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HARVINDER SINGH (MCA 4 Semester) Roll Number - 511025273

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Book ID: B0901


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HARVINDER SINGH

HARVINDER SINGH (MCA 4th Semester) Roll Number - 511025273

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August 2010
Master of Computer Application (MCA) Semester 4 MC0076 Management Information Systems 4 Credits (Book ID: B0901) Assignment Set 1

1.

What do you understand by Information processes data?

Ans: Information is a complex concept that has a variety of meanings depending on its context and the perspective in which it is studied. It could be described in three ways1. As processed data, 2. As the opposite of uncertainty, and 3. As a meaningful signal-to illus-trate the richness of the concept of information. Information as Processed Data Data are generally considered to be raw facts that have undefined uses and application; information is considered to be processed data that influences choices, that is, data that have somehow been formatted, filtered, and summarized; and knowledge is considered to be an understanding derived from information distinctions among data, information, and knowledge may be derived from scientific terminology. The researcher collects data to test hypotheses; thus, data refer to unprocessed and unanalysed numbers. When the data are analysed, scientists talk about the information contained in the data and the knowledge acquired from their analyses. The confusion often extends to the information systems context, and the three terms maybe used interchangeably. Information as the Opposite of Uncertainty A different perspective on information derives from economic theory and defines information as the negative mea-sure of uncertainty; that is, the less information is available, the more uncertainty exists, and conversely, the more information is available, the less uncertainty exists? In microeconomic theory the equilibrium of supply and demand depends on a market known as a perfect mar-ket, where all buyers and sellers have complete knowledge about one another and where uncertainty does not exist. Information makes a market perfect by eliminating uncertainties about supply and demand. In macroeconomic theory, firms behave according to how they read the economic climate. Economic signals that measure and predict the direction of the economy provide information about the economic climate. The firm reduces its uncertainty by decoding these signals. Taking an example of Federal Express in USA, each incoming aircraft has a scheduled arrival time. However, its actual arrival depends on unforeseen conditions. Data about when an aircraft departed

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from its destination is information in the economic sense because it reduces uncertainty about the aircrafts arrival time, thereby increasing Federal Expresss ability to handle arriving packages. Managers also define information in terms of its reducing uncertainty. Because managers must project the outcomes of alternatives in making decisions, the reduction of uncertainty about the outcomes of various alternatives improves the effectiveness of the decision- making process and the quality of the decision. Information as a Meaningful Signal Information theory, a branch of statistics concerned with measuring the efficiency of communication between people and/or machines, defines information as the inputs and outputs of communication. Electronic, auditory, visual, or other signals that a sender and receiver interpret similarly convey information. For example, in the recruitment scenario about, the resumes and applications for the open positions are information because they are signals sent by the applicants, and interpreted similarly by both. The Managers in their roles as communicators both generate and receive information. They receive reports that organize signals or data in a way that conveys their meaning. Reports of sales trends become information; so do reports about hazardous waste sites. Managers derive meaning from the information they see and hear as part of communication and use it to make decisions. This definition of information requires a manager to interpret a given signal as it was intended. For example, a managers incorrect interpretation of body language in a negotiation would not be considered to be information from this perspective, although we know that managers use both correct and incorrect perceptions as information in decision making and other managerial functions. Again, this view of information suggests the complexity of the concept and the value of a multifaceted definition. 2. Discuss the Components of an Organizational Information System.

Ans: Management Information Systems (MIS) are information systems, typically computer-based, that are used within an organization. WordNet describes an information system as "a system consisting of the network of all communication channels used within an organization". A management information system may also be defined as "a system that collects and processes data (information) and provides it to managers at all levels who use it for decision making, planning, program implementation, and control." An information system is comprised of all the components that collect, manipulate, and disseminate data or information. It usually includes hardware, software, people, communications systems such as telephone lines, and the data itself. The activities involved include inputting data, processing of data into information, storage of data and information, and the production of outputs such as management reports. As an area of study it is commonly referred to as information technology management. The study of information systems is usually a commerce and business administration discipline, and frequently involves software engineering, but also distinguishes itself by concentrating on the integration of

