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Suresh Raj Bhattrai
Ashish Raj Shrestha(2) MBA(Finance), 1st Trimester
New Baneshwor, Kathmandu April 2, 2011
This assignment is prepared for Management Information System for the degree of Masters in Business Administration (Finance). This assignment is a result of effort made and cooperation extended by many individuals. The assignment would not have been possible without the kind support of various personalities. I would like to thank Mr. Suresh Raj Bhattrai, faculty of Uniglobe College, for providing me such an opportunity to do a creative and practical assignment Besides, I am very much grateful to Mr. Darshan Bhattrai, Senior System Officer of Employee Provident Fund, who provided me various information and suggesion. I would also like to thank Ms. Priyanka Siwakoti, my classmate, who helped me to get information from various sources and also helped me complete this assignment. Finally, regardless of all sources, I would express my gratitude and thanks to all those who have contributed and supported me in preparing this report.
Thanking You Ashish Raj Shrestha
Question 1 What is management information system? In your opinion, how are the Nepalese business organizations managing their information in the current scenario? Discuss with several examples of various business organizations Answer 1 Management is the process of getting things done with and through people. It is the process of planning, organizing, staffing, coordinating, directing and controlling the various resources in an organization. Information is the processed data that has some meaning and helps to make decisions. System is a collection of interdependent and interrelated group of components. So, management information system is a process of managing the various information that helps any business to perform effectively and efficiently and make proper decisions. Management information system is managing information system and organized combination of people, hardware, software, communication networks and data resources that collects ,transforms and disseminates information in an organization to make proper decisions. It is a system that is manual or computer based and gives necessary information in decision making. Management of information is effective and efficient with the use of information technologies. According to Kenneth C. Laudon and Jane Price Laudon an information system is "a set of procedures that collects (or retrieves), processes, stores, and disseminates information to support decision making and control." In the present scenario of Nepalese organizations, it is clearly seen that most of the organizations are using information technology to manage the information and operate the activities of the organizations. So they are having efficient and effective information which are relevant and reliable to make any decisions. But in past, all most all organizations managed their information manually, which was costly and time consuming and not reliable to make decisions. Various private organizations are updating themselves by using information technology and managed information systems. Some of the organizations using management information system are as follows:
Employee Provident Fund Employee Provident Fund (EPF) was established in 1962 AD. Employee provident fund is a social security organization which provides financial security to the employees after their retirement. Further, it provides loan to the employees with some interest rates without any collateral, mortgages, etc. This organization used to keep records of employees of several public and private organizations manually in past, which was burdensome to retrieve any needed
information about employees. Also to maintain such information, EPF used more than 900 employees. But at present, it uses proper computer based information system along with sufficient information technologies. Due to this, the cost of employees has been reduced as there are many employees cut off and now it’s about 400 employees. It performs transparent money transactions as of banks, and also provides information of the employees to the respective persons. Now this organization is more dependent on its management information system to make decisions as whom to provide loan, how to reduce the defaulters, what amount to be paid to retired employees, etc. This organization in fact provides e-service to the employees of different organizations by the use of information technology as they can access the information related to their pay after retirements, loan amount, effective monthly installments to pay, etc. Some of the components of IT used by this organization to maintain the information are Software and programs Oracle report form 6i (it is developed by the system department by own for their use). ASP.net C#.net MS-word, excel Other various programs
Hardware and network Workstation Dell optiplex Server (high range, medium range, low range) LAN (Local Area Network) Wi-fi to the computer department and other department chiefs Fibre optic cable WAN set up – optical fibre connection of NTC
Banking sector Banking sector is one of the largest sectors in Nepal that uses managed information system by the use of information technology. All most all banks use the computer system to record the information. They use various kinds of programs and software and networks as per need to store the records and information to operate the business smoothly. They utilize the information and make new strategies to sustain in the competitive market. Some of the programs and software used in banking sector are MS-Word, Excel, Pumori, Newton, Finaccle, Globus, Azian, etc. Among these, DCBL bank uses Pumori to maintain the accounting records and Azian to issue managers’ cheque. Himalayan bank uses Globus to maintain all the transaction records such as account opening and other accounting records, Himal remit TM to record the transactions of remitted money from place to place. Nabil bank uses Finaccle to record all the transactions.
Air traffic control system Air traffic control system of domestic and international level requires information technology to maintain the records and information. It is a must for this sector. There is huge information to be managed by this sector. Such as the information of passengers, flight, flight route, flight time, airplanes, pilots, etc. Some of the technologies and information systems used by this sector are: Primary and secondary radar to enhance controller’s situation.
