

– Production of useful information, usually in the form

of documents and reports

SOLVING BUSINESS PROBLEMS WITH IS

Information technology includes products and services that can improve a company’s day-to-day
operations and security. This includes computers, servers, peripheral devices, phone systems, internet
connectivity equipment, and security software. IT is an integral part of modern business that can help
companies solve several key problems.

Information technology can allow you to securely store your company’s files and sensitive customer or
patient information. Data will be accessible only to authorized users within the company and will be
protected from hackers who could try to steal it and technological problems that could cause it to be lost
or corrupted.

Rapid communication is essential to compete in today’s business world. Email servers, routers, internal
company billboards, and chat services can enable employees to communicate with customers and with
each other, making communications smooth and easy.

You can improve your workers’ efficiency by streamlining workflow systems, sharing storage, and
creating collaborative work spaces. This can enable employees to produce more work in a shorter
amount of time. Technology can let you automate routine tasks, improve data analysis, and store data
for easy retrieval.

IT can also help you maintain your company’s competitive advantage. You can create new products,
differentiate your products from those of your competitors, and improve customer service.

You can lower your company’s costs by using technology to centralize redundant tasks in one location.
You can migrate high-cost functions to an online environment. You can offer customers email support at
a lower cost than phone support. You can also outsource some functions, offer employees the
opportunity to work remotely, and use less expensive communication options

UNIT-II
IS FOR BUSINESS OPERATIONS
The principal business functions in a business firm are:

1. Marketing and sales

2. Production

3. Accounting and finance

4. Human resources

Activities involved in the day to day functions of the business conducted for the purpose of generating
profits.

MARKETING INFORMATION SYSTEMS

Marketing activities are directed toward planning, promoting, and selling goods and services to satisfy
the needs of customers and the objectives of the organization.

Marketing information systems support decision making regarding the marketing mix. These include:

1. Product

2. Price

3. Place

4. Promotion

In order to support decision making on the marketing mix, a marketing information system draws
on several sources of data and information.

Marketing mix subsystems include:

1. Product subsystem

2. Place subsystem

3. Promotion subsystem

4. Price subsystem

5. Sales forecasting

Product Subsystem
The product subsystem helps to plan the introduction of new products. Continually bringing new
products to market is vital in today's competitive environment of rapid change. The product subsystem
should support balancing the degree of risk in the overall new-product portfolio, with more aggressive
competitors assuming higher degrees of risk for a potentially higher payoff.

Place Subsystem

The place subsystem assists the decision makers in making the product available to the customer at the
right place at the right time. The place subsystem helps plan the distribution channels for the product
and track their performance.

The use of information technology has dramatically increased the availability of information on product
movement in the distribution channel. Examples include:

1. Bar-coded Universal Product Code (UPC)

2. Point-of-sale (POS) scanning

3. Electronic data interchange (EDI)

4. Supports just-in-time product delivery and customized delivery

Promotion Subsystem

The promotion subsystem is often the most elaborate in the marketing information system, since it
supports both personal selling and advertising. Media selection packages assist in selecting a mix of
avenues to persuade the potential purchaser, including direct mail, television, print media, and the
electronic media such as the Internet and the WEB in particular. The effectiveness of the selected media
mix is monitored and its composition is continually adjusted.

Price Subsystem

Pricing decisions find a degree of support from DSSs and access to databases that contain industry
prices. These highly unstructured decisions are made in pursuit of the companys pricing objectives.
General strategies range from profit maximization to forgoing a part of the profit in order to increase a
market share.

Information systems provide an opportunity to finely segment customer groups, and charge different
prices depending on the combination of products and services provided, as well as the circumstances of
the sale transaction.

Sales Forecasting

Based on the planned marketing mix and outstanding orders, sales are forecast and a full marketing plan
is developed. Sale forecasting is an area where any quantitative methods employed must be tempered
with human insight and experience. The actual sales will depend to a large degree on the dynamics of
the environment.
Qualitative techniques are generally used for environmental forecasting - an attempt to predict the
social, economic, legal, and technological environment in which the company will try to realize its plans.

