Chapter 2

Information System Concepts

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Information
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1. What is information? [NOV 2011 – 8 MARKS]
2. Briefly explain the types of information?
3. What are the characteristics/attributes of effective and useful information? [NOV 11 – 8 MARKS]
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System
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4. Define System. Give some Example of System.
5. Briefly explain the classification / types of System?
6. What are the characteristics of System/ Sub system?
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Information System / CBIS
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7. What is information System? Give some important Advantages of IS in business? [MAY2010 -5 MARKS]
[IS & Its Role in Management]
8. What is CBIS?
9. What are the components of CBIS ?
10. What are the characteristics of CBIS? [MAY 2011 – 4 MARKS]
11. What are the limitations of CBIS?
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Types Information System
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Operation Support System
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12. What is Operation Support System?
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Transaction Processing System
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13. What is Transaction Processing System?
14. What are the activities involved in TPS?
15. Explain the various Components of TPS?
16. Explain the features of of TPS?
17. What is Process Control System?
18. What is Enterprise Control System?
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Management Information System
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19. Explain the concepts of MIS in terms of its three elements?
20. Discuss the characteristic of an effective MIS. [NOV – 15 – 6M]
21. Explain various MIS- conceptions of MIS.
22. What are the main Pre- requisites of an Effective MIS? Explain them briefly.
23. What are the major constraints in operating MIS? Discuss them briefly. [MAY 12 – 4 M]
24. Explain the Limitation on MIS. [NOV 12 – 4 M]
25. Explain the effect of computers technology to MIS.
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Decision Support System
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26. What is Decision Support System? [NOV 2008/ MAY 12 -5 MARKS]
27. Explain various characteristic of DSS? [NOV 2008 /MAY12 -5 MARKS]
28. Explain the basic components of DSS.
29. What do you understand from the term “Database? How is it implemented in three different levels? [MAY 10]
30. DSS are extensively used for accounting application support this statement by providing the users of DSS in
accounting applications.
31. Differentiate between DSS and MIS
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Executive Information System
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32. What is an executive information system? [NOV 08/ NOV 12 - 5 M]
33. Explain various characteristic of EIS. [MAY 11/ NOV 12 – 4 M]
34. What are the principles which are required to be followed while designed an EIS?
35. What are the characteristics of types of information used in Executive decision making? [MAY 10 -5 M]
36. What purposes are served by EIS? [NOV 2008 -5 MARKS]
37. What contents are appropriate for EIS?
38. How EIS is different from a Traditional IS? [MAY 13 – 4 M]
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Expert System
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39. Explain Expert System. [NOV 2014 – 6 M]
40. What are the areas where ES can be Used?
41. Writ e short note on Need Of Expert System. [NOV 2015 – 6 M]
42. Explain the key Benefits of Expert System. [NOV 10/ MAY 11 – 4 M]
43. Properties of Expert System. [NOV 2014 – 6 M]
44. Describe components of Expert System.
45. Explain the limitation and uses of Expert System.
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Office Automation System
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46. What is Office Automation System?
47. Explain the Key Benefits of Office Automation System?
48. Describe the four categories of Office Automation System?
49. What are the types of operations which the office activities can be broadly grouped under office automation
system? [NOV 10 /MAY 15 – 6 M]
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Knowledge of Business Managers
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50. A business manager should have adequate knowledge to operate IS effectively. Elaborate. [May 2015 -4 Marks]
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Cross Functional IS [CFIS]
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51. ERP
52. Component of ERP /Methodology for implementing ERP model.
53. Benefits of ERP
54. Core Banking System
55. Element of Core Banking System.
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Information
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Question 1 :- What is Information?
Question 2 :- Briefly explain the Types of Information?
Question 3 :- What are the Characteristics / Attributes of effective and useful information?
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Information
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1. “Information is data that has been processed into a form that is meaningful to the recipient and is of
real or perceived value in current or progressive decision”.

2. Information may be represented in the form of text, graph, picture, voice, video etc.

3. Information relates to description, definition, or perspective. ( what- who- when-where)

4. Information is essential because it adds knowledge, helps in decision making, analyzing the future
and taking action in time.

5. Therefore, the quality of information determines the quality of decision or action.

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Types of Information
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Internal Information

1. Internal information can be defined as information that has been generated from the operation of the
Organization by the various functional areas.

2. The internal information gets processed and summarized from junior to top most level of
management.

3. Middle and junior level managers usually consume this type of information.

4. Examples: Production figures, Sales figure , Accounts Receivables/payables, Progress reports,

Employees details ,Budget etc.

External information

1. External information is collected from the external environment of the business organization.

2. Mainly Top Management uses such information for unstructured decision making

3. Examples: Government policies , Competitors Information , Economic trends, Global business trends,
Technological changes etc.
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Attributes / Characteristics of effective & useful Information
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1. Completeness and Adequacy : -

- The information provided should be complete and adequate in itself because only complete
information can be used in policy making.

2. Availability : -

- It is very important aspect of information.

- Information is useful if it is not available at the time of need.