Transponder-equipped aircraft reply to secondary radar interrogations by giving an ID
(Mode A), an altitude (Mode C) and/or a unique call sign (Mode S).
Flight Data Processing System to manage all flight plans. Operational Display System to make information available to the controllers.
Short Tem Conflict Alert (STCA) to check possible conflicting trajectories within a time horizon and alert the controller prior to loss of separation.
Automatic Dependent Surveillance Broadcast to provide data downlink of various flight parameters via transponder (1090MHz) and reception in the vicinity by other aircrafts., Controller Pilot Data Link Communications to allow digital messages to be sent between pilots and controllers, and avoids the need of radio telephony.
Education sectors This is another sector that uses managed information for various purposes. It maintains records of students, teachers, staffs, suppliers of resources, other educational institutions, etc. Further, the schools and colleges maintain the records of books and other materials useful for the students and teacher as well by the use of various software. By the use of better management systems, these institutions record various information to make decisions. For example, Uniglobe College maintains the record of books in the library by use of MIDAS software as Library Management Information System. By the use of MIDAS, the librarian is being able to maintain the records of all books available in the college such as All the information of all available books Books issued along with issue date, Number of books available for issuance, etc.
Besides, it provides teaching materials via internet and virtual class as e-resources.
Trekking industry Trekking industry is one of the largest industries to gain profit under tourism sector. It is utilizing various kinds of information technologies to maintain the information about the trekkers. It manages the information about the trekkers, their trekking route, destinations, etc in the Trekkers Information Management System (TMIS). Nepal Tourism Board (NTB) and trekking Agencies’ Association of Nepal (TAAN) have introduced separate TIMS card for free individual trekkers. So the agencies get information by the use of proper information management system. They use management information system for: Recording the important details about the trekkers and trekking route in a computerized database management system to maintain safety and security of the trekkers. Authentic Information Service is used to help carry out search and rescue operations for trekkers in case of natural calamities and other accidents. Maintaining a record system that includes personal details of trekkers, trekking area, trekking routes, handling agencies, duration, etc.
Making the data useful to all concerned stakeholders such as tourism organizations, Government agencies, diplomatic missions, tour operators, research institute, etc.
Health sectors Health sectors is another sector that need to manage its various information about the personnels, health programs, trainings, medical facilities, etc. The health institutions mostly use Logistics Management Information System (LMIS) to reform the documents defining the procurement indicators and reporting on the stocks. For example, Nepal Family Health Program and Public Health Office use LMIS for the following reasons: At central level, it is used for procurement planning, forecasting, receiving the stocks and distribution management, and to determine estimates regarding national needs of commodity. At district and unit level, it is used to prepare quarterly reports and such reports are distributed to districts, regions, etc. It is also used to determine quantities of commodities to be sent to each health units.
LMIS is a integrated system which includes commodity for nine different programs which are: Family planning (five contraceptives), Malaria/ Kalazar Program (seven malaria drugs), Control of Diarrheal Disease (CDD) Program (ORS and Zinc Sulphate)., Tuberculosis Program (ten TB drugs as well as glass slide and sputum container), Expanded Program on Immunization (EPI) (six vaccines plus immunological agents), Essential drugs (56 standard plus other essential drugs). Acute Respiratory Infection (ARI) Program (Cotrim-P100/20 mg, and Cotrim-P 200/40 mg). Leprosy Program (four leprosy drugs). Nutrition Program (vitamin A, iron tablets, and Albendazole).
Question 2 Suppose you are a MIS manager of one of the commercial banks of Nepal and it’s your responsibility to help organization increase its competitive advantage using information technologies. Therefore, what will be your competitive strategies for cost leadership, differentiation, innovation, alliance, growth using information technologies to combat possible competitive forces? If you need additional assumption for this case, you may assume and mention them.
