MIS Full Notes for MBA, BBA , BCA(Commerce)

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Chapter –I

Organization Introduction & Meaning of Organization Organization generally knows like an institution, business entity (excluding sole proprietorship business). A organized group of people with a particular purpose, such as a business or government department known as Organization. Each & Every business in which group of people are included is an part of Organization, where all people comes together & take efforts to achieve the common goal which is Making Profit or complete any particular task.

OR The institution institut ion or business in which planning, planning, coordination, coordination , implementation implementat ion & controlling of work is done by group group of people with the help of proper administration is called as organization.

Characteristics / Features of Organization The main characteristics or Features of organization are as follows: 

Hire & Promote employees based on Qualifications

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Adherence to principle of efficiency( Maximum Output)

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Outlining the Objectives: Born with the enterprise are its long-life objectives of profitable manufacturing and selling its products. Other objectives must be established by the administration from time to time to aid and support this main objective.

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Assigning the Duties: When activities have been grouped according to similarities and common purposes, they should be organized by a particular department. Within the department, the functional duties should be allotted to particular individuals.

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Defining and Granting the Authority: The authority and responsibility should be well defined and should correspond to each other. A close relationship between authority and responsibility should be established.

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Creating Authority Relationship: After assigning the duties and delegations of authority, the establishment of relationship is done. It involves deciding who will act under whom, who will be his subordinates, what will be his span of control and what will be his status in the organization. Besides these formal relationships, some informal organizations should also be developed.

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Role /Functions of Managers Manager is a person who manages the overall activities in the organization. Managers just don't go out and perform their responsibilities is not true. Good managers are tried to implement the five basic functions: planning, organizing, staffing, leading, and controlling. •

Planning: This step involves mapping out exactly how to achieve a particular goal. Say, for example, that the organization's goal is to improve company sales. The manager first needs to decide which steps are necessary to accomplish that goal. These steps may include increasing advertising, inventory, and sales staff. These necessary steps are developed into a plan. When the plan is in place, the manager can follow it to accomplish the goal of improving company sales.

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Organizing: After a plan is in place, a manager needs to organize her team and materials according to her plan. Assigning work and granting authority are two important elements of organizing.

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Staffing: After a manager discerns his area's needs, he may decide to beef up his staffing by recruiting, selecting, training, and developing employees. A manager in a large organization often works with the company's human resources department to accomplish this goal.

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Leading: A manager needs to do more than just plan, organize, and staff her team to achieve a goal. She must also lead. Leading involves motivating, communicating, guiding, and encouraging. It requires the manager to coach, assist, and problem solve with employees.

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Controlling: After the other elements are in place, a manager's job is not finished. He needs to continuously check results against goals and take any corrective actions necessary to make sure that his area's plans remain on track.

Required skills for Managers in i n Organization •

Leadership — ability to influence others to perform tasks

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Self ‐objectivity — ability to evaluate yourself realistically

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Analytic thinking — ability to interpret and explain patterns in information

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Behavioral flexibility — ability to modify personal behavior to react objectively rather than subjectively to accomplish organizational goals.

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Oral communication — ability to express ideas clearly in words

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Written communication — ability to express ideas clearly in writing

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Personal impact — ability to create a good impression and instill confidence

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Resistance to stress — ability to perform under stressful conditions

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Tolerance for uncertainty — ability to perform in ambiguous situations.

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Decision Making In organization for continuing business managers having a right to take decisions & implement the work according it. Decision means choice made between between alternative alternative courses of of action in a situation of uncertainty. uncertainty. Managers are constantly called upon to make decisions in order to solve problems. Decision making and problem solving are ongoing processes of evaluating situations or problems, considering alternatives, making choices, and following them up with the necessary actions. Sometimes the decision ‐making process is extremely short, and mental reflection is essentially instantaneous. In other situations, the process can drag on for weeks or even months. The entire decision ‐making process is dependent upon the right information being available to the right people at the right times. Decision making is a daily activity for any human being. There is no exception about that. When it comes to business organizations, decision making is a habit and a process as well. Effective and successful decisions make profit to the company and unsuccessful ones make losses. Therefore, corporate decision making process is the most critical process in any organization. In the decision making process, manager choose one course of action from a few possible alternatives. In the process of decision making, manager may use many tools, techniques and perceptions.