3. Reliability : -

- It is a measure of failure or success of using information for decision making.

- If information leads to correct decision on many occasions, we say the information is reliable.

4. Quality : -

- Information should be qualitative because quality of information determines quality of decisions or

actions.

5. Mode: -

- The mode of communicating information to humans should be in such a way that it can be easily
understand by the people.

- The mode may be in the form of voice, text and combination of these two.

6. Format: -

- Format of information should be simple, relevant and should highlight important points but should not
be too cluttered up.

- It should be designed in such a way that it assists in decision making, solving problems, initiating
planning, controlling and searching.

- According to different types of information the different format can be used.

For examples: - diagrams , graphs, curves etc.

7. Purpose/ objective : -

- Information must have purpose/objective at the time it is transmitted to a person or machine, otherwise
it is simple data. The basic objective of information is to inform, evaluate, persuade and organize.

8. Current / updated : -

- The information should be refreshed from time to time.

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System
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Question 4 :- Define System. Give some Example of System.
Question 5 :- Briefly explain the classification / types of System?
Question 6 :- What are the characteristics of System/ Sub system?
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System
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1. System is a Collection of Certain Components which work together to achieve some objectives/goals.

2. A system generally consists of input, processing , storage and output.

3. Example: - Human Body, Motor Bike, Information System etc.

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Classification of System
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System can be classified on the basis of various parameters like – Elements, Interactive, Behavior, Degree
of Human Intervention and Working Output.

On the Basis of Elements

Abstract System Physical System

It is also known as ‘ Conceptual System’ It is a set of tangible elements which operate together
to achieves some objectives.
It does not contain any physical components. It contains physical components.
It is an orderly arrangement of ideas. It is more common than abstract system.
Example: - Example: -
Architectural Design, plant Design Transportation system , computer system

On the Basis of Interactive Behavior

Open System Closed System

A system is called as open system A system is called as closed system
When it interact with its environment. When it does not interact with its environment.
Open system can change itself Closed system cannot change itself
according to the requirement of environment. according to the requirement of environment.
It subject to unknown inputs It subject to known inputs
Environmental Disturbances. No Environmental Disturbances.
Example: Humans, Animals , Plants etc. Example: completely /relatively closed system etc.
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On the basis of Working/Output

Deterministic System Probabilistic System

A system is called as deterministic system When A probabilistic System is one in which
input, processing and output known with Output can be predicted in probabilistic terms.
certainty.
It operates is predictable manner. It does not operate in predictable manner.
It provides Exact outputs. It provides expected output.
Example: Accounting Information. Example: Demand Forecasting System.

On the basis of Degree of Human Intervention

Manual System Automated System

In this type of system Collection of data – In this type of system computers , mini processors , are
processing – reporting etc. are performed by used for data processing , storage and reporting etc.
human efforts’
Example: Manual Accounting System It will be wrong to say that a business system is 100 %
Automated system because it depends upon manual
intervention.

Sub System Supra System

A system is divided into a smaller system and such A system immediately above a sub system
smaller system further divided into smaller system is is known as supra- system.
known as ‘sub – system’
Sub system concept is used when we decompose the Supra system concept is used When we integrate
system into smaller system. the system
Example: - Example: -
Business org – finance – marketing – production Business org – finance – marketing – production
Here Finance/marketing/production are sub system of Here business org. is supra system for Finance ,
business org. marketing , production system.
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Characteristics of System
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Decomposition (Factoring):
- It is very difficult to understand a complex system.
- Thus for the purpose of understanding the system it can be divided into smaller units i.e. subsystem.
- This is called decomposition or factoring of a system.
Simplification:
- Simplification is defined as the process of organizing subsystems so as to reduce the number of
interconnections between all the sub-systems for communication among sub-systems.
- The number of interconnections required, if all the subsystems interact with each other.
Decoupling:
- If two different subsystems are connected very tightly, very close coordination between them is
required.
For example, if the raw material is put directly into production the moment it arrives at the factory, the
raw materials system can be said to be tightly couple.
Under these conditions, raw material delivery must be precisely timed in order to avoid delays in
production or to prevent new material from arriving too soon with no place to be stored.
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Information System / CBIS
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Question 7 :- What is Information System?
Question 8 :- What is CBIS?
Question 9 :- What are the Components of CBIS?
Question 10 :- What are the Characteristics of CBIS?
Question 11 :- What are the Limitation of CBIS?
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Information System
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1. Processed data is known as information and the system developed for providing information is
known as Information System.

2. Information is required for efficient and effective functioning of the organization; therefore it is very
important that organization should develop an Information System which provides quality information
to its users for efficient and effective working.

3. With the help of Information System enterprises and individuals are able to use computer to collect,
store, and process, analyze and distribute information.