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computer systems with the aims of the organization. The area of study should not be confused with Computer Science which is more theoretical and mathematical in nature or with Computer Engineering which is more engineering. In business, information systems support business processes and operations, decision-making, and competitive strategies. Components of an Organizational Information System The environment in which organizations operate from the in-formational perspective in terms proposed by George Huber of the University of Texas, who has studied the organizational design required by an information society. His conclusions provide a framework for determining what is required of an organizational information system. These, according to Huber, are the hallmarks of an information society: 1. Dramatic Increase of Available Knowledge Whether measured in terms of the number of scholarly journals, patents and copyrights, or in terms of the volumes of corporate communications, both the production and the distribution of knowledge have undergone a manifold increase. 2. Growth of Complexity Huber characterizes complexity in terms of numerosity, diversity, and interdependence. A growing world population and the industrial revolution combined to produce numerosity, or a growing number of human organizations. To succeed, people and organizations learned to specialize: they do things differently and organize themselves differently to accomplish specialized tasks. These differences lead to diversity. Two principal factors have led to increased interdependence. The first as been the revolution in the infrastructure of transportation and communication. The second factor is specialization in firms that make narrowly defined products, as opposed to the self-sufficiency of companies producing a complex product down to its minute elements. A companys product is typically a part of a larger system, produced with contributions from a number of interdependent firms (consider a car or a computer). Moreover, interdependence has increased on a global scale. Even the most isolated of countries participates in some way in the international division of labor. Organizations operating in the public sector, while rarely in a competitive situation, are still governed by the demands of society. Pressures on the public sector in democratic societies, along with the pressures conveyed from the private sector, also make the environment in which public organizations operate more complex.

HARVINDER SINGH (MCA 4th Semester) Roll Number - 511025273

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3.

What are the features contributing to success and failures of MIS models?

Ans: MIS is to be success then it should have all the features listed as follows: 1. The MIS is integrated into the managerial functions. It sets clear objectives to ensure that the MIS focuses on the major issues of the business. 2. An appropriate information processing technology required to meet the data processing and analysis needs of the users of the MIS is selected. 3. The MIS is oriented, defined and designed in terms of the users 4. The MIS is kept under continuous surveillance, so that its open system design is modified according to the changing information needs. 5. MIS focuses on the results and goals, and highlights the factors and reasons for non achievement. 6. MIS is not allowed to end up into an information generation mill avoiding the noise in the information and the communication system. 7. The MIS recognizes that a manager is a human being and therefore, the systems must consider all the human behavioral factors in the process of the management. 8. The MIS recognizes that the different information needs for different objectives must be met with. The globalization of information in isolation from the different objectives leads to too much information and information and its non-use.

9. The MIS is easy to operate and, therefore, the design of the MIS has such features which make up a user-friendly design. 10. MIS recognizes that the information needs become obsolete and new needs emerge. The MIS design, therefore, has a basic potential capability to quickly meet new needs of information. 11. The MIS concentrates on developing the information support to manager critical success factors. It concentrates on the mission critical applications serving the needs of the top management. Many a times MIS is a failures. The common factors which are responsible for this are listed as follows: 1. The MIS is conceived as a data processing and not as an information processing system. 2. The MIS does not provide that information which is needed by the managers but it tends to provide the information generally the function calls for. The MIS then becomes an impersonal system.