MANUFACTURING INFORMATION SYSTEMS

Global competitive pressures of the information society have been highly pronounced in manufacturing
and have radically changed it. The new marketplace calls for manufacturing that are:

1. Lean - highly efficient, using fewer input resources in production through better engineering and
through production processes that rely on low inventories and result in less waste.

2. Agile - fit for time-based competition. Both the new product design and order fulfilment are drastically
shortened.

3. Flexible - able to adjust the product to a customer's preferences rapidly and cost effectively.

4. Managed for quality - by measuring quality throughout the production process and following world
standards, manufacturers treat quality as a necessity and not a high-price option.

Manufacturing information subsystems include:

1. Product design and engineering

2. Product scheduling

3. Quality control

4. Facilities planning, production costing, logistics and inventory subsystems

Product Design and Engineering

Product design and engineering are widely supported today by computer-aided design (CAD) and
computer-aided engineering (CAE) systems. CAD systems assist the designer with automatic calculations
and display of surfaces while storing the design information in databases. The produced designs are
subject to processing with CAE systems to ensure their quality, safety, manufacturability, and cost-
effectiveness. CAD/CAE systems increasingly eliminate paperwork from the design process, while
speeding up the process itself. As well, the combined techniques of CAD/CAE and rapid prototyping cut
time to market.

Product Scheduling

Production scheduling is the heart of the manufacturing information system. This complex subsystem
has to ensure that an appropriate combination of human, machinery, and material resources will be
provided at an appropriate time in order to manufacture the goods.
Quality Control

The quality control subsystem of a manufacturing information system relies on the data collected on the
shop floor by the sensors embedded in the process control systems.

Total quality management (TQM) is a management technique for continuously improving the
performance of all members and units of a firm to ensure customer satisfaction. In particular, the
principles of TQM state that quality comes from improving the design and manufacturing process, rather
than Ainspecting out@ defective products. The foundation of quality is also understanding and reducing
variation in the overall manufacturing process.

Facilities Planning, Production Costing, Logistics and Inventory Subsystems

Among the higher-level decision making supported by manufacturing information systems are facilities
planning - locating the sites for manufacturing plants, deciding on their production capacities, and laying
out the plant floors.

Manufacturing management requires a cost control program, relying on the information systems. Among
the informational outputs of the production costing subsystem are labor and equipment productivity
reports, performance of plants as cost centers, and schedules for equipment maintenance and
replacement.

Managing the raw-materials, packaging, and the work in progress inventory is a responsibility of the
manufacturing function. In some cases, inventory management is combined with the general logistics
systems, which plan and control the arrival of purchased goods into the firm as well as shipments to the
customers.

HUMAN RESOURCE INFORMATION SYSTEMS

A human resource information system (HRIS) supports the human resources function of an organization
with information. The name of this function reflects the recognition that people who work in a firm are
frequently its most valuable resources. The complexity of human resource management has grown
immensely over recent years, primary due to the need to conform with new laws and regulations.

Human Resource Planning

To identify the human resources necessary to accomplish the long-term objectives of a firm, we need to
project the skills, knowledge, and experience of the future employees.

Recruiting and Workforce Management

Based on the long-term resource plan, a recruitment plan is developed. The plan lists the currently
unfilled positions and those expected to become vacant due to turnover.

The life-cycle transitions of the firm's workforce - hiring, promotion and transfer, and termination - have
to be supported with the appropriate information system components.
Compensation and Benefits

Two principal external stakeholders have an abiding interest in the human resource policies of
organizations. These are:

1. Various levels of government

2. Labor unions

ACCOUNTING AND FINANCIAL INFORMATION SYSTEMS

The financial function of the enterprise consists in taking stock of the flows of money and other assets
into and out of an organization, ensuring that its available resources are properly used and that the
organization is financially fit. The components of the accounting system include:

1. Accounts receivable records

2. Accounts payable records

3. Payroll records

4. Inventory control records

5. General ledgers

A financial information system (FIS) is a business software system used to input and track financial and
accounting data. The system generates reports and alerts that assist managers in effectively running the
business.