4. There are different types of Information System

E.g. Manual Information system (Paper and pencil) ,

Informal Information system (word to mouth),

Formal Information System (written procedures) and

Computer based Information System. (CBIS)

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Information system & role in management
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An IS cab be considered as an arrangement of a number of elements that provides effective information for
decision making and control of some functionalities of an organization.
Information is an entity that reduces uncertainty about an event or situation.
Some of important implications of IS in business are as follows:
1. Aids in decision making to achieve the organization goal.
2. Gain competitive edge.
3. Innovative ideas for solving critical problems.
4. Knowledge gathered may be utilized by managers in unusual situations.
5. It can be integrated to formulate a strategy of action or operation.
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Computer Based Information System [CBIS]
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1. CBIS is an Information System in which the computer plays a major role.

2. CBIS is a Combination of people, IT and business processes that helps management in taking
important decisions to carry out the business successfully.

3. It provides accurate and speedy information.

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Components of Information System and CBIS
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1. People:

- The success of CBIS is depends upon People. This includes System Analysts, System
Administrators, Users, Programmers, etc.

2. Data:

- Data are facts that are used by programs to produce useful information.

- Data are generally stored in machine-readable form on disk or tape until the computer needs them.

- The data may alphanumeric, text, images, video, audio and other forms.

3. Network

- The network means communication media. It helps to provide online distributed data processing
environment.

4. Procedures

- Procedures are policies and rules which govern the functioning of CBIS. It provides an efficient
working and use of CBIS.

5. Computer System:

This includes components in terms of Hardware and Software.

• Hardware

- Hardware means physical components of Computers. Such as CPU, RAM, Hard Disk etc.

• Software

- Software means System Software, Application Software and utility Software.

- System Software includes different types of Operating System like UNIX, LINUX, and WINDOWS
etc.

- Application Software includes different types of computers programs designed to perform specific
task. Utility Software includes tools etc.
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Characteristics of CBIS [May 2011]
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1. All system works for pre-determined objectives and the system is designed and developed
accordingly.

2. In general a system has a number of inter – related & interdependent sub-system or components.

3. If one sub-system or component of a system fails, then in most cases the whole system does not work.

4. The way a sub-system works with another sub-system is called interaction.

5. The different sub-system interacts with each other to achieve the goal of the system.

6. The work done by an individual sub-system is integrated to achieve the central goal of the system.
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Major areas of Computer Based Application
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1. Finance and Accounting.

2. Marketing and Sale.

3. Production and manufacturing.

4. Inventory/Stores Management.

5. Human Resource Management.

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Types of Information System
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1. Operation support system (OSS)

2. Management support system (MSS)

3. Office automation system (OAS)

4. Other information system (OIS)

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Operation Support System
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Question 12 :- What is Operation Support System?
Question 13 :- What is Transaction Processing System?
Question 14 :- What are the Activities involved in TPS?
Question 15 :- Explain the Features of TPS?
Question 15 :- Explain the various Components of TPS?
Question 16 :- What is Process Control System?
Question 18 :- What is Enterprise Control System?
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Operation Support System
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1. OSS support in the day to day Data Processing activities of the org.

For Example: Management receivable, payables, general ledger, inventory etc.

2. The main objective of OSS is to improve the operation efficiency of the enterprise.

3. It includes TPS – PCS – ECS.

4. OSS produces a variety of information for internal and external use.

5. OSS ensures that business procedures are followed.

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Transaction Processing System
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1. TPS processes the transaction and provides the routine & regular reports/information.

2. TPS automates those routine processes, which are used to support day to day business operations.

3. TPS acts as a Base to almost all other types of information system.

4. TPS accepts data as inputs and provides information as outputs.For example: -

Accept transaction [ i.e. : purchase, sale , receipt, payments etc.] as inputs &

Provide routine and regular report [ i e : Balance sheet, trial balance etc.] as Outputs.
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Activities involved in TPS
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1. Capturing data to organize in files or databases.

2. Processing of files/databases using application software

3. Generating information in the form of reports and

4. Handling of queries from various quarter of the organization

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Features of TPS
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1. Large volume of data

- As TPS is transaction oriented, it generally consists large volumes of data and thus require greater
storage capacity.

2. Automation of Basic or Routine operation

- TPS helps to automates basic or routine operations.

- This helps to maintain updated information in the system.

3. Benefits are easily measurable

- TPS reduces the workload of the people associated with the operations and improves their efficiency
by automating some of the operations.

- Most of these benefits of the TPS are tangible and easily measurable.

4. Source of input for other system

- TPS act as a Base to almost all other types of information system or provides input to other
information system.
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Various Components of TPS
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1. Inputs

- This component provides data to TPS for processing. To make a data suitable for processing, it may be
a two step process.

Collection or Recording:-

In this step data is recorded into a computer for processing, it is known as data capturing.

Classification or Conversion: -

In this step the recorded data is classified as per the type of data.

Data is normally classified according to its type as payment, receipts, purchase and sales etc.

2. Processing

- This component is used to convert the given data to TPS into information.

- Processing of data / transaction is done as per the accounting rules or business logics.

3. Storage

- Storage is used to hold data permanently or temporary based on the requirement.

- Storage essentially helps in processing as well as for storing data.

- In CBIS the master and transaction files are used to store data just like Ledgers and day books are used
for storage of date in manual processing.

