Unit III

Information System applications

Introduction

Management information systems (MIS) provide data to help company in decision making
reduce waste and increase profits. MIS in company management provides a broad picture of
company performance, acts as a planning tool, emphasizes strengths and weaknesses. It helps
improve performance and illuminates levels of organizational efficiency. All levels of
management, departments and even customers can use the information generated through
various MIS data to inform decisions like buying, hiring, reorganizing, pricing, marketing and
budgeting.

Applications of MIS

MIS application in business falls into several different categories that provide information on all
forms of functioning within an organization. Executives and departments within an organization
could obtain any of the following forms of data:
 Business Intelligence System: In BI, all levels of management and executives can print data and
graphs showing information or trends relating to growth, costs, strategic control, efficiency, risk
and performance. 
 Executive Information System: An EI system provides the same information as a BI system, but
with greater attention to detail and more confidential information, designed to help top-level
executives make choices that impact the entire organization. 
 Marketing Information System: MI systems provide data about past marketing campaigns so
that marketing executives can determine what works, what does not work and what they need
to change in order to achieve the desired results. 
 Transaction Processing System: TPS handles sales transactions and makes it possible for
customers to sort search results by size, color or price. This system can also track trends related
to sales and search results. 
 Customer Relationship Management System: Keeping up with customers is key to overall
success, and CRMS helps companies know when and how to follow up with customers in order
to encourage an ongoing sales relationship with them. 
 Sales Force Automation System: Gone are the days when sales teams must do everything
manually. SFA systems automate much of what must be done for orders and to obtain
customer information. 
 Human Resource Management System: HRM systems track how much employees are paid,
when and how they are performing. Companies can use this information to help improve
performance or the bottom line. 
 Knowledge Management System: Customers with questions want answers right away and
knowledge management systems allow them to access frequently asked questions or
troubleshoot on their own timetable. 
 Financial Accounting System: Financial accounting systems help to track accounts receivable
and accounts payable, in order to best manage the cash flow of a company. 
 Supply Chain Management System: SCM systems record and manage the supply of finances,
goods and data from the point of origin domestically or abroad, all the way to its destination in
the hands of a customer. 

Decision Support System (DSS)

DSS is an information system that aids a business in decision-making activities that require
judgment, determination, and a sequence of actions. The information system assists the mid-
and high-level management of an organization by analyzing huge volumes of unstructured data
and accumulating information that can help to solve problems and help in decision-making. A
DSS is either human-powered, automated, or a combination of both.

Purpose of a Decision Support System

A decision support system produces detailed information reports by gathering and analyzing
data. Hence, a DSS is different from a normal operations application, whose goal is to collect
data and not analyze it.
In an organization, a DSS is used by the planning departments – such as the operations
department – which collects data and creates a report that can be used by managers for
decision-making. Mainly, a DSS is used in sales projection, for inventory and operations-related
data, and to present information to customers in an easy-to-understand manner.

Theoretically, a DSS can be employed in various knowledge domains from an organization to

forest management and the medical field. One of the main applications of a DSS in an
organization is real-time reporting. It can be very helpful for organizations that take part in  just-
in-time (JIT) inventory management.

In a JIT inventory system, the organization requires real-time data of their inventory levels to
place orders “just in time” to prevent delays in production and cause a negative domino effect.
Therefore, a DSS is more tailored to the individual or organization making the decision than a
traditional system.

Components of a Decision Support System

1. Model Management System

The model management system stores models that managers can use in their decision-making.
The models are used in decision-making regarding the financial health of the organization and
forecasting demand for a good or service.

2. User Interface

The user interface includes tools that help the end-user of a DSS to navigate through the
system.

3. Knowledge Base

The knowledge base includes information from internal sources (information collected in a
transaction process system) and external sources (newspapers and online databases).
Types of Decision Support Systems

 Communication-driven: Allows companies to support tasks that require more than one
person to work on the task. It includes integrated tools such as Microsoft SharePoint
Workspace and Google Docs.

 Model-driven: Allows access to and the management of financial, organizational, and

statistical models. Data is collected, and parameters are determined using the
information provided by users. The information is created into a decision-making model
to analyze situations. An example of a model-driven DSS is Dicodess – an open-source
model-driven DSS.
 Knowledge-driven: Provides factual and specialized solutions to situations using stored
facts, procedures, rules, or interactive decision-making structures like flowcharts.

 Document-driven: Manages unstructured information in different electronic formats.

 Data-driven: Helps companies to store and analyze internal and external data.

