National Institute of

Business Management
Master of Business
Master of Business
Administration (MBA)
Administration (MBA)

Management Information System

 CONTENTS

Chapter Title Page No.

I INTRODUCTION AND BASIC CONCEPTS 5

II COMPOSITION AND STRUCTURE OF

MIS - DEVELOPMENT 18

III ROLE OF MIS IN ORGANIZATION -

PLANNING AND DECISION MAKING 29

IV IMPLEMENTATION OF MIS IN ORGANIZATION 44

V COMPUTER AND DATA MANAGEMENT IN MIS 59

VI EMERGING TRENDS IN MIS 78

VII MIS IN MARKETING INFORMATION SYSTEM 86

VIII FUTURE THRUSTS AND METHODOLOGIES OF

MANAGEMENT INFORMATION SYSTEMS 100
 CHAPTER - I
INTRODUCTION AND BASIC CONCEPTS

Objective
Management Information Systems are of pivotal importance for the array of industries and
organisations. MIS is an excellent tool to provide management information at all stages of decision
making, thus, greatly helping an organisation to achieve its set of goals and objectives. MIS may be
explained as a distinct methodology in conceiving, creating, planning and implementation of all managerial
functions.
An effective MIS helps to supply accurate, relevant and timely information to the
management of the organisation and that of a poor MIS may provide inaccurate, irrelevant and obsolete
information which becomes too expensive or fatal to an organisation.

CONCEPTS
The word ‘MIS’ comprises of three basic elements such as :
a) Management
b) Information
c) System

Management
The Management is the technique of getting things done through people by following careful
planning, organizing, staffing, directing and controlling. The effective management process includes
right communication, motivation, and leadership by incorporating dynamism in implementing an
integrated frame work of system. The word management also may be defined as working with and
through individuals and groups to accomplish total organisational goals. It may be applicable to any
organisation viz., business, educational institutions, hospitals, families, social institutions and political
organisations.
A management process involves planning, organising, motivating and controlling in the capacity
of Presidents, Chairperson, Department Heads, Foremen, Superiors, College Deans, Bishops and
Governmental Heads or even a well run Household Manager. Management hierarchy involves strategic
planning, Management control and operational supervision.
Planning involves setting up of goals for the Organisation’s development, (preparing work
maps, job charts etc.).
The first level i.e., strategic planning decides what should be the type of business now and
what should be the nature of business in the near future.
The next level, management control, includes processor functions that facilitate the
management of those processes delegated to the operational control level. An example of this is

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production scheduling, where a system is established wherein a product passes through various points
for transformation within a factory. The feed back received from the production scheduling process
helps the management to have proper control over the operation.

Operational control narrates the processes performed to control the basic product or services
of the Company.

Information

The concept MIS gives very high regard to the individual and his ability to use information.
MIS gives information through data analysis. Therefore, while analyzing data, it depends on many
academic disciplines. These generally include theories, principles and concepts from management
science, management accounting, operational research, organisational behaviour, computer engineering
science etc. Human psychology makes MIS more effective and useful. These disciplines are used in
designing the MIS, evolving decision support tools for modeling and decision making. The foundation
of MIS is the principles of management and practices. Management information system can be evolved
for a specific objective, if it is developed after a systematic planning and design. It demands for an
analysis of business, management views and policies, organisational culture and management style.

The concept therefore, is a blend of principles, theories and practice of management

information and system giving rise to a single product known as MIS.

Conceptual view of MIS

Information systems

Business goals and mission

Application of pure and Social sciences

Application of principles and practices of management

Use of database and knowledge base

Computers and information technology

The physical view of the MIS can be seen as an assembly of several sub-systems based on
databases in the organisation. These may range from data collection, transaction processing and

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validating, processing, analysing and storing the information in the database. The sub-system can be
at functional level or corporate level.

The physical view of the MIS can be outlined as follows :

MIS

Business information system

Mission critical applications

Functional information sub systems

Data and knowledge base

Data processing and analyzing system

Validating systems and storage

The MIS has been understood and described in a number of ways. It is also referred to as:
a) Information system
b) Information and decision system
c) Computer based information system
MIS can be defined in a number of ways :
1. The MIS is defined as a system which provides information support for decision making in
the organisation.
2. MIS is an integrated system of men and machines for providing the information to support
the operations, the management and decision making functions in the organisation.
3. MIS is defined as a system based on the database to the Organisation evolved for the purpose
of providing information to the people in the Organisation.

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 4. MIS can be explained as computer based information system.

In present day world the MIS is a computerized business processing system, generating
information for the people in the Organisation to meet the information needs for decision making to
achieve corporate objectives of the Organisation. In order to achieve better grip on the activity of
information processing, it is essential to have a formal system which should take care of the following
points.

n Handling of huge data.

n Confirmation of the validity of data and transactions.
n Complex processing of data and multi-dimensional analysis.
n Quick search and retrieval.
n Mass storage of data
n Communicating the information system to the user.
n Achieving the changes needed of the information.
The important ingredients of MIS are as follows:

(i) Concept and value of information such as planning, implementation and controlling.
(ii) The management functions associated with information.
(iii) MIS incorporates the dynamism associated with its operations as well as implementation in
an integrated frame work of system approach.

Systems

A system is an integrated set of components or entities, that interact to achieve a particular

function or goal. The system has characteristics such as boundaries, outputs, inputs, methods of
converting inputs into outputs and system interfaces.

Systems are composed of interrelated and inter dependent sub systems. Eg. a college class
room, which includes class room situation including instructor, students, text books and facilities. This
can be depicted as below.
Input Teacher Students Output
Students with
skills and
(Students without Textbooks and Facilities knowledge
knowledge and skills) Course material

System boundaries
Every system has a boundary that defines its scope of activities. For example, the activities
in a class room include lectures, discussions, examinations, grading etc., with the responsibilities of a
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teacher to perform duties. In this case boundary delineates area of responsibility. While defining a
system one should establish its boundaries.

Sub system
The main system consists of several sub-systems; each of these has elements, interactions
and objectives. Sub-systems perform specialised tasks related to overall objectives of the total system.
For example, a defined degree of course in a college will have several courses as a sub-system. In a
business system various functions such as marketing, finance and product manufacturing are sub-
systems.

Inputs and Outputs

The inner working of a system or sub-systems are organized to produce outputs from inputs.
In this conversion process some value or utility should be added. For example, training programme
to produce trained employees with adequate knowledge and skills.

Interface
Interface is a connection at system or sub system boundaries. This serves as a medium to
convey the output from one system as the input of another system. For example, two typical business
systems that interface with each other are inventory control and purchasing.
Information is generally defined as “ data that has been processed into a form that is
meaningful to the recipient and whose real value has been perceived”. The term ‘data and information’
are often used interchangeably, however, data is the raw material for the information. The constrains
of information communication can be classified into three levels: -
a) Technical level How accurately can information be transmitted?
b) Presentation level How precisely do the transmitted symbols, signs,
convey the desired meaning?
c) Effectiveness level (quality) How suitable is the message to motivate human action?
Different management levels need different types of information as they perform different
functions in an organisation.
Most of the engineering products are complicated, hence can only be designed by considering
them as a system. System is explained as a set of elements joined together to achieve common
objectives. A system is made up of sub-systems composed of further sub-systems. For example, the
business organisation is a system and parts such as divisions, departments, functions, units etc. are
sub-systems.
The word ‘system may be defined as engineering artifacts that are easily analyzed, described
or designed and is an assembly of simpler components’.

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Illustration of system :-
System
(Business organisation)

Sub-systems

Marketing Production Finance Materials Personnel

Sub-sub system of marketing

Sales Marketing Promotion

Research

Sub-sub-sub-system of promotion

Publicity Advertising Direct Selling

A piece of data is a system element, for example, pay cheque is a system and receiver’s
names, amount etc., are sub-systems.

Information needs at different management levels:

(1) Top management Unstructured, non-programmed, future, inexact, external etc.\
(2) Operating management Structured, programmed, exact, historical, internal etc.
(3) Middle management In between of (1) and (2)

The information model from analysts point of view are described below:
Raw datum A pure form of facts.
Compiled data Data put together with or without processing.
Information Complied data which confirms a shift from the current
knowledge state of the reviewer.
Knowledge It is totality of a range of information assimilated either through
years of experience or by formal research studies.
Behavioural drive It is the nature of ‘being’ constituted of values, attitudes, beliefs,
needs and ambitions.
Behaviour Is a manifested effect of information determined by nature of
being who reacts to the information.

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Characteristics and Organization of MIS
MIS should have a few parameters which are explained as follows:
1. System approach : The system approach involves holistic approach to the study of the system.
This approach is anti-piece meal, in the sense taking comprehensive view or complete picture
of all sub-systems that operate within the organisation, thus avoiding serious short comings.
2. Management orientation : This is a very important characteristic and for MIS designs, top
down approach in developing should be followed.
3. Information need based: MIS design and development should be as per information needs
of managers at different levels like strategic level, management control level and operational
control level.
4. Exception based: MIS should be developed on exception based reporting principle. When
there is an abnormal situation, it should be reported to the decision making authority of
appropriate level.
5. Integrated : It is a very indispensable characteristic of MIS and it produces more meaningful
information. Eg:- For developing an effective production scheduling system the balance of the
following factors is necessary.
(a) set up cost
(b) work force
(c) over time rates
(d) production cost/capacity
(e) inventory level
(f) capital requirements and
(g) customer service.
6. Common data flow: This helps to have an opportunity to avoid duplication and redundancy in
data gathering, storage and dissemination. The common data flow concept supports several
basic tenants of system analysis- avoiding duplication, combining similar functions and simplifying
operations.
7. Heavy planning : In MIS generated over long periods, a heavy planning is involved. MIS
designer should have future objectives and needs of the company in mind. The designers must
avoid the possibility of system getting obsolete.

8. Future oriented: The emphasis has to be on the future instead of past or historical information.

Management Information System is a system having combination of persons, missions,

procedures and data base as its elements, which pool data from internal and external sources of an
Organisation, and after processing of these data, supply management information to Managers in an
organisation, to support decision-making process of management.

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 It may be also explained as a system in which all the informations applicable to requirements
of each management level, whenever and wherever, should be prepared through the collection and
accumulation of internal and external information proper to each corporation/organisation. The
generalized concept of information system is depicted diagrammatically.

DECISIONS REPORTS

PRODUCT

ENGINEERING PURCHASING

RESEARCH MANUFACTURING

FINANCE MIS INVENTORY

PLANT DISTRIBUTION

PERSONNEL SALES

FORECASTS

THE GENERALISED REPRESENTATION OF MIS

Organisation of MIS

The type of business decides the location, organization and importance of MIS. In some
organisations, MIS pervades all areas of business. The MIS can be organised under financial
department, under the direct control of CEO or as different entity depending on the importance of
MIS to the organization.
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Information characteristics

It is very logical that information attributes, which are important for evaluation of MIS
effectiveness and relevant for analysis of information of managers at different levels, depend on
following characteristics: -

1. Time limit: For effective decision making information must reach the decision maker at right
time.

2. Accuracy: Accuracy is a paramount key attribute of management information. It means that

information is free from mistakes, errors and it is clear and accurate reflecting the meaning and
data on which it is based. It conveys an accurate picture to the recipient.

3. Relevance: The management information must be relevant to the recipient for making decision.
Irrelevant information may not be tolerated by top management. Information should be clear
and specific at each level of reporting. The data should be updated with adequate explanation.
Over loading of the information should be avoided to prevent chaos or crisis.

4. Up-to-date: Apart from being timely, the information must be up to date, stale information will
lead to faulty decision.

5. Adequacy: The information provided must be sufficient enough for a manager to take a decision
based on it. Inadequate information will result in a wrong decision, detrimental to the Organisation.

6. Avoid overloading: Overloading with information will lead to chaos and faulty decision.
Whereas information must be adequate, voluminous unwanted information will lead to confusion
and waste of effort.

7. No-duplication: Avoid overlapping and redundancy of information. Duplicate information will

result in ineffectiveness of decision making.

8. Explicitness: A report is said to be good if further analysis is not required by the recipient.
The report should be such that a Manager need not waste anytime on further processing to
take a decision. This reduces wasteful time and expenditure.

9. Exception-based reporting: Report has to be precise and such information which will be of
use for the appropriate level only need be reported. This will result in saving of time for the top
Management and help the Management to devote its precious time to pursue growth of the
organization.

10. Format clarity: MIS of an organisation should provide reports in simple formats to read and
understand. The headings, codes, columns, rows and structures of the report formats should
be meaningful. Therefore, a good MIS should generate reports in clear formats for Managers
at all levels. No duplication of data should be reported.

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Defective reports generated by defective MIS in terms of information attributes: -

Characters Defective report

Timeliness Late reports
Accuracy Reports containing inaccurate information
Relevance Irrelevant information
Up-to-dateness Without current information
Adequacy Inadequate information
No overloading Over loaded information
Format clarity Ambiguity
No duplication Duplicate information
Explicit Require further analysis
Exception based Not based on exception reporting

Decision making

A decision may be defined as an act of choice wherein an executive forms a conclusion

about what must be done in a given situation. A decision may be explained as a particular course of
action chosen by a manager as a most potent tool at his disposal for achieving the goals or solving
the problem beset with the Organisation. It should be the simplest in a selection of alternatives.

Decision making is a science and art involving both intuitive and deductive faculties. It includes
activities of coordination, information processing, problem solving and evaluating that precede the
decision. The decision may depend on the following.

a) Nature of decision making situation

b) Ambience of decision making
c) Personalities involved.

The decision made in an organisation may be classified as :

(i) Strategic and tactical

(ii) Programmed / non-programmed
(iii) Organisational or personal
(iv) Policy and operating
(v) Administrative and executive
(vi) Individual and group.
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Role of information in decision making

Most decisions such as formulating and introducing new products, selecting marketing
channel, enhancing sales etc are to be carefully analyzed and deliberated. Decision making involves
the following steps:

(1) Setting of goals

(2) Identifying the problems
(3) Analysis of the problems
(4) Developing alternative solutions
(5) Evaluation of the alternative solutions
(6) Selection of one of the alternative solutions
(7) Implementation of decision
(8) Follow up and control.

Nomenclature of information system

The concepts of Information System has evolved over years since it is a concept which is
matter of degree rather than absolute. Therefore, it is classified for convenience in the following way
and there will be overlapping among the following classes.

1) Transaction Processing System (TPS) : TPS uses data and produces data.
2) Management Information System (MIS) : Uses TPS for its data inputs. Generates
information out of data which can be used for control of operations, planning and problem
solving.
3) Decision Support System (DSS) : It is an information system application that assists decision
making.
4) Executive Support System (ESS) : It is an extension of MIS meant for Chief Executive of
an organization.
From all the above discussions, it emanates that the concept of MIS continues to evolve.
The hierarchy of information system is as follows :

ESS - DSS - MIS - TPS

Executive Decision Management Trasaction

Support Support Information Processing
System System System System

The above figure illustrates the overlapping nature of the various classes of information.

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Summary

Management Information is a critical resource in the operation and management of

organizations. Timely availability of relevant information is vital for effective performance of managerial
functions such as planning, organizing, leading, and control. An information system in an organization is
like the nervous system in the human body: it is the link that connects all the organization’s components
together and provides for better operation and survival in a competitive environment. Indeed, today’s
organizations run on information.

The term management information system usually refers to a computer-based system, one
that is designed to support the operations, management, and decision functions of an organization.
Information systems in organizations thus provide information support for decision makers. Information
systems encompass transaction processing systems, management information systems, decision support
systems, and strategic information systems.

Information consists of data that have been processed and are meaningful to a user. A system
is a set of components that operate together to achieve a common purpose. Thus a management
information system collects, transmits, processes, and stores data on an organization’s resources,
programmes, and accomplishments. The system makes possible the conversion of these data into
management information for use by decision makers within the organization. A management information
system, therefore, produces information that supports the management functions of an organization.

Information is data that have been put into a meaningful and useful context and communicated
to a recipient who uses it to make decisions. Information involves the communication and reception of
intelligence or knowledge. It appraises and notifies, surprises and stimulates, reduces uncertainty, reveals
additional alternatives or helps eliminate irrelevant or poor ones, and influences individuals and stimulates
them to action. An element of data may constitute information in a specific context; for example, when
you want to contact your friend, his or her telephone number is a piece of information; otherwise, it is
just one element of data in the telephone directory.

Computers have made the processing function much easier. Large quantities of data can be
processed quickly through computers aiding in the conversion of data to information. Raw data enter
the system and are transformed into the system’s output, that is, information to support managers in
their decision making.

The characteristics of good information are relevance, timeliness, accuracy, cost-effectiveness,

reliability, usability, exhaustiveness, and aggregation level. Information is relevant if it leads to improved
decision making. It might also be relevant if it reaffirms a previous decision. If it does not have anything
to do with your problem, it is irrelevant.

Information has a great impact on decision making, and hence its value is closely tied to the
decisions that result from its use. Information does not have an absolute universal value. Its value is

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related to those who use it, when it is used, and in what situation it is used. In this sense, information is
similar to other commodities.

Information supports decisions, decisions trigger actions, and actions affect the achievements
or performance of the organization. If we can measure the differences in performance, we can trace the
impact of information, provided that the measurements are carefully performed, the relationships among
variables are well defined, and possible effects of irrelevant factors are isolated. The measured difference
in performance due to informational factors is called the realistic value or revealed value of information.

Questions:
1. Why is MIS important to an organization?
2. What are the basic elements of MIS. Explain?
3. While defining a MIS, what are the boundaries to be established?
4. What is an interface?
5. Define a System? Illustrate with suitable example?

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 CHAPTER - II
COMPOSITION AND STRUCTURE OF
MIS - DEVELOPMENT

Objective
The subject of management information system has inspired and evoked emotions as wide
as spectrum of light. It adds in the understanding of MIS concept and is greatly useful to Organisations
in designing or redesigning of their information system.
Information management is the collection and management of information from one or more
sources and distribution to one or more audiences who have a stake in that information or a right to that
information. Management here means the organization of and control over the structure, processing
and delivery of information. Information Management (IM) is characterized by the phrase ‘Getting the
right information to the right person at the right place at the right time’. It does not, however, address the
question of what constitutes the ‘right information’. This omission can be addressed through the philosophy
of Informational management (IaM). IaM is characterized by the phrase, ‘Knowing what information
to gather, knowing what to do with information when you get it, knowing what information to pass on,
and knowing how to value the result.’ This identifies the ‘right information’ and the resulting whole
solution is worth more than the sum of its parts.
Composition of MIS – Different approaches
MIS is a system where Manager could access detailed piece of information instantaneously.
For example, it also explains annexures and appendages of accounting system and financial summary
statements.
The basic composition of MIS can be explained in terms of different approaches:
1) Physical components
2) Information system functions
3) Decision support
4) Management hierarchy
5) Organisational functions.
MIS can be defined as an integrated man-machine system that provides information to support
planning and control function of Managers in the Organisation.
MIS reveals clear planning targets to control operations and information of performances.
The major purpose of MIS could be generalized as to sub-serve managerial functions, routine
collection of information, support and review planning control decisions.
The five approaches mentioned above are explained in detail below.

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1. Physical components
Physical components of MIS can be explained to a person interested in understanding structure
of MIS in the organisation. The physical components are;
Hardware Refers to physical computer equipment and associated devices such
as CPU, monitor, keyboard, printer, discs, tapes and CD’s.
Software It is a broad word assigned to the instructions that direct the
operations of the hardware. This can be further classified as a system
software and application software.
Data Base This consists of all data used by the application software and stored
in files.
Procedure Regular operating procedures like manuals also form a part of physical
structure.
Operating Personnel like computer operator programmer, system analyst, System
Technician Manager are users of information system.
MIS helps to assess internal sources, market research, government rules, publications,
advertisements, external data and special analysis of information needed.

2. Information system functions

The information system could be explained in terms of its processing functions.
i) Transaction: Information system process transactions. Transaction may be defined as an
activity taking place in the Organisation. It may be internal or external. For example - purchase
or sale of a product in an Organisation.
ii) To produce reports: Many reports are produced on a regular basis which are termed as
schedule reports. It may be adhoc or special reports.
iii) To process inquiries: Data base information system is utilized for processing inquiry. They
may be regular with a pre-defined format or adhoc inquiries.
iv) To process interactive support applications: Various types of models are used for
processing applications designed to support planning, analysis and decision making. The mode
of operation is interactive with the user responding to questions and requests for data yielding
immediate results.
v) To maintain master files: Information system is used to create and maintain master files of
an organisation. For example :
a) processing of pay slips,
b) wages,
c) employee’s rate of pay,
d) deduction etc.
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3. Decision support

The basic structure of the MIS can be differentiated on the basis of its support in decision
making in an Organisation. The decision can be highly structured or unstructured. A structured decision
is programmable and they are routine in nature. The information system support will differ for two
types of decision and so also information system. Some decisions will fit easily into this classification,
but some decisions are more or less structured and have some elements that are programmable and
some that are not, such decisions are called semi-structured decisions.