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Decision making making is a process process of choosing choosing among alternative alternative courses courses of action action for the purpose purpose of at taining/ achieving achieving Common goal/ goals. goals.

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Decision making making is process process of identifying identifying problems problems and opportunities opportunities and and resolving resolving them. Sometime manager may make our own private decisions or may prefer a collective decision. Usually, decision making is hard. Majority of corporate decisions involve some level of dissatisfaction or conflict with another party. Manager takes a decision with following some steps / process which is also called as Decision making Process/ Decision making life cycle.

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Steps of Decision Making Process: Following are the important steps of the decision making process. Each step may be supported by different different tools and techniques. Step 1: Identification of the purpose of the decision. Step 2: Information gathering. Step 3: Principles for judging the alternatives. Step 4: Brainstorm and analyze the different choices. Step 5: Evaluation of alternatives. Step 6: Select the best alternative. Step 7: Execute the decision. Step 8: Evaluate the results. ��

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Step 1: Identification of the purpose of the decision: In this step, the problem is thoroughly analyzed. There are a couple of questions when it comes to identifying the purpose of the decision. •

What exactly is the problem?

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Why the problem should be solved?

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Who are the affected parties of the problem?

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Does the problem have a deadline or a specific time-line?

Step 2: Information gathering: A problem of an organization will have many stakeholders. In addition, there can be dozens of factors involved and affected by the problem. In the process of solving the problem, you will have to gather as much as information related to the factors and stakeholders involved in the problem. For the process of information gathering, tools such as 'Check Sheets' can be effectively used.

Step 3: Principles for judging the alternatives: In this step, the baseline criteria for judging the alternatives should be set up. When it comes to defining the criteria, organizational goals as well as the corporate culture should be taken into consideration. As an example, profit is one of the main concerns in every decision making process. Companies usually do not make decisions that reduce profits, unless it is an exceptional case. Likewise, baseline principles should be identified related to the problem in hand.

Step 4: Brainstorm and analyze the different choices: For this step, brainstorming to list down all the ideas is the best option. Before the idea generation step, it is vital to understand the causes of the problem and prioritization of causes. For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-Effect diagram helps manager to identify all possible causes of the problem and Pareto chart helps you to prioritize and identify the causes with highest effect. Then, you can move on generating all possible solutions (alternatives) for the problem in hand.

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Step 5: Evaluation of alternatives: Manager use judgment principles and decision-making criteria to evaluate each alternative. In this step, experience and effectiveness of the judgment principles come into play. Manager need to compare each alternative for their positives and negatives for result.

Step 6: Select the best alternative: Once manager complete steps from Step 1 to Step 5, this step is easy. In addition, the selection of the best alternative is an informed decision since manager have already followed a methodology to derive and select the best alternative.

Step 7: Execute the decision: Convert decision into a plan or a sequence of activities. Execute/implement plan by manager or with the help of subordinates.

Step 8: Evaluate the results: Evaluate the outcome of decision then must check that nothing goes wrong & check whether there is anything should learn and then correct in future decision making. This is one of the best practices that will improve decision-making skills.

TYPES OF DECISIONS: 1) PROGRAMMED DECISIONS:

A routine or repetitive decision that can be handled by established business rules or procedures. These types of decisions are often called for at certain points in a standard process, and are decided based on recognized and easily identifiable factors. Programmed decisions typically do not require much consideration or discussion, and can generally be automated to ensure consistency and save time for decision-makers.

2) NON PROGRAMMED DECISIONS:

Non programmed decisions are typically one shot decisions that are usually less structured than programmed decision. The managers is always involved in this type of decision. Decisions that must be custom made to solve unique and nonrecurring problems. E.g. Non programmed decisions include deciding whether to acquire another organization.