Advantages of a Decision Support System

 A decision support system increases the speed and efficiency of decision-making

activities. It is possible, as a DSS can collect and analyze real-time data.
 It promotes training within the organization, as specific skills must be developed to
implement and run a DSS within an organization.
 It automates monotonous managerial processes, which means more of the manager’s
time can be spent on decision-making.
 It improves interpersonal communication within the organization.

Disadvantages of a Decision Support System

 The cost to develop and implement a DSS is a huge capital investment, which makes it
less accessible to smaller organizations.
  A company can develop a dependence on a DSS, as it is integrated into daily decision-
making processes to improve efficiency and speed. However, managers tend to rely on
the system too much, which takes away the subjectivity aspect of decision-making.
 A DSS may lead to information overload because an information system tends to
consider all aspects of a problem. It creates a dilemma for end-users, as they are left
with multiple choices.

Group Decision Support System (GDSS)

A group decision support system (GDSS) is an interactive computer-based system that

facilitates a number of decision-makers (working together in a group) in finding solutions to
problems that are unstructured in nature. They are designed in such a way that they take input
from multiple users interacting simultaneously with the systems to arrive at a decision as a
group.

The tools and techniques provided by the group decision support system improve the quality
and effectiveness of the group meetings. Groupware and web-based tools for electronic
meetings and videoconferencing also support some of the group decision making processes,
but their main function is to make communication possible between the decision-makers.

In a group decision support system (GDSS) electronic meeting, each participant is provided with
a computer. The computers are connected to each other, to the facilitator’s computer and to
the file server. A projection screen is available at the front of the room. The facilitator and the
participants can both project digital text and images onto this screen.

A group decision support system (GDSS) meeting comprises different phases, such as idea
generation, discussion, voting, vote counting and so on. The facilitator manages and
controls the execution of these phases. The use of various software tools in the meeting is also
controlled by the facilitator.

Components of Group Decision Support System (GDSS)

A group decision support system (GDSS) is composed of 3 main components, namely hardware,
software tools, and people.

 Hardware: It includes electronic hardware like the computer, equipment used for
networking, electronic display boards and audiovisual equipment. It also includes the
conference facility, including the physical set up – the room, the tables, and the chairs –
laid out in such a manner that they can support group discussion and teamwork.

 Software Tools: It includes various tools and techniques, such as electronic

questionnaires, electronic brainstorming tools, idea organizers, tools for setting priority,
policy formation tool, etc. The use of these software tools in a group meeting helps the
group decision-makers to plan, organize ideas, gather information, establish priorities,
take decisions and document the meeting proceedings. As a result, meetings become
more productive.

 People: It compromises the members participating in the meeting, a trained facilitator

who helps with the proceedings of the meeting, and an expert staff to support the
hardware and software. The GDSS components together provide a favorable
environment for carrying out group meetings.

Features of Group Decision Support System (GDSS)

 Ease of Use: It consists of an interactive interface that makes working with GDSS simple
and easy.

 Better Decision Making: It provides the conference room setting and various software
tools that facilitate users at different locations to make decisions as a group resulting in
better decisions.
  Emphasis on Semi-structured and Unstructured Decisions: It provides important
information that assists middle and higher-level management in making semi-structured
and unstructured decisions.

 Specific and General Support: The facilitator controls the different phases of the group
decision support system meeting (idea generation, discussion, voting and vote counting,
etc.) what is displayed on the central screen and the type of ranking and voting that
takes place, etc. In addition, the facilitator also provides general support to the group
and helps them to use the system.

 Supports all Phases of the Decision Making: It can support all the four phases of
decision making, viz intelligence, design, choice, and implementation.

 Supports Positive Group Behavior: In a group meeting, as participants can share their
ideas more openly without the fear of being criticized, they display more positive group
behavior towards the subject matter of the meeting.

Group Decision Support System (GDSS) Software Tools

Group decision support system software tools help the decision-makers in organizing their
ideas, gathering required information and setting and ranking priorities. Some of these tools are
as follows:

 Electronic Questionnaire: The information generated using the questionnaires helps the

organizers of the meeting to identify the issues that need immediate attention, thereby
enabling the organizers to create a meeting plan in advance.

 Electronic Brainstorming Tools: It allows the participants to simultaneously contribute

their ideas on the subject matter of the meeting. As the identity of each participant
remains secret, individuals participate in the meeting without the fear of criticism.
  Idea Organizer: It helps in bringing together, evaluating and categorizing the ideas that
are produced during the brainstorming activity.