4. Management Hierarchy

MIS supports management activities in terms of hierarchy and they can be classified
into three levels : (a) strategic planning level
(b) management control level

(c) operation control level

a) Strategic planning deals with long term considerations such as choice of business, market
strategy, product mix, etc.
b) Management control level has a medium term planning horizon including acquisition and
organisation of funds, programming work schedule, training personnel etc.
c) Operational control is generally short-term decisions. Immediate operations like production
level pricing, inventory are as a result of operational control.
Therefore, information system will be different for all the three levels of management hierarchy
even though the management activities and information processing for the 3 levels are inter-related.
Eg: Inventory control functions at all levels.

5. Organisational functions

MIS is essentially a federation of information systems that are designed to support the functions
of sub-system of an organisation.
There is no set classification of functions but a designed group of functions are necessary in
any manufacturing organisation which include production, sales, finance and accounting, materials,
personnel, marketing and information systems. Each of the above function has unique information needs
and requires specific information support.

MIS development approaches

MIS development is construed as a process involving various phases. A clear understanding

of these approaches would be necessary to make a proper selection for development of MIS and to
ensure proper implementation and running of systems. The following models are used for MIS
development:
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 I.System development life cycle (SDLC)
II.Prototyping

I SDLC APPROACH
In this approach, a system is visualized as a living organism with different phases of life such
as birth, growth, maturity and death. The following are the phases of it.
1.Investigation
2.Analysis
3.Design
4.Construction
5.Implementation and
6.Maintenance

1. System investigation
This consists of two sub-stages :
i) Problem definition
ii) Feasibility study (Organisation, Economic, Operation)
i) Problem definition
It is always essential that problem to be solved should be clearly defined for the system
development. System analyst should prepare a written statement of the objectives and scope of the
problem based on interview with the Management and the end users. System analyst should also
provide rough estimate of the costs involved for the system development.
ii) Feasibility studies
Feasibility report can be considered as high level capsule version of entire process, trying to
answer number of questions about the problem. The report should be brief and crisp to the objectives
with sense of scope and should be presented to the user and Management. Feasibility study report
represents an excellent model of the system analyst’s understanding of the problem to provide a clear
sense of direction for the future development of the system. The main objectives of feasibility studies
is to evaluate alternative systems and to propose most desirable method for development. The four
major categories, to which the feasibility of a proposed system can be evaluated are given below :
a) Economic feasibility: To identify and understand expected rise in returns, reduction in costs,
lowering required investment and other benefits over the costs of developing and operating
proposed system.
b) Technical feasibility: Whether exact and reliable hardware and software capable of meeting
the needs of the proposed system can be developed in time.

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 c) Organisational feasibility: This report deals with how good the proposed information
system will support the organisation to implement strategic plans for information system.
d) Operational feasibility: The attitudes of the management, employees, customer, suppliers
and so on towards the proposed system.

2. System analysis
The system analysis involves detailed examination of :
— The information needs of the organisation and its end-users.
— Existing information system (activities, resources, and products).
— Expected information system.

3. System design
System design specifies how the system will meet the objectives, set. The system design
should stress on the following activities such as user interface, data and process design.

4. Construction and testing

The system is developed according to the specification to a physical form. The required
programme are coded, debugged and documented. The system is tested with some old or new data
to test its ability to cope up with the objective of system change.

5. Implementation
The system implementation stage involves hardware and software acquisition, site preparation,
user training and installation of the system.

6. Maintenance
System should be maintained and updated to make desirable improvements.

II. PROTOTYPING
Prototyping approach is easy and convenient compared to SDLC since it is comprehensive
and does not include all the requirements of the user. The process of prototyping includes:
1. Identifying the user’s basic information requirements
2. Developing the initial prototype system
3. Use of prototype system to refine the users requirement and
4. Revise and enhance the prototype system.
Generally the user is requested to use the system and suggest required modifications to
improve the system. The feed back, which is the basis for designing the system, is made use of to
prepare specification documents.

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The processes involved are described below:
1. Identification of the user’s basic information requirements
In this case user identifies basic requirement in terms of output from the system. The designer
should establish realistic user expectations and calculate the costs for the development of prototype.
2. Development of the initial prototype system
In this step functional interactive application system is developed that, is required by the
user. The prototype is developed using high level language. More emphasis is laid in the speed rather
than efficiency of operations.
3. Use of prototype system to refine the user’s requirements
This facilitates the user to get the experience with the system and to understand what it does
and does not perform. The user decides the changes necessary to have a control on development
time.
4. Revise and enhance the prototype system
In this step designer makes required changes using basic principle. The emphasis is on speed
to complete the modification and return to the user.
Prototyping approach is highly suitable for the large organizations with multiplicity and
complexity of the operations involved. Prototyping methodology has significant advantages in
development of applications having high uncertainty as to requirements:
1. Ability to ‘try out’ ideas without incurring huge costs.
2. Low cost for development where requirements change frequently.
3. The ability to get a functioning systems into the hands of the user quickly.
MIS in today’s world of ever increasing complexities of business and management become
essential to survive and grow. MIS supplies accurate, relevant and timely information to the Management
of the Organisation. If the MIS is poorly developed, designed and implemented, becomes irrelevant
or obsolete to improve an Organisation.

Development of MIS
Development of MIS is vital and most important in any Organisation for its success. The
Organisation should have top management executives to involve with commitment and proper direction.
The important basic questions to be answered are:-
a) What should be the characters of MIS ?
b) In what manner study should be organised ?
c) To what extent sophistication is required ?
d) Should the total system be developed or critical sectors only be built ?
e) What will be the cost of the system ?

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Objectives of MIS and a comparison with Business Plan
A long-range MIS plan provides direction for the development of systems and helps to
achieve targets against time frame.
It is essential to develop the goals and objectives for the MIS to support business goals.
The MIS objectives should consider management philosophy, policy, constraints, business risks, internal
and external environment of the Organisation and business.
The typical goals and objectives of the MIS are as follows :
— Provide online information on the stocks, markets and accounts balances.
— The query processing should not exceed more than three seconds.
— The focus of the system will be on end user computing and access facilities.
— Information support will be first in the strategic areas of management such as marketing or
service of technology.

Business plan versus MIS plan

Business plan MIS plan

1. Business goals and objectives MIS objectives consistent to the goals and
objectives.
2. Business plan and strategy Information strategy for the business plan
implementation playing a supportive role.

3. Strategy planning and decisions Architecture of MIS to support decisions.

4. Management plan for execution and control System development schedule,matching

the plan execution.
5. Operation plan for the execution Hardware and software plan for the
procurement and the implementation.

The MIS designer has to take a number of strategic decisions for the achievement of MIS
goals and objectives. They are listed below :
1. Development strategy.
2. System development strategy.
3. Resources for system development.
4. Manpower composition.

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 A model of the MIS plan:
Contents Particulars Focus
Corporate information Business environment and Where are we?
current operations
Corporate philosophy Policy, guidelines, culture What is the foundation
of business?
Corporate mission / Current and new mission / Where do we want to
goals/ objectives goals/objectives reach?
Business risk and rewards Clear quantitative statements What is the risk? Is it
on these factors showing worth the risk?
a trade off between
the risk and rewards
Business policy and strategy Details of the strategic and How do we achieve the
policy decisions affecting goals and objectives?
the business
Information needs Strategic/planning, operational What is the key
information?
Architecture of the plan Information technology details What are the tools for
achievement?
Schedule of development Details of the system and When and how will it be
sub systems and their linkage achieved?
charted against the time scale.
Organisation and execution Manpower and delegation Who will achieve it?
of the plan details. Internal and
external resources
Budget Details on the investment How much will it cost?
schedule and benefits
Critical steps in building MIS
In the development of MIS the following steps are recommended for successful functioning:
i) Study the organisation
ii) Identification of decision responsibilities
iii) Establishing information flow to different decision centres
iv) Evaluate the information flow
v) Development of conceptual design of the new system
vi) Production of detailed system for creation of data bank and out put from the system
vii) Implementation of the entire system.

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Cost / Benefit analysis
In establishing cost estimates for a system, the organisation should consider several cost
factors such as hardware, personnel, facility, operating and supply costs.
1. Hardware costs generally relate to the actual purchase or lease of computer and peripherals
like printer, disk drive, tape unit, ink etc.
2. Personnel costs include staff salaries and other benefits such as health insurance, leave travel
and sick pay. All these costs become recurring once the installation of the system is over.
3. Facility costs and expenses incurred in the preparation of physical facilities like flooring, lining
acoustics, lighting and air conditioning. These are regarded as one time costs.
4. Operating costs are associated with day-to-day operations of the system. The total costs
depend upon number of employees required, shifts, experience and caliber of the operating
staff.
5. Supply costs are highly variable with increased use of the system. They include paper, ribbons,
discs and other materials.

Determination of cost / benefit ratio

This technique reveals cost / benefit analysis and rules associated within the system. The
outlined steps are as follows :
a) Establishment of costs and benefits pertaining to a defined project
b) Categorization of different benefits for analysis
c) Selecting exact method for evaluation
d) Interpretation of data of the analysis
e) To take right action.

Summary

All businesses share one common asset, regardless of the type of business. It does not matter
if they manufacture goods or provide services. It is a vital part of any business entity, whether a sole
proprietorship or a multinational corporation. That common asset is information. Information enables
us to determine the need to create new products and services. Information tells us to move into new
markets or to withdraw from other markets. Without information, the goods do not get made, the
orders are not placed, the materials are not procured, the shipments are not delivered, the customers
are not billed, and the business cannot survive.

But information has far lesser impact when presented as raw data. In order to maximize the
value of information, it must be captured, analyzed, quantified, compiled, manipulated, made accessible,
and shared. In order to accomplish those tasks, an information system (IS) must be designed, developed,
administered, and maintained.

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 An information system is a computer system that provides management and other personnel
within an organization with up-to-date information regarding the organization’s performance; for example,
current inventory and sales. It usually is linked to a computer network, which is created by joining
different computers together in order to share data and resources. It is designed to capture, transmit,
store, retrieve, manipulate, and or display information used in one or more business processes. These
systems output information in a form that is useable at all levels of the organization: strategic, tactical,
and operational. Systems that are specifically geared toward serving general, predictable management
functions are sometimes called management information systems (MIS). The administration of an
information system is typically the province of the MIS or information technology (IT) department
within an organization.

The design of an information system is based on various factors. Cost is a major consideration,
but there certainly are others to be taken into account, such as the number of users; the modularity of
the system, or the ease with which new components can be integrated into the system, and the ease
with which outdated or failed components can be replaced; the amount of information to be processed;
the type of information to be processed; the computing power required to meet the varied needs of the
organization; the anticipated functional life of the system and/or components; the ease of use for the
people who will be using the system; and the requirements and compatibility of the applications that are
to be run on the system.

There are different ways to construct an information system, based upon organizational
requirements, both in the function aspect and the financial sense. Of course, the company needs to take
into consideration that hardware that is purchased and assembled into a network will become outdated
rather quickly. It is almost axiomatic that the technologies used in information systems steadily increase
in power and versatility on a rapid time scale. Perhaps the trickiest part of designing an information
system from a hardware standpoint is straddling the fine line between too much and not enough, while
keeping an eye on the requirements that the future may impose.

Applying foresight when designing a system can bring substantial rewards in the future, when
system components are easy to repair, replace, remove, or update without having to bring the whole
information system to its knees. When an information system is rendered inaccessible or inoperative,
the system is considered to be “down.”

A primary function of the maintaining an information system is to minimize downtime, or

hopefully, to eradicate downtime altogether. The costs created by a department, facility, organization,
or workforce being idled by an inoperative system can become staggering in a short amount of time.
The inconvenience to customers can cost the firm even more if sales are lost as a result, in addition to

27
any added costs the customers might incur. The location and retrieval of archived information can be
a direct and logical process, if careful planning is employed during the design of the system. Creating
an outline of how the information should be organized and indexed can be a very valuable tool during
the design phase of a system. A critical feature of any information system should be the ability to not
only access and retrieve data, but also to keep the archived information as current as possible.

Questions:
1. What are the different approaches used to explain the composition of MIS? Explain?
2. Discuss the models used for MIS development?
3. What are the goals and objectives of MIS? Compare MIS plan with a Business Plan?
4. What are the Strategic decisions taken by a MIS designer for achieving MIS goals and
objectives?
5. Prepare a model of MIS plan under the following heads: Contents, Particulars and Focus?

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 CHAPTER - III
ROLE OF MIS IN OR GANIZATION - PLANNING AND
GANIZATION
ORGANIZA
DECISION MAKING

Objective
Planning means taking a deep look into the future, assessing the likely events in the total
business environment and the course of action to meet any eventuality. It further means generating the
courses of actions to meet the most likely eventuality. Planning is a dynamic process. As the future
becomes the present reality, the course of action decided earlier may require a change. Planning,
therefore, calls for a continuous assessment of the pre-determined course of action versus the current
requirements of the environment. The essence of planning is to see the opportunities and the threats
in the future and pre-determine the course of action to convert the opportunity into a business gain,
and to meet the threat to avoid any business loss.
Planning involves a chain of decisions, one dependent on the other, since it deals with a long
term period. A successful implementation of a plan means the execution of these decisions in a right
manner one after another.
Planning, in terms of future, can be long range or short range. Long range planning is for a
period of five years or more, while short range planning is for one year at the most. The long range
planning is more concerned about the business as a whole, and deals with subjects like the growth
and the rate of growth, the direction of business, establishing some position in the business world by
way of a corporate image, a business share and so on. On the other hand, short range planning is
more concerned with the attainment of the business results of the year.

Essentiality of strategic planning

There are some compelling reason which force all the organisations to resort to strategic
business planning. The following reasons make planning an essential management process to keep
the business in a good shape and condition.
a. Market forces
b. Technological change
c. Complex diversity of business
d. Competition
e. Environment (Threats, Challenges and Opportunities)
a) Market forces
It is very difficult to predict the market forces such as the demand and supply, the trend of
the market growth, the consumer behaviour and the choices, the emergence of new products and the
new product concepts.

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b) Technological change
There are a number of illustrative cases throughout the world on the technological
breakthroughs and changes which have threatened the current business and also creating new business
opportunities. The emergence of the microchip, plastic, laser technology, fiber optics technology, nuclear
energy, wireless communication, audio-visual transmission, turbo engines, thermal conductivity and
many more, are the examples which have made some products obsolete, threatening the current
business, but at the same time, have created new business opportunities. The technological changes
have affected not only the business prospects but also the managerial and operational styles of the
Organisations.
c) Complex Diversity of Business
As the business grows, it reaches a stage where the strategies such as the expansion - vertical
or horizontal, integration - forward or backward, diversification - in the same line or in the diverse
line of business, are the issues which the Management is required to handle. These issues are investment
oriented and have a far reaching effect on the business growth, direction and profitability.
d) Competition
Competition is a natural phenomenon in business, and it has to be dealt with in a proper
manner to protect business interests. This means that the management has to continuously evolve new
strategies to deal with the competition. Evolving strategies and their implementation, calls for forward
thinking and planning, without which it is not possible to handle competition.
Competition forces the management to look for new products, new markets, and new
technologies to keep the market share intact, the process controlled and the quality improved.
Strategies also have to be implemented in a proper sequence as business competition demands an
intricate planning, testing and implementation of the strategies. The competition should never be
underestimated and has to be met squarely through corporate planning.
e) Environment
The environment is beyond the control of the management. Depending upon the Organisation’s
business and its purpose, different environments have bearing on the fortunes of business. It could be
one of the social, business, economic, industrial, technological environments affecting the business.
Many a times, it could be a mix of different environments. The environmental changes are difficult to
predict and are generally slow. Therefore, many times the managements, are caught unaware by the
environmental changes.

Development of the Business Strategies

Long range strategic planning
In the very beginning of the planning process, it is necessary to establish and communicate
to all concerned, the social and economic responsibilities of the organisation. In order to discharge

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these responsibilities, it is necessary to decide the purpose of the organisation for which it works.
Many Organisations call it a mission.
The mission or the aim of an Organisation is a broad statement of the Organisation’s existence
which sets the direction of the Organisation and decides the scope and the boundaries of the business.
The task after deciding the mission or the aim is to set goal(s) for the Organisation. The
goal is more specific and has a time scale of three to five years. It is described in the quantitative
terms in the form of a ratio, a norm or a level of certain business aspect such as the largest share,
leader in the industry, dominant in certain product, quality, reach and distribution, etc.
After determining the mission and the goals, the next task is to set various objectives for the
organisation. The objectives are described in terms of business results to be achieved in a short duration
of a year or two. The objectives are measurable and can be monitored with the help of business
tools and techniques. Objectives may be the profitability, the sales, the quality standard, the capacity
utilization, etc. When achieved, the objectives will contribute to the accomplishment of the goals and
subsequently the mission.
The next step in the planning process is to set targets for more detailed working and reference.
The objective of the business is to be translated in terms of functional and operational units for easy
communication and decision making. The targets may be monthly for the sales, production, inventory
and so on. The targets will be the direct descendants of the objectives.
The success in achieving the goals and objectives is directly dependent on the management’s
business strategies. Business is like a war where two or more business competitors are set against
each other to win and are constantly in search of a strategy to win. The strategy means the manner in
which the resources, such as the men, the material, the money and the know-how will be put to use
over a period to achieve the goals. The resources of an organisation are deployed based on its goals
and its business strategies but also the competition being faced by it. The game is of evolving strategies
and counter strategies to win.
The development of the strategy also considers the environmental factors such as the
technology, the markets, the life style, the work culture, the attitudes, the policies of the Government
and so on. A strategy helps to meet the external forces affecting the business development effectively
and further ensures that the goals and the objectives are achieved. The development of the strategy
considers the strength of the organisation in deploying the resources and at the same time it compensates
for the weaknesses. The strategy formulation, therefore, is an unstructured exercise of a complex nature
riddled with the uncertainties. It sets the guidelines for use of the resources in kind and manner during
the planning period.

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 Socio-economic
Environment Mission, goals
purpose

Factors for strategy

formulation

Strength and weakness Business

Competition
of the organisation strategy

Types of Strategies
A strategy means a specific decision(s) usually, but not always, regarding the deployment of
the resources to achieve the mission or goals of the Organisation. The right strategy beats competition
and ensures the attainment of goals, while a wrong strategy fails to achieve the goals. Correction and
improvement, in case of a wrong strategy is possible at a very high cost. Such a situation is described
as a strategic failure.
If a strategy considers a single point of attack by a specific method, it is a pure strategy. If a
strategy acts on many fronts by different means, then it is a mixed strategy. The business strategy
could be a series of pure strategies handling several external forces simultaneously.
Hence, the strategy may fall in any area of the business and may deal with any aspects of
the business. It could be aspects like price, market, product, technology, process, quality, service,
finance, management strength and so on. When the management decides to fight the external forces
of a single area by choice, it becomes a pure strategy. If it uses or operates in more than one area,
then it becomes a mixed strategy.
The success of an organisation, inspite of its strength, depends on the strategic moves or
planning the Management pursues. The strategy may be pure or mixed. It can be classified into four
broad classes :
1. Overall Company Strategy;
2. Growth Strategy;
3. Product Strategy; and
4. Marketing strategy.
1. Overall Company strategy
This strategy considers a very long-term business perspective, deals with the overall strength
of the entire company and evolves those policies of the business which will dominate the course of
the business movement. It is the most productive strategy, if chosen correctly and fatal if chosen wrongly.

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2. Growth strategy
An Organisation may grow in two different ways. Growth may either mean the growth of
the existing business turnover, year after year, or it may mean the expansion and diversification of the
business.
Growth strategy means the selection of a product with a very fast growth potential. It means
choice of industries such as electronics, communication, transport, textile, plastic and so on where
the growth potential exists for expansion, diversification and integration. The growth strategy means
acquisition of business of the other firms and opening new market segments.
Growth strategies are adopted to establish, consolidate, and maintain a leadership and acquire
a competitive edge in the business and industry. It has direct, positive impact on the profitability.
3. Product strategy
A growth strategy, where the Company chooses a certain product with particular
characteristics, becomes a product strategy. A product strategy means choice of a product which
can expand as a family of product and provide the basis of adding associated products. It can be
positioned into the expanding markets by way of model, type and price.
4. Marketing strategy
The product and the marketing strategies are closely related. The marketing strategies deal
with the distribution, services, market research, pricing, advertising, packing and choice of the market
itself.

