MANAGEMENT

INFORMATION SYSTEM
 INTRODUCTION
• Information is the finished product for which data is the raw material. The
dictionary defines information as processed data, which is used to trigger certain
actions or gain understanding of what the data implies.

• Also defined as:- Data that have been put into a meaningful and useful context
and communicated to a recipient who uses it to make decisions. Information
involves the communication and reception of intelligence or knowledge. It
apprises and notifies; surprises and stimulates, reduces uncertainty, reveals
additional alternatives or helps eliminate irrelevant or poor ones, and influences
individuals and stimulates them to action. The information must be received by
the recipient within the required time frame and the information must be free
from errors
 INTRODUCTION contd..
• Information Technology means the collection, storage, processing,
dissemination, and use of Information. It is not confined to hardware and
software but acknowledges the importance of man and the goals he sets for his
technology, the values employed in making these choices, the assessment
criteria used to decide whether he is controlling the technology and is being
enriched by it
 OPERATIONS SUPPORTS SYSTEM
• These are the systems that help the business organizations perform
routine processes. These systems produce information that helps in
the automation of routine office work, efficiently processing business
transactions, controlling production processes, and facilitating the
communication and collaboration among members of the
organization
 Process Control System
• The system that monitors and controls physical processes are known as PCS.
• Ex:- Pharma company uses electronic sensors linked to computers to monitor
chemical processes and make required adjustments.

• Process control systems are those systems in which decisions adjusting a physical
production process are automatically made by computers. For example, in a
refinery, electronic sensors which are linked to computers are used to monitor
the processes on a continuous basis. The computer captures and processes the
data detected by sensors, and makes any instant adjustments if deemed fit to the
refinery processes. Another example is that of Frito Lays potato chips production
unit, where a laser is thrown on each chip, and the chips that have the slightest
burn mark are popped out from the production process to maintain the quality
standard of every single chip.
 Enterprise Collaboration Systems
• The objective of enterprise collaboration systems is to help users to work
together efficiently and effectively by providing help with:
■ Communication: This is the sharing of information with one another.
■ Coordination: Coordinating individual work efforts and use of resources across
the organization.
■ Collaboration: Collaboration is working with one another cooperatively on joint
projects and assignments.
 Management Support Systems
• Management information systems. Provide information in the form of
prespecified reports and displays to support business decision making. Examples:
sales analysis, production performance, and cost trend reporting systems.
• Decision support systems. Provide interactive ad hoc support for the decision-
making processes of managers and other business professionals. Examples:
product pricing, profitability forecasting, and risk analysis systems.
• Executive information systems. Provide critical information from MIS, DSS, and
other sources tailored to the information needs of executives. Examples: systems
for easy access to analyses of business performance, actions of competitors, and
economic developments to support strategic planning
 Management Support Systems
The MIS is defined as a system that provides information support for decision
making in the organization.
■ The MIS is defined as an integrated system of man and machine for providing the
information to support the operations, the management, and the decision-making
function in the organization.
■ The MIS is defined as a system based on the database of the organization
evolved for the purpose of providing information to the people in the organization.
■ The MIS is defined as a computer-based information system
 Decision Support System
• A system which supports the middle (tactical) level and also the higher level
• of management in arriving at a decision is termed as a decision support system
(DSS).
• DSS is a system that reduces the uncertainty surrounding the
• decision-making process and helps managers in making decisions that are
• not easily specified in advance.
• DSS not only provides relevant information to the management, but it also
suggests the possible decisions to be made in a particular situation.

• DSS are capable of running several times a day in

• order to respond to the changing business environment.
 Executive Support System
• Executive support systems (ESS) are systems that help the top level of
management in the decision-making process.
• ESS incorporates many features of the MIS and DSS, and also helps the strategic
level by providing information so that they can come to a conclusion.
• ESS does not provide top management with any fixed set of solutions, but rather
it creates a generalized computing and communication environment that can be
applied to many situations that demand decisions.
• The designing of ESS is usually done in such a manner that it incorporates data
about external events, such as changes in tax policies or new competitors in the
market place.
• ESS provides advanced graphics tools that help in presenting data in graphical
form making it easy for senior executives to comprehend.
 Need of MIS
• MIS has become necessary due to the increased Business & Management complexities.
• MIS enables processing of data from the organization and present it in a form of reports
at regular intervals (data processing)
• MIS is capable of presenting information in a form and format that it creates an impact
on its user, provoking a decision, an action or an investigation.
• MIS is capable of handling a need based exception reporting.
• MIS is capable of keeping the data all together in such a form that it can be accessed by
anybody and can be processed to suit his needs (concept of database)
• MIS is capable of decision- making (quantitative & qualitative ) and helps to minimize
risk.
• MIS facilitates pro-active decision making.