Answer If I was a MIS manager of one commercial bank, then there would be some areas of improvement and better performance of the bank to achieve competitive advantage in the industry and increase the market share. This can be done only with the help of managed information system backed up by better use of information technology. We use information technology to collect, analyze, interpret, make decisions and communicate the information. Further, this helps to operate business effectively and efficiently. By the maximum use of information technology, we can collect various information of all round aspects of the business and its environment. We can utilize some strategies to gain competitive advantage. Those strategies are as follows: 1. Cost leadership Cost leadership is one of the competitive advantages of the business. It is the strategy that is easiest to understand. In this strategy, the firm sets relatively lower cost for product in the industry. Lower cost can be achieved by seeking out and exploiting source of potential cost advantage. The cost leaders sell a basic product or service and are concerned with pursing economies of scale and absolute cost advantages. The product and services must be perceived as acceptable and comparable to its competitors. A cost leader should maintain some degree of parity with the competitors’ performance, setting the same price of the product. In case of the bank, we can obtain this advantage by having better management information system. Our management information system should have proper managed information about the suppliers who supply resources at lower cost to the bank. For us, the suppliers are the supplier of advanced technology and equipments, human resources on contract basis. Moreover our suppliers of funds may be strong customer base such as industrialists, who are ready to deposit their huge amount of money for safety and better rotation with convenience and not for highest
interest rate in return. We should collect and manage properly information of such suppliers and customers well in our information management system. On the basis of such information, we should also try to reduce the various extra costs involved in supply chain to acquire the resources. We should continuously seek the areas, access the market and exploit for cost reductions by the help of the analysis of the various information. For instance, from our information system, we can see that we are having lower costs, so we can charge the least rate of commission on travelers’ cheque for students. Still we will be in profit. This helps to increase our customer and then increase the revenue by maximizing the bank’s turnover in this area. 2. Differentiation This is the second generic strategy to gain competitive advantage in the business. Here, the firm seeks to be the best in the industry by providing some more of quality or added value to its product than that of its competitors. The firm positions itself uniquely to satisfy the customers. Here the cost for the firm may be equal or more as in its industry, but the customers are willing and ready to pay the premium for the products’ value. In case of our bank, we can have various differentiations on our products and services than that of other banks by the use of our managed information. We can set ATM machines at various business places with backup power supply for 24 hours, which is lacking by most of the banks at the time of power cut off in Kathmandu valley. Further, we can increase the interest rate on deposits for the customers by 0.5% p.a. who maintains minimum 100000/- in their account each month. We can also provide birthday cakes to the account holders whose age is below 12 years and maintain minimum balance of 2500/- in the account. This helps to increase the number of accounts in total. Further, we can approve the business loan upto 800000/- within 3 working days. By the use of proper information, we can analyze that monetary transactions of almost all offices and business occur highest at the month of Asar and Srawan. So we can add more cash counters at that time at various branches.
3. Innovation This is another strategy to gain competitive advantage in the business by the use of various information. In this strategy, the businesses provide unique products or services to the existing market or new market. This helps the business to gain market leadership. This is very difficult in market to make much of innovation. But the use of information technology helps to analyze the market need and trend. And the deficit of any products or services in the market forces the business to innovate the products and services to satisfy the market needs.
In case of our bank, by proper use and analysis of information, we can enforce the customers and motivate them to use any new product launched by the bank. We also can get the information of the consistent depositor and can provide them with some added benefits and values. Since almost negligible banks provide accounts for disabled ones, we can add new products such as account opening for the disabled, i.e. Apaanga Bachat Khata. Further, we can provide home service to them on the basis of e-banking and sms-banking. 4. Alliance This is another strategy for any business to gain competitive advantage and increase their business and profitability. This strategy helps to make various direct linkages and between/among different firms. Those firms can be competitors, suppliers, customers, consultants and other businesses. The forms of alliance can be mergers, acquisitions, joint ventures virtual companies, outsourcing business, etc. In case of our bank, we can utilize our information and make alliance with other bank in the industry to make the strong capital base and customer base in the industry and make profits by reducing the profit of the top performing bank. Further we can make any insurance company as our alliance partner so that we accept payments of insurance of the customers of that insurance company. Also we can provide some non-life insurance facilities to our own customers as well to process forward the documents needed to approve the loan on certain collateral basis. 5. Growth This is another strategy to gain competitive advantage for a business. It simply refers to expansion of the business. The expansion may refer to just increase in business activities at same place or the expansion of the branch or outlets. For our bank, we can analyze the information from the information system and can find that the banks are operating in urban areas only. So based on this fact and information of our feasibility, we can make more of business at sub-urban and rural areas. Most of the people in rural areas are not enjoying the banking facilities even if they want to. So we can expand our branch at rural areas as well. Further, we can extend our ATM lounges at the place where there are frequent monetary transactions such as business areas, Yatayat Karyalaa, Malpot Karyalaya So, these strategies along with the help of managed information system helps to gain competitive advantage for the business. The strategies can be utilized one or some or all at a time.
Goyal, D.P., Management Information System.Macmillan India Limited,2000. O’brien, James A, and Marakas George. Manangement Information System. New Delhi:Tata Mcgraw Hill Education,9th ed. Yadav, Mahesh K, Kafle Atul, and Bajracharya Dinesh. Introduction to Management Information System. Kathmandu: Ayam Publication, 2065. http://travelandtreknepal.com/nepaltrekking www.dcbl.com.np www.en.wikipedia.org/wiki/Air_traffic_control www.epfnepal.com www.google.com
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