4. Output :

- An IS developed to produce various types of outputs / reports.

- Outputs from IS are produced in the form of reports. Such as Financial Report & Operation Report.

- Financial Reports:

Provides summarized information. For example: Balances Sheet & Income Statement.

- Operational Report:

Provide day to day detail operational information. For example: Daybook.

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Process control System
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In this type of system computers are used to control ongoing physical process and to automatically make
decisions which adjust the physical production process.
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Enterprise Control System
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These systems use a variety of technologies to help people who work together in an integrated manner.
ERP is a kind of ECS system.
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Management Support System
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Question 19 :- Explain the Concepts of MIS in terms of its three elements?
Question 20 :- Discuss the Characteristic of an effective MIS.
Question 21 :- Explain various MIS- conceptions of MIS.
Question 24 :- Explain the Limitation on MIS.
Question 25 :- Explain the effect of computers technology to MIS.
Question 2 :- What are the major constraints in operating MIS? Discuss them briefly.
Question 22 :- What are the main Pre- requisites of an Effective MIS? Explain them briefly.
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Management Support System
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MSS focus on the managerial uses of information resources and provide information to managers for
planning and decision making.

There are 3 types of MSS, namely:

1. Management Information System.[MIS]

2. Decision Support System.[DSS]

3. Executive Information System. [EIS]

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Management Information System
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1. MIS is an integrated user machine system designed for providing information to support
operational control, management control and decision making functions in an organization.

2. MIS is considered as an expansion of TPS because it can provide certain value added reports in
addition to routine and regular reports provided by TPS.

3. It consists of following 3 components / elements

1. Management.

2. Information.

3. System.
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Characteristics of MIS
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1. Management Oriented

- It is management which uses the MIS for effective decision making.

- Therefore, information provided by the MIS should be management oriented.

2. Management directed

- Management should be involved in setting the system specification. Without the involvement of
management it is very difficult to develop an effective MIS.

3. Need based

- MIS design & development should be as per the information needs of managers at different level.

4. Exception based

- MIS should be developed on exception based reporting principle.

5. Computerized

- It is possible to establish MIS without computers also but it would be obsolete and ineffective.

Thus MIS is effective only when it is integrated with computer systems.

6. Common database

- Database should be integrated to all different users to access it commonly.

7. Common data flow

- Wherever possible common input, processing and output should be done to avoid duplication of data
collection.

8. Heavy Planning Element

- An MIS usually takes 3 to 5 years and sometimes even longer period to get established firmly within a
company. Therefore, a heavy planning element must be present in MIS Development.

9. Sub-system concept

- The process of MIS development is quite complex.

- Thus the MIS must be broken down into small functional sub – system to enable easy development,
implementation and maintenance.
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Misconception of MIS
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1. Any computer based information system is MIS.

2. Any reporting system is MIS.

3. MIS is a management technique.

4. MIS is a bunch of technologies.

5. The study of MIS is about use of computers.

6. More data means more information

7. Accuracy plays vital role in reporting.

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Limitation of MIS [Nov 2012]
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1. MIS is less useful for unstructured data.

2. MIS generate the information based on internal data only.

3. MIS ignores the non- quantitative factors.

4. TPS’s limitations still exist in MIS.

5. Ad hoc Reporting is not possible.

6. Input and processing quality determines the quality of outputs of MIS.

7. MIS cannot substitute an effective mgt. It is a tool for helping management in decision making.

8. Integration is lacking.
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Effect of using Computer Base MIS
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1. Fast processing and retrieval:

- With the use of computers in MIS the speed of data processing and retrieval has increased
tremendously.

2. Up-to-date information:

- With the use of computers in MIS the user gets up-to-date information for decision making.

3. In-depth analysis of data:

- With the use of computers more detailed analysis of business data can be done for better decision
making.
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4. Handling of more complex business operations:

- With the use of computers, more complex business operations can now be handled through MIS like
logistics, production schedules etc.

5. Integration of sub-systems:

- With the use of computer in MIS various sub-systems can now be integrated easily and more
comprehensive view can be generated for the use of top management.
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Major Constraints in operating a computer based MIS
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1. Qualified Staff Not Available

- The most important requirement for operating an effective MIS is that of qualified system and
management staff. Those officers should understand the views of their fellow officers.

- This problem may be overcome by grooming internal staff.

2. Quantifying the benefits of MIS is difficult

- Due to the difficulties in quantifying the benefits of MIS, the justification of the cost involved is
difficult.

- These constraints can be resolved by educating the top managers and telling them about the
advantages of MIS.

3. Expert’s Turnover is High

- Information Technology is an evaluating field and there is high turnover of expert for better pay –
packets, promotion etc. which cause a problem in operating MIS effectively.

- This problem can be handled by creating the better working conditions any paying at least at par with
similar organization.

4. Problem in selecting the sub-system

- Experts usually face the problem of selecting the sub system of MIS to be installed and operated upon.

- These constraints can be overcome by identifying the need and important of the function for which
MIS is installed first.

