CIS Itm Unit 1 2

Computer Information System
Mahabala Shetty M
Examples of information system
• Redbus.in
• Railway reservation system
• Hospital Management system
• GST system
• Land Records system
• GEM, Amazon.com
• Walmart, …
• What is Information ?
…….> Processed data (pertaining
to the Business / Organization)
Processing
(calculating,
Data Information
comparing, sorting,
analyzing, ….)
Computer Information System ( or
Management Information System ) 
Is the system which provides information to the

Management
Why Management requires Information ?
= > Management ->
Planning, Organizing, Leading & Controlling

Data flow in a Business Organization
Invoices Disbursement
Customers Accounting Vendors
& Finance
Customers Purchase
New Orders Customers Bills
Orders
Ideas Shipment
For Approved
Production For Purchase Purchased
Marketing
Bills Materials
New
Requests Purchase Copy
R&D Regular Requisition of
Shipping Orders Purchase
Orders Order
Manufacturing Inventory
Distribution Purchased
Finished Materials
Goods
Information required for the
Management & other stake holders
• Details of Customer orders received
weekly/monthly/total cost involved/materials to be
procured/human resources required/profit likely to
get, ……
• Out of these, no. of requests for New Products
development (strategic decision)
• Details of Orders issued by the Marketing Department,
but work not started by the Production department
(Middle Management)
• Details of finished products and payment received and
pending
…. Information required for the
• Details of shipping orders from Marketing Department
to Distribution Department
• Details of orders to be executed by Purchase
Department for procuring raw materials
• Inventory available at the Inventory (Stores
Department )
• Details of materials to be received at the Inventory
from the Vendors for which advance payment already
made
• stocking
….. Information required for the
• Raw materials required for another 6 months
• HR to be recruited for another 1 year
(Engineers/Salesmen/….)
• Lending of money to be done for the next one year
• No. of units to extended/cost involved for the next two
years
• Likely profit / loss in the financial year
• Taxes to be paid to the Government/Bonus to be paid to
the share holders
• Details of non-performing units, …..
• ………. etc ….
Information system refers to the
 Complementary networks of Hardware and

Software
 cooperating to Collect, Process, Store data
and Disseminate information
 in order to support the managerial role of
leveraging Information Technology (IT)
 to increase business value and profits.
Reasons for the adoption of the Information
system
• To provide information for Planning,
Organizing and Controlling purposes
Eg:
– New Product Development
– New plant to set up
– HR to be recruited ….
… Reasons for the adoption of the
Information system
• To provide information quickly as and when
required.
Eg: Products development yet not started