 Tools for Setting Priority: It includes a collection of techniques, such as simple voting,
ranking in order and some weighted techniques that are used for voting and setting
priorities in a group meeting.

 Policy Formation Tool: It provides the necessary support for converting the wordings of
policy statements into an agreement.

Knowledge Management System

A knowledge management system (KMS) is a tool used by companies to help organize

documentation, frequently asked questions, and other information into easily accessible
formats for both internal and external customers.

Using knowledge management software can help keep documentation up to date, assist
customers in finding their own answers, and manage knowledge access and permissions across
user groups. It’s a tool that’s valuable to both small businesses that are just starting out and
global enterprises that need to distribute knowledge to a wide variety of audiences.

Types of knowledge to include in knowledge management

There are three different types of knowledge to gather:

Explicit knowledge

This is the knowledge that needs to be documented and is usually easy to turn into an article. It
is a description about, or a set of steps towards, achieving something. Examples include
clothing measurements and fabric information or where to change your login information on a
software application. Gather explicit knowledge through fact-finding with your subject matter
experts.
Implicit knowledge

This is information customers need to infer from explicit knowledge. It requires customers to
interpret existing pieces of explicit knowledge as described above, or general knowledge to
create desired outcomes. For example, how to combine software features to achieve a business
need or knowing a certain material is waterproof. Gather implicit knowledge by documenting
your customers' use cases and then explain how to combine other knowledge to achieve them.

Tacit knowledge

This is knowledge coming from experience and typically requires a lot of context and practice to
acquire. It could be something like knowing immediately what to do during an emergency or
that a specific shoe brand doesn't give you enough arch support. Tacit knowledge is hard to
gather because it is often specific and requires individual testing. Start by getting specialists or
senior members of your team together to disseminate complex ideas and use that to build
larger training content.

Bringing these all together: Explicit knowledge is knowing what apples, cinnamon, flour, and
sugar are. Implicit knowledge is knowing they can be combined to make a pie. Tacit knowledge
is knowing the exact combination of the ingredients that makes the most delicious pie.

Benefits of a knowledge management system

Whether you’re a SaaS company supporting business customers, a consumer product shipping
out retail items, or a helpdesk manager dealing with internal customers, a knowledge
management portal will help you effectively deliver information to the people who need it. Not
only is a knowledge management system great for business, but it’s also great for your
customers. Providing a thorough knowledge management system is key to helping customers
help themselves and improving the overall customer experience.
Knowledge Management System for small business

If you’re a smaller business, you might think that you don’t have enough knowledge to require
a system to manage it. But small businesses benefit just as much from using a KMS. Providing a
way for customers to help themselves is even more important because your team doesn’t
always have a ton of extra time - and scaling as you grow is important.

 It’s all hands on deck, so having an easy-to-use tool that encourages team members to
document their work is important.

 Finding opportunities to surface relevant information is critical to helping a small

customer support team manage customer contacts.

 As processes change regularly, keeping internal documentation up to date will help

small businesses maintain order in the chaos of growth.

 While analytics might be essential for revisions and improvement, it probably won’t be
the priority of small business teams that are focused on getting things done. It will come
into play as they grow.

Enterprise Knowledge Management System

For enterprise companies, effective knowledge management has exponential returns as the
number of customers that will receive help grows - but their knowledge base requires much
more effort to maintain and scale.

 Workflow management and permissions are more important as more people become
involved in updating existing articles.

 As the amount of knowledge grows, keeping it organized becomes more important.

Enterprise teams will rely heavily on information architecture to organize content.

 Global companies will require robust multilingual support to track translation

completion and support customers in their native languages.

 Internal documentation tools are essential for growing enterprise teams who have
complex and large amounts of knowledge to share internally.
  Analytics and reporting will be extremely crucial for enterprise teams who will likely
want to integrate their KMS with Google Analytics for robust insights that will also be
delivered to marketing and product teams.

INTERNAL KNOWLEDGE MANAGEMENT SYSTEMS

Internal Knowledge Management System

An internal KMS is only accessible to employees (or even a specific group of employees) and
hosts private, internal information that customers shouldn’t have access to like policies, specific
troubleshooting requirements, or HR material. Developing an internal knowledge base together
can help scale your customer support team more effectively, and help onboard new agents as
you grow.

 As your company grows, there’s more information and processes required for the
smooth running of the organization. If this information isn’t documented, it’s tough to
keep everyone on the same page.