19
Role of MIS in an Organisation
• Support day-to-day business operations
• Support managerial decision making
• Supports strategic decision making & competitive advantage
• Optimizing operational cost
• Provide timely & accurate information
• Provide expert advice to the mangers on selected domains

20
Role of MIS in an Organization
• Provides information to all the levels of management
for the following purpose

• Define objectives of the organization

• Formulate strategies & policies to achieve the objectives
• To report organisation’s performance to tax authorities,
share holders, regulatory authorities and other stake
holders such as suppliers & customers etc
• To prepare future plans on short & long term basis
• To exercise day-to-day control on various operations in
different functional areas
• To allow management by exception

21
 IMPORTANCE OF MIS:
• MIS is important in business because of the following reasons:
• 1) It helps in minimizing risk in decision-making
• 2) It processes the data and derives information out of them
• 3) It provides information about the various aspects of business
• 4) It helps the executives to avail the information regarding the functional
areas quickly
• 5) It helps the HRD manager in finding out the requirement of the human
resource, their wages and salary, performance appraisal, training, promotion,
absenteeism and employees, turnover, which is useful in drafting sound HRD
policies
• Report Orientation: The concept of Management Information System is modified, so, that
information rather than voluminous data has become the requirement of the user
• Action-Oriented: This concept was further modified due to the need that information should be
such that it leads to some action, decision or investigation or research.
• Exception Oriented: After having action oriented nature of Management Information System it
was realized that there must be some specific or selective approach to the action or the analysis
of data
• Data-base Orientation: As we know our environment is dynamic in nature so the change in every
system is must. So the concept of Management Information system based on bata-base is
emerged and proven to be effective
• End-user Orientation: After successfully implementing these changes, the concept of end user
computing using multiple data bases emerged. This concept brought a basic change in the nature
of management information system that is decentralization of system and independency of user
over computer professionals or experts

• Academic Discipline Orientation: Management Information System is based on the information

gathered for analyzing the data. While analyzing the data it relies on many academic disciplines
like theories, Principles, and concepts from management, organization behavior, computer
science, psychology and human behavior
Introduction- Systems concept
• The word ‘System’ is used quite often in our everyday life. We talk
about an educational system, political system, economic system,
circulatory system, solar system, computer system and so on
Systems Concept
• A system is a group of interrelated components, with a clearly defined
boundary, working toward the attainment of a common goal by accepting
inputs and producing outputs in an organized transformation process.
Feedback is data about the performance of a system. Control is the
component that monitors and evaluates feedback and makes any necessary
adjustments to the input and processing components to ensure that proper
output is produced
Types of System
• Abstract and Physical Systems: Systems can be categorized as abstract systems and
physical systems. An abstract or conceptual system is an orderly arrangement of
interdependent ideas or constructs, which may or may not have any counterpart in
the real world. Physical systems are concrete operational systems made of people,
materials, machine, energy and other physical things

• Deterministic and Probabilistic System: A deterministic system is one in which the

occurrence of all events is known with certainty. In such a system, given a
description of the system state at a particular point of time of its operation, the next
state can be perfectly predicted. A Probabilistic system is one in which the
occurrence of events cannot be perfectly predicted. Through the behavior of such a
system can be described in terms of probability, a certain degree of error is always
attached to the prediction of the behavior of the system
Types of System
• Open and Closed System: An open system is one that interacts with its
environment and thus exchanges information, material, or energy with the
environment, including random and undefined inputs. Open systems are adaptive
in nature as they tend to react with the environment in such a way, so as to favor
their continued existence. Such systems are ‘self organizing’, in the sense that
they change their organization in response to changing conditions. All living
systems (e.g. human, plants and cell etc.) are open systems. They attempt to
maintain equilibrium by homeostasis, i.e the process of adjusting to keep the
system operating within prescribed limits. A closed system is one which does not
interact with its environment. Though relatively can man, such systems are rare in
business world.
Types of System
• User-Machine Systems: Most of the physical systems are user-machine system. It
is difficult to think of a system composed only of people who do not utilize
equipment of some kind to achieve their goals. In user-machine systems both, i.e.
human as well as machine, perform some activities in the accomplishment of a
goal.
ELEMENTS OF A SYSTEM:
• To understand a general system, let us take an example of a system in
which certain data is processed with the objective of converting it into
information for decision-making. Input may be defined as the start-up
component on which the system operates. Output is defined as the
result of an operation. The process is the transformation activity that
converts input into output
 LIMITATIONS OF MIS:
• I) Unemployment - While information technology may have streamlined the business
process it has also crated job redundancies, downsizing and outsourcing. This means that a
lot of lower and middle level jobs have been done away with causing more people to
become unemployed.

