MTM 4

UNIT 1 DATA, INFORMATION AND KNOWLEDGE:
INTELLECTUAL ASSETS
Structure
1.0 Objectives
1.1 Introduction
1.2 Value and Importance of Information
1.2.1 Central and Pivotal Role
1.2.2 A Network of Related Concepts
1.3 Information: Theory and Definitions
1.4 Types of Information
1.5 Properties of Information
1.6 Barriers to Information
1.7 Meaning of Data
1.8 Nature, Properties and Scope of Data
1.9 Data, Information and Knowledge
1.9.1 Characteristics and Interrelationships
1.9.2 Comparative Study
1.10 Tourism and Information
1.11 Let Us Sum Up
1.12 Key Words
1.13 Clues to Answers
1.0 OBJECTIVES
After reading this Unit you will be able to:
• perceive the value, pervasive role and importance of information in today’s context of
development,
• distinguish the meaning, distinctive characteristics and interrelationships of data, information

and knowledge,
• explain the meaning of data and describe their types, nature and properties,
• examine the scope of data in different fields,
• get a good overview of the nature and definitions of information,
• obtain a clear insight into the types and kind of information, and
• discern the qualities and properties of and barriers to information.
1.1 INTRODUCTION
From the primitive days of human civilisation to the present day, information has always been a
component of growth and improvement in living standards. In modern societies, however,
information is closely interlocked with growth and development which is reflected in many ways,
as seen in the growth of economic, political, social, occupational, cultural and other sectors. But
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the concept of information has to be understood in its relation to many other associative concepts
such as data, fact, observation, intelligence, skill, knowledge, experience, wisdom and similar
others to perceive the impact of information on modern societies. All these concepts, indeed, are
very much the creation of the human mind. It is, in fact, the combination of these concepts and
their applications for human resources development that, in effect, contribute to the growth and
prosperity of a society. Information and knowledge are, therefore, deliberately being created to
meet a variety of challenges posed to human living. A sea change is taking place in society due to
the application of information and knowledge for development. Information Technology with all
its spectacular advances has been, in fact, the chief instrument of these revolutionary changes,
leading societies to an information age. Creation of new knowledge and information, their
processing, storage, retrieval, dissemination, distribution, etc. have become critical areas for
industrial investments. Today, Information Technologies are emerging as a major group among
modern industries.
Being aware of these fast and the sweeping changes taking place in society, tourism organisations
are making efforts to meet the new challenges of obtaining, handling, upgrading and servicing
information. In this Unit, we shall study these aspects with particular focus on the characteristics,
interrelationships and comparative utility of data, information and knowledge.
A study of this Unit will also be useful in getting yourself acquainted with the meaning of data,
their types, nature and properties. It will also enable you to assess the scope of data in different
fields of knowledge and to recognise how important it is to acquire data in order to enrich tourism
services.
In this Unit, information is studied as forming a link in a communication chain, which integrates
the source that generates it, the channel employed to transfer it, the receiver who finally receives
it and the medium through which it is communicated. We shall also give a brief resume of the
literature on the nature, definitions and concept of information.
As there is no single definition for information, there can be no single set of characteristics for the
classification or grouping of information into its types. The basis of such grouping or
classification of information has to be in relation to the Information Transfer Process that links
Sources, Media, Channels, Recipients and Needs which are inseparable.
The qualities and properties of information while depending upon all different types, have their
own attributes, some of which are universally recognised and accepted. There are also quite a few
barriers that obstruct the free flow of information. We have also mentioned them in this Unit.
1.2 VALUE AND IMPORTANCE OF INFORMATION
All societies ancient, medieval or modern have functioned and proposed on the basis of
information and knowledge in their various stages of developments. In the past, the creation of
new knowledge, innovations and inventions have been the efforts of a small number of
individuals with a passion for and dedication to such activities and, therefore, growth of new
knowledge has largely been sporadic and incidental. Application of the new information and
knowledge was largely accidental; consequently, progress in terms of material advancement of
life had been slow. But from the beginning of 20th century, more particularly in the last half of
the century, information has come to occupy the central position, to be reckoned as a driving
force for all human development. Let us examine the causes for such a reckoning.
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1.2.1 Central and Pivotal Role
Some of the factors attributed to the current value of information and knowledge which have
contributed so much to socio-economic developments are discussed below:
1) Research and Development (R&D)
It is increasingly realised and recognised that information and knowledge and their application for
transformation of non-resources into value-added economic resources are the real driving power
for human material progress. This assessment has resulted in the creation of institutions
exclusively for Research and Development (R&D) in last two centuries in the western countries,
although initially R&D activities were mostly individual efforts. The output of these R&D
activities has been the generation of new information and knowledge. These efforts in Science
and Technology in particular, and the application of this new knowledge for industrial and
economic development has brought to the people of the certain countries a high standard of life.
The infrastructure built for this purpose by these countries has indeed become a model for
developing countries to emulate.
2) Fusion and Science and Technology (S&T)
In the last half a century, there has been a fusion of Science and Technology that has begun to
transform the character of technology itself. For a long time, Science had grown independently
without relation to Technology. But as Science developed in association with Technology, an
integrated framework of reference (conceptual as well as theoretical) resulted offering much
greater explanatory power. For instance, the development of solid-state Physics, which is the
foundation of the electronic revolution, arose out of the work of metallurgists and physicists on
the structure of conductor devices. Since Technology is the instrumental mode of rational action,
Daniel Bell, the well known sociologist, has characterised this new methodological development
as “intellectual technology” which constitutes a set of algorithms that are embodied in a
computer programme to represent a formalisation of judgements. Their routine application to
many situations is becoming predominant in the management of organisations and enterprises
today.
3) Science and Technology (S&T) and Societal Information
Another important point to note in the last quarter of a century, is the increasing emphasis on the
application of Science and Technology to social and economic developments. The organising
principle for information systems and services today is a mix of Science, Technology and
Societal Information (STSI) for all socio-economic developments. Development, being a complex
and multidimensional process, involves information and knowledge inputs of Science and
Technology and their applications. They combine with other forms of society-related information,
such as, political, economic, sociological, demographic, occupational, health, legal, regulatory
and environmental information to provide a complete information universe. Development is said
to be not merely cultivating the physical resources, but also human resources as well. Any
imbalance in these development approaches weakens the overall capacity of a society to
transform itself. All these aspects have further reinforced the importance and value of information
and knowledge.
4) Information Technology
The rapidly developing Information Technology has revolutionised information processing,

storage, dissemination and distribution and has been the chief instrument and a major contributing
factor to changes in society. These technologies are not merely rapidly developing, but they also
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are converging and integrating, giving an unprecedented push to growth and development in
every area.
5) Information Demand
The demand for information from lay persons to sophisticated specialists and scholars has
phenomenally increased in recent decades. Almost every person needs information for some
purpose or the other. Access to the availability of information, therefore, has become very crucial.
6) Power Shift
Information and knowledge have become a tremendous source of economic and political power
as they have become the main driving forces for the acquisition of wealth, political strength and
more knowledge. Information-rich countries of today are becoming even more powerful than the
colonial powers of the nineteenth and early twentieth centuries on account of their expertise in
creating new information and knowledge and exploiting them for their advantage.
There are a number of pressures that have brought about the demand for information. Some of
these pressures and their consequent demand for information are shown in the Figure I.
Growth of population greater complexity of

administration
Social differentiation and reorganisation development of group and Increasing

class interests Demand for
Information
Technological innovation needs of inventors and
Entrepreneurs
new products, services and process

new occupations and skills
more leisure development of private
interests
improved transport
exploration and discovery
trade new products
travel cultural contracts
Growth in education
need of teachers and students

increased scholarship, science, speculation
needs of researchers
new ideas and knowledge
growing ability to learn and assimilate
Life expectancy increases longer and more diverse

Careers; needs of old age
Social welfare provision needs of agencies and clients
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Figure I: Pressure and Consequent Demand for Information
1.2.2 A Network of Related Concepts
You can easily make out from the above that information and knowledge are as essential to
development as they have been to sources of power.
Information and knowledge, however, have to be understood in their widest connotation to grasp
fully their impact on society. A network of concepts is associated with information and
knowledge, such as data, facts, intelligence, know-how, skills, experience and wisdom. It is the
combination of an all these concepts that go to provide the necessary creative capabilities and
competence to transform a non-resource into a value-added economic resource. We shall study in
the later sections the essential characteristics, interrelationships, value and use of data,
information and knowledge, as these are the ones which are most tangible and could be serviced
in libraries in whatever physical form they are available.
Check Your Progress – 1
1) Give at least three reasons as to why information has acquires much importance today.
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2) Describe the factors contributing to the enhancement of the value of information.
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1.3 INFORMATION: THEORY AND DEFINITIONS
In this Section, we are presenting a quick resume of the literature on the discussions on the
definition of information as there are too many formal definitions and none is accepted
universally.
But, before we consider the informations of information, let us briefly sketch the theory of
information by Shannon/Weaver.
Information Theory
This theory pertains more accurately to the communication process of signal transmission and has
an extremely sophisticated mathematical base for examining the effects of transmission of
messages. When communication engineers use the word ‘information’, they are not concerned
with contents but with signal transmission. They do not deal with the contents that are to be
communicated but the instructions that the sender, by signals, conveys to the receiver to select a
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particular message from the given ensemble of possible messages. Therefore, in this narrow sense
of the term, information is the statistical probability of a sign or signal being selected from a
given set of signs or signals.
The model has been simplified into a flow model:
Source Message Channel Receiver
This model recurs implicitly or explicitly in many of the information transfer systems that have
been evolved dealing with contents of information as well.
Definitions of Information
Most writers take the position that the word ‘information’ is used with many different
connotations and a single precise definition encompassing all its aspects cannot in principle be
formulated. Whatever be the definitions of the basic concepts of information it would be useful to
give a brief review of discussions on the definitions rather than giving the different formal
definitions of information.
1) Belkin
In an elaborate study on the information concepts for Information Science Belkin makes the
distinction between definition and concept. The distinction is that while a definition presumably
defines the phenomenon, the concept, is looking at or interpreting the phenomenon. By accepting
the idea of a concept, it becomes easier to look for a useful concept rather than attempting a
universal definition of information.
Belkin postulates three approaches to the determination of the requirement of an information

concept:
• Methodological – having to do with the utility of the concept;
• Behavioural – having to do with the phenomena which the concepts must account
for, and
• Definitional – having to do with context of the concept.
With these postulates, the following eight requirements are enumerated which would be relevant
and operational to developing a structure of Information Science:
i) It must refer to information within the context of purposeful, meaningful communication,
ii) It should account for information as a process of social communication among human
beings,
iii) It should account for information being requested or desired,
iv) It must account for the relationship between information and state of knowledge of
generator and of recipient,
v) It should account for the effect of information on the recipient,
vi) It should account for the varying effects of messages presented in different ways,
vii) It must be generalisable beyond the individual case, and
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viii) It should offer a means of prediction of the effect of information.
Requirements 1 to 6 pertain to relevance of information to user communities; the rest two are
operational requirements to design and develop useful models of information systems.
2) Wersig and Neveling
Wersig and Neveling consider information much more comprehensively, adopting six different
approaches:
i) The Structural approach (matter oriented) in which information is seen as structures of the
world or static relations between physical objects which may be perceived or not.
ii) The Knowledge approach which records knowledge that is built up on the basis of
perception of the structure of the world. This approach is not recommended because
knowledge and information are used as synonyms.
iii) The Message approach in which information is recorded as symbols oriented in a physical
carrier. This approach is used by those concerned with the mathematical theory of
communication.
iv) The Meaning approach where the semantic content of a message is accepted as information.
v) The Effect approach or the Recipient-oriented approach which states that information
occurs only as a specific effect of a process.
vi) The Process approach where information is seen as a process which, for example, occurs in
the human mind when a problem and useful data are brought together.
The substance of these approaches is that information is a social process and can be understood
only if it is defined in relation to needs either as reduction of uncertainty caused by a
communication of data or as data used for reducing uncertainty.
3) Brookes
Brookes, the eminent British Bibliometrician and Information Scientist, takes yet another stand.
According to him, knowledge is summation of many bits of information which have been
organised into some sort of coherent entity. This relationship is expressed in a simple equation
which he calls the fundamental equation of Information Science.
K(S) + ∆1 = K(S + ∆S)
Where K is knowledge structure and (S + ∆S) is the modified knowledge structure, caused by the
absorption of the increment of information ∆1 to K(S). But Brookes is still inconclusive, as the
equation defines the unknown in terms of another unknown and is symbolised by a vicious circle
of very small radius. He, however, believes that the fundamental problem of Information Science
is to interpret this equation and thereby to explain the information process.
4) Bell’s Approach
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A more pragmatic view of information is given by Daniel Bell suggesting information to be data
processing in the broadest sense; the storage, retrieval and processing of data becomes the
essential resource for all economic and social exchanges. These include:
i) Data processing of records: payrolls, government benefits (e.g., social security), bank
clearances, credit clearances and the like.
ii) Data-bases: characteristics and features of population as shown by census data, market
research, opinion surveys, election analysis and the like.
iii) Data processing for scheduling: airline and railway reservations, production scheduling,
inventory analysis, document delivery priorities in libraries and information centres, and the
like.
Knowledge is an organised set of statement of fact or ideas, presenting a reasoned judgement or

an experimental result, which is transmitted to others through some communication medium in
some systematic form. Knowledge consists of new judgements (Research and Scholarship) or
presentation of older judgements as exemplified in text books, teaching and learning, and
collected as library and archival material.
1.4 TYPES OF INFORMATION
We have so far been discussing the nature, concept and definition of information in general. But
these discussions also have to be seen along with the different types of information to get a view
of all its dimensions. We shall examine, in this Section, the fuller dimensions of information with
reference to its different manifestations.
Just as we have seen that the word ‘information’ has no single universally accepted definition,
there is no one single way we can group or classify information. In fact, the types of information
could be grouped using different characteristics depending upon the purpose of such a
classification. Keeping these in view, let us choose a set of characteristics on the basis of the
modified Shannon/Weaver Model of Information Transfer with an added one, viz., information
needs. These are:
• Source is the mode of communicating messages through signs, symbols, texts or graphics.
• Channel refers to the established carriers that disseminate information or knowledge or any
type of their surrogates.
• Media is the physical media that carry messages or contents of information.
• Recipient is the ultimate receiver of information who may also generate or create
information.
• Information Needs indicate the types of information that are normally communicated to
those who seek the different types of information relevant to their needs. The scope to divide
information in this way, however, is almost unlimited.
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1) By Source
Using Source as a characteristic, information can be grouped as follows:
• Signals, Message in the form of Signs, Symbols, Words and Numbers, e.g., Mathematical
formulae, Statistical and Factual data, etc.
• Text Matter, carrying larger amount of message or information, e.g., News, Research papers,
Reports, etc.
• Graphic of various kinds, e.g., Photographs, Pictures, Graphs, etc.
It may be worthwhile repeating here that in this context Source connotes the way in which
information is communicated, i.e., in the form of signals, textual matter or graphics, irrespective
of the persons or groups who generate information.
2) By Channel
Using Channel as a carrier that disseminates information for grouping information, we have the
following in terms of literature, information organisations and institutions and agencies that
distribute them.
• Literature: Primary, Secondary and Tertiary channels. The different characteristics of these
three channels with examples are given in Chart – 1.
CHART – 1
Primary
Characteristics Examples
1) New, Original or new interpretations of Journal Articles, Research Reports.
known facts and ideas.
2) Unorganised and unrelated, each unit being a Conference Papers and Proceedings, Official
separate. Publications.
3) Widely scattered. Thesis and Dissertations, Project Reports.
4) Unassimilated into the general body of Diaries, Memos, Correspondence, Personal Files
knowledge.
Secondary
1) Information derived from primary sources. Bibliographics, Current Awareness Bulletins.
2) Organised and arranged according to a Indexing Journals, Abstracting Journals,
definite plan. Reviews, State-of-art.
3) Scattered information collected Reports, Progress, Advances, etc.

4) Repositories of assimilated and digested Reference Books, Dictionaries, Encyclopaedias.
knowledge.
5) Bibliographical key to primary literature. Directories, etc.
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Tertiary
1) Compilations of primary and secondary Bibliographies of Bibliographies, Year Books.

sources.
2) Organised and arranged according to a Directories, Lists of Research in Progress, Guides to

definite plan Literature.
3) Aids to searching primary and secondary Information Sources, Organisations, Human

sources. Resources.
• Information Institutions: Libraries, Documentation and Information Centres, Information

Analysis Centres, and such others. These institutions collect, process, analyse, disseminate
and distribute all the three types of literature mentioned above.
• Distribution Agencies: Booksellers, Subscription Agents, Clearing Houses, Information

Brokers and such others. While information institutions are essentially agencies involved in
the provision of Information Science with reference to specific clientele, distribution agencies
are largely commercial agencies, selling information. However, these distinctions are getting
blurred with the advent of Information Technology.
3) By Media
Using Physical Media as a characteristic for grouping information, we have the following:
Oral – Person to person, one to one, one to many
Recorded – Paper-print
Microforms
Audio-visuals
Electronic
In the above two categories, we distinguish audio from other types of textual matter, irrespective
of the physical media. Oral information refers to voice information with or without any
corresponding textual information.
4) By Recipient
Using Recipients as a characteristics for grouping information, we have the following who
receive and use information and knowledge for various requirements:
• Individual,
• Groups,
• Organisations, and
• Institutions.
5) By Information Needs
Using Information Needs as a characteristics for grouping, we have the following Information
Needs:
By Standard By Type
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Popular Know-why
Scientific Know-how
Technical Show-how
• Know-why information: more scientifically oriented information, readily accessible in the

numerous secondary tools, available in the libraries and information centres and also easily
transferable.
• Know-how information: more technically oriented, not noticed in the tools and more
difficult to locate and obtain; less easy to transfer.
• Show-how information: operational skills, maintenance and control capabilities, seldom

recorded in communicable form and, therefore, never gets recorded in any primary or
secondary tools. Transferable only through personal contacts and interaction, depending very
much upon the willingness of the person who has the skills to share them and the person who
wants to learn the skills.
Recipients and information needs, as characteristics for grouping while producing different sets
or classes or information, are in fact closely intertwined. As B.C. Vickery puts it, the social
position of recipients, their activities, knowledge generation and information input, knowledge
structure, ability to assimilate, communication behaviour, etc. may all be a series of influences
that will determine the information needs of individuals or groups. Information systems and
services must respond to these kinds of requirements.
1) Explain the simplified model of information transfer derived from Shannon-Weaver

Theory.
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2) Give the salient points on the nature and definition of information propounded by Belkin,
Wersig and Brookes.
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3) Summarise in a tabular form the classification of information as discussed in Section 1.4.

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1.5 PROPERTIES OF INFORMATION
Information can be examined from the point of view of its inherent properties. We are studying
them here with reference to those that apply to:
i) Information in General,
ii) Scientific and Technical Information, and
iii) Information pertaining to Technology and Economics.
1) General
• Information is not consumed in its use.
• It can be shared by many and can be used simultaneously without any loss to anyone.
• It is the most democratic resource in that it can be consumed by poor and rich alike
depending upon the intake capability.
• Knowledge is dynamic, ever growing and continuing and no final word is said or will ever be
said on any aspect of it.
2) Scientific and Technical Information

• Universal, particularly in the Physical, Chemical, and Biological Sciences.
• Open and available to all who seek them, through a well organised operating communication
system.
• A system of peer review and mode of communication operates in its dissemination.
• Peer group review ensures quality to a large measures.
• Healthy competition results on account of peer review and speedy communication.
• Becomes obsolete in fast developing disciplines and obsolescence factor is quite in some of
them.
• Exponential growth in scientific publications has been causing concern in accessibility and
availability.
3) Technological and Economic Information

• Restricted because of time and geographical space bound.
• Competitive because of business interests, sometimes for reasons of security of nations.
• Secretive because of competition and reasons of security.
Over the years knowledge and information have become powerful weapons for political and
economic superiority among nations. The generation of knowledge and its applications for
various purposes have been given the highest priority in the recent decades, particularly among
the western industrialised societies. The developing countries naturally suffer from a number of
constraints in the acquisition, storage processing, disseminating and making them available for
use. Some of the barriers to information are given in the next Section.
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1.6 BARRIERS TO INFORMATION
A variety of obstacles are hindering the free flow and use of information and knowledge. Some of
these barriers are deliberate and hence do not appear within easy means.
The barriers to communication and information flow are of the following kinds. (Given
groupwise)
Group 1:
Language Jargon Presentation

Man-man Neologism Level
Man-machine Synonym Style
Acronym Form
While language is a powerful means of communication, the barriers caused by jargons and levels
of presentation fail to convey the message intended to be communicated.
Group 2:
Communication Problem Media Problem Socio-economic Problem

Multiplicity of Sources Comprehension Culture
Seepage and Scatter Perception Level of Development of Countries
Alien of Reality
Misunderstanding
Cultural and Social differentiation may cause serious problems of communication. These
problems may be overcome by appropriate presentation of information.
Group 3:
Over Population Pollution (Noise) Delays in Handling

Primary Papers Propaganda Publication
Rehash Redundant Data Postal Transit
Abstracts, Digests, etc. Error Translation
Processing
Searching
Accessing
Document Delivery
Feedback
In this group, the problems posed are volume, misinformation and delays in publication due to
various reasons.
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Group 4:
Economic Political Regulatory

Direct Cost Instability Foreign Exchange
Overheads War Customs
This group of barriers indicates the problem of costs, political situation in a country and other
regulatory measures of a country.
Some of these barriers can possibly be overcome with the instrument of information policies at
national levels and the establishment of the International Information and Communication Order.
1.7 MEANING OF DATA
The word ‘data’ is Latin in origin, and literally, it means anything that is given. Different sources
have defined the word in different ways. Webster’s Third New International Dictionary
defines data as “something given or admitted; facts or principles granted or presented; that
upon which an inference or argument is based, or from which an ideal system of any sort is
constructed”. According to Oxford Encyclopaedic English Dictionary data are “known facts
or things used as a basis for inference or reckoning”. These dictionaries also state that even
though data is the plural form of datum, it is often treated as a singular collective noun. Hence, its
treatment as a singular noun is equally acceptable. For the sake of consistency, however, the word
is used in this Unit as the plural form of datum.
UNESCO defines data as facts, concepts or instructions in a formalised manner suitable for
communication, interpretation or processing by human or automatic means”. Robert A.
Arnold, in his book ‘Modern Data Processing” (Wiley, 1972), has defined the term in the
context of commerce as a function of business and accounting. Dictionary of Modern
Economics defines data as “observations on the numerical magnitude of economic
phenomena such as national income, unemployment, or the retail price”.
Data are defined in McGraw-Hill Encyclopaedia of Science and Technology as “numerical or

qualitative values derived from scientific experiments”. While another definition of data in
Science is obtainable from CODATA (Committee on Data for Science and Technology) as
quoted by Luedke and others in ARIST, 12, 119–181, CODATA defines data as a “crystalised
presentation of the essence of scientific knowledge in the most accurate form”. According to
this definition, clarity and accuracy are two essential attributes of data. One also learns of yet
another attribute of data from the CODATA definition. That is to say, data are the essence of the
matter. The phrase ‘essence of scientific knowledge’ in this definition is synonymous with
‘qualitative values derived from scientific experiments’ as given in the McGraw-Hill definition.
In Social Sciences, data are stated as values or facts, together with their accompanying study
design, code books, research reports, etc., and are used by researchers for the purpose of
secondary analysis. At one extreme, economics and demography have been heavily quantitative
in orientation. At the other extreme, anthropology is concerned with qualitative materials or
observations. Sociology and, more recently, political Science falls between these two extremes.
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The change in research orientation in the subject can be seen with changing data, especially with
data relating to public opinion.
In Information Science, Shuman (BASIC, 1975, 1(7), 11–12, 34) defines data as “quantitative
facts derived from experimentation, calculation, or direct observation”. Shuman opines that
a more meaningful definition of data is “the symbolisation of knowledge”.
To understand further, we can say that data or facts have no shape that is relevant to a particular
view point. It must be given relevance, arrangement, coherence, usefulness within a definite
framework of meaning, intent, or interest. This is how data is to be looked upon or used in
tourism, either for planning, research or business operations.
1.8 NATURE, PROPERTIES AND SCOPE OF DATA
As you have read in the earlier Section data is given relevance by the persons handling the data.
To be able to give some relevance to data, one should know more about the nature, properties and
scope of data.
1) Nature of Data
To understand the nature of data, we must recall, what are data? and what are the functions that
data should perform on the basis of its classification? The first point in this is that data should
have specific items (values or facts) which must be identified. Secondly, specific items of data
must be organised into a meaningful form. Thirdly, data should have the functions to perform.
Furthermore, the nature of data can be understood on the basis of the class or category that is
whether the data is required for Science, Social Science, Management decisions and so on to
which it belongs. However, these are not mutually exclusive. There is a large measure of cross-
classification, e.g., all quantitative data are numerical data, and most data are quantitative data.
The nature of data can be described as:
i) Numerical data: All data is Sciences are derived by measurement and stated in numerical
values. “Most of the time their nature is numerical”. Even in semi-quantitative data,
affirmative and negative answers are coded as ‘1’ and ‘0’ for obtaining numerical data,
except in the cases of qualitative, graphic and symbolic data, and so on.
ii) Descriptive data: Some qualitative data in Sciences are expressed in terms of definitive
statements concerning objects. These may be viewed as descriptive data. Here, the nature of
data is descriptive.
iii) Graphic and Symbolic data: Graphic and Symbolic data are modes of presentation. They
enable users to grasp data by visual perception. The nature of data, in these cases, is graphic.
Likewise, it is possible to determine the nature of data as either enumerative or descriptive in

nature. Whenever the data are derived by enumeration, their nature is enumerative. The data that
describe the phenomena are descriptive.
i) Enumerative data: Most data usually used in Social Sciences are enumerative in nature.
However, they are refined with the help of statistical techniques to make them more
meaningful. They are known as statistical data. This explains the use of different scales of
measurement whereby they are graded.
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ii) Descriptive data: All qualitative data usually used in Social Sciences can be descriptive in
nature. These can be in the form of definitive statements. However, if necessary, numerical
values can be assigned to descriptive statements which may then be reduced to numerical
data.
Having seen the nature of data, let us now examine the properties which the data should ideally
process.
2) Properties of Data
For examining the properties of data, reference to the various definitions of data discussed in
Section 1.7 is necessary. Reference to these definitions reveals that following are the properties of
data:
i) Amenability to use: From the dictionary meaning of data it is learnt that data are facts used
in deciding something. In short, data are meant to be used as a basis for arriving at definitive
conclusions. They are not required, if they are not amenable to use. The use may differ with
the context. Amenability to use nevertheless remains a characteristic of data.
ii) Clarity: According to the CODATA definition, data are a crystalised presentation. This
means data should necessarily display clarity, so essential for communicating the essence of
the matter. Without clarity, the meaning desired to be communicated will remain hidden.
iii) Accuracy: Data should be real, complete and accurate. Accuracy is thus an essential property
of data. Since data offer a basis for deciding something, they must necessarily be accurate if
valid conclusions are to be drawn.
iv) Essence: Many a times, large quantities of data are collected which cannot be presented, nor
is it necessary to present them in that form. They have to be compressed and refined. Data so
refined can present the essence or derived qualitative value, of the matter. Data in Sciences
consists of observations made from scientific experiments; these are all measured quantities.
Data, thus, are always the essence of the matter.
Besides the above four properties three more properties are also evident. They are the properties
of being aggregated, compressed and refined.
v) Aggregations: Aggregation is cumulation or adding up. For example, monthly data are added
up to form a consolidated annual cumulation. Cumulative percentages are always worked out
in data, presented on a variable in tabular form. For instance, production figures, tourist
arrivals, export and import statistics and census data are cases of aggregation.
vi) Compression: Large amounts of data are always compressed to make them more meaningful.
To present the essence of the matter, it is necessary to compress data. Compressed data are
manageable and can be grasped quickly. There exist a number of techniques to compress data
to a manageable size. Graphics and charts are some examples of compressed data.
vii) Refinement: Data require processing or refinement. When refined, they are capable of
leading to conclusions or even generalisations. This refinement can then discover new facts.
Conclusions can be drawn only when data are processed or refined.
3) Scope of Data
20
Scope of the data can be studied from the following points of view:
i) Utility of Data: Data have great utility as their use in the growth of knowledge. No research,
investigation, experiment, etc. is possible without reference to data already existing. Nor does
any research end without generating new data. No decision making system can work, nor can
a problem be solved, without adequate use of data. No planning is conceivable without
enough data. For want of sufficient data research results or conclusion drawn from an enquiry
are automatically rendered untenable. Data also alters concepts and removes uncertainty.
Data, then, are indispensable in research and in planning and decision making. Data is
equally important in tourism so as to understand the emerging trends of tourist flow, tourism
planning and strategic planning by tourism organisation to carry on their business. It is also
used for future projections.
ii) Size of Data: Size of the data involves the converge of the subject under study, data
elements, and data population covering documents, data banks, and field survey methods
(questionnaire, interview, observations, etc.). In Science what already exists is in the form of
data. According to an Aslib statement, scientific data include:
• the properties and attributes of an individual entity,
• the values of one property over many entities,
• variations of one property of one entity under different conditions,
• classification of entities based on properties, and
• quantitative relations between two or more entities.
There are equations and formulate, properties and values, actions and reactions and conditions
and variations. All these, when stated, form data. There also exist numerous data banks, e.g.,
Chemical Formulary and British Pharmacopoeia. The scope of data in Science is, thus, very vast.
All governments are involved in socio-economic upliftment. Most applied research all over the
world, therefore, is being conducted now-a-days at the behest of the state. Every government has
established its own data system for collecting and organising data in their respective fields, e.g.,
Indian Meteorological Department, Survey of India, Indian Statistical Organisation, National
Sample Survey, Census of India, Tourism Statistics and several others. Governments cannot
frame policies and formulate plans unless large amounts of data are available as a basis. This
explains the establishment of National Informatics Centre.
There also exist international bodies like International Monetary Fund, International Labour
Organisation, World Tourism Organisation and scores of others. UN agencies collect and
organise data as an indispensable aid in policy research. Management and administrative data
called operational data are gathered by institutions, either public or private, national or
international, in the performance of their functions. No worthwhile socio-economic programme
nor pure economic planning is possible without a supportive data system. Thus, data are
pervasive in all human endeavour in all fields of knowledge.
iii) Period of Data: Data collection for any research problem must indicate the time span. It
should be clearly stated whether data period is current or cumulative. In Science the
interpretations and conclusions are mainly drawn keeping in view the whole text of the
subject. In Social Science and Humanities, however, the cumulative period is not taken into
account for data collection.
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Tourism department also uses a vast amount of data to keep track of changes and emerging
trends. The Foreign Exchange is also calculated from data. It is seen that there exists no field of
knowledge, no human activity where data can be dispensable. All investigations begin and end
with data. In intellectual pursuits data are all pervasive, only their nature varies with the event.
1) List the three broad groups under which information properties are studied in this Unit.
Give two properties for each.
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2) Write a paragraph explaining the meaning of data.

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3) Write a note on data as a crystalised presentation.

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1.9 DATA, INFORMATION AND KNOWLEDGE
Data, information, knowledge and wisdom are the products of the mind that are created, acquired
and perfected. They are not of equal value in terms of utility and application. Rather, they (Data,
Information, Knowledge) are evaluated in an ascending scale of values, data having the least
value, wisdom the greatest. These concepts in their totality constitute valuable human intellectual
assets. They serve as the most precious human capital in all developmental processes.
1.9.1 Characteristics and Interrelationships
Data is usually an observed fact, obtained on the basis of a systematic survey or study, relating to
a certain activity. For example, social data with reference to urban life and civic amenities,
government statistics relating to trade, excise duties, taxes, etc., statistics relating to number of
beds in hotels, number of inbound and outbound tourists, foreign tourists, domestic tourist flows
and similar others. These have value with reference to studies on subjects connected with these
22
data. These data are analysed and synthesised to derive indicators, provide projections and arrive
at valid inferences with reference to any event or activity.
Information is obtained through processing of data. The storage, retrieval and processing of data
become the essential resource for all economic and social exchanges. These include:
1) Data processing of records: payrolls, government benefits (e.g., social security), bank
clearances, credit clearances and the like.
2) Data-bases: characteristics and features of tourists as shown by tourist data, market research,
opinion surveys, election analysis, bibliographic data and the like.
3) Data processing for scheduling: airline and railway reservations, production scheduling,
inventory analysis, document delivery priorities in libraries and information centres, and the
like.
Knowledge on the other hand, is an organised set of statements of fact or ideas, presenting a
reasoned judgement or an experimental result, which is transmitted to others through some
communication medium in some systematic form. Knowledge consists of new judgements
(research and scholarship) or presentation of older judgements as exemplified in text books, in
teaching and learning, and collected as library and archival materials. The interrelationship of the
three concepts could well be understood from the Chart–2.
CHART – 2
Data Raw Material Cotton : destination

Information Intermediary Yarn : tour operator
Knowledge Finished Product Cloth : conducted tour
Note: These examples of cotton and cloth and destination and conducted tour are given here merely to
illustrate the interrelationship of data, information, and knowledge. The raw material, intermediary and the
finished product may vary as per the context.
It must be clear from the above description of data, information and knowledge, that these three
concepts are interrelated, in the sense that one is the building block of the other. Data is the
building block for information and information is the building block of knowledge.
Much of the confusion arises because these distinctions are ignored in common and popular usage
of these words. They are used interchangeably, very often information standing for knowledge or
data. But as tourism professionals we have to understand their distinction and interrelationships
and serve them according to the needs of users.
1.9.2 Comparative Study
Information is news, facts, statistics, reports of contemporary events and activities, legislation,
tax-codes, judicial decisions and the like.
Knowledge is interpretation in context, relatedness, conceptualisation and forms of argument. The

results of knowledge are theories; the effort to establish relevant relationships or connection
23
between facts, data and other information in some coherent form and to explain the reasons for
these generalisations.
Both in everyday use or in the usage of these words among specialists, however, knowledge is
universally regarded as a much wider concept than information or data. Knowledge is a
summation or many bits of information or data, organised into some sort of a coherent entity.
Comprehension and understanding results from the acquisition of information.
Fritz Machlup, the well known scholar in this field, says that information is a process, a flow of
messages involving, the act of telling or being told, and knowledge is a state or sense of knowing,
an accumulated stock. So we talk of flow of information and stocks of knowledge.
The distinctions between information and knowledge are summed in Chart–3 below as described
by Fritz Machlup:
CHART – 3
Information: Knowledge:
is piecemeal, fragmented, particular; is structured, coherent and often of enduring
significance;
is timely, transitory, perhaps even ephemeral; and is stock, largely resulting from the flow, inputs of
information; and
is flow of messages. may affect the stock of knowledge by adding to it,
restructuring it or changing it on any way.
None of these distinctions relate to practical usefulness; neither information nor knowledge needs
to be useful or valuable in all contexts.
Wisdom is an individual trait which comes to one through acquisition of sound knowledge and
the related virtues by age and experience. The trait among others may comprise ability to see far
ahead into the future, have a vision of things to come and judgement in selecting the right
alternatives among several others available for making a decision and so on. While this is the
highest form of knowledge, this knowledge cannot be transferred; it is only acquired.
1.10 TOURISM AND INFORMATION
It would not be an exaggeration to say information is key to tourism. From individual tourists to
tourism organisations, tourism planning to tourism development, designing tourism products,
marketing tourism products, etc. everything is based on information.
Every tourist decides about going to a destination on the basis of information and this information
the tourist collects from a variety of sources which include word of mouth or oral communication,
brochures, travel write-ups in magazines, newspapers, journals, etc., Internet and so on. Many
tourists seek information to plan their own holiday and the type of information they gather is
related to attractions at the destinations, accommodation, modes of travel, prices and tariffs,
sources of entertainment, etc. Computerised reservations systems, electronic media, electronic
communications and Internet not only provide them with information but also help them in
planning their itinerary and making necessary reservations. Hence, information and information
technology, today, have an impact on the destination choice, accommodation choice and modes
of travel.
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From the point of view of suppliers, both tour operators and travel agents design their products
and services on the basis of information. A tour operator packages a holiday tour which includes
travel, stay, site seeing, entertainment, etc. and for this he or she needs information on each of the
aspects in order to make a viable package. Not only this, the tour operator’s entire marketing
whether it is search for new markets, profiling of tourists, market segmentation, target marketing
and ultimately the designing of the product is based on information in the form of data available
from various tourist generating markets as well as destinations. Similarly, the entire operations of
travel agency are based on the information and data related to airlines, car rentals, tourist
transport, tariffs, fairs, travel routes, etc. and again the travel agency has to look for different sorts
of data, analyse it and then carry out its own operations. Similarly, a hotel or an airline also has to
do such exercises.
When it comes to destination planning and development or formulating the tourism policies of the
national, regional or local tourism organisations, information again is the starting point for that.
What type of tourism is to be promoted, what kind of facilities are to be planned and in which
direction the tourism policy should go will depend on the analysis of the data either available or
to be generated on these aspects. The World Tourism Organisation plays a major role in this
regard. Government tourism organisations, travel agencies, tour operators, hotels, tourist
transporters, etc., i.e. all the players in the tourism not only seek information but they also
generate and provide information either to the consumers or to the retailers or to the principle
suppliers. Various kinds of information needed for tourism planning and operations flows from
various sources but generally the most crucial in this regard are the destination data basis, tourist
data basis and computerised reservation systems. Besides these the print media and electronic
media facilitate the information seeking process along with the first hand information and
experience which is sought through familiarisation tours. Needless to say that the travel writers
are important components of information seeking, assimilation, storage, analysis and
dissemination in tourism. In the subsequent Units of this course, various aspects related to
information technology have been dealt with and you should keep linking them with the various
aspects of tourism.
1) Distinguish between data, information and knowledge with an illustrative example.

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2) Why does Machlup consider information as a flow and knowledge as a stock?

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1.11 LET US SUM UP
In this Unit we have learnt why information has acquired a strategic significance today, although
its role in all societies throughout the past has always been to provide for growth and
development. The reasons attributed to the present status of information are:
• The realisation and recognition of information as a vital component in socio-economic

development,
• Creation of exclusive R&D institutions, especially in Science and Technology, to generate

new information and knowledge,
• The fusion of Science and Technology and its synergetic impact under which Information
Technology is rapidly advancing,
• The organising principle of information today is a mix of Science, Technology and Societal
Information, the focus being on socio-economic development,
• Information Technology and its fast increasing impact on changes in society causing, in the
process to transform the society itself into an ‘Information Society’ as some scholars have
maintained,
• Ever increasing demand for, and supply of information contributes to raising the level and
reorganisation into a strategic source of economic and political power.
Information has to be examined in its relationship with other concepts which together constitute
the intellectual capital which is the driving force for changes in the society.
While many concepts are associated with information, the three concepts of data, information and
knowledge are studied with reference to their general meaning and inter-relatedness.
In this Unit you have also seen that the definitions of information have a wide ranging variety and
no one single definition has emerged as common to all the disciplines.
The Information Transfer Model has been taken as a method of examining the different types of
information. Source, Channel, Media, Receipient and Information Needs are the five
characteristics that have been used for studying information types with suitable examples. The
properties of information are also examined in the light of their general, scientific and technical
and economic point of view. The barriers to communication are discussed with reference to a
number of constraints.
Finally, in this Unit, you have also learned that ‘Data’ literally, means anything that is given.
They are facts or information used in discussing or deciding something. In short, the term ‘data’
includes facts, figures, letters, symbols, words, charts or graphs that represent an idea, object or
condition. The term, thus connotes diverse things. Unlike codes, data are measured in quantities
or derived qualitative values. Data constitute the basis for drawing conclusions, taking policy
decisions and formulating and implementation plans.
26
Amenability to use, clarity, accuracy, essence of the matter, aggregation, compression and
refinement are the properties of data. Because of these properties, data is usable in investigative
studies. By nature, data are either quantitative or qualitative. Quantitative data are numerical and
qualitative data are descriptive. It is possible to transform qualitative data into numerical values.
The scope of data is truly vast. Data pervade all Sciences, all investigations, all human activities,
planning and implementation. They provide the basis for conclusions drawn. All techniques used
in research are aimed at collecting objective data which lead to the creation of new knowledge.
The scope of data information and knowledge cannot be over looked. They form a very important
part of the tourism sector.
1.12 KEY WORDS
Algorithm : Instructions for carrying out a series of logical procedural

steps in a specific order.
Channel : Established carriers that disseminate information of

knowledge or any type of their surrogates.
Human Intellectual : Skills of all variety necessary for all capital round
development.
Information Age : A period characterised by domination of information.
Information Industry : Market place created by the convergence of computers,

telecommunication and microelectronics.
Information Technology : Acquisition, processing storage and dissemination of

information by a combination of base technologies, such
as, micro-electronics, and communications.
Information Transfer : The movement of information from generation to use

Process with a series of intermediate links that connect each other
to form a chain.
Media : The physical media that carry messages or contents of

information.
Phenomenon : Fact or occurrence (Phenomena is the plural form).
Population : An aggregate of individual units, whether composed of

people or things, having the characteristic under study.
Recipient : The ultimate receiver of information who may also

generate or create information.
Source : The mode of communicating messages through signs,

symbols, texts or graphics.
Synergetic Effect : An effect produced as a result of combination of two or

more forces representing more than their mere
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summation.
1.13 CLUES TO ANSWERS
1) Information is the key to growth. Right information has become the most crucial weapon for
acquisition of economic and political power. The demand of information is increasing more
and more. Find more of the answer in Secs. 1.1 and 1.2.
2) Information value is increasing as demand for information is increasing as demand for

information is increasing. Information is needed is different sectors such as Research and
Development, Science and Technology and so on. The different factors contributing to the
enhancement of the value of information is described in Sec. 1.2.
1) The simplified model of information derived form Shanon-Weaver Theory is:
(Source Message Channel Receiver)
The model speaks essentially about the instructions or signals being sent and not necessarily
about the complete message. Read in detail in Sec. 1.3.
2) Belkin postulates three approaches to the determination of the requirement of an information

concept – Methodical, Behavioural and Definition. Weisig and Neveling consider
information much more comprehensively adopting six different approaches – Structural
approach, Knowledge approach, Message approach, Meaning approach, Effect approach and
Process approach. Brookes sums up many bits of information in a simple equation which he
calls the fundamental equation of Information Sciences: K(S) + ∆1 = K(S + ∆S)
Where K is Knowledge Structure and (S + ∆S) is the modified knowledge structure caused by
the absorption of the increment of information ∆1 to K(S). See Sec. 1.3.
3) Study Sec. 1.4 and tabulate in the following manner:
Characteristics Definitions Examples
Source Mode of Communicating Mathematical formulae, News,

message through signs, Research paper, Photographs,
symbols texts or graphics Picture
And so on.
1) The broad groups are General, Scientific and Technical Information and Technologies and
Economic Information. You will find two properties for each in Sec. 1.5.
2) Data is a word of Latin origin literally meaning anything that is given. Though word data is
commonly used, it is the plural form of word datum. The term connotes diverse things. Read
more about data in Sec. 1.7.
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3) According to CODATA definition “data are a crystalised presentation”. This means data
should display clarity, so essential for communicating the essence of matter. Read Secs. 1.7
and 1.8 which explain the need of data to be clear, complete and accurate and suitable for
processing.
1) Data is undifferentiated observation of facts in terms of words, numbers, symbols, etc.
Information is processed data. Knowledge is consolidated and structured information as in

encyclopaedic articles, textbooks, etc.
Study Sec. 1.9 to see the inter-relation and the comparison between the three.
2) Machlup is a process involving the act of telling or being told, and knowledge is a state of
knowing. So we say that information is a continuous process of flow and knowledge is a
stock. It is described in Sec. 1.9.
Activity
Identify the Sources of Information in Tourism.
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UNIT 2 GENERATION OF INFORMATION:
MODES AND FORMS
Structure
2.0 Objectives
2.1 Introduction
2.2 Information
2.2.1 Need and Concept
2.2.2 Differentiation From Data, Knowledge, Intelligence, etc.
2.2.3 Information and Communication
2.2.4 Information vs Information Science and Computer Science
2.2.5 Characteristics of Information
2.2.6 Value of Information
2.3 Generation of Information
2.4 Modes of Information Generation
2.5 Forms of Information
2.6 Let Us Sum Up
2.7 Keywords
2.0 OBJECTIVES
• explain the concept of information in the process of communication, and how it is different from
data, knowledge, meaning, intelligence, and so on,
• get a clear insight into how information is produced/generated,
• describe the roles of workers/users involved in the generation and use of information,
• perceive different forms through which information is communicated in society,
• appreciate the role of different actors in the cycle of information generation and communications,
and
• obtain an overview of the impact of Information Technology on information generation, storage,

retrieval, communication and use.
2.1 INTRODUCTION
The world is fast moving to a stage where not steel or miles of railways but the size and complexity of
information and communication systems will be the yardstick of a country’s development. No
country can any longer afford to remain in isolation and ignore rapid developments in the field of
information and communications technology. This so called ‘Information Society’ has its genesis in
the post-industrial era.
Several thinkers have expressed the view that information is the power and the key to development. It
is an important input or basic resource and a link between a variety of activities, intellectual and
30
material in the society. Access to information at the right time in a convenient form can trigger new
directions in research, development and managerial action.
A widely accepted fact today is that input in modern productive systems is no longer confined to
land, labour and capital only. It also includes information. “Information” and “Communication”
are without doubt two key words and any activity or human relationship involves a process of
communication. The scientific study of the communication of information in society is an
academic discipline called “Information Science”.
This Unit introduces to you the concept of information and it’s various shades of meanings in the
present age of information conscious society. Further, it discusses how information is generated
and communicated to users, who in turn regenerate information; the producers of information and
the different forms of information in the communication process.
2.2 INFORMATION
In a broad sense, it has been accepted that information is a vital resource in development
activities of any society/nation. This makes it necessary to understand the concept, it’s nature,
scope and purpose and the whole gamut of the modes and forms of information generation.
2.2.1 Need and Concept

Today, Science dominates the lives of all mankind, and its vital element – ‘information’ is of
great importance for the world. All our economic and social progress depends on the transfer of
scientific and technical information.
People in different situations require information on a subject in different forms and with
different emphasis and different depths of explanation. Even the same person seeks information
in different ways and forms on various occasions, depending on his/her knowledge of the subject
and the reasons for wanting the information.
To illustrate, scientists and technologists will read a great range of literature and go to many types
of conferences and meetings in order to collect information of relevance to their applied problem.
After scanning of the literature and listening, their attention is focussed on matters of immediate
interest to them. Thus, they form the link between research and practice. Similarly, non-scientists,
viz., managers, technical administrators and political leaders require information in different
forms not only to know broad details of research findings, but to know why the investigations
were made, what resources (both of manpower and equipment) were used, whether any results of
practical significance emerged, or what further work and resources are required before the
findings can be used in an applied situation. They cannot judge the value of research without
being supplied with information in a form that answers these questions.
Thus, information is often also called ‘power’, ‘vital’, ‘economic value’, a ‘community’ or a
‘resource’.
Terms like ‘information’, ‘knowledge’, ‘data’, ‘language’, ‘meaning’, are in common use in
everyday discourse, used freely without careful attention to precise meanings. The various shades
of meaning of the concept of information, drawn from a wide range of sources, are:
“An assemblage of data in a comprehensible form capable of communication” (Harrod’s
Librarian’s Glossary and Reference Book. Comp. By Ray Prytherch, 7th ed., 1990).
31
“Information is the core, the sum total of all the facts and ideas, accessible or not, that are
available to be known by somebody at a given moment”. (Harlan Cleveland in Information as
a Resource).
“Information is knowledge communicated concerning some particular fact, subject or event”.

(Oxford English Dictionary).
“Information is data recorded, classified, organised, related or interpreted within context to

convey meaning”. (S.C. Blumenthal in Management Information systems, 1969).
Some specialists have defined information as “any data that is transmitted over communication
lines”, while to others it is “the context of text”. To a telecommunications engineer, it is not
defined by the context of the message but by the physical and electrical characteristics of the data
as it is transmitted. Similarly, to a computer programmer it may not be the content of the data in a
computer file but the organisational structure of the file itself.
2.2.2 Differentiation from Data, Knowledge, Intelligence, etc.
Embedded in the above discussion of the concept and need of the information, it is assumed that
we know, what information is and its various manifestations. Information, like matter and energy,
is a basic property of the universe and any system which exhibits its organisation, contains
information. It has quite different meanings depending upon how you interpret and evaluate it.
Whatever may be the mode of generation of information, it will be stored, accumulated, recorded
and disseminated. Like money, it could be accumulated, but is useful only when it is spent, that
is, when it is transmitted. See Figure I.
1 2 3 4 5 6
Information Coding Transfer Decoding Assimilation Usage
Figure I
It can be summarised as follows:
1) Information present in the mind of the person wishing to impart it.
2) Coding the information in terms of words or pictorial illustrations.
3) Transfer by means of the printed, spoken word, or by pictorial illustrations, audio-visual

means or so on.
4) Reception and decoding of the printed or spoken word to extract the meaning.
5) Analysis of the information and committal to meaning or other record.
6) Use of information.
With this preamble, we will now understand ‘information’, in relation to ‘meaning’, and
‘intelligence’.
Information vs Meaning
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Information is all pervasive and perceived as an intrinsic property of various systems and the
whole universe itself. Meaning is achieved when the perceived information can be put into a
“context”. That is, information becomes meaningful only if it can be analysed, compared and
integrated with other information which already exists within the perceptor system. For example,
a word in a foreign language possesses information, but may have no meaning for the listener, if
the listener has no prior knowledge of the language. Thus, the word cannot be integrated into the
knowledge structures of the listener unless it is accompanied, or preceded by further information
inputs – such as a language lesson.
In America this In France In Japan it In Tunisia it means

Means `A-OK it means `zero’ means `money’ `I’ll kill you’
Figure II: Sign and its different connotations
Information vs Intelligence
Intelligence is defined as “a cognitive disposition (knowing) distinct from the affective

(emotional) or motivational models of human behaviour”. Scientists have accepted it as having a
biological bias, since cognition manifestly is a function of a central nervous system and
individual differences are related to biological-genetic endowment. The above description of
‘intelligence’ provides a portmanteau description of the highest level of coordinated thinking that
can be achieved by an individual. Many of the descriptions and conceptualisations are primarily
biological, psychological and operational. Thus, in a world of sovereign nations, “information is a
prime element of power and ‘intelligence’ as evaluated information is pivotal or vital
foundation.”
In modern Information Technology ‘intelligence’ is a property of advanced information systems.