 When you scale, instead of continuing to hire more and more support agents, a robust
internal knowledge management system equips your existing team to provide speedy
answers and work efficiently.

 The internal knowledge management system captures organizational knowledge that is

known to long-term employees, making it accessible to the wider team and helping in
maintaining organizational continuity.

 An internal KMS fosters collaboration amongst different teams and breaks departmental
silos that exist within different teams in your company.

 Creating onboarding guides in your internal knowledge management system will help
transfer knowledge to new employees more effectively. New employees will have a go-
to place to search for help before asking another team member.


How to implement a knowledge management system

Now that you know all about KMS, you can work on your knowledge management strategy to
decide the right knowledge to share, whom the information is for, the best format to convey it,
and the optimal way to organize the information.

Start capturing the information you want to document

Decide what information you want to record in your knowledge management system. It could
be product information, on boarding guides, how-to tutorials, FAQs, or troubleshooting
instructions for common issues. Find out common customer inquiries that are submitted at
your support helpdesk and build your knowledge repository based on customer needs.

Arrange the information with your audience in mind

You need to start by thinking about who will be searching for the information and when. You
can do this by analyzing your customer journey and figuring out the information that’s required
at each state, and identifying the best way to efficiently convey that. For example, as you move
down the customer journey, you’ll want to restrict some content like information on referral or
loyalty programs to logged-in customers. Or, for an internal KMS, you can set your support
agents up for success with deeper product details and pricing specifics.

Track and analyze feedback

In order to measure the success of your KMS, you need to tap into user feedback. Add feedback
surveys at the end of each article and guide to understand if the information was useful or not.
For example, Freshdesk articles offer an option for readers to vote Yes or No to “Did you find it
helpful?” at the bottom of each article. If many customers report that an article is not helpful,
it’s almost certainly time for an update. 

Modern knowledge management software have built-in analytics in them that tracks and
projects the article feedback and article view count on intuitive dashboards. Integrating your
online knowledge management system with Google Analytics gives deeper insights into how
users navigate within your KMS and how relevant your content is.
Update your KMS regularly

Rarely is any knowledge static. You need to include a process that constantly revises your
knowledge base as the product expands, as customers express confusion or dissatisfaction, or
as your offerings change. Invite multiple stakeholders within your organization like the
customer support team or the sales department to collaborate, contribute, and update the
knowledge shared

Business Process Reengineering

Imagine a company is making great profits and achieving business success. It is reaching its
goals quite easily, but the problem lies in the way these business goals are being met. Business
processes play an integral part in lashing goals. But their inefficiency can cause great harm to
your business in long run.

As the business expands, it becomes even more challenging to change and modify the
processes to get the desired outcomes. This happens due to old habits and methods of
investments. It is a fact that no process can’t be improved without making suitable amends and
changes in it.

That’s when business process re-engineering comes into play! Processes need to be re-

engineered thoroughly and carefully as the experiments and mistakes can cause a lot of
perplexity in the system.

Just making a plan isn’t enough! Effective execution is needed. Proper Business Process Re-
engineering (BPR) execution can prove to be a game-changer for any business. It has the
potential to perform miracles on even a failing or deteriorating company, by escalating the
profits and propelling business growth.

The concept of Business process re-engineering is not the simplest to understand and grasp. It
comprises imposing changes within an organization – scrapping the old ways and making space
for the new one.
And trust me, it isn’t an easy task at all. This is a thorough guide that will help you understand
the A to Z of Business Process Re-engineering. Let us jump straight to what business process re-
engineering is?

What is the Business Process Re-engineering Steps?

Here are certain steps to follow for efficient Business Process Re-engineering:

Step #1: Identify the Need for Change and Communicate

For small startups, this step is probably very easy. You can go for BPR when you realize that
your product is receiving a huge user drop-off rate. Then, the next thing to do is informing the
co-founder, suggest a direction to spindle and you are good to go for the further steps.

For a large business, the first step is the biggest hurdle itself. You will always find individuals
who are satisfied and happy with the existing ways of working. These individuals can be both,
from management side and the employees. The management will most probably be afraid of
getting their investments sunk, and the employees might see it as a job security threat.

Before anything else, you will have to make up their minds and convince them why the change
is required for the firm. This shouldn’t be difficult if your company isn’t doing well.

Perform a thorough research and try answering these questions in case of dilemma: Which of
the processes might not be efficient? Where are you lagging behind of your competition? Are
you even part of the competition or is the condition worse?