• II) Privacy - Though information technology may have made communication quicker, easier
and more convenient, it has also bought along privacy issues. From cell phone signal
interceptions to email hacking, people are now worried about their once private information
becoming public knowledge.

• III) Lack of job security - Industry experts believe that the internet has made job security a
big issue as since technology keeps on changing with each day. This means that one has to
be in a constant learning mode, if he or she wishes for their job to be secure.
 LIMITATIONS OF MIS:
• 1. Highly sensitive and requires constant monitoring
•  2. Budgeting of Budgeting extremely difficult
•  3. Lack of flexibility to update itself
•  4. Lots of time required to construct or prepare MIS
•  5. Constant training required.
•  6. In depth study or required training has to be carried out before designing the
software.
•  7.Organizational change: Difficult to adapt in new settings for Human resource i.e.
Employees.
•  8. Quality and reliability of the available information.
•  9. The expense to create and implement an MIS,
•  10. Training time for employees,
 LIMITATIONS OF MIS:
• 11. Capturing wrong or incomplete information.
•  12.Sometimes when the information is wrong, it create chaos in organisation.
• 13. Highly sensitive and requires constant monitoring
•  14. Budgeting of Budgeting extremely difficult
•  15. Lack of flexibility to update itself
• 16.Organizational change: Difficult to adapt in new settings for Human
resource i.e. Employees.
•  18. Quality and reliability of the available information.
•  19. The expense to create and implement an MIS,
•  20. Training time for employees,
Classification of Information System
• Classification by Organizational Levels
Management Support Systems
• Various definitions provided by different authors for MIS are
summarized as follows: ■ The MIS is defined as a system that provides
information support for decision making in the organization. ■ The
MIS is defined as an integrated system of man and machine for
providing the information to support the operations, the
management, and the decision-making function in the organization. ■
The MIS is defined as a system based on the database of the
organization evolved for the purpose of providing information to the
people in the organization. ■ The MIS is defined as a computer-based
information system
• If one analyzes these definitions, one will find there is a single focus on the
definition of MIS: the MIS is a system that supports the decision making in an
organization. Thus it can be said that MIS is a computerized data processing
system that generates information for the people working in the organization
to meet their information needs for decision making. Management
information systems are designed to support the need of three If one analyzes
these definitions, one will find there is a single focus on the definition of MIS:
the MIS is a system that supports the decision making in an organization. Thus
it can be said that MIS is a computerized data processing system that
generates information for the people working in the organization to meet
their information needs for decision making. Management information
systems are designed to support the need of three
Decision Support System
• A system which supports the middle (tactical) level and also the
higher level of management in arriving at a decision is termed as a
decision support system (DSS). DSS is a system that reduces the
uncertainty surrounding the decision-making process and helps
managers in making decisions that are not easily specified in advance.
DSS not only provides relevant information to the management, but it
also suggests the possible decisions to be made in a particular
situation. DSS are capable of running several times a day in order to
respond to the changing business environment. DSS have more
analytical power than any other systems working in an organization.
• A few of the important functions of a DSS are: ■ DSS offers its users
flexibility and prompt responses. ■ DSS lets the users have control on
the input and output of the process. ■ To work on DSS, managers
need not have a specialized computer programming knowledge. ■
DSS uses sophisticated analysis and modeling tools for generating
results and are knowledge-based systems
 Executive Support System
• The top strategic level of management is often confronted with situations that
are unique in nature and are not repeated. Executive support systems (ESS)
are systems that help the top level of management in the decision-making
process. ESS incorporates many features of the MIS and DSS, and also helps
the strategic level by providing information so that they can come to a
conclusion. ESS does not provide top management with any fixed set of
solutions, but rather it creates a generalized computing and communication
environment that can be applied to many situations that demand decisions.
The designing of ESS is usually done in such a manner that it incorporates data
about external events, such as changes in tax policies or new competitors in
the market place.
• ESS employs tools to compress and filter critical data out of piles of
data, which helps in saving time and efforts required to obtain
information which is useful to the management for decision making.
ESS provides advanced graphics tools that help in presenting data in
graphical form making it easy for senior executives to comprehend.
The graphical display of data allows senior executives to reach down
to the lowest possible detail in no time and thus reduce the
uncertainty surrounding the decision. Thus one can say that in ESS the
processed data or information is presented in front of the senior
executives in a manner that facilitates fast decision making.
Decision Making and MIS
• Decision making is selecting the best alternative out of many and
involves the following four steps: (i) Identify the problem (ii) Diagnose
the problem (iii) Identify the alternatives (iv) Select the best
alternative from which decision will be made
Various Methods That Influence Decisions
• past experience
• trial and error
• logical reasoning
• random choice
 Level of Decision Making
• Strategic Decision Making: Decisions taken by the top management of an
organization falls under this category. These are the decisions that determine the
objectives, policies, and future course of action of the organization, which is a very
difficult task. The Board of Directors and CEOs are generally involved in this
decision-making process in which the problems are very complex and non-routine.