5. Staff’s co-operation not available

- This is a very crucial problem. It should be handled carefully and tactfully.

- This problem may be solved by educating the staff about the utility of MIS.

6. Standardized Approach not Possible

- Due to varied objectives of the business organizations, the approach adopted by experts for designing
and implementing MIS is a non standardized one.
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Pre Requisites of MIS
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1. Database

- The database is organized in such a way that accessing to the data is improved and redundancy is
reduced.

The main Characteristics of Database is given as follows: -

• The database should be User-Oriented.

• It is available to authorized persons only.

• It is controlled by a separate authority established for the purpose , known as Database

Management System.(DBMS)

2. Control of MIS

- MIS needs to be controlled from any deviations resulting from short-cuts being used by employees.
Without proper control MIS will lose its effectiveness.

3. Maintenance of MIS

- Maintenance implies that there should be changes/ modifications form time to time based on changing
needs.

4. Support to Top Management

- Implementation of MIS in any organization is a strategic step which can only be carried out with the
support of top management.

- Middle and lower management will not show willingness for new changes unless top management
shows its interest in such activities.

3. Qualified staff:

For effective MIS there should be two categories of experts:

- Computer experts - who understand management,

- Management experts - who understand computers,

5. Evaluation of MIS

- An effective MIS should be capable of meeting the information requirements of its executives in future
as well.

- The capability can be maintained by evaluating the MIS and taking appropriate timely action.
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Decision Support System
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Question 26
What is Decision Support System?
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Decision Support System

1. DSS is a type of computerized information system that supports business and organizational decision-
making activities.

2. DSS can be defined as a system that provides tools to managers to assist them in solving semi-
structured and unstructured problems in their own, somewhat personalized way.

3. A DSS Support the human decision making process, rather than a means to replace it.

4. Two types of planning languages that are commonly used in DSS are

1. General purpose planning languages

2. Special purpose planning languages.

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Question 27
Explain various Characteristic of DSS? [Nov 08, May 12]
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Characteristics of DSS

1. It should be easy to use.

2. It should be user friendly.

3. It should be flexible and adaptable.

4. It can be used for structured problems.

5. It focuses on decision rather than data & information.

6. This support decision making and occurs at all levels of management.

7. DSSs are used mainly for decision making rather than communicating decisions and training purpose.

8. The impact of DSS should be on decision where the manager’s judgment is essential and there is
sufficient structure for computers.
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Question 28
Explain the basic components of DSS.
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Components of DSS

DSS has following four components:

1. User

- The user of DSS is usually a manager with an unstructured or semi-structured problem to solve.

- The users do not need a computer background to use a decision support system for problem solving.

- The most important knowledge is a thorough understanding of the problem and the factors to be
considered in finding a solution.

2. User interface (planning language):

- Two types of planning languages that are commonly used in DSS.

General purpose planning language

- GPPL allow users to perform many routine tasks.

Special purpose planning language

- SPPL are more limited.

3. Database:

- DSS includes one or more database which contains routine and non- routine data from both external
and internal sources.

• External data may relate to market conditions, economic conditions, competitive positions etc.

• Internal data relates to various functions within the organization like accounts, production,
marketing, material management etc.

4. Model base

- Model base is the brain of the DSS because it performs the data manipulation operations like
Mathematical functions, Statistical functions and financial functions.

- There are so many types of model bases but most of them are custom developed models that do some
type of mathematical functions.
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Question 29
Implementation of Database.
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Database is implemented at three levels as shown below:

1. Logical level:

- It is designed by professional programmers, who have complete knowledge of DBMS.

- It deals with the nature of data stored, the scheme of the data storage which is logically divided into
various tables having rows and columns and the techniques for defining relationships with indexes.

2. Physical level:

- It involves the implementation of database on the hard disk i.e. storage of data in the hard disk.

- The management of storage and access is controlled by operating system.

3. External level (User level):

- The external level defines how users understand the organization of the data.

- A single database can have any number of views at the external level.
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Question 30
DSS are extensively used for accounting application support this statement by providing the users of DSS
in accounting applications.
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Use of DSS in accounting function: DSS is widely used in various accounting functions:
1. Cost accounting system:

- DSS is used for problems like pricing decisions, inventory control.

2. Capital budgeting system:

- DSS is used to see projects financial feasibility.

3. Variance analysis:

- Using DSS variance analysis can be done cost center-wise and then comprehensive figures can be
calculated and analyzed.

4. General financial analysis:

- Like ratio analysis, working capital management etc.