It is not confined to humans or higher animals but represent a broad spectrum of phenomena.
According to T. Stonier (in “Beyond Information: The Natural History of
Intelligence”, Springer, London) intelligence can be defined as “a property of any
information system which is able to analyse its environment, then on the basis of that analysis
respond in a manner which enhances its chances of survival or reproduction”.
2.2.3 Information and Communication

Information and human activity are inextricable. Most of the activities are primarily concerned
with information with which they will become more effective. Any activity implies a process of
communication. The process may be direct (person-to-person) or indirect (between the public and
medium). The fact is that the former is dependent on time and space. It will be durable, if
33
recorded on some form of carrier: (book, image, photograph, sound record, etc.) in short, a
document. Though communication takes extremely varied forms, the general pattern remains
more or less the same. The underlying principle is the circulation of a message between a source
(emitter) and a target (receiver) by means of a carrier (channel) as illustrated in Figure III:
NOISE NOISE NOISE
E mi t t e r T r a n s mi s s i o n Receiver
( Co d in g ) Ch a n n e l ( D e c o d in g )
Co mmo n
I n f o r ma t i o n
Feedback
Figure III: Circulation of a Message
The different media through which the process of information communication is affected, is
shown in Table 1:
Table 1 : Classification of Media
Natural language Pictorial image

ORAL TEXTURE STILL MOTION
Conversation Letter Drawing Silent film
Lecture Manuscript Painting Videoscope
Audio record Typescript Photograph
Telephone Duplicated text Print
Slide
Radio broadcast Printed text Filmstrip

Photocopy
Microform
Computer printout
Teletype output
Television output
Facsimile
2.2.4 Information vs Information Science and Computer Science
Information is pertinent data or data that is useful in decision-making. Because its importance to
the user is relative and depends on changing situations, times, and needs, ‘information’ is most
valuable when it is quickly and easily available.
The events and inventions of World War II presaged revolutions in the field of communication
and in the handling of data and information. The urgency for precise information became fast and
34
led to dependence on developments in Science and Technology. Research led to the production of
vast amounts of knowledge and paper work in different disciplines. Energized by the postwar
developments, the Information Science began to take shape. The Shannon-Weaver information
theory, Norbert Wiener’s conception of cybernetics and developments in electronic computers,
collectively seemed to point out to a new field – “Information Science”.
New developments in graphic arts, management science, etc. made the field a ‘multifaceted’ one,
termed variously as ‘Informatics’ (French), or ‘Informatika’ (former USSR).
Historically, ‘Information Science’ is linked to ‘Computer Science’ and drew a majority of its
practitioners from the Physical Sciences and moved to specialise in the information related
aspects of their individual scientific fields. And information scientists became specialists either in
the use of information or in the high-level design of information handling systems.
2.2.5 Characteristics of Information
Based on the following two assumptions
a) Information, like matter and energy, is a basic property of the universe;
b) Any system which exhibits organisation, contains information;
it is clear that ‘information’ exists in a variety of forms and may be transmitted from one system
to another and it undergoes a series of transformations. Hence, it is necessary to have a look at the
inherent characteristics of information – which is a ‘crucial resource’ through it’s refined
products, knowledge and wisdom. The following points illustrate the different perspectives:
• The unique characteristics of information is that all other resources depend on

information and knowledge. It is the perception and evaluation of resources which make
their use possible. You cannot use that, or which you know nothing. Thus, the availability of
information determines the use of other resources.
• As a resource itself: Information is not reduced or diminished by wider use and sharing. On
the contrary, its value tends to gain in the process. Hence, Anne Wells Branscomb
(Communications Lawyer) calls it “a synergetic resource”, i.e., the more we have the more
we use and the more useful it becomes.
• Information is alive: Information exists only in the human mind – what it observes,
remembers and can retrieve, and what it then analyses, intuites and integrates. Information is
the input and output of human perception.
• Information is compressible: It can be concentrated, integrated, summarised or miniatured

for easier handling. Thus, we can store many complex cases in a theorem, squeeze insights
from masses for data into a single formula or capture lessons learned from much practical
experience in a manual of procedure.
• Information is diffusive: It tends to leak and the more it leaks the more we have. Examples
are the strait-jackets of public secrecy, intellectual property rights, etc.
• Information is shareable: To quote the communications expert Colon Cherry ‘information’
cannot bring about exchange transactions, but only shared transactions. To illustrate, if I give
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you a flower or sell you my automobile, you have it and I don’t but if I pass on an idea or a
fact, we both have it.
Thus, we come to the conclusion that ‘information’ as a resource is pervasive and different from
other resources in fundamental ways, in kind not merely in degree.
The use and value of information depends on a number of factors. These are generic and some are
related to the particular environment or situation in which information is received.
The generic factors include:
a) A person’s cognitive style in receiving the information. People differ from each other in their
preferences. Some understand information better in the form of pictures and graphs. Others
prefer a narrative text or symbolic form.
b) Knowledge contained in a person’s memory.
c) Language.
These three factors operate independently, in addition to other factors such as his/her
understanding of the system, the time available to respond or take action, the presence of work
and so on.
Kenneth Arrow, a Nobel laureate is worth quoting in this connection: “no amount of legal
protection can make a thoroughly appropriate commodity of something as intangible as
information. There is a fundamental paradox in the determination of demand – it’s value to the
purchaser is not known until he has it”.
The value of information as given by Pauline Atherton in “Handbook for Information

Systems and Services” (UNESCO, 1977), can be cited as follows:
a) Improved capability of a country to take advantage of existing knowledge and ‘know-how’
achieved elsewhere.
b) Rationalisation and systematisation of a country’s research and development efforts in light
of knowledge already available.
c) Wider knowledge base for the solution of problems.
d) New alternatives and approaches to the solution of technical problems, and options for
minimising future ones.
e) Improved effectiveness and efficiency of technical activities in the production and services
sectors.
f) Above all, better decision making in all sectors and at all levels of responsibility.
In setting a value on information, M.P. Carter (in the article : “The Cost of Management
Information”) points out the factors that need to be taken into account. These are:
a) Time: The speed at which the information can be obtained and is required. It implies the view
that the quicker the information is, the greater its value, because time has ‘directionality’ and
is ‘irreversible’. Moreover, right information at right time helps an organisation to gain an
edge over the competitors.
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This factor is extremely important in tourism from the point of view of reservations, tour
planning, information related to destination, etc.
b) Knowledge: The knowledge level of the recipients of the information is anothor important
factor when talking in terms of information needs. There is no point in providing information
if the knowledge of how to use it is not there.
Tourism organisations must have capable managers and employees for making full use of the
information received in the pursuit of their organisational goals.
c) Prior Information: The amount and type of other information that is available to assist with
the decision for which the piece of information is to be used. In determining the value of a
piece of information all the other information connected with it must be considered.
This is a must for planning tour operators iteneraries, etc.
d) Accuracy: Not only in general terms, but also at the operational level, the greater the
accuracy of a piece of information, the greater it’s value. Knowledge will determine the
extent to which the information will approach its true value. It will not add to the true value
of the information, but a lack of it will not allow the true value to be achieved.
Accuracy is the keyword as far as information in tourism is concerned.
e) Quantity: The size of a piece of information or the amount of information available for
particular decision can affect it’s value. The effect is due to the time constraint, e.g.,
insufficient time to study it.
Through experience, managers should use their discretion about the quantity to be obtained or
analysed.
f) Power: Information can be closely linked to power, and as a result this may enhance the
value of the information to the individual but not necessarily to the organisation. It is not only
the source of power, but also an effective power itself, if released at an appropriate time.
This gets related to politics of tourism and is also used as an effective tool by the super powers.
To sum up, though it is neither possible to develop a general model for study of the value of
information nor any realistic way of quantifying the value of information, the brief review by
McMullen, R.M. (in the “Journal of the American Society for Information Science”) dealing
with the ‘cost-effectiveness’ of information is worth quoting:
“Information is not free, you cannot spin gold from straw … Information is like
insurance. Information is valueless except when you need it, when it becomes priceless.
In this respect it is like insurance; 99% of the time one doesn’t need insurance, but for the
other 1% the need is critical. For insurance, we recognise the value of paying a relatively
small sum now so that we have access to a relatively large sum in the future if we need it.
Surely this is precisely what we do in building-up a library or information resource”.
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1) Identify the different types of users of information, indicating their information needs.
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2) Explain how the process of information communication takes place.

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3) Summarise the value of information.

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2.3 GENERATION OF INFORMATION
Having accepted the ‘information’ is all pervasive, a basic resource/ commodity, power, etc. some
basic questions arise as to:
• How is information acquired and generated?
• Who are the producers of information?
• In which form(s) is it generated or produced?
• What are the channels of its transmission, in addition to the normal formal ways?
• What are the effects of ‘Information Technology’ on information, its shape?
All these questions will be dealt with in the following parts.

To design ways of effective capture of required information, one must understand its generation
as well as its sources or carriers. Researchers, specialists, suppliers in different areas go about
38
generating information, each with a different purpose. Just as the dance cannot be
viewed/separated from the dancer, it is difficult to separate the generation of information from its
recording and dissemination.
‘Information’ already existing in the highly structured ‘forms’ is perceived, transduced, stored,
processed, abstracted, stored and transmitted in chunks and manifested through various
perceivable media. For example, in computers, data and programme information coded in discrete
transformed and transmitted, until the information reaches the control unit for recognition and
interpretation.
NATURAL PROCESSES
Symbolic space FORMS
Human Brain effect
Recognition, Relevance
& Sensory perception
Acceptance & Rejection

Classification
Abstraction,
Identification
Decision making Expert knowledge
(Commands & Goals)
Generation of Information & Order
Figure IV: Generation of Information and Usage.
Here, phenomenologically, ‘information’ is an entity apart from the means by which it is

processed, from the carriers by which it is transported, and from the symbols and forms by which
it is presented. It involves an additional domain of activity – that of ‘symbolics’ and ‘form’ of
‘meaning’ and of ‘pragmatic value’. As stated earlier and in the view of Panos A. Ligomenides
(in the article: “Nations and Dynamics of Information”, Journal of Information Science) one
of the inherent characteristics of information is that it is alive, it exists only in the human mind
and, as such, it is both the input and output of human perception.
Figure IV depicts the physical, natural processes present in the symbolic space in various forms
that are sensed, recognised, accepted/rejected, classified and interpreted for relevance in semantic
and pragmatic terms by the human brain. These, further through reasoning and decision making
result in more forms recognised as ‘information’, after abstraction into experiential and expert
knowledge.
39
PRODUCERS
Information sources
(Informal) (Formal) (Tabular)
Talks-lectures,
conferences, etc. (Published) (Unpublished)
PUBLISHERS,
EDITORS
Letters PRIMARY
to editors, SOURCES
preprints, etc. Selection
Production
Books, Journals Thesis, reports Distribution
ABSTRACTING
AND INDEXING SECONDARY
SERVICES SERVICES
Analysis and
storage
LIBRARIES CLEARING HOUSES Dissemination
INFORMATION DATA
CENTRES CENTRES
Abstract and
index journals
Catalogues, guides Quantified

Referral services, surveys
etc.
Special bibliographies,
translations etc.
TERTIARY
Reviews, syntheses, etc. SERVICES
Evolution
Compression
Consolidation
USERS
Figure V: Some Channels of Disseminating Information. (Source: Atherton)
2.4 MODES OF INFORMATION GENERATION
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In the cyclic nature of information production were included publishers, authors, editors,
scientists, suppliers, planners, managers of information systems and networks, computer
programmers, statisticians, and so on. As many of them are generating new information, they are
labeled ‘information workers’ at least as much as the librarians and information scientists who are
mostly providing access to existing information (see Figure IV and V).
The above figures depict the workers/producers involved in the information chain. They are:
1) Authors: Author is the creator of information or of messages. An author may be the

originator of an electronic-mail message confirming an appointment of an original scholarly
paper or a book. The author is the person or persons who have created the document and the
document bears his or her name. The author may be an individual, an organisation (corporate
body) or an unidentified author, i.e., an anonymous document. They are also users of all the
information services and discovered word processing, electronic-mail, and database
searching. Their prime functions are to create, formulate or relate. The technological impact
is less on their fundamentality, but the style and rate of production may change significantly,
depending on how the author expects the material to be perceived and used.
Authors require their work to be visible to the scientific and technical community. They wish
that their work be in a form that carries creditability within institutions, their colleagues,
research granting bodies to establish top priority, and hence, do not spend much effort on
putting material into forms that publishers find it convenient to use, though they are willing to
go a long way if they have to. Hence, the ‘article’ is often the only tangible product of
intensive research.
2) Editor(s): The editor is the person responsible for a publication that groups together the
contributions of several authors, with or without one from himself or herself. The
publications are termed as ‘collective works’ (e.g., Conference proceedings) and bears his or
her relationship with the work – ‘ed.’ (editor) or ‘responsible for publication’, or ‘comp.’
(compiler) or ‘trans.’ (translator) and so on. Their role is to help accomplish the joint mission
of authors and publishers, to produce an information product that users will want.
3) Primary Publishers: They manage the process of bringing authors’ work into usable form
and distributing it to users. Changes in the telecommunications technology have resulted in
the repackage of information. That is, users do not need to buy large volumes of directories
and indexes, but can have a service which will enable them to find what they want, and only
as they want it. (printed vs telephones). Thus one of the publisher’s role is to anticipate these
changes and react accordingly.
4) Secondary Publishers/Database Producers: They have played the role of enabling users to
access the published information of a field. Their role is increasingly shifting from the
conventional printed products, such as abstracts, indexes, etc. to the online mode and full-text
materials. Figures VI and VII illustrate the role of database producers, authors, primary
publishers, library and information centres, users in the cycle of information generation and
also in the production of different forms of information products and services.
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A u th o r s A u th o r s
42
P r i ma r y
Publishers Machine-
readable
text
D a ta b a s e L ib r a r ie s
producers
P r i ma r y E l e c t r o n ic Bulletin
p u b lis h e r s ma il board
Online hosts
I n t e r me d i a r i e s
Users Users
A u th o r s w ith th e p u b lis h e r s a n d A u th o r s b yp a s s in g p u b lis h e r s .

U s e r i n t h e i n f o r ma t i o n c h a i n .
P r ima r y p u b lis h e r s W ir e s e r v ic e s A u th o r s
D a ta b a s e p r o d u c e r s P r ima r y p u b lis h e r s
Machine-
readable CD-ROM Database producers
text
Online hosts as
O n lin e h o s ts D a ta b a s e p r o d u c e r s
Online hosts
L i b r a r i e s / I n f o r ma t i o n c e n t r e s
O n lin e n e tw o r k s
Users User-
CD-ROM friendly
Authors bypassing Database Interface
p r o d u c e r s , u s in g O p tic a l Me d ia
t o L i b r a r y & I n f o r ma t i o n c e n t r e s .
I n t e r me d i a r i e s Users
Online hosts as publishers
Figure VII: Different Channels of Disseminating Information from the Author to Users
(Source: Bawden)
The figures illustrate that the chain in which the author and the user are the main
components, with the other publishers, librarians, database producers, online hosts and
other intermediaries sensitive to the needs of the user, and their contribution.
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Authors send to users draft reports, reprints of their papers published through primary
publishers, who supply their publications direct to users or to libraries. Primary publishers
also supply their publications to database producers, who in turn supply their printed
products or SDI services to users or to libraries, who in turn pass them to users direct or
through intermediaries. The database producers also supply their databases to online hosts
who make them available direct or via intermediaries, to users. Finally, users interact with
authors and the cycle is repeated.
Database producers also act (Figure VIII) as primary publishers by accepting original
research reports from authors, bibliographic data from machine-readable form, from the
publisher and share his input with other database producers and vice versa. Also, as an
online host by himself, the database producer provides his database on CD-ROM and
delivers documentary service, much like a librarian.
A u th o r s
Machine
readable P r i ma r y P u b l i s h e r s D B P a s P r i ma r y
abstracts Publisher
D a ta b a s e p r o d u c e r s D a ta b a s e p r o d u c e r s
CD-ROM Online hosts DBP as Online host
L ib r a r ie s /I n f o r ma tio n D BP g iv in g
S e r v ic e s d o c u me n t d e liv e r y
Users
Figure VIII: Database Producers as Publishers, Online Hosts of Document Delivery.

(Source : Bawden)
5) Libraries: Libraries are termed as treasure house of knowledge. Though varied in nature,
they collect, organise and preserve documents and make them available to users through
reproduction of documents, retrospective searches, referral and question-answer services, etc.
They also serve as a venue for lectures, exhibitions and other events. Depending on their
nature and the role they play in the information cycle. In tourism they are used for travel
writing, destination information, tour planning, etc. They are divided as follows:
a) National Archives: A state institution whose function is to receive, preserve and make
available to authorised users the documents of national and local public administration,
individual people and to some extent public companies and private organisations. They make
44
extensive use of microfilm (for space and security reasons) and information is communicated
after a lapse of time and under certain conditions.
b) National Library: It is a state institution and acquires, processes, conserves and makes
available information to the public – published in the country and elsewhere relevant to the
country or national activities. Through their specialised departments they provide technical
advice to all the libraries and their major publication is the “National Bibliography”.
c) Public Libraries: Institutions run by the state or the local authorities, concerned with the
preservation collections on cultural, recreational or practical needs of the local community as
an indispensable source of information.
d) University (Academic) Libraries: Located in the universities and institutions of higher

education, are concerned with the information provision through normal library services.
Established to support the scientific and technical information of the scholars, students, etc.,
they also publish thesis, university’s ongoing research activities, etc.
e) Special Libraries: These are varied in their nature depending on what they specialise in, i.e.,
concentrate on a single discipline or field of knowledge. For example, the tourist
department’s library would concentrate on tourism.
6) Documentation Centres: Both special libraries and large companies establish these centres
where production depends upon access to economic and technological information. The
information products include bulletins, machine-readable files, etc.
7) Information Analysis Centres (IACs): These are advanced forms of information centres,
attached to research centres. Their function is to evaluate current knowledge on specific
subjects and to provide directly usable information. Further, they play a role in stimulating
research by pin-pointing gaps in knowledge or shortcomings and their work entails as much
attention to factual data as to specialist literature.
The information needs on numerical data on a particular subject field (e.g., toxicity of certain
chemical products) are dealt with by the “Data Centres”, which serve to collect, arrange and
store such information for use. At an advanced level these centres are termed as “data
consolidation and evaluation centres” and reflect the current state of knowledge, together
with comments on the precision or reliability of the data, with regard to the various aspects of
a product or phenomenon.
8) Databanks: These are usually concerned with a broader field such as the counter-indications
of medicines or town planning data and to user queries like: Is such and such destination safe
to be visited by tourist? What are the dangers and how they can be avoided?
To meet these demands, databases use very precise guides to extract the raw data from data
collections and the relevant literature, arrange them in structured files so as to be ready for
subsequent processing for providing the right answers.
Thus, databases can be used directly for decision making or a piece of research, obviating the
need to consult primary documents or other sources of information. The answers they provide
stimulate and focus not on the initial situation but on the possible consequences of the
intended course of action.
9) Information Networks: Information networks comprise a group of individuals or
organisations that exchange information in various forms on a regular and organised basis.
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They are established with a set of objectives: ‘the need for knowledge’, less burden, share
tasks, pool resources with a formal structure, common procedures and techniques.
They are based on a particular territorial unit – a city, region or country and others are
specified to that particular task: for instance the creation of shared database, loans, and so
forth. The network may be decentralised, centralised or a mixed one. In tourism examples
are:
• Utell, the world’s largest hotel representation company maintaining a central database
with up-to-date information on their hotels, like location, prices, facilities and
availability,
• Airlines Computerised Reservation Systems (CRS),
• Websites on internet of World Tourism Organisation, Pacific Asia Travel Association,
etc.
In 1989, M. Porter suggested that “the world of the next decade is going to be a world
where people struggle with how to connect systems, how to make them compatible, how
to deal with the complexity of systems that span many activities within the firm and
cross functional boundaries”.
10) Users: The user is the focal point of all the information systems. The concept of ‘user’,
though unclear, points out that he or she is both a consumer as well as a producer of
information. For example, a travel writer, is a producer of information through articles and a
user of referral and bibliographic search services when seeking documents to help with his or
her articles for communicating one’s opinions/messages to the public.
2.5 FORMS OF INFORMATION
“Form”, is defined as a particular condition, character, or mode in which something appears. It

often includes a sense of mass or volume. It can be applied to physical objects, mental images,
methods or procedures, etc. (The Random House Dictionary of the English Language).
Like energy, information may appear in many forms. These can be identified as:
1) Documents: A ‘document’ is an object that provides information based on the nature of the
subject. There are two categories: Textual and Non-textual documents.
Textual documents present their information exclusively in the form of written text to be
read. Examples are books, periodicals, catalogues, statistical compendia, trade publications,
patents, etc. Non-textual documents may contain some text but the important part is presented
in some other form. They are meant to be seen, heard or manipulated. These are:
Ionic documents – images, maps, plans graphs, diagrams, posters,
paintings, photographs, slides.
Sound documents – sound records, sound tapes.
Audio-visual documents – combining images and sound: films, slide shows, video
tapes, discs.
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Documents of a material – objects, samples, artistic works, monuments, books in
Braille, teaching nature games.
Mixed documents – which brings together various textual and non-textual
documents on the same subjects such as books and records,
educational kits.
Magnetic documents – for computer processing, i.e., the programmers that make it
possible to carry out the various operations of calculation,
scoring, simulation, file processing, etc., and the files.
2) Periodicals: These are the most frequently used ‘form’ of all the sources of information by
scientists and technologists though books, reports, conference proceedings also play an
important part. They form the heart of most specialist collections and are known variously as
journals, serials, magazines, transactions, proceedings, bulletins, etc. and appear with
different periodicities like weekly, fortnightly, monthly, quarterly, etc. Their value over
books lies in the fact that they report nascent scientific observations or experiments. It is
assumed to be the definitive, economical and archival version of published research.
The following list brings out the varied types of journals, their pros and cons in printed, optical
and magnetic media based on acceptability and economy:
a) Printed full text journals: Definitive form of published research for authors and consumers,
especially for current articles. It cannot be equalled for visibility, credibility or physical
quality.
b) Synopsis journals: Regarded as inferior to full text publications by authors, as it takes time
for them to prepare. Suited well to subjects such as Chemistry, where a formula and a few
paragraphs may say nearly all there is to be said. They are good for current awareness in
peripheral areas where depth and detail are not necessary, but could be backed up by full text
on demand.
c) Miniprint/Newspaper-style journals: Both are liked poorly by authors because of lower

visibility and size and fragility, unsuited to long term storage and retrieval.
d) Microform journals: It is a good conservation medium for libraries, though disliked for low
visibility by authors and unsuited to scanning or browsing. Though annotation is impossible,
it can be produced both from a printed version and electronic versions (COM – Computer
Output Microfilm).
e) Online: The information can be downloaded with restrictions, but printouts can usually be
made from the internet. Access varies in its ease and rapidity according to the system and
software.
f) CD-ROMs (Digital Optical Discs): The Compact Disc Read-Only-Memory is a powerful

tool for storage and retrieval of large amounts of data. It is essentially a PC-based technology
and hence, cannot be matched with those of online systems using large mainframes. It is well
suited for people who frequently search one or two databases. It offers information managers
and researchers tremendous storage potential. The essential features include:
• A single CD-ROM disk can store the equivalent of upto 1500 floppy disks.
• CD-ROM is virtually indestructible.
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• It can combine text with audio, graphic images and moving images.
• CD-ROM drives are fairly inexpensive and easy to use.
Its adaptability should be viewed not just as a new storage medium, but as a whole new
information management technology, as a viable and cost-effective alternative to books and
paper, micro-image, magnetic disc, video and audio for information storage and distribution –
since information is not just bibliographic records, abstracts and full-text, but also graphics,
illustrations, colour, layout, styles, sounds and movements.
g) Optical Discs: Optical discs can be (1) read-only-memory, (2) write-once, and (3) erasable
with the data/information recorded either in analog or digital formats. Of the three, the read-
only-memory discs cannot be changed once produced. Write-once and erasable discs are
recorded directly at the work station. The former cannot be changed once recorded, though
new data can be added following the already recorded data. Erasable discs can be changed
and referred to sometimes as ‘write-many discs’. The information is recorded using optical
(laser) technology and with the help of search software, searchers can download records from
CD-ROM to floppy or hard disks for data manipulation and in-house database development
according to the needs.
Besides these there are certain information forms specific to tourism sector. Brochures, travel
magzines, Airlines schedules, Tourism Departments, reports and bulletins, specialised
publications and websites on the internet are the examples of these forms.
1) Discuss the role of CD-ROMs as a form of information storage and transmission media.
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2) Discuss the various modes through which information is generated.

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2.6 LET US SUM UP
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To summarise, in a world with nobody incharge but everybody partly incharge, the concept of
‘information’ is somewhat anthropological in meaning and is strongly based on culture and social
structure, which serve as ‘bridges of thought’ between individuals and societal civilisation.
As a basic property of the universe and as an input into modern productive systems, information
pervades all economic activities influenced by technology (Communications, Computer and
Electronics, etc.) and telecommunication systems and networks. This technology in its various
forms, in turn has become dominated by ‘Information Technology’, thus making the whole
spectrum an “advanced communications society”, characterised by a variety of users’
desire/freedom for selection of information which influence the form of the information market,
different kinds of information with emphasis on quality and reassessment of the existing
communication media – the print media as well as broadcasting and telephoning, irrespective of
when or where or from whom the information originated.
2.7 KEY WORDS
Artificial Intelligence : Use of computers to perform ‘human-like’ activities such

as visual perception, speech recognition, natural language
analysis, expert systems, etc.
Atlas : A set of geographical maps, tables, plates, etc.
Book : A set of printed pages brought together to form a
paperback or bound volume.
Cassette : A plastic container for audio and video tape or film
CD-ROM : Compact Disc Read-Only-Memory. An optical disk which
can store video, audio and computer data.
Communication : An oral or written address to a learned society.
Computer : A processor of information.
Decoder : A logic circuit that changes a code from its encoded form
back to its original form.
Document : An aggregate of an information carrier, the data recorded
there-on or therein and their meaning, used for
consultation, study, testimony.
E-MAIL : Electronic-mail. The ability to send and receive documents
via suitable networks, including the telephone system.
Encoder : A logic circuit that changes data into a code suitable for
machine entry.
Expert System : A specialist problem-solving system programmed with
knowledge from human experts.
Film : A sensitive-surfaced flexible transparent material in the
form of sheets, strips or rolls.
Floppy Disk : A small flexible version of a disk mainly used on
microcomputers. There are several formats and size of
floppy in use today : 8”, 5.25” and 3.50”.
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Graph : A representation by means of a drawing or similar
procedure of all kinds of given or observed data.
Hypermedia : A system making use of computer data, pictures, video and
audio, etc.
Hypertext : A subset of hypermedia where textual information can be
set up by associating parts of the text with other ideas.
Useful for research on the text.
Illustration : An engineering or drawing accompanying the text of a
book journal or article.
Image : A display of information by projection, generally for
visual use.
Model : A reduced-scale copy of a device, machine, setting or
work of art.
Plate : An extra-illustration, i.e., not included in the paging of a
printed work.
State-of-the-art : A report on the present state of a subject or field, drawn
up by evaluating the relevant literature over a given period
of time.
Sound Record : A flat plastic disc used for recording and reproducing
sounds.
Synopsis : A short summary of a work, usually by the author.
Thematic Map : A document resulting from a specific study requiring
interpretation, analysis or synthesis on a given theme.
Thesis : Research submitted to a faculty to qualify for a university
degree.
Transducer : A device that converts a physical input into an electrical
signal.
Video Cassette : Container for videotape whereby record images can be
viewed on a television screen by means of a video tape-
recorder.
Video Tape : A special magnetic tape used for recording images and
sometimes the accompanying sound.
1) Information Users Needs

Students For pursuing their academic studies.
Teachers For imparting education.
Scientists and Technologists For research.
Managers, Administrators, Political Leaders, etc. For decision making.
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Read about information needs in detail in Sub-sec. 2.2.1.
2) Most of the human activities are concerned with information communication. The
information communication process may be direct, i.e., person to person, or indirect, i.e.,
between the public and medium. The process of information communication has been
explained in Sub-sec. 2.2.3.
3) The value of information depends on a number of factors. The generic factors are: (i)
person’s cognitive style in receiving the information; (ii) knowledge contained in a person’s
memory; and (iii) language.
The factors important for determining the value of information are: (i) Time; (ii)
Knowledge; (iii) Prior knowledge; (iv) Accuracy; (v) Quantity and (vi) Power. For
answering the question in detail, study properly Sub-sec. 2.2.6.
1) The Compact Disc Read-Only-Memory (CD-ROM) is a powerful tool for storage and
retrieval of large amounts of data. It is essentially a PC based system and cannot be used in
mainframes or other systems. The essential features of CD-ROM as a storage and
transmission media has been discussed in Sec. 2.5.
2) Information is regularly generated by a vast number of persons and modes such as Authors;
Editors; Primary and secondary publishers; Libraries; Documentation Centres; Information
Analysis Centres; Databanks; Information Networks and Users.
Activity
Find out the Information needs of the following:

1) Tour Operators
2) Hotels
3) Tourism Planners
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UNIT 3 CONCEPTUAL FOUNDATIONS OF
INFORMATION SYSTEMS
Structure
3.0 Objectives
3.1 Introduction
3.2 Information Systems
3.3 Types of Information
3.4 Organisation as an Information Processing Unit
3.5 Organisational Functional and Activity Subsystems
3.6 MIS and Data Processing
3.7 Operating Elements of Information Systems
3.8 Information Needs for Decision-Making
3.8.1 Information for the Intelligence Phase
3.8.2 Information for the Design Phase
3.8.3 Information for the Choice Phase
3.8.4 Information for the Implementation Phase
3.9 Structure of Information Systems
3.10 Types of Information Systems
3.11 Let Us Sum Up
3.12 Key Words
3.0 OBJECTIVES
After reading this Unit, you should be able to:
• appreciate the significance of information systems in an organisation,
• understand the information subsystems which could be defined within a typical

organisation, and
• differentiate between various types and levels of information systems.
3.1 INTRODUCTION
Information has been recognised as one of the crucial corporate resources, which facilitates better
utilisation of other important resources such as men, machines, materials, money and methods.
Managers have come to realise that without proper information – at the right time and at the right
place – even the other resources may not be fully utilised. A Manager needs to have proper
information at all the stages of a decision-making process. And a fully informed manager is in a
position to take better and faster decisions as compared to an uninformed one.
It was way back in 1957 that the organisations in the United States passed from the industrial era
to the information era. It was in that year that the number of employees who were primarily
handling information surpassed the number of industrial workers; and this number of information
workers has kept on increasing since then.
The present Unit discusses various conceptual foundations related to information systems. To
understand the use of information systems, we first define the concepts in detail.
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3.2 INFORMATION SYSTEMS
A management information system has been defined by Davis and Olson as “an integrated user-
machine system designed for providing information to support operational control, management
control and decision-making functions in an organisation. The information systems make use of
resources such as hardware, software, men, procedures as well as supplies”. As the above given
definition indicates, the information systems are meant for supplying, and not generating, the
information to various managers involved in the decision-making process. The information
systems are expected to provide processed information to the decision-makers at various
management levels in different functional areas throughout the organisation. To understand the
management information systems, it is possible to define it into three constituent components:
Management: Management has been defined as a process, a function, a profession dealing with
the activity of getting the work done with and through people. The various functions of managers
include directing, controlling, staffing, leading and motivating.
Information: Information could be defined as sets of facts, figures and symbols processed for
the current decision-making situation. The information is considered to be of significance in a
particular situation.
System: A system is defined as a set of related components, activities, processes, and human
beings interacting together so as to accomplish some common objective.
Putting all these three components together, it could be seen that Management Information
Systems are sets of related processes, activities, individuals or entities interacting together to
provide processed data to the individual managers at various levels in different functional areas.
While defining the Management Information Systems (MIS) the following characteristics should
be kept in mind:
a) The Management Information Systems are primarily meant for providing information from
the data after processing them. The information systems do not generate data. The data is
generated, collected, recorded, stored, processed and retrieved after it has been generated by
business operations in an organisation. The information systems follow the procedures
designed for processing this data which has been generated within the organisation.
b) The information systems are designed for the job positions rather than for individuals.
Regardless of who is the individual holding the job position, the information systems are
designed keeping in mind the job responsibilities that the individual is supposed to perform
and depends upon the information needs of the individual in the organisational hierarchy.
c) The information systems are designed for different levels of management – they are supposed
to cater to the information needs of decision-makers at top, middle and junior levels of
management.
d) The information systems are designed for supplying information to managers in different
functional areas. The information is supplied to managers in the areas of marketing, finance,
production, personnel, materials, logistics, etc.
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e) The information systems should be integrated by way of databases. The redundancy in
storage of data, processing of data and generation of reports is avoided by way of integration
of information systems. Single point data entry and upgradation of data in the master data
files should be ensured to minimise chances of discrepancies in the data integrity.
f) The information systems are facilitated with electronic equipment such as faxes, computers
and so on.
You will read more about MIS and its definition in Units 4 and 8.
3.3 TYPES OF INFORMATION
Broadly, information can be divided into two different types – internal information and external
information. Figure I shows the scope of internal and external information in the context of
business organisations.
Internal Information: The internal information can be defined as the information which has
been generated from the operations of the organisation at various management levels in the
various functional areas. The internal information gets summarised and processed as it goes from
juniormost to the topmost levels of management. The internal information always pertains to the
various operational units of the organisations. Examples of internal information would be sales
figures, information on personnel, accounts, etc. This type of information is usually consumed by
middle and junior levels of the management. However, summarised internal information is also
consumed by top level of management.
Planning Information related to the External

the external environment Information
TOP
MIDDLE Controlling information related to Internal

the internal environment Information
JUNIOR
Figure I: Internal and External Information
External Information: The external information is usually collected from the environment of the
business organisation. External information is considered to be affecting the organisational
performance from outside the organisation. Information such as government policies,
competition, economic status and international market is considered to be external information.
The external information is usually required by the top management cadres and is helpful in
shaping the long term policy plans for the organisations.
In the tourism industry external information is necessary for many reasons. Tourism planning and
forecasts, destination development, tourism trends and flows, tourist generating markets, tourism
supplies, possible distributors, product/service design, etc. all depend on the external information
related to them. Databases for marketing, etc. are needed for designing tourism products and
services. Hence, external information has a great bearing on the tourism organisation.
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3.4 ORGANISATION AS AN INFORMATION PROCESSING
UNIT
The information gets processed within an organisation as it travels from clerical level to the top
levels of management. Figure II shows how the information gets processed within an
organisation. It could be seen from the figure that the data is collected from units like customers,
internal operations, competition and external data on economy and market, etc. The collected data
is processed so as to generate the outputs usually in the form of information reports. This output
is information and leads to managerial action. The processed information is also disseminated to
the members of the organisation, public at large, stockholders as well as government and
regulatory agencies. It could also be seen from the figures that information is the only linking
thread between the external environment and the internal members of the organisation.
Data Collection Input Processing Output Dissemination
Customers Members of
Organisation
Competitors
Public and
Field Operations Shareholders
Environment Action Government
Government Environment
Figure II: Information Processing in an Organisation
The various subsystems of any information system could be better understood by looking at it
from the organisation’s point of view. The two approaches used to define the subsystems of a
MIS (Management Information System) are - (1) Organisational functional subsystems and (2)
Activity subsystems.
3.5 ORGANISATIONAL FUNCTIONAL AND ACTIVITY

SUBSYSTEMS
Figure III clearly shows the various functional areas which could be separated from the MIS
point of view. The major subsystems and the typical reports generated within each functional area
are given as under:
Functional Subsystems Some Typical Reports
Marketing Marketing Analysis & Sales Forecasting Report, Sales

Planning Report, Customer and Sales Analysis Report
Production/Service Service/Production Planning Reports, Cost Analysis &

Control Reports, Quality Control Report
Personnel Personnel Information Reports, Performance Appraisal

Reports, Training & Leave Records
Finance & Accounting General Accounting Reports, Payroll Accounting Reports,

Bonus & IT Reports, Financial Analysis Reports, Cost
Analysis Reports
55
Functional
Areas
Applications For
Strategic Planning
Management Control
Operational Control
Transaction Processing
Figure III: Various Subsystems of MIS
The information subsystems could also be understood by looking at the subsystem from activity
point of view. In each functional area, the processing activity could be done at four different
levels. These levels are handled by different levels of manpower within the organisation. For
example, in tour operation the filing and processing of a tour group is usually looked after by the
desk executive, whereas the operational control activity is the responsibility of junior levels of
management/management executive. The management control and strategic planning functions
are direct responsibilities of middle and top levels of management respectively. Table-1 shows
the typical user profile for these activity subsystems:
TABLE-1
Activity Subsystem Typical Users
Transaction processing Executive
Operational control Junior Level Managers/ Management Executive
Management control Middle Level Managers
Strategic planning Top Level Managers
The various functional areas are integrated through the common database which is an integral part
of the information system in an organisation. The processed data from marketing function is
stored in the database and whenever it is required, it is fed over to the production.
Check Your Progress-1
1) What is the role played by internal and external information in an organisation?

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2) Define Management Information System and discuss various characteristics expected of a
good MIS.
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3.6 MIS AND DATA PROCESSING
MIS can be differentiated from data processing from the users point of view. Historically, the
data processing was the first subsystem to be used in business organisations. It is recently that the
data processing is being treated as a lower level activity as compared to MIS. Data processing is
basically aimed at processing of transactions generated from day-to-day operations within an
organisation; whereas MIS aims at supplying information from the processed data to various
cadres of management to support their decision-making process. The use of computers for
processing of data actually started with data processing and MIS has evolved only recently within
the organisation. Data processing could be further divided into four different streams as given
below:
a) Office Automation Systems (OAS)
The Office Automation Systems are those activities and processes which are undertaken on the
computer to perform the office routines such as routine correspondence, scheduling,
appointments, calendar functions, bulk mail, word processing, etc. However, it may be noted, that
OAS does not lead to generation of data directly. These systems are designed following basic
principles of Office Management.
b) Transaction Processing Systems (TPS)
The transactions which get generated on a day-to-day basis in an organisation are collected,
stored and used for updating master data files so as to change the current status of organisational
entities within an organisation. The Transaction Processing Systems are primarily aimed at
updating the files relating to finance such as, generation of detailed transaction reports, preparing
summarised processed transaction data and so on. Examples of Transaction Processing Systems
are sales accounting systems, financial accounting systems, personnel accounting systems, etc.
All these systems are designed following the basic principles of accounting.
c) Management Information Systems (MIS)
These systems are designed for providing information to the key functionaries in an organisation.
These systems make use of the already processed transaction data which is outputted from TPS
and generate information reports after processing data. The examples of this kind of systems
could be personnel information systems, marketing information systems, sales information
systems, production and operations systems, etc. These systems are designed following the
principles of organisational theory. The major group of users for this kind of systems are the
middle levels of management.
57
d) Decision Support Systems (DSS)
DSS are the highest order of systems among the computer based information systems. These
systems make use of the summarised organisational data as well as external data collected from
the environment of the organisation. The internal data is mostly used for studying the trends
whereas external data is mostly used for understanding the business environment. These systems
also make use of analytical and planning models such as management science and operations
research models. These systems are mostly used for assisting the top management in taking
unstructured and semi-structured decisions having long-term impact on the organisational
performance.
3.7 OPERATING ELEMENTS OF INFORMATION SYSTEMS
Any information system will make use of the following physical components:
a) Hardware: The equipment and devices for inputting, outputting, secondary storage,
processing as well as communications in the system.
b) Software: The set of programmes to facilitate processing procedures; it includes systems

software, applications software and the model base.
c) Data Base: The organisational data to be used by various software programmes is usually
stored in the form of files and database on the physical storage media such as computer tapes,
disc drives, floppy diskettes.
d) Procedures: The operating procedures documented in the form of physical manuals

constitute an important part of MIS components. These documents could be divided into
three major types: Operating Manuals, User Manuals, and Systems Manuals.
e) Operating Personnel: The manpower operating these information systems include systems
managers, systems analysts, data administrators, programmes, data entry and computer
operators.
Processing Functions
The major processing functions in information systems include the following:
a) Processing of business transactions: To capture, collect, record, store and process the
events of business interest, so that their effect should be carried over to the organisational
performance records.
b) Updation of master files: The effect of these transactions is carried over to the status files of
the organisational performance. Master files at any given time shall reflect the status of any
entity after having incorporated the impact of up-to-moment transactions.
c) Generation of information reports: After having processed the transactions and updation
of master files, the information reports are generated so as to assist the managers in their
decision-making.
d) Processing of interactive enquiries: On-line information processing systems provide the

facility of responding to the business queries raised by managers on the data files – both
master as well as transaction files.
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e) Providing interactive analytical support: The key decision makers not only need to
interact with the data files for extracting data, with the help of scientific and planning models,
they also require on-line processing support to analyse, the impact of some possible actions.
When the system is able to extract data from relevant files and address this to the models
chosen by the user, this leads to a Decision Support System.
3.8 INFORMATION NEEDS FOR DECISION-MAKING
To take any decision proper information is needed. For example, a tour company planning to start
inbound tours from Europe, first must have all the data and information regarding the market
there to design the package and then choose an area/region/country to start the operation. Herbert
A. Simon has proposed a conceptual framework that divides the decision making process into the
following stages or phases:
a) Intelligence Activities: At this stage, a search of the environment takes place to identify
events and conditions requiring decisions. Data inputs are obtained, processed and examined
for clues that may identify problems or opportunities.
b) Design Facilities: At this stage, alternative courses of action are developed, analysed and
evaluated. This involves processes to understand the problem, to generate solutions, and to
test solutions for feasibility.
c) Choice and Implementation Activities: Here one has to select an alternative as course of
action from those available. A choice is made, implemented and monitored.
Though intelligence, design, choice and implementation activities are sequential in nature,
the decision-making process includes the ability to cycle back to a previous stage as shown in
Figure IV. Choice and implementation have been shown to be separated for better understanding.
Is there What are the Which should Is the choice

a problem alternatives? you choose? working?
Intelligence Design Choice Implementation
Figure IV: Flow Chart of Decision Process
Let us now look into the information requirements for the various stages described above.
3.8.1 Information for the Intelligence Phase
Information Systems can help in the intelligence stage by providing information about external
and internal conditions. Intelligence entails scanning the environment, either intermittently or
continuously, depending on the situation to identify potential decision situations. For example:
a) a marketing executive makes periodic visits to key customers to review possible problems
and identify new customer needs.
b) Sales analysis reports can be furnished to managers periodically, when exceptional sales
situations occur, or on demand. These help managers to identify the status of sales
59
performance. Also information from market research studies and external databases can help
managers (at higher levels) identify changes in consumer preferences or competitive activity
so as to design or rejuvinate a product/service.
c) A tour executive might attend a trade fair to observe possible new ventures that may or could
be incorporated in future packaging of tours.
The Intelligence phase and its activities result in some type of dissatisfaction with current state or
alternatively aid in the identification of potential rewards for a new state. The intelligence phase
is the ‘tricky’ phase and embraces the unstructured non-programmed category of decisions that
we have discussed earlier in this Unit.
A major information system capability is needed at this stage. It should be possible to provide
situation-specific information to managers when they make ad-hoc inquiries that could be unique
and often unscheduled. All this should be in addition to some of the exception reports that might
be churned out on a weekly basis.
3.8.2 Information for the Design Phase
The design phase involves designing of several possible solutions to the problems and evaluation
of the alternate courses of action. Here more carefully specified and directed information
activities and capabilities, focused on specific designs, are required. This stage calls for quite a
deal of creativity and innovation. Idea generation and idea engineering could play a useful role in
this stage of decision-making. Techniques like Brainstroming, Nominal Group Technique, etc.,
could be utilised.
Models of business operations can be developed with decision support software, including
advanced statistical, management science, and modelling packages, or less complex spreadsheet
programmes. These packages and models can then be used to manipulate information collected in
the intelligence stage to develop and evaluate a variety of alternatives.
Thus, the information system should contain decision models to process data and generate
alternative solutions. It should assist with checklists, templates of decision processes, scenarios,
etc. The models should assist in analysing the alternatives.
3.8.3 Information for the Choice Phase
In this stage a final selection of a particular course of action has to be made out of the various
alternatives generated in the preceding design stage. Here a manager can use information tools
that can calculate and keep track of the consequences, costs and opportunities provided by each
alternative designed in the previous stage. Information systems should help managers select a
proper course of action. An information system is most effective if the results of design are
presented in a decision-impelling format. The final choice would depend whether there is a single
criteria or objective on which it is to be decided or whether the decision situation is one which
involves multiple criteria and objectives. An ‘expert choice’ software is available for the purpose
of prioritisation of alternatives.
The quality of the choice stage depends very much on the quality of inputs made from the
previous two stages – intelligence and design phases. It is possible that the manager, even though
at the choice stage, might like to refer and return to the previous stages and reopen the issues for
more data or alternatives, etc.
60
Information systems can help managers in the choice stage in various ways. Managers can be
provided with summarised and organised information emphasising major points such as major
assumptions, resource requirements and expected results of each decision alternative. Some type
of a ‘what-if’ simulation analysis could be established.
3.8.4 Information for the Implementation Phase
This is the final stage of the decision-making process. It is concerned with implementing and
monitoring. When the choice is made in the previous stage, the role of the system changes to the
collection of data for further feedback and assessment. The information systems must help
managers monitor the successful implementation of the decision. Here managers can use a
reporting system that delivers routine reports on the progress of a specific solution. Some of the
difficulties that arise are resource constraints and possible ameliorating actions. Support systems
can range from full-blown Management Information Systems to much smaller systems and
project planning (PERT/CPM based) software operating on micro-computers. Feedback about
business operations affected by a decision helps a manager assess the decision’s success or
failure, and whether follow-up decisions are needed.
3.9 STRUCTURE OF INFORMATION SYSTEMS
The MIS structure could be discussed in terms of support for decision-making, management
activity and organisational functions. A conceptual framework would show the synthesis of these
three approaches into an MIS structure. The structure could be understood by looking at the
conceptual structure and the physical structure:
i) The Conceptual Structure
The conceptual structure could be defined as an integrated system of functional subsystems each
one of which could be divided into four different information processing components:
1) transaction processing system,
2) operational control information system,
3) managerial control information system, and
4) strategic planning information system.
Each of the functional subsystems in the organisation will have unique data files required for a
particular subsystem, as well as each of the subsystems will also make use of general database
files which can be accessed by more than one subsystem. The concept of database which is
common to more than one functional area is called a general database and is managed with the
help of a database management system. A micro view of the MIS structure would also show the
presence of the software programmes in addition to the specific programmes which are developed
for each functional area. The MIS also makes use of a model base primarily meant for MIS
reporting and decision support systems. The model base and common application software is
common to a range of applications within and across the functional areas. Figure V shows the
conceptual structure of an information system for a function. When application software for top
management, middle management, management executive and executive functions are put
together, along with the common application software, it becomes a complete conceptual
structure of an information system.
61
Functional Sub-system
Top Management
Middle Management Model Base
Management Executive/ Common Software Programmes

Junior Management
Executives Dedicated Data files
Organisational Data Base Data Base Management System
Figure V : Conceptual Structure for a Functional Subsystem
ii) The Physical Structure
It is quite similar to the conceptual structure except that there is lot of integrated processing and it
makes use of common modular software. The integration of information systems takes place
through database which is normally a common database. The various subsystems and different
functions interact with each other through the database. The outputs of one subsystem are stored
in the common database which are subsequently used by the next subsystem as inputs. This is
how the integration of information processing activity takes place across the various subsystems.
To reduce duplication of efforts for development and maintenance of software the common
modules of application software are also used across the various functional areas. These modules
cross the functional boundaries and are useful in more than one functions. These modules are
either inserted into the system or called in by the system.
3.10 TYPES OF INFORMATION SYSTEMS
The information systems usually belong to two different types, i.e., structured and
unstructured information systems. Formalisation and publicisation of information leads to
structuredness in information processing activity; whereas absence of these two leads to
unstructuredness of information systems. Figure VI shows the various information system
components in an organisation. It could be seen from the figure that public information systems
are designed to provide the organisational information to the authorised persons in the
organisation. Private systems, on the contrary, are designed to limit the availability of the
information to select individuals. Normally, the private information systems are meant for
supplementing or duplicating the efforts of public information systems. The public information
systems are characterised by the presence of formal documents and records whereas the informal
information systems may or may not have any recording or predesigned process of retrieval.
Public Private
Formal
Informal
Figure VI: Information System Components
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The information systems could also be characterised as formal and informal. Formal
information systems are those which follow the hierarchial structure of the organisation. The
information system where all those who are using information are authorised to use it and are also
responsible for dissemination of specific information is called formal information system.
Whereas information systems where unauthorised people pass on the public or private
information from one level to another level are called informal systems. In informal systems, the
user as well as sender may or may not be authorised users. It could be seen that when the
information systems are formalised and they are developed for handling of public information.
They become more and more structured with predefined frequency, content, source and objective;
whereas absence of predefined frequency, content, source as well as justification leads to
unstructured information systems. With computerisation of information systems, more and more
structuredness is achieved and the information system components are affected as shown in
Figure VII.
Public
Formal
Informal
Figure VII: Impact of Computerisation on MIS Components
Check Your Progress– 2
1) Explain the operating elements of Information System.

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2) Explain different types of Information Systems.