• Management Control Decisions: Middle-level or tactical-level management is

basically responsible for the execution of the decisions made by the top/strategic
level of management. They are the ones responsible for the management of the 3
“M”s: man, machine, and material. It is their responsibility to ensure how efficiently
and effectively resources are utilized and how well operational units are performing
Role of MIS in Decision Making
• Decision making can be considered the single largest activity that is
carried out at various levels in business organizations. Herbert Simon’s
model1 can be summarized to explain how MIS supports the decision
making process. This model basically consists of three phases as
shown in this diagram:
• In Simon’s model of decision making the first phase is the intelligence phase,
which deals with the search of situations surrounding organizational
environment that demand decisions. Information inputs are accepted during
the intelligence phase. The design phase is categorized by identifying the
various available alternatives, and if any suitable alternative is not available
then efforts are made to invent or develop an alternative for the solution of the
problem. The viability of the alternatives are evaluated in this phase. The
choice phase is the one where the optimum alternative is chosen. By optimum
we mean that the solution that fits the organization’s philosophy and available
resources. It is not at all essential that the best alternative is always the best for
the organization.
• All the phases of Simon’s model depend on MIS to provide relevant
data/information for the decision-making process. In the intelligence phase, MIS
provides the right data/information at the right time which helps in the processing
and evaluation of the data/information accurately. In the design phase MIS helps in
the creation and evaluation of alternatives by providing relevant information. MIS
even plays a significant role in the choice stage of the decision-making process.

• MIS plays a significant role in all types of decisions. The role played by MIS in
decision making varies according to the type and the level at which the decision is
being considered. It is a well-known fact that humans are greatly affected by the
surrounding environment, and this creates numerous stressful situations that
negatively affect their decision-making process by blocking the information or
misinterpretation of information. In such circumstances MIS acts as a bridge
between the environment in which a business operates and the decision maker
through information availability and is not at all affected by the environmental
factors. Overall, this helps in a better decision-making process.
• Rapid Access to Information:- Managers need rapid access to information to
make decisions about strategic, financial, marketing and operational issues.
Companies collect vast amounts of information, including customer records,
sales data, market research, financial records, manufacturing and inventory data
and human resource records. However, much of that information is held in
separate departmental databases, making it difficult for decision-makers to
access data quickly. A management information system simplifies and speeds up
information retrieval by storing data in a central location that is accessible via a
network. The result is decisions that are quicker and more accurate.

• Decisions Based on Latest Information:- Management information systems bring

together data from inside and outside the organization. By setting up a network
that links a central database to retail outlets, distributors and members of a
supply chain, companies can collect sales and production data daily, or more
frequently, and make decisions based on the latest information.
• Teams Can Collaborate:- In situations where decision-making involves
groups, as well as individuals, management information systems make it
easy for teams to make collaborative decisions. In a project team, for
example, management information systems enable all members to access
the same essential data, even if they are working in different locations.