Financial information systems rely on external sources, such as on-line databases and custom produced
reports, particularly in the areas of financial forecasting and funds management. The essential functions
that financial information systems perform include:

1. Financial forecasting and planning

2. Financial control

3. Funds management

4. Internal auditing

Financial Forecasting

Financial forecasting is the process of predicting the inflows of funds into the company and the outflows
of funds from it for a long term into the future. Outflows of funds must be balanced over the long term
with the inflows. With the globalization of business, the function of financial forecasting has become
more complex, since the activities in multiple national markets have to be consolidated, taking into
consideration the vagaries of multiple national currencies. Scenario analysis is frequently employed in
order to prepare the firm for various contingencies.

Financial forecasts are based on computerized models known as cash-flow models. They range from
rather simple spreadsheet templates to sophisticated models developed for the given industry and
customized for the firm or, in the case of large corporations to specify modeling of their financial
operations. Financial forecasting serves to identify the need for funds and their sources.

Financial Control

The primary tools of financial control are budgets. A budget specifies the resources committed to a plan
for a given project or time period. Fixed budgets are independent of the level of activity of the unit for
which the budget is drawn up. Flexible budgets commit resources depending on the level of activity.

Spreadsheet programs are the main budgeting tools. Spreadsheets are the personal productivity tools in
use today in budget preparation.

In the systems-theoretic view, budgets serve as the standard against which managers can compare the
actual results by using information systems. Performance reports are used to monitor budgets of various
managerial levels. A performance report states the actual financial results achieved by the unit and
compares them with the planned results.

Along with budgets and performance reports, financial control employs a number of financial ratios
indicating the performance of the business unit. A widely employed financial ratio is return on
investment (ROI). ROS shows how well a business unit uses its resources. Its value is obtained by dividing
the earnings of the business unit by its total assets.

Funds Management

Financial information systems help to manage the organization's liquid assets, such as cash or securities,
for high yields with the lowest degree of loss risk. Some firms deploy computerized systems to manage
their securities portfolios and automatically generate buy or sell orders.

Internal Auditing

The audit function provides an independent appraisal of an organization's accounting, financial, and
operational procedures and information. All large firms have internal auditors, answerable only to the
audit committee of the board of directors. The staff of the chief financial officer of the company
performs financial and operational audits. During a financial audit, an appraisal is made of the reliability
and integrity of the company's financial information and of the means used to process it. An operational
audit is an appraisal of how well management utilizes company resources and how well corporate plans
are being carried out.

TRANSACTION PROCESSING SYSTEM (TPS)

In manufacturing organization, there are several types of transaction across department. Typical
organizational departments are Sales, Account, Finance, Plant, Engineering, Human Resource and
Marketing. Across which following transaction may occur sales order, sales return, cash receipts, credit
sales; credit slips, material accounting, inventory management, depreciation accounting, etc.

These transactions can be categorized into batch transaction processing, single transaction processing
and real time transaction processing.

Examples of transaction processing systems include;

Point of Sale Systems – records daily sales

Payroll systems – processing employees salary, loans management, etc.

Stock Control systems – keeping track of inventory levels

Airline booking systems – flights booking management

UNIT-III

MANAGEMENT INFORMATION SYSTEM

A management information system is an information system used for decision-making, and for the
coordination, control, analysis, and visualization of information in an organization.

A management information system (MIS) is a computerized database of financial information organized

and programmed in such a way that it produces regular reports on operations for every level of
management in a company. It is usually also possible to obtain special reports from the system easily.