Information system
• To store and manage data efficiently from all
the functional areas of the business.
Eg:
• Sales data
• Personnel data
• Products data
• Financial position, ….
Information system
• To reduce the risk and uncertainties in the
managerial decision-making.
Eg:
– No. of units to be closed for non-performance
– New requests to be rejected for want of
machines, …
Information system
• To process the collected data and derive
information out of them.
Eg:
• Based on the customers orders - number of
equipments to be shipped in the next six months
• no. of machines to be installed, ..
Information system
• To collect and store the data for the purpose
of internal research.
Eg:
• Though sales is increasing
– Revenue collection is reducing
Information system
• To assist in identifying the managerial
problems and arrive at their solutions.
Eg:
– Distribution is not taking place properly
– Sales is not happening as expected …
Information system
• To provide information regarding work force
planning.
Eg:
• Engineers to be recruited for the new plants to
be opened
• No. of clerical staff required in the accounts
department …
Information system
• To provide the information regarding the
financial health of the business organization.
Eg:
• Income & Expenditure statements for the last
quarter
• Loans to repay
• Tax to be paid
• Salary payment pending, ..
Information system
• To provide information regarding Production
and Inventory.
Eg:
– No. of equipments manufactured in the last six
months and the stock available
Information system
• To provide information regarding sales and
other marketing aspects, i.e. Product, Price,
Promotion, Market, Physical distribution,
Payment, Collection, Market segmentation
etc.
Information system
• To speed up the execution of the results with
the reliable data available.
• Smoothen the flow of data through various
levels of the organization.
• ……..
Computerised Information flow in a Business Organization
& Finance
Customers Purchase
Orders
Ideas Shipment
For Approved
Marketing
Bills Materials
New
Requests Copy
Purchase
R&D Regular of
Requisition
Orders Order
Finished Materials
Goods
Importance of Information System
• It helps in minimizing risk in decision making.
• It processes the data and derives information out
of them.
• It provides information about the various aspects
of business.
• It helps the executives to avail the information
regarding the functional areas quickly.
• The database helps in inducting research.
– The data stored are used as secondary data.
… Importance of Information System
• It provides sound information regarding the
financial health of business organization.
• It helps in preparing corporate report.
• It helps the HRD manager in finding out the
requirement of the human resource, their
wages and salary, performance appraisal,
training, promotion, absenteeism and
employee’s turnover, which is useful in
drafting sound HRD polices.
… Importance of Information System
• The data regarding production helps the
production manager in deciding about
– capacity utilization
– number of rejections per batch
– frequency of break down
– status of shipment of processed order and product,
region wise.
• It provides information regarding
– inventory position and
– ensures that the chances of inventory out of stock are
minimized.
It provides information regarding
• Product
• Price
• Promotion
• Segmentation
• Demand
• Sales etc.
to marketing manager instantly and ensures
smooth functioning of that department.
Importance of IS
• Every business organization has to give due
importance to this department.
• The credit of growth and development of
many of the business organizations goes to it.
• If organization underestimates the importance
of Information System, they may have greater
chances of generating negative profit.
Need of Information System
• Information System plays a very important
role in the organization function
• it creates an impact on the organization's
functions, performance and productivity.
• The Information System creates impact in
the organization which relates to the
understanding of the business itself.
… Need of Information System
Information System increases productivity
• Information System reduces time, errors and

costs associated with processing information
… Need of Information System
Information System enhances the quality of
decision-making
• Information System helps top management
to do business in a better way, find solutions
to problems/opportunities, or help them in
decision-making by providing the relevant
information.
• Information System support for decision-
making falls in two categories:
• When Information System helps you analyze a
situation by providing all the relevant information
about the situation and then expecting you to make the
decision.
• When Information System actually makes some sort of
recommendation or giving some insight into what
decision to take.
…. Need of Information System
Information System improves communication
and helps develop team work
• It helps to manage information and facilitates
communication between diverse teams.
• A collaborative management information
system is a specific system to improve team
work.
Data Capturing Processing the Data
Functions
Of
Information
Systems Storage of Information
Connectivity
Retrieval of Information
Functions of Information System
Data Capturing:
• Information System captures data from
various internal and external sources of an
organization.
• Data capturing may be manual or through
computer terminals.
… Functions of Information System
Processing of data:
• The captured data is processed to convert it
into the required management information.
• Processing of data is done by such activities as
– calculating
– comparing
– sorting
– classifying and
– summarizing.
Storage of information:
• Information System stores processed or
unprocessed data for future use.
• If any information is not immediately required, it
is saved as an organizational record.
• In this activity, data and information are retained
in an organized manner for later use.
• Stored data is commonly organized into records,
files and databases.
Functions of Information System
Retrieval of information:
• Information system retrieves information from
its stores as and when required by various
users.
• As per the requirements of the management
users, the retrieved information is either
disseminated as such or it is processed again
to meet the exact demands.
Dissemination of Management Information:

• Management information, which is a finished
product of Information System, is
disseminated to the users in the organization.
• It could be periodic, through reports or on-line
through computer terminals.
Systems Approach Management oriented
Characteristics
of
Information
Systems
Need Based
Characteristics of Information System
System approach:
• The information system follows a System’s
approach.
• The system’s approach implies a holistic
approach to the study of the system and its
performance to achieve the objective for
which it has been formed.
… Characteristics of Information System
Management oriented:
• For designing of Information system, top-down
approach should be followed.
• Top-down approach suggests that the system
development starts from the determination of
the management needs and overall business
objectives.
• Management oriented characteristic of
Information system also implies that the
management actively directs the system
development efforts.
… Characteristics of Information System
Need based:
• Information system design and development
should be as per the information needs of
managers at different levels that are strategic
planning level, management control level and
operational control level.
Data Processing &
Information Generation Communication
Role of
Information
Systems
Facilitating Decision
Problem Identification making
The Role of an Information System
• The Information System plays the role of