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3. Under estimating the complexity in the business systems and not recognizing it in the MIS design leads to problems in the successful implementation. 4. Adequate attention is not given to the quality control aspects of the inputs, the process and the outputs leading to insufficient checks and controls in the MIS. 5. The MIS is developed without streamlining the transaction processing systems in the organization. 6. Lack of training and appreciation that the users of the information and the generators of the data are different and they have to play an important responsible role in the MIS. 7. The MIS does not meet certain critical and key factors of its users such as a response to the query on the database, an inability to get the processing done in a particular manner, lack of userfriendly system and the dependence on the system personnel. 8. A belief that the computerized MIS can solve all the management problems of planning and control of the business. 9. Lack of administrative discipline in following the standardized systems and procedures, wrong coding and deviating from the system specifications result in incomplete and incorrect information. Budgeting Models Controlling the business performance through the budget system is an accepted management practice. In this approach, various budgets are prepared, viz., the Sales Budget, the Production Budget, the Capacity Budget, the Manpower Budget, the Expense Budget, and the Inventory Budget, etc. Using these budgets the profits are estimated. Budgets are also used for planning and control. The system is used to find out whether the performance is under the budget or over the budget. This gives the manager a self evaluation tool for assessing the current status and also provides some insight into the operations of the Company. The use of Spread Sheet, Lotus123, VisiCalc, Framework and many others are a standard tool for these applications, where the planning, budgeting and analysis are required. All these systems are based on the worksheet which has columns and rows with labels on each. The package helps in arriving at the row totals and the column totals. It not only provides the totals but also summaries at the subheads. It has also a facility that if one row or column changes, it computes the changes in the rest of the worksheet, where it is affected. Breakeven Analysis Model

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This model is simple but very useful for determining the volume of business activity at which there is no loss or profit. The model is used to decide the alternatives based on the cost, volume and price. BEP= FC = 100000 = 1000 REV-VC 200-100 Where FC = Fixed cost REV = Revenue per unit BEP = Break Even Point TC = total Cost VC = Variable Cost N = No. of Units demanded Suppose FC = 1, 00,000, VC/Unit = 100 and Rev = 200 then BEP is calculated as above. This model can be built for the company, for the product groups or for any activity, where you can identify the fixed cost, the variable cost and the revenue at each activity level in terms of the units demanded. The advantage of this model is that it tells you as to what the breakeven point for the given level of costs and revenue is. If there are possibilities of altering the costs, it would tell its impact on the breakeven point, i.e., if the price is reduced, the revenue will come down and the breakeven point will further go up. The costs are generally not linear over the entire range of activity. The cost would go up after a breakeven model can be built for the multiple activities and for the nonlinear costs. The computerized model helps in assessing the various parameters of business and its sensitivity towards the profit/loss. The model is very popular when the costs are known and are controllable. It is very handy tool for a quick decision on the price, cost considerations, etc. and can be used very effectively for commercial negotiations.

HARVINDER SINGH (MCA 4th Semester) Roll Number - 511025273

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4.

Lists down the Potential External Opportunities, potential internal Weaknesses.

Ans: Corporate level strategy addresses which lines of business a company should pursue. It views an organization as a portfolio, agglomeration, federation, or amalgam of businesses or subunits. Strategic management at the corporate level focuses on decisions about acquiring new businesses, divesting old businesses, establishing joint ventures, and creating alliances with other organizations. Determining its corporate-level strategy requires top management to obtain information about business growth rate-the speed of industry growth-and market share-the portion of the industry market captured by the business unit, among other information. Information on industry growth and market share is often public, due to the disclosures required of companies issuing stocks and bonds. Industry lobbyists, stock market researchers, trade magazine journalists, and other researchers also act as sources of this information. Information systems can regularly provide organizations with such information by tapping into commercially sold databases that offer extensive economic, technological, demographic, and even legal information. This ongoing availability of information allows organizations to determine their strategic position as well as the appropriate actions for maintaining or changing this position. Information systems can provide the information for making resource allocation and other investment decisions. Information about market share, profit margins, patent ownership, technical capability, competitive strengths and weaknesses, quality of the management team, ability to compete on price and quality, customer requirements, and markets helps management determine its investment strategy. For example, business units with high ratings on both industry attractiveness and business strength make good financial investments; those low on both dimensions have no growth potential, and managers should consider divesting or liquidating them. Strategic management also involves business-level strategy, matching the strengths and weaknesses of each business unit or product line to the external environment to determine how each unit can best compete for customers. Strategic decisions include what products or services the company should offer, what customers it should service, and how it will deploy resources for advertising, research and development, customer service, equipment, and staffing. Potential External Opportunities Serve additional customer groups Enter new markets or segments Expand product line to meet broader range of customer needs Diversify into related products Vertical integration Falling trade barriers in attractive foreign markets Complacency among rival firms