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3.11 LET US SUM UP
The Unit defined the information system as an organisational system designed for the purpose of
providing information to various managers in different functional areas so as to assist them in
decision-making. The internal information, which is mainly generated from the operations of the
organisation, is consumed by lower level managers. Summarised internal and environmental
information is used by the senior managers for long-term perspective planning. The
organisational information systems could be studied by looking at these from the functional
viewpoint as well as from the managerial activity level. The top management interest for
positioning of information processing activity has been considered important for proper use of the
information resources. The information systems in an organisation vary from totally structured to
components such as, hardware, software, manuals and men.
3.12 KEY WORDS
Business Systems Analyst : A systems analyst tied to an end-user business area with
specialised understanding of the business information
requirements of that functional area. The analyst is responsible
for translating those specific business requirements into
information systems for that functional area.
Decision Making Process : A process of intelligence design, choice and implementation of

a particular course of action (Simon’s Model).
Procedures : Set of instructions used by people to complete a task.
Check Your Progress–1
1) Internal information deals with various operational units of an organisation, such as, sales
figures, information on personnel, accounts, etc. This type of information helps in smooth
running of an organisation and also helps in keeping track of all the changes taking place in
an organisation.
External information deals with the information collected from the environment of the
business organisation. This information is considered to be the one affecting. The
organisation performance from outside the organisation. To answer in detail study carefully
Sec. 3.3.
2) A Management Information System is an integrated user-machine system designed for

providing information to support operational control, management control and decision
making functions in an organisation. The information systems make use of resources such as
hardware, software, men, procedures as well as supplies. To describe the characteristics
desired in an MIS, read Sec. 3.2.
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1) The operating elements of Information System consists of physical components and, also, the
processing functions involved to make the system operational. The physical components of
Information Systems are : Hardware, Software, Data Base, Procedures and Operating
Personnel.
The processing functions include Processing of business transactions, Updation of master

files, Generation of information reports, processing of interactive enquiries and providing
interactive analytical support. To answer in detail read Sec. 3.8.
2) The information system usually belong to two different types, i.e., structured and
unstructured information systems. Formalisation and publicisation of information leads to
structuredness in information processing activity; whereas absence of these two leads to
unstructuredness of information system.
The information system can also be characterised as formal and informal. Formal
information systems follow the hierarchial structure of the organisation whereas
information systems where unauthorised people pass on the public or private information
from one level to another level are called informal systems. The above said has been
explained in Sec. 3.10.
Activity
Visit any organisation and see how the Information System functions there.
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UNIT 4 ROLE OF COMPUTERS IN MANAGEMENT
Structure
4.0 Objectives
4.1 Introduction
4.2 Need and Levels of Information Handling
4.3 Advantages of Computerisation
4.4 Approach to Computerisation
4.5 Strategic Issues of Computer-aided Decision-making
4.5.1 Communication Gap
4.5.2 Reliance on Service Bureaus or Computer Vendors
4.5.3 Lack of Master Plan
4.5.4 Organisation of the MIS Function
4.5.5 Lack of Good Management System
4.5.6 Managerial Participation
4.5.7 Failure to Identify Information Needs
4.5.8 Poor Systems Prior to Computerisation
4.5.9 Overlooking Human Acceptance
4.6 Let Us Sum Up
4.0 OBJECTIVES
After going through this Unit you should be able to :
• appreciate the significance of computerisation for efficient management decision-making at

the corporate level, and
• understand the role of Computer-aided decision-making in management of an organisation

along with the advantages and limitations thereof.
4.1 INTRODUCTION
Prof. H. A. Simon views the computer as the fourth great breakthrough in history to aid man in
his thinking process and decision-making ability. The first was the invention of writing which
gave human beings a memory in performing mental tasks. The remaining two events prior to the
computer were the devising of the Arabic number system with its zero and positional notation,
and the invention of analytic geometry and calculus, which permitted the solution of complex
problems in scientific theory. Now the electronic digital computers combine the advantages and
attributes of all these breakthroughs and make them available for decision-making and
management of organisations.
This Unit takes into account the various aspects of information handling through computerisation.
It goes on to discuss the role of computers in decision-making processes.
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4.2 NEED AND LEVELS OF INFORMATION HANDLING
INFORMATION
Recorded
Stored
Processed
Retrieved
For MANAGERIAL
DECISION-MAKING
of planning, organising
controlling and marketing
Figure I: Definition of MIS
Management Information System (MIS) can be defined, according to Joel E. Ross, as a

communication process wherein information (input) is recorded, stored, processed and retrieved
for decisions (output) regarding the managerial process of planning, organising and controlling. If
we now define decision-making as the process of selecting from among alternatives a course
of action to achieve an objective, the link between information and decision becomes clear.
Indeed, decision-making and information processing are so inter-dependent that they become
inseparable, if not identical, in practice. You will learn more about MIS and its definition in
Unit 8.
Computerised MIS cannot technically make a decision but it can yield processed data and follow
instructions to the extent of its capacity. For example, the computer can be properly instructed to
compare inventory levels with programmed decision-rules on re-order level and re-order quantity,
and generate purchase requisition, purchase enquiry and purchase order, etc. This can resemble an
automatic control of purchase documents.
The modern role of MIS for managerial decision-making in a complex organisation has been
compared to that of a military commander. Commanders often adopt a strategy built by direct
observation of partial situations. This is the style used by the managers who track operations by
periodic communications with remote sales depots, plant divisions and other offices. For instance,
the central marketing organisation of a travel agency has to keep track of all its booking offices
spread all over India for marketing related decision-making.
Levels of Information Handling
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As you have read in Unit 3, there are four levels of computerised information handling. These
are:
LEVELS
DSS MIS TPS OAS
used at used at used at used at

top level middle shop floor clerical level
management
Figure II: Levels of Information Handling.
In a modern complex organisation, the levels of information handling can be divided as decision
support system, management information system, transaction processing system, and office
(and other) automation system.
At the apex, the top level managers may need decision support system (DSS). This would be
an inter-active system that provides the user-manager with easy access to decision models and
data in order to support semi-structured and non-structured decision-making tasks. Inputs for DSS
can be some processed data, and mostly management-originated data along with some unique
models. The DSS would involve queries and responses, operations research models, and
simulation. The output from DSS would be special reports to resolve difficult questions and
replies to management queries.
At the middle management level (if there exists one), MIS would deal with an organised set of
procedures to provide information for middle managers to support their operations and decision-
making within the organisation. At this level, inputs for MIS would be both processed and raw-
data and some management-originated data, along with pre-programmed models. The MIS
process would involve report generation data management, simple models and statistical methods.
The outputs from MIS would be filtered and screened for semi-routine decisions and replies to
simple management queries.
At the shop-floor management level, transaction processing system (TPS) is a computer-based

system that would capture, classify, store, maintain, update and retrieve simple transaction data
for record keeping and for feeding MIS and DSS. The TPS would have transaction data as inputs.
The processing for TPS would involve classification, codification, sorting, merging, adding,
deleting and updating. Outputs for TPS would be detailed reports relating to routine decisions
and processed data.
At the clerical level, office and other automation control system can be in operation. Office
automation system (OAS) is simple in an automated office having multiple functions, where the
integrated and computer-aided system allows many office activities to be performed with
electronic equipment. The OAS would have inputs such as appointments, documents, addresses,
etc. The OAS processing would be scheduling word-processor, data storage and retrieval. Outputs
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from OAS would be schedules, memoranda, bulk mail and administrative reports. Computer
Reservation Systems used in hotels and travel agencies are also operated at this level.
4.3 ADVANTAGES OF COMPUTERISATION
The advantages associated with computer-based managerial decision-making can be the

following :
1) response time is greatly reduced;
2) very large data are stored for information and decision-making;
3) accuracy of information is considerably improved, thereby improving the quality of the
decision;
4) problems are handled more easily by using various operation research models;
5) the cost involved in the decision-making process is reduced;
6) more secrecy is observed as compared to manual file system;
7) ability to take quick decision improves considerably as the time for retrieval of information is
very fast;
8) paper work is reduced to the minimum as all the information is stored in the computer itself;
9) lots of information are stored for future reference;
10) chances of leakage of classified information are reduced;
11) accuracy in manipulation is increased very much; and
12) time spent in various decision-making activities is reduced to a minimum.
Emanating from the above, the following benefits for a commercial organisation can be attributed
to computerisation :
1) the availability of accurate forecasts within 1 per cent of net income;
2) the preparation of short-term profit plans and long-term projections;
3) the provision of pre-plan information in budget preparation;
4) the calculation of variances between budgeted and actual results;
5) the triggering of revised forecasts if not proceeding in accordance with plans;
6) the early warning system for monitoring activities and the signalling of necessary reactive
plans;
7) the indication of income and cash flow by following alternate investment strategies;
8) the assistance to the planning of new facilities and a host of special strides; and
9) the accomplishment of the preceding items at a great speed.
While TPS has been in use over several decades, OAS is coming into practice only now in a
number of organisations. The TPS has brought its own benefits for speedy execution, accurate
performance and quite often confidential handling. Such benefits will become evident if one
considers a couple of very common TPS applications.
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The first is examination result processing which the bulk of Indian universities are doing on
computer today, either with in-house systems or with hired service bureaus. The massive nature
of such processing can be visualised by looking at one State alone, namely, U.P., where 13 lakh
candidates go through high school stream and 6 lakhs through the intermediate stream in any
single year. The processing and publication of their results in time would not have been possible
without computerisation. Besides, it is possible to maintain some confidentiality on computer
processing. Another application is computerised electricity billing adopted by several State
Electricity Boards in India. Under the computerised system, every meter for light and fan, or for
power is invariably supported by a billing raised by computer and every such bill is again
invariably despatched by computer centre. Both these actions guarantee improvement over the
manual system where there is usually little certainty of bills being raised or being actually
despatched due to adoption of foul means. In a single state undertaking like UPSEB it was
estimated that the computerisation in the Western U.P. district for electricity billing had resulted
in a considerable amount of additional revenue.
Now, consider the effect of computerisation on an airlines. The computerisation of the Ticketing
Section has resulted in an easy ticketing procedure and also helps the ticketing agents of the
airlines who can get the system on their computers. Moreover, now a days the customer care
cargo, marketing departments and others are also computerised. This makes the customer needs
easy to handle. Similarly most of the travel agencies have linked themselves to Computerised
Reservation Systems of hotels, airlines, car rentals, etc. This not only saves time and energy, but
also helps them in providing better services and instant bookings to the customers.
Advantages of MIS can be manifold because of the aid to higher level decision-making. Once the
planning, monitoring, reviewing and control process are facilitated, the benefits can literally
multiply several times, over and above the mere shop-floor or clerical TPS applications.
1) Prepare a brief report on the extent of Decision Support, Transaction Processing and Office
Automation Systems, prevailing in your organisation, in context of the description given
above (in case you are not working go to an office and find out there).
………………………………………………………………………………………………..
………………………………………………………………………………………………..
………………………………………………………………………………………………..
………………………………………………………………………………………………..
2) List some advantages of computer based managerial decision-making.

………………………………………………………………………………………………..
………………………………………………………………………………………………..
………………………………………………………………………………………………..
………………………………………………………………………………………………..
4.4 APPROACH TO COMPUTERISATION
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The first important stage of organising MIS at the corporate level is to build up comprehensive
data-base from TPS for the clerical systems. Valid data should be initially classified and codes
attached to each data-set. Thereafter data-base should be constantly updated. The analogy to a
reference library system is almost uncanny, where books have to be classified according to the
subjects (e.g., reference, economics, management, etc.) and then codes attached to each book
(e.g., 001 for reference, 338 for economics, 658 for management, etc.). Thereafter the books need
constant updating through cataloguing and indexing. A library, however, is not as amenable to
easy cross-reference among a vast number of books, as a computerised data-base is. With
classification, codification and updating, a computerised data-base can help the user with almost
instant retrieval of any amount of cross-classified and cross-revised data, thus helping
tremendously the decision-making process.
The second important stage to MIS at corporate level is to decide on the principles of evaluating
the raw data for decision-making. For this purpose, the four principles that can be unhesitatingly
recommended are: selection, pattern, linkage and overview. The first principle of selection
looks at a screened segment of data which can focus attention on variances from standards,
deviations from norms, fluctuations from targets and differences from budgets. It is presumed that
whatever data are related to the initially fixed standards, norms, targets and budgets they are, to
that extent, not required to be looked at any further. But whatever are not conforming to the
steady state are worth looking at for decision-making purposes. The second principle of pattern
is to look at the collection of data and to derive insight by virtue of management ratios, trends,
correlations and forecasts. Essentially this is a principle of gaining insight into the given mass of
data. The third principle of linkage is a way of looking at a number of widely dispersed data-sets
and to formulate a coherent picture. The last principle of overview is to derive a total picture
which cuts across a number of control parameters and sums up the managerial position.
The third stage of MIS at corporate level is to realise the above four principles in actual practice.
The first principle of selection can be implemented by generating exception-based reports. This
requires the safe-keeping of classified, codified and updated data on the computer and retrieving
only specially meaningful reports on the basis of exception. The second principle of pattern can
be implemented by using mathematical modelling and statistical analysis. Such analytical
approach requires the data-sets to be treated with mathematical models and statistical methods in
order to derive meaningful indicators for decision-making.
The third principle of linkage can be implemented by inter-relating different data-sets from
disparate files or data-bases. The inter-relationships would provide again available insight across
the board. The fourth principle of overview can be implemented by aggregating data. Such a
process of aggregation can connect together the classified and codified data for purposes of
deriving a managerial insight into the total span of operations
4.5 STRATEGIC ISSUES OF COMPUTER-AIDED

DECISION-MAKING
Transaction processing systems using computers have played a relatively limited role as a
management tool. This has been so because decision-making has not been their central theme.
Instead, they have been speciality-oriented for on-going clerical needs in personnel (pay roll),
book-keeping (accounting), technical data (capital projects) or specific functional areas
(materials). Alternatively, they have been project-oriented, used to manage a specific
programme of limited time and scope, such as, examination result processing, or, they have been
problem-oriented for emergency and random retrieval of information to meet a crisis situation of
limited duration and scope.
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According to Robert Anderson, the corporate MIS should assist such material functions as:
• manufacturing, marketing and other real-time operations,
• futuristic improvement and problem-solving, instead of historical reports of the past actions,
• necessary corrective action rather than book-keeping, and
• monitoring of outside conditions affecting the organisational plans.
Joel E. Ross identifies the reasons for corporate MIS as the same for planning in general. It
should offset uncertainty, improve economy of operations, focus on the objectives and provide a
device for control operations. Such an approach is radically different from the patch-work
approach of the transaction processing system. (What follows is identification of some of the
strategic issues identified by Ross and others, and their suggested solutions in the Indian context).
4.5.1 Communication Gap
One of the reasons for the over-emphasis on the transaction processing system is the
communication gap between the computer professional and the user-manager of the system. In
India, far too many organisations have become used to separate EDP departments, now
increasingly called computer services departments. Because of the training interest and peer
pressure, Ross suggests that there is a compulsive tendency for the computer professional to
generate massive data-bases, to install display devices and glittering data-communications
techniques, and to install newer and grander design. This only serves the purpose of empire
building and not improved management.
There is a familiar situation where the computer professional is engaged in developing the
computer-aided decision-making but is not able to communicate to the user-manager. The
information that the user needs is called for, but the user cannot adequately express them as he or
she has not been accustomed to a rigorous self-analysis. Thereafter, the computer professional
works out a plan based on his or her own understanding of the user-needs, to convert them into
the flow-charts and programming. In the process, the information needs themselves get altered.
When the programmer codifies and implements the system, his or her own interpretation gets
incorporated, thus further changing the user-needs. All these end up by frustrating the user-
manager. This can be called “ten-minute syndrome” where sufficient time has not been spent
between the user-manager and the computer professional to get all the needs clearly conveyed
and understood.
A situation arose where during examination processing grace marks had to be allocated by way of
moderation. Computer professionals allocated grace marks to all students which resulted in
glaring anomalies where some top ranking students secured more than 100 per cent marks by
virtue of additional grace marks. Obviously, the Controller of examinations had not explained
properly the mystique of grace marks to the computer professionals!
4.5.2 Reliance on Service Bureaus or Computer Vendors
Quite often, Indian user-manager is approached by computer vendor who brain washes the
management into buying a system, indicating that the system has all the solutions to the
managerial problems. The end-result is that either the user gets a system which is too large for
him or her with a lot of computer “fat” or gets inadequate computing power for his or her needs.
Ross suggests that there should not be any technical romance with the computer vendor but a
return on investment (ROI) approach to expenditure. Further, the user-manager should operate
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with a master plan, rather than react to the vendor’s suggestions. There have been cases where an
organisation had appointed a service bureau for a large sum of money to develop a corporate
MIS. After spending a year as well as a couple of lakhs of rupees, the user-organisation was
thoroughly dissatisfied with the recommendations of the service bureau and did not implement it.
4.5.3 Lack of Master Plan
The bulk of computer failures are due to the lack of master plans to which hardware acquisition,
software development and individual MIS design can be related. Without such a plan, “islands of
mechanisation” result with little integration between separate systems. We can cite two successful
cases in this regard. The TISCO studied the interface of various systems like production planning
and control system, financial control system, and sales invoicing and order processing system. It
was observed that if individual systems were developed without regard to their mutual interfaces,
the result would be an absence of communication between the systems and the incompatibility of
the systems would prevail throughout the company. This was prevented by building up sufficient
linkages among these systems and developing an integrated approach according to a master plan.
A similar approach was also adopted by TELCO with encouraging results.
4.5.4 Organisation of the MIS Function

Since clerical systems came first involving accounting, pay roll, inventory returns and similar
financial jobs, the transaction processing system developed around all of them. Following the
normal principle of assigning a service activity by “familiarity”, the historical trend in India has
been to assign the computer to the Controller of Finance or Chief Accountant. This has been the
case in many sectors. Only now the situation is being reversed, MIS function has been placed
under the user-manager.
With more distributed processing becoming possible, the trend has been to place computer-aided
decision-making where it belongs, mainly under the user-manager with his or her own computing
power. Already, the personal computers (PCs) have made this trend possible in practice, with
individual data-bases available to the users. Similarly terminals are available to most important
users to share central computing power. In both cases, all PCs as well as terminals, the control of
the computer-aided activity has to remain with the user-manager.
4.5.5 Lack of Good Management System

It is imperative for successful corporate MIS on computer that there is good planning and control
within the framework of an efficient organisational structure. No degree of sophistication with
computers can cure the basic ill of chaotic data management.
There have been many organisations where computerisation has not brought any tangible
improvements because there has been no systematic handling of data or attention paid to the data
management. In such cases, there would have been considerable gain by first conducting a good
Organisation and Method (O&M) study. MIS has to be built on top by a management system
which should include the organisational arrangements, the structure and procedures for
adequate planning and control, the clear establishment of objective, and all other
manifestations of good organisation in management.
It is interesting to note that good computer professionals know their craft but are simply not
oriented to managerial jobs. In other words, the road-based skills, which are necessary to function
both in the computer room and in meeting with user-manager for the MIS, are conspicuous by
their absence. This phenomenon has been known globally and that is why computer professionals
are often called “machine-mesmerised”, where they are more loyal to their profession than to
their organisation!
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4.5.6 Managerial Participation
The single most critical problem in effective computer utilisation is the need for understanding
and support from top management. Even after top management support is ensured, it is necessary
that there is user participation in the design phase on corporate MIS so as to avoid subsequent
extensive and time-consuming re-work. This can be called overnight syndrome where users spell
out their needs and expect the computer professionals to deliver the outputs immediately
thereafter. Converting jobs eventually for computerisation needs a stabilisation period, which is
all too easily forgotten.
It makes good sense, when the user-manager picks up minimum familiarity with the MIS at the
beginning. From the point of view of the organisation, corporate MIS is as much a vital part of
the operation as marketing operations and finance are today. Indian Airlines, too, discovered that
managers had to be involved in order to get better and more effective information systems by
virtue of their participation. A similar approach is being followed in many other organisations.
4.5.7 Failure to Identify Information Needs

A clear identification of information needs is fundamental and necessary to go for design of
a corporate MIS. Recently, a Central Government department spent lavish sums on hardware
and software to perpetuate the existing 53 MIS reports and to build a sophisticated data-bank
without first determining the real information needs of management. It is often forgotten that only
that information should go into the corporate MIS which can increase the perception of managers
in critical areas such as problems, alternatives, opportunities and plans.
It is the user-manager who is to provide the specification for what he or she wants out of his or
her corporate MIS. If the manager fails to do so, the computer professional by default would
provide his or her own objectives and own information needs. These would seldom meet the
needs of the user-manager.
4.5.8 Poor Systems Prior to Computerisation

It has been observed that computerisation of a poor system will merely increase inefficiency at an
accelerating rate. The user-manager gets irrelevant or bad information faster and the bad
decisions are made sooner!
Hindustan Zinc Ltd., for instance, planned to upgrade and improve their transaction-processing
system in a methodical manner. Such clerical systems as ledger accounting were to be upgraded
to financial planning; invoicing to sales analysis; inventory accounting to inventory management;
and production reports to production planning and control. Well established procedures helped
them to make a smooth transition.
4.5.9 Overlooking Human Acceptance

A new MIS quite often meets resistance from the user-organisation because people do not accept
what they do not understand. Such reasons for resistance have to be analysed and a new attitude
brought in to overcome it. Ross identified the reasons as threat to the status of the salesmen;
threat to the ego of the managers; economic threat to the clerical persons (fear of job loss),
insecurity for the managers having personal powers and political base; loss of autonomy and
control for the production managers and engineers; and frayed and inter-personal relations for all
others.
A number of public and private sector organisations such as BHEL, Indian Airlines, ITDC,
NTPC, etc. have started a process of systematic programme of training and user-education. It is
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imperative that such education begins at the top level for computer appreciation, at the middle
management for specific computer applications in their own domains, and at the working
level for direct involvement in input and output quality control. It is good to see the bulk of
Indian organisations going through such an elaborate process of computer initiation as there is no
short-cut to it.
1) Explain the four principles usually recommended for evaluating raw data for decision-
making.
……………………………………………………………………………………………...
……………………………………………………………………………………………...
……………………………………………………………………………………………...
……………………………………………………………………………………………...
2) Explain the points/facts to consider before changing to computer aided decision-making.

……………………………………………………………………………………………...
……………………………………………………………………………………………...
……………………………………………………………………………………………...
……………………………………………………………………………………………...
4.6 LET US SUM UP

We have given a brief account of a purposive way of using computer as a management tool.
There are two eloquent reasons why such a tool is more feasible to operate today than ever
before. The first reason is that computing power in any organisation is becoming increasingly
available on a distributed basis through an array of terminals and/or through desk top computers
available for personal use. Availability of both terminals and personal computer is almost a
common phenomenon today.
The second reason is that the computers were used to be driven earlier by the professionals and
were housed exclusively in the EDP departments. From that atmosphere, the computers have
currently become very much user-friendly when the barriers of EDP department have broken
down and computer languages are becoming more and more English-like. From this stage on, it is
very likely that computers would show a trend to become user-driven. Thus, the transition from
professional-driven to user-friendly computers is a near reality now!
Further we have described some of the strategic issues which have bedevilled introduction of
computer-aided decision-making in the forms of corporate MIS in many organisations in India
and abroad. Some general principles have been used to illustrate the situation and a number of
Indian examples have been cited by way of deriving appropriate lessons. It is vital to keep
reviewing the situation so that such strategic issues are not lost sight of in the country’s current
emphasis on computerisation. It is important to avoid frustration before one aims at achieving
elation on successful computerisation!
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1) Study Sec. 4.2 carefully and compare it with the information system prevalent in your
organisation or the organisation of your study.
2) A few advantages associated with computer based decision-making are:
i) response time is greatly reduced.
ii) very large data are stored for information and decision-making.
iii) problems are handled more easily by using various operation research models.
Read Sec.4.3 to learn more advantages of computer based decision-making.
1) The four principles are:

i) Selection – it looks at a screened segment of data.
ii) Pattern – it looks at the data gaining insight into the given mass of data.
iii) Linkage – is to formulate a coherent picture.
iv) Overview – it derives a total picure.
Study Sec.4.4 to answer the question better.
2) The points/facts to be considered before changing to computer aided decision-making are:

i) Communication Gap.
ii) Reliance on Service Bureaus or Computer Vendors.
iii) Lack of master plan.
iv) Organisation of the MIS function.
v) Lack of Good Management System.
vi) Managerial participation.
vii) Failure to identify information needs.
viii) Poor systems prior to computerisation.
ix) Overlooking Human acceptance.
Read carefully Sec.4.5 and expand the above answer.
Activity
Prepare a list of the most recent functions that computers can perform in managing an
organisation after visiting a computer dealer and having a look at the latest models and software.
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UNIT 5 INTRODUCTION TO COMPUTERS
Structure
5.0 Objectives
5.1 Introduction
5.2 Evolution of Computers
5.3 Computer Hardware
5.3.1 Central Processing Unit (CPU)
5.3.2 Main Memory
5.3.3 Secondary Memory
5.3.4 Input and Output Devices
5.4 Computer Software
5.4.1 Language Translators
5.4.2 Operating Systems
5.4.3 Utilities
5.4.4 Special Purpose Software
5.5 Classification of Computers
5.6 Let Us Sum Up
5.0 OBJECTIVES
The objectives of this Unit are to makel you understand :
• initially what actually a computer is and its evolution,
• the two major components of a computer system, viz., Hardware and Software, and
• classification of computers.
5.1 INTRODUCTION
Computers today have become an integral part of information system and management. They
form an important part in the tourism sector as in other sectors. In this Unit, you will know about
the evolution of computers which come together to make computers what they are. The various
computers available and their classification would also be explained to you. Some knowledge
about computers will help you to adjust better in your professional career. The Unit also explains
certain things related to computer software.
5.2 EVOLUTION OF COMPUTERS
Computers have brought about a revolution in the field of computing as a result of technological
advancement in the field of electronics.
“Abacus”, the first mathematical device used to facilitate arithmetical computation, was invented
by the ancient Chinese before the birth of Christ. Abacus used beads strung of wires to aid
arithmetical computations and is believed to have been in use till recently.
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The first mechanical ‘Computer’ called ‘Analytical Engine’, designed by Charles Babbage
between 1830 and 1850, marked the birth of computer age. This was the first mechanical
computer capable of performing basic arithmetical functions. Charles Babbage designed his
analytical engine with around five components, namely :
• a STORE to hold numbers,
• an ARITHMETIC UNIT (which he called the ‘Mill’) to perform arithmetical operations,
• a CONTROL UNIT to control and coordinate various activities in the correct sequence,
• an INPUT device to transfer both numbers and instructions into the computer, and
• an OUTPUT device to display the results of computations.
Remarkably even today’s computers are built around the same concepts. However, modern
electronic computers provide three major advantages :
• enabling the computer to operate at electronic speeds (an electron travels approximately 1
foot in 1 billionth of a second),
• providing tremendous reliability,
• making the computer a general purpose machine.
The first commercial computer called UNIVAC (Universal Automatic Computer) using vacuum
tube circuits was used by the U.S. Census Bureau in 1951. Computers using vacuum tube circuits
belonged to First Generation Computers. Invention of the transistor by Bell Labs in U.S.A.
gave birth to Second Generation Computers which used transistors instead of vacuum tubes. An
example of a Second Generation Computer is the IBM 1401. Third Generation Computers
were introduced in the mid-1960s with the invention of tiny integrated circuits on silicon chips.
IBM released its 360 series computers with integrated chips of 28/1000 each sq. carrying more
than 1000 circuits. Large scale integrated chips became available in 1969. Computers which used
large scale integrated chips can be called Fourth Generation Computers even though there is no
general agreement on what constitutes a Fourth Generation Computer.
Invention of the micro-processor in 1972 changed the computing scene dramatically. A micro-
processor when interfaced with memory and input/output units becomes a micro-computer. A
micro-computer is very small in size (can be actually placed on a table top) but is very powerful
and provides a user-friendly atmosphere for managers to interact with it. The first business micro-
computer called APPLE II was released in USA in 1977.
Recent advances in the field of artificial intelligence are being used to design a “thinking
computer”. In this case, it has been tried to infuse intelligence into the computers. These
computers can be called Fifth Generation Computers. A special feature anticipated in these
computers is their ability to respond to spoken words.
5.3 COMPUTER HARDWARE
Physical units of a computer system constitute a computer’s hardware. When you look at a
computer system you are actually looking at the computer hardware.
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A computer, like the human brain, receives information, stores it, processes it, and displays
results. A computer receives information from input devices, stores it in memory, processes this
information in the central processing unit and displays the results of processing in a useful form
through output devices. Most commonly used input device is the keyboard. It resembles
somewhat like the typewriter. Using the keyboard one can type in the inputs. Mouse is also
another input device commonly used. The output device usually used is the VDU (i.e., Visual
Display Unit). This resembles very much like the TV screen and it can display both text and
graphic images. The output is displayed after being processed by CPU. The output displayed can
be in colour or black and white as the composition of screen is, just as in the case of TV. Another
commonly used output device is the printer. A printout is a more permanent output than getting
the output displayed on the screen. A computer’s memory like the human’s is limited. Hence, it
stores most critical information in its main memory and less critical and less frequently used
information in its secondary memory. Below we describe each of these parts in detail.
5.3.1 Central Processing Unit (CPU)

The Central Processing Unit is the most important component of a computer’s hardware. It could
even be called ‘the computer’ by itself. It has an arithmetic logic unit (ALU) and a control unit.
The ALU, as the name indicates, performs all the arithmetical and logical operations. Examples
of arithmetical operations are: addition, division, multiplication, etc. Examples of logical
operations are :
a) Is A = B, where A and B are both numeric/alphanumeric?
b) Is a given character equal to M for male or F for female? etc.
All the arithmetical and logical operations are performed in the CPU in special storage areas
called registers. The size of the register is a very important consideration in determining the
speed of processing Register size refers to the amount of information that can be held in a register
at a time for processing. The larger the register size, the faster will be the speed of processing. A
CPU’s processing power is measured in million instructions per second (MIPS). The speed of
CPU was measured in milliseconds (one 1000th of a second) on first generation computers, in
micro-seconds (one millionth of a second) on second generation computers, in nano-seconds (one
billionth of a second) on third and fourth generation computers, and is expected to be measured in
pico-seconds (one 1000th of a nano-second) in the future fifth generation computers.
Control Unit
Input Device Output Device
ALU
e.g., Keyboard CPU e.g. printer,

Disk, Tape
Figure I: Architecture of Computer Hardware
The control unit, as the name indicates, controls and co-ordinates all the operations of a CPU. It
ensures that the required information is transferred between the main memory, the arithmetic
logic unit, input devices and output devices in the required and desired sequence. It also contains
the logic circuits and storage needed for the control of multiple input and output devices. When a
programme begins an input operation, the control unit identifies the input devices and sets up
electronic data path for the data and instructions to enter the CPU. Subsequently the control unit
executes the various operations in CPU in the desired manner. Upon completion of a job, the
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control unit identifies the required output devices and sets up data paths for supplying the output
information to the desired output devices.
5.3.2 Main Memory

Main memory stores a variety of critical information required for processing by the CPU. Just
how does it store information?
A computer works by electricity. Hence a binary number system which uses only two digits,
namely, 0 and 1 is a very convenient way to represent information inside a computer. We could
use the symbol 1 to represent the presence of an electrical pulse and the symbol 0 to represent the
absence of it. Information in a computer consists of data (numerical and non-numerical) and
instructions which are made up of a large number of characters, namely, decimal numbers 0 to 9,
alphabets A to Z, arithmetical operators like (+), (–), etc., relational operators like (=), (<), etc.,
and many other special characters like (,), (;), etc.
With two binary digits, we can represent four different characters, namely, 00, 10, 01 and 11.
With three digits we can represent eight different characters, namely, 000, 100, 010, 001, 110,
101, 011 and 111. Computers use eight binary digits (bits) to represent information
internally. This allows upto (2n)28 = 256 different characters to be represented uniquely. A
collection of eight bits is called a byte. One byte is used to represent or store one character
internally. Most computers use two bytes or four bytes to represent numbers (positive and
negative) internally.
The memory unit stores all the information in memory cells, also called memory locations, in
binary digits. Each memory location has a unique address. The contents of the desired memory
locations are provided to the central processing unit by referring to the address of the memory
location. The amount of information that can be held in the main memory is known as memory
capacity. The capacity of the main memory is measured in kilobytes (KB) or mega bytes (MB).
One kilobyte stands for 210 which is approximately 1000 bytes. A mega byte stands for 220 which
is approximately one million bytes or app. 1000 KB.
Earlier computers used magnetic core memory. However, all modern computers use semi-
conductor memory. Semi-conductor memory is faster and cheaper than magnetic core memory.
Semi-conductor memory is also available in a small board. These characteristics have made semi-
conductor memory more popular and attractive. The only drawback of semi-conductor memory is
that it is volatile, that is it loses its contents in the event of power failure. However, it is not a
serious drawback and can be easily overcome by having back-up power units.
Semi-conductor memory is known as RAM (Random Access Memory). This means that any part
of the memory can be accessed for reading and writing. A magnetic core memory is also a
random access memory. However, the terminology RAM has been used in the literature with the
invention of semi-conductor memory. Another part of main memory is ROM, (Read Only
Memory), ROM allows its contents to be read only an does not allow users to store their
programs. Usually ROM contains utility programs supplied by the manufacturers, frequently used
by the users.
RAM capacity is useful indicator to compare the main memory capacity of various computers.
Earlier computers, provided a memory capacity of 16 KB, but a memory capacity of 512 KB is
very common in today’s micro-computers.
5.3.3 Secondary Memory

Secondary memory is essential to any computer system because of the limited main memory.
There are two types of secondary memory available, serial access memory, random access
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memory and index sequential method. A serial access memory provides only a serial access to
retrieve information stored in it. A random access memory provides a random access to retrieve
information stored in it. It is helpful to think in terms of a cassette tape providing serial access
memory and an LP record providing a random access memory. Computers use magnetic tapes to
provide serial access memory and magnetic disks to provide random access memory. In index
sequential access method, the file is accessed by certain tables which divide the file into definite
areas. The read/write head is taken to the beginning of the concerned area and thereafter the file is
accessed sequentially.
Described below are a few ways to store information, other than in the hard disk.
1) Magnetic tape
A magnetic tape is a very compact medium for storing a large amount of data. A standard tape
reel is 2400 feet long, ½ inch wide and can store up to anywhere from 20 MB to 150 MB
depending on the recording density it permits. A magnetic tape is mounted on a tape drive which
has a read/write head.
The density of a magnetic tape refers to the amount of information stored in one inch of its tape
length and is measured in bits per inch (bpi). Standard tapes come with 800 bpi or 1600 bpi,
even though tapes with 6250 bpi are also common. A text book of 600 pages with 50 lines per
page and 40 letters per line can be accommodated in less than 20 feet of a tape of density 6250
bpi. Imagine how much data can be stored in a 2400 feet tape?
The major advantages of a tape is its economical storage of large volumes of data and a quick
transfer of its contents to CPU. However, it has a major disadvantage namely it permits only a
serial access of data. This is because the read/write head is fixed and immovable. As a result the
tape has to be moved physically over the read/write head till we come to the desired location to
access the required data.
2) Magnetic Disk
Spindle – around which the disks rotate
tracks dividing the

disk into a set of . . . . . . . . . . . . . . . . read/write arm
sectors read/write head
disk
Figure II: Concept of Magnetic Disk pack with concept of

read/write head and tracks/sectors on disk.
Magnetic disk was invented to overcome the sequential processing requirement of magnetic tape
data. It is helpful to visualise a magnetic disk as a LP record. An access mechanism moves the
read/write head to the desired surface on the disk to provide random access of data. A disk pack
is a collection of individual disks stored vertically one atop the other and mounted on a disk
drive. The disk drive rotates the disk pack at a constant speed. There is enough room in between
the spinning disks to allow access arms with read/write heads to move to any storage location.
Each disk in a disk pack has two recording surfaces, except the first and last disks which have
only one recording surface. Thus, a disk pack with 10 disks provides 18 recording surfaces. Such
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a disk pack also has 9 access arms. Each access arm supports two read/write heads, one read/write
head to access the lower recording surface of the top disk and the other read/write head to access
the upper recording surface of the bottom disk. Each recording surface is divided into a series of
concentric circles called tracks and each track is further divided into sectors. The capacity of
each sector whether it is on the innermost track or outermost track is constant. One important
characteristic of a disk drive is the access time which represents the time needed to access the
desired record from a disk. Access time consists of two components, namely, seek time and
rotational delay. Seek time represents the time required to seek the desired track on the desired
recording surface. This involves a movement of the access arm, which supports the read/write
head. Rotational delay represents the time required for the rotating disk to position the desired
sector under the read/write head. Access time is measured in milliseconds. An average seek time
of 25 milli seconds and an average rotational delay of 10 milli seconds resulting in an average
access time of 35 milli seconds are common. Disk packs are classified into three types, namely,
removable disks, fixed disks and winchester disks.
A removable disk pack, as the name indicates, can be transported and replaced. A fixed disk pack
on the other hand, cannot be removed or transported or replaced. However, it provides a quicker
access time. A disk storage capacity of 600-1000 MB is very common.
Diskettes provide random access memory on micro-computers. A diskette is a smaller disk of 5¼

inch in diameter. It provides a storage capacity of 360 KB and an average access time of 180
milli seconds.
5.3.4 Input and Output Devices
The input or output units of a computer system establish the communication between the system
and its users. A large number of input and output units are available in the market. A few of them
are discussed here :
a) Punched card is the most ancient (few decades old) input medium. Instruction and data
punched on cards are transmitted into a computer through a card reader. A printed card has
survived a whole century because of its simplicity. But it is on its way out now. Punched
cards are being replaced by terminals which provide direct data entry.
b) Terminals have become very popular interactive input and output units. A terminal, when
connected to a CPU, sends data and instructions directly into the computer. Terminals can be
classified into two types, namely, hard copy terminals and soft copy terminals. A hard
copy terminal provides a print out on paper whereas a soft copy terminal provides a visual
display on a screen. A soft copy terminal is also known as a CRT (Cathode Ray Tube)
terminal.
c) Key-to-tape, key-to-disk and key-to-diskette are stand alone data entry stations. These units
usually have a small processor attached to a keyboard and a visual display unit. The processor
checks for the accuracy of data at the time of entry. The screen displays what is being
entered. These facilities are highly desirable for a data processing centre. Hence, most of the
data processing centres are switching over from punched card input to data entry stations.
d) A graphic display terminal displays information in both character and graphic forms. These
are extensively used for CAD/CAM (computer aided design/computer aided manufacture)
applications.
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e) A plotter is used to obtain printed copies of graphic outputs. It is used by architects and
designers to produce blueprints of their design on paper.
f) Printers are purely output devices. Printers are classified into line printers and dot matrix
printers. A line printer prints one line of information simultaneously, whereas a dot matrix
printer prints one character at a time. A dot matrix printer uses a 5 7 or 7 9 dot matrix
formation to represent each character. Dot matrix printers, therefore, provide a broken
appearance to the characters, whereas a line printer provides a better quality output. A line
printer has a speed of about 2000 lines per minute whereas a dot matrix printer has a lower
speed of approximately 100 characters per second.
g) Daisy wheel printers and letter quality printers are also character printers. But they
produce excellent quality output. However, they are more expensive and slower than dot
matrix printers. All the printers discussed so far are called impact printers as they make
physical contact with paper while printing. A nonimpact printer on the other hand transfers
information to paper without any physical contact. Examples of nonimpact printers are laser
printers, xerographic printers, electrostatic printers, etc.
h) Most recent trend for data input is towards source data automation. The equipments used
for source data automation capture data as a by-product of a business activity thereby
completely eliminating manual input of data. Some examples are:
i) Magnetic ink character recognition devices are used by the banking industry to read
the account numbers on cheques directly and do the necessary processing.
ii) Optical mark recognition devices can sense marks on computer readable papers. This
kind of device is used by academic and testing institutions to grade aptitude tests where
candidates mark the correct alternatives on a special sheet of paper. These answer sheets
are then directly read by the optical mark recognition devices and the information sent to
a computer for processing.
1) Describe briefly ‘generation of computers’.

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2) Explain the difference between Random Access Memory and Serial Access Memory.
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3) What is index sequential access method? Why is core memory (RAM) or ROM so called?
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5.4 COMPUTER SOFTWARE
Computer software consists of sets of programmed instructions which enable the hardware units
to perform. Programming a computer to perform has always been a very difficult task. The first
electronic computer was programmed using wired panels. Today’s computers are programmed
using software.
A computer software can be broadly classified into two categories – System Software and
Application Software. System software is a set of instructions to the machine hardware to
interpret and execute application software. An application software is a set of programming
instructions for specific applications like payroll accounting, inventory control, etc. a system
software consists of language translators [called compilers {compiles program-wise),
interpreters (compiles like-wise) and assemblers (converts semi-machine-language, macro-
instructions, to machine language), operating systems, utilities and special purpose software.
5.4.1 Language Translators
A language translator is a system software which will translate a computer programme written by
humans into a machine understandable form.
The most elemental form of programming uses only the binary digits 0, 1 which is directly
understood by the electronic circuits. A programme written using only binary digits is called a
machine language programme.
Assembly language provided a significant improvement over machine language. Assembly

language programmes are written using mnemonic codes like ADD, STORE, etc. rather than their
machine language representations in binary digits. Therefore, programming in assembly language
is easier. However, it needs to be translated into machine language codes. This translation is done
by an assembler. Both machine language and assembly language programmes are machine
dependent. This means that a programme written for one machine cannot be used in another
machine.
High level languages, which are closer to English overcame the drawback of machine
dependence. A few high level languages are FORTRAN, BASIC, PASCAL, COBOL, etc.
These languages relieve the programmers from being machine specific. However, a programme
written in a high level language needs to be translated into machine language codes before
execution. This translation is done either through compilers or through interpreters. A compiler
is a translator which reads an entire programme written in a high level language and converts it
into machine language codes. An interpreter on the other hand, is a translator which interprets
statement by statement, any programme written in a high level language. An interpreter is a very
effective tool for programme development as it checks for errors statement by statement in an
interactive mode. This allows the programmer to correct the errors statement by statement as he
or she enters them. A compiler on the other hand, will request the user to enter the entire
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programming statement and then it will check for errors. Basic language provides a compiler and
an interpreter. Other language such as Fortran, Cobol and Pascal had only compiler initially.
However, interpreters for these high level languages are also becoming available, partly due to
the popularity enjoyed by micro-computers in the field of computing.
5.4.2 Operating Systems
An operating system is the most important system software and is required to operate a computer
system. An operating system manages a computer’s resources very effectively, takes care of
scheduling multiple jobs for execution and manages the flow of data and instructions between the
input/output units and the main memory.
Operating systems became a part of computer software with the second generation computers.
Since then operating systems have undergone several revisions and modification in order to
achieve a better utilisation of computer resources. Advances in the field of computer hardware
have also helped the development of more efficient operating systems.
The first operating system called batch processing (serial) operating system was developed for
the second generation computers. This operating system executes jobs serially one after another
from a batch of jobs submitted for education. The central processing unit is kept busy only during
the processing cycle of a job and it idles during the input and output operations.
The above drawback of idling the CPU was overcome with the introduction of overlapped
processing. For example, why not take up input operation of job 2 and the output operation of
job 1 simultaneously? This and similar considerations gave rise to the concept of multi-
programming. A multi-programming operating system handles multiple jobs simultaneously by
overlapping the input, output and processing cycles of various jobs.
This operating system was introduced along with third generation computers and is still very
popular. It has replaced the earlier batch processing (serial) operating system. With multi-
programming a CPU’s utilisation is increased and hence jobs get executed faster on an average.
However, a multi-programming operating system is more complex than a batch processing
operation system and hence it requires more powerful hardware to support it.
Other types of operating systems which are popular today are multi-processing operating
systems and real time operating systems. A multi-processing operating system uses multiple
CPU’s to process multiple jobs. A real time operating system is a very different type of
operating system, because it is used for different type of applications, i.e., real time applications
such as airlines reservations, process control, etc.
A very commonly used and popular operating system is MS DOS (Microsoft Disk Operating
System).
5.4.3 Utilities
Utility programmes are those which are very often requested by many application programmes. A
few examples are:
1) SORT/MERGE for sorting large volumes of data and merging them into a single sorted list.
2) Transfer programmes for transforming contents from one medium to another, e.g., disk to
tape, tape to disk, etc.
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5.4.4 Special Purpose Software
Special purpose programmes are those intended to extend the capability of operating systems to
provide specialised services to application programmes.
A few examples are:
1) Spreadsheet software like LOTUS, VISICALC, etc.
2) Data Management software like dBase III, DBMS, etc.
5.5 CLASSIFICATION OF COMPUTERS
In the 1970s computers were classified into three categories, namely, super computers, large
computers and mini computers. But the invention of the micro-processor which gave birth to
micro-computers in the late 70s drastically changed the computing scene. A wide range of
computers are available today in the market ranging from a personal computer to a super
computer.
• A personal computer (PC) is a micro-computer which has its entire central processing unit
on a single micro-processor chip. A PC provides a main memory capacity upto 640 kilo bytes
and a processing power of 0.5 MIPS. It supports one or 2 diskette drives of 360 KB each for
random access secondary memory. A PC usually comes with a standard keyboard, a visual
display unit and a dot matrix printer. A PC is usually operated by a single user and not
suitable for applications requiring very large storage capacities. PCs are commonly used for
word processing, desktop publishing, accounting and so on.
• A super micro-computer has its entire central processing unit on a very powerful micro-
processor, provides a main memory capacity of upto 16 mega bytes, has a processing power
of 2 to 3 MIPS, supports winchester disks of capacity 20 to 80 mega bytes and allows
simultaneously access to multiple users. Today’s super micro is actually replacing
yesterday’s mini computers which provide almost the same computing power if not less, but
based on a different technology. They are used to control and monitor production processes,
analyse results in laboratory experiments among other things. They are also used as servers in
LAN (Local Area Network).
• A large computer provides a main memory capacity of upto 32 mega bytes, a processing
power of MIPS and supports a large number of disks and tapes. Disk capacities range from
100 MB to 1000 MB. It also allows simultaneous access to multiple users and supports a
large number of input and output devices. It is also known as mainframe computer. They
operate at very high speed and are used for processing large amount of data. They are also
used as controlling node in WAN (Wide Area Network).
• A super computer is the largest computer system available in the market. It provides a main
memory capacity of upto 64 mega bytes and a processing speed of 20 MIPS. It also supports
a large number of disks and tapes of enormous capacity for providing random access and
serial access secondary memory. A super computer also allows multiple users to interact with
the CPU simultaneously through multiple types of input devices. It also provides outputs in a
variety of output devices. Super computers are not easily available as only a very few
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organisations can afford them. These computers are used for weather forecasting, weapon
designing and so on.
• Most commonly used computers are the PCs (Personal Computers). Personal computers are
used by managers for their own computing needs. Availability of a large number of user-
friendly software packages on PCs have made them effective tool to support managerial
decision-making. PCs have also encouraged distributed data processing. A super, micro or
mini computer is used for commercial data processing and managerial applications. A large
or mainframe computer is necessary for very large data processing and data management
applications. A super computer is primarily used for highly scientific and research purposes.
1) What do you understand by computer hardware and computer software?

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2) What are the differences between a compiler and an interpreter?