– information generation
– communication
– problem identification and
– helps in the process of decision-making.
• The Information System, therefore, plays a
vital role in the Management, Administration
and Operation of an organization
Hardware Software
Components of
Information
Systems Databases
Connectivity
Human Resources
Components of Information Systems
Hardware
• This is the physical technology that works with information
• Hardware can be as small as a smart phone that fits in a

pocket or as large as a supercomputer .
• Hardware also includes the peripheral devices that work

with computers, such as keyboards, external disk drives,
and routers, switches, ….
• With the rise of the Internet of things (IOT), in which
anything from home appliances to cars to clothes will be
able to receive and transmit data, sensors that interact with
computers are permeating the human environment.
… Components of Information Systems
Software
• The hardware needs to know what to do, and that is
the role of the software
• Software can be divided into two types:
System software and Application software
• The primary piece of system software is the operating
system, such as Windows or iOS, which manages the
hardware’s operation
• Application software is designed for specific tasks, such
as handling a spreadsheet, creating a document, or
designing a web page.
Connectivity
• This component connects the hardware together to form a
network.
• Connections can be through wires, such as Ethernet cables
or fibre optics, or wireless, such as through Wi-Fi.
• A network can be designed to tie together computers in a
specific area, such as an office or a school, through a local
area network (LAN).
• If computers are more dispersed, the network is called a
wide area network (WAN).
• The Internet itself can be considered a network of
networks.
Databases & Datawarehouses
• A Database is a place where data is collected and
stored, from which it can be retrieved by
querying it using one or more specific criteria.
• A data warehouse contains all of the data in
whatever form that an organization needs.
• Databases and data warehouses have assumed
even greater importance in information systems
with the emergence of “big data,” a term for the
truly massive amounts of data that can be
collected and analyzed.
Human resources and procedures
• Human Resources element:
People that are needed to run the system and
the procedures they follow so that the
knowledge in the huge databases and data
warehouses can be turned into learning that
can interpret what has happened in the past
and guide future action.
MIS and other Subsystems

Information Generators
Governments Share Advertising Lenders
Vendors
Holders
Customers Trade Unions

External
Information
Generators
Payment
Purchasing
Collection
Distribution Internal
Receiving Inventory Production Sales Billing

Information System
Information Systems are developed for
• Internal Reporting Needs ( Production, Inventory,
Marketing, ….. )
• External Reporting needs (Government, Share holders,

Customers, Vendors, …..)
Because of these differing user needs, we must

identify the levels of Information System
Information System Levels
(i) Operational (functional)
Routine production/clerical operations
(eg: materials clerk receives a material
requisition )
(i) Lower Management
Performs supervisory functions (eg: day to day
job scheduling, checking the results,
corrective action, …)
(iii) Middle Management (tactical in nature )
Eg: allocation & controlling of resources, planning, ..
(iv ) Top Management (strategic)

Eg: Establishing vision, mission, goals
New market/product development, Mergers &
Acquisitions, Major policy decisions, …
Top
Management Strategic decisions
Middle
Tactical decisions
Management
Supervisory
Lower Management Role
Operational Management
(functional)
Horizontal & Vertical integration of
Information Systems
Vertical Integration :
The internal functional systems are connected
vertically as major systems
FUNCTIONAL SYSTEMS
Marketing System Sales, Distribution, …
Production System
Purchasing, Receiving,
Inventory, Production, ..
Financial System
Billing, Collection, Payment, …
Administrative / HR System
Personnel, Contracts, …
Information Systems
…. Vertical Integration within a system :
PRODUCTION SYSTEM
Machine assignment & job time Functional
reporting
Machine scheduling Supervisory
Make (in own shop) or Buy (from Middle Management

Vendor)
New Product Development Top Management
Information Systems
Horizontal Integration :
• May occur within or between major systems
Eg:
• Between major systems
Eg: Between Finance & HR – a Payroll system
• Within major system – combination of
purchasing, receiving, inventory through
shared database
Framework delineated by
Robert Anthony
• Distinguishes between the different types of