Use of strategic management in the industry

Presently most of the well established organisations use effective Decision Support System
as a tool by the strategic management.
To conduct research on the evaluation of system, any MIS researcher should keep in mind
the following procedures.
1. Objective of the investigation - to understand DSS and its acceptance in Indian organisations.
2. Research methodology to be adopted - scope and importance of the study, sample size
and sampling techniques, appropriate data collection, scoring and analysis of data and finally
discussion of results and interpretation to arrive at final inference.

Short - Range planning

Short-range planning deals with the targets and the objectives of the organisation. Based on
the goals and the objectives, a short-range plan provides the scheme for implementation of the long-
range plan. Short-range plans are made for one year in terms of the targets which are to be achieved
within the given budgets. The organisation translates long-range plans into the target covering all the
critical areas of business, to be achieved by the Organisation on a time scale. A manufacturing

33
Organisation will make targets for production, sales, capacity etc. Most of the companies after deciding
the targets, work on the budgets.
Advantages of short range planning
1. It gives the Manager a clear target for achievement.
2. It specifies to the Manager the resource allocation for a given task and the freedom to use
it.
3. It provides the Manager with information on the performance; whether it is under or over
the budget.
4. It helps the Management assess the overall performance of the business in the light of short-
term targets and long-term goals.
5. It provides an efficient tool to co-ordinate all the efforts within the organisation.
6. It provides the Management selective information on the shortfalls and overruns, for immediate
action.
7. It provides all the information in monetary terms for comparison between any two business
entities in the Organisation.

Tools of planning
Planning, long-range or short-range, strategic or tactical, involves a series of decisions to be
taken by the managers in the organisation. So when we talk about the tools of planning, we are talking
about the tools of decision making with reference to planning.
Decision relate to several aspects of corporate business planning. There are a number of
alternatives, choices and options available while planning the business. Further, there is selection of
resources and their allocation in an optimum manner to maximise the gains. Then there is selection of
method whereby the efforts at all the levels are co-ordinated towards a common goal and direction.
The planning, therefore, involves decision making with the help of tools. These tools are based on
one or more factors. These factors are : creativity ; systems approach ; sensitivity analysis ; and
modelling.
a) Creativity
Creativity comes out of an experience, a judgement, an intuition of an individual or a group
of individuals. When decision making is called for on a situation which has no precedent then creativity
is the only tool to resolve the problem of decision making. Creativity is the result of the conceptual
skills of an individual. The conceptual skills comprises the following:
1. The ability to generate a number of ideas rapidly.
2. The ability to change quickly from one frame of reference to another.
3. Originality in interpreting an event and generating different views on the situation.
4. The ability to handle with clarity and ease a complex relationship of various factors in a given
situation.

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b) Systems approach
Systems approach to planning considers all the factors and their inter-relationship relevant
to the subject. It takes a course to an analytical study of the total system, generates alternative courses
of action and helps to select the best in the given circumstances. It is used in a situation of risk or
uncertainty, and examines the various alternative courses of action. It helps to find solutions to problems.
The systems approach helps to understand the situation with clarity. It helps to sort out the
factors on the principles of critical and non-critical, significant and insignificant, relevant and irrelevant,
and finally controllable and uncontrollable. It tests the solutions for feasibility - technical, operational
and economic. It further studies the problem of implementation of the solution.
c) Sensitivity analysis
The sensitivity analysis helps to test the validity of the solution in variable conditions. The
problem situation is handled with certain assumptions and conditions. Based on these considerations,
a rational solution is found. Sensitivity analysis requires to know whether the solution will still remain
valid if the assumptions change, constraints were relaxed and new conditions emerged. It helps to
assess the impact of change on the solution in economic terms. If various factors are involved, the
sensitivity analysis helps to assess critically the factors against the impact it makes on the solution.
d) Modelling
A model is a meaningful representation of a real situation on a mini scale, where only the
significant factors of the situation are highlighted. The purpose of a model is to understand the complex
situation based on only the significant factors.
There are several types of models. The model could be a physical model, like a model of a
house, a park, a sports complex, etc. The model could be a scale model reducing a large body to a
small one. The model could be mathematical model like break-even analysis model, linear programming
model, queuing model, network model etc.
The planning model considers those business variables which affect the business prospects
and which show a significant impact on the business results. The long- range strategic models are
generally dynamic model and the short-range management and operations models are mostly static
models.

MIS : Business planning

Business environment is prone to changes and this factor makes business planning very
complex. Some factors like the market forces, technological changes, complex diversity of business
and competition have a significant impact on any business prospects. MIS is designed to assess and
monitor these factors. The MIS design is supposed to provide some insight into these factors enabling
the Management to evolve some strategy to deal with them. Since these factors are a part of the
environment, MIS design is required to keep a watch on environment factors and provide information
to the Management for a strategy formulation.

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 Strategy formulation is a complex task based on the strength and the weakness of the
organisation and the mission and goals it wishes to achieve. Strategy formulation is the responsibility
of the top Management and the top Management relies on the MIS for information.
There are various business strategies such as overall company growth, product, market,
financing and so on. MIS should provide the relevant information that would help the Management in
deciding the type of strategies the business needs. Every business may not require all the strategies all
the time. The type of strategy is directly related to the current status of business and the goals it wishes
to achieve. The MIS is supposed to provide current information on the status of the business vis-à-
vis the goals. MIS is supposed to give a status with regard to whether the business is on a growth
path or is stagnant or is likely to decline, and the reasons thereof. If the status of the business shows
a declining trend, the strategy should be of growth. If business is losing in a particular market segment,
then the strategy should be a market or a product strategy.
The continuous assessment of business progress in terms of sales, market, quality, profit and
its direction becomes the major role of MIS. It should further aid the top Management in strategy
formulation at each stage of business. The business does not survive on a single strategy but it requires
a mix of strategies operating at different levels of the Management. For example, when a business is
on the growth path, it would require a mix of price, product and market strategies. If a business is
showing a decline, it would need a mix of price discount, sales promotion and advertising strategies.
The MIS is supposed to evaluate the strategies in terms of the impact they have on business
and provide an optimum mix. The MIS is supposed to provide a strategy-pay off matrix for such an
evaluation.
In business planning, MIS should provide support to top management for focusing its attention
on decision making and action. In business management, the focus shifts from one aspect to another.
In the introductory phase, the focus would be on a product design and manufacturing. When the
business matures and requires to sustain or to consolidate, the focus would be on the post sales services
and support. The MIS should provide early warning to change the focus of the management from
one aspect to the other.
Evolving the strategies is not the only task the top Management has to perform. It also has
to provide the necessary resources to implement the strategies. The assessment of resource needs,
and its selection becomes a major decision for the top Management. The MIS should provide
information on resources, costs, quality and availability, for deciding the cost effective resource mix.
When the strategies are being implemented, it is necessary that the Management gets a
continuous feedback on its effectiveness in relation to the objective which they are supposed to achieve.
MIS is supposed to give a critical feedback on the strategy performance. According to the nature of
the feedback, the Management may or may not make a change in the strategy mix, the focus and the
resource allocations.

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 MIS has certain other characteristics for the top management. It contains forecasting models
to probe into the future - the business model for evaluation of the strategy performance by simulating
business conditions. It contains functional models such as the model for a new product launching,
budgeting, scheduling and the models using PERT/CPM technique for planning.

MIS for the top management relies heavily on database which are external to the organisation.
The management also relies heavily on the internal data which is evolved out of transaction processing.
Management uses the standards, the norms, the ratios and the yardsticks while planning and controlling
the business activities. They are also used for designing strategies and their mix. The MIS is supposed
to provide correct, precise and unbiased standards to the top management for planning.

We can summarize the role of the MIS to the top Management function as follows: MIS
supports by way of information, to

1. Decide the goals and objectives.

2. Determine the correct status of the future business and projects.
3. Provide the correct focus for the attention and action of the management.
4. Evolve, decide and determine the mix of the strategies.
5. Evaluate the performance and give a critical feedback on the strategic failures.
6. Provide cost benefit evaluation to decide on the choice of resources, the mobilization of
resources, the mix of resources.
7. Generate the standards, the norms, the ratios and the yardsticks for measurement and control.
Success of business depends on the quality of supports the MIS gives to the management.
The quality is assured only through an appropriate design of the MIS integrating the business plan
with the MIS plan.

Decision making concepts

The word ‘decision’ - is derived from the Latin root ‘decido’, meaning to cut off. The concept
of decision, therefore, is settlement, a fixed intention bringing to a conclusive result, a judgement and
a resolution. A decision is the choice out of several options made by the decision maker to achieve
some objectives in a given situation.

Business decisions are those, which are made during the process of conducting business to
achieve its objectives in a given environment. In concept, whether we are talking about business
decisions or any other decisions, we assume that the decision maker is a rational person who would
decide, with due regard to the rationality in decision making.

The major characteristics of the business decision making are :

a) Sequential in nature.

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 b) Exceedingly complex due to risks and trade offs.
c) Influenced by personal values.
d) Made in institutional settings and business environment.
The decision making process requires creativity, imagination and a deep understanding of
human behaviour. The process covers a number of tangible and intangible factors affecting the decision
process.
The problems faced in making rational decisions
a. Uncertainty in the problem.
b. Insufficient knowledge.
c. Not enough time to be rational.
d. The environment may not co-operate.
e. Other limitations.
Decision methods, tools and procedures
Decision making is a process which the decision maker uses to arrive at a decision. The
core of this process is described by Herbert Simon in a model. He describes the model in three phases
as shown in figure viz., (a) Intelligence (b) Design and (c) Choice. MIS follows this model in its
development stage.

Intelligence

Design

Choice
Intelligence: Raw data collected, processed and examined. Identifies a problem calling for a decision.
Design : Inventing, developing and analyzing the different decision alternatives and testing the feasibility
of implementation. Assess the value of the decision outcome.
Choice : Select one alternative as a decision, based on the selection criteria.
In the intelligence phase, the MIS collects the data. The data is scanned, examined, checked
and edited. Further, the data is sorted and merged with other data and computations are made,
summarised and presented. In this process, the attention of the manager is drawn to all the problem
situations by highlighting the significant differences between the actual and the expected, the budgeted
or the targeted.
In the design phase, the Manager develops a model of the problem situation on which can
generate and test the different decisions to facilitate its implementation. If the model developed is useful
in generating the decision alternatives, he then further moves into phase of selection called as choice.

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 In the phase of choice, the manager evolves a selection criterion such as maximum profit,
least cost, minimum waste, least time taken and highest utility. The criterion is applied to the various
decision alternatives and the one which satisfies the most is selected.
In these three phases, if the manager fails to reach a decision, he starts the process all over
again from the intelligence phase where additional data and information is collected, the decision making
model is refined, the selection criteria is changed and a decision is arrived at.
Decision making systems
The decision making systems can be classified in a number of ways. There are two types of
systems based on the manager’s knowledge about the environment. If the manager is functioning in a
known environment it becomes closed decision making system and the conditions that operate are as
follows:
a) The Manager has a known set of decision alternatives and knows their outcomes fully in
terms of value, if implemented.
b) The Manager has a model, a method or a rule whereby the decision alternatives can be
generated, tested and ranked.
c) The Manager can choose one of them, based on some goal or objective.
A few examples are a product mix problem, an examination system to declare pass or fail,
or an acceptance of the fixed deposits.
If the Manager operates in an environment not know to him, then the decision making system
is termed as an open decision making system. The conditions of this system are :
a) The Manager does not know all the decision alternatives.
b) The outcome of the decision is also not known fully. The knowledge of the outcome may
be a probabilistic one.
c) No method, rule or model is available to study and finalise one decision among the set of
decision alternatives.
d) It is difficult to decide an objective or a goal and, therefore, the manager resorts to that
decision, where his aspirations or desires are met best.
The MIS tries to convert every open system to a closed decision making system by providing
information support for the best decision. The MIS gives the information support, whereby the Manager
knows more and more about the environment and the outcomes, he is able to generate the decision
alternatives, test them and select one of them. A good MIS achieves this.
Types of decisions
A good MIS tries to convert a decision making situation under uncertainty to the situation
under risk and further to certainty. Decision making in the operations management, is a situation of
certainty. This is mainly because the Manager in this field, has fairly good knowledge about the events
which are to take place, has full knowledge of environment, and has a pre-determined decision
alternatives for choice or for selection.
39
 Decision making at the middle Management level is of the risk type. This is because of the
difficulty in forecasting an event with hundred per cent accuracy and the limited scope of generating
the decision alternatives.
At the top Management level, it is a situation of total uncertainty on account of insufficient
knowledge of the external environment and the difficulty in forecasting business growth on a long-
term basis.
A good MIS design gives adequate support to all the three levels of Management.
Nature of decisions
Decision making is a complex situation. To resolve the complexity, the decisions are classified
as programmed and non-programmed decisions. If a decision can be based on a rule, method or
even guidelines, it is called the programmed decision.
Under this condition, the MIS itself can be designed to make a decision and even execute
it. The system in such cases plays the role of a decision maker based on a given rule or a method.
Since the programmed decisions are made through MIS, the effectiveness of the rule can be analysed
and the rule can be reviewed and modified from time to time for an improvement. The programmed
decision making can be delegated to a lower level in the management cadre.
A decision which cannot be made by using a rule or a model is the non-programmed decision.
Such decisions are infrequent but the stakes are usually larger. Therefore, they cannot be delegated
to the lower level. The MIS in the non-programmed decision situation, can help to some extent, in
identifying the problem, giving the relevant information to handle the specific decision making situation.
The MIS in other words, can develop decision support systems in the non-programmed decision
making situations.
Behavioural concepts in Decision making
A Manager, being a human being, behaves in a peculiar way in a given situation. The response
of one Manager may not be the same as that of the two other managers, as they differ on the
behavioural platform. Even though tools, methods and procedures are evolved, the decision is many
a times influenced by personal factors such as behaviour.
The Managers differs in their approach towards decision making in the organisation, and
therefore, they can be classified into two categories, viz., the achievement oriented i.e., looking for
excellence and the task oriented i.e., looking for the completion of the task somehow. The achievement
oriented manager will always opt for the best and therefore, will be enterprising in every aspect of
the decision making. He will endeavour to develop all the possible alternatives. He would be scientific
and therefore, more rational. He would weigh all the pros and cons properly and then conclude.
The manager’s personal values will definitely influence ultimately. Some of the managers show
a nature of risk avoidance. Their behaviour shows a distinct pattern indicating a conservative approach
to decision making - path of low risk or no risk. Further, even though decision making tools are
available, the choice of the tools may differ depending on the motives of the manager.

40
 The behaviour of the Manager is also influenced by the position he holds in the Organisation.
The behaviour is influenced by a fear and an anxiety that the personal image may be tarnished and
the career prospects in the organisation may be spoiled due to a defect or a failure. The Managerial
behaviour, therefore, is a complex mix of the personal values, the atmosphere in the Organisation, the
motives and the motivation, and the resistance to change. Such a behaviour sometimes overrides
normal rational decisions based on business and economic principles.
Organisational decision making
An Organisation is an arrangement of individuals having different goals. Each individual enjoys
different powers and rights because of his position, function and importance in the Organisation. Since
there is an imbalance in the power structure, the different individuals cannot equally influence the
organisational behaviour, the management process and the setting of business goals. Ultimately, what
emerges is an hierarchy of goals which may be conflicting, self defeating and inconsistent.
The corporates goals and the goals of the departments/divisions or the functional goals, many
a times, are in conflict. If the Organisation is a system, and its departments/divisions or functions are
its sub-systems, then unless the system’s objectives and the sub-system’s objectives are aligned and
consistent to each other, the corporate goals are not achieved.
In case of inconsistent goals, the conflict in the Organisation increases, affecting the
organisation’s overall performance. The Organisational decisions making should help in the resolution
of such conflicts. Otherwise, the organisation suffers from indecision.
MIS and decisions making concepts
The methods of decision making can be used directly in the MIS provided the method to
be applied has been decided. A number of decision making problems call for optimisation, and
operational research models are available which can be made a part of the system. The optimisation
models are static or dynamic, and both can be used in the MIS. Some of the problems call for a
competitive analysis, such as a payoff analysis. In these problems, the MIS can provide the analysis
based on the gains, the regrets and the utility.
The concepts of the organisational and behavioural aspects of decision making provide an
insight to the designer to handle the organisational culture and the constraints in the MIS. The concepts
of the rationality of a business decision, the risk averseness of the managers and the tendency to avoid
an uncertainty, makes the designer conscious about the human limitations, and prompts him to provide
a support in the MIS to handle these limitations. The reliance on organisational learning, makes the
designer aware of the strength of the MIS and makes him provide the channels in the MIS to make
the learning process more efficient.
The relevance of the decision making concepts is significant in the MIS design. The significance
arises out of the complexity of decision making, the human factors in the decision making, the
organisational and behaviour aspects, and the uncertain environments. The MIS design addressing
these significant factors turns out to be the best design.

41
Summary

Management Information Systems (MIS) can be used successfully to facilitate access to a

wide range of integrated data sets. They are consistent, modular and flexible tools for the systematic
acquisition, analysis and archiving of data and information from a variety of sources. When socio-
economic data are also included, MIS can become even more powerful tools for planning and decision-
making

The term ‘information system’ is a general term for a system that facilitates access to
information; however, a ‘management information system’ refers to integrated data sources and
information systems, which meet the particular needs and requirements of planning and decision-
making. In an ideal case, the major objectives of MIS are to:
1. reach an understanding of the relevant processes on the basis of the available historic information.
This element forms the basis for the development of models, required for forecasting and
simulation.
2. provide information on the current situation, especially for early warning purposes, for instance
related to issues impacting on food security, water resources or pest and disease status.
3. forecast changes and impacts, either natural or man-made, as an element in vulnerability
assessments.
4. forecast the consequences of policy decisions and measures before they are implemented in
reality. This implies evaluating options for several given scenarios based on the possible results
and predicted consequences, and selecting the most acceptable alternative.
In view of the broad scope and wide variety of planning and decision-making tasks, MIS
generally generate a range of outputs or results. These can be in a textual (report) or graphical (curve,
graphic) form. A number of desired outputs can be generated automatically and periodically (daily,
weekly) and transmitted to the relevant users in a printed or digital form. These outputs generally
serve as a check on the situation and the developments in the field. A second group of outputs could
be generated only in the case where certain conditions are fulfilled (drought reports in case of low
precipitation levels) or when certain levels are being exceeded (contaminants in ground or coastal
water). A third group relates to specific, dedicated outputs, to assess the possible consequences of
certain measures or activities, for instance the construction of a hydroelectric dam.

MIS are precious and costly assets, and require detailed planning if their design,
implementation and operation are to be successful. The adequate introduction and performance of
MIS require that they build on already existing elements, and ensure consultation and coordination
with all stakeholders.

A key issue for the application of MIS is open distribution of information, providing each of
the actors with the same basic overview and synthesis. Manipulating the information provision by
selective information distribution causes an information imbalance between the partners, leading to
less than optimal decisions and when discovered is detrimental to mutual trust. Therefore a strong,

42
positive commitment from all involved is needed: active participation and accountability of users and
contributors of environmental information at all levels, including local actors. Under such conditions,
the benefits of the MIS by far outweigh the cost of acquiring and organizing the information, including
the manpower required and the maintenance cost of the system.

MIS applications should meet criteria relating to:

• Timeliness
• Completeness
• Reliability
• Availability
• Accessibility
• Cost-effectiveness
The need for up-to-date information implies the need for continuous collection, analysis and
dissemination of environmental data on a regular, well standardized basis: monitoring. The information
collected should be relevant for all stakeholders: from the policy makers to the local population, to
ensure the relevance, quality and continuity of the process. It should be collected in compatible formats,
in minimal time and with minimal cost. Monitoring is also useful to detect possible negative impact on
the environment and existing agricultural systems, but for this purpose baseline data should be available
as a reference on the original situation.

It is difficult to foresee precisely what information (or combinations) will be the appropriate
information for decision-making in the future. Based upon experience, the data sets presented in the
previous paragraph are given as a first approach, but should be adapted to the specific requirements
of each situation. Implementation of all parameters depends highly upon the capabilities and the situation
in each country.