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5.6 LET US SUM UP
This Unit began with a brief commentary on the evolution of computers. We then discussed in
detail the two major components of a computer system, viz., Computer Hardware and
Computer Software. A few important characteristics which measure the power of a computer’s
hardware and software have also been mentioned. Finally we provided a classification of
computers ranging from a personal computer to a super computer.
1) There are five generation of computers. The first generation computer used vacuum tube
circuits, the second generation used transistor, the third generation used integrated circuits on
silicon chips and the fourth generation used large scale integrated chips. The fifth generation
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computers are being developed with “Artificial Intelligence”. Find more about the answer in
Sec. 5.2.
2) Random Access Memory is a semi-conductor memory, which provides a random access to
retrieve information stored in it. A Serial Access Memory provides only a serial access to
retrieve information stored in it. The difference has been explained in Sub-sec. 5.3.3.
3) In Index Sequential Method, the file is accessed by certain tables which divide the file into
definite areas. The read/write head is taken to the beginning of the concerned area and
thereafter the file is accessed sequentially.
RAM is called so, as any part of the memory can be accessed for reading and writing. In case
of ROM, it allows contents to be read only and does not allow users to store their programs.
Read about the above in Sub-secs. 5.3.2 and 5.3.3.
1) The physical units of a computer constitutes a computer’s hardware while computer software
consists of sets of programmed instruction which enable the hardware units to perform. Study
Secs. 5.3 and 5.4 for answering in detail.
2) A compiler is a translator which reads an entire programme written in a high level language
and converts it into machine language while an Interpreter checks for errors state by
statement in an interactive mode. Study Sub-sec. 5.4.1 for details.
Activity
Can you identify the three most leading PC brands in the market? What gives them an
edge over others.
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UNIT 6 PERSONAL COMPUTERS AND THEIR USES
Structure
6.0 Objectives
6.1 Introduction
6.2 Micro-Computers
6.3 Hardware
6.4 Applications Software
6.4.1 Data Base Management
6.4.2 Word Processing
6.4.3 Electronic Spreadsheets
6.4.4 Business Graphics Software
6.4.5 Data Communications Software
6.4.6 Statistical Packages
6.4.7 Operations Research Packages
6.4.8 Integrated Software
6.5 Let Us Sum Up
6.0 OBJECTIVES
• understand what a personal computer is and how it is used by managers, and
• know the most common types of software used for management applications on personal
computers.
6.1 INTRODUCTION
Computers were first used in management and business applications in centralised data
processing departments. These departments were manned by computer specialists who were the
only persons allowed access to the machines. Later terminals were provided to users for certain
applications. However, cost, complexity, size and the need for special environment control did
not permit computer users to have computers at their work places. All this has changed with the
advent of microcomputers, i.e., Personal Computers. In this Unit, we explain to you what
microcomputers are and their uses. Further the Unit goes on to discuss various types of software
and their applications.
6.2 MICRO-COMPUTERS
Micro-computers are computers which have their entire Central Processing Unit (CPU) on a
single integrated circuit ‘chip’ (called a micro-processor). Today powerful micro-computers are
available which cost as little as Rs.20,000/=. These micro-computers can do many of the jobs
earlier done by large computers which cost many times this amount. In addition, because they are
small enough to sit on a desk and do not require extensive environmental control, they can be
used in most reasonably dust-free environments. This ready availability for users has enabled a
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large number of entirely new applications to be undertaken. It has also increased user interest in
computing since users can be directly in control of their data unlike the situation with centralised
computing. Due to these factors and the fact that micro-computers can be used at home and
schools for education and entertainment there has been a spectacular increase in their numbers
since their first arrival as hobby kits in the U.S. Several million micro-computers are used in
management applications around the world today. PCs are widely used in India and specially in
tourism sector. Hotels, Airlines and Railways use computers for reservations. Tour sector is also
using PCs for making vouchers, bills, invoices, etc. and thus save time, whereas the travel
agencies use them for ticketing. At the same time they are being used for information seeking,
storage, analysis and retrieving.
6.3 HARDWARE
Micro-organisms are structurally similar to large computers in that they have the same basic
components — CPU main memory, secondary memory and input/output devices. The most
popular secondary memory devices are floppy disk drives and fixed disks.
Floppy disks store between 140 K Bytes to 1 Mega Byte = 1024 K Bytes (MB) while hard disks
store 10 MB to 40 MB. The main memory is made from several chips. These may be ROM or
RAM chips. ROM (Read Only Memory) chips contain instructions permanently written in the
memory. The contents of these chips cannot be altered. RAM (Random Access Memory) chips
provide the memory that can be read from, written into and cleared. Most micro-computers have
between 16 K bytes and 1 MB memory. The typical word-size of micro-computers when they
were introduced in business in the late seventies was B-bits. Today, the most common word-size
is 16-bits. It is virtually certain that in the next few years 32-bit micro-computers will be very
common although today their numbers are somewhat limited due to cost and scarcity of software.
Dot matrix and daisy-wheel printers are printing devices on micro-computers. Now-a-days Ink-jet
and Laser printers are more popular printing devices with PCs.
With the proliferation of micro-computers, the concept of distributed computing has emerged. In
distributed computing, a number of computers are dispersed in different parts of an organisation
and inter-connected using special cables, telephone lines or other telecommunication media. This
allows data and programmes to be shared and also provides for some new types of applications
such as electronic mail. Electronic Mail moves messages through inter-linked
computers/terminals. To support such networking special electronic devices such as modems and
network inter-face cards are often fitted into micro-computers. Presently internet is very popular
and can be easily used via PCs or micro-computers. For that a special modem has to be
connected. Internet can also be used for e-mail.
As with larger computers, micro-computers have operating systems to enable the user to easily
interact with the machine. These operating systems are similar to those on large machines except
that they are much simpler. This is because the majority of micro-computers are not multi-
terminal machines - only one user has access to the machine at any time. In this situation the
machine is the personal computer of the user. Personal computers are used for a variety of tasks.
The most common applications are :
• Word Processing,
• Financial Analysis and Accounting,
• Data Base Access and Internet,
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• Graphics and Designing, and
• Using CD Roms, Email and Faxes, etc.
6.4 APPLICATIONS SOFTWARE
Systems software available on micro-computers includes compilers and interpreters for popular
programming languages like BASIC, COBOL and FORTRAN. However, because of their large
numbers for personal use, powerful applications software which does not require significant
programming knowledge has been developed to run on personal computers. These windows is
very much preferred to other applications as it combines the uses of many applications together
such as Spreadsheet, Word Processing and so on. Other than Windows, the other most important
categories of software, which enables a user to autonomously utilise a personal computer are :
• Data Base Management Software
• Spreadsheet Software
• Word Processing Software
• Graphic Software
• Data Communication Software
6.4.1 Data Base Management
Software packages called Data Base Management Systems (DBMS) had been developed long
before micro-computers to handle the problems of maintaining and integrating large volumes of
data on large machines. The most important distinguishing feature of a DBMS package on
personal computers is that it provides a very high level language interface which can be learned
by a user who is not a computer programmer. In a few hours, it is possible to acquire enough skill
to use the basic features of DBMS packages like dBASE III which is the best selling software
currently in this class.
The dBASE III package has attained its current popularity mainly for the following reasons :
• It is easy to use and is simple. Its basic features can be learned in a couple of hours.
• It provides a very high level language interface which is command oriented. Some people
consider it a fourth generation language. In lay man’s terms, fourth generation language
means it is superior to standard programming languages like BASIC, COBOL, FORTRAN
and PASCAL; and it simplifies and sometimes even avoids programming in a conventional
sense.
• Small business information systems can be easily implemented in a few days using this
package.
• This package can be used as a tool to prototype large applications. Prototyping is useful for
saving costs in implementing large applications. Parts of a large system may be implemented
through dBASE III package to finalise specifications on what users want through the
envisaged application and how these parts could possibly be implemented in their final form.
Like other DBMS packages, dBASE III provides features for :
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i) Creating data files on a computer.
ii) Maintaining these data files by way of providing functions for adding, deleting, editing and
updating a given set of data items.
iii) Generating reports based on the data files created through dBASE III.
iv) Querying on those data files.
To develop an understanding of the features provided by dBASE III package, let us take a
specific application and see how it could be implemented in dBASE III. Suppose we are
operating a small business house which has 1000 customers. We are interested in maintaining a
list of these customers and using this list for our day-to-day business operations. Obviously we
will have to create a file which contains data about these 1000 customers. In this file there will be
one record for each customer. Thus, we will have a file containing 1000 records.
Bytes
compose
Words
compose
Files
compose
Records
compose
Files
Figure I: Describes the hardware of a typical personal computer system
Each record will have to contain details about a customer. What constitutes the necessary details
will depend mostly on what use we want to make of this data-base. For the sake of simplicity, let
us say we will have the following information for each customer.
1) Customer Identification code CUSTID (G 1029)
2) Customer Name CUSTNAME (V.K. GANDHI)
3) Address ADDRESS (NARAYAN

CHAMBERS,
ASHRAM ROAD)
4) City CITY (AHMEDABAD)
5) State STATE (GUJARAT)
6) Pincode PINCODE (380009)
7) Phone Number PHONE (77334)

8) Amount Due AMOUNTDUE (5249.25)
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9) Credit Limit CRDLMT (10000.00)
Each data item listed above will form a field in the record structure for the customer. When we
create a customer file through dBASE III package, it will first want us to specify the record
structure for the file.
For a customer file we want each record to have nine fields: one each for the items listed above.
In dBASE III, it is necessary to give names to each of these nine fields so that they can be later
referred to using these names. The fields names which we have chosen are shown in the third
column above. Apart from the name we have to also indicate what type of data will be stored in
the field and in certain cases number of characters to be reserved to hold the data for that field.
We will want AMOUNTDUE and CRDLMT to hold numeric data and all other fields to hold text
or character data.
Now let us have a quick look at a dialogue in dBASE III for creating and using such a file.
When we start the dBASE III programme, it prompts by dot(.). Also when it finishes executing a
given command, it writes dot in the first column of next line on the screen. Interaction with
dBASE III package consists mainly of issuing appropriate commands against this dot prompt.
Each dBASE III command starts with a key word (or verb) followed by certain parameters. The
command for creating a file for customer data would be
...CREATE CUSTLIST
Note the keyword CREATE which is typed by the user against the dot prompt produced by
dBASE III. CREATE command wants a parameter which will be used as a name for the file so
created. The user can choose any name that he or she desires within the syntactic rules specified
by the package. We shall henceforth omit such minor syntactic details of the package. We shall
use the symbol ↵ to indicate enter or return key of the keyboard.
In response to CREATE command, dBASE III will provide a screen where we can enter the
above nine field names along with their type characteristics.
Note that this command will have only specified the structure of the record for a file which is to
contain customer data. Therefore, we should have some way of loading the customer records in
the CUSTLIST file. For this purpose we will have to type the following command:
…APPEND ↵
With this command we get a screen which provides a blank customer record. As the name
implies, this command will append a record to our CUSTLIST file. Thus, it can be used whenever
we want to add one more customer list.
In the screen provided with above command, we now type the necessary details of a customer.
The names of the fields are displayed on the screen to facilitate entry of data for a customer for
which we wish to create a record in CUSTLIST file. After we type in all the required details
about the customer and type ↵ we get another blank record in which we can enter data about next
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customer and so on. When we type ↵ right at the beginning of a blank record we get back to dot
prompt where we can issue a new dBASE III command.
Now suppose we want to close our dBASE III session and come next day to query this customer
file. We must first exit from dBASE III. The command for this is
…QUIT
Next day when we start the dBASE III programme, we must first indicate which file we want to
use, otherwise dBASE III will not know which file we are interested in. The command for this is
…USE CUSTLIST
Now let us say we want to query on the customer data for extracting different types of
information. Here is a sample list to illustrate how easy it is.
TYPE TO GET
• LIST FOR AMOUNT DUE > 5000 Details of all customers for whom amount due is
greater than 5000.
• LIST PHONE FOR CUSTID = ‘G1029’ Phone number of a customer whose

identification number is ‘G1029’
• LIST CUSTNAME, ADDRESS FOR CITY = Name and address of all customers from
‘MUMBAI’ Mumbai
• LIST FOR AMOUNT DUE > CRDLMT Details of all customers who have crossed their
credit limit.
• LIST FOR ‘SHAH’ $ CUSTNAME Customers who have a character string SHAH in
their names. Note that this will list not only
SHAH but also customers like SHAHNAZ
We have seen that just with five commands we can do a lot with dBASE III package. Below are a
few more commands which further illustrate the simplicity of dBASE III package.
TYPE TO GET
• AVERAGE AMOUNT DUE Will provide on the screen average amount that
is due from the customers.
• COUNT FOR AMOUNT DUE > CRDLMT Will show on screen a number indicating how
many customers have crossed their credit limit.
• SUM AMOUNT DUE FOR CITY = ‘MUMBAI’ Will give how much amount is due from
customers from Bombay
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One has to learn only few additional features to see how sales and receipt transactions can be
used to update amount due for each customer. The dBASE III package also has REPORT
command for producing user specified reports.
With the command verbs, dBASE III also provides conventional programming features like IF-
THEN-ELSE, WHILE-DO. A complete set of dBASE III programmes can be designed to
implement a medium sized application in a couple of weeks.
6.4.2 Word Processing
Word Processing software is designed to enable the user to prepare typed documents. Thus, in
contrast to data processing where the focus is generally on numerical data, in word processing the
main concern is with text. In the early days of computing a disparaging remark that computer
professionals employed to refer to an application system which did very little computing was to
say that the system used the computer as an ‘expensive typewriter’. With dropping costs and the
increased productivity due to word-processing, today the micro-computer can be used as a
‘cheap-typewriter’!
In order to prepare a document using a word-processing package, it has initially to be typed into
the computer’s memory from the keyboard. The main productivity improvement comes from the
ease and rapidity with which the document can be modified. Only when the finished version is
ready it is necessary to put it on paper. Where there are several drafts of a letter or report, or
where extensive text from past reports is to be used the productivity gains can be very large.
Typical situations where high gains are possible are : law firms, contractors, newspaper offices,
banks and government offices. Studies in the U.S. have shown that the manpower required to
prepare a document can be reduced from 40 to 80 per cent over using an ordinary typewriter. In
addition, the document can be sent at electronic speeds over a local or long-distance network to
other computers easily because it is in computer-readable form. Thus, word-processing provides a
ready interface to electronic mail.
A typical word-processing package (WPP) has the following features:
• Automatic wrap-around
With a typewriter, the typist has to watch for the end of the line and press the carriage return
key to start a new line. With a WPP typist simply continues typing, the computer
automatically starts a fresh line when a line is filled up. Only at the end of a paragraph, it is
necessary to perform a carriage return.
• Cursor Control
All WPP display a bright movable area, the size of one character on the screen. This is called
the cursor. It can be moved around the screen by pressing keys. The cursor enables the WPP
user to identify an area of text where he or she wants to make changes.
• Deletion
Characters, words, sentences, paragraphs and entire pages can be deleted by using the cursor
with just one keystroke. The text following a deletion will automatically get re-adjusted to fill
the gap created by deletion.
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• Insertion
Just like deletion except that characters, words, sentences, etc. can be inserted anywhere in
the text.
• Replacement
Typed characters can over-write characters in document (this is like a combined deletion and
insertion).
• Movement of blocks
A block of continuous text can be moved from any point to any other point in the document.
• Copying of blocks
A block of continuous text can be copied from one document to another or from one part of a
document to another.
• Formatting
Spacing, margins, right and left justification, page numbering can be set and changed at any
time.
• Mail Merge
A common need in many offices is to send the same letter with changes for name and address
to a number of parties. This feature enables the computer to process a file of names and
addresses and merge it with a standard letter creating letters for each party.
• Search and Replace
A string of characters can be replaced anywhere in the document by another string of letters.
This is useful, for example, when the spelling of a person’s name has to be corrected in
several places.
• Spelling checker
The WPP can be instructed to check spellings and point out where errors may have been
made. It would also suggest what the correct spelling might be. Some WPPs also enable the
user to add words to its dictionary that the user commonly uses but which are not in its
dictionary. Specialised technical terms are examples of this situation.
• Thesaurus
The WPPs can be requested to supply words that are similar in meaning to a particular word
(synonyms) in a document.
• Multiple fonts
Different styles such as italics and bold as well as different sizes and shapes of characters can
be typed (provided the printer has the requisite features). Mathematical symbols, Greek
letters are also available.
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6.4.3 Electronic Spreadsheets
Electronic Spreadsheet software hailed as the single most important reason for management use
of micro-computers. It is doubtful if the business world would be buying micro-computers in the
volume that it does if there were no electronic spreadsheet packages. The fundamental idea of
value in such packages is the concept of an ‘electronic’ spreadsheet. A spreadsheet is simply a
sheet of paper with rows and columns in which one can enter data in the form of numbers and
text. A balance sheet is a spreadsheet, a price list is a spreadsheet, in fact most managerial report
are spreadsheets. An electronic spreadsheet is like a paper spreadsheet except that:
• It is much faster and easier to make modifications to it and to make both electronic and paper
copies of it.
• At a given time one can only see a part of the whole sheet. To see parts which are not visible,
we need to ‘scroll in’ those parts. It is like seeing the spread sheet through a window.
• In addition to allowing numbers and text it allows formula (such as Contribution = revenue –
Variable Cost) to be entered into the worksheet. This enables very rapid recalculation to be
done under changed assumptions.
The most important capability that a spreadsheet offers is that of a straight-forward, rapid and
unobtrusive sensitivity analysis. Once a spread sheet has been set up, it is very easy to answer
‘what-if’ questions. For example, if one has a spreadsheet reflecting all the cash-flows and other
aspects of an investment, we can readily re-compute the impact of errors in our sales prediction
on the return on investment.
Lotus 1-2-3 is the most popular spreadsheet software package today. The Lotus 1-2-3 spread
sheet (called a worksheet) has rows entered numbered 1,2,3 upto 2048. It has 256 columns – from
A, B, C, …, Z through AA, AB, etc. upto IV. Newer versions can handle more rows and columns.
The width of the columns can be different and can be adjusted to suit the application. At any time
20 rows and (typically) 8 columns are visible on the computer-screen. To view other parts of the
worksheet, the ‘cursor’ key has to be manipulated. The ‘cursor’ is a bright rectangle of light
which is one row by one column in size. By using up, down, left and right arrow keys the cursor
can be moved around on the screen. When the cursor is at the right extreme, pressing the right
arrow key will ‘scroll’ the worksheet one column to the right, i.e., the left column(s) will
disappear and a new column (the column to the immediate right of the previous right-most visible
column) will appear. By repeating this action as often as required, we can move the window to
the right. Similarly, by using the other arrow keys, we can move the window left, up and down as
well.
To enter a number of text, we need to move the cursor to the desired row-column position (called
a ‘cell’). Next, the data is entered by pressing the appropriate typewriter keys. Finally, when the
‘Return’ key is pressed, the data will get entered in the cell and be displayed on the screen. To
enter formulas a similar procedure is followed. The only difference is that instead of data, a
formula is entered. A formula indicates how the value of the chosen cell depends on other cells
of the worksheet. For example, if cell A5 contains the revenue figure and cell B8 contains the
variable cost, and the cursor is at cell E15, entering ‘+A5 – B8’ will ensure that cell E15 will
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always show the contribution value. Lotus 1-2-3 has many for more advanced features. These will
be covered in greater detail in a subsequent unit.
Spreadsheet models have a simplicity which makes them natural for users. They also find use in a
surprising variety of applications. Although, undoubtedly, their largest use is in financial
modelling, they find frequent use in areas like marketing, production, logistics and human
resources.
6.4.4 Business Graphics Software
While spreadsheets and database packages are very useful in doing analysis, the output of such
analysis is generally tables of numbers. The human brain is much more adept at picking up
patterns from pictorial representations. If it is true, as the old adage says, that a picture is worth a
thousand words, it is equally true that it is worth a thousand numbers. Computer accessible data
can readily be converted to graphic form on the screen as well as paper using printers or plotters.
With plotters it is possible to have different colours (four colours is very common).
Typical business graphics software enables data to be plotted as:

• Line Charts
• Bar Charts
• Pie Charts.
Sophisticated business graphics software provides for three dimensional display and maps.
6.4.5 Data Communications Software
In large organisations there is often a central computer for data processing which does routine
data processing. Sometimes a manager would like to get some of this data for processing on his or
her personal computer. To facilitate this, data-communications software has been developed
which runs on the personal computers to make it look like a terminal to another computer. Using
this ‘terminal emulation’ facility the manager can access data from his or her computer. Selected
data can be ‘downloaded’ into the personal computer’s memory and stored in files on disks.
Subsequently, he or she can analyse these files using DBMS or spreadsheet software. An example
of this kind of use would be a situation where a main-frame data processing computer has files on
sales of products broken down by month and by region. Downloading on a personal computer
would enable the manager to analyse up-to-date data on product movement in different markets.
6.4.6 Statistical Packages
A number of easy-to-use packages which run on micro-computers to perform standard statistical

analysis are available. Typical capabilities are frequency distributions, cross-tabulations, tests for
population means and proportions, analysis of variance, contingency table tests, regression and
correlation analysis. More advanced packages would include forecasting modules, time-series
analysis and non-parametric analysis.
6.4.7 Operations Research Packages
Inexpensive packages are available for standard operations research models such as linear
programming, critical path analysis, resource scheduling, simulation, decision free analysis and
network flow. While these packages are not as powerful as software on large machines, they are
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far more user-friendly and cost one-tenth to one-hundredth as much. They are powerful enough to
solve problems of moderate size. For example, practical linear programming models with less
than 100 variables and around 50 constraints can be readily solved.
6.4.8 Integrated Software
Software that combines several of the capabilities of packages listed above are now available. For
example, LOTUS 1-2-3 version 2 combines spreadsheet, database, graphics and statistical
capabilities. Another example, is FRAMEWORK which combines word-processing, spreadsheet,
database and graphics functions. The advantage of integrated software is that the user does not
have to learn to handle a variety of disparate packages so that his learning time and effort is
reduced. Another advantage is that the same data can readily be passed from one function to
another. One such integrated software is the WINDOWS of Microsoft. Latest version is the
WINDOWS 98 and is extremely popular. The WINDOW 95 is also very popular. The Microsoft
company keeps on introducing newer version of WINDOWS to make it more user friendly by
introducing more graphic oriented commands for easy application of programmes. This allows
even totally computer illiterate persons to work on computers. The disadvantage is that such
software is expensive and makes greater demands on the computer resources. But more and more
easy availability of software has resulted in better and a bit cheaper software than say a decade
earlier. The pioneer in integrated software nowadays is Microsoft with their WINDOWS software
application.
1) Describe the hardware of a typical personal computer system.

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2) Name 5 most common applications done on PCs.

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3) What are the reasons for popularity of micro-computers?

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4) Describe four functions of word-processing software that would increase the productivity of a
typist?
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5) What is meant by ‘down-loading’ of data?

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6.5 LET US SUM UP
A personal computer is a micro-computer system that is available to a user for his or her
exclusive use. The use of personal computers in management is growing by leaps and bounds.
This is due to their low cost, small size, and the availability of very user-friendly software that
runs on these machines. The major types of software that account for the popularity of personal
computers are: word-processing, database management, electronic spreadsheets, graphics, data
communications, statistics, operations research and integrated software.
To learn more about softwares, do read the latest computer journals as computer technology is a
fast changing technology. And it is very important to keep track of them, which is possible only
through the regular computer journals.
1) The hardware of a typical personal computer system are – CPU main memory, secondary
memory and input/output devices. The popular secondary memory devices are floppy disk
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drives and now-a-days Ink-jet and Laser printers are more popular printing devices. Study
Sec. 6.3 and answer in detail.
2) 5 most common applications done on PCs are – Wordprocessing, Financial Analysis, Data
Base Access, Graphics and Accounting.
3) Micro-computers are very popular as they are small enough to sit on a desk and can be used
in most reasonably dust free environment. Also they are a large number of new applications
is possible on these comparatively cheaper computers. Study Sec. 6.2 and answer in detail.
4) Four functions of word processing software that would increase the productivity of a typist
are:
i) Automatic wrap around
ii) Deletion
iii) Insertion
iv) Formatting
Study carefully Sub-sec. 6.4.2 and answer.
5) ‘Down-loading’ of data refers to the transmission of information from a central computer to a

terminal. Read about it in Sub-sec. 6.4.5.
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UNIT 8 AN MIS PERSPECTIVE
Structure
8.0 Objectives
8.1 Introduction
8.2 Management Information Systems
8.3 Status of MIS in Organisation
8.4 Framework for Understanding MIS
8.5 Let Us Sum Up
8.6 Key Words
8.0 OBJECTIVES
• understand the main features of a Management Information System (MIS),
• have an idea about the development of MIS and its present status in the organisations, and
• appreciate different viewpoints regarding applications of MIS in organisations.
8.1 INTRODUCTION
You have read about Information Systems and MIS in Units 3 and 4. In this Unit, we take up
certain details in this regard with a view to make you understand what an MIS perspective is.
It should not surprise you if we say that MIS are in fact as old as the oldest writings in the world.
The clay tablets found at Sumer in Mesopotamia (3000 B.C.) contain records of inventory system
carrying information on receipts and issues made to individuals from temples’ grain stores.
Hence, we can say that MIS existed in some form or the other in all historical periods.
But why is MIS a subject of great interest today? There are two principal reasons for this:
a) Firstly, organisations have grown in complexity to levels which are unprecedented and
information plays a vital role in holding together and coordinating organisations. The role of
management information system is very similar to that of the nervous system in animals. One
notices that with evolution of creatures of greater structural complexity and functional
specialisation, the nervous system too grows greatly and becomes critical in the survival of
the animal. It is said that one of the reasons for the extinction of dinosaurs was the poor
capability of their nervous system at low temperatures. One has only to imagine an
organisation in which one department, say production, does ‘not speak to’ another
department, say marketing, to realise the fundamental importance of information in
coordinating the activities of an organisation. Indeed, management is nothing if it is not
coordination and control. Despite this fact it has only been lately that management has paid
an explicit attention to its information processes.
b) The second reason is the advent of the computer. Computers are able to both access and
record information and perform calculations at speeds which are almost unbelievable. Even
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older (1960 vintage) computers can access information at a rate higher than 20,000 character
per second from magnetic tape which would correspond to reading and writing about 400
pages of an average sized book in one minute! When it comes to calculation, the computer is
even more of a whiz kid. It can do about 50,000 multiplications in one second! These figures
are not for unusual computers but for very modest-sized older models. More recent
computers have add times in nanoseconds. A nanosecond is the time taken by light travelling
at 186,000 miles per hour to move a distance of one foot! But it is not only the speed of
computers but rather the reduced cost of information handling made possible with computers
that has launched them into the management environment.
It is clear that the sort of technological environment provides a challenge to management.

Traditionally, management had to think of managing four resources: money, materials, men and
machines. Now, a fifth resource is added to this list, namely, ‘information’.
8.2 MANAGEMENT INFORMATION SYSTEMS
What constitutes a Management Information System? Some people have used the term to
describe systems in which a manager has instantaneous access to detailed pieces of information
regarding the entire organisation. Some see it merely as an appendage to the accounting system
which blends into the usual financial type of summary statements. Usage of the term sometimes
includes any information processed by computers. Definitions that are most useful in practice are
those which emphasise the use that is made of the information provided by an MIS rather than the
technology or methodology employed in collecting and disseminating the information.
A Management Information System is an integrated system that provides information to

support the planning and control functions of managers in an organisation.
Let us make a few remarks in elaboration of this definition:
a) The output of an MIS is information that subserves managerial functions. If a system

provides information to persons who are not managers we will not consider it as part of an
MIS. For example, an organisation often process a lot of data which it is required by law to
furnish to various government regulatory agencies. Such a system, while it may have
interfaces with an MIS, would not be a part of it. Instances of such systems are salary
disclosures and excise duty statements.
b) An MIS deals with information that is systematically and routinely collected in accordance
with a well-defined set of rules. This implies that an MIS is a part of the formal information
network in an organisation.
c) The information provided by an MIS assists managers to make planning and control
decisions. Let us clarify what we mean by planning and control. Every organisation in order
to function must perform certain operations. For example, a car manufacturer has to perform
certain manufacturing activities, a wholesaler has to receive and dispatch goods, a municipal
corporation has to provide water to its area of jurisdiction. All these are operations that need
to be done. In addition to performing these operations, an organisation must make plans for
them. In other words, it must decide on how many and what type of cars to make in the next
month or year. Also an organisation must control the operations in the light of the plans and
targets developed in the planning process. The car manufacturer must know if decisions are
needed to correct the deviation or revise his plans. Similarly the wholesaler has to correct the
deviation or revise the plans. Similarly, the wholesaler will want to know the impacts that his
commissions have had on sales and make decisions to correct adverse trends. Figure I
depicts the relationship between operations, planning and control.
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Need for Revision of Plans
Planning
Plans & Targets
Control Performance information
Corrective Actions
Operations
Figure I: Relationship between Operations, Planning and Control
By our definition an MIS is concerned with planning and control. Often there are elaborate
systems for information that assist operations. For example, the car manufacturer will have a
system for providing information to the workers on the shop floor about the job that needs to
be done on a particular batch of material. There may be route sheets which accompany the
rate materials and components in their movement through various machines. This system per
se provides only information to support operations. It has no managerial decision-making
significance. It is not part of an MIS. If, however, the system does provide information on
productivity, machine utilisation or rejection rates, then we would say that the system is part
of an MIS.
To take another example, the wholesaler may have a computer system to send out bills to his
retailers. If this was all that the system did, it would only be supporting operations. If,
however, the system uses the bills to produce information on sales, profitability and retailer
performance, it would qualify under our definition as part of an MIS. We will see that often
systems that provide information on operations can be the basis for information for planning
and control. However, we must be careful to realise that in an end of themselves, they are not
management information systems no matter how sophisticated the technology employed.
d) An MIS includes all the ingredients that are employed in providing information support to
managers in making planning and control decisions. Managers often use historical data on an
organisation’s activities as well as current status data to make planning and control decisions.
Such data comes from a data base which is contained in files (paper or electronic) maintained
by the organisation. This data base is an essential component of an MIS. Manual procedures
that are used to collect and process information and computer hardware are obvious
ingredients of an MIS. Less obvious, but equally important are the computer programmes
used to process information, and operations research models employed to marshall the data to
provide highly processed information to support decisions. These also form part of the MIS.
In summary, when we say that “an MIS is an integrated man-machine system that provides
information to support the planning and control functions of managers in an organisation” we
mean that it is a system which:
• subserves managerial functions
• collects information systematically and routinely
• supports planning and control decisions
• includes files, hardware, software and operations research models.
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8.3 STATUS OF MIS IN ORGANISATIONS
Traditionally management information systems have not really been designed at all. They are the
end product of a process in which manual systems are automated in a piecemeal fashion. The
choice of applications is largely dictated by what similar companies are doing with computers or
else such areas are taken up where the operational problems are most visible. Generally what may
be called an MIS is nothing but a limited analysis of data captured through routine data
processing applications. Thus, analysis of invoice data leads to a sales analysis system in which
region-wise, outlet-wise, product-wise sales is reported periodically. Similarly a few reports on
overstocked, or out of stock items from the stores accounting data pass for an inventory control
system.
Such applications may result in benefits which outweigh costs of computerisation in a marginal
way. However, this does not represent a use of computers which will have the maximum pay off
for the organisation.
8.4 FRAMEWORK FOR UNDERSTANDING MIS
The information process in an organisation are labyrinthine and without some overall map to
guide our steps in studying them we should soon be lost in a mass of unstructured detail. Such
maps are provided by general frameworks that seek to sharpen important distinctions in the kinds
of information that support managerial decisions. A number of such frameworks which,in our
opinion, provide the most insight from a pragmatic standpoint are discussed below.
Robert Anthony has delineated a framework which distinguishes between the different types of
planning and control process that typically occur in organisations. His basic thesis is that
thinking of planning and control as two separate and homogeneous activities in an
organisation is not only meaningless but positively dysfunctional. Instead of this segmentation
of management planning and control activities into two categories of planning and control,
Anthony suggested that the area of management planning and control be segmented into three
categories, resisting the “natural temptation to use as the two main divisions”, i.e.:
• planning (roughly, deciding what to do, and
• control (roughly), assuring that desired results are obtained”.
The three categories suggested by Anthony are:

i) Strategic Planning
ii) Management Control
iii) Operational Control
Anthony, describes planning and control activities as so closely inter-linked that to make a
separation of these activities is not only undesirable but would make them meaningless. Instead,
according to him, it makes much more conceptual and practical sense to link together planning
and control activities which are similar and inter-twined.
Anthony’s definition of these three sub-species of planning and control are:
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a) Strategic Planning is the process of deciding on objectives of the organisation, on changes in
these objectives, on the resources used to attain these objectives, and on the policies that are
to govern the acquisition, use and disposition of these resources.
b) Management Control is the process by which managers assure that these resources are
obtained and used effectively and efficiently in the accomplishment of the organisation’s
objectives.
c) Operational Control is the process of assuring that specific tasks are carried out effectively
and efficiently.
Anthony’s departure from the traditional concept of separate planning systems and control
systems is diagrammed in Figures II (a) and (b), respectively.
PLANNING SYSTEM
CONTROL SYSTEM
Figure II (a) : Traditional Segmentation of Planning and Control Systems
STRATEGIC
CONTROL SYSTEM
PLANNING
PLANNING AND
MANAGEMENT
CONTROL
OPERATIONAL
CONTROL
Figure II (b) : Anthony’s Framework of Planning and Control
It is useful to clarify the above definitions with some examples. Table-1 gives instances of
planning and control activities in different functional areas classified according to the above
definitions.
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Table – 1
Strategic Planning Management Control Operational Control
Production Location of a new factory Determining the product mix Scheduling specific jobs on
for a monthly production specific machines in a shift
programme
Marketing Entering the Export market Media planning for advertising Planning sales contacts to be
expenditure made by a sales man in the next
week
Finance Raising capital by issuing Determining maximum levels Determining what action to take
new shares of credit for customers against non-payment by a specific
customer
Personnel Deciding on changes to be Determining who will be Determining which workers will
made in the organisation promoted to fill a vacated post be on each shift
structure at middle and lower levels in
the organisation
Anthony’s framework enables us to understand the characteristics of information needed to

support the three types of planning and control processes.
Table-2 depicts these characteristics and highlights the substantial differences in information
required for strategic planning, management control and operational control.
Table – 2
Information Characteristic Strategic Planning Management Operational
Control Control
1 Volume Low Intermediate High
2 Level of Aggregation High Intermediate Low
3 Frequency of use of a particular Low Intermediate High

type of data
4 Currency requirement Low Intermediate High
5 Accuracy Low Intermediate High
6 Scope Wide Intermediate High
7 Source Significant amount from Mostly Internal Entirely Internal

external sources
8 Predictability of use* Low Fairly High Very High
9 Variability with user** High Intermediate Low
10 Distance of user (in Far Fairly close Close

Organisational terms)
from sources within organisation
* How far in advance can the information that will be needed for a decision be stipulated?
** For a given decision, how much of the information considered necessary likely to vary from one
individual to another.
Another framework which is useful in structuring our understanding of an MIS is one provided
by Simon. Whereas Anthony’s framework is concerned with the objective of the decision-maker,
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i.e., what the manager is trying to do, Simon’s framework examines the process of decision-
making, i.e., how does the manager makes decisions.
Simon breaks down the process of making a decision into three stages.
i) Intelligence: This is the stage in which the decision-maker recognises that there is a problem
or opportunity that requires him or her to make a decision.
ii) Design: This stage covers the determination of the alternative actions that he or she could
take to resolve the problem or exploit the opportunity.
iii) Choice: This stage is concerned with the process by which one of the alternatives generated
in stage-2 is singled out to be pursued.
With this framework we can distinguish between three major classes of decisions.
1) Programmed decisions are those in which all stages are handled by following a preset
well-defined procedure. These decisions are repetitive and routine which arise often and are
capable of being modelled mathematically in their entirety. The classic example would be
inventory ordering decisions.
2) Non-programmed decisions are those where none of the stages is amenable to handling
by a well-defined, pre-specified procedure. (These decisions are novel and difficult to
structure in logical-mathematical terms. They have to be treated de novo whenever they
arise.) An example would be the decisions to set up a new hotel or launch a new line of
products or services.
3) Semi-programmed decisions are those in which at least one and no more than two of the
above stages can be handled by a well-defined preset procedure. An example where the
intelligence phase is well-structured would be the diverse kinds of variance analysis. Here
comparison with a budget or standard is undertaken in a well-defined way to signal the need
for a decision. Subsequent stages of design and choice, however, are not handled by a set
procedure.
W.S. Zani’s framework (Harward Business Review) draws upon the earlier two frameworks.
He argues that effective MIS can only be designed in a top down fashion, viewing the
organisation’s information needs from the vantage point of managers who will use it rather than
in a ‘bottom up’ manner which automates existing clinical procedures. According to Zani, the
important determinants of MIS design are:
• Opportunities and risks
• Company strategy
• Company structure
• Management and decision-making processes
• Available technology
• Available information sources
Opportunities, risks, competencies and resources, plus the strategy derived from them, yield the
company’s organisational structure. This structure sub-divides the essential task to be performed,
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assigns them to individuals, and spells out the interrelationships of these tasks. These tasks, and
the organisational structure they compose, determine the various information needs of the
company.
Every organisation must understand its key success variables which are activities on which the
company must score high for it to succeed. For example, a tour operator company in tourism
market must focus on product promotion, understanding customer response to product and
monitoring competitive changes. Whereas a mill selling grey cloth (unprocessed) must focus on
manufacturing and distribution costs.
The key success variables name the key tasks of the company and thus help identify the priorities
for information system development. The system must provide information that makes the
individual managers’ performance of these tasks easier and better. These tasks could be related to
strategic planning, management control or operational control. The content and frequency of
reports that will provide the necessary information for key task must be identified through an
analysis of the decision-making processes. Here the frameworks proposed by Anthony and Simon
prove to be useful.
Zani advocates participative process of MIS design where top management and functional
managers help in understanding critical areas of operations, identification of specific information
requirements. To fulfil this role properly, managers must be aware of the major sources of
information, of alternative methods of supplying data, and of the impact of the major changes of
information technology. The major contribution to information systems in these areas, of course,
must come from the information and data-processing specialists.
Using the framework, then, encourages understanding of the critical areas of operations,
identification of specific information requirements, and recognition of the technological,
economic and personnel constraints within which an MIS develops. As important as anything
else, perhaps, is the fact that systems are of necessity dynamic, changing with the environment
and the organisation.
In designing an MIS there are two types of situations one may come across:
1) If the organisation has no experience of computing, applications which will create the
maximum impact on the organisation can be identified by using Zani’s framework. Key
success variables are however seldom obtained through a questionnaire survey of managers.
Data on environment, past company performance must be analysed and discussed to identify
key success variable. It is sometimes useful to pen down a qualitative measure of such
variable. For example the performance of a textile unit can be summed up through two
indicators – contribution per loom shift and fixed cost per loom shift. Similarly the
performance of a tour operator may be measured as gross operating profit per day per tour.
Precise definitions of performance indicators enables the analyst to understand and quantify
the likely impact of improvement in different tasks of planning and monitoring.
An analysis of the company’s key success variables can be done only after a thorough
understanding of the company’s operations. Consultants and vendors who do not spend
adequate time in understanding the operations are unlikely to throw up application areas
which will create the maximum impact. They are likely to suggest ‘off-the-shelf’
applications. For such applications use standard software which is available.
For a company getting into computerisation for the first time, a list of applications would
have to be generated, keeping in view a 4-5 year perspective on the basis of which a suitable
configuration would be decided. However, the development and implementation of the
application would have to be done in a phased manner. The first few applications must be
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those, which can create an impact on the performance of the organisation, are quick to
implement with the least amount of changes in the existing procedures and systems. Initial
success can make the later implementation of complex and more involved systems easier.
2) For organisations which have been into data processing and would like to graduate to
MIS, the choices are somewhat limited. Existing computer technology, manpower and past
experience with computer applications all such factors will condition the future growth of
MIS.
By and large an effort is made to create useful data bases which capture data during the execution
of routine data processing systems. Such data are then analysed to produce periodic planning
report for monitoring.
Examples of such systems are the sales analysis based on invoice processing; inventory control
based on stock accounting; costing and profitability analysis on the basis of financial accounting
systems. Of course marginal additions to data fields, new coding structure, revised procedures are
introduced to make the data base and reporting more useful.
A few factors which will increase the chances of a successful implementation of MIS are:
a) Involvement of top management in the computerisation effort, in defining the purpose and
goals of computers within the organisation.
b) Selection of an EDP Manager who has the political skills to involve managers in choosing
application areas, identifying information needs and designing reports.
c) A computer staff which has interdisciplinary skills in computers, management and operations
research.
d) A balanced expenditure on hardware and software.
Check Your Progress
1) Explain Robert Anthony’s framework for understanding MIS.

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2) Based on Zani framework, list the important determinants of MIS design.

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8.5 LET US SUM UP
This Unit has given you a fair understanding of the main features of a Management Information
System in Organisational Context, describing its various functions, importance and relationship
with planning, control and operations in an organisation, i.e., what an MIS is and what it is not.
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Further, the unit systematically leads you to the prevailing status of MIS in organisations,
discussing the ever growing need of information and its proper handling (processing), which in
turn led to the development of MIS and advent of computers therein to cope with the hazards
faced in coordinating and managing the organisational challenges. We have also discussed
different viewpoints about the MIS given by same management scientists.
8.6 KEYWORDS
Labyrinthine : Complicated network of winding passages, etc., through which it

is difficult to find one’s way.
Pragmatic : Treating things in a sensible and realistic way; concerned with

practical results.
1) Robert Anthony has delineated a framework which distinguishes between the different types
of planning and control process that typically occur in organisations. His basic thesis is that
thinking of planning and control as two separate and homogeneous activities in an
organisation is not only meaningless but positively disfunctional. Instead of this segmentation
of management planning and control activities in two categories of planning and control.
Anthony suggested that the areas of management planning and control be segmented into
three categories, resisting the natural temptation to use as the two main divisions, i.e.:
• Planning (roughly, deciding what to do), and
• Control (roughly, assuring that desired results are obtained).
The three categories suggested by Anthony are:

i) Strategic Planning
ii) Management Control
iii) Operational Control
Read carefully Sec. 8.4 and expand the above answer.
2) According to Zani, the important determinants of MIS design are:

• Opportunities and risks
• Company strategy
• Company structure
• Management and decision-making processes
• Available technology
• Available information sources
Study carefully Sec. 8.4 and explain the above.
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UNIT 9 INFORMATION NEEDS AND ITS ECONOMICS
Structure
9.0 Objectives
9.1 Introduction
9.2 Growing Need for Information
9.3 Information Classification
9.4 Information from Data
9.4.1 Data Life-cycle
9.4.2 Data Processing Method
9.5 Information Economics
9.5.1 Cost of Information
9.5.3 Bias and Error
9.5.4 Value of Perfect Information
9.6 Let Us Sum Up
9.0 OBJECTIVES
• have a historical perspective on data and information processing,
• distinguish between data and information,
• conceptualise the data life-cycle,
• identify both the logical and physical ways in which data can be processed or manipulated to
produce information, and
• appreciate the primary aspects of cost, value and effectiveness as they relate to data and
information processing.
9.1 INTRODUCTION
Since the dawn of civilisation, people have required information to aid them in their personal
battle of survival as well as in their attempts to manage their organisations. Though for centuries
man lived on earth without keeping records, it became necessary for man to adjust with the
growth of social organisations. As tribes grew into nations, trade and commerce developed.
Historians have traced some type of record keeping and data processing back to about 3500 BC,
when in Babylonia, merchants were keeping records on clay tablets. At about the same time, the
ancient Egyptians made a great improvement in record keeping when they developed papyrus
(the fore-runner of paper) and a sharp pointed pen called a ‘calmus’. Today merchants and all of
us still keep records and process data, but the technology by which data is processed has had a
quantum leap forward especially in the last fifteen to twenty years. The world has gone through
the agricultural revolution, industrial revolution and we are in the midst of the so called
‘information’ revolution.
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In this Unit, you will learn more about the day by day increase in the need of information. You
will also study the economics involved in information processing and how perfect information
can help at the correct time.
9.2 GROWING NEED FOR INFORMATION
There were two primary reasons for processing data before eighteenth century. First there was a
natural desire of humans to keep an account of their possessions and wealth as exhibited by the
Babylonian merchants. Second reason for processing data before eighteenth century was
essentially because of governmental requirements for compiling administrative survey data for
raising taxes and conscripting soldiers. Around fifteenth century Luca Pacioli developed the
double entry book keeping system, the fore-runner of our modern financial accounting systems.
With the dawn of the industrial revolution, the basic tasks of production shifted from home and
small shops to the factories. With the advent of factories, other service industries like marketing
and transportation grew. The increasing size and complexity of the organisation prohibited any
one individual from effectively managing them without some data and its appropriate processing.
As factories grew in size it necessitated the need for more sophisticated capital goods, equipment,
plant and machinery, requiring large investments. On one hand, management needed more
information for internal decisions while investors, on the other hand, needed information about
the organisation, its soundness, health and credibility of its managerial performances. In spite of
the technological developments, there is an ever increasing pressure for more and more
information.
Granting of loans, credits, etc. created a need to maintain accounts receivable, accounts payable
etc. It has now become statutory for any type of organisation to display certain financial
statements like a balance sheet, profit and loss statement etc. duly audited and certified by
chartered accountants.
There was a swing from integration to fragmentation and now we are trying to integrate once
again. Most organisations were run by single individuals. In government, this figure was the
ruler/king, but in business it was the owner. However, with the increasing size and complexity in
government, parliaments evolved and took away many of the king’s powers and duties.
Bureaucratic groups were established and made responsible for specific areas, thereby resulting in
erosion of authority of the central figure and fragmentation of responsibility. In business, the
owner began by managing his or her own concern. But as the business diversified and grew, it
became necessary to delegate authority to other persons. The communication lines and their
length increased. The result was that the owner often had very little knowledge and control of
what decisions were made at the lower levels. More people at the lower levels got involved in
their immediate problems losing sight of the organisation’s overall goals. Fragmentation had thus
become a necessary evil. The situation as of today, however, is that there is a visible movement
back to some type of an integration because of the advent of technology in the form of computers
and electronic data processing.
The executives in Indian Industry, though they complain of many things, have three areas in
common. The first is personal income tax. The second is the increasing amount of paper work and
the third is the paucity of ‘information’ available for their decision-making. At the first glance the
second and third complaints seem contradictory. On the other hand, information is pouring in
through paper submerging the executive while on the other hand there is not adequate information
for rational decision-making. “Water, water, everywhere but not a drop to drink!” This
contradiction is present because there is abundant ‘data’ but a great paucity of ‘information’. In
general usage, the terms data and information are often used interchangeable. However, there is a
difference between data and information as you have read in the earlier Unit.
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Systems approach
Traditional
Figure I: The Classical and Systems Approach to Organisation and Information Flow
9.3 INFORMATION CLASSIFICATION
As you know, information is the result or product of processing data. It provides knowledge or
intelligence. It contains an element of surprise, reduces uncertainty and triggers off action.
Data
Processor
Information
Figure II: Conversion of Data to Information
Data becomes information when it is processed and placed in some context. Information is the
‘stuff’ of paperwork systems just as, material is the ‘stuff’ of production systems. In fact the
relation of data to information is that of raw material to finished product. Information for one
person may be the raw material for another. Information resources (in the sense of stored data of
all types) are re-usable.
Information is information only to the extent that it serves the needs of the manger. It is
significant for him or her only if it can add to the knowledge in planning the operations and help
in discharging the personal responsibility. A manager has multifarious responsibilities and the
time at his or her disposal is limited. Therefore, his or her information needs should be
identified and only that data which can be helpful, should be accumulated and supplied to
the manager.
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Information Classification
We can classify information found and used by a manager in an organisation into the five groups:
i) Action Versus Non-action Information: Here a non-action information is synonymous to

data. Action information requires the recipient to do something when information is received.
ii) Recurring Versus Non-recurring Information: Recurring information is one which is

generated at regular intervals such as periodic reports. Non-recurring information is typified
by some special kind of studies to aid in management decision. This is of a non-repetitive
type nature.
iii) Documentary Versus Non-documentary Information: Documentary information is that

which is preserved in some written form or available on microfilms, punch cards, magnetic
tapes, floppy disks, accounting reports, etc. Non-documentary information is transmitted
orally or received by an individual observation.
iv) Internal Versus External Information: The distinction here is obvious. It will be seen in
the subsequent Sections that different managers at different hierarchies in the organisation
require different blend of internal and external information.
v) Historical Information Versus Future Projection: The distinction here is again obvious.
The historical information could be futile, unless it can be used for future projection.
9.4 INFORMATION FROM DATA
As you know in most of the cases, the information accumulated is based on the data collected.
But we should keep it in mind that data is not the only base of information generation but is just
one of the modes of generating information. Some computation and processes have to be
followed while generating information from data. Also the life cycle of the data has to be
considered. Some facts to be considered while generating information from data are:
9.4.1 Data Life-cycle

We can think of data having their own life-cycle namely, data generation, data manipulation,
transmission of data (and communication of information) and storing/retrieving and reproduction
of data.
The generation of data could take place internally and/or externally. This data has to be captured
by recording of data from an event or occurrence in some form such as sales slips, personnel
forms, purchase orders, etc.
The accumulated data would have to be stored either in person’s mind or in a document or in a
‘mechanical’ or electronic device, microfilm, punched cards/tapes or in a device of some suitable
form before they may be operated upon or utilised.
Stored data would have to be retrieved by searching out and gaining access to specific data
elements from the medium where it is stored.
Retrieved data may be converted or reproduced to a different form of storage or presentation

format by way of documents reports, etc.
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Data are also constantly being transported to the user in processed form. It is transferred to
storage from the source, then processed and passed on to the user, who again return it to storage
after working on it, which becomes available for further retrieval.
The randomly accumulated data has to be stored and classified to reveal appropriate information.
For example, sales data can be classified product-wise, territory-wise, salesperson-wise, etc. Such
a classification will give the sales data more meaning.
Sometimes aggregation or synthesis of many pieces of data to structure a meaningful whole or

complete report is often required.
Processing of data might entail quite a bit of manipulation and calculations involving addition,
subtraction, multiplication, division, etc. based on certain formulae. Computations might have to
be performed for deriving employee’s pay, customer’s bill, financial ratios, etc. Management
science/operational research models might be used for determining optimal product mix,
aggregate planning and economic order.
Data stored must be utilised on some occasion by some one at some point of time, otherwise there
is no point in putting in on inventory. When data is finally put in a usable form it can be retrieved
and turned into information at appropriate time for decision-making.
Some type of continuous verification and evaluation of data ought to be taken because there is
also an economic aspect of cost of processing data versus the value of the information. Therefore,
data files should be continuously monitored to eliminate useless data.
It is important to destroy data following its evaluation or use. Destruction of data records may be
on a purely routine basis following one time use or may occur in review of old records.
Destruction is the terminal stage or the end of the data life-cycle.
The data life-cycle is portrayed in Figure III.
Store Retrieve
Sort
Generate Evaluate Manipulate Utilise
Destroy Synthesise
Figure III: Data Life Cycle

(Source: R.G. Murdick & J.E. Ross Information System for Modern Management, Prentice Hall Int.)
9.4.2 Data Processing Methods

Every organisation whether business, government or social requires a certain amount of paper
work or data processing which can be done in a variety of ways. In the past, data processing
consisted of manual procedures whereby the data operations were performed by hand with the aid
of basic devices such as pencil, paper, slide rule, etc. Then came the electro-mechanical method
which is actually a symbiosis of man and machine. Then came the use of typewriters, cash
registers, time clocks, etc.
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The punched card equipment method came into use along with the ‘unit record system’, the
principle being that data concerning a person, object, or event is normally recorded (punched) on
a card. A number of cards placed logically and sequentially in a deck was termed a ‘file’. There
was considerable reduction in the manual intervention. However, it was only after the
development of the electronic computer that one machine became capable of performing most of
the data operations without intermittent human intervention. Today data processing is generally
assumed to be computer or electronic data processing (EDP). Computer systems were used
initially in many organisations to perform essentially the same functions as ADP (Automatic Data
Processing) systems.
The computer simply means a configuration of input devices, a central processing unit (CPU) and
output devices. A major innovation in the development of CPU was the stored programme
concept. A computer executes only the instructions given to it at fantastic speed. They are highly
suited to highly repetitive type of calculations. However, whenever judgement is to be exercised,
humans remain far superior, though of late more researches are being conducted in Artificial
Intelligence (AI) and the development of knowledge based expert systems. Recently significant
technological developments (especially in the field of electronics) have reduced the cost and size
of the computer to such an extent that organisations of almost any size can now invariably benefit
by using computer data processing. Computers of various types – mainframes, minicomputers,
micro-computers and personal computers are there for the asking. You will be introduced to
computers, different types of computers, application of computers in management and also other
topics related to computer. It will be explained to you the difference between hardware, only the
computer and hard disk equipment and software, the programmes required to run a computer.
There are many software available and people choose software according to their needs, i.e., as to
what purpose they require the computer-data processing or report typing, and so on. You must
know that though the hardware cost are coming down, the software costs, however, are rising. Let
us now figure out the cost of information.
1) How do you classify information?

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2) What do you understand by data life cycle?