Planning & Controlling process in an
organization
• His basic thesis is that thinking of Planning &
Controlling as two separate activities is
meaningless
• He bifurcated into Three
… Framework delineated by
Robert Anthony
(I ) Strategic Planning
Deciding Objectives, policies, resources allocation,
etc ..
(ii) Management Control
Managers assures that, these resources are
obtained and used effectively
(iii) Operational Control
Assuring that specific tasks are carried out
effectively and efficiently
… Framework delineated by Robert Anthony
Functions Production Marketing Finance Personnel
Levels
Strategic Establishing New Product Raising capital Deciding
Planning A new Factory Development changes
required in the
organization
structure
Management Determining Media Determining Recruiting a
Control Product mix planning for maximum new CEO
for a month advertising levels of credit
for Customers
Operational Scheduling Planning sales Action to be Determining
Control specific jobs on contacts to be taken against which of the
specific made by a default in workers will be
machines sales man in payment by a in each shift
the next 3 Customer
months
Information system should be able to assist for taking decisions at each level
Feedback and Control
Essential to the design of a Information System
• Feedback is the process of comparing an
actual output with a desired, for the purpose
of improving the performance of the system
• Control is the action taken to bring the
difference between an actual output and
desired output within an acceptable range
Open Loop Systems
• There is no feedback & control
• It transforms input into output, but no
feedback
• Provides no opportunity for Management
Control
Output
Input System
Eg: Operational Systems --- Payroll system

Closed Loop Systems
• Comparison of desired and actual outputs results in
management action, which may modify the inputs,
the system or both
• Very complex to design because of feed back and
control
Desired
output
Management Input Actual

action System Output
Comparison
of desired Eg: Management Systems --- Manufacturing company
and actual
outputs
Information System Organization
Management can be broadly classified
depending upon the requirements of
information for performing the Management
functions
Top Management Strategic level
Middle Management Tactical level
Supervisory Management Operational Level
Data Processing Transactional level

Transaction Processing Management
System Information System
Information
Systems
Types Executive Support
Decisions Support System
System
Office Automation
system
Types of Information Systems
1. Transaction Processing System (TSS)
• structured operational applications and to a lesser degree
management control applications
• Data collection & processing
eg: payroll system
2. Management Information System (MIS)

• primarily for semi-structured, management control applications
• it also overlaps into operational and strategic planning level
3. Decision Support System (DSS)

• used primarily for unstructured decision making at the
operational, management and strategic planning levels
….Types of Information Systems
4. Executive Support System (ESS)
are used primarily for structured management
and strategic planning applications
• Office Automation System (OAS)

Used as a facilitator for office correspondence
and communication
Support of Information Systems
Internal Use
• Support for strategic planning
• Support for Management control
• Support for Operational control
External use
• Improve product quality
• Improve product delivery
Domain of Information System
Operational Management Strategic
Control Control Planning
Structured TPS ESS
Semistructured MIS
Unstructured DSS
OAS covers
everything
Information system versus Data processing
• A data processing system processes

transactions and produces reports
• Information system is more comprehensive to
cater the needs of organizational functions
and management processes
Information System as a federation of
Sub systems
(i ) Organizational function sub system
• Marketing
• Manufacturing
• Logistics (SCM)
• Personnel (HRM)
• Finance & Accounting
Sub systems
• Each functional subsystem is unique in its
procedures, programs, models, etc ..
• data items are stored among sub systems
Sub systems
(II ) Managerial activities subsystems
• Transaction processing
• Operational control
• Management control
• Strategic Planning
Sub systems
Production
Marketing Logistics
Finance &
HR
Accounting
DMBS
Database
Synthesis of a Information System structure
Information System architecture has been

described in terms of :
• Support for decision making

• Management activity
• Organizational functions
These three approaches are synthesized into a
Information system structure
Synthesis of a Information System structure
Information system structure has two categories