Types of MIS

The following are types of information systems used to create reports, extract data, and assist in the
decision making processes of middle and operational level managers.

Decision support systems (DSS) are computer program applications used by middle and higher
management to compile information from a wide range of sources to support problem solving and
decision making. A DSS is used mostly for semi-structured and unstructured decision problems.

Executive information systems (EIS) is a reporting tool that provides quick access to summarized reports
coming from all company levels and departments such as accounting, human resources and operations.

Marketing information systems are management Information Systems designed specifically for
managing the marketing aspects of the business.

Accounting information systems are focused accounting functions.

Human resource management systems are used for personnel aspects.

Office automation systems (OAS) support communication and productivity in the enterprise by
automating workflow and eliminating bottlenecks. OAS may be implemented at any and all levels of
management.

School Information Management Systems (SIMS) cover school administration, often including teaching
and learning materials.

Enterprise resource planning (ERP) software facilitates the flow of information between all business
functions inside the boundaries of the organization and manage the connections to outside
stakeholders.[8]

Local Databases, can be small, simplified tools for managers and are considered to be a primal or base
level version of a MIS.

DECISION SUPPORT SYSTEM (DSS)

A decision support system (DSS) is an information system that supports business or organizational
decision-making activities. DSSs serve the management, operations and planning levels of an
organization (usually mid and higher management) and help people make decisions about problems that
may be rapidly changing and not easily specified in advance—i.e. unstructured and semi-structured
decision problems. Decision support systems can be either fully computerized or human-powered, or a
combination of both.

Components of DSS

Three fundamental components of a DSS architecture are:

the database (or knowledge base),

the model (i.e., the decision context and user criteria)

the user interface.

Developmental framework of DSS

The Early Framework of Decision Support System consists of four phases:

Intelligence – Searching for conditions that call for decision;

Design – Developing and analyzing possible alternative actions of solution;

Choice – Selecting a course of action among those;

Implementation – Adopting the selected course of action in decision situation.

DSS technology levels (of hardware and software) may include:

The actual application that will be used by the user. This is the part of the application that allows the
decision maker to make decisions in a particular problem area. The user can act upon that particular
problem.

Generator contains Hardware/software environment that allows people to easily develop specific DSS
applications. This level makes use of case tools or systems such as Crystal, Analytica and iThink.

Tools include lower level hardware/software. DSS generators including special languages, function
libraries and linking modules

An iterative developmental approach allows for the DSS to be changed and redesigned at various
intervals. Once the system is designed, it will need to be tested and revised where necessary for the
desired outcome.

IT MANAGEMENT

IT management is the discipline whereby all of the information technology resources of a firm are
managed in accordance with its needs and priorities. These resources may include tangible investments
like computer hardware, software, data, networks and data centre facilities, as well as the staff who are
hired to maintain them.

Managing this responsibility within a company entails many of the basic management functions, like
budgeting, staffing, change management, and organizing and controlling, along with other aspects that
are unique to technology, like software design, network planning, tech support etc.

The central aim of IT management is to generate value through the use of technology. To achieve this,
business strategies and technology must be aligned.

The below concepts are commonly listed or investigated under the broad term IT Management:

Business/IT alignment

IT governance

IT financial management

IT service management

Sourcing

IT configuration management

Benefits of IT Management

One of the huge benefits of computers is that we are able to compress all that data we used to store in
file cabinets or back rooms and keep safely stored on a tiny hard drive. This saves a lot of space, but you
do need to remember to arrange your files and folders in a way that makes them easy to access. While
space is one area where IT Management has clear benefits, another is speed. With so much information
at the tips of our fingers we can access just about anything we need at the click of a button. Having a
centralized place to find useful information, and, in turn, store it, makes our lives so much easier in a
myriad of ways.

Advantages of IT in business

the advantages of information technologies in business are:

Storing and Protecting Information

Working away

Automated Processes

Communication