• Interpret Results Efficiently:- Management information systems help

decision-makers understand the implications of their decisions. The
systems collate raw data into reports in a format that enables decision-
makers to quickly identify patterns and trends that would not have been
obvious in the raw data.Decision-makers can also use management
information systems to understand the potential effect of change. A sales
manager, for example, can make predictions about the effect of a price
change on sales by running simulations within the system and asking a
number of “what if the price was” questions.
Database Management System
• A database system is a combination of software and hardware that makes it
possible and convenient to perform one or more tasks that involve handling
large amounts of data. The four major components of a database system are:
• data • hardware • software • user

• The objective behind this creation is to make information access easy, quick,
inexpensive, and flexible for the user. A DBMS acts as an interface between
the user of the system and the database, which controls the database and
performs the entire job required by the user on the database
Database
• A database can be defined as a collection of non-redundant information
organized in such a way that the stored data can be manipulated or
retrieved when required to produce reports or to achieve desired goals by
multiple users. All information must be related in some way. Sharing
common data means that many programs can use the same information.
For example, a telephone directory in which names and telephone
numbers are listed. These names are listed in alphabetical order so that a
user may access a name quickly and easily. Such a collection of
information that is sorted in a particular manner is termed a database.
• A database management system (DBMS) is a specific type of software for
creating, storing, organizing, and accessing data from a database. Microsoft
Access is a DBMS for desktop systems, whereas DB2, Oracle Database, and
Microsoft SQL Server are DBMS for large mainframes and midrange
computers. MySQL is a popular open-source DBMS. All these products are
relational DBMS that support a relational database.
 Data Model

• Though there are many data models being used nowadays but the
Relational model is the most widely used model. Apart from the
Relational model, there are many other types of data models about
which we will study in details in this blog. Some of the Data Models in
DBMS are:
• Hierarchical Model
• Network Model
• Entity-Relationship Model
• Relational Model
• Object-Oriented Data Model
• Object-Relational Data Model
• Flat Data Model
• Semi-Structured Data Model
• Associative Data Model
• Context Data Model
Hierarchical Model

• Hierarchical Model was the first DBMS model. This model organises
the data in the hierarchical tree structure. The hierarchy starts from
the root which has root data and then it expands in the form of a tree
adding child node to the parent node. This model easily represents
some of the real-world relationships like food recipes, sitemap of a
website etc. Example: We can represent the relationship between the
shoes present on a shopping website in the following way:
Features of a Hierarchical Model
• One-to-many relationship: The data here is organised in a tree-like structure where
the one-to-many relationship is between the datatypes. Also, there can be only one
path from parent to any node. Example: In the above example, if we want to go to
the node sneakers we only have one path to reach there i.e through men's shoes
node.
• Parent-Child Relationship: Each child node has a parent node but a parent node can
have more than one child node. Multiple parents are not allowed.
• Deletion Problem: If a parent node is deleted then the child node is automatically
deleted.
• Pointers: Pointers are used to link the parent node with the child node and are used
to navigate between the stored data. Example: In the above example the 'shoes'
node points to the two other nodes 'women shoes' node and 'men's shoes' node.
Network Model

• This model is an extension of the hierarchical model. It was the most

popular model before the relational model. This model is the same as
the hierarchical model, the only difference is that a record can have
more than one parent. It replaces the hierarchical tree with a graph.
Example: In the example below we can see that node student has two
parents i.e. CSE Department and Library. This was earlier not possible
in the hierarchical model.
Features of a Network Model
• Ability to Merge more Relationships: In this model, as there are more
relationships so data is more related. This model has the ability to
manage one-to-one relationships as well as many-to-many relationships.
• Many paths: As there are more relationships so there can be more than
one path to the same record. This makes data access fast and simple.
• Circular Linked List: The operations on the network model are done
with the help of the circular linked list. The current position is
maintained with the help of a program and this position navigates
through the records according to the relationship.
Entity-Relationship Model
• Entity-Relationship Model or simply ER Model is a high-level data model diagram. In
this model, we represent the real-world problem in the pictorial form to make it easy
for the stakeholders to understand. It is also very easy for the developers to
understand the system by just looking at the ER diagram. We use the ER diagram as a
visual tool to represent an ER Model. ER diagram has the following three components:
• Entities: Entity is a real-world thing. It can be a person, place, or even a
concept. Example: Teachers, Students, Course, Building, Department, etc are some of
the entities of a School Management System.
• Attributes: An entity contains a real-world property called attribute. This is the
characteristics of that attribute. Example: The entity teacher has the property like
teacher id, salary, age, etc.
• Relationship: Relationship tells how two attributes are related. Example: Teacher
works for a department.
Features of ER Model
• Graphical Representation for Better Understanding: It is very easy
and simple to understand so it can be used by the developers to
communicate with the stakeholders.
• ER Diagram: ER diagram is used as a visual tool for representing the
model.
• Database Design: This model helps the database designers to build
the database and is widely used in database design.
Relational Model