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9.5 INFORMATION ECONOMICS
Information is a valuable resource in any organisation. However, the preparation of formal

information is not free; it costs money. How much should an organisation spend for information.
Some type of a cost-benefit analysis ought to be undertaken. It is more easily said, than done.
Difficulties occur in measuring the cost of providing the information and measuring the value of
information. Information is conceptual in nature and possibly has hardly any tangible
characteristics except symbolic representations. However, let us attempt to understand some
aspects of information economics.
9.5.1 Cost of Information
The costs of operating the information system could be categorised as follows:
a) Hardware Costs: This is normally a fixed or sunk cost over a relevant range in case of
computer based information system. With the quantum jumps in the field of electronics, the
hardware costs are coming down in an appreciable way.
b) System Analysis, Design and Implementation Costs: This again is a sunk cost. This
function includes formulating a methodology for overall electronic data processing
procedure. This should include the cost for preparation of programmes and the so called
software costs. With computers being the ‘in thing’ these days, software people are pitching
their costs higher and higher.
c) Conversion Costs: This is a sunk cost and includes any kind of change from one method of
data processing to another.
d) Cost for Space and Environmental Control Factors: This cost is semi-variable. Examples
of this cost are floor space, air-conditioners and dehumidifier systems, power control units,
standby generator, security and so on. The size of the computers has shrunk considerably
over the years whereas power and capabilities have increased manifold. Many mini-and-
microcomputers of today are rugged enough and do not even require an air-conditioned room
(like the BBC Micro’s etc. which have been introduced in schools both in rural and urban
settings in India).
e) Operation Costs: This is basically a variable cost and includes a variety of personnel,
facilities and systems maintenance, supplies, utilities and support facilities costs.
These costs are often classified as either variable or non-variable costs.
Let us now discuss what we understand by the term ‘value’ of information. To be of ‘value’ there
are certain desirable characteristics or attributes of information, quantitative and descriptive.
Information must primarily possess attributes of relevance, availability and timeliness, to have
value and thus to qualify as information. Objectivity, sensitivity, comparability, consciousness,
and completeness are desirable and necessary only in varying degrees. No doubt quantifiability is
desired to the maximum extent possible. The quality attribute refers to the presence or absence of
ambiguities in information. No doubt all information should preferably possess ‘quality’.
Measures of quality are validity, accuracy and precision. These measures of quality are
especially important and applicable to quantified information.
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Quality is defined as excellence or fitness. It is not an absolute concept; it is defined within a
context. An application has quality relative to its primary and secondary users, operations
personnel, control personnel, maintenance personnel, etc. Perfect quality is very costly and
perhaps impossible. Since information is a critical organisational resource, low quality
information has an adverse effect on organisational performance.
Even if information is presented in such a way as to be transmitted efficiently and interpreted

correctly, it may not be used effectively. The quality of information is determined by how it
motivates human action and contributes to effective decision-making. Information may be
evaluated in terms of ‘utilities’ which may facilitate or retard its use. These ‘utilities’ are
explained below:
a) Form Utility: As the form of information more closely matches the requirements of the
decision-maker, its value increases. If the manager is looking for a graph depicting the sale of
different outbound tours/destinations, he or she appreciates receiving the data in the graphical
form rather than in a tabular form.
b) Time Utility: Information has greater value to the decision-maker if it is available when
needed. If you make information available well ahead of time, one might forget about it.
Obviously, any availability after the due time might have no relevance. Therefore, greatest
value is at the appropriate time when the decision-maker needs it. The difficulty is that
sometimes the appropriate time is not known to the decision-maker himself/herself. Time
utility is an important factor in travel agencies and tour operations.
c) Place Utility (Accessibility): Information has greater value if it can be accessed or delivered
easily. On line systems maximise both time and place utility. It is very important to have the
information available at the right place at the right time.
d) Possession Utility (Organisation Location): The possessor of information strongly affects

its value by controlling its dissemination to others. Information is power or rather one who
has information has the power.
Though it is difficult to quantify the contribution of the utility of information, one surrogate worth
considering is information satisfaction, viz., the degree to which the decision-maker is satisfied
with the output of the formal information system.
9.5.3 Bias and Error
Managers or in fact anyone, would have strong bias towards quality rather than quantity of
information. It is possible to estimate the biases of the decision-makers and provide suitably
adjusted information. For example, one might have some bias regarding a destination and not
bother or believe any information provided by the promoters of that destination.
Here we would like to introduce the notion of errors in contrast to bias. Errors, a more serious
problem, may result from:
a) incorrect data measurement and collection methods,
b) failure to follow correct processing procedures,
c) loss or non-processing procedures,
d) loss or non-processing of data,
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e) incorrect history (master) file (or use of wrong history file),
f) mistake in processing procedure, and
g) deliberate falsification.
In most information systems, the receiver of information might have no knowledge of either bias
or errors that may effect its quality. The difficulties with errors may be overcome by:
• internal controls to detect errors,
• internal and external auditing,
• addition of ‘confidence limits’ to data and user instruction in measurement, and
• processing procedures so that users can evaluate possible errors.
The first two methods attempt to reduce the uncertainty about the data and therefore increase the
information content. The last two remedies provide the user with confidence limits.
9.5.4 Value of Perfect Information
In the decision theoretic framework, there could be decision-making under certainty where we
assume existence of perfect information regarding outcomes. In decision-making under
uncertainty, we assume only a knowledge of possible outcomes but no information as to
probabilities. In decision theory, the value of information is the value of the change in decision
behaviour caused because of availability of information less the cost of obtaining the information.
Given a set of possible decisions, a decision-maker will select one on the basis of the information
at hand. However, if a new set of information input changes the decision, then the value of the
new information is the difference in value between the outcome of the old decision and that of the
new decision, less the cost of obtaining the new information. In this context, there is also the
notion of the value of perfect information. The value of the perfect information can be computed
as the difference between the ‘optimal’ policy without perfect information and the ‘ideal optimal’
policy with perfect information.
The concept of the value of perfect information is useful because it demonstrates how information
has value as it influences or changes a decision. However, decisions are usually made without the
right and appropriate information because the needed information is usually not available; the
effort to acquire the information is too great or too costly; sometimes there is no knowledge of the
availability of the information and often the information is not available in the form needed.
1) Discuss the value of information.

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2) From what the errors result?
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9.6 LET US SUM UP
In this Unit we have discussed the concept of information. Over the years with the growing
complexities and increasing competition, the pressures for information have stepped up manifold.
There are various methods of processing data to give some type of information. A data life-cycle
has also been explained. Data could be free, but information costs something. We have tried to
explain the various costs of information. Now there must be some benefits, utility or value of
information. We have discussed how the value or utility could increase depending on
circumstances. It is quite difficult to quantify quite a few of the desirable characteristics of
information. A brief introduction to the mathematical information theory in communication is
also given. Information tries to reduce the uncertainty in a given situation. This Unit is a pre-
requisite to the next unit on management information systems as the concepts of desirable
characteristics of information, would be particularly useful in understanding management
information systems.
1) Read Sec. 9.3 for your answer.
2) Every data has its own lifecycle. The cycle consists of data generation, data manipulation,
transmission of data (and communication of information) and storing/retrieving and
reproduction of data. Read Sub-sec. 9.4.1.
1) Information must primarily possess attributes of relevance, availability and timeliness to have
value and thus to qualify as information. Study Sub-sec. 9.5.2 for answering in detail.
2) See Sub-sec. 9.5.3.
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UNIT 10 MANAGEMENT OF INFORMATION
RESOURCES AND CONTROL SYSTEMS
Structure
10.0 Objectives
10.1 Introduction
10.2 Information, Organisation and the System View
10.3 Concept, Structure and MIS Growth
10.4 Strategic Planning for MIS
10.5 Top Management Interest and A Corporate MIS Plan
10.6 Information Requirements, Analysis and Critical Success Factor (CSF) Method
10.7 Resource Allocation and Charging for Services
10.8 Information Resource Assessment
10.9 Management Steering Committees and Information Network
10.10 Role of MIS at Various Management Levels
10.11 Desirable Characteristics of MIS
10.12 Let Us Sum Up
10.13 Key Words
10.0 OBJECTIVES
After going through this Unit, you should be able to:
• understand the growth process related to MIS function in an organisation,
• relate the issues concerned with Information Resource Management in the organisations with
available frameworks,
• comprehend and conceptualise the systems basically using a classification of input, processor,
output, control and the environment,
• appreciate and understand the management functions at various levels in the context of
relationships between management and informational needs, and
• define clearly the concept of management information.
10.1 INTRODUCTION
Information has already been recognised as one of the crucial corporate resources. The
significance of producing more information; information processing and making information
available to users is being realised more and more in the recent years. Whether it is industry,
commerce, banking, education, economics or tourism, information is needed everywhere. The
investors need information on the financial health of the organisation before extending any credit
facility to the organisation; the government agencies need information for national planning and
industrial control. The organisations have long since realised the need for the availability of
information resource for the interested groups as well as individuals on time.
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A significant part of an individual’s working and personal time is spent on searching for,
recording and absorbing information. Information is ‘live’ as it is required to be updated all the
time, and it is renewable. Information is substitutable and transportable and can be made to travel
nearly at the speed of light in a communication networks. Today, information gets doubled in just
five years. The exponential growth of information all around makes it necessary that it is properly
collected, stored and retrieved in various fields so that it could be usefully exploited where and
when needed. Information resources have to be managed and management of Information has
emerged as a specialisation in its own way. The management of information resource has also
been subjected to a lot of thinking. Organisations have been made to think seriously about the
growth and development of this function as an independent support function rather than as part of
a major function, such as, finance and accounting. Serious thought has been given to the
involvement of the users in the information processing activity as well as to the conversion of the
function to a profit centre by developing and implementing change-out systems for the services
rendered to the user groups.
To develop an understanding about the information resource management in an organisation and

other related issues, the present Unit discusses various concepts related to the information
systems management. Here, we are interested in a system for providing the necessary
management information. Thus, we need to conceptualise a management information system
(MIS).
Before describing explaining each term, let us give a crude definition of sub-systems which may
be composed of further sub-systems. We could carry on this refinement till we arrive at the so
called ‘black box’ level which is some perceptible manageable level. Just as a system is made up
of sub or sub-sub-systems it itself is part of a super or supra system. This could be termed as the
environment in which the system operates. The forces in the environment impinge on the system
while the system itself exerts pressure outwardly on the environment thereby having some sort of
a dynamic equilibrium at the boundary which separates the environment from the system.
Whether the MIS is computer based or non-computer based, it ought to focus on managerial
effectiveness and in the earlier Units you have been introduced to the various aspects related to
MIS. However, once again in this Unit certain issues related to MIS, which have not been
discussed earlier, are to be taken up to complete your knowledge on MIS. Issues related to
Information resources and control systems have also been discussed in this Unit.
10.2 INFORMATION, ORGANISATION AND THE SYSTEMS VIEW
The organisational factors play a major role in what type of information is to be processed and
communicated to the decision-makers. These factors include nature of the organisation, category
of the organisation, structure of the organisation, size of the organisation and the management
style followed in the organisation.
Information is the primary tool that will help the management, its products and services in the
competitive environment. It should be clearly understood that the information technology
and quality information are not the goals but merely the competitive weapons that support
the organisations in their activities. Without quality information, organisations are operating in
a world of uncertainty, and quality information could be produced by taking a number of steps
and making sure that the information generated and presented to the decision-makers is accurate,
timely and relevant.
There has been a subtle but definite shift in the way the MIS function is looked upon in an
organisation. This change is characterised by the change in the nomenclature of the titles under
which the function exists in various organisations. Initially, the executive looking after the
function of data processing with the help of the computer was referred to as the computer
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manager, and, in the 1960’s the same position was renamed as Electronic Data Processing
Manager. During this period, the department was also named as the EDP Department. It is during
the seventies and eighties that the function has been recognised as MIS function and the manager
is called the MIS Manager. There are other titles also given to the information processing
function. Some of the common ones are Management Services Division, Corporate Services
Division and Information Resource Management.
A change that has occurred in recent years is the adoption of the so called ‘systems approach’. In
the past, managers, decision-makers and problem-solvers attempted piecemeal solutions, thinking
in an isolated compartmentalised fashion independent of other operational units in the
organisation. Today besides professional managers, political administrators have also become
aware of the need for adopting an integrated holistic perspective by adopting the systems
approach to problem conceptualisation and decision-implementation.
Today we find everyone talking of systems — the transport system, educational system, healthcare
delivery system, defence system, economic system, communication system, management
information system, transaction processing system, decision support system, computer systems,
etc. We are in the midst of an era of systems so to say. But what exactly do we mean by a system?
A system is an organised or complex whole. It is an entity, conceptual or physical, which consists

of interdependent parts or components. It is this interdependency which is a characteristic of the
parts of the system. It is an interlocking complex of processes characterised by many reciprocal
cause effect pathways. A system is a complex of elements or components directly or indirectly
related in a casual network. This brings in the notion of some type of feedback and control to see
whether or not the system is in a position to achieve the goals/purpose/objectives of the system.
Any system must have an objective or a set of objectives or a hierarchical set of objectives. In a
large context, a system is an assembly of procedures, processes, methods, routine techniques, etc.
united by some form of regulated interaction to form an organised whole. In fact no system,
unless it be a totally closed system, can exist in isolation.
A system is made up of sub-systems which may be composed of further sub-systems. We could

carry on this refinement till we arrive at the so called ‘black box’ level which is some perceptible
manageable level. Just as a system is made up of sub or sub-sub-systems, it itself is part of a
super or supra system. This could be termed as the environment in which the system operates.
The forces in the environment impinge on the system while the system itself exerts pressure
outwardly on the environment thereby having some sort of a dynamic equilibrium at the boundary
which separates the environment from the system.
Super or supra system
The system under consideration Other Systems
Sub system-1 Sub system-2 Sub system-N
Sub-sub system
(SSS-1) SSS-2 SSS-M
Black Box BB-2 BB-Q

BB-1
Figure I: Hierarchy of Systems
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The above narrative description has been graphically depicted in Figure I. This figure, while
depicting the Hierarchy of systems, shows that every system is a part of another system. The
inter-linking of sub-systems and systems make a system work better and gives the best results in a
given situation and system.
10.3 CONCEPT, STRUCTURE AND MIS GROWTH
Few concepts have been more vague than an MIS as understood in its definition and scope. Many
experts think that an MIS is the computerisation of clerical work. This is incorrect. Others hope
that some day it might be possible to have an all knowing expert computer system which will
provide answers and decisions for complex problems when a manager/executive simply presses a
few buttons. This view would perhaps remain a dream. An MIS is a means for connecting the
managed operating systems by exchange of information. An MIS is more than a set of ideas or
concepts. It is an operational system performing a variety of functions to produce outputs which
are useful to the operating personnel and management of an organisation. Managers have always
had ‘sources’ of information, the MIS provides a system of information. It is imperative to realise
that a systems approach to managing is necessary to compete in today’s world. The systems
approach to management must precede the design and use of an MIS. The computer is only a
component, or a tool of the MIS, not the MIS itself or the central focus of MIS. Management
must take an active part in the design of the MIS. Technical knowledge of the computer, though
preferable, is not necessary for the manager to perform his or her role in the design of MIS.
Davis and Olson define MIS as an integrated user machine system for providing information to
support operations, management and decision-making functions in an organisation. The system, if
it is computer based, utilities computer hardware and software, manual procedures, decision
models and preferably a data base. A data base is a centrally controlled integrated collection of
logically organised data. The underlying concept of a data (bank) base is that data needs to be
managed in order to be available for processing and have appropriate quality and value. Over
time, the concept of a single highly integrated system was demonstrated to be too complex to
implement. The MIS concept is now veering around to that of a federation of sub-systems
developed and implemented as needed but conforming to the overall plan. Thus, rather than a
single global MIS, an organisation may have many related information systems which serve
managerial needs in various ways.
MIS is also an organised method of providing past, present and projected information relating to
internal operations of an organisation and external intelligence by good environmental scanning
techniques. All organisations have some kind of information system even though some systems
might be nothing more than filing cabinets and an accounts ledger. An information system
should have a systematic formal assemblage of components that performs data processing
operations to :
• meet the legal and transactional data processing requirements,
• provide information to managers at all levels for carrying out their functions effectively, and
• provide a variety of useful reports, as required to internal and external constituents.
If a report does not have an element of utility, why generate it or ask for it, unless it is a statutory
requirement. Since the facts are too many and keeping track of them means getting bogged down
in day-to-day routine matters, the managers do not have sufficient time for creative and
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innovative work and for decision-making of a strategic nature. It is, therefore, imperative to ask
for ‘exception’ reports. Perhaps it is well to introduce a brainstorming session of executives
involved at different levels to specify what they are looking for, what is to be done, by whom, by
what data and in what form? It would be worth creating confidence and mutual trust about not
reporting normal things. Perhaps some type of a selective information management could be
pursued somewhat similar to the selective inventory management of value based ABC analysis
and critically based VED (Vital, Essential, and Desirable) form.
For studying the growth of the MIS activity in an organisation we could apply the model
developed by Richard Nolan in 1979, popularly known as the Stage Growth Hypothesis. This
six-stage model very clearly explains the stage by stage development of the MIS function in an
organisation. This model provides a framework for the analyst to understand the reasons for
success or failure of the MIS function in an organisation and also assists in developing solutions
to take the functions ahead.
According to this model, there are distinctive features associated with each and every stage of the
growth of the MIS function in an organisation from which the decision-makers can understand
the growth pattern and use the MIS function to the strategic advantage of the organisation.
Figure II depicts the framework suggested by Nolan. In this figure, the horizontal axis shows the
stages of growth, and the vertical axis shows the growth processes of the MIS function. The
curve on the graph shows the trend of the MIS budgets. It could be noted that the budget curve
shows an upward trend till the third stage, and becomes more level towards the beginning of the
fifth stage onwards. The different stages discussed in the model are as under:
Growth
Processes
Application
Portfolio
DP
Organisations
D P Planning
and Control
User
Awareness
DP
Expenditure
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6

Initiation Contagion Control Integration Data Admn. Maturity
Figure II: Nolan Six Stage Growth Model
Stage-1 : Initiation
The first time the organisation buys and installs a computer system, the MIS function in the
organisation has entered this phase. Since most medium and large-sized companies have
installations of the computer systems, this stage is already reached as far as the majority of the
organisations are concerned. During this stage, the following features may be distinctive :
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a) Functional cost reduction applications;
b) Specialist DP organisation for technological learning;
c) Lack of strict planning and control in the MIS function;
d) Hands-off training for user awareness.
Stage-2 : Contagion
The second stage involves a rapid proliferation of the computer resource all over the organisation,
sometimes based on the actual organisational needs and sometimes just to add some equipment to
feel important in the organisation. This is the phase when most of the organisational units feel
that they should have an access to the computer hardware, develop software and have the trained
manpower working in their units. Every unit head wishes to have some computer resource
controlled exclusively by himself or herself. Due to this non-planned proliferation, the MIS
function grows disproportionately and, there is, absolutely no control on the MIS budgets
resulting in confusion in the organisation. The budgets go shooting up without any controls. The
applications are developed in an independent manner, and this results in duplicated efforts and
systems. This stage is marked by the following characteristics :
a) Proliferation of applications,
b) User-oriented departmental programmers,
c) More relaxed planning and control of MIS function,
d) Users are superficially enthusiastic without sincere involvement.
Stage-3 : Control
It is towards the end of the second stage that the management gets conscious of the fact that the
benefits being derived are not in proportion to the actual expenditure on the MIS activity, and the
organisation starts exercising control and some restraint in sanctioning the budgets. The
management takes serious interest in planning the function, and it results in a better control on the
activity. The MIS budgets get checked with the result that the users also get aware of the fact that
information technology should be used to some meaning rather than just have some infrastructure
under them. The major highlights of this stage are :
a) Upgradation of the documentation and modification of existing applications,
b) Middle level management to look after the MIS function,
c) Formalised planning and control of MIS function,
d) Users are involved with some accountability imposed on them.
Stage-4 : Integration
After the management has been able to provide the control guidelines to the MIS function, the
organisation starts thinking in terms of integrated applications so as to avoid the duplication of
efforts and systems, as well as, providing better levels of integrity to the systems and data. Data-
based systems are used and the applications are designed as subsystems of the organisational
systems, unlike the earlier ones interfunctional and intrafunctional integration is ensured through
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the database. Capable database management systems are used to manage the data, and the data
communication facilities are used to transfer data from one location to another. The budgets, once
again, start looking high. This stage is marked by the following characteristics :
a) Retrofitting the existing applications using data base technology,
b) Establishing the computer utility and the user accounts teams,
c) Tailor-made planning and control systems,
d) The user accountability to learn and involve in the systems.
Stage-5 : Data Administration
With the integration of the applications using a data base environment in the fourth stage, the
MIS function in the organisation undergoes a major change in the functional outlook. The
technical expertise looses over to the management process and responsiveness to the users, and
the data becomes the most crucial resource in the organisation to be managed. Since the data is
being stored, used, manipulated and processed from integrated files in the database, the function
of the database administrator to plan, supervise, provide, control and secure the data becomes
most important. The stage is characterised by the following features :
a) The application are further integrated as per the organisational requirements,
b) The data-processing organisation is for the data administration,
c) The systems are based on data and system sharing basis,
d) The user becomes effectively accountable for the MIS systems.
Stage-6 : Maturity
It is almost impossible to attain the sixth stage of maturity when everything has been achieved,
and the MIS systems will never fail themselves or fail the organisations. The applications by this
stage have been incorporated into the organisational functioning and these are as per the strategic
requirements of the organisation. The technology has become an integral part of the
organisational thinking, philosophy and systems. Some of the major features related to this stage
are :
a) Integration of application mirrors the organisational strategic choices,
b) The emphasis is on the data resource management rather than on the system management,
c) Data resource has become the key factor in strategic planning,
d) The users and data-processing professionals share the responsibility of the MIS function,
jointly and willingly.
It is towards the end of the third stage that the information technology becomes a turning point
for the strategic performance of the organisation and the full benefits of the information
technology are realised by the organisation. Some of the organisations are able to go beyond this
point, but some organisations may never reach this point at all. Such organisations can never have
the advantages of the technology, and may find it difficult to survive in the competitive
environment.
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1) Explain ‘Black Box’ level.

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2) What do you understand by Stage Growth Hypothesis?

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10.4 STRATEGIC PLANNING FOR MIS
Planning of the MIS effort is very crucial for organisations. Absence of proper planning may
result in the sky-rocketing of MIS budgets, thereby leading to a resource crunch during the later
stages of MIS growth. In the initial stages, the application development projects and operations of
completed application systems are the focus of the planning efforts. As the MIS activities grow in
an organisation, the planning shifts its attention from operational planning to strategic planning.
For operational planning of MIS, common techniques such as structural flow, charting, structured
programming and walk throughs are used. For managerial and strategic planning of MIS,
formation of steering committees composed of key executives from the user and MIS groups is a
common practice. These steering committees are generally created to monitor proper functioning
of MIS activity towards the achievement of long range organisational goals. Organisations
commonly face the following problems in MIS planning :
a) The MIS plan may not be compatible with the overall strategies and objectives of the
organisation,
b) The framework of MIS structure may be difficult to design,
c) Allocations of development resources to various applications may be difficult,
d) Project management, to control time and cost schedules, may be lacking.
The overall objectives of planning for MIS have changed from linking processing strategy with
business strategy in 1970s to linking the information technology strategy with the business
strategy in 1980s.
10.5 TOP MANAGEMENT INTEREST AND A CORPORATE MIS PLAN
For successful growth of the MIS activities in any organisation, the top management’s continuous
interest as well as involvement is crucial. Not only that the top management should be involved in
computerisation, it should also insist on having a corporate plan for MIS activities. The top
management involvement could be in the following areas :
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• Providing appropriate infrastructural facility,
• Linking MIS with business activities,
• Monitoring the level of user awareness and understanding,
• Making strategies that can be understood among users,
• Monitoring the financial/capital requirements of all application areas on a time frame basis,
• Providing flexibility for future designs,
• Reviewing major system changes, and
• Establishing overall schedules for implementation.
One of the greatest hurdles to using information technology for strategic purposes, has been the
inability of the top management to appreciate and manage the information systems. Mostly it has
been due to the lack of understanding on part of the top management and a fear of
uncontrollability of information systems, which leads to a lower level of interest.
Corporate Systems Plan
Organisation Structures
Application Operations
Equipment & Staff Needs
Charging Control
Figure III: Framework for Managing IR (Information Resource)
For the top management to be involved in information processing activities, a framework for
managing information systems has been suggested as shown in Figure III. Positive top
management actions are needed in all these areas to avoid decisions by default. Since information
technology affects the entire business from organisation structure to product market strategies,
chief executives should not skip the corporate policy decisions by delegating or postponing.
10.6 INFORMATION REQUIREMENTS, ANALYSIS AND

CRITICAL SUCCESS FACTOR (CSF) METHOD
Once the overall MIS goals and strategy have been laid down, the next stage is to ascertain
organisational information requirements. Information requirements are vital for MIS planning,
application, identification and planning an information structure. Three levels at which the
information requirements need to be established for the design and implementation of CBIS have
been identified as:
i) Organisation level to define the overall information system, and to specify a portfolio of
applications and data bases.
ii) Database level to specify data models and other specifications.
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iii) Traditional approaches adopted by system analysts to assess information requirements. These
are as follows:
a) Asking questions from the users by available methods,
b) Deriving from an existing system, or from descriptions in textbooks/hand books,
c) By object system analysis,
d) Experimentation with an evolving information system.
John F. Rockart, while advocating the CSF approach, evaluated the existing four methods of
determining executive information needs, viz., the by-product technique, the null approach,
the key indicator system and the total study process.
These four techniques have their relative merits and demerits, and to overcome the disadvantages,
the Research Team at Sloan School of Management, suggested a creative approach termed as
CSF approach for information requirement analysis. Its application was found effective and
response-provoking amongst the executives. As a part of the exercise, the executive goals and the
CSFs are identified and reviewed to the satisfaction of both the executives and the system
analysts.
The CSFs for any business are the limited number of areas in which results, if they are
satisfactory, will ensure successful competitive performance for the organisation. These are a
few areas where the things “must go right”, for the business to flourish. The CSFs must receive
constant and consistent attention from the management as well as individual managers. CSFs
differ from company to company and from manager to manager and like organisations may have
differing CSFs. There are four prime sources for identifying the CSFs as listed below:
• Structure of the particular industry,
• Competitive strategy, industry position and geographical location of the company,
• Environmental factors,
• Temporal organisational factors needing immediate attention.
The CSFs are generally not meant for strategic planning, since the data requirements are
impossible to pre-plan. The CSF method centres around information needs for management
control where data requirements could be defined and pre-planned. Most executives have
four to eight CSFs.
10.7 RESOURCE ALLOCATION AND CHARGING FOR SERVICES
Allocation of resources is one of the important issues related to the MIS function in an
organisation. It is during this stage that we prioritise the applications and decide on their
implementation schedules. The following four factors should be kept in mind while allocating
resources to different applications:
• Quantifiable returns,
• Judgmental benefits,
• Institutional factors or constraints,
• System priority factors.
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Intangible benefits, such as, improved levels of service, better financial control, standardisation
and better quality of information are also considered important while considering resource
allocation.
It is an accounting approach for allocating costs of information systems to their users. There are
two different ways of charging the users for the information services:
• Charging by allocation of costs to the users as corporate overhead, and
• Charging for services the individual users get.
The second approach is based on the user’s willingness to buy the information services and
willingness to pay for the new system development.
The reasons for having a charge-out system include cost assignment, control, incentives and
budgeting. The different techniques which are used for allocating costs are:
a) No charge-out,
b) Complete Charge-out,
c) Partial Charge-out.
10.8 INFORMATION RESOURCE ASSESSMENT
Let us look at Figure IV. The lower arrow in the Figure represents Information Resource
Assessment (IRA) — a process of using information and knowledge to support the
development of the organisation’s strategic business direction. In effect, it is the mirror
image of “Strategic Planning for Information Resource”, in the sense that it is the process
through which information and knowledge are used to identify the strategic comparative
advantages and a create and evaluate new strategies, i.e., to influence change in the
“Organisational Strategy Set”.
IR Strategy Set
Strategy Planning for IR
Role of Information and IS in the Organisation
IR Mission
Organisational Strategy Set IR Objectives
IS Design-Development Strategies
Organisational Mission Information Acquisition Plan
Organisational Objectives Model Development Plan
Organisational Comparative Advantages
Organisational Strategies Implementation
Other Strategies Attributes
Information Resource Assessment Information and Decision Support Systems
Data Bases
Model Bases
Model Bases
Figure IV: Operationalising Information as a Strategic Resource

(Source: Management Information Systems: The Technology Challenge, edited by Nigel Piercy;
Croom Helm London & Sydney Nichols Publishing Company New York; 1987, p.240)
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Figure IV shows that this influence does not come directly from the Information Resource (IR)
Strategy Set, but rather from the Information Systems (IS) databases and model-bases that have
been created to implement the ‘IR Strategy Set’.
The basic IRA process is one of identifying information that is crucial, or potentially crucial, to
the organisation’s strategy set. This may be of the nature of ‘new’ information, that has not
previously been used to advantage, or it may be information that has been re-evaluated and
updated. Such information and knowledge may be put to use in creating information products or
in developing new and more effective business strategies, objectives, or organisational missions.
One variety of IRA influences the creation of information that is available to the firm through its IS.
However, the creation of information products is only one of the ways in which information can
be made to be a strategic resource. King and Cleland, (1978) have developed a technique of
‘strategic databases’ that may be used to illustrate the way in which IRA can be conducted. The
basic idea is that much of the data on which the organisation’s strategy may be based is often
routinely collected and analysed as ‘data’, rather than as strategic ‘information’. The distinction
between data and information may appear to be pedantic, but it is a useful one to be made in this
instance.
As you are already aware, data are the numbers, letters and other symbols that are used to
represent events, activities, entities, etc. (The best-known set of organised data may be the
telephone directory) Information is data that has been evaluated for some use or purpose. (For
instance, a name and phone number on a message that says that your offer to purchase a tour
package has been accepted, is information rather than data). Information is clearly required for
the effective support of strategic planning and for the making of vital decisions in an organisation.
Yet, many of the processes that are directed towards decision-support utilise and present data
rather than information. Illustrative of this, are the strength-weakness assessments that are
frequently made by a firm in support of its strategic decision-making and planning. Most
concepts of strategic management and planning incorporate strength-weakness assessment as an
important determinant of strategy. According to these concepts, the firm should base its future
strategy on its primary strengths and avoid basing strategy, even implicitly on weakness. To
implement this concept, many firms charge staff planners with doing a ‘staff study’ of strengths
and weaknesses. The predictable result of such a study, is often a voluminous report, that more
represents data than information. The same is true in other areas of critical information that are
essential to the development of an effective business strategy. Environmental opportunities and
risks are routinely assessed and reported in the form of voluminous data that are not easy to use in
the strategy-making process. Indeed, it may be argued, that such reports cannot realistically be
directly used in strategy formulation and assessment.
Formal models, may be well used, in providing such strategic decision support. For instance,
models may ‘automatically’ review companies for their ‘acquisition potential’ – the degree to
which their acquisition would serve to enhance the goals of the firm. However, the effective use
of such models requires the input of criteria that can only be generated by the organisation’s
managers.
These ‘acquisition criteria’, like strength and weaknesses, environmental opportunities, and a
variety of other strategic information, must be developed through the organisational processes
that are here termed as ‘IRA’. The ‘Strategic data base’ represent one way to implement IRA.
They are concise statements of the most significant strategic parameters that will guide the use of
the models that are in the IS and their application to the development of strategy. A set of criteria
to be used in the evaluation of the acquisition of the candidates is a strategic database (SDB), if it
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is developed through an organisational process that ensures that the different points of view of the
managers of various functions and product-market groups have been taken into account, that there
is a reasonable degree of organisational consensus concerning it, and that it is accepted by the
organisation’s managers.
To illustrate this, consider, for example, the traditional process that might be used in an
organisation to conduct a strength-weakness assessment. This approach commonly relies on staff
analysts, who gather data and prepare documents which are to serve as background information
for the support of planning activities and strategic choices. Because the planners and analysts,
who perform these tasks, often have neither the managerial expertise nor the authority to make
the significant choices that are involved in any information evaluation process, the typical output
of such an exercise is a document, which seems to have been prepared on the basis of ‘not leaving
anything out’. Such an emphasis on ensuring that nothing relevant is omitted rather than on
attempting to distinguish the most strategically relevant information from the mass of the less
relevant serves only to perpetuate the existing state of affairs regarding the informational support
provided to managers at all levels; top executives and planners are deluged with irrelevant
information, while, at the same time, they are unable to find the elements of information which
are crucial to the identification of comparative advantages and to the determination of strategy.
The ‘strategic-database’ approach to implementing IRA, on the other hand, involves the
institutionalisation of ongoing processes in which task forces, each of which is made up of
managers representing various of the parochial interests within the organisation, are charged with
gathering and evaluating the data in strategic areas, such as, strength-weakness analysis,
acquisition criteria, etc. In effect, these task forces use the information resources of the
organisation to change and up-date its organisational strategy set. Such ‘strategic databases’
produce and represent information in its most valuable form rather than data since, in this
process, large quantities of data have been evaluated and condensed to a form which can be
feasibly used in the direct support of strategic decision-making.
The strength-weakness, SDB, may be used as an illustration. A task force, composed of key
managers in each of the major functional and product sub-units of the organisation, is charged
with developing a concise consensus list of the most important strengths on which the
company (business) should base its future and the most significant weaknesses on which it
should avoid having its future become dependent. Thus, a team is given the job of producing
the strength-weakness ‘answers’, and of making the strategic information choices of those
strengths and weaknesses on which the future will depend.
This team of managers, supported by their staff, is charged with arriving at conclusions
concerning a specified approximate number (usually from 10 to 15) of the most important
strengths and weaknesses which should influence the future of the organisation.
The development of conclusions on the 10 to 15 most important organisational strengths and

weaknesses can be, as any experienced manager knows, is a difficult task when it involves
managers representing various organisational interests and points of view. Developing a twenty
page list of strengths and weaknesses could be accomplished relatively easily, but a list of the 10
to 15, most significant ones requires substantial analysis, debate and negotiation among the
various individuals and interest areas that are involved. This is so because of both, the judgements
which are needed, and the potential organisational impact which such a list will inevitably have as
it is used in the development of strategy.
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The strength-weakness, SDB, that may be so developed, is clearly a substantial basis for
assessing potential comparative advantages, and for evaluating proposed strategies. For instance,
once such an SDB is in place, proposed strategies can be screened using it as a standard, in a
somewhat mechanical fashion, just as a proposed acquisition candidate might be ‘automatically’
screened using an ‘acquisition criteria’ SDB that has been similarly developed. In the case of the
strength-weakness SDB, this would be done through the routine application of a set of questions
like:
a) Which specific strength of our firm does the proposed strategy build on?
b) What is the relative importance of each strength to using the proposed strategy in achieving
the firm’s goals?
c) Does the proposed strategy, implicitly or explicitly, assume the existence of some strength
that the firm does not possess?
d) Is the proposed strategy explicitly or implicitly dependent on any weakness, though it may be
primarily based on strengths?
This illustration of a strength-weakness SDB process illustrates the information resources

assessment process of Figure IV. It is a routine organisational process that is used to translate the
informational resources of the organisation into sources of potential strategic comparative
advantage.
It is, in effect, the mirror-image of the ‘strategic planning for information resources’ process,
which makes the reverse transformation to ensure that business strategies are supported by
appropriate information and knowledge bases.
1) List the problems commonly faced in MIS planning.

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2) Evaluate Critical Success Factor Method for the purpose of Information Requirement
Analysis.
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10.9 MANAGEMENT STEERING COMMITTEES AND

INFORMATION NETWORK
Due to active involvement of human beings, organisational powers, needs and politics in the
functioning of the MIS department, a steering committee composed of senior personnel from
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various user groups, such as, the finance and EDP function proves to be a better alternative to
prepare the priority list for allocation of resources. Though this method also suffers from major
disadvantages, such as, the time wasted on meetings and negotiations and powerful group
politicking, some of the experts have considered the steering committee approach as the most
suitable approach to get the best results in the MIS function. The user involvement can be
ensured by having their representatives on the steering committee. A steering committee formed
under the chairmanship of the chief executive with 5-10 members (may be less in small
organisations) has been found to be an effective experience.
Invariably we find information flowing from one place to another, from one decision-maker to
another in an organisation. Perhaps it is this phenomenon which motivated Forrester to
conceptualise an organisation as an Information Network. He observes that enterprises are very
complex multiloop interconnected systems. Decisions are made at multiple points throughout the
system at various hierarchical levels. Each resulting action generates information that may be
used at several, though not necessarily at all decision points. This structure of cascaded and
interconnected information feedback loops, when taken together, describe the total system. The
interlocking network of information channels emerges at various points to control physical
processes such as the hiring of employees, the building of factories, and the production of goods
and/or services. Every action point in the system is backed up by a local decision point whose
information sources reach into other parts of the organisation and the surrounding environment.
Management is a process of converting information into action-a process analogous to decision-
making. Forrester conceptualises six information feedback networks in an industrial setting
namely, materials, orders, money, personnel, capital equipment and information. A policy is
a rule that states how the day-to-day operating decisions are made. Decisions are the result of
applying the policy rules to the particular conditions that prevail at any moment.
In essence, therefore, there is essentially an activity centre where certain actions or activities take
place which change the level or state of the system. These activities are carried out because of
higher level direction received from the managers at the decision centres which have their own
set of decision procedures or norms. The combination of an activity centre plus decision centre is
termed a functional unit because it performs a function. The functional unit is represented in
Figure V, which shows the flow of information. Hence the information system could be designed
to provide information to each functional unit, in fact at each of the strategic planning level,
management control level and operational level. The information system for related functional
units can be clustered into an information sub-system.
An operational function is a class of any one or more types of actions, carried on by the same or
different functional units which regulate the inflow and/or outflow to or from sequence of levels
as a group.
A management control centre is one or more management people together with their supporting
staff which acts as a decision centre for a group of functional units or for a group of subordinate
management control centres.
An information sub-system is a special operational function unit and MIS is an operational

function whose parts (corresponding to functional units) are information sub-system of other
operation functions. We could also think of an Operational Control Module as that part of an
information sub-system which supports the functional units of an operational function.
A Management Control Module is that part of an information sub-system which supports the
management control centres of an operational function. Parts of information sub-systems, termed
modules, are the basic entities which help in adopting a modular approach to an MIS design. The
use of modules is desirable because it allows improved project control. The modules can be
written and tested separately allowing more efficient planning and implementation in phases.
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Goals, policies,
objectives
Other decision Decision Other decision

centres centre centres
Decisions
Activity Centre
Actions
Level or state
of systems
Figure V: Flow of Information in a Functional Unit
The Non-formal Element
An MIS model has to reflect formal and informal flow of communication of

messages/data/information. At the bottom is the physical system – the workers and all equipment
and facilities used to produce the products and/or services. Internal data generated here is passed
on to the information processing resources (which could be manual or computer based, preferably
making use of a data base) which generate internal information formally. The internal and
external environmental information is passed on to the appropriate executives/managers who also
acquire on their own internal and external information on an informal, non-formal manner.
Gordon Davis has conceptualised the various MIS components chart as shown in Figure VI.
Public Public formal Public

informal
Private Private formal Private

Informal
Formal Informal
page
Figure VI: Davis’ MIS Formal & Informal Components
Part of the MIS is available for use by anyone in the organisation, and part is private, restricted to
only the person establishing it. The computer resource (in case of computer based MIS) is a part
of the public MIS, whereas the information that an executive receives from telephone calls,
letters and memos sent on a personal basis are examples of the private MIS. Likewise, part of the
MIS is formal and part is informal. The formal MIS is prescribed by procedure such as computer
programme. The informal MIS has no spelled-out routine. The size of the four boxes in Figure
VI are what it ought to be like – the largest being public-formal and the smallest being private-
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informal (which in an ideal case ought to be at the zero level which perhaps will never occur).
Attention must be directed also to the informal organisation structure. Management should try to
identify information needs that are not being fulfilled by the formal system and to incorporate as
many of these flows as possible into the formal MIS. Certainly those informal power centres of
the organisation that can influence the success of the MIS should be identified and included in the
design effort. One often wonders whether an MIS should straightaway be superimposed on the
existing organisation structure.
10.10 ROLE OF MIS AT VARIOUS MANAGEMENT LEVELS
Some say that management can be understood by observing what managers do. Managers get the
work done through others. Management can also be understood by the type of functions a
manager performs (see course MTM-01). In fact management is a process of achieving an
organisation’s goals and objectives by judiciously making use of resources of men, materials,
machines, money, methods, messages and moments (the last two in the context of information
being a vital resources to the manger/decision-maker).
Management can also be seen as structured into three hierarchical levels namely, top level,
middle level and bottom level or strategic, tactical and operational levels, respectively. Although
lines of demarcating are not absolute and clear-cut, one can usually distinguish certain layers
within the organisation which are characterised by classical pyramidical type of structures. Top
management established the policies, plans and objectives of the company as well as a budget
framework under which the various departments will operate. These factors are promulgated and
passed down the middle management. They are translated into specific revenue, cost and profit
goals particularly if each department works under a cost or profit centre concept. These are
reviewed, analysed and modified in accordance with the overall plans and policies until
agreement is reached. Middle management then issues the specific schedules and measurement
yardsticks to the operational management. The operational level has the responsibility of
producing goods and services to meet the revenue, profit and other goals, which in turn will
enable the organisation achieve its overall plans and objectives.
Planning
Planning
Control Organising
Organising
Control Staffing
Coordinating
Staffing
Coordinating
Top Level Bottom Level
Planning
Organising
Control
Staffing
Coordinating
Middle Level
Figure VII: The Allocation of Managers’ Time
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The hierarchical view of management is important for two reasons: information needs tend to be
different at different levels of management and the amount of time devoted to any given function
varies considerably with the level as can be seen in Figure VII. The job content at various
management levels is further elaborated in Table 1.
Table 1: Job Content of Management Levels
Sl. Top Middle Operating

No Character Management Management Management
1. Focus on planning Heavy Moderate Minimum
2. Focus on Control Moderate Heavy Heavy
3. Time Frame 1 – 5 Years Upto a year Day to day
4. Scope of activity Broad Entire functional Single sub- function or

area subtask
5. Nature of activity Relatively Moderately Highly structured

unstructured structured
6. Level of complexity Very complex, Less complex, Straightforward

many variables better defined
variables
7. Job measurement Difficult Less difficult Relatively easy
8. Result of activity Plans, policies Implementation End product

and strategies schedules,
performance
yardsticks
9. Type of information External Internal, reasonable Internal, historical;

accuracy high level of accuracy
Efficient, effective
10. Mental attributes Creative innovative Responsible, Efficient, effective

persuasive,
administrative
11. Number of people Few Moderate number Many

involved
12. Department divisional Intra-division Intra-division, Intra-dependent

interaction Inter department
In the context of MIS, management can perhaps be best defined as a process of

a) selection of objectives,
b) judicious allocation of resources,
c) determining operational plans and schedules,
d) keeping control of progress, and
e) evaluation through feedback.
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Each of these areas require certain decisions to be made.
Thus, we take strategic decisions at the top level, tactical decisions at the middle and
operational decisions at the junior level. As can be seen from Table 1, the type of problems and
decisions at the junior level are quite deterministic and structured and we can have programmed
decisions.
But as we move to higher level, situations become fuzzy, ambiguous and unstructured, and thus
we are faced with non-programmed decisions. We find that with the introduction of computers,
we have gone about routine EDP type of an activity for the essentially programmed decisions that
take place at the operating level. Perhaps with the rapid advances that are taking place in the field
of electronics, communication and computers, we might have good progress in the field of AI
(Artificial Intelligence) and accordingly devise knowledge based expert systems which would be
helpful at the strategic level to cater to non-programmed complex type of decision-making
situations.
Though the classic pyramidical structure is generally acceptable, unfortunately in the modern
complex organisation this neat, militaristic, configuration seldom(!) fits the reality. Under
conditions facing modern management the strategy and the control tend to become more remote
from the resources that are geographically spread and organisationally diverse. Between the
decision-maker and the resources lie systems – of people and data handling equipment – that can
distort, delay, amplify, and dampen messages. External to the enterprise, interest groups – in
government, consumers, labour representatives and other national and international agencies are
involved in an information exchange. The modern manager must be capable of managing his or
her information systems for strategic planning, management control and operational control.
The following guidelines for fitting the MIS function into the overall organisation could be of
help to the organisation :
• The level of reporting has a correlation with the performance of the MIS function. The
organisation where MIS function reports to Chief Executive has showed a higher success
rate, and
• For enhancing capabilities of the MIS function beyond providing services to a select user
group or limited range of services, it is very important to have MIS as an independent
function.
10.11 DESIRABLE CHARACTERISTICS OF MIS
It would be proper if we recall the desired characteristics of information, i.e., accuracy,

timeliness, objectivity, relevance, conciseness, etc. You will discover that some of these
characteristics are also the desirable characteristics of a good, effective and efficient MIS. The
process of developing an MIS is never ending as organisations strive to take advantage of new
technology and methodology. Indeed, even the newly-emerging computer systems concept of
‘information resource management’ (IRM) merely ‘upgrades’ the computer system and its
attendant information to the position of a resource that is to be husbanded and administered, much
as are other organisational resources.
This pervasiveness of computers and the increasing familiarity of people at all levels of the
organisation with them will, inevitably lead to a wide variety of new computer applications. More
importantly, however, it will lead to the amplification and acceleration of a phenomenon that is
already beginning to be experienced – the creation of a comparative business advantage
through information.
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The evolutionary process followed in achieving an MIS is called the MIS life-cycle which
consists of phases in a sequence of planning, analysis and design, implementation, operation and
control. The manager is ultimately responsible both for developing and using it. The information
specialists ought to serve as valuable technical assistants. No doubt, the information specialists
play a vital role in the development of MIS. They often trigger the manager’s interest in a new
system by informing the manager of a new technology or method. Though the specialists
recommend a particular system design, it is the manager’s responsibility to approve its
implementation. Once the manager makes the decision, it is the information specialists’ task to
implement the system. The MIS would have to preferably cater to the management/leadership
styles also. If there could be greater user-involvement at all stages of the MIS life-cycle, then the
end results would tend to be superior.
The system should help each executive in his or her decision-making process for problem
identification, generation and evaluation of alternative courses of action, to acquire necessary
feedback on implementing his or her decision and help him or her to take corrective action. The
MIS should develop the much needed management information rather than facts. It should
provide relevant data in a summarised form to the higher echelons, viz., the system should be
integrated through a centralised data base to cut down on redundancies, overlaps and costs. Apart
from the appropriateness of information at different levels, it is important to recognise that
different types of information are required for planning, control, and other managerial functions.
It might become necessary to computerise your system especially if you are dealing with a large
complex organisation or if you find that the existing manual based MIS is not in a position to
provide you with timely information. Make sure that the reports churned out from the MIS are
relevant and meaningful. They should be easy to understand and read with good documentation.
It is a good practice to distribute the reports only to those that genuinely need and make use of it.
The MIS should be robust but at the same time it should be flexible and sensitive enough to cater
to relevant changes in technologies, methodologies and the changed parameters. There should be
some type of a review undertaken periodically to assess the worth of the MIS.
Another crucial issue is the positioning of the MIS function in an organisation. It would always
be better to put this function under an independent charge with its chief directly reporting to the
chief executive. However, in some cases a decentralised user group reporting to chief executive is
also suggested. In fact, this positioning will depend on the nature of the organisation.
1) What do you understand by the term “functional Unit”?

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2) List a few desirable characteristics of MIS.

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10.12 LET US SUM UP
The Unit discussed various issues related to the management of information resources in
organisations and we have also tried to conceptualise management information and control
systems. Systems concepts and systems approach were also discussed along with certain concepts
of management in the context of MIS. A manager is primarily a decision-maker and a problem-
solver. Information is one of the prime resource inputs to his or her decision-making. It becomes
necessary to provide the right type of information to the right decision-maker at the right time.
Thus, the need for an effective system to provide information to management at all levels.
We studied Nolan’s Six Stage Growth Hypothesis to show how the MIS function grows in an
organisation. Initially, the organisations commit their financial resources little realising that these
commitments have to be carried on even subsequently. The control stage on this model explains
the relevance of management intervention in the functioning of the MIS department, so as to
develop certain control measures to avoid the unplanned growth of the MIS resource. It is during
the second part of the growth cycle from the fourth stage onwards that the actual benefits of
technology could be realised in organisations.
Top management interest is indicated by way of steering committees, set up to forward the cause
of the MIS function and the relative organisational position of the chief of MIS function. A
policy for charging for the services rendered to the users could be in the interest of the MIS
function, because only then the function can justify its existence. Critical success factor analysis
has been identified as the best approach to assess the need for this function in any organisation.
The whole organisation could be thought of as an information network, both formal and informal,
connecting various decision centres at various levels. Managers at different levels perform
different managerial functions and hence require different types of information. A conceptual
framework outlining the desirable features of MIS have been described which could lead you
toward the design of an MIS, if you do a little more reading on the subject.
10.13 KEY WORDS
Analysis : The methodical study of a problem. Especially the

modularising of a problem into smaller and simpler
problems. Usually used in a nonbusiness sense (such as
numerical analysis, operations analysis) unless combined
with a business term.
Audit : Examination and verification of records.
Business System : A system used to accomplish some business goal. Typical

business system include accounts receivable systems, payroll
systems, banking systems and so on.
Central Processing Unit : Directs the operation of other units in a computer and
performs the data manipulation and computations needed to
effect the desired transformation of the input data.
Frequently written CPU. When the word computer is used to
mean less than a complete computing system, it generally
denotes the CPU. The computers referred to as mainframe.
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Communication System : Used to convey data from one point to another. Consists of a
message source, message channel and message receiver.
Also called data transmission system, data communication
system and the like.
Data Base : Some number of files. Most data bases have names
(corporate data base, financial data base, production data
base and so on).
Implementation : The step in the system life-cycle where a system design is

constructed as a real business system.
Installation : The step in the system life-cycle where a new business

system is put into use. Also used to mean a business or
computing facility.
Management by Exception : A principle of management where attention is focused only

on performance. The phrase used in connection with the
presumed action required where reports on performance
differ from original projections. Characteristically these
reports bring out ‘favourable’ and ‘unfavourable’ variances,
the latter being the basis for ‘Management by exception’.
Modular System : A system composed of distinct sub-systems. The sub-

systems are called modules.
Storage : A mechanism into which data can be entered, in which it can

be held, and from which it can be retrieved at a later time.
Loosely any mechanism that can store data.
Systems Analysis : The step in the system life-cycle where a detailed study is
made of the need and its solutions and the environment in
which they must exist.
Systems Life-Cycle : The sequence of steps through which a typical business

system passes; need, conception, feasibility study, system
analysis, design, implementation testing installation or
conversion, production maintenance and cessation.