Questions:
1. Explain the functions aiding MIS with respect to Production, Marketing, Finance and
Personnel?
2. What are the phases favouring breaking down of decision making process?
3. What are the factors influencing successful use of MIS in an organization?
4. Enumerate the strategies for plan achievement?
5. Describe the methods used in implementing MIS?

43
 CHAPTER - IV
ATION OF MIS IN OR
IMPLEMENTA
IMPLEMENT GANIZATION
GANIZATION
ORGANIZA

Objective
The technological advancement has created a challenge to the Management. Traditional
Management used to think how to manage resources such as money, materials, men and machines.
Now it must also manage a resource known as information. Manager in the organisation is defined as
translator or transducer of information into decision making body. This chapter describes the main
features of a management information system in organisational setup with various functions, importance,
relationship with planning, control and operations, indicating clearly what is MIS and what is not.

As businesses are gradually moving their orientation from production perspective to customer
perspective, they are expected to dynamically adjust their production methodology to suit market and
trend demands. This requires a highly reliable management system to support overall business processes.
Businesses can no longer compromise with inefficiency and inaccuracy caused by either human or
system factors.

In today’s life, business means competition. Every business will contend to produce not
only a better and more reliable product but also providing a better customer service. In the mean
time, they are enforced to minimise their production costs as well as their overhead costs. These can
only be achieved through developing a better information system, a highly reliable infrastructure and a
more efficient management system.

Management Divisions

Management is segmented into two main divisions such as:

(1) Planning - means deciding what to do and
(2) Control - means assuring that desired results are obtained.
MIS aids in the following functions :-
(1) Strategic planning
(2) Management control and
(3) Operational control.
These concepts can be defined as follows :
1) Strategic planning - is the process of deciding on objectives of the organisation such as
changed objectives and policies that govern acquisition, use and disposition of resources.
2) Management control – is nothing but assurance of the manager that these resources are
obtained and utilized efficiently in the accomplishment of organisation objectives.
3) Operational control - is method of assuring that defined tasks are carried out very
benevolently and effectively.
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 The various functions of management planning and control are listed below for quick and
easy understanding.

Functions Strategic planning Management control Operational control

Production Location of new/ old Determining the type Scheduling specific jobs.
unit. of product mix, for
a monthly production
programme.
Marketing Decision on entering Planning for mass media Deciding and planning for
export market. advertisement. sales contacts for next
fortnight.
Finance Raising capital by shares, Ascertaining max. Decision of action for non-
debentures and warrants. credit level for customers. payment by a customer.
Personnel Deciding on changes Filling a vacated post at Deciding the shift schedule.
to be made in the middle and lower levels
organisation setup. of the organisation.

Many experts favour breaking down of decision making process into three phases as :
1) Intelligence : In this particular stage decision maker recognises that there may be problem
or opportunity that compels him to make a decision.
2) Design : This stage helps to determine alternative action that could resolve the problem or
create advantage of opportunity.
3) Choice : This phase is concerned with the process by which one of the alternative created
in stage - 2 to be singled out to be persued.

Factors influencing successful use of MIS in an Organisations

1. Involvement of top management in computerization efforts explaining the role of computer
in achieving the goals of the organisation.
2. Selection of manager who has practical skills in choosing areas of application, identification
of information needs and designing reports.
3. An acceptable level of spending on hardware and software.
4. Computer personnel with inter-disciplinary skills in management and operation research.

Strategies for the Plan achievement

The designer has to take a number of strategic decisions for the achievement of the MIS
goals and objectives, such as;
a. Development strategy : An online, a batch, a real time.
b. System development strategy : An approach to the system development - Operational versus

45
 Functional ; Accounting versus Analysis ; Database versus Conventional approach; Distributed
versus Decentralized processing ; One Database versus Multiple databases.
c. Resource for system development : In-house versus external, customized development
versus the use of packages.
d. Manpower composition : Analyst, programmer skills and know-how.
The selection of the architecture, the approach to the information system development and
the choice of hardware and software are the strategic decisions in the design and development of the
MIS in the organisation. The Organisations which do not care to take proper decisions in these areas
suffer from over-investment, under utilization and are not able to meet the critical information
requirements.
It is important to note the following points :
1. The organisation’s strategic plan should be the basis for the MIS strategic plan.
2. The information system development schedule should match with the implementation schedule
of the business plan.
3. The choice of information technology is a strategic business decision and not a financial
decision.

Ascertaining the Class of Information

Ascertaining the information needs of the Management for the business execution is a complex
task. The complexity can be handled if the information is classified on the basis of its application and
the user, which becomes the basis for the ascertainment.

Classes of information
Information class Example of information User
Organisational The number of employees, products, Many users at all the
services, locations, the type of business, levels
turn over and variety of the details of
each one of these entities.
Functional Purchases, sales, production, stocks, Functional heads
receivables, payables, outstanding,
budgets, statutory information.
Knowledge The trends in sales, production Middle and the top
technology, the deviations from the management
budgets, targets, norms etc. competitor’s
information, industry and business
information plan performance and target;
and its analysis.

46
 Decision Status information on a particular aspect, Middle management and
such as utilisation, profitability standard, operations management.
requirement versus availability.
Information for problem solving and
modelling.Quantitative information
on the business status.
Non-moving inventory, overdue
payments and receivables.
Operational Information on the production, Operational and
sales, purchase, dispatches, management-supervisor,
consumption, etc. in the form of section officers.
planned versus actual.
The information for monitoring
of execution schedules.

The design of the MIS should consider the class of information as a whole and provide
suitable information system architecture to generate the information for various users in the Organisation.
Let us now proceed to ascertain the information needs of each class.

Determining the Information Requirement

The sole purpose of the MIS is to produce such information which will reduce uncertainty
in a given situation. The moment what is unknown becomes known, the decision maker’s problems
become simple. Methods have to be evolved to handle the degree of uncertainty, the Management is
expected to deal with.
The difficulty to determine a correct and complete set of information is on account of the factors
given below :
1. The capability constraint of the human being as an information processor, a problem solver
and a decision maker.
2. The nature and the variety of information.
3. Reluctance of decision makers to spell out the information for the political and the behavioural
reasons.
4. The ability of the decision makers to specify the information.

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 Methods of handling uncertainty
Level of uncertainty
Low (near certainty).
Precise probabilistic
knowledge
(A risk situation).
Not able to determine in
probabilistic terms
precisely (Very risky).
High (Total uncertainty).
Level of management Method
Operations management. Ask questions such as,
‘what do you need’?
Middle management. Determine from the
existing systems and
methods of decision
making and problem
solving.
Middle and top management. Determine through the
critical success factors,
decisions parameters
and decision
methodology.
Top management. Determine through
modelling and
sensitivity analysis.
experimentation,

There are four methods of determining the information requirements. They are :

1. Asking or interviewing.
2. Determining from the existing system.
3. Analyzing the critical success factors.
4. Experimentation and modelling.

Implementation of MIS

The choice of the system or the sub-system depends on its position in the total MIS plan,
the size of the system, the user’s understanding of the system and the complexity and its interface
with other systems. The designer first develops systems independently and starts integrating them with
other systems, enlarging the system scope and meeting the varying information needs.

Determining the position of the system in the MIS is easy. The real problem is the degree of
structure, and formalization in the system and procedures which determine the timing and duration of
development of the system. Higher the degree of structuredness and formalization, greater is the
stabilization of the rules, the procedures, decision making and the understanding of the overall business
activity. Here, it is observed that the user’s and the designer’s interaction is smooth, and each other’s
needs are clearly understood and respected mutually. The development becomes a methodical
approach with certainty in inputs-process and outputs.

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 MIS is generally used by medium and larger scale organisations. However, small organisations
are yet to understand its application. There is dire need to build up computer culture by properly
disseminating information about computer applications and its benefits.

Implementation of MIS can be achieved by using any of the methods such as direct, parallel,
modular or phase in.

a) Direct approach

Direct installation of the new system with immediate discontinuance of the old existing system
is referred as ‘cold turnkey’ approach. This approach becomes useful when these factors are
considered.

1. The new system does no replace the existing system.

2. Old system is regarded absolutely of no value.
3. New system is compact and simple.
4. The design of the new system is inexpensive with more advantages and less risk involved.
b) Parallel approach

The selected new system is installed and operated with current system. This method is
expensive because of duplicating facilities and personnel to maintain both the systems. In this approach
a target date must be fixed when the operations of old system cease and new one will operate on its
own.

c) Modular approach

This is generally recognized as ‘Pilot approach’, means the implementation of a system in

the Organisation on a piece - meal basis.

This has few advantages / merits

1. The risk of systems failure is localized.

2. The major problem can be easily identified and corrected before further implementation.
3. Operating personnel can be trained before system is installed in a location.
d) Phase-in-implementation

This approach is similar to modular method but it differs because of segmentation of system,
however, not the Organisation. It has advantages that the rate of change in a given Organisation can
be totally minimized and the data processing resource can be acquired gradually over a period of
time. System exhibits certain disadvantages such as limited applicability, more costs incurred to develop
interface with old system and a feeling in the Organisation that system is never completed.

49
Implementation procedures

(a) Planning the implementation

After designing the MIS it is essential that the Organisation should plan carefully for
implementation. The planning stage should invariably include the following :
1. Identification of tasks for implementation: Planning the implementation activities, acquisition
of facilities, procedure development, generating files and forms, testing the system and
evaluating and maintenance of the system.
2. Relationship establishment among the activity: Network diagram must be prepared to
correlate concurrent and sequential activities.
3. Establishing of MIS : For monitoring the progress of implementation and for proper control
of activities, efficient information system should be developed.
(b) Acquisition of facilities
For installation of new system or to replace current system the Manager should prepare a
proposal for approval from the Management by considering space requirement, movement of personnel
and location for utility outlets and controls.
(c) Procedure development
This is an important step for implementation of the system including various activities such
as evaluation, selection of hardware, purchase or development of software, testing and implementation
strategies.
(d) Generating files and forms
The MIS manager should generate files and formats for storing actual data. This requires
checklist data, format data, storage forms and other remarks in data base.
(e) Testing of the system
Test should be performed in accordance with the specifications at the implementation stage
consisting of component test, sub-system test and total system test.
(f) Evaluation and maintenance of system
The performance should be evaluated in order to find out cost effectiveness and efficacy of
the system with minimum errors due to designs, environmental changes or services.

Software maintenance
The proper maintenance is the enigma of the system development and it holds software
industry captive, tying up programming resources. There are some problems in maintenance such as
regarding it as non-rewarding, non-availability of technicians and tools, noncognizance of users about
maintenance, problem and cost, lack of standard procedures and guidelines. Most programmers feel

50
maintenance as low level drudgery. If proper attention is paid over a period of time eventually less
maintenance is required.
Types of maintenance
The maintenance of system can be classified into corrective/ adaptive/ perfective. Corrective
maintenance means repairing process or performance failures. Adaptive maintenance means changing
the programme function, whereas perfective maintenance deals with enhancing the performance or
modifying the program.
Primary activities of a maintenance procedure
Documentation is major part of maintenance in system development. Maintenance staff
receives requests from the authorized users. Programming library should be maintained.
Reduction in maintenance costs
Several Organisations having MIS generally go in for reducing maintenance costs and it
consists of three major phases.
1. Maintenance management audit through questionnaires and interviews.
2. Software system audit.
3. Software modification.

Evaluation methods
Evaluation of the MIS in an Organisation is integral part of the control process. There are
several evaluation approaches such as quality assurance review, compliances of audits, budget
performance review, computer personnel productivity assessment, computer performance evaluation,
service level monitoring, user audit survey, post installation review and cost benefit analysis.
Evaluation performance measurement can be classified into two classes as effectiveness and
efficiency. The relationship between effectiveness and efficiency is that the former is a measure of
goodness of out put and the latter is a measure of the resources required to achieve the out put.

Information Resource Management (IRM)

IRM is a concept, an idea and a perspective rather than an entity. IRM attempts to focus
attention on the information that is produced by a system rather than the system itself or on the hardware
and software components of the system. [IRM emphasises managerial abilities but not technical. It is
interaction of managers and technicians.
The change over of traditional organisation into MIS brings out change in attitudes towards
information system. These changes bring distinct perspective.
1. Information is taken as resource but not a by-product of transaction processing.
2. It becomes resource of entire organisation but not of an unit.
3. Information from traditional data processing activities change to collection of information from
many resources.
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Ingredients and Implementation of IRM
IRM activity comprises of all the information resources of an organisation which include
business data processing, data management information centres, end user computing and networking.
The major function of IRM is to integrate and co-ordinate all the above activities in the organisation.
The implementation of the system is a management process. It brings about organisational
change, it affects people and changes their work style. The process evokes a behaviour response
which could be either favourable or unfavorable depending upon the strategy of the system
implementation.
In the process of implementation, the system designer acts as a change agent or a catalyst.
For a successful implementation he has to handle the human factors carefully.
There are certain guidelines for the systems designer for successful implementation of the system.
1. Not question should limit the information need of the user.
2. Not to forget that his role is to offer a service and not to demand terms.
3. Remember that the system design is for the use of the user and it is not the designer’s
prerogative to dictate the design features. In short, the designer should respect the demands
of the user.
4. Not mix up technical needs with the information needs. He should try to develop suitable
design with appropriate technology to meet the information needs. The designer should not
recommend modifications of the needs, unless technically infeasible.
5. Impress upon the user the global nature of the system design which is required to meet the
current and prospective information needs.
6. Not to challenge the application of the information in decision making. It is the sole right of
the user to use the information the way he thinks proper.
7. Impress upon the user that the quality of information depends on the quality of input which
he provides.
8. Impress upon the user that he is one of the users in the organistaion and that the information
is a corporate resource and he is expected to contribute to the development of the MIS.
9. Ensure that the user makes commitment to all the requirements of the system design
specifications. Ensure that he appreciates that his commitments contribute largely to the quality
of the information and successful implementation of the system.
10. Ensure that the overall system effort has the management’s acceptance.
11. Enlist the user’s participation from time to time, so that he is emotionally involved in the
process of development.
12. Realise that through serving the user, he is his best guide on the complex path of development.
13. Not expect perfect understanding and knowledge from the user as he may be the user of a
non-computerized system. Hence, the designer should be prepared to change the system
specifications or even the design during the course of development.
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 14. Impress upon the user that the change, which is easily possible in manual system, is not that
easy in the computer system as it calls for changes in the programs.
15. Impress upon the user that perfect information is non-existent, his role therefore still has an
importance in the organisation.
16. Take care that the problems in the organisation are resolved first before the system is taken
for development.
17. Conduct a periodical user meetings on systems where you get the opportunity to know the
ongoing difficulties of the users.
18. Train the user in computer appreciation and systems analysis as his perception of the
computerized information system will fall short of the designer’s expectation.
Implementation of the MIS in an organisation is a process where organisational transformation
takes place. This change can occur in a number of ways.

The Lewin’s model suggests three steps in this process.

(1) The first step is unfreezing the organisation to make the people more receptive and interested
in the change.
(2) The second step is choosing a course of action where the process begins and reaches the
desired level, and
(3) The third step is re-freezing, where the change is consolidated and equilibrium is reinforced.
Many a times, this process is implemented through an external change agent, such as a
consultant, playing the role of a catalyst. The significant problem in these tasks is the resistance
to change. The resistance can occur due to three reasons viz., the factors internal to the
users of information, the factors inherent in the design of the system and the factors arising
out of the interaction between the system and its users. The problem of resistance can be
handled through education, persuasion, and participation. This itself can be achieved by
improving the human factors, and providing incentives to the users, and eliminating the
organisational problems before implementing the system.

Management of Quality in the MIS

Information is a corporate resource, as important as the capital, know-how etc. and is being
used for decision making. Its quality, therefore, is required to be very high. A low quality information
would adversely affect the organisational performance as it affects decision making. The quality of
information is the result of the quality of the input data, processing design, system design, system and
procedures which generates such a data, and the management of the data processing function. Quality,
unlike any other product, is not an absolute concept. Its level is determined with reference to the
context and its use, and the user. Perfect quality just as perfect information is non-achievable and has
cost-benefit implications.

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 However, it is possible to measure the quality of information on certain parameters. All these
parameters need not have a very high value in terms of the unit of measure. Some parameters may
have lesser importance in the total value on account of their relevance in the information and its use.
The quality of these important parameters is ensured by conducting a proper systems analysis,
designing a suitable computer system and ensuring its maintenance from time to time and also subjecting
it to audit checks to ensure the system integrity.
The quality of the parameters is assured if the following steps are taken.
1. All the input is processed and controlled.
2. All updating and corrections are completed before the data processing begins.
3. Inputs (transactions, documents, fields and records) are subjected to validity checks.
4. The access of the data files is protected and secured through an authorization scheme.
5. Intermediate processing checks are introduced to ensure that the complete data is processed
right through i.e., run to run controls.
6. Due attention is given to the proper file selection in terms of data, periods and so on.
7. Back up of the data and files are taken to safeguard corruption or loss of data.
8. The system audit is conducted from time to time to ensure that the computer system
specifications are not violated.
9. The system modifications are approved by following a set procedure which begin with
authorization of a change to its implementation followed by an audit.
10. Systems are developed with a standard specifications of design and development.
11. Computer system processing is controlled through programme control, process control and
access control.
Quality parameters
Parameter of quality Example Comments
Complete data of all All invoices of the month. This achieves integrity of
the transactions All vouchers of the month. data with respect to the
time period.
Valid transaction and input data Only correct transaction Ensures the validity of the
types are permitted in the data and in turn, assures
system. Only that data a valid information.
which meet the design
specifications can be used. Assures that the results
Accuracy and precision Correct use of the formula are accurate and
or procedure and precisely correct based
relevant data. on rule, act or law using

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Relevance to the user
Timely information
Meaningful and complete information
complete data.
It should be relevant to the If the relevance is
user for a decision making. appropriate, the quality
required is high.
Information on the sales If the information is
despatch, pending position. received late it becomes
useless from a point of
view of decision making.
Production information Incomplete information
should be reported in terms forces the user to infer or
of quantity, quality and interpret erroneously
groups,or family and leading to a wrong
rejection and reasons. decision.
It should be given
in a proper format
with references.

The assurance of quality is a continuing function and needs to be evolved over a period and
requires to be monitored properly. It cannot be assessed in physical units of measures. The user of
the information is the best judge of the quality. Utility of information and its relevance are the two
other measures of quality.

Organisation for implementation of the MIS

Proper organisation is basic to the management of any activity or function. The same thing
is true for the application of MIS. The principles of the organisation and structuring the organisation
to the specific needs of the function is a prime necessity. When we talk with reference to the MIS a
number of issues come up and they are not the same in all the organisations. Hence, the organisation
structure of the MIS would differ from one organisation to the other.

The type, the size and the structure of corporate organisation becomes the basis for the
MIS organisation for handling the MIS function and management alternatives. The major issues involved
are :

1. Whether the function should be handled as a centralized or decentralized activity.

2. The allocation of the hardware and software resources.
3. The maintenance of the service level at an appropriate level.
4. Fitting the organisation of the MIS in the corporate organisation, its culture and the
management philosophy.

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MIS : The factors of success and failure

Many organisations use MIS successfully, others do not. Though the hardware and the
software is the latest and has appropriate technology, its use is more for the collection and storage of
data and its elementary processing. There are some factors which make the MIS a success and some
others, which make it a failure. These factors can be summarized as follows.

a) Factors contributing to success

If a MIS is to be a success then it should have all the features listed as follows:

— The MIS is integrated into the managerial functions. It sets clear objectives to ensure that
the MIS focuses on the major issues of the business. Also adequate development resources
are provided and the human and organisational barriers to progress are removed.
— An appropriate information processing technology required to meet the data processing and
analysis needs of the users of the MIS is selected.
— The MIS is oriented, defined and designed in terms of the user’s requirements and its
operational viability is ensured.
— The MIS is kept under continuous surveillance, so that its open system design is modified
according to the changing information needs.
— MIS focuses on the results and goals, and highlights the factors and reasons for non-
achievement.
— MIS is not allowed to end up into an information generation mill avoiding the noise in the
information and the communication system.
— The MIS recognizes that a Manager is a human being and therefore, the systems must consider
all the human behavioral factors in the process of the Management.
— The MIS recognises that the different information needs for different objectives must be met
with. The globalization of information in isolation from the different objectives leads to too
much information and its non-use.
— The MIS is easy to operate and therefore the design of the MIS has such features which
make up a user friendly design.
— MIS recognises that the information needs become obsolete and new needs emerge. The
MIS design, therefore, has a basic potential capability to quickly meet new needs of
information.
— The MIS concentrates on developing the information support to Manager critical success
factors. It concentrates on the mission critical applications serving the needs of the top
management.