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Faster market growth Potential Internal Weaknesses No clear strategic direction Obsolete facilities Lack of managerial depth and talent Missing key skills or competence Poor track record in implementing strategy Plagued with internal operating problems Falling behind in R&D Too narrow a product line Weak market image Weaker distribution network Below-average marketing skills Unable to finance needed changes in strategy Higher overall unit costs relative to key competitors 5. What do you understand by Multinational Corporation, Global Corporation, International Corporation, Transnational Corporation?

Ans: Multinational Corporation: A multinational corporation has built or acquired a portfolio of national companies that it operates and manages with sensitivity to its subsidiaries local environments. The subsidiaries operate autonomously, often in different business areas. A company that follows a multinational strategy has little need to share data among its subsidiaries or between the parent and subsidiaries except to consolidate financial positions at years end. Global Corporation: A global corporation has rationalized its international operations to achieve greater efficiencies through central control. Although its strategy and marketing are based on the concept of a global market, a headquarters organization makes all major decisions. A company pursuing a global strategy needs to transfer the operational and financial data of its foreign subsidiaries to headquarters in real time or on a frequent basis. A high level of information flows from subsidiary to parent, while limited data move from parent to subsidiary. International Corporation: An international corporation exports the expertise and knowledge of the parent company to subsidiaries. Here subsidiaries operate more autonomously than in global corporations. Ideally, information flows from the parent to its subsidiaries. In practice, subsidiaries often rely on the parent to exercise its knowledge for the subsidiaries benefit rather than simply to export it to the subsidiaries. For example, a subsidiary without a great deal of human resources expertise may pay its parent to operate its human resources function. Although the information

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theoretically should stay within the subsidiary, in this case it may flow back and forth between the parents location and the subsidiarys location. Transnational Corporation: A transnational corporation incorporates and integrates multinational, global, and international strategies. By linking local operations to one another and to headquarters, a transnational company attempts to retain the flexibility to respond to local needs and opportunities while achieving global integration. Because transnational operate on the premise of teamwork, they demand the ability to share both information and information services. 6. What are the limitations of ERP systems? How ERP packages help in overcoming theses limitations.

Ans: Enterprise Resource Planning: - Manufacturing management systems have evolved in stages over the few decades from a simple means of calculating materials requirements to the automation of an entire enterprise. Around 1980, over frequent changes in sales forecasts, entailing continual readjustments in production, as well as the unsuitability of the parameters fixed by the system, led MRP (Material Requirement Planning) to evolve into a new concept : Manufacturing Resource Planning (or MRP2) and finally the generic concept Enterprise Resource Planning (ERP The initials ERP originated as an extension of MRP (material requirements planning then manufacturing resource planning). ERP systems now attempt to cover all basic functions of an enterprise, regardless of the organization's business or charter. Nonmanufacturing businesses, nonprofit organizations and governments now all utilize ERP systems. To be considered an ERP system, a software package must provide the function of at least two systems. For example, a software package that provides both payroll and accounting functions could technically be considered an ERP software package. However, the term is typically reserved for larger, more broadly based applications. The introduction of an ERP system to replace two or more independent applications eliminates the need for external interfaces previously required between systems, and provides additional benefits that range from standardization and lower maintenance to easier and/or greater reporting capabilities. Some organizations -typically those with sufficient in-house IT skills to integrate multiple software products - choose to implement only portions of an ERP system and develop an external interface to other ERP or standalone systems for their other application needs. For example, one may choose to use the HRMS from one vendor, and the financials systems from another, and perform the integration between the systems themselves. Ideally, ERP delivers a single database that contains all data for the software modules, which would include: Enterprise Resource Planning is a term originally derived from manufacturing resource planning that followed material requirements planning. MRP evolved into ERP when "routings" became a major part of the software architecture and a company's capacity planning activity also became a part of the standard software activity.ERP systems typically handle the manufacturing, logistics, distribution, inventory, shipping, invoicing, and accounting for a company. Enterprise Resource Planning or ERP software can aid in the control of many business activities, like sales, marketing, delivery, billing, production, inventory management, quality management, and human resource management