1) A system is made up of sub-systems which may be composed of further sub-systems. We

could carry on this refinement till we arrive at the ‘black box’ level which is some perceptible
manageable level.
2) For studying the growth of the MIS activity in an organisation we could apply the model
developed by Richard Nolan in 1979, popularly known as the Stage Growth Hypothesis.
This is a six-stage model which very clearly explains the stage by stage development of the
MIS function in an organisation.
Read Sec. 10.3 to answer in detail.
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1) Organisations commonly face the following problems in MIS planning:

a) The MIS plan may not be compatible with the overall strategies and objectives of the
organisation,
b) The framework of MIS structure may be difficult to design,
c) Allocations of development resources to various applications may be difficult, and
d) Project management to control time and cost schedule, may be lacking.
Read Sec.10.4 to know more about MIS planning.
2) The Research team at Sloan School of Management, suggested a creative approach termed as
CSF approach for information requirement analysis. Its application was found effective and
response-provoding amongst the executives. As a part of the exercise, the executive goals and
the CSFs are identified and reviewed to the satisfaction of both the executives and the system
analysts.
Read carefully Sec. 10.6 and answer in details.
1) An activity centre is where certain actions or activities take place which change the level or
state of the system. These activities are carried out because of higher level direction received
from the managers at the decision centres which have their own set of decision procedures or
norms. The combination of an activity centre plus decision centre is termed as Functional
Unit because it performs a function.
Read carefully Sec. 10.9 and answer with figure.
2) A few desirable characteristics of MIS are:

a) Accuracy, timeliness, objectivity, relevance, conciseness, etc. are the desired
characteristics of information. Of these characteristics some are also the desirable
characteristics of a good, effective and efficient MIS.
b) The MIS should develop the much needed management information rather than facts.
c) The reports churned out from the MIS should be relevant and meaningful.
d) The reports should be easy to understand and read with good documentation.
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UNIT 11 COMPUTER, MANAGEMENT FUNCTIONS AND
DECISION MAKING
Structure
11.0 Objectives
11.1 Introduction
11.2 Financial Decision-making
11.3 Personnel Decision-making
11.4 Marketing Decision-making
11.5 Production Decision-making
11.6 Materials Decision-making
11.7 Maintenance Decision-making
11.8 Let Us Sum Up
11.0 OBJECTIVES
• understand the role of computers in Management Decision-making, and
• appreciate the need for proper handling of the information and an efficient Management
Information System at corporate level.
11.1 INTRODUCTION
The common experience in the Indian scene has been a plethora of transaction-processing
systems which have been abiding for long. Left to themselves, computer professionals have
usually been good at planning, designing, developing and implementing the transaction-
processing systems, due to their inherent advantages of recurring qualitative data and decisive
logic base. On the other hand, MIS at a corporate level always needs involvement of the user-
manager in an intensive way and this has shown a tardy growth.
In this Unit we take up some selective applications of computers in the decision-making areas.
11.2 FINANCIAL DECISION-MAKING
At corporate level MIS would still need the database comprising the transaction-processing
inputs, such as, cash transactions, receipts, issues, return, foreign exchange earned or spent,
rejections, interests, depreciation, etc. The other inputs are in the nature of the various accounting
rules and procedures, apart from the scales of payment.
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Based on the above, the financial management decisions are made with monthly and annual final
accounts, profit and loss accounts, balance sheet, etc. In addition, cash accounts are needed by
management, apart from the cost accounting for pay-roll accounting, suppliers ledger and
preparation of capital and operations budget.
To build up a corporate-level MIS for a tourism organisation, one can look at such selective data
as bills payable and bills receivable, and segregate them commodity-wise, establishment-wise,
region-wise and agent-wise. This immediately gives a management decision-making capability to
examine and take remedial action on the differences and deviations from the set pattern. The
analysed data for financial decision-making can have various management ratios and
management trends leading on to managerial forecasts. Linked data can be of the form of inter-
related items between finance and inventory, between finance and marketing, between finance
and production costing, and between finance and personnel. Integrated data can take the form of
obtaining a picture for total credit, total sales turn over, total profit and so on.
The corporate areas to be helped would be cash planning, credit planning, profit planning, and
facility planning. For instance, cash inflow and outflow are of great interest for most
organisations and much monumental bankruptcy takes place in organisations due to the faulty
cash-flow adjustments. Similarly, the credit planning takes care of voluntary and involuntary
credit, in establishment where voluntary credit is often deliberately introduced to push new
products, to lift accumulated stock or to provide relief to bulk customers. In all such areas,
decision-making is facilitated by an appropriate MIS, as has been experienced in many
organisations.
In service organisations, investment planning and budget planning are additional features.
Interestingly, budget planning can be a common feature in both production and service
organisations. The tourism organisations have shown a tremendous scope for corporate MIS in
terms of trends, analysis and forecasts arising out of various reconciliation processes such as
inter-branch, inter-agents or even for such instruments as travellers cheques and so on. Financial
data can be generated and stored for hotel tariffs, package tour costs, commissions to distributors,
volume of business provided by distributors, etc.
In the domain of public administration, commercial tax data-base has been built up in some of the
Indian states for various categories of taxes on commodity-wise, establishment-wise, region-wise
and year-wise bases. Such a data-base has given rise to a capability of concentration upon tax
evasion cases selectively, to strengthen the inspection machinery for tax non-realisation cases, to
keep track of recovery of diverse installments in court-injunction cases and generally to
streamline pursuit of the outstandings.
11.3 PERSONNEL DECISION-MAKING
Personnel pay rolls have been an old hat in transaction-processing systems. In a number of
organisations, pay-rolls have been extended to cover the entire gamut of employee service,
namely, income-tax assessment and recovery, provident fund accumulation and withdrawal,
compulsory deposits (when they existed) and statutory reports and returns. A comprehensive
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database for personnel decision-making would require not merely such financial data but also
other categories of pre-recruitment and post-recruitment personnel data.
Examples of comprehensive personnel data would include prior qualifications, experience,
categories and grades of posting, places of transfer, experience gained, new qualifications,
acquired, training undertaken, disciplinary actions, merit rewards and performance appraisals, etc.
Such a data-base can be used for retrieval of selective data to assess grade-wise, year-wise and
region-wise personnel inflow and outflow, for deciding upon recruitment planning as well as
promotion planning. A similar approach can be undertaken to match availability of persons
experience-wise, location-wise and duration-wise with the demand of such persons in new
locations with appropriate grades and experiences for purposes of personnel plan. Career
development planning can also be done while looking at the grade-wise, experience-wise and
qualification-wise profile and decide on fresh areas of training and education.
Finally, retirement planning can be done by looking at the selective aggregation of data on
personnel wastage, so that recruitment can be undertaken and the bulk of retirement benefits can
be released rightaway pending the settlement of accounts.
Personnel decision-making based on corporate MIS has become quite common in a number of
large organisations in the country. In addition, states like Andhra Pradesh and Madhya Pradesh
have often done personnel planning for doctors and teachers respectively using comprehensive
database approach. Bhilai Steel Plant has planned total human resource management with
creation of complete data-base including history and skills of personnel; and manpower planning
and administration, including establishment functions; training needs as identified in the appraisal
reports and so on.
In tourism many jobs are seasonal and in certain cases outside people are hired (like guides,
escorts) to carry specific jobs. Any good organisation will keep a database of such persons with
quality rankings and their rates for the services. This data needs constant upgradation.
11.4 MARKETING DECISION-MAKING
Sales invoicing and sales accounting have been the early transaction-processing systems in most
organisations. The inputs can be the deciding of a tour package, inspection of all the places of
concern and despatch of documents on tours arranged and despatched apart from the price
schedules, some occasional returns. Such data can be built into a comprehensive data-base which
can help eventually the market planning and the publicity (advertisement) planning on one hand
and linkages with order-processing on the other.
Both market planning and publicity planning depend on the creation of a number of profiles with
full particulars such as customer profile, product profile and user industry profile. The seasonality
of orders, the trends in market fluctuations, the philosophy of industrial indents and the ebb and
flow of relevant markets can be assessed and taken care of in such a planning process.
Destination data, customer profile data, costs data etc. come handy in designing the
product/service mix along with the product line. Similarly data on competition is also useful for
marketing planning.
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On the other hand, linkages with order-processing gives a vital control on the quantity of tours to
be arranged or suspended to meet live and dead orders, respectively. Such a dynamic inter-facing
can help to eliminate a lot of infructuous order execution and finished tours inventory creation.
1) How can a data base help in financial decision making?

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2) What types of marketing data can be used in tourism?

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11.5 PRODUCTION DECISION-MAKING
The production of goods is a general term used very often in most of the organisation. In the
service sector it can be thought as a substitute for the service to be rendered or specifically in the
tourism sector, for example, it can be a term used to specify all the tour packages specially
designed every year as the goods produced.
The basic inputs are the salient production data collected periodically from all the production
units or designing units as and when the main events occur. The corporate MIS would involve:
performance review on a periodic basis (daily, monthly and annually), monitoring of in-process
inventory, other performance statistics, comparison of the current production with the past
performance, receipt and consumption of services and energy resources and daily analysis of
performance.
Corporate production decision-making involves production planning and control (PPC) and this
involves certain elements:
• The first element of PPC is the order processing involving maintenance of current status of
orders and despatch programmes.
• The second element of PPC is the corporate production MIS indicated earlier.
• The third element of PPC is the material tracking including maintenance of detailed
production schedules through various stages of operations (from initial idea up to the final
finishing); in-process material and so on.
• The fourth element of PPC is the planning, including annual plans based on market demands;
maintenance schedule and corporate plan requirements; quarterly and monthly plans based on
annual plans and organisation targets; daily plans for fulfillment of monthly plans;
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comparison of plan versus performance at different time intervals; and preparation of
subsidiary plans for requirement of raw-material, energy resources and finished inventory.
Many organisations have today incorporated PPC as part of their corporate MIS. This is very
useful in hotel, airlines and tour operators.
11.6 MATERIALS DECISION-MAKING
Materials accounting based on receipts, issues, returns, and rejections have been the part of
transaction-processing system in all organisations so far. For the purpose of materials decision-
making, comprehensive databases can have three components of purchasing, inventory, and
materials review.
The purchasing data-base can help creating a corporate MIS for monitoring of purchase indents
up to acceptance of tenders, monitoring of purchase orders against schedules of delivery, analysis
of lead-time delays, vendor-rating (in terms of quality performance of delivery schedule), and
monitoring payments against deliveries.
The inventory data-base can help increasing a corporate MIS for preparation of standard
specifications for regular consumption items, prompt inspection and acceptance of delivered
goods, preparation of receipts documents, monitoring of stock balance, purchase dues, and
indents dues; monitoring of procurement of regular consumption items, decentralised control of
consumption, analysis of consumption and movement (particularly for slow moving, non-moving
and critical) of items for control forecasting and budgetary control of consumption and
procurement and so on.
Materials review data-base can help in creating a corporate MIS for the on-going review of the
various control parameters such as re-order level, re-order quantity, the phasing of deliveries for
‘A’ class items, the bulk purchasing of ‘B’ and ‘C’ class items and so on. Basically, materials
review should look critically at all the expected norms of purchasing and inventory so that a
dynamic adjustment is possible before the on-set of any crisis.
Materials review data is essential for hotels and tourist transporters along with others subsidiary
products and services in tourism like emporiums, restaurants, etc.
11.7 MAINTENANCE DECISION-MAKING
Maintenance management distinguishes between preventive maintenance and breakdown

maintenance. While preventive maintenance can be planned, the breakdown maintenance is
invariably unplanned.
As regards plant preventive maintenance, the experience with oil refineries, industrial blast
furnace, dock facilities and thermal projects have all shown that a thorough planning and a
scheduling of preventive maintenance can be immensely time-saving and cost-reducing. The
same is applicable in case of tourism transport operations and hotels maintenance, vehicle
breakdown or bad maintenance in hotels can adversely affect the business.
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Transaction-processing systems have looked at the records of components, spare-parts, jugs,
fixtures and tools as inputs, and consumption statements and maintenance accounts as outputs.
These inputs can still be valid for building up a corporate MIS with such additional data as
equipment conditions, history of failures, direct cost of maintenance, inventory values and
materials movement, man-hours spent, over-time paid, other resource usage, maintenance of
employee’s performance, reliability and maintainability of equipment, and maintenance
contribution to the finances.
From such a comprehensive database, one can generate MIS reports for transport control, such as
vehicle register (to provide vehicle specifications and project details), vehicle history (to provide
maintenance particulars), major failure report, forecast on maintenance (providing probable
failure time and period), office non-availability, reliability and maintainability, and maintenance
schedules (providing maintenance activities to be done during a specific period). One can also
generate MIS reports on work control, such as, craft performance report (providing planned and
actual performance of each craft), craftsman’s performance report, maintenance planning
efficiency report (providing an efficiency ratio on planned activities), overtime report, resource
levelling report (providing analysis of resource required job-wise), delay cause report, etc. One
can finally generate materials control reports and cost control reports providing management
details of costs and material transactions involved in maintenance management.
1) Discuss the four elements of PPC.

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11.8 LET US SUM UP
This Unit provided a brief account of the practice of computer-aided decision-making in such
selected functional areas as finance, personnel, marketing, production, materials and maintenance.
These can be applied to many other services as all have similar needs to build up from basic
inputs a good quality database each and then to evaluate selective data, analysed data, inter-linked
data and aggregated data to derive suitable MIS support to decision-making at the corporate level.
The practice is becoming more and more endemic in the Indian environment and the proliferation
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can only be beneficial to the management in the long run. Medium and small enterprises in
tourism should make use of this practice for a professional decision-making.
1) The financial decisions are made with annual and monthly final accounts, profit and loss
accounts, balance sheet, etc. All the above are based on data base. Study Sec. 11.2 to learn
more about financial decision-making.
2) Data on tours arranged and despatched, destination data, customer profile data, costs data,
etc. are the marketing data used for tourism. Study Sec. 11.4 to know more about marketing
data used.
1) The four elements of PPC are:

i) Maintenance of current status of orders and despatch programmes,
ii) Corporate production MIS,
iii) Maintenance of detailed production schedule and
iv) Planning.
Study Sec. 11.5 to know more about PPC.
2) Maintenance decision-making is helped by data as comprehensive database help generate

MIS reports for providing management details of costs and material transaction involved in
maintenance management. Study Sec. 11.7 and answer in detail.
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UNIT 12 SYSTEM ANALYSIS AND DESIGN:
AN OVERVIEW
Structure
12.0 Objectives
12.1 Introduction
12.2 Systems Concept
12.3 Systems Analysis – What and Why?
12.4 System Life Cycle
12.4.1 Objectives and Feasibility
12.4.2 System Analysis
12.4.3 System Design (Logical)
12.4.4 System Design (Physical)
12.4.5 Implementation
12.4.6 Maintenance
12.5 Let Us Sum Up
12.0 OBJECTIVES
After going through this Unit, you should be able to:
• understand the concept of system,
• understand what and why of Systems Analysis,
• develop a broad appreciation of the design and development of Computer Based Information
System (CBIS),
• know about the various aspects and components of System Life Cycle in a CBIS, and
• appreciate the efforts involved in each of the stages of the system life cycle.
12.1 INTRODUCTION
You already have a fairly good idea about system from Unit 8. As you know, “a system is an
organised, interacting, interdependent and integrated set of components/variables/ parts. A system
has objectives or goals” (Lucas, 1985, p-5)
This Unit, apart from briefly repeating some of the earlier discussed ideas, further builds upon
them.
System analysis and design provides a structured approach to the design and development of
Computer Based Information System (CBIS). A CBIS is a set of software packages which
when executed, provides information for decision-making, i.e., it is a help and a part of MIS.
Designing and developing of CBIS is one of the most important activities in any organisation, as
it involves people at different levels in the organisation. Like any living organism, a CBIS also
has a life cycle.
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Regardless of where the data or information processing system has been implemented, what
functional area it addresses, what level of management it caters to and who has designed,
developed and implemented it, the growth of an information system passes through various
identifiable stages and all these stages put together are referred to as the System Development
Life Cycle.
The system size, complexity and coverage do not affect these stages, any system designed for
processing of information revolves around a life cycle that begins with the recognition of the
problems and ends up with development and implementation of the system.
To appreciate the stage involved in design and development of an information system and the
efforts required to build up these systems it is a must that managers should be familiar with the
distinct stages of this cycle. The various stages and related issues have been discussed in this
Unit.
12.2 SYSTEMS CONCEPT
A couple of other definitions of systems are –
• Webster unabridged dictionary describes system as a set or arrangement of things so

related or connected to form a unity or organisation.
• A system is a set of elements forming an activity or a processing procedure/or a scheme,

seeking a common goal or goals by operating on data/and/or energy and/or matter (inputs) in
a time reference to yield information and/or energy and/or matter (output) (Murdic Ross and
Claggett, 1990, p.15)
There are also several ways of classifying systems. Three such classifications are: (1) Natural or
man-made (2) Closed or open (3) Conceptual or physical.
Natural systems occur in nature, like the solar system, On the other hand man-made systems
are deliberately created for specific objectives. For example, Communication System, Transport
System, Organisations, etc.
Closed systems theoretically, are self-sufficient and have no interaction with their environment.
In practice, those, which are relatively cut off from the environment are termed as closed.
Whereas open systems exchange information and/or energy and/or material with their
environments. As members (parts) of a system they receive from the environment as inputs and
give to the environment as output.
Conceptual systems are theoretical in nature and deal with concepts which may or may not
physically exist. Sometimes it may be possible to convert a conceptual system to a physical
system, for example, Social System, Economic Theory, etc. In contrast physical systems
physically exist in real world. They are generally man made, e.g., Production System, Power
Generating System, Fire Control System, etc. However, these classifications are not necessarily
exclusive of each other. For example, there can be a system which is man made, open and
physical.
The information systems are considered to be evolved through three different levels of systems.
These are:
a) Conceptual System: Every information processing system is evolved by way of a concept

when somebody imagines that the organisation should have such and such a system to
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accomplish such and such an objective. A system so conceived may or may not be attained in
reality. A conceptual model is no more than an idea.
b) Logical System: When the conceived system model is further worked out to design new
ways to accomplish the objective set out in the conceptual system, it becomes the logical
system design. A logical system design necessarily includes understanding of the flow of
information, logic of processing and input-output relationships. The Data Flow Diagrams,
Flow Charts, etc. are the basic components of the logical models.
c) Physical System: When the logical models are developed to actually deliver the desired
results, it is referred to as a physical system model. The physical system model can be tested
and implemented. It consists of programmess, data files and documentation.
In subsequent sections, we will be particularly discussing the in open, physical man made systems
such as Organisations and Computer Based Information System which is used in MIS.
1) What do you understand by system? How can we classify systems?

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2) What are the three different levels of information system?

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12.3 SYSTEMS ANALYSIS – WHAT AND WHY?
What is Systems Analysis? Well Harry Coode and Robert Machol mentioned that:
For more than a decade, engineers and administrators have witnessed the emergence of a
broadening approach to the problem of designing equipment. This phenomenon has been
poorly understood and loosely described. It has been called Systems design, Systems
analysis and often the Systems approach. Rarely does the speaker using these terms intend
to convey those concepts which are brought to the minds of his or her hearers, nor for that
matter are any two hearers likely to be in agreement.
Analysis of the system means identification, understanding and critically examining the system
and its parts (sub-systems) for the purpose of achieving the goals (objectives) set for the system
as a whole, through modifications, changed interrelationships of components, deleting or merging
or separating, or break up of components. It may also involve upgrading the system as a whole.
The methodology of systems analysis involves:
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1) identification of the system (setting system boundary), the system objectives, the system
elements (components), and
2) understanding the role and interrelationship of elements with other elements of the same
system.
This identification and understanding process generates:

1) the capability (or background), the system objectives, the system elements (components), and
2) system functioning vis-à-vis the system objectives.
Outcome of the systems analysis job is a set of recommendations towards creating a system
which best meet its objectives giving due regard to cost-effectiveness and the risks.
Systems analysis, thus, emerges as a means through which the total system is conceived,
designed, implemented and made operational to achieve the desired objectives. The basic
objective of systems analysis is to understand and modify the system in some way to improve its
functioning. The modification may require one or more of the following: change the outputs,
change the goals of the system, make it more efficient, have different set of inputs or improve in
some other way or even create a new system.
Why Systems Analysis?
The understanding of what systems analysis is, itself provides an insight into its importance and
why it is needed. Systems analysis basically is an approach towards viewing the processes,
activities, and complex problems in their totality. Thus, specifically it:
• offers a means to greater understanding of the complex structures,
• is a means to trade off between functional requirements of a subsystem (component) and its
immediately related subsystems,
• helps in understanding and comparing functional impacts of subsystems to the total system,
• helps in achieving inter-compatibility and unity of the purpose of subsystems,
• helps in discovering means to design systems where subsystems may have apparently
conflicting objectives, and
• helps in placing each subsystem in its proper perspective and context, so that the system as a
whole may best achieve its objectives with minimum available resources. It thus creates
synchronisation between systems and objectives.
Thus, systems analysis is one of the important techniques that provides a systematic and broader
outlook to understanding, examining and creating or modifying systems to meet specific
objectives. Systems analysis and design is an interactive and creative process.
12.4 SYSTEM LIFE CYCLE
The various stages in the life cycle of a CBIS are described in detail in the following Sub-
sections.
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12.4.1 Objectives and Feasibility
The first and the most important step is to provide a broad statement of organisational objectives,
for the proposed CBIS. This is primarily a responsibility of the top management, since this
Information System is expected to help the organisation and the management in the discharge of
their function. The Information Systems development effort begins by understanding the
organisations objectives, for these are required to be translated to constitute the objectives of the
Information System.
The next step is to examine the feasibility of the proposed system. This involves considering
various broad alternatives, such as, valuating the costs and benefits of the system. Initially a
rough cost-benefit analysis will be sufficient for the top management to take a decision either in
favour of or against the proposed CBIS.
Costs include costs of design, development, implementation and maintenance of the system.
Benefits will be realised from the timely and accurate generation of required information to meet
the stated objectives of the organisation. It is to be realised that a database created for a particular
CBIS application usually serves other applications as well to a certain extent. For example, a data
base for pay roll accounting can be used for applications such as Provident Fund (PF) accounting,
Retirement Benefits Accounting, Personnel Information Systems, etc. Such indirect benefits also
should be considered in the feasibility analysis. Also, even though system objectives in relation to
management/ organisation objectives have already been discussed, they are again reviewed and
made more specific with respect to peak level processing loads, complexity of processing, time
frame for various types and categories of output, frequencies of occurrences, communication
needs, etc. On the other side, assessment is also made of the restrictions or constraints on the
system. These restrictions may be external or internal and may be with respect to content,
processing requirements, procedures, input/output formats, data frequency; data accuracy, units of
measurement, etc.
External constraints may be due to government regulations, customers, suppliers, unions, social
groups, etc. Internal constraints can be due to the areas of operations of the organisation, its
policies, attitude and support of top management, the prevalent work culture within the
organisation, cost and resources for the proposed system, willingness of the user employees,
availability of required skilled manpower, internally and externally, etc.
Identification, recognition and understanding of both internal and external constraints is crucial
to designing a viable system. As part of the design effort, the designer provides for these
restrictions and knows to some extent what he or she can do and what he or she cannot do to
attain the stipulated objectives of the system. In the process, sometimes one may have to
review/or prune the system objectives or he or she may try to overcome some of the restrictions.
This exercise is also a basic part of feasibility analysis at a general level.
The systems objectives are transformed into specific information needs of the organisation or, for
that matter, of the manager users. A clear understanding and aggregative view of management’s
information needs is the base on which the whole design is erected. Special efforts are needed for
assessment of organisation as well as user manager’s information needs. So, information needs
which can really help the management in discharge of their functions are identified. An easy way
to judge the feasibility of a system is to ask a few questions, like:
a) Is the proposed system worth developing?
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b) Will the proposed system contribute by way of improved efficiency, productivity or
organisational effectiveness?
c) Will the system improve information availability and be cost-effective?
d) What will be the system development costs and will these be justifiable?
e) How will the user departments take this system and what will be the overall impact of this
system on the organisation?
The key considerations involved in the feasibility analysis are:

• Economic,
• Technical, and
• Behavioural
As discussed earlier, the economic feasibility will only consider the cost/ benefit analysis of the
proposed project. The benefits are always expected to be overweighing the costs.
The technical feasibility always focuses on the existing computer hardware and software. This
also includes the need for more hardware or software and the possibility of procuring/installing/
maintaining such facility.
The behavioural feasibility includes a study of the organisational behaviour. An estimate of how
strong the user reaction will be to the new system will have to be made at this stage.
The final output of this step is a Feasibility Report having discussions on Financial Feasibility,
Economic Viability, Technical Feasibility and Social Acceptability of the proposed system.
Feasibility study is a part of Systems Analysis. Experience has shown that delaying or neglecting
feasibility study is one of the major reasons for the failure of a CBIS.
12.4.2 System Analysis
Systems Analysis is the next stage in the life cycle of a CBIS. The system analysis includes
review of the existing procedures and information flow. Decision-making and individual
information needs at various levels in different functional areas are also reviewed. The system
analysis phase primarily focuses on isolation of deficiencies from the existing system.
The fundamental activities involved in the system analysis are:

• Definition of the overall system,
• Separation of the system into smaller and manageable parts, and
• Understanding the nature, functions and interrelationships of various subsystems.
The analysis of the information systems could be done with the help of various tools of system
analysis. Some of the tools which are available with the system analysts are:
i) Review of Documentation: Documentation on the existing system could be reviewed and

analysed to study the objectives, reports, procedures being followed and equipment being
used. The only limitation with this technique is that the documentation on any existing system
is never complete and up-to-date.
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ii) Observation of the Situation: The system under study can always be observed by getting
involved in the system. The system analyst can work in the system or can be a mere observer.
The exercise is time consuming and costly. Also it has an inherent limitation of the fact that
the analyst may never be able to observe the intricacies of the system.
iii) Conducting Interviews: The system analyst can conduct interviews with the user managers
and ask questions related to their job responsibilities. The interviews could be formal or
informal ones and may span over a period of time. The limitation of this tool is that the user
manager may not be able to explain the problem in detail.
iv) Questionnaire Administration: A printed structured or unstructured questionnaire may be

administered to find out the information needs of individual managers. The questionnaire
survey does help in saving time as compared to interviews as well as gets more committed
data, but it is impossible to design an exhaustive questionnaire to cover various aspects of the
system under study.
The analysts use a combination of all these tools to analyse an existing system. The analysis
phase is a time consuming phase and yet a very crucial phase. In brief the steps involve the
following:
• understanding the organisation to identify the flow of information between different levels in
the organisation,
• a detailed examination of the proposed system (application area) for CBIS,
• identifying alternative approaches to meet the stated objectives on the system,
• evaluating the costs and benefits of each alternative in detail, and finally,
• choosing the ‘most appropriate’ alternative.
Systems Analysis involves teamwork and a considerable amount of time. A clearer picture of
costs and benefits of alternative approaches will emerge from a detailed study of the proposed
system. Involvement of ultimate users of CBIS is very crucial at this stage itself, so that the
acceptance of CBIS upon implementation will be relatively easy.
12.4.3 System Design (Logical)
If the system analysts phase defines the way things are, the Logical System Design phase defines
the way things should be for the same problem.
The system development phase includes mapping of the business requirements of the managers
on to the proposed system. The conceptual design for the model which has been developed in the
problem definition stage is enlarged to understand the actual flow of data and the logical model is
developed. The logical model is worked out to finally develop and test the physical system in the
system development phase.
Providing a Logical System Design for the chosen alternative involves:

• understand user requirements,
• identifying data requirements,
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• suggesting a logical organisation of data, and
• suggesting a logical procedure to produce the desired outputs from available inputs.
It is very important that we understand the requirements of various users in the organisation.
Users at different levels in an organisation have different information requirements for decision-
making. Information requirement can be broadly classified into three groups as follows:
• monitoring and control decisions,
• planning decisions, and
• policy and strategy decisions.
Detailed discussion between designers and ultimate user is very essential to estimate users’
requirements clearly. This includes identifying report contents, frequency of reporting, formatting
of reports and presentation of reports (tabular vs. pictorial), for each user.
After estimating users’ requirements, a system designer works backwards to identify data
requirements. This includes identifying data sources, the nature and type of data that is available,
and data gaps.
The next step is to establish a processing logic to produce the desired outputs from the available
inputs. This step involves a data flow analysis and a data processing analysis. Data flow
analysis helps us to arrive at a logical organisation of data into computer files. A file is a
collection of similar records, each record has a number of data items (fields) of information of a
particular entity. For example, a payroll file will contain many payroll records, each record
carrying the necessary data items (fields) of information of an employee, like name, designation,
basic salary, etc.
A logical representation of data flow analysis and data processing analysis in a CBIS can be
effectively provided through structured system design tools. These are:
a) Data Flow Diagram
A Data Flow Diagram (DFD) is a graphical representation to depict the flow of data in a CBIS. It
should be realised that a DFD provides only a logical data flow and not a physical data flow.
A logical data flow in a CBIS can be explained as follows: Data originates from a Source,
undergoes some Processing and terminates in a Sink. The processing step may require data
stored elsewhere in Data Stores, over and above what is supplied by the source. Similarly the
output of processing may be an intermediate data store which is used for subsequent processing.
These components of a DFD are presented graphically, using the following conventions:
• a closed square box to denote source/sink,
• an open rectangular box to denote intermediate data store,
• a circle to denote processing, and
• an arrow to denote the directional flow of data.
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For example, consider the case of a ‘pay roll accounting’ system, to prepare salary statements for
each employee of an organisation. Data flow for such a system can be represented as shown
below in Figure I.
SALARY
STATEMENTS
EMPLOYEE
data on
ACCOUNTS employees PAYROLL
OFFICE PROCESSING
UPDATED
UPDATED DATA DATA ON
EMPLOYEES
Figure I: A DFD for Payroll Processing
In Figure I, data on employees originates from accounts office (source), gets processed, salary
statements go to employees (sink), and updated data on employees (e.g., total tax deducted, total
contributions to provident fund, etc.) is stored in an intermediate computer file (data store) which
is needed for subsequent processing next month.
A DFD displays data flow in a top-down approach. Therefore, we start with a macro DFD and
‘explode it’ into micro DFDs. Care has to be exercised to provide clarity for each level of DFD.
Towards this, a standard practice is:
i) not to use more than one page for one DFD, and
ii) not to show more than 6 or 7 circles (processing steps) in each DFD.
Figure II illustrates this practice.
updated data updated data

on employees
salary statements
EMPLOYEES
data on gross salary on

ACCOUNTS employees Computing employees Computing
OFFICE Gross Salary 1 Net Salary 2
deductions
deductions
on various
categories
Figure II: A DFD Payroll Accounting
While exploding a DFD into lower levels, it is very essential to maintain a continuity and linkage
between a DFD and its member DFDs. This is achieved by numbering each circle (processing
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step) by adopting the numbering system used in text books. In a text book, chapters are numbered
1, 2, 3, …, sections within a chapter have numbers as extensions of the chapter number, e.g., 1.1,
1.2, 1.3, … and sub-sections within each section numbered as 1.1.1, 1.1.2, 1.1.3, etc. Similarly
circles in DFDs are numbered as 1,2,3…, 1.1, 1.2, 1.3,…, 1.1.1, 1.1.2, 1.1.3, ….
The following Figure III illustrates this numbering convention.
PROCESSING 1 PROCESSING 2
1.1 1.2 2.1 2.2
1.1.1 1.1.2
Figure III : Numbering Convention
Such a hierarchical approach to drawing DFDs provides a clear logic for system design, a proper
documentation of processing steps and an estimate of processing requirement.
b) Data Dictionary for Data Flow Analysis
A Data Dictionary (DD) is intended to provide a complete documentation of all the elements of a
Data Flow Diagram, namely data items, data stores, and data flows. Data described in a DD
carries the following details:
Data type Data item/data store/data flow
Data name Name of data item/data store/data flow
Data aliases Alternate names used for convenience by multiple users
Data description A short description of data, explained in simple terms
Data characteristics Characteristics of each data type.
A data item is characterised by its type (numeric/ alphanumeric),
width, etc.
A data store is characterised by its composition (set of data items),
organisation (sequential, random), etc.
A data flow is characterised by its origin, destination, etc.
Below we describe the contents of a DD for a sample data item, data store and data flow for a
CBIS on payroll accounting.
i) DATA ITEM
• Data type Data item
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• Data name G-SALARY
• Data aliases Wages
• Data description Monthly gross salary of an employee
Data characteristics
Type Numerical
Width 7.2
4 digits for the rupee component
1 digit for the decimal point
2 digits for the paise component
Associated data stores Payroll file

Personnel file
Associated data processes Payroll file

PF accounting
Personnel information systems
ments Gross salary is based on employees designation, and hence falls within a specified range.
ii) DATA STORE
• Data type Data store
• Data name Payroll file
• Data aliases Salary file
• Data description Master file on employees for payroll accounting
Composition EMP-NAME
Designation
B-salary
Department
:
G-Salary
:
Organisation Sequential file
Volume 1000 records (approximately)
Size 350 K bytes (approximately) per record
Associated data processes Payroll accounting

PF accounting
Inbound data flow
Outbound data flow
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Comments This file gets updated every month at the time of payroll
processing. On an average, in a large organisation, about
5 records are deleted per month ( retiring/leaving the
organisation) and about 10 records are added per month
(new appointments).
iii) DATA FLOW
• Data type Data flow
• Data name DATA ON EMPLOYEES
• Data aliases
• Data description data on employees required for payroll processing
Origin Accounts office
Destination Process 1 in payroll accounting
Contents EMP-NAME
Designation
B-Salary
Department
Associated data processes Payroll accounting
Associated data stores
Comments
c) Decision Tables
A decision table displays and documents clearly the processing logic for each processing step
identified in a DFD.
A decision table has the following structure.
Combination of conditions
Condition 1 Y
Condition 2 ····
Condition 3 Y
Action 1
Action 2 Y ····
This table is to be read from top to bottom, one column at a time. For example, interpret column 1
as follows: If conditions 1 and 3 are satisfied, then take action 2.
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For illustration, consider an ‘accounts receivable’ application in ABC Corporation. Customers are
prioritised based on how much they owe to ABC Corporation and for what length of time. The
following procedure is used to classify customers into A, B, C categories. A customer is a A type
customer if the amount due from him is not for more than one month. A customer is a C type
customer if he owes at least Rs.6,000 for a period exceeding 2 months or if he owes less than
Rs.6,000 for a period exceeding 3 months. All other customers are classified as B type customers.
This logic can be represented in a decision table as shown below:
C
o Period due: less than 1 month Y Y
n 1-2 months Y Y
d 2-3 months Y Y
i more than 3 months Y Y
t Amount due: less than Rs.6,000 Y Y Y Y
i At least Rs.6,000 Y Y Y Y
o
n
s
A
c Actions: Type A Customer Y Y
t Type B Customer Y Y Y
i Type C Customer Y Y Y
o
n
s
d) Decision Trees
A decision tree is another way to document processing logic, specially when the number of
alternatives is not too many.
Combination of conditions are represented along the branches of a decision tree. The outcome of
each of these combinations is given at the end of the final branch. For illustration, the processing
logic followed by ABC Corporation for prioritising its customers (mentioned in section 4) can be
explained in a decision tree as follows (Figure IV):
Customer
Period due less than 1 month Type A
Period due 1-2 months Type B
Amount less than Rs.6000/- Type B

Period due 2-3 months
Amount at least Rs.6000/- Type C
Period due more than 3 months Type C
Figure IV : Decision Tree
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e) Structured English for Data Processing Analysis
Processing logic can also be explained clearly in a structural English language. For illustration,
the processing logic for ABC Corporation can be explained as follows:
IF period due is less than 1 month, then customer = A Type.

ELSE
IF period due is less than 2 months, then customer = B Type
ELSE
IF period due is less than 3 months, then
IF amount due is less than Rs.6000 then the customer = B Type.
ELSE Customer = C Type.
ELSE Customer = C Type.
Structured English statements should be properly indented and aligned for readability. It is also
advisable to avoid long statements; if necessary break up a long statement into many short
statements.
Programming, the processing logic in a higher level language, is very easy if the logic already
explained in structured English. Structured programming languages like PASCAL are based on
structured English statements.
These tools are highly recommended to present a well documented and self explained logical
system design.
12.4.4 System Design (Physical)
While a logical design provides an estimate of processing requirements, a physical design

involves mapping the logical design onto the physical hardware of a computer system. Upgrading
the existing hardware and/or acquiring a new computer system if required to meet the processing
requirements is also undertaken at this stage.
The system analysts assign specific responsibilities to the programmers who develop and test the
progranmmes. The development and testing of the systems take place in a phased manner:
• Development and testing of the individual programmes,
• Development and testing of the individual programmes as a part of the system modules,
• Development and testing of the system modules as a part of the major subsystems, and
• Development and testing of the major subsystems as a part of the proposed system.
The development of the system includes writing of the actual programmes to handle data.
Subsequently, file organisation details are worked out and appropriate file organisation methods
established for processing and storing data. File organisation methods can be broadly classified
into two types – serial access organisation and random access organisation.
Excellent programming skills and experience are required for this phase of the system. The basic
activities involved in this phase are:
• Checking of the programme specifications received from the system development stage and
expanding these specifications,
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• Breaking the system modules into smaller programmes and allocating these programmes to
the members of the system development team,
• Producing the programme code in the chosen computer programming language,
• Defining the interfaces between various programmes and designing tests for checking their
interfaces,
• Ensuring the data availability for individual and integragted testing,
• Checking the quality of the code and its adherence to the established standards,
• Prepare the documentation for each one of the programmes,
• Receiving the user data for acceptance testing, and
• Getting the user sing-off after the acceptance testing
For development of the proposed system, it is important that all possible support should be
provided to the development team. This support includes availability of:
• Office Space,
• Relevant Data,
• Secretarial Assistance, and
• Access to key functionaries throughout the system development effort.
The final output of this phase is a fully developed and tested software system along with complete
documentation and testing results.
12.4.5 Implementation
Once the system has been declared fully developed and tested by the development team, it is
ready for implementation. Actual programming is undertaken at this stage to implement the
proposed CBIS in the available hardware. The involvement of the user is necessary throughout
the project duration, but the user involvement is critical during this phase.
The implementation includes the following activities:

• Programme development and planning for implementation,
• Preparing the schedule for implementation,
• Procurement of hardware,
• Installation of software,
• Operation and testing of software on hardware,
• Getting acceptance of the CBIS from its users,
• Recruitment of operating personnel,
• Motivation and training of the selected personnel and users,
• Preparing user manual and documentations,
• Conversion of data files from old system,
• Final changeover, and
• Operation and production.
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Once the system has been implemented, the systems group provides outside support to the user
group and trains the user group to handle production and operations of the system.
This is the most time consuming activity in the life cycle of a CBIS; and is also the costliest
activity. Systems Analysts have a tendency to lose interest once all the programmes are
developed and tested to their own satisfaction, and not necessarily to the satisfaction of the users.
This tendency is dangerous and should be avoided at all cost. It is the responsibility of systems
analysts to properly document their programmes, prepare user manuals, provide user training and
getting acceptance for the CBIS from its users.
12.4.6 Maintenance
Though the system is thoroughly tested before the implementation, yet the system is never
foolproof and errors always continue to exist. Therefore, there is a need to have a systems person
to look after the system and maintain it even during the operation and production.
As users develop faith in a CBIS, their demands on the system will grow. The system design
should be flexible enough to accommodate future requests, refinements, modifications, and
changes to suit users’ requirements. Well documented logical and physical designs of a CBIS will
facilitate its maintenance considerably.
The system maintenance could be because of any of the following reasons:

• Minor changes in the processing logic,
• Errors detected during the processing,
• Revision of the formats of the reports, and
• Revision of the formats for data inputs.
Also the management is keen to know the quality of the system developed and the standards
which have been followed. There is usually a review team which evaluates the implemented
systems and suggests changes, if required. It also leads to integrated and standardised system
development.
Table–1 summarises the various activities in the development of a CBIS.
Table 1: System Life Cycle

Stage Description
Objectives Broad statement of objectives
Feasibility Rough cost/benefit analysis
System Analysis Evaluating alternatives and choosing the most appropriate
alternative to meet the objectives
Systems Design (Logical) A broad logical design using structured tools like DFD (Data
Flow Diagram involved in Data Flow Analysis), Data
Dictionary, Decision Tree, Decision Table, Structured
English, etc. and arrive at system requirements
System Design (Physical) Detailed system design, taking into account available and
proposed hardware – use of system flow chart
Implementation Programming, implementing and user documentations
Maintenance Modifications and revision for user needs.
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1) Explain why System Analysis is important.

………………………………………………………………………………………………...
………………………………………………………………………………………………...
………………………………………………………………………………………………...
………………………………………………………………………………………………...
2) What do you understand by System Design (Logical)? Describe the System Design (Logical)
stage in the life cycle of a CBIS.
………………………………………………………………………………………………...
………………………………………………………………………………………………...
………………………………………………………………………………………………...
………………………………………………………………………………………………...
12.5 LET US SUM UP
In this Unit, you have been introduced to the three types of systems: (1) Natural or man-made; (2)
closed or open; and (3) conceptual or physical. We have explained in detail the open; physical
man made system such as CBIS. After examining the ‘why’ and ‘what’ of system analysis, it was
seen that analysis of the system involves identification, understanding and critically examining
the system, and its set for the system as a whole, through suitable modification of its
components.
Every system either developed as an improvement over the existing system or developed for the
first time has to undergo various identifiable stages. The Unit has discussed these stages as
objective, feasibility study, system analysis, system design (logical), system design (physical),
implementation and maintenance of CBIS. The birth of system takes place when the conceptual
model is developed by way of expressing a need. This need is converted into a logic for fulfilling
of this need. It ultimately gets converted into data files, programmes and documentation at the
stage of physical mode. The total development cycle needs more than one full-time individual.
Generally a project team consists of members from user group as well as systems group.
1) A system is an organised, interacting, interdependent and integrated set of components/