5. Portfolio management:

- Now-a-days mutual fund managers use DSS to assist them in achieving a suitable portfolio as per their
risk perceptions.
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Question 31
Differentiate between DSS and MIS
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Difference between DSS and Traditional MIS

Dimensions DSS Traditional MIS

Philosophy DSS provides integrated tools , data, MIS provides Structured
models & languages to end users information to end users.
Orientations External Internal
Flexibility Highly Relatively
Analytical capability More Little
System analysis Emphasis on - tools to be used in Emphasis on - information
decision process requirement analysis.
System Design Interactive process System development based on
static information requirement.
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Executive Information System
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Question 32
What is an executive information system? [Strategic Level IS]
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Executive Information System

1. It is a tool that is designed to meet the special needs of top-level managers.

2. It provides direct on line access to relevant information in a useful and navigable format.

3. It serves the strategic level. E.g. Top level managers of the organization.

4. ESS creates a generalized computing and communications environment rather than providing any
present applications or specific competence.
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Question 33
Explain various characteristic of EIS.[May 2011, Nov 2012]
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Characteristics of EIS

1. EIS is CBIS that serves the information need of top executives.

2. It is capable of accessing both internal and external data.

3. It provides extensive online analysis.

4. EIS provides rapid access to timely information and direct access to mgt reports.

5. It can easily be given a DSS support for decision making.

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Question 34
What are the principles which are required to be followed while designed an EIS?
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1. EIS must be easy to understand and collect.

2. It must be based on a balanced view of the organizations objectives.

3. It must be available to everyone in the org.

4. It must be encouraging for the management & staff to share ownership of the organization’s
objectives.

5. It must be evolving to meet the changing need of the org.

6. It must be reflecting everyone’s contribution in a fair and consistent way.

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Question 35
What are the characteristics of types of information used by Executives?
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1. Structure is Lacking

- Many of the decisions made by executives are relatively unstructured.

For Instance : What general direction should the company take?

2. High degree of uncertainty

- Executives have to make decisions in environment of uncertainty and sometimes there is no past
experience of a particular problem also since it never occurred in the past.

3. Future orientation

- Strategic planning decisions are made in order to shape future events.

- As environmental conditions change, organization must also change.

- It is the executive’s responsibility to make sure that the organization keeps moving towards the future
trends.

4. Informal source

- Senior executives rely heavily on informal source for key information.

For example : Lunch with friends in other companies, tours, chat with employees, social events etc.

5. Low level of detail:

- Most important decisions are made by observing broader trends.

- This can only be done by viewing the things in comprehensive manner.

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Question 36
What purposes are served by EIS?
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Purposes of EIS

1. Support learning:

- EIS helps executives to monitor the organization more closely.

2. Timely access to information:

- EIS allow executives to have timely access to latest information.

3. Highlights the problem:

- One of the key benefits of EIS is that it can highlight any problem in the system on a timely basis.
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Question 37
What contents are appropriate for EIS?
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Following data/information is generally contained in any EIS:

1. Anything which is useful for the executives

2. Targets and budgets of the organization in different functional areas.

3. Data about work processes in different departments of the organization.

4. Performance measurement indicators.

5. External information ranging in wide Variety

6. Information contents of EIS can change according to the changing environment.

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Question 38
How EIS is different from a Traditional IS? [May 2013]
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Difference between EIS and Traditional IS

Dimensions EIS Traditional IS

Level of Management For top or near top executive For lower staff
Nature of information Specific issues/problems Status reporting
access
Information sources External Internal
Information format Text with Graphics Tabular
Nature of Interface User – Friendly Computer operator generated
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Expert System
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Question 39
Explain Expert System.
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Expert System

1. An Expert System is a highly developed DSS that utilizes the knowledge generally possessed by a
human expert to solve a problem.

2. Expert Systems are software systems that imitate the reasoning processes of human experts and
provide decision makers with the type of advice they would normally receive from such expert
systems.

3. Expert system uses the concept of artificial intelligence to solve the problems.

4. It is useful for solving structured and semi-structured problems.

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Question 40
What are the areas where ES can be Used? [Business application of ES]
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Expert system can be used in the following areas:

1. Accounting and finance

- It provides tax advice, investment advice, tax planning, credit appraisal etc.

2. Marketing

- It provides Sales quotes, responding to customers enquires, determining discount policies.

3. Manufacturing

- It helps in determining whether a process is running correctly, analyzing quality and providing
corrective measures etc.

4. Personnel

- It is useful in assessing applicant qualifications, giving employees assisting at filling out forms.

5. General Business

- It helps in assisting with project proposals, recommending acquisition strategies, educating trainees,
evaluating performance.
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Question 41
Writ e short note on Need of Expert System.
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Need for Expert Systems

1. Expert professional employees are expensive and short in supply. Thus expert system can replace need
for human expert professional.

2. Human experts can handle only a few factors at a time, but expert system can consider several factors
at a time to solve the problem.
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Question 42
Explain the key benefits of Expert System.
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Benefits of Expert Systems:

1. Expert Systems preserve knowledge that might be lost through retirement, resignation or death of an
expert professional of the organization.

2. Expert Systems put information into an active-form so it can be used anytime.

3. Expert Systems help beginners in thinking the way experienced professional do.

4. Expert Systems are not subject to such human fallings as fatigue, being too busy, or being emotional.

5. Expert Systems can be effectively used as a strategic tool in the areas of marketing products, cutting
costs and improving products
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Question 43
Properties of Expert System.
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Problems areas for which expert system can be developed:

Some of the properties that potential applications should posses to qualify for Expert System

development are as follows:

1. Availability:

- One or more experts are capable of communicating how they go about solving the problems to which
the Expert System will be applied.