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b) Factors contributing to failures

— The MIS conceived as a data processing and not as an information processing system.
— The MIS does not provide the information which is needed by the managers but it tends to
provide the information generally the function calls for. The MIS then becomes an impersonal
system.
— Underestimating the complexity in the business systems and not recognising it in the MIS
design leads to problems in the successful implementation.
— Adequate attention is not given to the quality control aspects of the inputs, the process and
the outputs leading to insufficient checks and controls in the MIS.
— The MIS is developed without streamlining the transaction processing systems in the
Organisation.
— Lack of training and appreciation that the users of the information and the generators of the
data are different, and they have to play an important responsible role in the MIS.
— The MIS does not meet certain critical and key factors of its users such as a response to
the query on the database, an inability to get the processing done in a particular manner,
lack of user-friendly system and the dependence on the system personnel.
— A belief that the computerized MIS can solve all the management problems of planning and
control of the business.
— Lack of administrative discipline in following the standardized systems and procedures, wrong
coding and deviations from the system specification result in incomplete and incorrect
information.
— The MIS does not give perfect information to all the users in the Organisation. Any attempt
towards such a goal will be unsuccessful because every user has a human ingenuity, bias,
certain assumptions not known to the designer. The MIS cannot make up these by providing
perfect information.

Summary

Alignment of business and MIS goals has become a key consideration for most businesses.
This is especially true with technology infrastructure increasingly being viewed as a strategic asset by
most companies. Consequently, information systems department leaders are frequently called upon
to provide a strategic vision for the enterprise, which compliments the company’s stated business
objectives. Understanding and applying the strategic planning process has become a vital skill for
today’s technology leader.
Management information is an important input for efficient performance of various managerial
functions at different organization levels. The information system facilitates decision making.
Management functions include planning, controlling and decision making.

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Questions:

1. Explain the functions aiding MIS with respect to Production, Marketing, Finance and
Personnel?
2. What are the phases favouring breaking down of decision making process?
3. What are the factors influencing successful use of MIS in an organization?
4. Enumerate the strategies for plan achievement?
5. Describe the methods used in implementing MIS?

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 CHAPTER - V
COMPUTER AND D
DAATA MAN
MANAA GEMENT IN MIS

Objective
Management Information System is vital for all kinds of organisations. In todays world of
ever increasing complexities of business management MIS comes handy to the management in providing
information at various stages of decision making. This helps the organisation in achieving its
predetermined goals and objectives.
Computer may be referred as a fast and accurate electronic symbol manipulating system
that is designed and organised to accept automatically input data and process that for producing
outputs results, under set detailed stage by stage directions and programmes.
This word computer is derived from latin word ‘computare’ meaning to reckon or to compute.
Computers can be classified as analog computers and digital computers. An analog computer that
measures physical value of temperature, pressure that exhibits on a continuous scale. On the other
hand digital computers are those which directly counts the number that represent numericals, letters
and other specials. Most of the present day computer are of digital system and differ from mechanical
and electronic calculators in their nature like speed, internal memory, stored programme and auxiliary
memory.

Classification of computers
Present day computers are grouped into various categories based on their speed, memory,
capacity, no. of users it supports and number of peripherals attached. With advancement of computer
technology lot of categories of computers are fast vanishing.
Micro computers: These are generally based on micro processor with semi conductor ROM for
storing programmes and data. These are extensively used as personal (PC’s) and home computer.
Mini computer: Micro-computers are essentially of single user system where as Mini-computers
are multiuser type with more peripheral support. Examples under this categories are HP 3000, super
16 of ECIL. These are normally referred as superminies.
Main frame and super computers
These are very powerful system than other categories of computers. They have very high
capacity for raw data processing and used for complex applications like molecular structural analysis,
weather predictions and nuclear research.
Special features of computer
The unique characters of computer are explained below :
1. Speed : The time required for computer to execute a basic operation may vary from few
microseconds (1ms= 10-6S ) to nano seconds (1 ns =10-9 S)

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 2. Versatality : Computers can be used for preparing documents to launching of satellites,
thus makes them versatile machines.
3. Deligence : Computers can work long as hours than human beings without fatigue and
hindrance. Its diligence is never questionable.
4. Automation : Computers work without human intervention once data are fed with program
instructions.
5. Storage capacity : Computers are capable of storing huge information depending upon the
type i.e., in a PC-10 to 300 MB (1 MB = 10,00,000 characters).
6. Accuracy : The computers will produce accurate results provided the data are correct,
relevant and program instructions relevant and reliable.
Data processing
Computers take data at one end and produce information at the other end. The data may
be referred as basic facts, such as names and number and information means that data transformed
into more meaningful intelligent form.
Data processing may be explained as a process of collecting data together and converting
into information, generally referred as Electronic Data Processing (EDP).
In most countries MIS is viewed as a Computer Based Management Information System
(CBMIS). It is planned, analyzed, designed, developed, implemented and evaluated as an activity of
management.
Electronic Data Processing
There are three basic activities of EDP. They are :
1. Capturing data : The required data should be recorded in various forms before they are
processed and done through input devices.
2. Manipulating data : The important operations involved in manipulating data are classification,
calculating, summarizing and logical decision making.
3. Managing out put results : The major operations involved are storing and retrieving,
communicating and reproducing.

Computer application
Computer is an excellent technological invention influencing the society and extends and
expands human capabilities in terms of computer power. Examples of Computer application are pay
roll maintenance, customer accounts, inventory and production schedules. In many advanced countries
MIS has evolved to IRM through Decision Support System (DSS) and Executive Support System
(ESS).

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Computer based customer service
Use of on line terminals and past response processing data means will help for processing
many customers transactions, while serving the customer. For example, air line, bus and train
reservations, stock exchange and bank transactions.
Analysis and processing of data through computers
There are several computer oriented techniques developed because of high speed and low
cost involved for computation. Some of the examples are :
(a) System simulation
(b) Information retrieval
(c) Critical path scheduling
(d) Linear programming (this technique is used to achieve optimum results such as minimizing
the cost and maximizing the profits).
Guidance and controls
Computers are used to guide and control. Various mechanical systems are controlled by
computers according to the need and functions to be carried out based on the data furnished to it.
Examples (1) Missile and satellite guidance
(2) Nuclear submarines and warships.
Education
Computers are extensively used in teaching process such as CAI (Computer Aided
Instructions), decision simulations, management of games, management of information.
Other applications
(1) Medical diagnosis
(2) Computer art

Computer organisation
Computer comprises of hardware and software. The hardware of the computer involves
physical equipment that go together to make computer, while software is the specific group of programs
that computer needs to function to meet the specific objectives.
Hardware consists of fine principal components.
(1) Input
(2) Memory
(3) Control
(4) Arithmetic logic
(5) Out put device.

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Input device Converts information from form suitable to
human beings to one usable by the computer
Control unit Directs the result of the processing to output unit or
and to the memory unit for storage
Memory unit Stores information as directed by the control unit
Arithmetic and Logic Unit (ALU) Performs arithmetic operation and conducts
comparison of stored information to make logical
decisions. This particular unit contains detailed
components such as adders, counters, multipliers,
compactors and accumulators.
Out put device converts the results to a form understandable by human beings.

Software
Software is nothing but set of programs that are run in a computer. There are 4 major types
of computer programmes.
a) Operating system
b) Utility programme
c) Language processors
d) Application programme.
a) Operating System
These programmes are normally within and supplied by computer manufactures. These are
designed to (i) govern and control, the computer hardware components such as memory and input
output devices. (ii) act as an interface between the users programme and the computer components.
b) Utility programme
Most of the these programmes are written and supplied by manufactures. This type of utility
programmes are used in data based management system to manipulate and print out results.
The major functions are
(a) To load the program into the memory
(b) To duplicate magnetic tapes.

c) Languages processors
These processors are used to translate programmer written instructions into machine code
instructions.
d) Application programme
These programmes are specific with an intention to serve specific jobs such as pay roll, billing
and reservations.

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Programming language
The language used in communication or computer instructions is termed as programming
language. Presently the following programming languages are available.
a) Machine language
b) Assembly language
c) Procedure oriented language
a) Machine language
This is the only language understood by computers. It generally consists of a large number
of binary digits (Bits) of One’s and Zero’s. Programming in this language is slow and intricate.
b) Assembly language
In this system mnemonic codes are used.
Eg. Add/A = Addition,
Sub/S = Subtraction etc.
The programmes written in assembly language should be transformed into machine language
before it is used. This translation is done by a computer programme referred to as assemble or
translator. Generally writing a programme in a machine language is tedious and very slow.
c) Procedure-oriented language
These languages are generally developed for problem solving by the user than being machine
centered. Hence they are known as high level languages which are used to translate machine language
through a system software called compiler or translator. Most of the programmes written in HCL are
known as source programmes. Source programme (Programme in high level language) à Compiler
(translator) a Programme in low level language (object language) à Machine language.

Computer terminology for memory

Bits A bit is an abbreviation for a binary digit and can contain either 0 or 1.
Bytes Eight adjacent bits designed to store the binary code for a single character
(decimal digits or other characters) are referred to as a byte.
Word Each storage locations is called a word, a word can store a number or a
character or an instruction.
Storage locations These are labeled from o and up.
or cells
Address The label of location is called its address.
Auxiliary memory It is usually in the form of disks and tapes.
Common high level languages
There are several high level languages developed during last few years. Some of them are
summarized hereunder :
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 FORTRAN - Used in science and engineering and latest version is FORTRAN 77.
ALGOL - Used in Science and engineering termed as ALGOL 68 or extended ALGOL.
LISP - Employed in artificial intelligence reformed as LISP-1.6.
APL - Utilized in science and engineering abbreviated as APLSV.
COBOL - Common Business Oriented Languages employed in business and called as
COBOL -74
BASIC - Beginners All Purpose Symbolic Instruction Code used in science and engineering
called as standard basic.
PL/1 - Programme Language 1 used in general programs and available as PL/1, optimism,
NASI-standard.
PASCAL - Blaise Pascal used in general programming and referred to as standard PASCAL
Ada - Augusta Add Pryron utilized in general programming and called as Ada.

DataBase concepts
A database is an integrated collection of well defined data and information, centrally controlled
in all its aspects, created and stored in a typical structure for an organisation. In an organisation, the
database could be, one or more, depending upon the needs and the operations of the organisation.
The data structure and its storage should be such that it facilitates shareability, availability, evolvability
and integrity of the data.

Why Database
Conventionally, in an information system, the information is obtained by developing the systems
and integrating them. This calls for breaking the system into various sub systems and developing the
information systems independently. In this approach, each system will have its master and transaction
files. They have to be processed separately at different times, depending upon the needs and schedules.
The file layouts and the access methods could be different in different systems. Therefore, the files
will be updated at different times. This approach does affect the quality of the information across all
the systems. The main disadvantages are data redundancy and inconsistency, difficulty in access to
the data, concurrent accessanomalies and integrity of the data and security problems. To eliminate
these problems, database approach is the solution. Database is designed independent of its use for
the application. The user of database should view the data in the database as on which he can develop
his system separately.
The advantages in the database approach are as follows :
1. All the Managers are using the same database, hence, any report using the information will
not be inconsistent.
2. All the Managers can view the database as per their needs.
3. The application system can be developed independent of the database.
4. The data validation and updating will be once and same for all.

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 5. The data is shared by all the users.
6. The data security and privacy can be managed and ensured because the data entry in the
database occurs once only and is protected by the security measures.
7. Since the database is a storage of the structured information, the queries can be answered
fast by using the logic of the data structures.

Database models
There are three types of database models which are common in the industry. They are the
Hierarchical Data Model, the Network Data Model and the Relational Data Model. These models
have their own particular nature, and therefore, they are applicable in the industry where a similar
situation exists. There is a fourth model known as the Object Data Based Model (ODBM) in which
data is structured as objects at a much higher level as compared to the other models providing a
flexibility in designing the applications.

Difference between Three models

The main difference between three models of the database lies in representation of the entity
relationships and its structure, and the user has to understand the structure, while designing the
application based on the database models. The network model provides the relationship in the form
of network giving easy navigating path to the user of the database. The HDBM shows Parent Child
relation. The NDBM shows the Owner-Member relation and the dependencies of any two entities.
Of the three, the Relational Model has found wider acceptance for the following reasons:
a. Simplicity: The entity relationships are identified in simple tabular form, understandable to
the users of the data. It is not related to any structure of entities like the hierarchy or the
network.
b. Non-procedural requests: Since there is no structure dependence, the information can be
obtained from any point in the database. No procedural language is to be used.
c. Data independence: Since the model is based on the relations and not on the structure
there is a high degree of data independence. This, however, calls for ensuring that the
relationships must be complete and accurate.
d. Theoretical foundation: The relational data model is based on the set theory of relations
and is designed on the principle of normalization. For the other models, such mathematical
foundation does not exist. The disadvantages of the relational model are that it demands a
large amount of storage, access and speed capabilities to handle the model.

Database Design
To develop a database that satisfies the information needs of today as well as tomorrow, it
is necessary to understand the database conceptually. The first task of the designer is to develop the
Conceptual Model. The conceptual model is independent of the user applications, the hardware and
the DBMS.

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The steps in the development of the conceptual model are :
1. Data analysis
2. Relational identity
3. Graphical representation
4. Design process

Data analysis
The database administrator should initiate a plan to collect the data needs of each person to
the organisation. It is necessary to investigate further as to how the data is processed by these persons
in executing their functional responsibilities.

Relational Identity
The conceptual model is used to develop a logical model which can be implemented with
the relational, hierarchical or network model of the Database Management System. The major concept
used from the relational theory is Normalization. The normalization process groups the entities and
attributes in the form of two-way tables.

Design process
It is necessary to examine systematically the purpose of the input data which will find place
in the database of the desired outputs. The design process considers information requirements of many
different types of users (data views) and the designs the inputs for the database. The conceptual
relationship will decide the key data entities and its attributes. While designing the database, these
elements play an important role.

Physical Database Model

The physical model of the database is a stored framework of data on a physical device.
Since a large percentage of the database are used in an on-line environment, one has to be concerned
with the visible performance. The performance of the database is a multivariate function with the physical
model as a major variable.
The designing of the database always tries to optimise the physical model for the space and
the time considerations. The three areas, where the database designer needs expertise for an optimum
performance of the database are :
1. Knowledge of the database management system.
2. Understanding of the characteristics of the direct access devices and the access needs.
3. Knowledge of the applications.

Relational Database Management System (RDBMS)

The decision making is required more in a real time environment where the decision making
process, right from the problem definition to solution, needs to be handled quickly. The business
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environment is distributed and decentralized requiring a real time resource (hardware, software, data,
and information) sharing with a complex data flow. All this demands the RDBMS which can serve
both the decision support and the transaction processing requirements.
The latest RDBMS systems have two sub-systems or parts. One deals with data management
and transaction processing which is independent of its application in the information process. The
second part provides a set of tools for developing and utilizing on-line applications for the decision
support. This is handled by the Client-Server architecture which separates the data management
functions from its application.
The latest trend in the Information Technology is to make the end user computing simple,
easy to understand and easy to use. The concept is extended to the system analyst and programmers,
where the RDBMS provides the tools, saving development and processing time. It allows the business
rules of the organisation, standard transactions and queries to be programmed once and makes them
available to all the users and developers as a stored procedure in the Data Dictionary. These stored
procedures can be nested to develop an application. These procedures are, both reusable and sharable
and are developed using the standard SQL. The RDBMS is also capable through the interface to
handle the data sources from the other databases and application tools developed on different Operating
Systems.
The user does not have to change the development made on other platforms, i.e., the RDBMS
can interact with the other RDBMS, or call the data from a Personal Computer based Lotus
application or can use the programme written in the other language such as C, FORTRAN, COBOL
etc. With these advantages of the modern RDBMS over the traditional DBMS, the information
processing through-put and the resultant performance are considerably enhanced.
Modern RDBMS allows high level security by providing various tools to the system
administrators, the database owners and the users to grant and revoke permissions to the specified
users or a group of users on the specified tables, views, columns, stored procedures and commands.
In the traditional DBMS system, the data was required to store in different databases in line with the
security levels, while in the modern RDBMS system a multiple security is taken care of by one integrated
database management system.
The latest RDBMS allows an on-line maintenance, rapid recovery and software based fault
tolerance. These features ensure the availability of the database round the clock as the database
maintenance is possible on line when the system is in use.
The modern RDBMS, unlike the traditional DBMS, handles the distributed heterogeneous
data sources, software environments and hardware platforms.
RDBMS allows communication at the database level and performs in a unified manner as a
single entity through the updates, and processing would take place at the respective distributed locations.
This is achieved through a software interface across the organisation.

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 The characteristics of the modern RDBMS includes hardware independence, software
independence, workability under a client architecture, a control feature of integrity, security and
autonomy and built-in communication facilities to achieve and open the system feature for the MIS.
It, therefore, provides a very efficient and effective tool to a skillful designer, developer and user for
handling the information needs of the business enterprise.

MIS and RDBMS

The MIS is supported by database in its endeavour to support the management in decision
making. The database models be it the NDBM, the HDBM or the RDBM, play the same role in the
MIS. With the latest computer hardware and software capabilities the RDBMS have become popular.
The concept of the end user computing can be implemented easily with the database approach to the
information system. With the database approach, considerable data processing efforts, which were
spent in the approach of the conventional system, are saved. The data is made independent of its
application.
Now, the users of the data have a clear understanding of the entities and its attributes owing
to the concept of the data dictionary. The major problems, which the MIS designers had to face
earlier, were on account of the different definitions of data by the different users, and its applications.
These problems have automatically disappeared with the database approach. Another problem which
the designers faced was that of data concurrency and redundancy. Once an entity is defined and located
in the database, it is same and common to all. All the users using the database will get the same results
on account of the concurrency and hence avoid data redundancy.
With the database approach, the manager’s information needs on queries can be easily met.
With the RDBMS and the development of the Structured Query Language (SQL), it is possible to
interact with the database and satisfy the queries by using the SQL. The development of the SQL is
a blessing to the users of the database.
The attributes of a good information, viz., accuracy, scope, timeliness, form and so on can
be easily achieved with the database approach to the MI System.
The MIS designs have become more dependable due to the database and the SQL. The
rigidity of the design is replaced by the flexibility of the design. It is now possible to review the
applications more frequently from the point of view of utility and have them modified, if necessary.
The database has strengthened the foundations of the MIS due to the following :
a. The database can be evolved to the new needs of the MIS.
b. The multiple needs can be met with easily.
c. The data design and the output design are flexible.
d. Open system design of the MIS is possible.
e. The query handling becomes easier due to the Standard SQL.
f. User friendly end user computing is possible.

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 g. The data is freed from its ownership and its use has become universal.
h. The Information Technology provides tools to handle distributed multiple databases making
the MIS richer.

Client - Server Architecture

The need to access right information at the right time by its user is increasing at a rapid
pace. With the business environment becoming competitive and cost of business processing increasing
rapidly, the managers of business need flexible, dynamic, simple-to-use, technology friendly information
systems to meet their business information needs. Big business operations have multiple locations and
multiple divisions and because of that data generation, acquisitions and maintenance became a
technological challenge. To contain cost of running the business and to improve the services to the
customer, the managers developed variety of strategies.
The computing technology of the sixties and seventies supported centralized processing with
mainframe computing. In this period data and transactions were brought to a central place, processed
in batch mode and the resultant information was delivered at fixed intervals in pre-determined form
and content. In this period computing, storage and communication technologies were grossly inadequate
to take care of dynamically changing needs of business information.
On analysis of the needs it was found that what was needed is the capability to separate
data from its usage of application. It was found that data entities are same but they need to be processed
differently in different situations. It was a case when a situation demands more data from different
sources. The user of information also wanted freedom of option to choose information and its
processing. In the wake of such requirements, large data volumes and transactions required speedier
processing to deliver the desired information. Mainframe, host based computing technologies did not
serve these needs satisfactorily.
With downsizing of mainframes, increased CPU power and data storage capabilities, this
problem was overcome to a limited extent by resorting to distributed processing. In distributed
processing hardware-software is distributed at various locations and further data is distributed where
it is required most. The approach was to bring the data and the application closer to the user, reducing
dependence on centralized authority.
The networking technology coupled with Personal Computer (PC) becoming powerful, the
user found great relief in meeting their needs.
The environment of the business puts certain demands on the architecture of information processing
system. The demands are as follows :
1. Data, business rules and usage should be independent.
2. Data and database should be distributable with controlled access from any point.
3. Choice of hardware and software should be such that it is application independent.
4. The processing platform should be easily scalable with no need to change the development.