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Chapter II Information System Introduction of Data:"Data" comes from a singular Latin word, datum, which originally meant "something given." Its early usage dates back to the 1600s. Over time "data" has become the plural of datum. Data is raw, unorganized facts that need to be processed. Data can be something simple and seemingly random and useless until it is organized. o rganized.

Meaning of Data:Data are simply facts or figures — bits of information, information, but not information itself. When data are processed, interpreted, organized, structured or presented so as to make them meaningful or useful, they are called information. Information Information provides context for data. da ta. OR Data is unprocessed facts and figures. Plain collected data, as raw facts cannot help in decision making. However, data is the raw material that is organized, structured and interpreted to create useful information in formation systems. Data is defined as 'groups of nonrandom symbols in the form of text, images, voice representing quantities, action and objects

For example: example: - A - A list of dates — data — is meaningless without the information that makes the dates relevant (dates of holiday). Data" and "information" are intricately tied together, t ogether, whether one is recognizing them as two separate words or using them interchangeably, as is common today. Whether they are used interchangeably depends somewhat on the usage of "data"

Introduction of Information:Information is a meaningful data (facts) Societies mainly depend on the information & it support to achieve desired objectives like Planning, organizing, decision making, & other.

"Information" is an older word that dates back to the 1300s and has Old French and Middle English origins. It has always referred to "the act of informing,” usually in regard to education, instruction, or other knowledge communication.

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Meaning of Information:When data is processed, organized, structured or presented in a given context so as to make it useful, it is called information. in formation. OR Information is interpreted data; created from organized, structured and processed data in a particular context. OR Information is a data that has been processed into a form that is meaningful to recipient and is of real or perceived value in the current or the prospective action or decision of recipient E.g. The average score of a class or of the entire school is information that can be derived from the given data. Information can be classified in a number of ways; this tutorial will give two of the most important ways to classify information: i nformation:

Classification by Characteristic:Based on Anthony's classification of Management, information used in business for decision making is generally categorized into three types:

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Strategic Information:Strategic information is concerned with long term policy decisions that defines the objectives of a business and checks how well these objectives are met. product, diversification diversification of business etc. E.g. E.g. Acquiring a new plant, a new product, •

Tactical Information:Tactical information is concerned with the information needed for exercising control over business resources & used for medium /short term planning by the Middle Management like budgeting, Quality control, service level, inventory level, productivity level etc. •

Operational Information-: Operational information is concerned with plant/business level information and is used to ensure proper conduction of specific operational tasks as planned/intended. Various operator specific, machine specific and shift specific jobs for quality control checks comes under this category. •

Classification by Application:In terms of applications, information can be categorized as: Planning InformationIt covers the whole organization & having a longer span & looks for & analyses trends/patterns. & it is used for working futuristic trends/forecasts. These are information needed for establishing standard norms and specifications in an organization. This information is used in strategic, tactical and operation planning of any activity. E.g. E.g. Time standards, Design standards. Control Information:Information: It concerns with small specific part of the organization. & It has a shorter time span. It looks for specific details for functional activity & used for assessing actual performance vis-à-vis budgeted. This information is needed for establishing control over all business activities through feedback mechanism. This information is used for controlling attainment, nature and utilization important processes in a system. When such information reflects a deviation from the established standards, the system should induce a decision or an action leading to control. Knowledge Information:Information:Knowledge is defined as "information about information". Knowledge information is acquired through experience and learning and collected from archival data and research studies. •

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Organizational Information:Information: Organizational information deals with an organization's environment, culture in the light of its objectives. Karl Weick's Organizational Information Theory emphasizes that an organization reduce uncertainty by collecting, managing and using these information prudently. This information is used by everybody in the organization; examples of such information are employee and payroll information. Functional/ Operational Operational Information:This is operation specific information. For example, daily schedules in a manufacturing plant that refers to the detailed assignment of jobs to machines or machines to operators. In a service oriented business, it would be the duty roster of various personnel. This information is mostly internal to the organization. Database Information:Database information construes large quantities of information that has multiple use and application. Such information is stored, retrieved and managed to create databases. For example, material specification or supplier information is stored for multiple users. •

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Classification by Management Hierarchy:Top Level Information :Refer the strategic Information point from Classification by Characteristics Middle Level Information:Refer the Tactical Information point from Classification by Characteristics Supervisory Level Information Refer the Operational Information point from Classification by Characteristics

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Quality of Information Information is a vital resource for success of any organization. Future of an organization lies in using and disseminating information wisely. Good quality information placed in right context in right time tells us about opportunities and problems well in advance. What is good quality information? Quality is a value that would vary according to the users and uses of the information.