2. Complexity:

- Solution of the problems for which the Expert Systems will be used is a complex task that requires
logical inference processing, which would not be easily handled by conventional information
processing.
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3. Domain:

- The domain, or subject area, of the problem is relatively small and limited to a relatively well-defined
problem area.

4. Expertise:

- Solutions to the problem require the efforts of experts.

- That is, only a few possess the knowledge, techniques, and intuition needed.

5. Structure:

- The solution process must be able to cope with ill-structured, uncertain, missing, and conflicting data,
and a dynamic problem-solving situation.

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Question 44
Describe components of Expert System.
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Component of Expert Systems:

1. Knowledge Base:

- The knowledge base stores the rules, data and relationships that are used to solve problems and
contains specific facts about the expert area.

2. Inference Engine:

- The inference engine is the main processing component of the expert system.

- It consist of software programs that requests data from the user, manipulates the knowledge base and
provides a decision to the user.

- There are various reasoning techniques which are used by interface engine. These include backward
and forward chaining.

3. Knowledge Acquisition Subsystem:

- The Knowledge Acquisition Subsystem is the software component of an expert system that helps to
improve the logic and data of knowledge base.

4. User Interface:

- A user interface is the method by which an expert system interacts with a user.

- The user interface can ask questions from the user to get the required input for the inference engine.

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Question 45
Explain the limitation and uses of Expert System.
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Limitation of Experts system

1. Costly and complex system to develop, and also it takes a lot of time to develop expert system.

2. It is difficult to obtain the knowledge of experts in terms of how they specify a problem and how they
make the decisions.

3. It is also difficult to develop the programs to obtain the knowledge of experts for problems’ solutions.

Uses of Expert System:

1. Indian Revenue Department uses Tax Expert System to investigate tax evasions and frauds on the
basis of given tax returns details.

2. Doctors use expert system to diagnose the patient disease by providing symptoms of disease to expert
systems

3. Audit expert systems are used by auditors for audit related problems.
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OFFICE AUTOMATION SYSTEMS (OAS)
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Question 46
What is Office Automation System?
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Office Automation System (OAS) is among the newest and most rapidly expanding computer based
information systems.

The application of computers to handle the office activities is termed as office automation.

All the activities mentioned below have been made very simple and effective by the use of computers.

Different office activities can be broadly grouped into the following types of operations:

1. Document Capture:

- Documents originating from outside sources like incoming mails, notes, handouts, charts, graphs etc.
need to be preserved.

2. Document Creation:

- This consists of preparation of documents, dictation, editing of texts etc. and takes up major part of the
secretary’s time.

3. Receipts and Distribution:

- This basically includes distribution of correspondence to designated recipients.

4. Filling, Search, Retrieval and Follow up:

This is related to filling, indexing, searching of documents, which takes up significant time.

5. Calculations:

- These include the usual calculator functions like routine arithmetic operations for bill passing, interest
calculations, working out the percentages and the like.

6. Recording Utilization of Resources:

- This includes, where necessary, record keeping in respect to specific resources utilized by office
personnel.
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Question 47
Explain the Key Benefits of Office Automation System?
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1. Improve communication within an organization and between organizations.

2. Reduce the cycle time between preparation of messages and receipt of messages at the recipients’
end.

3. Reduce the costs of office communication both in terms of time spent by executives and cost of
communication links.

4. Ensure accuracy of communication flows.

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Question 48
Describe the four categories of Office Automation System?
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Text Processing Systems:

1. Text processing system is the most widely used office system since most of the communication takes
place in written format.

2. Text processing systems automate the process of development of documents such as letters, reports,
memos etc. They permit use of standard stored information to produce personalized documents.

3. The text processor may be simple word processing systems or desktop publishing systems.

4. The desktop publishing systems are often supported with laser printers, inkjet printers, scanners and
other such devices for producing good quality documents.

5. Example of text processing system is MS Word.

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Electronic Document Management Systems:
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1. The computer based document management system is used to store, retrieve and manage document
files or scanned copy of documents.

2. These systems are very useful in remote access of documents that is almost impossible with manual
document management systems.

3. In the case of internal communication document management systems can prove to be very useful.

For example,

The loan application form filed in a branch of a bank can be accessed by the sanctioning officer for
scrutiny at the head office or any office for scrutiny of loan proposals.

4. With computer based document management systems, location of the executive becomes irrelevant for
access to documents. Thus, these systems can be very useful in an office environment where traveling
executives share work space in the office.
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Electronic Message Communication Systems:[NOV 201 – 4 MARKS]
The three basic components based message communication systems are as follows:

1. Electronic Mail

2. Facsimile (Fax)

3. Voice Mail
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Electronic Mail:

Various features of electronic mail are stated below:

1. Electronic transmission:

- The transmission of messages with email is electronic and message delivery is very quick, almost
instantaneous.