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 5. The architecture of the hardware should be scalable to meet the budget constraints meeting
ongoing changing user needs.
6. The application designed should be such that it follows standards of coding, presentation
and storage giving same look and feel in all application to all users.
7. Data and hardware resources should be sharable.
8. Its platform should remain same even if the organisation is restructured, downsized, protecting
the investment and development.
The system architecture from the sixties to eighties was grossly inadequate, inefficient and
incapable to handle these genuine business requirement. This was mainly due to technology
incompetence which is now (in the nineties) overcome. The technology in all walks of business has
become very efficient to handle these requirements. The technologies of computing, storing,
programming, processing, communicating and presenting the processed result are so advanced that
one can build a new architecture called as Client Server.
Client Server Architecture (CSA) is a distributed, co-operative, processing environment
whereby the entire task of processing is divided in such manner that there is a demand on the system
through a client and there is a server in the system to serve this demand. The architecture has two
components, client and server, where client makes a request and the server then processes the request
and serves the client by offering the result. The clients and servers are connected to each other through
a network component which handles communications between the two.
In the CSA, client sits at the front end and the server is at the back end. The client represents
front end tasks requested by the end user. The server represents the back end tasks of processing
and communicating to the clients.
The simple architecture of Client Server is where application is broken into two logical
divisions, data and its processing logic. While data sits on back end server and its management is
done by DBMS and the application processing logic such as validations, application of business rules
and computing is placed in a front end client device. Both client and servers are essentially computers
of varying capacity and capability.
The client and servers are connected through either LAN or WAN network. The client has
its own processing application logic and server has its own processing logic to handle data and its
processing.
The client handles server independent tasks through its stored application logic and server
handles clients’ requests which are triggered after processing in the client. Hence, true Client Server
implementation requires, application programs split in such a manner that client level processing is
done by the client and communicated to server to carry out the rest and offer the feedback to the
client with the processed result. Broadly, back end server has DBMS system and related application
logic, and the client has front end tools to handle the requirement in terms of input, process and
presentation. This is a traditional model of the mainframe system. An improved version of the traditional
model is known as PC centric client – server system, which is known as first generation client – server

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model consisting of (1) server (Database) (2) work station (main PC) with logic sites (secondary
PC) Based on the two tier first generation model, second generation two tier client server model is
evolved.
There are three basic software components of Client Server - front-end software, middleware
and the server software for a three-tier client – server model. Front-end software includes application
development tools and reporting tools, including spreadsheets and word processors. The role of this
software is to connect to servers, submit the requests and receive processed information result. Front-
end development tools such as Power builder, Delphi, Visual Basic are widely used. These front-end
tools support open database connectivity (ODBC) feature to popular database like Oracle, Sybase,
Progress, Ingress, making these tools DBMS independent.
Report tools also link to Database servers, allowing users to create ad-hoc reports and graphs
using back end database. These tools provide rapid application development allowing users to use
prebuilt components of other application systems which reside in the directory or library.
A typical three tier Client Server Model has three components i.e., Data Server, Application
Server and PC-Client. The middle tier, usually is used for transaction processing or object request
processing. Since middle level servers can be provided easily, developer can plan the system for much
more number of users than the two tier model provides. The second server can be introduced
considering the possibility of dividing the application processing, and distributing it on more than one
server. Such distribution makes the processing faster. The techniques of distributed processing and
parallel processing would be used for suggesting the partitioning of the processing logic.
Whatever may be the number of tiers, each tier has a role to play in the application
processing. Database servers don’t just serve up the data, they provide locking mechanisms, access
controls, optimise database queries and support communication calls received from server to client.
Database server also stores procedures to be used in application when called by client or
server. The stored procedures, triggers and rules allow developers to program the database server
itself providing another location for application logic. The stored procedures or triggers are a collection
of SQL statements and procedure logic, which can be placed in database server as objects. Client
applications can execute these stored procedures or triggers by making call on them. The difference
between stored procedure and triggers is that the trigger is activated automatically by data -related
events that the database server may come across. A rule (stored procedure) is a special type of trigger
which is activated if data is checked for a condition and it is satisfied.
Application server is used for application logic processing. Using partitioning tools the
processing logic is split into server or between servers, and PC clients. Essentially it is a place where
applications are broken into smaller units, known as transactions and the server ensures that they are
processed completely in a co-ordinated manner to produce the application result. Application
partitioning tools Dynasty of Dynasty Technologies and Forte of Forte Software enable developers
to partition a logic application dynamically over several servers reducing the processing load resulting
into better performance.

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 At client level, application development tools are put to use to develop and execute the
application. Some of the popular tools are Borland’s Delphi, Symantic’s Enterprise Developer,
Powersoft’s Powerbuilder, Gupta’s SQL Windows 5 and Microsoft’s Visual Basic. The basic features
of all these tools are that they perform the role of middleware, help in object oriented development,
aid in designing GUI (Graphical User Interface) features and provide mechanism for the application
distribution among the client and servers. With the ODBC feature, developer needs only to load
appropriate database drivers and log-on information leaving rest of the process to the tool itself.
Report writer is the third component which is provided to developers and end users to
generate documents, records and reports. All front end tools are supported by the report writers.
They use middleware or ODBC to communicate with database server. Based on the user criteria,
report writer generates the database request and sends it to server or servers. It processes the request
and returns the data in a desired format of the client. All report writers run in Microsoft Windows
GUI Environment.
The Report Writer allows developers to select data elements from a menu and paste them
directly on the report. These tools support application development in three ways, as stand alone
reports, as embedded objects and as components of an application. Some of them provide a complete
development environment with runtime report distribution facility.
Second generation Client - Server characteristics are :
— Application logic placement in servers.
— Application partitioning.
— Transaction intensive.
— Scalable from simple to complex environment.
— Supports multiple platforms.
— High order security, testing and maintenance.
It uses Oracle, Sybase, Informix, Open-Ingress as back end database in database servers.
It uses application servers for loading transaction processing portion of the application. It uses
development tools such as Powerbuilders, Delphi, Visual Basic, SQL on PC client. Most of the current
Client Server implementation use ERP packages such as SAP, Peoplesoft, MAMIS, Oracle financials
with their proprietary development tools.
The Client Server architecture will continue to mature over next three to five years. The
research and development is continuing on all components of the architecture. Improvement in front
end tools, middleware and DBMS will facilitate easy customization of the architecture in terms of
distributed computing, partitioning of applications and processing on more than one server and
achievement of the desired performance.

Client Server Implementation Strategies

The Client-Server Implementation, is a customised solution. It is complex to conceive and
difficult to plan.
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The complexity of the implementation is due to following reasons :
— Application mix and load
— Varying load with different nature of applications such as transaction intensive, database
intensive, traffic intensive.
— Organisation structure: Divisions, locations and information management requirement.
— Hardware-Software variety due to applications, special and general, requiring co-existence.
— High processing load and data transfer and replication requirements for implementation in
multiple locations.
— Seamless integration of technical talent, hardware and software with varying configurations.
— Conceiving enterprise wide solutions for at least, five years.
The implementation procedure would broadly involve the following steps :
1. Setting the goal, time frame to cover the scope to be brought under the implementation.
2. Forming a project group of experts comprising business analyst, system analyst, information
analyst, network specialist, hardware and software specialist, supported by a consultant.
3. Discussing the requirement of information in terms of definition, scope, content, frequency,
number of users, distributed processing, data and application responsibilities and so on.
4. Translating the requirement of information into applications with systems involved and the
processes which run the systems.
5. Making a broad classification of applications as critical and non-critical, transaction intensive
and data intensive. Further putting them by location and assigning the responsibility and
ownership.
6. Understanding the underlying processes which run across the functions, locations and usage
to define the integration needs.
7. Classifying the applications in terms of their requirement of dedicated specialised hardware
and software, like CAD/CAM/CAE, and use of other technologies.
8. Constructing an application grid, system grid to bring clarity of enterprise functioning with
mission critical and other applications marked.
9. Deliberating and deciding Hardware, Software, Operating System needs and configuring each
of them based on load, nature of load, users, processing needs, nature of processing, reporting
needs and so on.
10. Making a plan of networking the variety of platforms with infrastructural details namely
servers, routers, gateways, TCP/ IP, NOS and networking strategy LAN/WAN, Internet /
Intranet.
11. Selecting enterprise wide solution comprising ERP solution, dedicated local solutions to meet
specific needs, solution on supporting technologies for data capture, transaction capture, data
replication and transfer.

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12. Deciding on RDBMS, front end tools, report writers, packaged solutions for text processing,
data handling and communication. Care should be taken while deciding whether they can
co-exist and function in a co-operative and co-ordinated manner and in an intelligent way
to meet the unified needs of information across the organisation.
13. Assessing the needs of hardware and software of all kinds in terms of users, capacity,
capabilities and quantity. Configuring them in terms of disk capacity, RAM, controllers, drivers,
utilities and features and most important processing speed in terms of Mhz.
14. Finalising the numbers of servers, clients and hardware components in network with clear
role identification as data servers, applications servers, dedicated servers and clients.
15. Focusing on long term requirements and choosing vendors who have clear vision on
technology, growth and are committed to serve and support your plans. The products are
selected first for its merit and then the vendors who make them. The client server architecture
is a customised structure to achieve total performance. Hence, each component however,
small contributes to the performance. Therefore its selection is strategic to the success of
the system. Choice of the number and capabilities are decided by network traffic which may
arise due to transaction process, DSS or combination of both. Every Client Server
implementation requires fresh scrutiny before it is finalised.
16. Most of the programming is done on the client and selection of the appropriate development
tool is very important. The choice of tool should largely be based on the features it offers, in
comparison with the features required by the applications.
17. Client server implementation is a cultural change in work style, managerial style and
operations. In this implementation, roles not only change but they are fixed to individuals. It
is therefore strategic to assess manpower resource to manage server, network and client
operations. A thorough training is essential to each of them to understand the working of the
system and their role in it. A team of experts headed by a system administrator should support
and maintain the system.
18. Long-term planning, with phased implementation to protect investment and then to ensure
the best technology, is critical to the success of Client Server implementation. Information
Technology, business and the information requirements change continuously to an extent that
obsolescence cannot be ruled out. Hence, architecture plan must be long term, investment
in hardware and software should be adequate to meet present needs and some of the future
as well. Investment in the application software should be slightly long term. This approach
provides flexibility to change and protect investment and gives highest price performance in
a given situation.
19. Ideally after planning, a pilot project should be chosen to confirm variety of decisions involved
in Client Server implementation. If pilot project proves efficient, the decisions on large scale
be implemented.
20. A typical Client Server project implementation would take two to three years to establish
and mature.

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MIS and Client Server Architecture
The classical definition of MIS of supporting decision making is continuously undergoing a
change due to the changing environment of business. The traditional definition served well in the era
of slower economic growth, protected local markets, limited competition and longer product life span
and the management process was basically supply management.
In the earlier environment, architecture of the MIS on the traditional lines with host computer
driven systems could meet the requirement of information, which were largely of routine nature. The
focus was on data capture, processing for summary information to confirm the plan and budget norms
and statutory reporting. Hardware-software architecture and MIS architecture both could be stable
with very little change. The environment is known as legacy systems environment.
But in the nineties business game has considerably changed due to fast economic growth,
stronger competitors, customer driven business strategies, faster product obsolescence and the
technology assuming strategic importance. To serve this change, quality, quantum, nature and frequency
of decision making required a significant modification where flexibility, speed and innovative skills
assumed great importance.
MIS design is more dynamic with well defined authority and decision making structure. The
client server architecture, because of its capabilities, serves well this need of the MIS. It provides
comprehensive support to the decision makers.
Client Server Architecture provides this environment where MIS is a flexible and dynamic
model as compared to traditional model of MIS working on main frame model.
MIS for competitive and strategic needs requires heavy transaction processing and using
processed information to update the business status initiating a variety of actions. Client-Server
architecture offers such functions to perform.
Ability of Client Server architecture to store data and swift access and processing capability
helps to try and simulate variety of strategies before they are firmed up. It also facilitates analysis of
the various strategy models. Use of Executive Information System (EIS), Data reverse engineering
for evolving and analysis of strategies is easily possible because of Client-Server architecture using
front end tools and packaged software on business modelling, risk analysis and forecasting.
Hardware software platforms with ODBC drivers and other systems software facilitate
pooling of the information residing at different platforms at different locations and then presenting it in
a form which is easy to understand to evoke a managerial response. Modern day business requires
MIS which can pool such information from various sources and present it to the user in an appealing
manner.
MIS essentially revolves around mission critical applications designed for highest customer
satisfaction. A majority of such applications are real time transaction processing at multiple locations.
MIS today serves the effort of enterprise management. The enterprise management requires
management of following technologies, namely:

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 — Information technologies
— Data capture technologies
— Bar coding, scanning, imaging
— Communications
— Network technologies
— CAD/CAM/ CAE
— Process automation and computer based manufacturing and many more.
Client server architecture recognise this need and provides interfaces, connectivity and
gateway to these systems.
With second generations multi-tier Client Server architecture, it is possible to build MIS which
is efficient to provide rich information for decision making at all levels. One can conceptualise different
models of MIS i.e., Corporate MIS, Function MIS, Division MIS, Personal MIS and Private MIS
where data and information integrity, consistency and security is reassuring. A good MIS designer’s
requirement is fully met in this model of Client Server as, business intelligence is available on the desktop
PC (client).

Summary

MIS refers broadly to a computer-based system that provides managers with the tools for
organizing, evaluating and efficiently running their departments. In order to provide past, present and
prediction information, an MIS can include software that helps in decision making, data resources such
as databases, the hardware resources of a system, decision support systems, people management and
project management applications, and any computerized processes that enable the department to run
efficiently. Within companies and large organizations, the department responsible for computer systems
is sometimes called the MIS department. Other names for MIS include IS (Information Services) and
IT (Information Technology).

To develop information systems that fill users’ needs, MIS professionals must understand
organizational structures, business objectives, and business operations (including processes and the
flow of data between processes), how to communicate effectively with users, and how to design
systems that support their activities. MIS professionals must also stay up-to-date with evolving
information technologies and have a solid foundation of technical skills to select appropriate technologies
and to implement computer-based information systems. Thus, the MIS combines computer- with
business. Create business applications in an event-driven programming language (such as Visual Basic)
including the development of user interfaces, use of controls, writing/debugging code, and the creation
of interactive menus.

Apply data modeling techniques (such as normalization and ER diagramming) to create a

database model.

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 Implement a database model in a relational database management system (such as SQL or
Access) including the creation of tables, establishing referential integrity constraints, loading data,
creating views, and producing forms and reports using database data.

Select and apply appropriate systems analysis and design techniques to create a system design
for a business process including systems development planning, requirements determination and
analysis, and data/process modeling.

Use modern application development products as prototyping tools in the systems development
process.

Management information systems and computer science are similar in some respects, in that
they are both concerned with using computers to solve problems. But there are definite distinctions
between these two fields. A MIS professional’s task is to help an organization realize the maximum
benefit from its investment in equipment, personnel, and business processes. This process may include
planning and developing new computer systems or devising ways to apply existing systems resources
to additional operations. An important element within the MIS field is “requirements analysis” which
consists of interviewing clients to determine the goals of the organization. Once the goals have been
established the MIS professional would determine what hardware and software would be needed to
meet those goals. This person would prepare specifications, work diagrams, and structure charts for
computer programmers to follow and then work with them to debug or eliminate errors from the
system. They coordinate tests and observe initial use of the system to ensure it performs as planned.
Due to the close interaction with management MIS will be centered around team work, leadership,
project management, customer service, and underlying business theories.

Computer science is a discipline that involves the understanding and design of computers and
computational processes. The current focus of this discipline is on new and better ways of writing
technical software, like operating systems, graphical interfaces, software utilities, and network protocols.
Some of the crucial areas of computer science are theory, algorithms, programming methodology and
languages, software engineering, and artificial intelligence. In particular, the field is concerned with
optimizing the capabilities of computer hardware and other technology. Computer involves the
understanding and design of computers and computational processes. The current focus of this discipline
is on new and better ways of writing technical software, like operating systems, graphical interfaces,
software utilities, and network protocols. Some of the crucial areas of computer science are theory,
algorithms, programming methodology and languages, software engineering, and artificial intelligence.
In particular, the field is concerned with optimizing the capabilities of computer hardware and other
technology.
Questions:
1. Discuss the role of computer and data management in MIS?
2. Describe the special features of a computer?
3. What are the basic activities of EDP?
4. What are the principal components of hardware?
5. What is software? Explain the major types of computer programmes?

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 CHAPTER - VI
EMERGING TRENDS IN MIS

Objective
Science is playing a pivotal role in developing objective decision methods which involve
continuous involvement of theory and scientific procedures. To fulfil the objectives, scientific approach
to decision making along with the intuition experience and subjective knowledge take over the decision
process.

The notions of heuristics coupled with utility theory have brought the managers closer to
science. Economists, econometricians, social scientists, socio metricians and management scientists
are increasingly motivated to solve the individual, institutional and organisational decision making
problems.

The new decision methods have roots that can be traced atleast as far back as Aristotelian
logic. A substantial contribution came from the work of Bertrand Russel and Alfred North Whitehead
(in their Principia Mathematics of 1912). Later developments in symbolic logic, as reflected in the
work of carnap, Rosenbloom and others (Circa, 1930), were also critical. These approaches stressed
linguistic logic, which (as Russel, among other, later noted) can be converted perfectly into mathematical
descriptions of the same problems. Gradually, the search for ‘ideal’ forms of objective, logical
expression yielded to the logician’s ultimate weapon, mathematics, with increasing success. Matrices,
for example are one of the most convenient methods of representing logical statements. They also
facilitate the bounding of systems into logical sets and subsets. Consequently the matrix form is widely
used for understanding the structure of management decisions and necessarily, the concepts of matrix
construction are critical for our purposes.

Decision Support System (DSS) - latest in information system

To upkeep the needs of management at various levels in a future data processing

environment, there is an urgent need for a new directions systems, frequently referred to as DSS.
This system directly supports the Managers in order to enhance the professional judgements required
in making decision, particularly when problem structures tend to be semi-structured and unstructured.

The relationship between DSS and MIS can be illustrated as follows :

Type of system Principle type of problem structure Decision making capability

DSS Semistructured and unstructured Manager / machine interface

where the manager retains
control for synergic decision
making
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 MIS Well structured New information produced
by analytical methods for
specific decisions,
summarization of
information for periodic
decision making, collection
and tabulation of data using
transactional processing for
decision making.
There are several reasons for non-use of DSS in many Indian organisations. The possible
causes are :-
1. Trained computer personnel not available.
2. Organisation not heard of DSS.
3. Unit has no time pressure in decision making.
4. Industry do not face ‘buts’ and ‘ifs’ in decision making.
5. Financial constraints.
6. DSS is too expensive to use.
7. Not aware of potential use of computers.
8. Decisions made are too simple to keep the computer.

Essential characteristics of DSS : Listed

Broad-based approach to supporting decision making - accent on ‘Management by
perception’: Decision support systems go beyond capabilities of a typical management information
system by taking a broad view of the organisation in terms of supporting decisions. They utilize
‘management by perception’, whereby managers are assisted in perceiving important future trends
and helped in adapting the organisation to upcoming conditions.
Human/machine interface where human retains control over the decision making process :
The utilization of CRT terminals gives the decision maker, the capability to retrieve, manipulate, present
and store data such that there is a human/machine dialogue during decision making. Throughout the
interface, the decision maker has complete control over all stages of decision making process in solving
a problem.
Support decision making for solving structured, semi-structured and unstructured problem:
Generally the focus is on semi-structured and unstructured decisions although well structured decisions
can also be made in a DSS environment. Basically DSS recognises the need for bringing together
human judgement and computerized information for improving the quality of the final decisions.
Utilization of appropriate mathematical and statistical models : Based on the needs of the
problem being solved, one or more mathematical/or statistical models are employed to assist the
decision maker in evaluating alternative solutions. The real pay-off from mathematical and statistical
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models as well as modelling languages comes from integrating them into the decision support system
as decision tools.
Query capabilities to obtain information by request-interaction mode : In DSS, query
capabilities go beyond those of interactive computations and include those of responsiveness. The
latter item refers to utilizing the system as an extension of the individual’s reasoning process throughout
the decision making process.
Output directed to organisation personnel at all levels : Although DSS has the capability to
supply top and middle management with important short-to-long range planning information for decision
making (that was not available with earlier computer systems), it is also capable of providing lower
management and their operating personnel with the necessary output for supporting decision on
controlling current operations.
Integrated sub-systems : This conception refers to the capability of processing data for use by all
sub system along broader, functional lines rather than the traditional, narrow departmental lines.
Integrated sub-systems allow Managers and their personnel to retrieve and manipulate information of
concern to them for supporting decisions.
Comprehensive data base : Contents of data base for DSS must go beyond just providing historical
informations about current and past operations. It must also contain appropriate external information
that is compatible with internal information contained in the database. Generally, it is desirable to utilize
a data base management system (DBMS) to assist a human/machine dialogue.
Easy-to-use approach : The hall mark of effective DSS is that it is easy to use, that is; not only
does it assist the decision maker in supporting decisions via. a human/machine interface, but also allows
the individual to pursue his/her own natural tendencies to problem solving. From this view, the individual
feels comfortable and ‘at home’ with the system rather than intimidated by it.
Adaptive system overtime : The main thrust of adaptive system concept is that, the decision maker
is able to confront changing conditions and adopt the system to meet these changes. The time factor
for effecting system changes is a few weeks to several months.