• Physical structure
This defines the way an Information System is
implemented
• Conceptual structure
– This is a federation of functional subsystems.
– This consists of integrated processing & use of
common modules
Information system as a Pyramid
Strategic
planning Unstructured decisions
Management
control
Structured
Operational Control decisions
Transaction processing
Information System Development Model
• Study the business environment

• Study the organization and structure
• Identify mission and business goals
• Identify critical business applications
• Ascertain the business strategy
• Develop key performance indicators to
measure the business progress and
performance
…. Information System Development Model
• Identify information needs meeting the

business goals
• Determine Information system support
structure to meet information needs
• Design information reporting structure
– Periodic reports
– Exceptional reports
– Control reports
Establishing an Information system
1 . Planning for the Information System
2. Designing the IS
3. Implementing the IS
4. Improving the IS
Planning
… Establishing an Information system
• Hardware projection
• Human Resources projection
• Financial Projection
2. Designing the IS
3. Implementing the IS
4. Improving the IS
Planning
Designing
2 . Designing the Information system
• Begin with an analysis of the types of decisions the

manager actually make in a particular organization
• Defining various decisions that must be made to run an
organization
• Determining the types of management policies that may
influence ways in which these decisions should be made
• Pinpointing the types of data needed to make the decision
• Establishing a mechanism for gathering and appropriately
processing the data to obtain needed information
Designing Information system is a critical
process
It should take into account the current
information required, as well as future
enhancements
Inputs for designing
(I ) Results of
– Enterprise-wide Information requirement analysis
– Information interface requirement analysis
– SWOT analysis
– System audits
– Benchmarking exercise
– Forecast exercise
(ii ) long-term information system master plan
(iii) Status reports on existing modules and
systems
(iv) Corporate goals as resulted through
Information System goals and objectives
(v ) Corporate policy guidelines for
implementation of information systems
(vi) Review of existing resources and their
utilization
The design activities review is done through
(I ) pictorial design
(ii ) Graphical representation
(iii) Verbose report
Such representation describe data structures,
database design, algorithmic procedures,
logical linkages, processing logic, interface
design, modular exchanges of information and
sharing sequence
Information system design is accomplished
through a two stage approach
1 . Translate the requirements into Information
System architecture
2 . The detailing is accomplished around the
basic architecture found in the earlier stage
Detailing the Information System architecture
(I ) Individual modules should have a specified

degree of freedom linked with certain level of
data discipline to ensure integration with other
modules
• It should be possible to commence
implementation of individual module or a group
of modules without waiting for other modules
… Detailing the Information system architecture
(ii ) I S design should provide for hierarchial control

over individual modules and for coordination of
interfaces
(iii ) Interfaces between different modules should
be clearly mapped in-terms of content,
frequency and mode of operation
(iv ) the design output should conform to the design
input requirements
After the design, development of individual
modules are implemented in a phased
manner
Advantages :
(I ) Investment required in a phased manner
(ii ) the available resources can be used to
maximum capacity, before additional
resources are required
• Sufficient time is available for testing & trial

run
• Users of the MIS get adequate time to get
conversant with new set of procedures and
reports of new modules
3 . Implementing the Information system
Planning
Designing
Implementing
3 . Implementing the Information system
• Putting the planned and designed MIS into
operation/action
• The equipment is acquired and integrated into
the organization
• Designated data are gathered, analyzed as
planned and distributed to appropriate
managers within the organization
• Hardware platform selection and acquisition
• Software tool selection and acquisition
• Resource allocation
• Development & Testing (unit, integration, system,
performance, load, regression, …)
• Quality assurance & auditing
• Corrective actions through feedback & control
• Joint review with the users of the system
• Documentation (SRS, SDD, UM, Test cases, …)
• Configuration Management (version control)
• Trouble shooting & fine tuning
• System & database administration
4 . Improving the Information System
Planning
Designing
Implementing
Improving
Improving the Information System
(I ) Maximise its value