• Relational Model is the most widely used model. In this model, the
data is maintained in the form of a two-dimensional table. All the
information is stored in the form of row and columns. The basic
structure of a relational model is tables. So, the tables are also
called relations in the relational model. Example: In this example, we
have an Employee table.
Features of Relational Model
• Tuples: Each row in the table is called tuple. A row contains all the
information about any instance of the object. In the above example,
each row has all the information about any specific individual like the
first row has information about John.
• Attribute or field: Attributes are the property which defines the table
or relation. The values of the attribute should be from the same
domain. In the above example, we have different attributes of
the employee like Salary, Mobile_no, etc.
 Object-Oriented Data Model
• The real-world problems are more closely represented through the object-
oriented data model. In this model, both the data and relationship are present
in a single structure known as an object. We can store audio, video, images, etc
in the database which was not possible in the relational model(although you
can store audio and video in relational database, it is adviced not to store in the
relational database). In this model, two are more objects are connected through
links. We use this link to relate one object to other objects. This can be
understood by the example given below.
• In the above example, we have two objects Employee and Department.
All the data and relationships of each object are contained as a single
unit. The attributes like Name, Job_title of the employee and the
methods which will be performed by that object are stored as a single
object. The two objects are connected through a common attribute i.e
the Department_id and the communication between these two will be
done with the help of this common id
Object-Relational Model

• As the name suggests it is a combination of both the relational model

and the object-oriented model. This model was built to fill the gap
between object-oriented model and the relational model. We can have
many advanced features like we can make complex data types
according to our requirements using the existing data types. The
problem with this model is that this can get complex and difficult to
handle. So, proper understanding of this model is required.
Flat Data Model

• It is a simple model in which the database is represented as a table

consisting of rows and columns. To access any data, the computer has
to read the entire table. This makes the modes slow and inefficient.
Semi-Structured Model

• Semi-structured model is an evolved form of the relational model. We

cannot differentiate between data and schema in this
model. Example: Web-Based data sources which we can't differentiate
between the schema and data of the website. In this model, some
entities may have missing attributes while others may have an extra
attribute. This model gives flexibility in storing the data. It also gives
flexibility to the attributes. Example: If we are storing any value in
any attribute then that value can be either atomic value or a collection
of values.
Associative Data Model

• Associative Data Model is a model in which the data is divided into two parts.
Everything which has independent existence is called as an entity and the relationship
among these entities are called association. The data divided into two parts are called
items and links.
• Item: Items contain the name and the identifier(some numeric value).
• Links: Links contain the identifier, source, verb and subject.
• Example: Let us say we have a statement "The world cup is being hosted by London
from 30 May 2020". In this data two links need to be stored:
1.The world cup is being hosted by London. The source here is 'the world cup', the verb
'is being' and the target is 'London'.
2....from 30 May 2020. The source here is the previous link, the verb is 'from' and the
target is '30 May 2020'.
Context Data Model

• Context Data Model is a collection of several models. This consists of

models like network model, relational models etc. Using this model
we can do various types of tasks which are not possible using any
model alone
Case Summary: 10th Dec
 E-commerce and its Applications
• Ecommerce or electronic commerce actually means the use of an electronic
medium for commercial transactions, but it is commonly used to refer to
selling products and services over the internet to consumers or other
businesses.