Step #2: Build a Great Team of Experts

Business process re-engineering demands a team of highly motivated, and skilled team of

individuals who has the potential to carry out all the needed steps involved.

The team of experts majorly consists of:

Senior Manager: For supervision and calling out the shots for taking major decisions. If your
BPR team doesn’t have anybody onboard from the senior management, then they will have to
get their approval for every little change.

Operational Manager: He is the one who is aware of the ins-and-outs of the process. Their
process knowledge can prove to be a great asset to build a new, effective and more efficient
process.

Reengineering Experts: They are the ones who expertise in the field from IT to manufacturing.
They will discover where and how the right changes should be implemented to yield the best
outcomes. The changes might be anything – software, workflows, hardware, etc.

Step #3: Define Key Performance Indicators (KPI) for the Inefficient Processes

After the team is ready and you are all set to launch the initiative, there will be the need to
define the correct Key Performance Indicators (KPIs). BPR is introduced to optimize your
process. Formulate BPR strategies that can bend as per your business requirements and, not
the other way around.

KPIs usually differ a lot depending on the type of process you’re optimizing. And the following
are the most typical ones:

Manufacturing

Cycle Time – The total time taken from initiating to concluding a process.

Changeover Time – Time in between required to shift the line from making one product to the
next.

Rate of Defect – The total percentage of defective products manufactured.

Inventory Turnover – The time taken in the manufacturing process to convert inventory into
products.
Planned VS Emergency Maintenance – The proportion of the times when planned maintenance
and emergency maintenance happened.

IT

Mean Time to Repair – The average time spent to repair the app, software, or system after any
emergency.

Support Ticket Closure rate – The ratio of number of support tickets closed by the support team
to the number opened.

Application Development – The time spent on completely developing a new application from
the scratch.

Cycle Time – The time required to get the network back up after a security fissure.

Perform business process mapping to know exactly where the KPIs need to be defined in the
individual processes. Use the step-by-step strategy to perform BPR effectively.

You can map out the processes using 2 ways:

1. Process Flowcharts – It is the most basic technique. Just grab a pen and a blank paper
and jot down the processes stepwise.
2. Business Process Management (BPM) Software – Technology makes anything easy!
Using a BPM software for process analysis makes everything clearer and easier to work
with.

For example, you can use BPM software, process digitization, setting deadlines, etc. Such
software will most probably lead you to optimize the said processes since it allows easier
collaboration among the employees.

Step #4: Reengineer and Compare KPIs of the Processes

After the all the above steps, it is important to perform A/B testing to check the working and
efficiency of the new process. Start by implementing the modifications and solutions on a
significantly small scale.

Now all you are left to do is – put up your theories into practice and see how the KPIs are
holding up. Once you realize that the new solution works better, and start scaling the solution
gradually. Eventually put it into action within other company processes as well.

If the new solution doesn’t prove to be that fruitful, then you need to start the process all over
again. The cycle of finding loopholes and solutions to them repeats until you form a desirable,
effective process.

How the Business Process Reengineering works? | Methodology

Business Process Reengineering (BPR) is a sensational initiative for change. Its methodology is
based on five core areas, which are laid as follows:

1. Refocus: Align company values with the customer needs and demands.
2. Redesign: Draft and design core processes to enable improvements using information
technology (IT).

 Reorganize: Convert individual teams into cross-functional teams to hold up end-to-end

responsibility of a process.

1. Rethink: Think about the basic organizational needs and issues people facing with the
current system.
2. Improve: Keep in mind all the business processes across the organization and work to
improve them.
What are the Advantages of Implementing BPR in your Business? | Benefits

There are many benefits of business process re-engineering to your business. Some of them are
as follows:

1. Cost-cutting and reducing cycle times

Business Process Reengineering eliminates all the unproductive and futile activities within an
organization. This drastically reduces the costs and cycle times for the employees performing
them. With team reorganization the need for management layers is eradicated.

This also enhances the flow of information eliminating the errors and rework efforts required
due to multiple handoffs.

1. Improve work, product and service quality

Business Process Reengineering minimizes work fragmentation and establish clear

responsibility and ownership of the processes. This impacts the overall process effectively.
Performance measurement can be evaluated easily with a prompt feedback and this allows
workers to gain insight on the output responsibility.

Let’s look at some of the tangible benefits of business process re-engineering:

 Integration within the organization.

 Empowered employees.
 Reduction in the process steps.
 Natural order of process steps followed.
 Process transparency increases.
 Drastic reduction in the manufacturing costs.