variables/parts. A system has objectives or goals. Three classification of system are:
i) Natural or man-made,
ii) Closed or open, and
iii) Conceptual or physical
Read Sec. 12.1 and 12.2 to expand the above answer.
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2) The information systems are considered to be evolved through three different levels of
systems. These are:
i) Conceptual System,
ii) Logical System, and
iii) Physical System.
Read carefully Sec. 12.2 and answer.
1) The understanding of what system analysis is, itself provides an insight into its importance
and why it is needed. System Analysis specifically:
i) offers a means to greater understanding of the complex structures,
ii) is a means to trade off between functional requirements of a subsystem (component) and
its immediately related subsystems, and
iii) helps in understanding and comparing functional impacts of subsystems to the total
system.
Read Sec. 12.3 to answer it better.
2) The Logical System Design is a phase in CBIS which defines the way things should be for a
given problem or situation.
Study carefully Sub-sec. 12.4.3 and answer.
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UNIT 13 INFORMATION TECHNOLOGIES AND
TOURISM
Structure
13.0 Objectives
13.1 Introduction
13.2 Travel Services and Computers
13.3 Tour Services and Computers
13.4 Hotel Services and Computers
13.5 Media: An Information Tool of Tourism
13.6 Internet: Key to Future Tourism
13.7 Let Us Sum Up
13.0 OBJECTIVES
• understand the importance of having the latest information technology in the tourism sector,
• comprehend the use of the various computer software packages in the travel and tour
services,
• learn the importance of proper use of print material and media, and
• comprehend the way Internet is being used by the tourism organisations to promote their
business.
13.1 INTRODUCTION
In the earlier Units you have read about the importance of information in today’s world. You read
about the use of information in the process of decision-making and also the use of computers and
other information technologies in aiding the aforesaid process. In this Unit, you will learn about
the use of information technologies, like, computers in tourism and also the various sources of
information in the context of tourism.
Today, the consumers have become very informative and also inquisitive. They require every
kind of information possibly available regarding the goods that they are purchasing or the
services that they are about to avail. The need of information is more important in the service
industry such as tourism, where the goods being sold are intangible. In other words, the
customers here are unable to see or touch the product that they are about to purchase but, they can
only imagine, maybe, the comforts of a flight they are about to take or the beauty of their travel
destination. And, in such cases it becomes important to provide more and more information so
that the client can imagine the feeling of the product. Computers are being used in a big way by
the tourism sector for handling all types of tourism information needs. The number of tourists is
increasing and so is the number of destinations. This has led to a boom in the tourism services,
which in turn has led to a great demand of information. The right kind of information at the right
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time and place is more important now than ever before. Information about destinations and
services is available in a variety of forms, i.e. from the traditional brochures to CD-ROMs and
through the web-sites at Internet. Technological advances have effected the selling of tourism
products and services. Today, tourism operators can show the clients the photographs of a remote
holiday resort at the press of a few keys and give them a better perspective of the services they
are about to buy.
In the earlier Units, you have also read about the computers and their various applications and
extensive use in the various areas of management functions, especially in context to information
systems. In this Unit, you will be reading specifically about the application of computers in the
tourism. You will be introduced to the use of information technologies in the different specters of
tourism, such as, Information and Reservation System (IRS) in travel industry, special
software packages used in the tour operations and also in the hotel industry. You will also be
introduced to media and Internet, both of which can be extensively used for providing and
receiving information.
13.2 TRAVEL SERVICES AND COMPUTERS
The travel services, all over the world and in many parts of India are fully computerised. The
travel services, such as, railways, car rental, bus/coach hire or trip and airlines tickets, all are
computerised and thus, proper information management is possible. Information regarding the
tourists or passengers of yesterday, today and tomorrow is now readily available through the data
generated by various tourism organisations.
The various fields of travel services using computer applications can be summed up as:
1) Car Rental
Car Rental is a big business world over and in the metropolis and big cities of India. The main
clients of car rental are the corporate or business travellers along with the tourists wanting better
service and comforts while travelling.
The car rental business is fully computerised abroad, specially in America and Europe, and the
Information and Reservation System, such as that of Amadeus, Sabre, etc. are being used for car
rental and information. In India, a very few companies have computerised their car rental
services. Couple of these companies are solely dealing with the rental of vehicles, such as
Wheels, etc. and the rest of the companies are the transport divisions of travel and tour operating
agencies, such as TCI, Thomas Cook, Garha Tours and Travels, etc.
In the case of computerised car rentals, instant confirmation is possible even in case of
international booking using the IRS, such as, Amadeus, Galileo and so on. Locally, in the same
city, computerised systems help in tracing free cars and cabs easily and quickly. And it becomes
possible to trace a vehicle in a garage close to the place of booking, and sending it over, as and
when required. Thus, providing efficient and prompt services to customers. In the same country,
usually a travel agent has sister concerns all over the country and, when a booking comes by, the
same is informed to the sister concern of the city of travel via telephone, fax or e-mail.
Internationally IRS (about which you will read in later sub-section) helps a lot. Whether the
booking is made over the IRS directly or with a travel agent, the same is passed on immediately
to a travel agency, preferably a concern with whom one has business dealings in the country of
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travel. For the purpose of international booking e-mail is the most preferred form of making
booking and also for making any inquiries.
2) Railways
In India, Railways is the most favoured form of travel. The computerisation of the railway
services was introduced a few years back. The software package used in ticketing and other
customer services has been specially designed and developed for the Indian Railways and the
railways itself provides the training required for operating the package to its employees.
The computerised system broadly centres around the PNR (Passenger Name Report) number
provided on each ticket of the customers. Each one of these PNR number is unique and identifies
not only the person travelling on the ticket along with the passenger’s personal details but also the
train and the destination of travel. Now a person can book tickets well in advance of the date of
travel and get reservation on the spot. The computerised ticketing system has also shown way to
computerised customer service facilities, in most of the cities of India. A dial-in facility for
information is also available. In this system, different phone numbers have been provided for
different information, such as one phone number for arrival and departure of trains, another
number for inquiries and so on. A person can dial the number for the information required and get
the information on following the directions of the computerised system. The computerisation of
railway services has made travelling in India not only easier, but also stress free in terms of
reservations.
3) Airlines
The airlines have seen the maximum computerisation in the travel segment. Computer
Reservation System (CRS) is widely used to book tickets in all the airlines. The CRS helps in
generating a higher rate of occupancy and also provides a better scope of marketing and
distribution to the airlines.
The increasing popularity of air-travel globally, gave rise to the need of a better and efficient
distribution mechanism. In the 1970s, the first Information and Reservation System (IRS) was
developed in U.S. This system provided both information of tourism industry, including that of
airline industry and also provided CRS for direct booking on the airline of choice. The IRS
initially provided information regarding the flight schedules, flight timings, flight availability and
the booking facility on CRS. The IRS are being used by the Airlines so as to market and
distribute their products better and, in this process, also improve efficiency and passenger
capacity as well as strengthen their position in the market. Travel agents are using this system to
gather information about the travel segment, get the details of flight schedules and also for
bookings on the Airline. Tourism Offices, Tour Operators and other service providers of
tourism are using this system to provide better customer service by being more informative, and
also to search for new markets for travel. A few global companies of IRS are AMADEUS,
GALILEO and SABRE.
AMADEUS, a popular European IRS, was founded in 1987 by Air France, Iberia, Lufthansa and
SAS (No longer a shareholder). AMADEUS, now known as AMADEUS Global Distribution
System is an electronic information and booking system. It shows flight information of over 700
airlines and provides booking on over 430 airlines. This information system now also provides
information and reservation facilities in many hotel properties and car rental companies globally.
AMADEUS also provides up to date information about Hotels, Rails, Ferry, Tours, Cruises and
many popular destinations. This is the first to have partner in railway networks.
The AMADEUS data is held in Erding, Germany, which is also the centre of AMANET which
uses various links to deliver over 26 million bits of information every second. AMADEUS has
established more than 50 companies worldwide with the help of local partners. These are the
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National Marketing Companies (NMC), where AMADEUS is a part or sole shareholder. These
NMCs market Amadeus products in their own country and also provide training, customer
service, and help desk facilities. NMCs work in coordination with the regional offices to provide
additional support to the NMCs in all areas.
GALILEO was also developed in 1987 by a group of airlines to provide CRS facilities, now it’s
a joint venture of many Airlines. It was established in Swidon, England. The primary purpose of
Galileo was to provide airlines reservation and information and thus, provide CRS facilities to the
travel agents. The distribution channel locally are known as National Distribution Companies
(NDC) which promote Galileo products in their country and also help in providing non-airlines
travel services, such as, hotels, cars, tours and so forth.
SABRE is the largest American IRS. It is marketed in Pacific in a joint venture. This provides
CRS facilities primarily in US and is very popular as an IRS. In the 1990s, it has tried to break
into the European Market and it’s been very successful. There are also other IRS available in the
vastly competitive airlines sector, such as, WORLD SPAN, and others.
Many IRS now provide information regarding all sectors of tourism industries and also provide
direct reservation of hotels, tours, cruises, car rentals and so on, but it is still more popular as an
Airlines CRS. All the IRSs are planning to be the largest information providers, globally, in the
future. Though they have started facilities of booking various services through their NMCs and
NDCs, they are still more popular as CRS and information providers of Airlines.
13.3 TOUR SERVICES AND COMPUTERS
The tour operators are also using computers on a large scale. The preparation of tour proposals,
itinerary, costing and pricing, invoice preparation, vouchers preparations all are done on the
computers. Software packages made specially for the tourism purposes are readily available in the
market. Many big companies like SITA, TCI and others have their own customised software
package developed for the purpose of tour operation handling. Whereas, many companies are
installing the readily available software package from the market and in some case customising
the packages to suit their own needs.
The software package used in the computers for tours operations can usually be used for handling
both customised packages as well as readymade tour packages. In the case of readymade tour
packages the tours, inclusive of price are printed on brochures. These brochures also have the
details of services that will be provided. The same is typed in the computer, say, TOUR 1: GOA
TRIP - 3 days and 2 nights, or TOUR 2: TRIP TO PORT BLAIR - 5 days and 4 nights. The
complete proposed itinerary is typed in the computer along with the price quoted on the brochure.
The software package consisting of itinerary, invoice and vouchers are all connected to each
other. The invoice in the bill is given to the client for the service utilised and also a copy of the
same is provided to the finance section for processing. The voucher is the coupon provided to the
clients, who in turn will give the same to the places where services have been partaken by them.
The clients mostly pay for their tour well in advance and the tour operators in turn pays to all the
service providers, such as, hotels, guides, etc. The client only uses the vouchers and pays to the
service providers through these vouchers. The service providers in turn send the vouchers to the
tour operators so as to confirm that the client has availed their services and subsequently the tour
operators pay the service provider. Sometimes the tour operator has to pay well in advance to
book the services, but in this case also, the client will use the vouchers and the service provider
will pass the voucher to tour operator. Once the tour booking is done by a client for say TOUR 1,
the name of the client is introduced for TOUR 1 and with proper commands the copy of itinerary
for the client along with the Invoice and the Vouchers will be processed on their own. The same
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will be true for more clients for the same or any other tour packages. These auto processes save a
lot of monotonous work and time of the tour operating personnel involved.
Usually, in the case of customised packages the format of itinerary is provided on the software
which is connected to costing, which in turn is connected to both invoice and voucher processing.
The package usually has access to a file regarding confidential tariff. A confidential tariff is the
tariff charged by a tour operator for a particular service. The tariff includes the special hotel rates
provided by the various hotels with a lot of concession and commissions. And also the rates of
different other services like sight seeing, transfer to and from hotel and so on forth. An executive
while making an itinerary in the computer can always follow it up with on computer costing. The
costing can be done on the computer by comparing the services and hotel provided for, as per the
clients budget and preferences, from the itinerary and getting the tariff for the same in the
corresponding tariff file. The costing completed, the concerned executive can initiate the
processing corresponding invoice and voucher by giving proper commands with the pressing of a
few computer keys. The computerised processing thus saves a lot of time and also brings down
the number of mistakes.
Though a lot many companies have totally computerised their tour section, many smaller
agencies have only partially computerised their work pattern. They use computer to type the
itinerary, do the respective costing, make invoices and vouchers, but a package as such is not
used. And due to this all the aforesaid is done separately. Though a lot of time is spent, but the
result is always neatly typed and easily understandable to both the service providers and the
clients.
Tour operators also make use of information technology in designing their products. Destination
databases provide all information related to accommodation, sight seeing, attractions, etc., which
come handy in preparing iteneraries and day schedules. Similarly, tourist databases help in
targeting market segments to be catered to.
13.4 HOTELS SERVICES AND COMPUTERS
The Hotel industry is using computers in all the departments like front office, house keeping, etc.
Computers are used to provide essentially efficient and better services. They are used for booking
bills, taking care of room services and also other food and beverage services.
1) Reservation
The room reservation system of star hotels has been computerised almost all over India.
Reservation system is very important as a proper system takes care of the selling of rooms,
keeping in view both the daily fluctuations concerning arrivals and departures. In a properly
managed property, much depends upon accepting and rejecting of reservation requests. The room
reservation requests are considered on the status of guest, i.e., whether the guest is a business
traveller or a tourist or say a VIP or a business partner or may be a black-listed guest and so on.
The booking of rooms should be done keeping in view the season, i.e., whether it is peak season
or a lean season, festival or any special occasion in the city, etc. Usually a hotel with 100 rooms
book 110 guests to cover the inconsistency of the guests not turning up. We must remember that
in service industry if services are not sold on time, they are lost forever. For example, if a room is
not booked for any said day, then the money to be earned for the room, for that day, is
permanently lost. An alternative policy has to be decided upon in case all the 110 guests turn up,
and for this purpose management has to be properly informed about the business in the said
period, business of and with the other hotels of the city, scope of guest adjustments in a nearby
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hotel and also the possibility of having recurring business from any of the guests. A proper and
well-informed management can forecast and handle crisis at a fast pace and efficiently. Many
hotels maintain guest data on computers for keeping the profile of repeat visitors.
Computerised reservation system takes off from the manual reservation system. The common
manual system used is Whitney’s system in which reservation is basically maintained on paper
mounted metal frames, arranged according to data and also alphabetically. Also, colour code is
used to identify a guest, i.e., whether an old client, or a VIP, a frequent traveller and so on, and
also identify their special needs and requests. The computerised reservation introduced in 1980s
follows mainly the Whitney system but it does not produce much paper work and the datas are
arranged in a much better and efficient manner. For example, after the introduction of a client
name, the computer will on its own search the files to find out whether the present guest was
previous guest or not and will also provide information on whether a travel agency asking for
booking is on the credit list or not. Many chain hotels are operating their own Centralised
Reservation System (CRS). The concept was influenced by the Airline CRS. By providing the
services of a CRS, the management can handle booking of large groups efficiently. The CRS also
helps to market and manage reservation demand. A guest, by availing a chain hotel CRS say Taj
CRS, can make bookings in all the hotels and properties of the chain, in this case Taj. Thus, all
the confirmation is available from one place only, reducing the tension and paper work. The
advantage of CRS have led the smaller hotels abroad to consider a CRS of their own as it is not
economically viable for a single hotel to have a CRS. The IRS systems are also providing
reservation with some of the hotels world over. The main advantage of computerised reservation
system is that one is able to keep track of the sold and unsold rooms, i.e., rooms inventory, and as
it provides the scope of self check-in and check-out by the guests. Even bills are prepared on the
checking out of the guests with a few proper commands.
2) Food and Beverage Services
Computers are used to keep track of the bills preparation and menu card preparation, among other
functions. The use of Election Cash Register (ECR) and Point-of-Sale (POS) technologies is
very common.
As in the case of room reservation, computers are also used for reserving tables in a restaurant –
even a table in a specific location of a restaurant. The computerised booking checks that no
double booking, i.e., overbooking takes place.
The room service uses computer for keeping track of the services provided. On receiving an
order, instantly it is sent over to the kitchen, via the LAN, where work station printer or monitor
is provided in the kitchen, or through a computerised receipt - one to kitchen.
In a restaurant service ECR/POS plays very important role. ECR/POS system usually works with
four files:
• Menu File, which lists all the items in the menu, describes them and states their prices, taxes
applicable and amount to be reported to the inventory,
• Guest Receipt/Check, which is an open data file containing the guest names and the items
ordered. Each guest receipt will identify the guest, identify the restaurant, the menu items
ordered, individual price of menu item, tax-applicable and total,
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• A Master File having the detail of each of the employee in the restaurant/s and the work
hours, guests handled and also wages earned are mentioned,
• Inventory file is very important so as to keep track of the purchase and utilisation of
products. The goods/ingredients bought for use are in a large scale and keeping track of them
in context of recipe ingredients is difficult, so an inventory file is necessary to get a clear
picture.
The ECR/POS forms daily report on revenue and sales reports to be used by the management.
The data contained in report provides an insight of sales trend, demand of customers and also
future employee requirement. The technology used by the restaurant depends upon the need of
the management and also on the type of restaurant – Quick service or sit-in and so on. A sales
report nevertheless is required by all to gauge the type of the product sold, as from these reports
at-a-glance one can say that 50 Russian Salad or 50 Sweet and Sour soup was sold. A trend can
always be seen and predicted from the ECR/POS system reports.
Computers are also used for Menu Preparation which includes taking account of the ingredients
used, calculate the possible cost of a helping, calculate the applicable taxes and other overhead
costs and decide upon a price which will prove profitable to the organisation.
In a very few restaurants, menu is displayed on a screen or monitor and patrons can order via the
screen. Either the screens/monitors are touch sensitive or they are accompanied by keys. The
guests can see the menu items on screen and by using specific commands can read the menu
description and use Price Look Up (PLU) keys to check the price. The guest can order to the
computer and they will be served by a steward. In this way the guests are not hurried by the
presence of a steward and can also easily understand and decide upon the food and price without
any embarrassment.
3) Billing
The billing of the rooms, room services and restaurant services are all done using computerised
receipt printing. The rates of the different rooms per day are already there in the computer
software packages. While billing a guest, the check-in and check-out data and time is typed and
auto processing allows computerised bills to be prepared. And the guest does not have to wait for
bill while checking out as his or her bills are ready as soon as he or she signs, for checking out, in
the guest register.
The room service and restaurant bills or any other bill, such as laundry, gifts, etc., if not paid
earlier by the guest are also attached or added to the bill. Then the room number and the guest ID
name and number on the bill initiates the computer to add any unpaid bill to the total bill. Usually
for room service the guest may or may not pay on the time of availing the service. Same is the
case of the restaurant bill. If the guest in the restaurant is a resident guest of the hotel then the
guest is identified by Guest Name, Room Number and guest ID number, and the guest can choose
to pay or just sign the bill for payment later on. The unpaid bill is automatically added to the
guest bill through guest ID and Room number. The guest, whether or not a resident of the hotel,
get the bill with each menu item ordered along with its individual price, taxes applicable and total
made out. The clean and neat print out makes it easier for the guest to understand the bill.
New technologies are always coming up and the old technologies are becoming obsolete, so keep
reading the periodicals and journals to keep track of the changes taking place.
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13.5 MEDIA: AN INFORMATION TOOL OF TOURISM
Media is playing a very important role in providing information. Media can be television or print
media which provides the required information.
1) Television
Television has proved to be a great sources of information. There are many travel related
programmes on the different channels. Most of the programmes provide information on new areas
of travel, how to approach/reach there, where to stay, what to eat, and also what are the do’s and
don’ts. Travelling to exotic and new places has become big business and travelogues are the new
“in programmes”. Many of these deal with budget travellers, others with luxury travellers
whereas some try to blend in both of them.
These travel programmes give information regarding the time of visit and also the people or
travel agents to contact for visiting those places. In a way they are promoting both the place and
the service providers by recommending them. Many a programmes, promote only a special type
of travel, i.e., adventure trips or trips on nature’s trail. It is not possible for one person to visit
every place of tourist interest and these travel programmes give an insight of the various
destinations. The information can prove to be vital when a prospective client asks you a question
about a place they are planning to visit. As a tourism professional, it would be useful for you to
watch these programmes to gain information about the present popular destinations and also
decipher why they are popular. You will get information about the current trends of travel and
also learn the skills of promotion and advertisement.
Many of the Indian, organisations have also understood the scope of TV as a promotional media
and have recently started using advertisements for promoting themselves, e.g., Taj Group of
Hotels, Raj Travel and Tours, Thomas Cook and so on. Earlier, only print media was being used
but lately very attractive and subtle advertisements of the tourism sector have started on the
television channels. You should remember that after seeing something on TV it stays longer on
the consumers mind than hearing about it. Also it gives you as a professional, a fair idea of what
the competition is upto.
2) Print Media
Travel industry has been using print media for a long time for promoting business. Regular
advertisements appear in the newspapers and magazines regarding the different fabulous or once
in a lifetime offer regarding a tour package. Also there are advertisements regarding air travel or
other modes of travel to a favourite holiday spot. Brochures and pamphlets are printed by tourism
organisations for promoting themselves. Many of the brochures and pamphlets are just promotion
material. While mostly these are printed to promote and publicise the travel services provided by
the agency many a times heavy discounts on different tourist resorts and other properties are also
advertised. One should always keep track of such information as it gives an idea of what is
happening in the travel and tour sector and in the process you might get a bargain for your
organisation.
Newspapers are the best way to advertise for reaching general public. But trade papers, such as,
Travtalk and others are also available for getting the news regarding the tourism sector. You
should regularly read the various travel and tourism magazines as government policies, new
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happenings, new schemes, new destinations, latest development in the industry, all are talked
about in the periodicals. One should keep abreast of the new happenings and also know more
about colleagues in the trade. They are a useful source of information.
3) Others
Various conferences, seminars and other meetings of the various organisations, such as, IATA,
PATA, etc., are organised to keep the travel and tour industry together. The plans for future and
are discussed on these occasions along with business transactions. These are the best time to
make business friends or new business partners.
Regular travel marts and trade fares are also the source of latest information besides being events
for promoting tourism. It is also possible that new ventures will open out for your organisation in
these marts.
Many a times you might get required information regarding a place or a hotel from travel books
or CD ROMs (Compact Disk - Read Only Memory). Many tourism guide books, such as, Lonely
Planet, Hotel and Restaurant guidebook of India, etc., are viable. Many new CDs are coming in
the market promising to be complete travel guides. You have to keep a constant track of these
developments related to tourism information and as managers also encourage your employees for
the same.
13.6 INTERNET: KEY TO FUTURE TOURISM
Internet is the latest and fastest way to gain information and also conduct business. The direct
booking on the various CRS is possible over the internet. Internet is not only easy to access but it
is also very easy to use since it is graphic oriented and uses very few than keyboard command.
While browsing the Internet for any information you can take the help of the search engines, such
as Yahoo.com or 37.com and others, and type in your subject of search. The process of searching
will take up a few minutes and various categories, websites and webpage for the topic will be
displayed to you.
You can either download the required information on to your computer or get a print out of the
same. Downloading, as you know from the earlier units, is the transfer of information from a
server to your computer. You can have information regarding a destination or an IRS all through
the internet. Many travel related sites of different newspapers and magazines are also available on
the net. A specific topic of a specific newspaper, can be read by you on the computer via the net.
Internet is a mine of information provided you have the time to search for the information.
There are many information posted on the internet by the various departments of tourism all over
the world, many tour operators, airlines and also IRS. Sitting at your office or home you can book
yourself a ticket or tour, over the net. The information sites of tourism also provide destination
guidance, booking facilities along with the costing and pricing.
The tour operators display their brochures on internet as it gives a wider scope of publicity and
for reaching people. A client can check out the trip of choice and make enquiries or booking via
e-mail and business is promoted very fast and easily. Every enquiry does not mean a client but it
does give an opportunity and hope of making a client.
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The travel agents are using IRS and even the IRS are giving direct access to people for booking
reservation on a flight over the internet. All the formalities and time limit is provided via net.
Internet is preferred by various organisations to communicate with each other and information,
messages and bookings, all are passed within minutes to other countries.
Internet is proving to be fast and easy, due to the graphic interface used. It is also proving to be
cost effective as say in the case of faxing a file overseas it will be easy to just e-mail the file as an
attachment with an e-mail message. We can say that very soon internet will be the way to conduct
travel business, and so keep abreast of the latest happenings on internet. Get to know the internet
better as it will help in shaping the tourism future.
Check Your Progress
1) What do you understand by IRS?

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2) Name the tour files with whom ECR/POS usually work?

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3) Explain why internet will hold the key for future business transactions.
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13.7 LET US SUM UP
In this Unit, you have learnt about the use of computer in tourism. We have discussed about IRS
and CRS used by the travel agents for making reservation on the various Airlines. The tour
operators are also using various Software packages to handle the various aspects of tour
operations such as itinerary preparation, costing, invoice and voucher processing. You have been
introduced to the use of computers in hotel industry in reservations, restaurants and billing. And
finally the use of Internet as a mine of information and a future business procedure has been
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explored. Internet is proving to be a boon in all business sectors and service industry. In tourism
also the use of Internet can prove to be cost-effective and a better way of business promotion and
management.
Check Your Progress
1) IRS, i.e., Information and Reservation System provides both information about the tourism
sector as well as provides the facility of Computerised Reservation System (CRS) for
reservation in the Airline of choice. Study Sec. 13.2 to know more about IRS.
2) The tour files are Menu file, Guest Receipt/Check, Master file and Inventory file. Read Sec.
13.4 to explain the tour files.
3) Internet is a mine of information and provides a vast scope of business. The various business
transactions are made easier and quicker via the internet. Study Sec.13.6 and use your
knowledge about internet to form an answer Yatra.com is a site related to tourism scope in
India, Amadeus have their own site, Times of India site called Indiatimes provides travel
related information, IATO have their site; these are just a few examples of internet sites
related to tourism.
Activity
Browse through the Internet and identify the various types of information available
related to tourism and travel.
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UNIT 14 PROTECTING INFORMATION IN COMPUTERS
Structure
14.0 Objectives
14.1 Introduction
14.2 DOS Environment and Susceptibility to Virus Attack
14.3 What is Perverse Software?
14.4 Characteristics of Computer Viruses
14.4.1 Virus : An Introduction
14.4.2 Areas of Infection
14.4.3 Symptoms of Virus Infection
14.4.4 How Does Virus Spread?
14.4.5 The Virus Attack
14.4.6 Some Popular Viruses
14.5 Protection and Treatment
14.5.1 Preventive Measures
14.5.2 Virus Detection
14.5.3 Virus Removal
14.5.4 Recovery of Damaged Files
14.6 Hacking and Prevention
14.7 Proper Information Storage
14.8 Let Us Sum Up
14.0 OBJECTIVES
After going through this Unit, you should be able to :
• define computer virus and its characteristics,
• identify different type of perverse software,
• list the possible damages due to the perverse activities of viruses,
• describe the important precautionary measures to prevent virus infection,
• perform necessary corrective actions in case of virus infection and attack on Personal
Computer, and
• know about the methods of protecting information in computer.
14.1 INTRODUCTION
Mr. Vijay Singh, a tour operations manager was analysing some destination data on his word
processor. Suddenly, a ball appeared on the screen and started bouncing from side to side. Mr.
Vijay called up the computer supplier, who informed him that he had a virus on his machine. Mr.
Vijay retorted, “Oh, God! I am sorry, yesterday I had a bad cold. Will my computer be showing
the same symptoms after some time? Can you rectify this problem or will I have to consult a
physician?”
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Such incidents are becoming quite frequent these days. Many of the computer users who are not
aware of Computer Virus are reporting loss of data, programmes and several other perverse
activities. Are all these problems resulting due to Computer Virus? No, the loss of data and
programmemes on computer can also occur due to one or more of the following reasons :
• accidental or physical damages to hardware resulting in corruption of programmemes or data,
• negligence by employees,
• data entry errors, etc.
But Computer virus is a major cause of data corruption.
Computer virus is a perverse software which causes a malicious activity. It is a relatively new
phenomenon which has resulted mainly due to advancement in technology and accessibility of
operating systems such as DOS. Previously, the operating system used to be secretive and hidden
from the user. A user was supposed to submit his or her pack of PUNCHED CARDS containing a
programme which in turn was processed by the hardware (and propriety operating system). But
with the advent of interactive computers and general purpose operating systems people started
working on machines with the idea “How to fail a computer” and hence came the concept of
Computer Virus.
The term like ‘Virus’, ‘Vaccine’, ‘Stoned’, ‘C Brain’, ‘Happy Birthday Joshi’, ‘Ping-Pong’ are
becoming increasingly popular. All these terms relate to the same problem, i.e., Computer Virus.
In this Unit, we will discuss about the features and characteristics of Computer virus, some of the
existing viruses, their areas of infection, treatment and preventive measures. Many new types of
viruses have been predicted in the years to come. For example, Computer Associates
International warned of three viruses (The Lucky 2000, The Emeralda 8.7 and the Spaces 1633)
as a part of string of viruses timed to take advantage of fears related to the changeover to the year
2000. These viruses harm the start-up functions of the computers. However, in this Unit we will
be restricting ourselves to the viruses that are most common on PCs in DOS environment. This
information is necessary for protecting the information stored in the computer.
14.2 DOS ENVIRONMENT AND SUSCEPTIBILITY

TO VIRUS ATTACK
The popularity of IBM Compatible PCs and its clones have grown tremendously in the last
decade. As per one estimate, the number of these PC’s, PC-XT’s and PC-AT’s is likely to be
more than a billion by 2000. There are certain inherent limitations of the currently used IBM
compatibles which most often are being used in MS-DOS environment as stand-alone PCs. These
limitations have made PCs vulnerable to security problems. These limitations are :
a) MS-DOS/PC-DOS operating system consists of three files, two out of which are hidden and
the third one is named COMMAND.COM [Try to visualise it in the root directory of your
DOS (Disk Operating System) floppy or hard disk of your PC-XT or PC-AT]. All these files
are normally kept in root directory of hard disk or floppy disk. Although the hidden files are
not accessible to normal users, yet there exist special commands by which these files can be
modified. On the other hand, UNIX operating system, commonly used on PC-386/Super-
mini/Mini computers, is installed in a distributed manner in different directories, sub-
directories and files. The Operating System files are not accessible to users and are stored in
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binary/machine language form, incorporating certain corrective routines. Thus, UNIX is less
prone to modifications.
b) In addition, DOS does not have in-built security/password scheme. Thus, either the user will
have to devise his or her own programmes/routines to restrict unauthorised access or will
have to use hardware locks and sometimes even physical locks. On the other hand, UNIX
operating system offers a secured two layer password scheme. One layer is for user-group
and another for system administrators (super users). Thus, each user can have his or her own
password. The super user can add new users or restrict/remove users as per the requirements
and is generally a trusted person.
14.3 WHAT IS PERVERSE SOFTWARE?
A simple definition of perverse software is: “A software which causes a perverse activity.”
But, what is a perverse activity for computer? The answer to this question lies in the basics of the
computer. A personal computer has I/O devices, CPU and Memory and it executes application
programme/software which in turn do data manipulation. Therefore, a computer essentially
maintains, in its storage, the data and the programme or software. A programme causing
hindrances of other programme execution in such a way that result in the modification or
even complete destruction of data without the user’s intentions or unpredictable behaviour
in display, print, etc. or even sabotaging the operational system are some of the examples of
perverse activities for computers. The computer system on which a perverse software is
operational is said to be an infected system.
But, how does a software cause a perverse activity? The answer to this question is given in this
Unit in the next few sections, since it requires some more details about computer virus. But we
can dwell for a moment on the reasons for this perverse activity. There are several reasons for it
such as:
• for gaining publicity some individuals have made these type of software,
• or are developed by individuals as practical jokes,
• or as personal vendetta against a company or another person,
• or may be it is an in-born natural desire to tease other persons,
• or an act of a maniac, etc.
All these perverse software are aimed towards producing a variety of disastrous effects while
normally a user wants to do something constructive with the help of the computer system to
increase his or her productivity and efficiency.
There may be different types of perverse software all of which generate a different type of
perverse activity. Yet all these activities have one thing in common, that is, they generate
uncertainty for computer users. The normal MS-DOS operations were designed with bona-fide
normal users in mind and were not geared up to detect such perverse software. Also, standard
security checks normally do not detect the anomaly caused by these perverse software in a
computer system. Thus, an infected computer system may continue to work, causing the infection
to spread.
The perverse software affects software/programme of a computer and can be classified in the
following types :
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i) Bombs : Bomb is a piece of bad code deliberately planted by an insider or supplier of a
Programme. A bomb gets triggered by an event which is logical or time based. The
bombs explode when the conditions of explosion get fulfilled causing the damage
immediately. However, these programmes cannot infect other programmes. Since they
do not propagate by infecting other programmes, chances of a wide-spread epidemic are
relatively slim. Bombs are generally of the following two types:
a) Time Bomb: This name has been borrowed from its physical counterpart because of
mechanism of activation. A physical time bomb explodes at the time it is set for (unless
somebody forces it to explode early), so is the computer time bomb which causes the
perverse activity, such as, disruption of computer system, modifications or destructions of
stored information etc. on a particular date and time for which it has been developed. It is
initiated by the computer clock.
b) Logic Bomb: These perverse software may be similar in perverse activity to time bombs.
Logic bombs are activated by certain combination of events. For example, a code like :
“If MYFILE is deleted then destroy the memory contents by writing zeros.” This code
segment, on execution, may cause destruction of the contents of the memory on deleting
a file named MYFILE.
These bombs can be set to go off at a future time or event.
ii) Trojan Horse: This name has been borrowed from the pages of history because Trojans are
considered to be programmes that conceal agents of ruin/malicious activity like the wooden
horse of Troy. Typically, a Trojan Horse is an illegitimate coding contained in a legitimate
programme, and causes an illegitimate action. The concept of Trojan is similar to bombs but
it does not necessarily get activated by a computer clock or particular circumstances. A
Trojan may change or steal the password or may modify records in protected files or may
allow illicit users to use the systems and have access to data and information stored there.
Trojan Horses hide in a host and generally do not damage the host programme. Trojans
cannot copy themselves to other software in the same or other systems. The Trojans may
get activated only if the illicit programme is called explicitly. It can be transferred to other
system only if the Trojan programme is copied by an unsuspecting user.
Christmas card is a well-known example of Trojan. It was detected on internal E-mail of

IBM system. On typing the word ‘Christmas’, it will draw the Christmas tree as expected, but
in addition, it will send copies of similar output to all other users connected to the network.
Because of this message on other terminals, other users cannot save their half finished work.
iii) Worms: The difference between the Worms and Trojan is that a worm can relocate itself
and does not require a host programme. Thus, a Worm programme copies itself to another
machine on the network. The worms are stand-alone programmes, and therefore can be
detected easily in comparison to Trojans and computer viruses.
Worms can help to sabotage systems yet they can also be used to perform some useful tasks.
For example, worms can be used in the installation of a network. A worm can be inserted in a
network and we can check for its presence at each node. A node which does not indicate the
presence of the worm for quite some time, can be assumed as not connected to the network.
Examples of worms are Existential Worm, Alarm Clock Worm, etc. The Alarm Clock
Worm places wake-up calls on a list of users. It passes through the network to an outgoing
terminal while the sole purpose of existential worm is to remain alive. Existential worm does
not cause damage to the system, but only copies itself to several places in a computer
network.
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iv) Viruses: The computer virus is a chronological successor of worm programmes. The
computer virus was termed by Davis and Gantenbein (1987) as: “A Trojan horse
programme with the capability of auto-relocation (same as in worms) and it can attack
other programmes.” Thus, a computer virus can cause a malicious activity as bombs or
Trojans but in addition can do something more. A computer virus is the most dangerous
perverse software which can reproduce itself within a computer system. Due to its replicating
nature it can attach itself to a regularly used programme and make you feel that the host file is
benign although it intends to do much more. Computer viruses are highly contagious in
nature and may cause considerable damage through an information disorder/
destruction. Computer virus can get the better of the operating system which you work on,
thereby taking control of the system which may sometimes lead to the destruction of all the
data and programmes on your hard disk.
Generally, a computer virus acts like a parasite. It draws on the resources of the computer to
monitor its activities, but otherwise does not immediately change the functioning of the boot
system. This is done to evade early detection. If the virus has destructive effects, the reaction
must be delayed somehow, because if it immediately destroys the host software, it will never
be able to reproduce and spread. The types and numbers of viruses are on the increase.
Melissa Virus.
Property
Perverse Can Replicate
Software Requires a Host and Relocate
Type
Bomb YES/NO NO
Trojan YES NO
Worm NO YES
Virus YES YES
Figure I: Comparison of various kinds of Perverse Software
14.4 CHARACTERISTICS OF COMPUTER VIRUSES
We have already discussed about the difference types of perverse software such as Time Bomb,
Trojan Horse, Worms and Virus. In this Section, let us first explore, why the first computer
virus was developed, and then we will discuss more about computer virus, its areas of infection
and reasons of the virus spreading in computer systems.
The first computer virus was designed and tested by Fred Cohen in 1983; on 3rd November. This
virus was conceived as an experiment to be presented at a weekly seminar on system security. On
10th November 1983, this virus was first demonstrated on VAX 11/750 system. This virus
resulted in the crash (failure of the computer system in terms of processing, do not confuse it with
physical breakdown) of computer in less than 30 minutes. Cohen was so successful that the
permission of continuing his experiments was withdrawn since it was perceived to be a major
threat to Computer Security. Further tests were banned on the computer virus when it was
reported that a user may be granted all system rights by a Computer Virus. The concept of the
computer virus was first made public in 1984 at National Computer Security Conference where
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Cohen published his results. Thus, a major security threat to the computer systems started. The
gravity of the threat can be measured from the fact that an “Internet” virus jammed over 6000
military computers across America for almost two days, raising a big question mark about the
computer security of even the Pentagon computer.
14.4.1 Virus: An Introduction
Computer virus is a software code that can infect other computer programmes by altering them to
include a copy of itself. It is not a biological virus. Though non-living and artificially created, the
computer virus still has certain analogies to its biological counterparts. These are :
• The biological virus has specific coded strains while each computer virus has specific
signatures.
• Both invade and replicate only in the host. The biological virus replicates in human or living
organisms, the computer virus replicates in computer programmes, thus, expanding its
influence progressively.
• The patient or host infected by either virus show a set of symptoms or effect. Thus, after
detecting the symptoms vaccine for the diagnosed virus can be prepared.
The main characteristics of computer virus are:
a) Making replicas: A virus can copy itself into another place, file or another disk. Typically, if
a disk carrying a virus is put into a computer, the virus can get loaded into the machine
through Random Access Memory (RAM) and copies itself onto every other disk that is used
thereafter. The virus can also propagate a copy of itself through the telephone lines or via
network connections. Sometimes a mutated version of the virus may be copied which may be
difficult to recognise.
b) Autonomous in nature: A virus may run without being explicitly called by the user of the
computer. This is possible because the virus may change the starting up procedure on
computer such that the code of the virus is executed prior to execution of the code of
operating system. Thus, it has a degree of autonomy.
c) Malicious activity: A virus can cause lot of damage to the computer system in terms of
software and data:
• it may cause loss of data,
• it may overwrite some of the important files with unrecognised characters,
• it may modify programmes or software making them unusable,
• it may scramble your database or Word Processor file resulting in incorrect information,
• it may not allow the system to start at all,
• some special effects on screen like falling of characters or bouncing balls may be
produced, and
• it may display messages or graphics on the screen such as Happy Birthday, Give me a
Cookie, your PC is stoned, etc.
It is usually believed that viruses cannot damage the hardware. However, there could be
situations when it can damage the moving parts. A virus can produce a sequence of sector
Read/Write instruction which can be thrust on one’s terminal causing a hard disk motor and
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IC working for very long duration with a lot of head movement. Similarly, in the case of
monitor it may result in rapid changes in frequency oscillations or by creating a high intensity
beam (if proper protective hardware had not been used). The beam may destroy the
phosphorous coating on the screen. Although no such incidents have been reported, yet one
thing is for certain, that is, because of over-working of the hard disk or low level formatting
or very high speed rotation for a very long time the overall life of these hardware components
may be reduced.
d) Avoid detection: A virus may take steps to avoid a detection. An active virus is difficult to
recognise as it can hide itself from the scanning programme through showing a mutated
version of itself.
14.4.2 Areas of Infection

Figure II briefly links the process of starting up with the virus attack.
Power OK
Virus can not be activated
Read only Memory (ROM) is Accessed
Execute Boot record if DOS floppy is The virus which has infected
inserted in drive A otherwise execute boot record or partition table
Master Boot Record containing will now become active in the
Partition Table of the Hard disk memory.
File viruses which have infected

Execute the two hidden files of the DOS DOS hidden files will be active.
Viruses hidden in these files will

Execute CONFIG.SYS if present become active. Execution of any
Execute COMMAND.COM infected .COM, .EXE or other file
Execute AUTOEXEC.BAT if present will make the respective virus
active in the Memory.
Display prompt indicating that now system

is ready to accept any DOS command
Figure II
Computer virus normally infect the following areas:
a) The hard disk partition table: The partition table of the hard disk consists of information
regarding the numbers and type of partition. This occupies the absolute sector on the hard
disk and is normally not accessible to an ordinary user. This area is modified by the viruses
by including its own code in the partition table information, thus on switching on the system,
the virus becomes active. Some of the partition table viruses are : Happy birthday, Joshi,
Stoned, etc.
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b) Boot record of hard disk or floppies: The boot record contains a programme which is
essential for starting up of computer system as it helps in locating DOS files on the disk. FAT
(File Allocation Table) contains the information of what areas on the disk are allocated to
which file. Virus changes the boot record by including itself or a pointer to its code in the
disk. This, results in execution of virus code prior to the Disk Operating System files. It may
reserve some space in FAT for itself, this space can be marked as bad sector. Partition table
and Boot Sector viruses are the most dangerous viruses because: (i) it is difficult to visualise
them as the partition table and boot sectors are sensitive areas and normal users are not
allowed to handle these areas and (ii) they get activated very early in the starting up
procedure, thus, they can take control of the system. These viruses may go unnoticed till the
time they strike and by that time irreversible harm to the data is already done.
c) Operational files: Viruses can destroy data files yet normally they do not infect data files
which are non-executable. Thus, a virus can overwrite wrong data on a data file but normally
does not copy or attach its code to the data files. User created Word Processor data file,
database file, ASCII files, source Programme Code files of BASIC, and PASCAL are
normally not infected by virus. The files which have following extension often get infected
by viruses:
.COM
.EXE
.OVR
.OVL
.SYS
.BIN
or any other files which can be loaded into memory and executed.
14.4.3 Symptoms of Virus Infection

Some of the following symptoms may be observed on the computer if the system is infected by
virus:
• Programme execution taking longer time,
• Any abnormal screen display,
• Any abnormal message,
• Drive light comes on unexpectedly,
• Decrease in the size of memory checked from CHKDSK or any other memory mapping
programme,
• Increase in the size of an executable file,
• Excessive increase in disk accesses,
• Delayed disk operations,
• Unknown volume label of the disk, and
• Destruction of data without any reason.
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14.4.4 How Does Virus Spread?
A virus may get into a stand-alone PC system through an infected floppy used on the system. This
infected floppy may contain commercial package or a game package that has been tampered with
or may contain virus in its boot sector. In a networked PC, in addition to above, the virus can
enter through programmes from Bulletin Board that have been either tampered with or specially
designed viruses that are disguised as useful programmes.
A user may unknowingly acquire an infected disk, with the system files infected with virus.
When a disk of this nature is used to start up the computer, the virus gets activated in the system
RAM (Random Access Memory) and reproduces itself to other executable files. Sometimes
viruses are intentionally put for some malicious purposes such as spoiling the prestige of
company, or for damaging others data.
14.4.5 The Virus Attack

A virus can attack a computer in four stages. In the first and second stage, the illicit code may get
attached or copied to commonly used system files such as COMMAND.COM or executable files
such as FORMAT.EXE, DISKCOPY.EXE, etc. Then a part of the virus code may replace the
boot sector or partition record by appending itself to these records. This causes the execution of
the virus code prior to operating system (DOS). In an executable file, it changes the normal flow
of execution such that the appended virus programme is generally executed first and then the
required file is executed.
In the third stage of its execution, the virus code checks one or more of the conditions such as:
• Specific date, time or day,
• Specific job’s execution or a combination of keywords,
• After copying it ‘N’ times in the system, and
• Computer restarting.
This delay gives virus ample time for replication before it is noticed.
In the fourth and final stage when one or more of the above conditions are fulfilled, it strikes
causing the intended damage. Figure III summarises the virus attack.
Initial Infection Trigger Stage

Replication
TIME
Figure III: Stages of Viral Infection

[Source: Javeri Harsh and Nanda Suchit: War on Virus (II Edition) 1991; The Computer Bookshop]
14.4.6 Some Popular Viruses

Some of the common viruses which have been detected are mentioned in the following list.
Please note that the list is not (and can never be) comprehensive or complete but we have tried to
give you some of the popular and typical viruses.
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a) Pakistani Brain or C-Brain Virus: It infects the boot sector of disks and writes a “C-Brain”
as the label of the disk. This virus gets activated on start up and starts destroying files/data on
the disk.
b) In late 1988, a virus devised by a student Robert Morris jammed more than 6000 military
computers across America for two days. This virus was known as ‘Internet’ virus.
c) Friday the 13th virus is a time bomb virus. This virus gets attached to .EXE or .COM files.
On any Friday which falls on the 13th of the month it removes the infected file from the disk.
The affected computers can be slowed down. The virus, was widely distributed prior to its
detection.
d) Israeli Virus: This virus was first reported by an Israeli daily newspaper in January 1988 and
hence the name. The virus starts destroying the files on May 13. It slows down the response
of computer on the thirteenth of every month. It was detected due to the wrong code of the
virus itself. During infection phase, it was infecting the already infected executable files, thus,
increasing the size of the original file to a great extent which caused its detection.
e) Lehigh Virus: It was first detected in November 1987. It gets attached to COMMAND.COM
file and destroys the file after four replications.
f) Bouncing Ball: A benign virus presumably intended to do nothing more than amusement.
While working on the computer you will find a bouncing ball appearing on the screen. It may
not damage any file.
g) Happy Birthday Joshi: This infects the partition table or boot sector and prints a prompt
“HAPPY BIRTHDAY” on the screen when it strikes. This may cause lot of damage to data
files. Sometimes it may not allow even starting up of the computer.
h) Stoned: This is also a partition table or boot sector virus and on striking it produces a
message “Your PC is stoned”. This also causes damage to data files, and may not allow the
system to be started sometimes.
i) Dir-2 Virus: This virus was very much in the spread at Bangalore. It is a boot sector virus
and is difficult to recognise.
j) Raindrop Cascade or Gravity Virus: This virus normally resides in .COM files. If the
infected file is run and certain system conditions are satisfied (logic bomb virus) then its
effect will be manifested in the showering of characters and letters on the screen.
1) What do you understand by perverse software?

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2) How does virus spread?

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14.5 PROTECTION AND TREATMENT
In the preceding Sections, we have discussed the various characteristics of computer virus. By
now, we are fully aware of its dangers and harms. Therefore, we must do something to prevent
virus infections from occurring. In this Section, we will describe the preventive methods for virus
attack and to rectify a system if virus has been detected. We can perceive four major activities in
this respect:
i) Preventive measures
ii) Detection of a virus
iii) Removal of a virus
iv) Recovery of the damaged data files
14.5.1 Preventive Measures
“Prevention is better than cure.” We must observe the following precautions while working with
computers:
i) Never use an illegitimate or pirated copies of software. Don’t accept free software from
unknown persons. Buy software only from legitimate source. Accept the software which is
either shrink wrapped or securely contained or sealed. Make a back-up copy of
purchased/acquired software, store it at different location, and check even these software for
virus on a stand-alone PC. While checking the software/programme, take the note of the
programmes execution. Check that it is consistent with the objective of the software. If you
have more than one PC’s then, preferably keep one as a stand-alone PC for checking the
software. You can name it as virus detection machine.
ii) Use of reliable memory resident programmes or hardware virus protection card which do not
allow virus to enter the system is strongly recommended.
iii) All the disks should be write protected. This write protection should be removed only if
something is to be written on the disk.
iv) Provide physical security for your computers, i.e., locked rooms, locks on the computers,
etc. Logout while leaving terminal/system. This will help in avoiding unwarranted people to
come with their floppies which may infect your system.
v) Do not use external floppy disks. If you are unsure of a floppy disk or a specific programme,
run it in an isolated environment where it will not be able to do any damage.
vi) Do not swap floppies across machines.
vii) Start a machine with an uninfected, write protected disk operating system.
viii) Check floppies and hard disk periodically and remove infected programmes immediately.
ix) Establish a sound Back-up policy. Make sure that you have at least three sets of back-up
disks which you can rotate through a regular cycle of use.
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x) Prevent access to unauthorised users.
xi) Make all the programmemers/users aware of the security procedures and carry out
surprise/regular checks.
xii) Maintain registers for having a strict control on software, data and programme acquisition.
14.5.2 Virus Detection
The various symptoms of virus attack have already been discussed in Sub-sec.14.4.3. If you
follow the strategies discussed in Sub-sec.14.5.1, probably your computer will never be infected.
Yet it is better to check the computer at least once in a week to avoid sudden data loss. Some of
the common scanning programmes available in the market can be used for checking. The best
way to check is by inspecting the size of COMMAND.COM, using programmes that show the
partition table of hard disk and boot record and the programmes that map memory usage. Most of
the times by only visualising the boot sector or partition table you can predict the presence or
absence of partition table and boot sector virus. This is because it leaves some readable marks
such as HAPPY BIRTHDAY JOSHI or YOUR PC IS STONED or signatures of specific virus on
to your system. Various virus detecting software are now available in the market for checking the
kind of virus infestation.
14.5.3 Virus Removal
Once a virus has been detected, it is necessary to remove it before it causes further damage. For
this there are a number of software available in the market and any computer firm will provide
you details about these products. Here, let us give you certain general methods which may be
required by you if you do not have a proper vaccine programme.
a) Writing another useful (as opposed to perverse) virus programme that finds the signature of
harmful viruses and overwrites these sectors. For example this virus may replace anything in
the boot record by an original boot record.
b) Using anti-virus software available in market. Some of these anti-virus software can be made
memory resident and can be put in “AUTOEXEC.BAT” or “CONFIG.SYS” such that they
become functional soon after the computer is started. These memory resident programmes try
to detect the presence of offending code. In case the presence of offending code is detected
the computer is halted and a warning message is flashed on the screen. Afterwards the same
software may be used to eliminate the detected virus from the computer. Also, certain watch
dog or scan programmes are available in the market. These programmes regularly scan RAM
and hard-disk for the presence of viruses. You must be cautious of bogus anti-viral
programmes that are actually viruses in disguise.
c) Start the infected system from ‘A’ drive by an uninfected floppy. Attempt to over-write the
Boot sector of the hard disk or recreate partition table using special programmes. This
procedure is successful in some cases. Although the virus code may still physically exist on
the disk but it cannot run since the loading programme has been deleted.
d) Another more rigorous procedure is to search the entire disk, sector by sector, until the virus
programme segment is located. Then erase the infected programme segment. One of the
common techniques which is less taxing than above is to search only those sectors marked as
bad by FAT (File Allocation Table) and then remove these bad sectors.
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e) Executable Files Infection can be removed but they do not guarantee restoration of normal
executable files. Thus, the best thing to do with an infected file is to delete that file and load
the new programme.
f) The ultimate method of removing any virus is Low Level Formatting but it wipes out all the
software and data of your system. Start the system from A drive using an uninfected floppy.
Take the Back-up of all the files and data from hard-disk to floppy disks. Now perform low-
level formatting with the help of standard software or debug command. (For debug command,
kindly refer to your system manual or service engineer.) And then, reload the data only after
testing it thoroughly for virus on an isolated PC. The low-level formatting should preferably
be done in the presence of a system engineer.
14.5.4 Recovery of Damaged Files

The damaged files can be of two types:
i) The executable file which is infected by the virus may not be recovered even after removal of
virus code. Therefore, the ideal thing to do is to keep a back-up of all the software, and store
it at different locations. When an executable programme is damaged by an infection of virus,
delete this file and then restore the files from the back-up.
ii) A data file whose data is corrupted completely cannot be recovered.
iii) Although the data base files may not be corrupted completely, yet they are difficult to recover
as scrambling of data may have taken place. A long word processor file, if not corrupted fully
can be partially recovered using some advanced software.
14.6 HACKING AND PREVENTION
Accessing information in a computer illegally is known as “Hacking”. The unauthorised access to

information is made possible due to poor computer security systems. Hackers, the persons
involved in Hacking, are usually students with ample scope and time on hand to pursue the
challenge of unattainable information. Hackers spend a lot of time looking for means to break
into high security systems as it is a challenge and a thrill to them. Many a times rival companies
use hackers to attain information which can be of use to them. Many insiders also use hackers to
retrieve information or destroy some information so as to hit back at their parent organisation.
Hackers also have a Hacker Bulletin Board. A bulletin board is an electronic computer system
wherein one user stores information and messages which other users can retrieve and use. An
electronic bulletin board is very easy to be installed. The bulletin board of the Hackers usually
have information regarding how to break into different software systems and to break into high
computer security systems. The boards are used primarily to spread information which would be
useful to other hackers such as user account identification, commonly used passwords and so on.
A book, The Hacker’s Handbook, Cornwall, 1985 lists twenty-five most common passwords
and suggests the easy ways and techniques for making illegal and successful entries in the
different computer security systems. Many hackers also destroy the web-sites on Internet.
Keeping in view the above it becomes very important for us to make proper arrangements to
safeguard our information and data. It has been observed that in most of the cases, the hacking is
made possible not because of improper security system but due to improper implementation of
the security procedure by the concerned personnel. In most of the cases the passwords are very
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common and easy to decipher. People consider passwords as the most common and easy manner
to install computer security. But giving a password is a matter of consideration. Passwords should
be introduced keeping in mind a time period and should be changed accordingly. The new
passwords should be known to only a few employees. It is very necessary to check up the
employee(s) to whom the passwords are known. These are only a few precaution against Hackers.
14.7 PROPER INFORMATION STORAGE
Proper storage of information is very necessary for the computer users. Any negligence during
the data and information handling and storage will affect the retrieval of information later on.
Listed below are a few ways to protect information in computers.
• Lock: Both mechanical and electronic locks can be used to lock up the computer. Most of
the computers are available with mechanical locks nowadays. And the use of electronic lock
can be the use of passwords or user identification and so on. In most of the cases, as
discussed earlier, the human factor matters. The organisation should check up the person in
charge of the information and the passwords.
• Hard Disk: Information to be stored in the hard disk is fed by one user. The user feeding the
information should store it under proper file names and directories, and should store the
information in a manner which is easily retrievable. The user should remember that the
information stored should be understood by all and if required some other person in authority
can retrieve it. And if a file is very important then the file can be hidden using ‘Attrib’
command so that it is not visible to others easily.
The user should be well versed in computer application and “save” the information after
feeding so as to store the information for future. Use of UPS with computers will also help
since power failure and cuts wouldn’t erase the unsaved information. In other words, if a
power failure occurs when a person is still using the computer then it won’t erase the
information even if the information is not saved.
• Floppy Disk: Unlike hard disks, floppy disk are easily manageable and information is
usually transferred from one computer to another using floppy disks.
To protect the information on floppy disk it is possible to move the write protection tab, in a
corner of the floppy. Thus, the floppy will then become write protected and it can be only
read and can’t be written on.
One should always use labels on floppy disks to easily identify them. One should write on the
labels using felt pen as pencils and ball-pens can damage the floppy if they are pressed too
hard. One should remember not to bend or touch the exposed parts of the floppy. And also
precaution should be taken that no heavy object is by accident kept on the floppy. Most
importantly all floppies should be kept in the floppy box.
1) How can you recover damaged files?