Essential Characteristics/ Features/ Attributes for Information Quality : •

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Intrinsic: Accuracy, Intrinsic: Accuracy, Objectivity, Believability, Reputation Contextual: Relevancy, Contextual: Relevancy, Value-Added, Timeliness, Completeness, Amount of information i nformation Representational: Interpretability, Representational: Interpretability, Format, Coherence, Compatibility. Form The level of detail, tabular versus graphic display, and quantitative versus qualitative form are selected in accordance with the situation Internal and External Information

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Accessibility: Accessibility, Accessibility: Accessibility, Access security

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Reliability - It - It should be verifiable and dependable.

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Timely - It - It must be current and it must reach the users well in time, t ime, so that important decisions can be made in time. It means Timely Available when needed and not outdated when made available

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Relevant -It - It should be current and valid information and it should reduce uncertainties. & it has direct bearing on/relating to the situation

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Accurate - It should be free of errors and mistakes, true and not deceptive. it Offers quantitative information with a degree of exactness appropriate to the underlying data

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Sufficient - It should be enough and adequate and sufficient in quantity, so that decisions can be made on the basis of it.

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Unambiguous - It should be expressed in clear terms. In other words in should be comprehensive.

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Complete - It - It should meet all the needs in current context. Complete Includes all the user needs to know about the situation where the information will be used

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Unbiased - It should be impartial, free from any bias. In other words it should have integrity.

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Explicit - It - It should not need any further explanation. Comparable - It - It should be of o f uniform collection, analysis, content, and format. Reproducible - It - It could be used by documented methods on the same data set to achieve a consistent result.

Information Need & Objective Information processing beyond doubt is the dominant industry of the present century. Following are the needs and objectives of information processing: •

Increasing impact of information processing for organizational decision making.

Dependency of services sector including banking, financial organization, health care, entertainment, tourism and travel, education and numerous others on information. •

Changing employment scene world over, shifting base from manual agricultural to machine-based manufacturing and other industry related jobs. •

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Information revolution and the overall development scenario.

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Growth of IT industry and its strategic importance.

Strong growth of information services fuelled by increasing competition and reduced product life cycle. •

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Need for sustainable development and quality life.

Improvement in communication and transportation brought in by use of information processing. •

Use of information processing in reduction of energy consumption, reduction in pollution and a better ecological balance in future. •

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Use of information processing in land record managements, legal delivery system, educational institutions, natural resource planning, customer relation management and so on. •

In a nutshell/Short: •

Information is needed to survive in the modern competitive world.

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Information is needed to create strong information systems and keep these systems up to

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Implications of Information in Business/ place of information systems in the organization Information processing has transformed our society in numerous ways. From a business perspective, there have been huge shift towards increasingly automated business processes and communication. Access to information and capability of information processing has helped in achieving greater efficiency in accounting and other business processes. A complete business information i nformation system, accomplish the following functionalities: •

Collection and storage of data

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Transform these data into business information useful for decision making

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Provide controls to safeguard data

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Automate and streamline reporting

The following list summarizes the five main uses of information by businesses and other organizations: Planning - at the planning stage information is the most important ingredient in decision making. Information at planning stage includes that of business resources, assets, liabilities, plants and machineries, properties, suppliers, customers, competitors, market and market dynamics, fiscal policy changes of the Government, emerging technologies etc. Recording - - business processing these days involve recording information about each transaction or event. This is information collected, stored and updated regularly at the operational level. •