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ERP systems saw a large boost in sales in the 1990s as companies faced the Y2K problem in their legacy systems. Many companies took this opportunity to replace their legacy information systems with ERP systems. This rapid growth in sales was followed by a slump in 1999, at which time most companies had already implemented their Y2K solution. ERPs are cross functional and enterprise wide. All functional departments that are involved in operations or production are integrated in one system. In addition to manufacturing, warehousing, logistics, and information technology, this would include accounting, human resources, marketing, and strategic management. The Ideal ERP System An ideal ERP system is when a single database is utilized and contains all data for various software modules. These software modules can include: 1. Manufacturing: Some of the functions include; engineering, capacity, workflow management, quality control, bills of material, manufacturing process, etc. 2. Financials: Accounts payable, accounts receivable, fixed assets, general ledger and cash management, etc. 3. Human Resources: Benefits, training, payroll, time and attendance, etc 4. Supply Chain Management: Inventory, supply chain planning, supplier scheduling, claim processing, order entry, purchasing, etc. 5. Projects: Costing, billing, activity management, time and expense, etc. 6. Customer Relationship Management: sales and marketing, service, commissions, customer contact, calls center support, etc. 7. Data Warehouse: Usually this is a module that can be accessed by an organizations customers, suppliers and employees. Limitations of ERP Success depends on the skill and experience of the workforce, including training about how to make the system work correctly. Many companies cut costs by cutting training budgets. Privately owned small enterprises are often undercapitalized, meaning their ERP system is often operated by personnel with inadequate education in ERP in general, such as APICS foundations, and in the particular ERP vendor package being used. 1. Personnel turnover; companies can employ new managers lacking education in the company's ERP system, proposing changes in business practices that are out of synchronization with the best utilization of the company's selected ERP.

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2. Customization of the ERP software is limited. Some customization may involve changing of the ERP software structure which is usually not allowed. 3. Reengineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage. 4. ERP systems can be very expensive to install often ranging from 30,000 US Dollars to 500,000,000 US Dollars for multinational companies. 5. ERP vendors can charge sums of money for annual license renewal that is unrelated to the size of the company using the ERP or its profitability. 6. Technical support personnel often give replies to callers that are inappropriate for the callers corporate structure. Computer security concerns arise, for example when telling a non programmer how to change a database on the fly, at a company that requires an audit trail of changes so as to meet some regulatory standards. 7. ERPs are often seen as too rigid and too difficult to adapt to the specific workflow and business process of some companies this is cited as one of the main causes of their failure. 8. Systems can be difficult to use. 9. Systems are too restrictive and do not allow much flexibility in implementation and usage. 10. The system can suffer from the "weakest link" problem an inefficiency in one department or at one of the partners may affect other participants. 11. Many of the integrated links need high accuracy in other applications to work effectively. A company can achieve minimum standards, then over time dirty data will reduce the reliability of some applications. 12. Once a system is established, switching costs are very high for any one of the partners (reducing flexibility and strategic control at the corporate level). 13. The blurring of company boundaries can cause problems in accountability, lines of responsibility, and employee morale. 14. Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software. 15. Some large organizations may have multiple departments with separate, independent resources, missions, chains of command, etc, and consolidation into a single enter price may yield limited benefits. 16. There are frequent compatibility problems with the various legacy systems of the partners. 17. The system may be over engineered relative to the actual needs of the customer. Before ERP systems, each department in an organization would most likely have their own computer system, data and database. Unfortunately, many of these systems would not be able to communicate with one another or need to store or rewrite data to make it possible for cross computer system

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communication. For instance, the financials of a company were on a separate computer system than the HR system, making it more intensive and complicated to process certain functions. Once an ERP system is in place, usually all aspects of an organization can work in harmony instead of every single system needing to be compatible with each other. For large organizations, increased productivity and less types of software are a result.

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