Important characteristics of DSS

Some of the most vital parameters of DSS are mentioned below :
1. Type of system : Forward and backward movement planning and control system with
integrated sub-systems.
2. Type of files : Storage of files on line for internal data and external environment data.
3. Data elements : Comprehensive data base.
4. Exception reporting : Current goals and plans based on management perception and used
for examining exceptions.

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 5. Information orientation : Input - Output terminals with graphic capabilities.
6. Processing mode : Interactive processing mode for human interface with computerized
information to arrive at effective decisions.
7. Mathematical models : Use of simple to complex mathematical and statistical models which
are standard or custom made.

Decision Support System

DSS is more than defined as support and integrated sub systems but includes the words
such as accessibility, flexibility, facilitation, learning, interaction and easy to use. In this system, there
is a three dimensional approach in decision making than two dimensional approach with MIS. MIS is
more concerned with operational aspects of controlling operations, but the key issue of DSS is one
of what decision making process or decisions are being supported to assist the Managers in fulfilling
their organisational duties and responsibilities. DSS gives support to the Managers and does not
replace the individual. The characteristics within a DSS framework are more concerned with providing
decision maker with a service as opposed to delivering a product as found in MIS environment. DSS
allows the decision maker to combine judgement with computer output in a human/machine interface
for producing meaningful support to the decision making process. They are capable of solving all
types of problems such as structured, semi-structured and unstructured.

From the overall point of view DSS can be looked upon as an integral part of decision
makers approach to problem solving with broad perspective by employing “management by
perception” principle.

Expert system

Expert systems are programmes that contain large amounts of expert knowledge that can
be conveyed to users in the form of consultative advice. They are designed to solve the practical
problems. It is so important in the development of artificial intelligence that they have been described
as ‘agents of second computer revolution’. Generally, expert system requires a knowledge base on
which contains expertise, problem solver to make inferences by applying knowledge known about
the specific case, a data base of facts about specific problems and a user interface to enable the
expert to communicate to the user.

The nature of the feed back

In general, feed back written about the evaluation of section of a report utilizes the following
types of comments :

1) Programme explanations.
2) Alternative tutor explanations.
3) Extra tutor comments.
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 4) Extra remedial comments.
5) Feature lists or overall performance for each equipment and tabulations.
6) Qualitative judgements.
7) Textual connectives.

Improving the system

ES should be (a) heuristic i.e., it reasons the judgmental knowledge as well as formal
knowledge of established theories, (b) transparent - it provides explanations of its line of reasoning
and answers to queries about its knowledge and (c) flexible - it integrates new knowledge incrementally
into its existing store of knowledge.

Relationship of Management Information System (MIS) and Decision Support System

(DSS) in terms of decision making

DSS

MIS
Routine and structured tasks
of data processing.
Tabulation and aggregation of periodic models for making well structured
reports for decision making
Human / Machine
interface model : Synergic
decision making
to produce a quality decision.
Utilization of
mathematical and statistical
problems : solution (i.e., decision)
for problem under study

Introduction to Object Oriented Technology (OOT)

With high computing and processing power, miniaturisation of memory chips, parallel
processing, distributed data processing, client server technology, seamless communication, and
multimedia technologies, it is possible to look at the organisation as a whole and also to analyze the
business in terms of processes as against functions. The business can now look beyond the corporate
boundaries. The new approach calls for looking at the business as a network of business processes.
The conventional design approach based on SSAD (Structured System Analysis And Design)
or SASD (Structured Analysis And Structure Design) with the help of life cycle/waterfall or spiral
model approach were found grossly inadequate and deficient to handle changing information needs
of business. If processes were not changed fast, it would have affected the business adversely. It
was, therefore, necessary to evolve a methodology to handle continuous changes in the process. For

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example, sales statistics and analysis and related management information remain the same but order
acceptance, sales processing, billing etc., are continuously required to change. Many times new
processes are required to perform the same business activity. To handle such complex and speedy
changes, an altogether different approach was necessary to execute new requirements very fast. This
new approach is called Object -Oriented Technology (OOT).
OOT helps in retaining the main behaviour and changing only the required aspect of sales
order processing minimizing the time and cost of change.

Object Oriented Analysis (OOA)

The purpose of OOA is to understand the application in terms of its functional requirement.
The OOA contains the following steps :
1. Finding the objects - Object view of the application.
2. Organising the objects - View the objects in terms of a relation representing an application.
3. Specifying object interaction - Identifies the objects association and relation to each other.
4. Defining the operations of the objects - Mechanism to change the status.
5. Constructing the objects in terms of behaviour, attributes and parts - Model the object in a
microscopic detail.

Object oriented languages

The use of Object Oriented Technology (OOT) requires programming languages for
implementation. The object oriented languages are higher order languages and they stand out differently
over second, third generation languages.
The development of languages also is linked with progress made in the science of computing,
data types and processes. Programming languages, grouped into four generations with the criteria
whether they support mathematics, algorithmic, data, or object oriented abstractions, have enriched
the understanding of the semantics of the statements, modules and abstractions.
There are two types of languages in object oriented technology implementation. The language
is object based if it directly supports data abstraction and classes. The language is object oriented
when it is object based and supports inheritance and polymorphism. All the objects handling languages
have been evolved from language ‘SIMULA’, developed in the sixties by Dahl, Myhrhaug and Nygard.
Its foundation is ALGOL, further strengthened by concepts of encapsulation and inheritance.

Object oriented language is evaluated and rated on the basis of support it gives in handling
object model. The OO language capability in supporting the object model is evaluated on seven factors,
namely, Abstraction, Encapsulation, Modularity, Hierarchy, Typing, Concurrency and Persistence.

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 The language must be able to recognise this, and act accordingly. The widely used languages
small talk, C++, Ada, Pascal and Eiffel are object oriented. Smalltalk was created by the work group
members of the Xerox Palo Alto Research Centre. It is so popular that graphic user interfaces such
as Macintosh, Window and Motif are influenced by Smalltalk development. The C++ was designed
by AT & T Bell Laboratories. It is an extension of C and better than C. The C++ corrects many
deficiencies of C, and adds to the language a support for classes, type checking and many other
features required for OOT implementation. Ada is developed by the United States Department of
Defence (DOD). It is designed with three objectives efficiency, reliability and maintenance.

It is seen that C++ is by far most preferred language because of its supportive ability on most
required parameters of object oriented language. The C, and C++ have widespread acceptance on
UNIX platform.

OOT and MIS

With OOT it is possible to universalise the objects disregarding organisaton, industry business
and country. One can aim at building global systems of data and information processing saving a lot
of effort by way of system development. Internet and WEB systems will play a significant role when
objects assume universal character, modeling them as reusable by all concerned.

With OOT, MIS will undergo a structural change transforming from an assembly of information
systems to one system of information processing which is not owned by a function or functions or by
group of people. It will address information needs of changing the key result areas of business.

Summary
Decision support systems are a class of computer-based information systems including
knowledge based systems that support decision making activities.

Because there are many approaches to decision-making and because of the wide range of
domains in which decisions are made, the concept of decision support system (DSS) is very broad. A
DSS can take many different forms. In general, we can say that a DSS is a computerized system for
helping make decisions. A decision is a choice between alternatives based on estimates of the values of
those alternatives. Supporting a decision means helping people working alone or in a group gathers
intelligence, generate alternatives and make choices. Supporting the choice making process involves
supporting the estimation, the evaluation and/or the comparison of alternatives. In practice, references
to DSS are usually references to computer applications that perform such a supporting role.

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 The need for decision support systems stems from the realities of cognitive, economic, and
temporal limits. The capacity for having decision support systems stems from ongoing technological
advances that puts inexpensive, yet powerful, computers on our desktops, in our vehicles, and even in
our pockets. It also stems from conceptual and software advances made by decision support researchers
and practitioners. The nature of support that can be furnished by a DSS has progressed rapidly over
the past decade and is likely to make continued advances. Because knowledge forms the fabric of
decision making, all the various kinds of support that a DSS can provide are essentially exercises in
knowledge management.

Questions:

1. Illustrate the relationship between Decision Support System and MIS?

2. What are the reasons for non-use of Decision Support System in an Indian Organisation?
3. List the essential characteristics of Decision Support System?
4. What are the important characteristics of Decision Support System?
5. Define Decision Support System and Expert System?
6. Illustrate the relation ship of MIS and Decision Support System in Decision making?
7. Write notes on
(a) Object Oriented Analysis
(b) Object Oriented Languages

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 CHAPTER - VII
MIS IN MARKETING INFORMATION SY
INFORMATION STEM
SYSTEM

Objective
Market information system may be defined as factual knowledge about the actions,
antecedents or consequences of social actors outside or inside the firm and the environment in which
they operate. Social actors are as consumers, competitors, employees, institutions, suppliers,
wholesalers, retailers, govt. bodies and NGO’s. The environment actors are physical, technological,
economic, legal and social taboos.
Marketing decision support systems (MKDSS) is an information system that helps with
decision-making in the formation of a marketing plan. The reason for using a MKDSS is because it
helps to support the software vendors’ planning strategy for marketing products; it can help to identify
advantageous levels of pricing, advertising spending, and advertising copy for the firm’s products .This
helps determines the firms marketing mix for product software.
Constituents of information needs in the context of marketing
Various constituent are: - consumer behaviour, aggregate demand, the competition, political
/legal / social environments, product consideration, distribution questions, pricing consideration,
communication issues and organisational behaviour.

Marketing Information System

Marketing information system can be defined as a collection of equipment, people and
programs in the organisation whose functions are to monitor, gather, analyze, evaluate, store and to
disseminate the knowledge. The company market linkage is shown below.

(Company) (Market)
Input Output
Through put

Feed Back
Further details are provided below

Input:- Internal environment

Top management

Formal departments
— Production
— Accounting
— Finance
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 — Public relation
— Procurement
— Marketing sub-groups
— Staff / line groups
— Groups
External environment: -
— Consumers
— Suppliers
— Intermediaries
— Competitors
— Government
— Special interest group
— General public
Throughput: - MIS (Marketing Information system)
- Communication system
Exchange function
— Data gathering
— Information storage
— Knowledge dissemination
Proactive functions
— Selling
— Service
— Negotiation
— Lobbying

Market science system

Market science system includes statistical models and analysis, data base, quantitative
analysis, mathematical models and analysis, and product analysis. All these lead to ‘interpretation
of analysis and findings’ to arrive at conclusions and recommendations.

Normative system
This system narrates shapes of judgement of an organisation what is good or bad,
important or unimportant, what action should be or should not be taken in. It is connected to
communication system and marketing science system. The normative system translates organisational
goals into sub-goals, policies and standards.
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Output
The overall output of MIS in the management decision systems arrives at policies, rules,
procedures and directives with regard to organising, planning, staffing, executing and controlling.

Feed back
Feed back on an environment and organisation is through the output of marketing information system.
However, one cannot specify what information is needed for decision making until an
explanatory model of the decision process and the system involved in it are constructed and tested.
The marketing information system enables in assessing the managerial information and their feed back
effects on environment and organisation. This is a continuous process to locate the very open system
of marketing in terms of responses to the internal and external pressures.

Enterprise Management Systems (EMS)

Computer, electronics, communication and audio video technologies have converged closely
to produce a new style of operating business. The dynamic business environment of today is full of
challenges and opportunities. The dependence on the information, as a driving energy source, is
increasing. Every business activity has additional dimensions, viz., speed and time. The business needs
of today are beyond the transaction processing. It requires an instant real time response in every case,
wherever it occurs.
The word enterprise is chosen to convey that it encompasses the larger business community
covering all the players and their participation in the business. The system is extended beyond the
Corporate boundaries.
Instant processing needs the management of EDI systems to get hooked to the customer
and vendor for a quick information communication. It also requires the management of interfaced
system such as CAD/CAM, MRP etc. It also requires event monitoring and updating systems such
as the Paging, Internet and the Imaging Systems.

The tools, the technologies and the well designed solutions and systems are available to
support all needs of the business. What is needed is an integrated solution out of these technologies
and the systems offering an enterprise wide management support. Such an integrated solution is called
as the Enterprise Management System (EMS). The following systems, which when implemented in
an integrated manner for co-ordinated and co-operative function of the business give rise to the
Enterprise Management System, i.e., EMS.
ERP Enterprise Resource Planning Systems
EDI Electronic Data Interchange System for Commerce,
Communication and Action
CAD/CAM/CAE: Computer Aided Design, Manufacturing and Engineering
Systems for Production Management
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AMS Attendance Management Systems, i.e., employee
attendance and presence management for the role
management or Data Capture Systems on floors, in stores,
at gates etc.
DMS Document Management Systems viz., imaging, copying and
text management and despatching document DBMS
CMS Communication Management Systems, such as, Paging,
cordless, mobile telephone systems and the audio video
systems
SMS Security Management Systems such as the close circuit
television, alarm or warning systems, movement tracing
systems etc.
Enterprise Resource Planning (ERP) System

The ERP system deals with the planning and use of resources used in the business. The
resources are finance, materials, manufacturing capacity and human resource. The ERP provides
methodology of assessing the resource needs for a given business plan to achieve certain business
objectives. It also helps to execute the strategies, plans, decisions, and actions in a time bound manner.
The ERP provides a support system in the transaction processing, updating and reporting across the
functions. The ERP is a package comprising all major functions of the business. The product is generic
in nature and is supposed to incorporate the best business practices, generally followed in most of
the companies.

ERP Model and Modules

The generic ERP package represents the commonly operated business model of the
organisation. It is built with the function models like Finance, Materials, Marketing, Sales, and Personnel
and their sub-modules. These modules are then integrated to perform, ensuring data and information
consistency and concurrency.

The seamless integration of the modules allows the users at any level to take a micro and a
macro view of the function and process view of the transaction across the function. A typical ERP
solution has the following modules:

— Business forecasting, planning and control (Business)

— Sales, distribution, invoicing (Sales)
— Production planning and control (Production)
— Materials management (Materials)
— Finance and accounting (Finance)
— Personnel Management (Personnel).
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General Features
— Separation of the programme code and the data areas.
— Command language
— Screen based flow control
— Application logic
— Common service function such as the currency, date, editing and help
— Diagnostic functions
— Transaction flow control
— Help functions
— Central table system for management of parameters, texts and master data, online logical
check and validations
— Word processing, text editing
— Action messages
— Tunin get fixing and allocation by the key parameters.
— MIS for strategy monitoring and control.
— Business modelling for the strategy development and testing. DSS for resource planning.
— Information base management for management applications.

Sales
— Basic data (master) management
— Order processing
— Despatching and invoicing
— Order analysis, forecasting
— Sales analysis, budgets and controls
— Finished goods stores management
— Dealer, distributor management system
— Receivable analysis
— Market / customer/ product analysis
— Market research information database
— Marketing personnel management
— Sales forecasting and budgeting.

Production
— Basic master data management.
— Bill of materials, classification.
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 — Process sheet, routing.
— Work under generation, scheduling and control.
— Production planning : BOM, MRP, MPS and capacity planning.
— Interface of CAD/CAM/CAE systems.
— Quality systems for data capture, analysis and control.
— WIP tracking, valuation.
— Work station/ machine centre management.
— Production materials interface.
— Collection of unit data for valuation and costing.
Materials
— Purchasing and procurement.
— Goods receipt and issue system.
— Stock management and valuation.
— Inventory analysis
— Stores ledger, valuation, analysis, disposal.
— Excise / customs interface.
— Data integration with production, accounts systems.
— Quotation / Enquiry processing.
— Sub-contracting, material accounting and bill passing.

Finance
— General accounting functions.
— Ledger, payable and receivable.
— Subsidiary ledgers.
— Cash flow management.
— Loan management, funds management.
— Working capital management.
— Budgeting, planning and control.
— Balance sheet processing.
— Tax management, status reporting.
— Assets accounting.
— Cost accounting : cost centre accounting, order accounting, product costing.
— Cost analysis for business decisions.
— Bank reconciliation.

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 — Letter of credit management.
— Consolidation of accounts.

Personnel
— Personnel data management.
— Personnel attendance system, time management.
— Payroll accounting : salary, wages, incentives, bonus, income tax and other deductions and
contributions to various public and provident funds.
— Human resources management : Planning, recruitment, training and upgradation.
— Personnel cost, projection and planning.

Fixed assets
— Fixed assets accounting : Inventory , register.
— Depreciation accounting.
— Capital work in progress.
— Fixed assets retirement and disposal.
— Year end processing for balance sheet schedules.

Maintenance
— Plant maintenance planning.
— Breakdown, preventive, conditional maintenance.
— Maintenance management : Initiation, planning, execution, control and cost accounting.
— Monitoring performances for maintenance action as all kinds of productive assets.
— Contract management.

Quality control
— System of data gathering to assess quality and measure against standard.
— Analysis of quality by process, material, work centre location.
— Analysis of quality by reasons and actions taken.
— Building quality assurance data for equipment / process/ technology selection.
— Monitoring quality across the organisation from input to output for operating decisions and
business decisions.

Consolidation of Business operations

— Accounting by units and divisions with local focus.
— Consolidation by accounts in corporate functions.

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 — Bringing out comprehensive reporting system for business decisions.

Characteristics of ERP solution

— Modular structure.
— Scalable architecture.
— Seamless integration of modules.
— RDBMS independent.
— Independence of hardware platform.
— Interface capabilities.
— PC download/ upload facility.
Benefits of the ERP
1. Better management of resources reducing the cost of operations.
2. Planning at functional and process level. Simultaneous increase in the productivity of the
business possible.
3. Customer satisfaction increased due to shorter delivery cycle. Closer contact with the
customer.
4. Simultaneous activisation of the decision centres because of instant inducement through
triggers or updates.
5. Business operations transparency between business partners cutting down the execution time
of critical business operations.
6. Intelligent ERP downloads the decision making at lower level, releasing the burden on the
middle management.
7. Due to faster processing technology and SQL, management can see the information in their
perspective and take different view of the business.
8. Due to strong interface capabilities, the human resource can be utilized better due to access
to the information across the databases distributed over the organisation.
9. Since, the ERP design is proactive, it makes the management alert at a number of points
demanding the decision or action.
10. The processes become faster due to work group technology and application of work flow
automation.
11. Due to the support technologies like EDI, E-mail, office automation, paperless office is a
newer possibility as communication is faster and systems get connected directly.
12. The ERP still remains a valid solution with the expansion of business as it is a scalable
architecture.
13. Due to the client - server architecture, the application of object technology and use of the
front end tools, the process changes can be easily carried out in a short duration of time.
Hence, the user service can be maintained at a higher level.

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 14. The ERP implementation automatically leads to the usage of the best business procedures
bringing the consistency of operations in the world of business.
15. With the use of the data warehousing and data reverse engineering, management becomes
knowledge driven and the organisation becomes a learned one.
16. The ERP scope can be enlarged through the Internet / Intranet access, making the ERP
sensitive to the latest events in the business, market and technology.
17. The quality of decision making improves as the user decisions maker is made alert and he is
made knowledgeable and better informed dynamically.
18. The tools available to the decision maker are friendly whereby he is equipped to take decision
and execute it simultaneously.

ERP selection
Since, the market offers a number of ERP packages, it is up to the buyer to make a choice.
Each product has its own USP and differs in a number of ways in content, scope, an ease of
implementation etc. The selection can be made on three dimension viz., the vendor, the technology,
the solution scope and architecture.