• According to another definition, ecommerce refers to the sharing of business

information, maintenance of business relationships and conducting business
transactions with the help of computers that are connected to a
telecommunication network, and without the use of paper documents.
 Types of eCommerce
• Business-to-Business (B2B)
• B2B is e-commerce representing electronic exchange of products, services and
information between businesses. Some of the B2B e-commerce applications
are product and supply exchange websites, online directories, that feature an
option to search for particular products and services and thus initiate payment
transactions within.
 Types of eCommerce
• Business-to-Consumer (B2C)
• B2C is the retail part of e-commerce where businesses sell products, services
and information directly to its customers online. B2C was introduced in the late
90s which revolutionized the retail system from then. Now the B2C market
comprises all sorts of consumer goods including many virtual stores and online
shopping platforms where Amazon or flipkart leading the markets with
domination and valuable customers.
 Types of eCommerce
• Consumer-to-Consumer (C2C)
• It is a type of e-commerce where consumers could trade their products or
services with each other online. The transactions are carried out through third
party online platforms. C2C e commerce consists of classified advertisements
and online auctions like the popular eBay and Craigslist. These types of
businesses are also known as C2B2C or consumer-to-business-to-consumer.
 Types of eCommerce
• Consumer-to-Business (C2B)
• C2B is that type of e-commerce in which the consumer builds their products and services,
making it available online for businesses to bid on and purchase. The most popular example of
C2B platform is an online market which sells everything for free like the iStock and Job Board.
C2B e-commerce is moreover said to be an opposite kind of traditional commerce B2C model.

• In this model, a consumer approaches a website showing multiple business

organizations for a particular service. The consumer places an estimate of amount
he/she wants to spend for a particular service. For example, the comparison of interest
rates of personal loan/car loan provided by various banks via websites. A business
organization who fulfills the consumer's requirement within the specified budget,
approaches the customer and provides its services.
 Types of eCommerce
• Business-to-Administration/ Government (B2A)
• This kind of e-commerce platform enables online payment transactions
between companies and administration or government bodies.Many
government authorities depend on e services or products directly or indirectly.
Businesses offer supply of e documents, registers,security, etc electronically
which has a tremendous growth in the recent years.

• An excellent example of a B2A model is Accela; it’s a software company that

provides government software solutions and public access to government
services for permitting, planning, licensing, public health, and so on
 Types of eCommerce
• Government - to - Business
• Governments use B2G model websites to approach business organizations.
Such websites support auctions, tenders, and application submission
functionalities.
• Government - to – Citizen
• Governments use G2C model websites to approach citizen in
general. Such websites support auctions of vehicles, machinery,
or any other material. Such website also provides services like
registration for birth, marriage or death certificates. The main
objective of G2C websites is to reduce the average time for
fulfilling citizen’s requests for various government services.
Most common applications of Ecommerce:
• Retail and Wholesale
• Ecommerce has numerous applications in this sector. E-retailing is
basically a B2C, and in some cases, a B2B sale of goods and services
through online stores designed using virtual shopping carts and
electronic catalogs. A subset of retail ecommerce is m-commerce, or
mobile commerce, wherein a consumer purchases goods and services
using their mobile device through the mobile optimized site of the
retailer. These retailers use the E-payment method: they accept
payment through credit or debit cards, online wallets or internet
banking, without printing paper invoices or receipts.
Most common applications of Ecommerce:
• Online Marketing
• This refers to the gathering of data about consumer behaviors,
preferences, needs, buying patterns and so on. It helps marketing
activities like fixing price, negotiating, enhancing product features,
and building strong customer relationships as this data can be
leveraged to provide customers a tailored and enhanced purchase
experience.
Most common applications of Ecommerce:
• Finance
• Banks and other financial institutions are using e-commerce to a
significant extent. Customers can check account balances, transfer
money to other accounts held by them or others, pay bills through
internet banking, pay insurance premiums, and so on. Individuals can
also carry out trading in stocks online, and get information about
stocks to trade in from websites that display news, charts,
performance reports and analyst ratings of companies.
• Manufacturing
• Supply chain operations also use ecommerce; usually, a few
companies form a group and create an electronic exchange and
facilitate purchase and sale of goods, exchange of market information,
back office information like inventory control, and so on. This enables
the smooth flow of raw materials and finished products among the
member companies and also with other businesses.
• Online Booking
• This is something almost every one of us has done at some time –
book hotels, holidays, airline tickets, travel insurance, etc. These
bookings and reservations are made possible through an internet
booking engine or IBE. It is used the maximum by aviation, tour
operations and hotel industry.
• Online Publishing
• This refers to the digital publication of books, magazines, catalogues,
and developing digital libraries.
• Digital Advertising
• Online advertising uses the internet to deliver promotional material
to consumers; it involves a publisher, and an advertiser. The advertiser
provides the ads, and the publisher integrates ads into online content.
Often there are creative agencies which create the ad and even help
in the placement. Different types of ads include banner ads, social
media ads, search engine marketing, retargeting, pop-up ads, and so
on.