(ii ) Find out lacuna
• Build cooperation (among Management
personnel & line managers)
• Stress decision making (providing managers
with decision related information)
• Cost-benefit analysis
Smart Working
• Today whether we know or not, we like it or
not, we use technology in our day to day life
• Online banking, e-commerce, ticket booking,
bill paying, mailing, messaging, …
Assignment – Case Study
Setting up a Information System
for the Manufacturing company
Data flow in a Business Organization
& Finance
Customers Purchase
Orders
Ideas Shipment
For Approved
Marketing
Bills Materials
New
Requests Purchase Copy
R&D Regular Requisition of
Orders Order
Finished Materials
Goods
Computerised Information flow in a Business Organization
& Finance
Customers Purchase
Orders
Ideas Shipment
For Approved
Marketing
Bills Materials
New
Requests Copy
Purchase
R&D Regular of
Requisition
Orders Order
Finished Materials
Goods
Development of Information system
for the Manufacturing company
Study the business process of the company
Starting from, how the customer gives the order, what Marketing
department does after receiving the order, with what details it is
forwarded to the Production department.
How Production department sends the raw materials purchase

requisition to the Purchase department.
The procedure of sending the purchase orders to the Accounts/Finance
Department and how Accounts department makes disbursements to
the Vendor.
What Stores does when the raw materials is received from the Vendor
and the procedure of making available the raw materials with the
Production Department, …..
Think of Business Process Reengineering (BPR)
• Whether some of the process can be avoided
• Any improvement can be infused into the
new system
• Develop software module to capture
Customers orders data ( Name, Mobile No,
product specifications, quantity, date, …)
• This data has to be stored in the customers
database
• Software module for the Marketing Manager
to pick the data from the customers
database, and to forward this requisition to
the Production department
• The forwarding details should be stored in the
Marketing database
• Software module for the Production Manager to
give the requisition to the Purchase department
• Purchase requisition details to be stored in the
Production database
• Software module for the Purchase Manager to
issue the Purchase Orders to the
Accounts/Finance Department
• Purchase order details to be stored in the
Purchase department database
• Software module for the Accounts Manager to
make disbursements to the Vendor for
supplying raw materials
• Payment made details to be stored in the
Accounts department
• Vendor supplies the raw materials to stores
(inventory)
• Software module for the stores to record the
details of receipt of raw materials
• Software module for the Stores Manager to
record the details of raw materials made available
to the Production Department
• The details have to be stored in the Inventory
database
• Software module for the Production Manager to
capture the details of raw materials received
• Software module for the production
department to record the details of finished
goods to the Distribution section
• The details to be stored in the Production
database
• Software module for the Distribution section
to record the details of finished goods
received and made available to the customer
• Integrate all the databases (Customers,
Marketing, Production, Purchase,
Accounts/Finance, Vendors, Inventory,
Distribution, …)
• Integrate all the software modules
• As all processes and databases are now
integrated, identify the Reports to be made
available for the Top, Middle, Supervisory and
Operational level functionaries for taking
Strategic, Tactical and Operational decisions
• Develop the required software modules for
generating these Information from the
integrated databases
Thank You

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Computer Information System

Is the system which provides information to the

Planning, Organizing, Leading & Controlling

 Complementary networks of Hardware and

Eg: Products development yet not started

• Information System reduces time, errors and

Dissemination of Management Information:

• The Information System plays the role of

• This is the physical technology that works with information

• Hardware can be as small as a smart phone that fits in a

• Hardware also includes the peripheral devices that work

MIS and other Subsystems

Customers Trade Unions

Receiving Inventory Production Sales Billing

• External Reporting needs (Government, Share holders,

Because of these differing user needs, we must

(iv ) Top Management (strategic)

Machine scheduling Supervisory

Make (in own shop) or Buy (from Middle Management

• Distinguishes between the different types of

Eg: Operational Systems --- Payroll system

Management Input Actual

Top Management Strategic level

Middle Management Tactical level

Supervisory Management Operational Level

Data Processing Transactional level

2. Management Information System (MIS)

3. Decision Support System (DSS)

• Office Automation System (OAS)

• A data processing system processes

Information System architecture has been

• Support for decision making

Information system structure has two categories

• Study the business environment

• Identify information needs meeting the

• Begin with an analysis of the types of decisions the

(I ) Individual modules should have a specified

(ii ) I S design should provide for hierarchial control

• Sufficient time is available for testing & trial

(I ) Maximise its value

How Production department sends the raw materials purchase

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