2. Online development and editing:

- The email message can be developed and edited online before transmission.

- The online development and editing eliminates the need for use of paper in communication.

- It also facilitates the storage of messages on magnetic media, thereby reducing the space required to
store the messages.

3. Broadcasting and Rerouting:

- E-mail permits sending a message to a large number of target recipients.

- Thus it is easy to send a circular to all branches of a bank using e-mail resulting in a lot of saving of
paper. The e-mail could be rerouted to many people.

4. Integration with other Information systems:

- The e-mail has the advantage of being integrated with the other information systems.

- Such integration helps in ensuring that the message is accurate and the information required for the
message is accessed quickly.

5. Portability:

- E-mail renders the physical location of the recipient and sender irrelevant.

- The email can be accessed from any personal computer equipped with network.

6. Economical:

- E-mail is the most economical mode of sending messages.

- Since the speed of transmission is increasing, the time cost on communication media per page is
falling further, adding to the popularity of email.
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Facsimile (Fax):

1. Facsimile (Fax) is electronic communication of images of documents over telephone lines

2. Computer based fax technology automates fax communication and permits sharing of fax facilities

3. It uses special software and fax servers to send and receive fax messages using common
communication resources

4. These servers have the ability to receive fax messages and automatically reroute them to the intended
recipient after viewing it at the central computer, similarly, the managers in an enterprise can leave the
fax messages to the server which will send it to the intended recipient automatically.
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Voice Mail:

1. Voice mail is a variation of the email in which messages are transmitted as digitized voice

2. The recipient of the voice mail has to dial a voice mail service or access the e-mail box using the
specified equipment and he can hear the spoken message in the voice of the sender

3. The secured type of voice mail service may require the recipient to enter identification code before the
access is granted to the stored information.
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Teleconferencing and Video-conferencing Systems:
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1. Teleconferencing can conducted a business meeting involving more than two persons located at two or
more different places.

2. The teleconferencing helps in reducing the time and cost of meeting as the participants do not have to
travel to attend the meeting.

3. Teleconferencing may be audio or video conferencing with or without use of computer systems.

4. The computer based teleconferencing has the advantage of flexibility in terms of pre-recorded
presentations and integration with other information systems.

5. These systems are based on Personal computers featuring a digital camera and run on visual
communication software.

6. The communication links are still quite expensive making the desktop video conferencing useful only
for selected applications.
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Other Information System (OIS)

1. Knowledge management system

2. Functional business IS

- Cross functional IS : [ERP] + [CBS]

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Application of IS in Enterprise Process
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IS performs following 3 vital roles in business firms:

1. Support an organizations business process and operations.

2. Support business decision making.

3. Support strategic competitive advantage.

To operate IS effectively and efficiently a business manager should have following knowledge about
it:

1. Foundation Concepts

- It includes fundamental business and managerial concepts.

2. Information technologies

- It includes operations, development and management of hardware, software, data management,

networks and other technologies.

3. Business applications

- It includes major uses of IT in business steps.

i.e. processes, operations, decision making and strategic/ competitive advantage.

4. Development Processes

- It comprise how end users and IS specialists develop and execute business/It solutions to problems.

5. Management Challenges

- It includes “ how the function and IT resources are maintained.

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Cross Functional IS [CFIS]
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1. It is an integrated IS which integrates various departments.

2. It generates information as well as supports decision making.

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Enterprise Resource Planning [ERP]
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1. It is a process management that allows organizations to use integrated systems and automate many
back office functions such as technology, service and human resources.

2. ERP integrates 5 business functions –

Accounts, Finance, HR, Production and Logistics.

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Components of ERP/ Methodology for implementing ERP Model
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1. Software

- This is the most visible component which consists of several models such as finance, HR,CRM, SCM
etc.

2. Process Flow

- This component illustrates the information flow from different modules within ERP system.

- It helps to understand ERP system.

3. Customer Mindset

- With the help of ERP the customer mindset should be focused on making them comfortable with new
ERP System.

4. Change Management

- In ERP implementation change needs to be managed at several levels.

E.g. User attitude, resistance to change, business process.

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Benefits of ERP
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1. Improves workflow and efficiency.

2. Reduced duplication in data entry.

3. Establish uniform process for sharing information.

4. Reduced Inventory cost from better planning.

5. Improved customer satisfaction by improving delivery time and quality.

6. Faster collection based on better visibly of accounts.

7. Prepares consolidated picture for organization.

8. Streamline processes into single integrated system.

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Core Banking System
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Core banking system is a banking service provided by network bank which has branches where customers
may access their bank account and perform basic transaction from any branch.

‘CORE’ stands for ‘Centralized Online Realized Environment’.

E.G. Finacle, finware, finane, fleexcube.

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Elements of Core Banking System
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1. Opening a new account.

2. Process cash deposit and withdrawal.

3. Processing payments and cheques.

4. Making loans.

5. Calculating interest.

6. Managing CRM.

7. Establishing minimum balance criteria.

8. Maintaining records of all activities.

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