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2) What precautions can be adopted against Hackers?
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14.8 LET US SUM UP
In this Unit, we have discussed a major problem faced by micro-computer users today, i.e., the
problem of Computer Virus. We have also discussed about the different types of perverse
software such as time bombs, logic bombs, Trojan horses, worms and viruses. In addition we
have discussed about virus infection. Here we would like to recapitulate that basically viruses
infect files or certain areas of the disk, or even both of them. If a virus wants to spread via
executable programmes (.EXE or .COM files), it must attach some extra code on to that
programmes. The viral code may be added to the file or it may replace some existing code. For
such a virus to become active, the infected programme necessarily has to be executed. For viruses
which infect the critical areas of the disk, the computer has to be booted from the infected disk.
Thus, only if you run an infected file or boot from an infected disk, can viruses get into the
system.
The intention in the Unit is to make you aware about dangers of computer virus so that you can
chalk out your priorities to fight against its menace. This problem can be prevented/tackled, by
proper safety measures.
The number of computer viruses is growing tremendously. Although in some countries there is
law prohibiting making of harmful viruses, still there is no legal action against a benign virus
developer. The legal issues involved are quite complicated and very new to this country.
Currently lot of hardware/software solutions are being proposed for the Computer Viruses, yet
their effectiveness has not been tested or reported. The number of viruses and vaccines are
increasing day by day.
In this Unit you have also learnt about the various practices of hackers and how to secure your
computer system against hackers. The various ways to secure and store information has also been
dealt with.
If you are interested to know more about latest viruses, vaccines, and protection against hackers,
then you must consult latest security journals on computers.
1) A programme causing hindrances of other programme execution in such a way that result in
the modification or even complete destruction of data without the user’s intentions or
unpredictable behaviour in display, print, etc. or even sabotaging the operational system are
some examples of preverse activities for computers. A software which causes a perverse
activity is a perverse software. Read Sec. 14.3 to know more about Perverse Software.
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2) A virus may spread in the following manner:
a) from an infected floppy disk,
b) in the case of networked PCs (from Bulletin Board),
c) in networked PCs, are also infected by viruses specially designed and disguised as useful
programmes.
1) Damaged files can be of two types —

a) The files which are totally infected by virus and cannot be recovered, so it is best to keep
back-ups on floppy disk.
b) Files if not corrupted completely can be partially recoverd using some advanced
software. Read Sub-sec.14.5.4 to answer in detail.
2) The hacking is made possible not because of improper security system but due to improper
implementation of the security procedure by the concerned personnel. The passwords should
be changed after a given time period and new passwords should be known only to a few
employees. Study Sec. 14.6 to know more about Hacking and its Prevention.
Activity
Visit a computer dealer and find out about the most recent anti-virus software.
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UNIT 15 SOCIAL DIMENSIONS OF COMPUTERISATION
Structure
15.0 Objectives
15.1 Introduction
15.2 Individual and the Computer
15.2.1 Impact of Computers on Living Style
15.2.2 Intellectual Capabilities of the Individual
15.3 Computer and Organisations
15.4 Computer and the Society
15.4.1 Employment Opportunities and Work Pattern
15.4.2 Computers and Living Styles
15.4.3 Computers and Politics
15.5 Computers and the International Community
15.6 Computers in India
15.7 Computers and the Indian Society
15.8 Let Us Sum Up
15.0 OBJECTIVES
• identify major social issues related to the use of the computer,
• explain how the computer has affected the individual in his or her pattern of life habits and
thinking,
• explain how computers can affect the society at large beneficially as well as harmfully, and
• examine the impact of computers in the context of Indian society in a limited way.
15.1 INTRODUCTION
As you have studied in the earlier Units, computerisation of the tourism sector is rapidly gaining
pace. Computer Technology is a reality and is there to stay. While the developed countries have
moved to an extent that the computer has become part of every man’s life, in the developing
countries the impact of the computer technology can be felt only in certain fields. Seeing the pace
at which the use of this technology is spreading all over, it may look rather out of place to raise
such questions as whether we should adopt this technology at all, or should we adopt it
selectively?, etc. Yet, as in the case of ecological and environmental aspects of fields such as
energy, industrial production, urbanisation etc., which are hotly debated all over the world, the
environmental impact of the computer technology also needs to be looked into. It is in this
background that the social, political, organisational and individual impacts of computer
technology are discussed in this Unit. Both, the beneficial and harmful consequences of the
computer technology will also be discussed.
This Unit not necessarily focuses on the effects of computerisation in the tourism sector but on
the effects of computerisation on our behaviour, lifestyle and society as a whole.
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15.2 INDIVIDUAL AND THE COMPUTER
You would like to know what does a computer mean to an individual? In the following Sub-secs.
We discuss the impacts of computers on the invidual.
15.2.1 Impact of Computers on Living Style
An individual who is a professional say a doctor, engineer, architect, manager, businessman,

consultant, etc., undergoes a substantial change in working pattern when he or she takes to a
computer. The computer helps to process information more quickly and effectively which in turn
upgrades the quality of work and makes one more self-confident. He or she also ventures to
examine more alternatives, do more comparisons and applies more of ones thinking and
analytical capabilities, as against the preoccupation with data processing. Thus the computer
enables the professional to become more competent.
An individual who is a member of an organisation also can, when making use of a computer,
become more competent in his or her field. However, an organisation means a lot of people with
different needs at different levels, under different circumstances. Therefore, subject to a variety of
forces in the organisational context, the actual growth of an individual in an organisation using
the computer technology will depend on many things other than the opportunity to avail the
technology.
An individual who is a researcher either in physical sciences or social sciences is perhaps more
benefited from the use of computers. In processing data, in getting accuracy, in controlling flow
of chemicals, in simulation etc., the computer offers enormous potential.
The common man in general is also affected by the computer even though he or she
himself/herself may not have access to a computer. The common man is the recipient of both the
beneficial as well as harmful effects of the computer technology. In many public services like
railways, airports, employment exchanges, universities, libraries, hospitals, departmental stores,
banks, stock exchanges, etc., one can get quick and effective service in a computerised
environment. In developing countries, especially with a public sector bias the common man has
been at the receiving end of the bureaucratic manual systems for so long that he or she will
definitely enjoy the services that can be provided in a computerised environment.
In all those countries which have adopted computer technology in a big way, the individual
citizen is affected in many other ways also. One can have a computerised alarm in the house to
wake up, a computerised telephone to help deal with the telephone calls, a computerised oven
which will bake bread to a pre-determined temperature, a computerised music and television
system which will play as per preferences etc. Also one can sit and ride a computerised car which
will take a person to his or her workplace with very little intervention from oneself. Perhaps he or
she does a kind of work in the organisation for which one need not necessarily go to the
workplace, but can sit at home and work on a terminal connected to the office. At the bank, in the
shops, no money need be exchanged but only computer printouts after necessary adjustments.
Even one need not go out for shopping for it is possible to have computerised ordering from
home. One could even hold a computer conference with a businessman in another part of the
world sitting at home over the internet and avoid a costly and time-consuming travel.
15.2.2 Intellectual Capabilities of the Individual

Another highly debatable question which is to be touched upon is whether the dependence on
computers for arithmetical operations will affect children in terms of their numerical abilities and
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thereby their I.Q. score. Though no research evidence is available on the subject, it is a fact that
many people in the West who work at shop-counters would be completely in difficulty if the
computers or cash registers which they are accustomed to fail even for a few minutes.
In India most elderly people have great veneration for the ability to do arithmetic mentally and
they look down upon children who cannot do such mental arithmetic. The other side of the
picture is that many a person who can do quick mental arithmetic can hardly comprehend any
higher form of mathematics. Therefore, it can be argued that children who shy away from lengthy
and time-consuming calculations may be tempted to take up the challenge of complex problems if
they have the support from the computer.
Beneficial Impacts: Some of the benefits which an individual derives from computerisation are
as follows:
• At home, in the workplace, the drudgery of repetitive type of operations is avoided.
• Speed of processing helps quicker, more timely decision-making.
• To such professionals as researchers, scientists, engineers, etc., the accuracy in calculation
and information provided by the computers is of immense value.
• As a customer one receives quicker service.
• The advances in medical diagnosis etc., can come to the help of every individual.
• The computer combined with electronic communication devices makes life easier for the
individual in many fields such as reducing or even eliminating costly travel, shopping from
home, getting news from any part of the world instantaneously etc., all of which are very
valuable to the businessmen and industrialists.
• With the help of computer and electronic communication devices, tourists can choose their
holiday destination, plan their travel, make reservations, etc., on their own.
Harmful Impacts: The harmful impacts are as follows:

• The individual’s dependence on computer can cause untold miseries, if for some reason the
data fed into the computer were to be lost without a back up.
• One may cease to use brain for commonsense arithmetic and may in the time lose ones
numerical ability.
• The individual becomes so transparent to the whole world through the storing of information
about every aspect of his or her life in many places thereby losing own privacy.
• The individual may suffer from the use of inaccurate information kept by him or her in the
computer. There is also likelihood of information being misused to ones disadvantage.
• Every individual who is not inclined to learn about computers may find himself or herself
being treated as a second class citizen in certain contexts.
• Every individual who is a wage earner may find his or her services superfluous, with the
computer taking over the work and thus making him or her at least temporarily out of job.
• The effects of radiation, harmful effects from the continuous exposure to the V.D.U. etc.,
may also affect some individuals.
• In tourism, over dependence on networks data may not provide total information regarding
the quality of services; computer failure can lead to breakdown of operations.
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15.3 COMPUTER AND ORGANISATIONS
As you know computerisation of organisations is rapidly bringing changes in the work culture.
Organisations have availed the speed and accuracy of the computers but in the process many
beneficial and harmful impacts of computerisation have come forth:
Beneficial Impacts: Organisations benefit from computerisation in the following ways:

• All the benefits which a computer affords to an individual are available to organisations also,
perhaps several-fold.
• The management process, which tries to substitute rationality in decision-making using
timely, relevant and accurate information, is greatly facilitated by the computer.
• Tremendous gains in financial control, inventory control, market control etc., are possible
using the computer technology. In factory production quality control, production planning
and monitoring etc., are made more effective and easy with the help of the computer.
• Organisations can move into higher levels of forecasting using such techniques as simulation,
and also benefit by the use of various O.R. techniques with the help of a computer.
• The horizons of organisations themselves are widened with the help of computers combined
with modern electronic communication facilities.
• Central Reservation Systems, through computer networks, have made transport and hotel
reservations much simpler and quicker.
• Destination databases, customer profile data, etc., help tourism organisations in a big way in
designing or rejuvinating their products and services.
• Providing computer services in itself has become a part of the product line, particularly of
those organisations who cater to business travel.
Harmful Impacts: These can be described as follows:

• Many organisations have and continue to invest in the technology without sufficient systems
analysis, and without preparing the ground properly for implementation. This results in
various kinds of frustrations in such organisations.
• The mix of skills needed in the organisation undergoes major change which may create
tensions and may harmfully affect the human resources.
• When computers take over many items of work from human beings the organisation may find
itself loaded with unwanted manpower.
• The employees start living in continuous fear of being declared redundant and lose morale
and motivation.
• The non-computer skilled people may find themselves treated as second class citizens in the
organisation.
• New and devious ways of misuse of the computer technology may be found to defraud the
organisation.
• The organisation becomes transparent and may suffer at the hands of competitors.
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• The dependence on computers for handling information can lead to several embarrassments
and even losses when there is a failure of the system.
• Large investments in hardware and software are required to use the technology which may
not yield immediate returns.
1) What harmful impacts a computer can have on individuals?

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2) In what way an organisation benefits from computers?

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15.4 COMPUTER AND THE SOCIETY
Since the introduction of computers, it was told how computers are going to enhance the quality
of our lives. The quicker, efficient working of computers is supposed to change the society and
bring better life-style, innovations and changes our way. For example, the information and
communication channels have opened up the world, electronic banking system, searching travel
information on the internet, etc. have indeed changed many traditional aspects of our life and in
all these we have the computer to play a role. Here we study the effects of computerisation on
three spectres – Employment opportunities and work pattern, lifestyles and politics.
15.4.1 Employment Opportunities and Work Pattern
One of the most hotly debated and sensitive issues arising out of computerisation is its impact on
employment. In developing countries, particularly, there is a widespread fear that the computer
will drastically reduce employment potential or result in retrenchment of currently employed
people. The trade unions particularly project this aspect of computerisation especially in relation
to white-collar workers such as clerks, accountants, etc. It is a fact that the computer is a potential
threat to ones means of livelihood.
Another aspect is the effect on the work pattern of an employee. Let us assume that an average
white-collar worker is rehabilitated in a computerised environment as, let us say, a data entry
operator, the basic question will arise whether the employee is really relieved of the monotony of
the earlier manual work. Is it not only moving from one form of monotonous work to another? In
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terms of position and power to influence also, it cannot be said that he or she has gained. In fact
in many situations one stands to lose terribly in terms of power. The typical clerk in a manual
system has a lot of power in view of his or her opportunity to harness or help the public at will.
The employee also has considerable influence over the superiors because of his or her familiarity
and knowledge of rules, precedents and procedures, none of which the supervisors are thorough
with. If rehabilitated as data entry operator he or she stands to lose terribly in terms of his or her
sway over the public and superiors. On the other hand, the supporters of computers argue that the
use of computers, in addition to providing employment opportunities in designing,
manufacturing, marketing and training, will also raise the demand for services in geometric
proportions which will compensate for the fall of employment in routine clerical operations. Of
course, the access to computers affects the manager’s work pattern in a qualitatively better way.
Ones dependence on others reduces and accessibility to information increases tremendously. The
drudgery reduces and the power arising from possession of relevant and timely information
increases. Another argument brought up in support of computerisation is that most of clerical
work is a very low level repetitive type of human brain work and is a kind of slavery imposed on
human beings. Arguments apart, what cannot be disputed is that the computer has been
specifically designed to do things which human beings used to do manually efficiently. Therefore
there is no merit in contending that the computer will not replace human beings in certain jobs.
Jobs do disappear with the advent of technology. Mechanisation has eliminated most skilled jobs
in handloom industries. Computers linked with phototype setters are replacing linotype machines
endangering the continued existence of the entire craft. Similarly, in the tourism industry the
introduction of electronic data processing can reduce employment in office. At the same time the
demand for workers with computer operating skills will also increase.
The question that follows is, what weightage should be given to job redundancy in making
decisions about computerisation. Should not the added conveniences and better public services be
given high weightage? Can some compromises be evolved by involving the trade unions also in
the decision-making process? David B. Archer redefines the problem as below:
“Our problem is not that computers, automation or technology will create

unemployment. Our problem is that the legislation does not exist to adequately
look after short run dislocations, and government economic and manpower
policies are inadequate to cope with a constantly increasing labour force.”
No readymade solutions are available in this regard and the solutions would vary society to
society.
15.4.2 Computers and Living Styles
One of the major changes that can arise is that people need not spend as much time as they spend
now in waiting for information. This will release good number of hours for other purposes. Of
course this additional time can be used for production or as leisure time depending on social
interventions.
Much better public service at the railway station, airport, banks, hospitals, tourist services, etc.,
can release a lot of tensions and frustrations of the average member of the society in developing
countries. People can reduce a lot of their local as well as long distance travel when the
potentialities of both computers and modern communication are combined. This adds to
convenience as well as saving of time. Again this time can be used for productive purposes or
leisure.
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As you have studied earlier in the Unit, with the help of computers one can work from ones own
home or neighbourhood at ones own pace and convenience. The employee will be connected to
the office computer and work from home or go to neighbourhood work station where employees
of many organisations work at one place using computer connection from individual organisation.
A stage may come when people can trade without having to use notes and coins. This adds to
safety and convenience.
Shopping can be done from home. Tickets for a show can be booked through computers. Sale of
shares can be done through computers. Books in libraries can be reserved through computers. For
the professional who is hard pressed for time these facilities are extremely valuable.
Computer controlled machine operations, chemical processing, control of exposure to various

energy beams, rays, etc., can provide high accuracy. Hence the society is likely to demand much
more accuracy for all products.
The programmed computer robot can do many production operations which are hazardous and
which are done by human beings today at great risk. In and around furnaces, in toxic
environment, in dizzy heights, in strait and narrow interstices, etc., the robot can relieve human
beings.
There is perhaps no human activity in which computer cannot have a place, aiding in reducing the
drudgery of repetition by giving information in a form suitable for taking decisions. In fact the
computer can take over decision-making in various programmed decision situations.
It can also support one in non-programmed and unstructured situations by helping one to evaluate
the possible consequences of several alternative decision choices. When combined with
Operations Research Techniques the computer serves as a real decision support system.
Computerised cars, planes, trains, etc., are becoming realities. Such automation can help society
to accomplish more speedy and safe travel.
Computers, together with modern satellite communication technology have made the world and
the countries shrink. The N.I.C. computer link now functioning in India has linked all the district
headquarters and has made the districts and Delhi come very close together for various
administrative purposes.
The computers have helped research in a phenomenal way resulting in several benefits to society.
The advancements in biomedical area are already available to humanity. Computers also help
monitoring of health status of patients in critical condition and have saved many a life.
The list of beneficial impact of computers on society is bound to undergo elongation day by day.
Imaginative adaptation by the human beings of the computer technology is bound to be moving
forward in leaps and bounds.
As in the case of nuclear technology, the computer technology is also equally susceptible to be
misused either deliberately which otherwise is also known as hacking.
As mentioned, one of the major impacts of the adoption of computer technology is that it will
displace a substantial proportion of employed people, especially those employed in white-collar
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jobs. This will naturally affect society’s equilibrium in socio-economic spheres. Whether
computerisation will produce equal or greater employment opportunities in other areas like
marketing, manufacturing, servicing, training, etc., is a moot question as far as the displaced
people are concerned. In a developing country with high unemployment, therefore, the extent of
resistance from white-collar workers is bound to be naturally very high. Further in organisations
where the number of supervisory positions is fixed on a ratio basis with reference to the number
of employees at lower levels, there is a possibility of loss of promotion opportunities. As long as
policy level changes in rehabilitation, promotion schemes etc., are not introduced to protect and
safeguard the interest of those who are displaced, the resistance will continue. And this will have
a negative bearing on life styles.
It is well recognised that the introduction of computers will reduce or eliminate the drudgery of
repetitive and low intellectual type of data processing manually. The speed of processing will
increase tremendously and this will help quicker public service. However, as far as the nature of
work of the rehabilitated workers is concerned, say as data entry operators, etc., as explained
earlier, they will only move into another form of drudgery.
With the introduction of computer technology the mix of skills required in the society will
undergo a substantial change. This will result in the educational and training scenes undergoing
major changes. Many new opportunities and innovations in these fields will also arise. However,
in the educational and employment fields which are already in a state of unhealthy competition,
more competition will be brought in. The consequence of this will be that there will be more
stratification of the society in terms of the extent of computer literacy.
Among managerial people a further division will be created in terms of the extent of computer
knowledge and skills. The relatively senior people stand to suffer in this situation, unless they can
quickly accomplish the necessary learning. Already the strains of this phenomenon on senior
managers are visible.
In the initial stages of the adoption of computer technology there are bound to be mistakes and
failures in implementation. There will be a lot of exploitation by manufacturers and marketers.
All these will lead to new tensions and problem situations which the society has not faced earlier.
Legislative, educational and preventive measures have to be developed and implemented.
The huge potential of the computer technology for handling large volume and complex problems
also throws open equally large opportunities to commit frauds. More thinking and innovative
safety measures and devices have to be generated. In fact, in India the Central Bureau of
Investigation has already started training its investigators in the area of detecting computer and
electronic banking related crimes.
When more reliance is placed on computers for decision-making in such strategic areas like
defence, operation of weaponry etc., the magnitude of catastrophes either due to willful human
action or through ignorance also increases. The threat to society is therefore enhanced.
The pleasures of shopping and bargaining, etc. are in itself an experience for many but the
possibility of a moneyless society can take away these pleasures.
The time released by the computer may corrupt the society rather than being used for beneficial
purposes. This needs careful social interventions. If people can do everything from home more
conveniently using the computer, social interactions will undergo tremendous changes.
Individuals may become less sociable and more and more self-centred. The threat to privacy of
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the individual due to storage of enormous amount of data about oneself in computers is a real
social problem to which several countries have started reacting. Many legislations have already
been enacted. However, it is doubtful whether legislations can really deal with the problem since
the size of the inspecting and prosecuting agencies has to be something like a parallel police
force.
From the foregoing discussions it becomes clear that the computer technology is endowed with
tremendous potential for benefits to society as well as having different types of harmful impacts.
The question of adoption of the technology or the extent of adoption, the extent and nature of
curbs to be introduced, the monitoring and correction process to contain the harmful effects etc.,
are all matters of social choice which should not be left to the technologist alone.
Multidisciplinary groups through democratic procedures should take decisions. The concern
which society has for ecological and environmental issues in respect of energy, industrialisation,
deforestation, mining, etc., should be extended to computerisation also. It may be that in this
process the full potential of computer technology as envisaged by the technologists is not
harnessed. But then that is also the safeguard against technological Frankensteins.
15.4.3 Computers and Politics
Computer helps in making all sorts of political analysis and gathering other information needed
by the politicians and media. We can summarise the effect of computers on the politics in the
following manner:
Beneficial Effects
• Data processing in census, elections, etc., have helped a great deal in making these operations
related to political activities more data-based, quick and efficient.
• The computer and communication technology has made election result processing and its
communication more effective.
• Even though still under debate the use of computerised voting machines in some
constituencies has made the election process less amenable to muscle power interventions.
• The computer has helped many a parliamentarian to use information effectively to support his
contentions. The whole parliamentary process can in due course be more databased
dependent.
• Constituency profiles like number of booths, villages, venues of village heads, development
work done, etc., are maintained by politicians on computers.
Harmful Effects
• When the opportunity for processing information through computers is not equally
distributed and also when the awareness of the potentialities of its use is also low some
politicians can twist information for various parochial ends.
• Trade union leaders are opposing the use of computerised information technology, especially
in organisations which provide employment to a large number of white collar employees.
• Total dependency on computerised data in elections and political life will do away with the
role of emotions and human values.
15.5 COMPUTERS AND THE INTERNATIONAL COMMUNITY
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With the introduction of internet our world has become even more smaller as people sitting in one
corner of the world can converse with another person living in another part of the world. The
effect of computerisation can be felt in a big way when we consider the international scene. New
ventures, discoveries, inventions are made possible due to the accurate and quick data processing
by the computers. In the same process faster and precise target specific missiles are also being
made using computers. Keeping in mind the international scene we can state a few important
impacts as below:
Beneficial Effects
• The frontiers of nations and countries have shrunk a great deal by the quantity and speed of
communication that has been facilitated by computer and communication technology.
• Computer conferences, tele-conferences, etc., using satellite communication has changed the
complex of business across nations and a new globalisation process has set in.
• The cause of research in scientific areas has been advanced.
Harmful Effects
• Computer technology has tilted the balance of weapon power in favour of certain countries
like USA through the use of computer and communication technology.
• The gap between poor nations and rich nations has increased in one more dimension, namely
the computing power. At will or even by accident rich nations can in a split second blast
accurately several capitals. A new form of technological imperialism has already emerged.
• The developing countries limited resources are being diverted towards technology,
computerised weaponary, etc., thus shrinking the expenditure on social welfare measures.
• The long debates and pressures brought about on developed countries on the question of
super computers is a clear evidence of how a technology can be used to pressurise developing
nations.
15.6 COMPUTERS IN INDIA
Computers were introduced in India in the early sixties. The growth of computer industry in India
in the sixties and seventies was slow. However, it picked up gradually and there were 2,00,000
computers in 1990 as compared to 500 in 1979.
Now-a-days in India, computers are widely used across the society from individuals to industry,
in both private and public sectors, in the service to the manufacturing sector and for application
like fortune-telling to process control.
In 1971, the Electronics Commission and the Department of Electronics were established to
further computer usage in a beneficial manner. A computer policy was evolved with the
following main features:
• Recognition of computers for national security and defence.
• Promotion of self-reliance in the computer industry.
• Taking care that employment opportunities are not affected by computers.
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Earlier, computer policy was protective of Indian manufacturers. Recently, there is a trend to
open it up to imports of peripherals and even entire systems. Technological self-reliance,
however, continues to remain the corner-stone of India’s computer policy and the manufacture of
sophisticated computer components like Integrated Circuits is also being taken up indigenously.
Moreover, United Nations Development Programme (U.N.D.P.) helped establish projects in

CAD/CAM, and the National Informatics Centre (N.I.C.) which develops computer applications
for Government Departments.
India can boast of an indigenous computer industry manufacturing micro and mini-computers,
mostly with imported components like chips and peripherals. Some companies are also
manufacturing systems in colaboration with foreign companies.
The software industry’s turnover is also mostly composed of exporting low-level software and is
in a nascent but fast developing stage.
Ancillary industries for floppies, stationery, ribbons, etc. have also come up. Service industries
providing hardware and software support and training have also sprung up.
15.7 COMPUTERS AND THE INDIAN SOCIETY
Students are the most privileged section of Indian society in terms of computer availability.
Starting from schools to colleges, there is a rapidly growing computer awareness which shall
make the future easier for today’s students having knowledge of computers, which has become a
state-of-the art machine.
The impact of computerisation on employment pattern in India is yet to be fully analysed. If not
positive it has not been negative also.
Lay-offs in computerised organisations can be prevented by alternative employment like

computer operating personnel training for the affected department. Moreover, growth of hardware
and software industry in India has resulted in greater employment generation.
Use of computers in generating data-bases and processing facilities for government departments
like Ministries of Transport and Health, Sales Tax Collection (e.g., in Uttar Pradesh),
employment exchange data (e.g., in Andhra Pradesh), Police Computer Centres, rural
development schemes, telephone and electricity billing, etc., has grown.
Both service and manufacturing industries are also taking to computerisation and public
awareness has grown due to use of computers even for mundane things like displaying scores in
cricket matches, displaying and forecasting election results on the National TV, etc. Several
computer magazines are adding to computer awareness in India.
However, the impact of computers on Indian society has been smaller as compared to developed
countries due to high prices, inadequate training and education, cultural factors and poor
telecommunication infrastructure.
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Still, growing public awareness and the falling personal computer prices in India due to growth in
volume, indigenisation and import of peripherals and components at low prices from South-east
Asian countries augur well for the Indian computer climate.
1) Discuss the impact of computerisation on job opportunities.

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2) Discuss the harmful impacts of computers.

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15.8 LET US SUM UP
This Unit discussed the impact of computers on individuals, organisations and society at large.
Both harmful and beneficial aspects of computerisation were discussed at these levels.
Lastly, computerisation and its impact especially with relation to the Indian context were
examined.
1) Harmful Impacts a computer can have on individual are —

a) One may cease to use brain for commonsense arithmetic.
b) The effects of continuous exposure to the V.D.U. and radiation.
For more harmful effects of computer on individuals, please read Sub-sec.15.2.2.
2) Beneficial Effects of computers on an organisation are —

a) All the benefits which a computer affords to an individual are available to organisations
also, perhaps several-fold.
b) CRS, through computer networks have made transport and hotel reservations much
simpler and quicker.
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For more beneficial effects of computer on an organisation, please read Sec. 15.3.
1) One of the most hotly debated and sensitive issues arising out of computerisation is its impact
on employment. There is a widespread fear that the computers will drastically reduce
employment potential or result in retrenchment of currently employed people. Also,
computerisation will give way from one form of monotonous work to anotehr different form
of monotonous job. Read Sub-sec.15.4.1 and answer in detail.
2) Computerisation has many harmful impacts on individual, organisation and society. There is
a chance of losing one’s privacy due to the storage of personal information in the computer.
Also there is a possibility of individuals becoming less sociable and more and more self-
centred. Too much computerised and monotonous work pattern may effect the employees
productivity. To know more about harmful impacts of computers, study Secs. 15.4 and 15.5.
You will learn about computers impact on every specter of our life – as an individual, on
organisation, international community and so on.
In providing tourism services manual back-ups should always be there where ever
computerised services have been introduced. The customer is not going to accept
computer failure as an excuse for denial of or delay in services
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UNIT 16 LEGAL DIMENSIONS OF COMPUTERISATION
Structure
16.0 Objectives
16.1 Introduction
16.2 Computers and Law
16.3 Purchase or Sale of Computers
16.3.1 Purchase/Sale – A Contract
16.3.2 Purchase/Sale of Software
16.4 Legal Aspects of Use of Computers
16.4.1 Patents
16.4.2 Copyright
16.4.3 Trade Secrets and Confidentiality
16.5 Tortious Liabilities in Use of Computers
16.6 Privacy and Confidential Information
16.7 Let Us Sum Up
16.0 OBJECTIVES
The objectives of this Unit are to:
• bring to focus the types of computer-law interfaces,
• explain how a computer purchase/sale is a contract,
• present a brief discussion on how a user can legally protect his or her programmes and data,
• discuss situations where liability arises with regard to computers even though there is no
contract, and
• bring out the right to privacy and confidentiality for individuals.
16.1 INTRODUCTION
In the earlier Units, you have learnt about computers and the importance of computerisation in
tourism sector. The computerisation process begins with the purchase of computer and computer
software packages. The proper knowledge about the process of acquiring them is very important.
In this Unit, you will learn about the legal aspects of computer purchase and its programmes. The
laws made in pre-computer era tend to overlook the technological advancement over the years
and therefore it is very much important for a computer buyer and user to know the different legal
aspects and also the loopholes in the law. This Unit discusses various issues related to them.
16.2 COMPUTERS AND LAW
The occasions when a computer user can benefit by knowledge of law applicable to the field of
Computer and its applications are many. To mention a few:
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• when you are buying or selling a computer, both hardware as well as software and also
peripheral systems,
• when you are using a Computer,
• when you are trying to change over from manual to a computerised system or when you are
trying to upgrade your existing computer system,
• when you incur loss or damage as a result of the use of computer by others,
• when you cause harm to others by your using of computer,
• when you want to do programmess and patent them or secure copyright,
• when you want to keep some parts of your technology of hardware or some aspects of your
software confidential,
• when systems connected to or operated through computers go faulty and you suffer as a result
of such faults,
• when your privacy is affected by storage of information relating to you in computer,
• when malpractices are committed in computer and you suffer damages as a result of such
malpractices,
• when you engage the services of a consultant or firm to provide you information services, and
• when your health is affected by the use of computer.
Each country attempts to deal with computer related legal matters within the framework of the
existing laws by reinterpreting the legal provisions. In a few cases some countries found it
necessary to amend, add or modify existing laws suitably to deal with special situations arising
from computer related matters. These aspects will be discussed in subsequent Sections.
16.3 PURCHASE OR SALE OF COMPUTERS
Computer technology being relatively new to developing countries like India, the consumer is
rarely aware of even the fundamentals of computers. Also consumerism is still very weak in
developing countries. As a result the sellers dump their products on the consumer. The customer
often buys a computer as children buy toys. Most consumers buy without knowing what they
actually want to do with the computer or whether the computer which they are buying will really
suit their specific requirements. The situation is true both of individuals and organisations. In
many cases the computers remain merely as show pieces after purchase and are often used for
playing games.
16.3.1 Purchase/Sale – A Contract

Every purchase of any movable article is a contract covered by the provisions of a branch of
contract law known as sale of goods. In India, for example, sale of goods is governed by the
provisions of the Sale of Goods Act 1897.
Off-the-Shelf Purchase
Sale or purchase of goods can be broadly of two types, one in which a specific product with
specified features is offered by a seller. Here the seller fully discloses all the features of the
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merchandise to the buyer through literature in the form of pamphlets, manuals, etc. The buyer
may buy with or without inspection relying upon the specifications disclosed. Here the buyer
buys a product with full knowledge of what it can accomplish, provided the equipment works
according to the features offered. In such a deal the buyer cannot complain later that the
equipment purchased did not fulfil the requirements. The purchase is similar to any other
purchase of consumer articles which are purchased from shops, as for example a branded packet
of cornflakes. The buyer has a cause for action only if the flakes are found to be not cornflakes or
that it is spoiled, etc. The customer cannot say that the children did not like the taste of cornflakes
and that therefore the purchase price should be refunded. Similarly when a customer buys a
computer of a branded variety of say, a P.C., by brand name, all that one can demand later is that
it should have capabilities and features described in the pamphlets or manuals. If due to the
volume of data to be handled or the high speed required for specific purposes, one finds the P.C.
unsuited to fulfil the requirements one cannot raise a claim against the seller.
Purchase based on Buyer’s Specifications
Let us now take the second kind of purchase in which the buyer specifies the actual requirements
and relies upon the seller to give an equipment that will meet the actual requirements. In such
cases, the buyer, if the equipment fails to suit purpose, can proceed against the seller and claim a
replacement or damages. Suppose a buyer explained to a seller that he or she wanted a grinder to
grind wet cereals and relied upon the seller to choose an equipment and later found that the
grinder which was sold will only grind dry, then he or she can compel the seller to give a
replacement that will grind wet or if this is not possible claim damages or refund.
The above principle of buying is so fundamental to all types of buying of movable properties and
therefore it would benefit both buyers and sellers equally to be aware of and adhere to it. The
principle binds individuals as well as organisations. If the buyer is clear of what he or she wants
and buys on a specification based on needs and the seller sells an equipment supposedly to meet
the buyer’s needs, then the buyer is on strong grounds. It would, therefore, be in the interest of
the buyer of a computer to spend some time on why and for what specific requirements he
or she wants a computer. The situation is all the more applicable to organisations since
organisations usually make larger investments. Of course in the current scene of little or no
awareness of the technological aspects of hardware and software, it might be necessary for the
buyer to seek help from a consultant. With or without the help of a consultant a reasonably good
systems analysis has to be done before investment. Also the hardware and software requirements
have to be translated into specifications for purchase. When both these steps do not take place the
buyer will have to be satisfied with shelf products.
A word of caution regarding specifying the speed of the hardware. Many users mistake the speed
of computer which they see in some demonstrations as the speed at which they will get results.
When volume of data is large as in most Dbase applications in real life, time involved in
processing is greater. It would not be practicable to include in specifications that the hardware
should be capable of completing the processing of a certain large number of transactions say,
accounting shall be computed within a given time, because time required to process is dependent
on the kind of software used also. Further, when an individual or organisation has its own
computer system it may be more economical to use the capacity fully and hence it may not be
worthwhile to invest much in fancy speeds.
This brings us to another aspect of computer buying, where the buyer is in a dilemma as to what
capacity of computer should be specified – whether to specify a capacity to suit current needs or
future needs. There are some options here. A buyer can invest just enough to meet current needs
and forget about future. After all one may argue that the technological changes taking place are so
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fast that there is not much merit in buying current technology with reserve capacity for future at
large investment, since under the fast changing technology, larger capacity units may even be
cheaper and more powerful in the future.
Another option is that upgradability be made part of the specifications and the seller bound by
contract to provide upgradations as and when the buyer chooses to have. The main point which
has legal implications is that upgradability has to be specifically made a condition of purchase,
failing which the buyer cannot have a later remedy for outdation. This aspect has much
significance in the current market conditions since competitive edge in prices is achieved by
many a manufacturer by providing absolutely minimum capabilities, that too with no features
supporting upgradation.
Compatibility with Peripherals etc.
Compatibility with peripherals like printers, communication equipment like fax, telex, digital
camera, scanner, etc. also are better specified in advance, so that if the buyer wants to link the
computer with such facilities later, he or she may not end up with problems. In situations where
the buyer is already having one system and is trying to upgrade it or expand it, the compatibility
aspect will be all the more important. It is generally claimed that hard disks can be added to an
ordinary P.C. quite easily, but when it comes to actual application many suppliers try to wriggle
out of this type of upgrading.
After Sales Service
Still another area where the buyer is advised to specify clearly is the after sales service facilities.
Computer is after all a piece of equipment and would need frequent servicing. In the current
Indian scene third party maintenance is yet to pick up and therefore after sales service in the form
of annual maintenance contracts or other type of periodical maintenance on actual cost basis etc.
have to be specified by the buyer.
Compatibility with Software
Compatibility with software as also the purchase of software are two aspects which deserve much
attention and specification by the buyer. The usual sales talk as well as computer advertisements
try to lure buyers to invest on hardware as if software is something which is automatically
available with hardware (of course this would never be specifically mentioned). The
demonstrations of the product are also usually so organised that the unknowing buyer is led to
believe that once he or she buys the hardware he or she has only to take it home and hook on to
the plug for getting the outputs. It is only after investing on the hardware that the unknowing
buyer is told that for operating the computer software is to be purchased separately. This aspect of
software purchase will be dealt with separately.
Networking
Still another aspect of hardware purchasing deals with incorporation of specifications for
networking of computers. Not all makes and all types of computer can be networked. Further
both additional hardware and software are required to do networking. If one hopes to do
networking later then one should specify at the time of purchase of the computer system that he
or she wants a model which will enable networking at a later date.
Inspection Before Purchase
It is one of the basic principles of the law of sale of goods that when a buyer has purchased after
inspection of a sample, the goods delivered should conform to the sample, failing which the buyer
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can proceed against the seller. However, this is a double-edged sword for the seller may also try
to take advantage of the position what one is bound to provide are only such features as were
incorporated in the sample. When inspection of the sample is not thorough the buyer will suffer.
Again there may be several features of a product which cannot be revealed during inspection. The
buyer has therefore to be clear of what aspects he or she wants to understand by samples and what
aspects by actual use subsequent to installation.
Conditions, Guarantees and Warranties
This brings us to the question of the liabilities of the seller for conditions, guarantees and
warranties and training of operators and installation and commissioning. Conditions of sale,
payment conditions etc. are so vital to the contract of sale that non-fulfillment of such conditions
may even render the whole sale void ab initio. If for example delivery is to be made within a
certain period after the payment of say 25% of the total price then unless and until the payment is
received and the specified period is over the seller is not bound to deliver. In leasing and hire
purchase schemes etc. the ownership of the equipment (referred to as property is goods) passes on
to the buyer only when the final installment is paid. Until such time one has only physical
possession. If payment is not made according to terms or payment is delayed the seller can take
away the equipment. Guarantees and Warranties on the other hand have different consequences.
When a computer such as say a P.C. is guaranteed for performance for one year (may be subject
to certain conditions such as that in case of a problem the supplier or the authorised agent only
shall attend to repairs, etc.) then if the equipment fails within the guarantee period the supplier is
bound to make it work at his or her cost either by repairs or replacement. Warranties, on the other
hand relate to the features of the equipment which are not so vital to the performance of the
equipment. Hence, they do not attract the same consequences. The seller can choose to repair the
shortfalls or agree to pay damages. For example, if the sample P.C. inspected by the buyer had a
particular manufacturer V.D.U. and the finally delivered computer had a V.D.U. manufactured by
another company the seller may argue that both V.D.U.s provide the same performance. The
buyer can, if he or she proves that the supplier has saved in cost by using the latter V.D.U. claim a
reduction in price. Of course, there is no end to such debates and a prudent buyer will confine all
attention to major vital components of the computer.
One more fundamental principle of sale of goods is that a seller professing to sell a particular
equipment which is commonly known to perform certain essential functions must make available
an equipment which will perform substantially such functions irrespective of guarantee clauses
and warranty clauses. Thus, a seller who sells a car with or without guarantee conditions has to
make available to the buyer a minimum of what a car will do. Therefore, a seller of car cannot
take shelter under the absence of guarantee clause to sell four wheels and a body without engine.
Therefore, if an ignorant buyer buys a “Computer”, then he or she can always compel the supplier
to provide him or her with an equipment that will perform the essentials of what a computer will
do. However, considering the sophistication and advancements that have come up in the field of
computers there can be never-ending disputes on what a “Computer” should essentially possess.
Only a court of law, after protracted examination of evidence can decide such issues. The more
prudent step for a buyer is to eliminate disputes as far as possible by making clear what he or she
wants and then bargain for the purchase of what he or she wants.
16.3.2 Purchase/Sale of Software

Software is the brain of the computer. Without the relevant software even the most powerful
computer cannot accomplish anything.
Considering the fact that software is as costly or even more costly than hardware the buyer has to
be quite alert and vigilant about the conditions of procurement, compatibility with hardware,
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usability for specific purposes of the buyer, etc. As already mentioned the manufacturers and
suppliers of computers project hardware in such a way that the ordinary citizen does not realise
that software is not included in the bargain. However, competition has forced many companies
now to include in their sale price the cost of essential software for using the computer.
There are two types of software, the system software and the application software. Without the
system software such as the Disk Operating System or the Unix or other types the user cannot
proceed to use the computer at all. Even many a reputed manufacturer/supplier keeps the price of
operating system extra and project the price of the hardware low. During demonstrations the
suppliers demonstrate the capabilities of the computer using several sophisticated application
softwares and the ignorant buyer may believe that all those are part of the hardware.
To take an example, suppose a PC/XT costs Rs.30,000. A professional like a chartered accountant
would need to invest about Rs.2,000 in MS Dos, Rs.20,000 in Dbase, about Rs.15,000 in lotus
and about Rs.75,000 in a wordstar for using the computer for his or her various needs. The cost of
an 80-column printer would be about Rs.10,000. The other alternative for the chartered
accountant would be to go in for an MS Dos and then specific application packages for financial
accounting and a wordstar which costs about Rs.17,500. But then the computer can be used only
for the limited purposes which the financial accounting package and the wordstar will facilitate. It
would therefore be in the interest of the buyer to specify what kind of software he or she wants
while negotiating the purchase of hardware.
Another form of software purchase is when the buyer contracts with the supplier of the equipment
to provide tailor-made software for the specific needs of the buyer. This is the usual practice in
the case of organisations. The supplier has then to do systems analysis and develop application
programmes to suit the needs of the buyer. In some cases it may be that the customer has some
software and needs a system which will enable him or her to use the software. This often happens
with professionals who go abroad and bring software which they find attractive. Another situation
may be one in which the buyer has both a system and software, but then wants to expand and
network the system for larger use. In all such cases the buyer and supplier have to sit together and
understand the ambit of supply, negotiate, lay down the responsibilities of the supplier and draw
up a proper contract. It is needless to point out that in all such situations the sale of goods is not a
mere off-the-shelf sale. There are many instances in which, for want of proper understanding
regarding the scope of work and the extent of responsibility of the supplier, the suppliers have
walked away after dumping costly hardware on the buyer and the buyer keeping the equipment as
a mere showpiece.
Computer Services
There are also situations where computer services are obtained by individuals or organisations
through agencies which provide such services. Here the taker of the services is not bothered about
hardware or software, but is paying for only a specific service. While there are many advantages
for the taker of such services, there are also disadvantages such as the loss of privacy, high
service cost, too much dependence on an outside agency, etc. There is practically no sale of goods
in such cases and the transactions are governed by the terms of the service contract.
1) Mention the situations in which a knowledge of law can help in the field of computers.
………………………………………………………………………………………………...
………………………………………………………………………………………………...
………………………………………………………………………………………………...
238
2) What do you understand by purchase based on buyer’s specifications?
………………………………………………………………………………………………...
………………………………………………………………………………………………...
………………………………………………………………………………………………...
16.4 LEGAL ASPECTS OF USE OF COMPUTERS
Apart from the contractual obligations arising from the sale/purchase of computers and software,
there are many other legal consequences that follow when a user uses a computer. Some of the
more important aspects of these such as patents, copyright, protection of trade secrets etc. will be
discussed here.
16.4.1 Patents
As has already been discussed, a hardware alone is useless without software. If the user has
programming capabilities than he or she can develop his or her own software using any language
like Basic, Cobol or C etc., Alternatively one may use Dbase, Lotus, unify, Ingress or other
general-purpose packages to develop suitable application software. Without taking the trouble to
do either of the above, one can buy readymade execution programmes for specific purpose. One
can also engage consultants to develop specific software from languages or general-purpose
software. Somebody has to develop programmes. Suppose a user or consultant makes a
programme which he or she thinks is original in its own way, then one can legally protect it as
own creation by becoming the owner of it in a certain sense. If this were possible, then when
others want to use it they can be made liable to pay certain charges on agreed basis. The law on
‘patents’ deals with such situations. Each country has its own legislation on patents. Here the
software created is treated as something similar to an invention in, say engineering or a new soft-
drink formula, etc. Patenting involves certain procedures. The applicant has to make full
disclosure of what he or she has developed. The patenting authority should get convinced that it is
not a mere reporduction of something already patented. Again the field of patents and law
connected with it are riddled with lots of debates and disputes. Mere intellectual advancements to
knowledge such as say a theorem in mathematics etc. cannot be patented, since if that were the
situation, free and unfettered advancement of knowledge would be inhibited. It would appear that
patenting would be possible of commercial applications. Ordinary computer programmes cannot
be patented.
16.4.2 Copyright
Copyright is another form of legal protection which software people can resort to for protection
of their products. Copyrights can be claimed for data as well as programmes. The former is
concerned with the use of information which is copyrighted and stored in retrieval systems. The
latter relates to protection of programmes which are marketed to the general public using
computers.
There remain a number of problems in deciding how far the law or copyrights relating to
intellectual property can be applied to computer programmes.
The basic protection afforded by copyright is directed against reproduction of the form of the
original material. If material such as rules of a game can be used without copying, then copyright
is not infringed. To obtain copyright protection it is necessary to obtain registration and also affix
copyright notice to a computer programme. In order to preserve copyright protection it is
239
essential that there is no unauthorised publication of a programme by purchasers or licencees
without explicit reservation of the copyright.
16.4.3 Trade Secrets ad Confidentiality

Another method by which a person can protect his other computer programmes is by relying on
common law relating to trade secrets and confidentiality. There is no doubt that computer
programmes are eligible for this form of protection, so long as they have progressed beyond the
stage of general idea to approach some specific problem. Indeed associated documentation such
as user’s manual or a flow chart would also be eligible for protection. In fact this branch of law
probably supplies the most widely adopted form of protection for computer programmes as of
now. This is especially so in the case of programmes which are written in-house for use by a firm
upon its own machine. Here the programmes need never be divulged to anyone outside the firm,
and employees can be restrained by contractual provision from making the programmes available
to third parties either during their service to the company or even after its termination, at least
within reasonable limits. Contractual provision may be similarly made in aid of the secrecy of
programmes which are divulged to third parties by way of sale, lease or license. Detection of
abuse, identification of offenders, and certainty of remedy are all enhanced by comparison with
patent and copyright protection.
16.5 TORTIOUS LIABILITIES IN USE OF COMPUTERS
A tortious liability arises when one suffers loss because of the action of another (such as say, use
of computer) even though there is no contractual relation between two persons. The computer is
not, by and large, a physically dangerous machine. It does pose some electrical and fire hazards,
and peripheral equipment has some moving parts. Occasional cases of physical injury may arise,
but are rare and legally uninteresting. This really leaves only three basic categories, cases of fraud
or deceit, cases of negligence and cases of breach of statutory duty. There may of course, be other
remedies than tortious claims also in such cases such as criminal liabilities and contractual
liabilities for warranties, etc. One of the most common situations in negligence is that of the
computer salesperson who makes a careless claim in an attempt to sell a system.
Determination of Damages in Contracts and Torts
Two main aspects of determination of liability for torts/contract violations are:

a) The measurement of damages for loss which is the result of the tort (or breach of contract in
cases of violation of contract).
b) The remoteness of the loss.
The general principle would seem to be that only estimated/actuals of real losses would be
awarded as damages. Remote losses are usually not allowed by courts. However, American courts
are seen to be more liberal in the interpretation of claims for damages than the British courts
which take a more restricted view of the interpretation of admissibility of claims from
considerations of remoteness.
16.6 PRIVACY AND CONFIDENTIAL INFORMATION
With the introduction of computers for information processing computerised systems hold in their
databases several pieces of information relating to individuals and organisations. The security of
240
such information is a problem which has started receiving attention. Politicians, lawyers,
publishers, scientists, police and other governmental agencies are all concerned with this
problem.
The concern mentioned above springs from certain notions prevalent or getting prevalent. These
are:
• Privacy of individuals is being intruded into more and more in present times.
• Modern technology is partly responsible for this intrusion.
• Much of the information that is stored in computers is inaccurate and goes unchecked.
However, users take the information to be correct.
• The stored information is available to anyone who wishes to have it either through legal or
illegal access.
• In comparison with the speed with which technological changes have taken place the legal
remedies available are far from adequate.
Much can be argued for and against the validity of the above propositions. Several solutions to
the problems by way of legislations and otherwise have been suggested. A lot of debate is going
on in different parts of the world on the subject. Some countries have taken the initiative to
legislate on the subject. Some countries rely on existing legislations only.
1) What do you understand by products and copyright?

………………………………………………………………………………………………...
………………………………………………………………………………………………...
………………………………………………………………………………………………...
………………………………………………………………………………………………...
………………………………………………………………………………………………...
2) Mention the tortious liabilities in use of computers.

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………………………………………………………………………………………………...
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16.7 LET US SUM UP
At each stage, from purchase to disposal of a computer, knowledge of the applicable laws is a
helpful aid. This Unit discussed the laws which govern purchase, sale and possession of not only
the hardware but also the system and application software of computers. Apart from contractual
obligations, this Unit also discussed some of the more important legal aspects pertaining to
241
computers like patents, copyright, etc. Tortious liabilities arising from the use of computers were
also discussed. Finally, the Unit mentioned the possible threats to an individual’s rights to privacy
in the context of information storage and retrieval using computers.
1) A few situations in which a knowledge of law can help in the field computers are:
a) when you are buying or selling a computer, both hardware as well as software and also
peripheral systems.
b) when you are using a computer.
c) when you want to keep some parts of your technology of hardware or some aspects of
your software confidential.
Read Sec. 16.2 to learn more about the situations where knowledge of law can help.
2) The kind of purchase in which the buyer specifies the actual requirements and relies upon the
seller to give an equipment that will meet the actual requirements. In such cases the buyer, if
the equipment fails to suit purpose, can proceed against the seller and claim a replacement or
damages. Read Sub-sec. 16.3.1 and answer with examples.
1) Patent: Suppose a user or consultant makes a programme which he or she thinks is original
in its own way, then one can legally protect it as own creation by becoming the owner of it in
a certain sense. If this were possible, then when others want to use it they can be made liable
to pay certain charges on agreed basis.
Copyright: The basic protection afforded by copyright is directed against reproduction of the
form of the original matter. If materials such as rules of a game can be used without copying,
then copyright is not infringed.
Study Sub-secs.16.4.1 and 16.4.2 to explain it better.
2) A tortious liability arises when one suffers loss because of the action of another even though
there is no contractual relation between two persons. Read Sec. 16.5 to answer the question.
Activity
If you have to buy a PC what steps would you take?
If you are buying for your organisation what procedure would you adopt?
242

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UNIT 1 DATA, INFORMATION AND KNOWLEDGE:

• distinguish the meaning, distinctive characteristics and interrelationships of data, information

• examine the scope of data in different fields,

• get a good overview of the nature and definitions of information,

• discern the qualities and properties of and barriers to information.

1.2 VALUE AND IMPORTANCE OF INFORMATION

1) Research and Development (R&D)

2) Fusion and Science and Technology (S&T)

3) Science and Technology (S&T) and Societal Information

The rapidly developing Information Technology has revolutionised information processing,

Growth of population greater complexity of

Social differentiation and reorganisation development of group and Increasing

new products, services and process

need of teachers and students

Life expectancy increases longer and more diverse

Social welfare provision needs of agencies and clients

Check Your Progress – 1

1.3 INFORMATION: THEORY AND DEFINITIONS

The model has been simplified into a flow model:

Source Message Channel Receiver

Belkin postulates three approaches to the determination of the requirement of an information

• Methodological – having to do with the utility of the concept;

• Definitional – having to do with context of the concept.

i) It must refer to information within the context of purposeful, meaningful communication,

iii) It should account for information being requested or desired,

v) It should account for the effect of information on the recipient,

2) Wersig and Neveling

K(S) + ∆1 = K(S + ∆S)

Knowledge is an organised set of statement of fact or ideas, presenting a reasoned judgement or

1.4 TYPES OF INFORMATION

• Media is the physical media that carry messages or contents of information.

Using Source as a characteristic, information can be grouped as follows:

• Graphic of various kinds, e.g., Photographs, Pictures, Graphs, etc.

3) Widely scattered. Thesis and Dissertations, Project Reports.

3) Scattered information collected Reports, Progress, Advances, etc.

1) Compilations of primary and secondary Bibliographies of Bibliographies, Year Books.

2) Organised and arranged according to a Directories, Lists of Research in Progress, Guides to

3) Aids to searching primary and secondary Information Sources, Organisations, Human

• Information Institutions: Libraries, Documentation and Information Centres, Information

• Distribution Agencies: Booksellers, Subscription Agents, Clearing Houses, Information

• Know-why information: more scientifically oriented information, readily accessible in the

• Show-how information: operational skills, maintenance and control capabilities, seldom

Check Your Progress – 2

1) Explain the simplified model of information transfer derived from Shannon-Weaver

3) Summarise in a tabular form the classification of information as discussed in Section 1.4.

2) Scientific and Technical Information

3) Technological and Economic Information

Language Jargon Presentation

Communication Problem Media Problem Socio-economic Problem

Over Population Pollution (Noise) Delays in Handling

Economic Political Regulatory

1.7 MEANING OF DATA

Data are defined in McGraw-Hill Encyclopaedia of Science and Technology as “numerical or

1.8 NATURE, PROPERTIES AND SCOPE OF DATA

Likewise, it is possible to determine the nature of data as either enumerative or descriptive in

Check Your Progress – 3

2) Write a paragraph explaining the meaning of data.

3) Write a note on data as a crystalised presentation.

1.9 DATA, INFORMATION AND KNOWLEDGE

1.9.1 Characteristics and Interrelationships

Data Raw Material Cotton : destination

1.9.2 Comparative Study

Knowledge is interpretation in context, relatedness, conceptualisation and forms of argument. The