Vendor evaluation
Factors
1. Business strength of the vendor.
2. Product share in total business of the vendor.
3. R&D investment in the product.
4. Business philosophy of the vendor.
5. Future plans of the vendor.
6. Market reach and resource strength of the vendor.
7. Ability to execute the ERP solution.
8. Strength in the other technology knowledge and the ability to use them.
9. Perspective plan of the ERP improvement with the technology development.
10. Image in the business and in the information technology world.
11. Financial strength of the vendor to sustain and handle the business and technology risk.
12. Organisation for product development and support.
13. The global experience of the vendor and commitment to the product for long term.

Technology evaluation
Factors
1. Client server architecture and its implementation - two tier or three tier.
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 2. Object orientation in development and methodology.
3. Handling of server and client based data and application logic.
4. Application and use of standards in all the phases of development and in the product.
5. Front end tools and back end data based management system tools for the data, process
presentation management.
6. Interface mechanisms : Data transfer, real time access, OLE/ ODBC compliance.
7. Use of case tool, screen generators, report writers, screen painter and batch processor.
8. Support system technologies like bar coding, EDI, imaging, communication, network.
9. Down loading to PC based packages, MS-Office, Lotus notes etc.
10. Operation system and its level of usage in the system.
11. Hardware - software configuration management.

ERP solution evaluation

Factors
1. ERP fit for the business of the organisation in terms of the functions, features and processes,
business scope versus application scope and so on.
2. The degree of deviation from the standard ERP product.
3. Ease of use : Easy to learn, implement and train.
4. The ability to migrate to the ERP environment from present status.
5. Flexible design.
6. The level of intelligent usage of ‘help’, error messages, dictionaries.
7. The ability for a quick start on implementation.
8. Versatility of the solution for implementation on a platform with the objectives of saving the
investment.
9. Rating on performance, response and integration.
10. Product quality in terms of security, reliability and precision in results.
11. Documentation for system handling and administration.
12. Product rating in its class of products.
13. Solution architecture and technology.
Once the committee makes the decision, the vendor should be asked to resubmit the technical
and commercial proposal with price and the terms of offer. The proposal should have the following
details :
1. Scope of supply.
2. Objectives.

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 3. Modules and deliverables.
4. Implementation methodology.
5. Plan and schedules of hardware and software implementation.
6. Resource allocation.
7. Responsibility division between the organisation and the vendor.
8. Process implementation.
9. Organisation for implementation.
10. Progress monitoring and control of the important events.
11. Process of resolving the issues at all levels.
12. The official product literature.
13. Association with the other vendors its purpose.
14. Commercial submission : Price by module and number of users, Payment terms.
15. Process of acceptance of the ERP by stages and linking with the payments.

ERP implementation.
The ERP implementation, generally, follows the waterfall model approach. Once a firm order
is received, the implementation begins with the kick-off meeting between the vendor and the
organisation. In such meetings the organisational issues are taken care of. Since it is a long-term activity
a preliminary planning is done to start the implementation.

The implementation steps are given as follows :

1. A user meeting is arranged to explain the ERP and process of implementation.
2. The Requirement Definition And Description (RDD) and the Deviation Requirement Definition
And Description (DRDD) are explained for understanding and approval.
3. The resource to carry out the changes in the system, generally, known as customization, is
provided. This could be business specific or customer specific.
4. The DERP (Deviation ERP) solution is tested.
5. The solution on the recommended platform is loaded.
6. The solution is tested on sample data of substantial nature.
7. The solution is then demonstrated to the users for their understanding and confirmation.
8. The users are trained to run the solution and resolve the difficulties in operations of the system
solution.
9. The change overs from the manual system to the ERP solution are meticulously planned,
taking care of the cut off dates, the opening balances, the data transfer etc.
10. A logbook of the system usage is kept to note down the problems, solutions and modifications
carried out to make the solution more efficient and effective.

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 11. Standard reports like checklist, ledger, trial balance, and sales analysis are taken to confirm
the integrity of the ERP solution.
12. The standard documentation of the ERP solution is changed to the changed version of the
ERP.
13. The system performance is checked in terms of speed, response, etc. and the ERP solution
and /or the hardware is tuned for improving the performance of the solution.
14. After three to four month’s working, a review meeting with the users is conducted, taking
the support of the log system for the purpose of improvement, confirmation and finalization
of the ERP implementation.

The major problems in the ERP implementation are due to :

1. The resistance of the users in the acceptance of standard ERP solution.
2. The limited awareness of the users and the appreciation of the Information Technology
applications.
3. The ability of the users to change over from the old conventional systems to the technology
based new systems.
4. The level of acceptance of the standard business processes incorporated in the system. Lower
the acceptance, longer the implementation time, resulting into a loss of efficiency and
effectiveness of the solution.
5. A lack of clarity on the business requirement, the customer focus and the strategy of business
and its impact on the ERP solution.
6. The ERP implementation is carried out without properly evaluating the business processes
and practices through business process re-engineering and is preceded by restructuring of
the organisation.
7. The choice of the ERP solution. Not all the ERP solutions are appropriate for the organisation.
Each solution has its own peculiarities in terms of design, architecture, technology, coverage
of business scope, functions and features. Some solutions are good for certain type of business
and industry and not for all the businesses and industries.

EMS and MIS

There is a qualitative change in the MIS design due to the complexity of the business
operations and the risk involved in handling the business.

The MIS is now required to maximise the process productivity and performance. The decision
making support is required for the process optimisation. The decision models are built across the
business management functions. Besides the normal MIS reports required for the top Management,
it also need a set of additional reports, where the critical business processes and the critical success
factors are a focus area.
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 The ERP solution caters to this requirement very easily. The ERP solution is an integrated
solution. The solution operation is seamless, disregarding the hardware or the software platform. The
ERP solution takes care of data integrity and consistency across the organisation, which may have
multiple locations.

The conventional MIS design is more or less embedded in the ERP solution. They provide
all the routine reports at any time for the middle management of the organisation. The ERP, over and
above this, provides an executive information for the strategic management of business. It further helps
to formulate the strategies to achieve these goals taking its implementation further.
The ERP through such an MIS design, improves the decision making skills of the individuals
very effectively. It provides an autonomy in a global system operations. With the ERP, the MIS design
is more flexible, highly decision intensive and efficient.
ERP along with other systems becomes an EMS, MIS design uses ERP which in turn uses
other systems for inputs in terms of data capture, transaction processing and data based creation.
MIS in ERP environment is a sophisticated design serving the needs of the organisation.

Summary
Marketing information system are information systems used in marketing and management
that automate some sales and sales force management functions. They are frequently combined with a
marketing information system, in which case they are often called customer relationship management
systems. Sales Force Automation Systems (SFA), typically a part of a company’s customer relationship
management system, is a system that automatically records all the stages in a sales process. SFA
includes a contact management system which tracks all contact that has been made with a given customer,
the purpose of the contact, and any follow up that might be required. This ensures that sales efforts
won’t be duplicated eliminating the risk of irritating customers. SFA also includes a sales lead tracking
system, which lists potential customers through paid phone lists, or customers of related products.
Other elements of a SFA system can include, sales forecasting, order management and product
knowledge. More developed SFA systems have features where customers can actually model the
product to meet their required needs through online product building systems. This is becoming more
and more popular in the automobile industry, where patrons can customize various features such as
color and interior features such as leather vs. upholstered seats.
An integral part of any SFA system is company wide integration among different departments.
If SFA systems aren’t adopted and properly integrated to all departments, there might be a lack of
communication which could result in different departments contacting the same customer for the same
purpose. In order to mitigate this risk, SFA must be fully integrated in all departments that deal with
customer service management.
Sales force management systems are information systems used in marketing and management
that automate some sales and sales force management functions. They are frequently combined with a
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marketing information system, in which case they are often called customer relationship management
systems.
Enterprise Management System (EMS) is any of the strategies and technologies employed in
the information technology industry for managing the capture, storage, security, revision control, retrieval,
distribution, preservation and destruction of documents and content. EMS especially concerns content
imported into or generated from within an organization in the course of its operation, and includes the
control of access to this content from outside of the organization’s processes.
Enterprise management systems are designed to manage both structured and unstructured
content, so that an organization, such as a business or governmental agency, can more effectively meet
business goals (increase profit or improve the efficient use of budgets), serve its customers (as a competitive
advantage, or to improve responsiveness), and protect itself (against non-compliance, law-suits,
uncoordinated departments or turnover within the organization). In a large enterprise, EMS is not
regarded as an optional expense, where it is essential to content preservation and re-usability and to the
control of access to content - whereas, very small organizations may find their needs temporarily met
by carefully managed shared folders. Recent trends in business and government indicate that EMS is
becoming a core investment for organizations of all sizes, more immediately tied to organizational goals
than in the past: increasingly more central to what an enterprise does, and how it accomplishes its
mission.

Questions:

1. Define (a) Market Information System

(b) Market Science System
(c) Normative System
(d) Enterprise Management Systems
(e) Enterprise Resource Planning Systems?
2. What are the modules of an Enterprise Resource Planning Solution?
3. Enumerate the benefits of an Enterprise Resource Planning System?
4. What are the factors responsible for a Vendor Evaluation, Technology Evaluation,
ERP Solution Evaluation?
5. How is ERP implemented? What are the major problems in ERP implementation?

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 CHAPTER - VIII
FUTURE THRUSTS AND METHODOLOGIES OF
MAN
MANAA GEMENT INFORMATION SY
INFORMATION STEMS
SYSTEMS

Objective
With the development of personal computers, and workstations, the importance of the
mainframe and the mini computers drastically came down as the computing and processing power
centre shifted to the users to reach on their desktop.
The personal computers and the workstations became more powerful day by day and so
capable that each user started having such desktop systems personalising the use of that data and
information. This attitude of the users created problems of data availability, redundancy, communication,
sharing of resources and information management as a resource for decision making. Though the
hardware and software became powerful and the desktop systems became more efficient, the
organisations suffered from its utility to the other needs of the business management. So, the efficient
islands of desktop systems became a bottleneck for the information flow, usage and sharing.

It was, therefore, necessary to put these information islands on one platform whereby they
can talk to each other. They can share the resources and the information, though processed locally,
becoming a corporate resource and an asset which is accessible, sharable and updateable and
simultaneously meeting the requirements of confidentiality, security and integrity.

The solution at the physical level is to connect them through a medium forming a network of
PCs and workstations. The networking primarily fulfilled the resolution of communication and access
issues. The initial implementation due to the technology limitation of distance was the departmental
networks popularly known as the Local Area Networks (LAN).

With the computer technology advances in disk storage, access capabilities, speed and
operating systems, it is possible to distribute a resource and be made available to the users in any
corner. The output devices such as the printers, the plotters, and the storage devices could be shared
by all from any point of the network reducing the investment and improving the utilization of these
costly resources. With the increase in the processing power and communication speed, large Local
Area Networks became efficient and attractive in terms of speed and response.

More and more technologies are supporting basic networking technology, making network
approach to information management most stable, efficient and effective. The coverage of network is
now shifting from LAN to WAN to Global to WEB, and the network, in general is becoming an
open processing platform, independent of hardware and OS. The network standards are now
established and they are mandatory for successful implementations.

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Network Features
The network essentially serves some important features like,
1. It allows the users / departments/ divisions to share the hardware resources like the laser
printers, the plotters and any other storage media like the disk drives.
2. It allows the information to be shared across the Company. The information such as the
product literature, the price lists, the organisation information, the vendor / customer masters,
the rules and regulations, etc., can be stored and maintained at one location to be shared by
the others through a controlled access mechanism.
3. It enables the electronic transfer of mail, document, or data at the addressed locations with
a confirmation.
4. It provides an access to other computer systems in the network to the data file for the local
processing need.
5. With a wide area network, different computer systems can talk to each other for the purpose
of processing, sharing and communicating.
6. It enables seamless integration of the functions and divisions at the operation level and also
at the application level.

Features of the Local Area Network

Apart from the cost saving features, it creates an environment of integrity because in such
cases the data, file and the information management are handled as a centralized function, ensuring
protection to the system as a whole.
The productivity of the work group increases due to quick access to the information and its
usage. The communication being fast, the networks are used for E-mail for sending the corresponding
data and information. Due to faster communication there is an easy access to the processed information.
The work cycles have been reduced increasing the manpower productivity. Due to the network features
and softwares like work flow automation, it is possible to restructure the work group such that the
work group productivity also increases.
In the event of growth, the network can be enhanced from all sides. It is possible to change
the server or add more servers. It is possible to increase the terminals with a proper networking
technology. Hence, meeting the growth needs is feasible and economical as the existing network and
the application development can still run as extended or enhanced network.
It is also possible to improve the efficiency of the network by configuring its basic resources
at the server level keeping a long term view. It is possible to change the roles of servers from dedicated
to non-dedicated and vice-versa. Hence, the network can be restructured with marginal investment
to take up the new processing needs.

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These features enable to offer :
1. A multiuser cost effective environment.
2. A customized application environment.
3. A department integrity and implementation of the critical applications.
4. Services to more users with a marginal investment.
5. An information processing platform which is easy to learn and use.
LAN has basically three components viz., the server, the networking components (Cables,
hubs, network interface cards) and a terminal (PC, workstation or output devices). LAN further has
its own operating system called the NOS.
The Network Interface Unit (NIU) is a microprocessor based device containing a hardware
and a software which supply the intelligence to control the access and the communication across the
network. It is a means to connect the workstations and the personal computers functionally and
physically. It has two parts, viz., the communication interface and the host interface. The host interface
supplies the connection between a specific terminal or workstations and the communication interface
unit. The communication interface plays the role of transmission of the data or the information between
the two units. The choice of the NIU decides the speed, the response and certain capabilities of the
network.
The Network Operating System (NOS) is a system software that facilitates and controls
the LAN working. As the personal computer or the MINI Main Frame has an operating system, the
LAN also has its own NOS to manage the network functionally. The NOS works in conjunction
with the local operating like MS-DOS. It performs the following functions :
— Directory hashing
— Disk file catching
— Record or file locking for security
— System fault tolerance
— Printer or a plotter spooling
— Online helping
— Menu utilities, drivers etc. for user assistance.
— Assisting in resource sharing and access control.

Data communication
Data communication is a process of transporting the data from one location to the other.
Airlines reservation system, automated banking and the point of sale system used in departmental
stores are the examples of the data communication which is central to these systems. The data
communication, therefore, needs a system to transport the data. The role of the system is to accept

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the input data, structure it for quick transportation and restructure it when received at the destination
in an understandable form. It uses the data communication software along with numbers to perform
the communication.
There are five components in data communication system.

1. Computer - To create data for sending.

2. Communication device - MODEM for data convertibility to send or to receive.
3. Communication channel or link - Telephone lines, microwave relay systems to carry the
communication.
4. Receiving computer - To receive the data and display it on the screen.
5. Communication software - To handle communication requirements to access, process, send
and receive and then display on the receiving computer in a format.

ATM Technology
The need for increasing network capacity in LAN is one of the catalysts behind Asynchronous
Transfer Mode (ATM) networking to the desktop. Most of the business and scientific computing
requires network capabilities to handle data as well as video, or circuit on the same network. To
facilitate the evolution of the network from LAN to ATM, ATM network must support the existing
application on desktop.
However, connection oriented ATM networks are different in operations from connection-
less LAN with regard to broadcast, setup and addressing. To raise existing LAN to ATM, based
emulated LAN (ELAN) one needs following setup.

— LAN Emulation Server (LES)

— LAN Emulation Configuration Server (ELCS).

LES is the address resolution server for ELAN. ELAN is associated with LES on one to
one basis. LECS maintains the database of configuration information for each ELAN.

The LAN emulation protocol provides an easy means of migrating existing applications and
evolving them to ATM LAN. One of the potentials of ATM is its ability to carry many kinds of traffic
over the same network link. ATM also provides each applications with the appropriate speed, the
control, while, making the best use of network capacity. ATM LAN has many benefits eg., increased
security, better possibilities for sharing bandwidth.

Corporate management information system

Corporate management information system consists of well defined aspects viz., goals, role
of computer, practice and strategic issues. The above aspects are very important in the implementation

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of MIS in a corporate management. The horizontal and vertical development of organisation clearly
depends on sheer organized information system for management planning and control.
The chronological phases of MIS development during last few years are manual reporting
system, centralized betals processing system, real time system, data base system, decentralized
processing system, distributed processing system and distributed data base system.

MIS methodologies
Techniques associated with MIS show basically the listed sequences :-
a) Using computer in MIS
b) Planning of MIS
c) Development of MIS
d) Design of MIS
e) Implementation of MIS
f) Evaluation of MIS
The methodologies of MIS depends on the use of computer evaluation. The information
management ensures accuracy, completeness, consistency, logical balance and homogeneity of data.

Summary
ATM creates a fixed channel, or route, between two points whenever data transfer begins.
This differs from TCP/IP, in which messages are divided into packets and each packet can take a
different route from source to destination. This difference makes it easier to track and bill data usage
across an ATM network, but it makes it less adaptable to sudden surges in network traffic.

v Constant Bit Rate (CBR): specifies a fixed bit rate so that data is sent in a steady
stream.This is analogous to a leased line.
v Variable Bit Rate (VBR): provides a specified throughput capacity but data is not sent
evenly. This is a popular choice for voice and videoconferencing data.
v Available Bit Rate (ABR): provides a guaranteed minimum capacity but allows data to
be busted at higher capacities when the network is free.
v Unspecified Bit Rate (UBR): does not guarantee any throughput levels. This is used for
applications, such as file transfer, that can tolerate delays.
Asynchronous Transfer Mode (ATM) is a technology designed for the high-speed transfer of
voice, video, and data through public and private networks using cell relay technology. ATM is an
International Telecommunication Union Telecommunication Standardization Sector (ITU-T) standard.
Ongoing work on ATM standards is being done primarily by the ATM Forum, which was jointly founded
by Cisco Systems, NET/ADAPTIVE, Northern Telecom, and Sprint in 1991.

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 A cell switching and multiplexing technology, ATM combines the benefits of circuit switching
(constant transmission delay, guaranteed capacity) with those of packet switching (flexibility, efficiency
for intermittent traffic). To achieve these benefits, ATM uses the following features:

Ø Fixed-size cells, permitting more efficient switching in hardware than is possible with
variable length packets
Ø Connection-oriented service, permitting routing of cells through the ATM network over
virtual connections, sometimes called virtual circuits, using simple connection identifiers
Ø Asynchronous multiplexing, permitting efficient use of bandwidth and interleaving of data
of varying priority and size
The combination of these features allows ATM to provide different categories of service for
different data requirements and to establish a service contract at the time a connection is set up. This
means that a virtual connection of a given service category can be guaranteed a certain bandwidth, as
well as other traffic parameters, for the life of the connection.

To understand how ATM can be used, it is important to have a knowledge of how ATM
packages and transfers information. The following sections provide brief descriptions of the format of
ATM information transfer and the mechanisms on which ATM networking is based.

The basic unit of information used by ATM is a fixed-size cell consisting of 53 octets, or bytes.
The first 5 bytes contain header information, such as the connection identifier, while the remaining 48
bytes contain the data, or payload. Because the ATM switch does not have to detect the size of a unit
of data, switching can be performed efficiently. The small size of the cell also makes it well suited for the
transfer of real-time data, such as voice and video. Such traffic is intolerant of delays resulting from
having to wait for large data packets to be loaded and forwarded.

Questions:
1. Write an essay on the future thrusts and methodologies of MIS?
2. Discuss the features of Local Area Network?
3. What is Data Communication? What are its components?
4. Describe ATM Technology?
5. What is Corporate Management Information System?

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 MODEL QUESTION PAPER

National Institute of Business Management

Chennai - 020

SECOND SEMESTER EMBA/ MBA

Subject : Management Information System

Time : 3 hours Marks : 100

Section A

I Answer all questions. Each question carries 2 marks :-

1. Define Management.
2. Which are the three basic elements of MIS?
3. What is the conceptual view of MIS? Illustrate with a diagram.
4. What is a System?
5. What are Inputs and Outputs?

5x2=10 marks
Section B
II Answer all questions. Each question carries 6 marks :-
1. What is Interface?
2. What are the characteristics of MIS?
3. What are the characteristics of Information?
4. What is the role of information in decision making?
5. Which are the critical steps in building MIS?
5x6=30 marks
Section C
III Answer any three questions. Each question carries 20 marks :-
1. Explain the five different approaches of the composition of MIS.
2. What are the objectives of MIS and compare it with Business Plan?
3. What are the essentialities of Strategic Planning?
4. Briefly explain the different types of strategies and its uses in the industry.
5. What is the role of MIS in Business Planning?
3x20=60 marks