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Controlling - a - a business need to set up an information filter, so that only filtered data is presented to the middle and top management. This ensures efficiency at the operational level and effectiveness at the tactical and strategic level. Measuring - a business measures its performance metrics by collecting and analyzing sales data, cost of manufacturing and profit earned. Decision-making - MIS - MIS is primarily concerned with managerial decision making, theory of organizational behavior and underlying human behavior in organizational context. Decisionmaking information includes the socioeconomic impact of competition, globalization, democratization and effects of all these factors on organizational structure. •

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Following factors arising as outcome of information processing helps in speed up of business events and achieves greater efficiency: •

Directly and immediate linkage to the system

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Faster communication of an order

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Electronic transfer of funds for faster payment

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Electronically solicited pricing (helps in determining the best price)

Introduction of System A set of detailed methods, procedures and routines created to carry out a specific activity, perform a duty, or solve a problem. An organized, purposeful structure that consists of interrelated and interdependent elements (components, entities, factors, members, parts etc.). These elements continually influence one another (directly or indirectly) to maintain their activity and the existence of the system, in order to achieve the goal of the system

Concept & characteristics of Information System Information System is classified into into •

Formal System

Computer Based Information System Formal Systems Fixed definitions of data and procedures for collecting, storing, processing, disseminating, and using these data can be computer-based or manual Computer-based Information Information Systems Use computer hardware and software to process and disseminate information OR •

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IS (Information System) System) is process (handle) the data & Convert it into useful information through H/W, S/W, telecommunicatio t elecommunication, n, DB (Database) IS or computer systems related to process data and provide required information. E. g. ATMs, airline reservation systems, course reservation systems

Inform ation systems use data stored in computer databases to provide needed information. A database is an organized collection of interrelated data reflecting a major aspect of a firm's activities. 1. Information systems capture data from the organization (internal data) and its environment (external data). 2. They store the database items over an extensive period of time. 3. When specific information is needed, the appropriate data items are manipulated as necessary, and the user receives the resulting information. 4. Depending on the type of information system, the information output may take the form a query response, decision outcome, expert-system advice, transaction document, or a report. Formal information systems rely on procedures (established and accepted a ccepted by organizational practice) for collecting, storing, manipulating, and accessing data in order to obtain information. Formal systems do not have to be computerized, but today they usually are. Informal information information systems also exist within an organization (interpersonal networking, water cooler gossip, etc.).

Components of Information Systems Information systems consist of the following general components: 1. Hardware 2. Software 3. Databases 4. Human resources 5. Procedures

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Hardware Multiple computer systems: microcomputers, minicomputers, mainframes, together with their peripherals. Computer system components are: a central processor(s), memory hierarchy, input and output devices.

Computer processor: The central processor carries out the instructions of a program, translated into a simple form. Memories: It included in a computer system form a hierarchy. They range from the fast electronic units, such as the main memory, to the slower secondary storage devices such as magnetic disks

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Software Computer software falls into two classes: Applications software. software.

Systems software

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Systems Software: Manage Software: Manage the resources of the computer system and simplifies programming. An operating system is the principal system software. It manages all the resources of a computer system and provides an interface through which the system's user can deploy these resources. Application Software: Software: Are programs that directly assist end users in doing their work. They are purchased as ready-to-use packages. Applications software directly assists end users in doing their work. Databases

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Databases are organized collections of interrelated i nterrelated data used by applications software. so ftware. Databases are managed by systems software known as database management systems (DBMS) and shared by multiple applications. Human Resources Professional information systems personnel include development and maintenance managers, systems analysts, programmers, and operators, often with highly specialized skills. End users are the people who use information systems or their information outputs, that is, the majority of people in today's organizations. The hallmark of the present stage in organizational computing is the involvement of end users in the development of information systems. End-user computing, or control of their information systems by end users and the development of systems by end users, has become b ecome an important contributor to information information systems in organizations. Procedures Procedures are the policies and methods to be followed in using, operating, and maintaining an information system. Specifications for the use, operation, and maintenance of information systems, collected in help facilities, user manuals, operator manuals, and similar documents, frequently delivered in an electronic form.

Characteristics of Information System In running business, using information systems to facilitate works is crucial to improve productivity. Employees have to access, manage, input, and manipulate data in a syste m to track and handle all business progress like inventory, cash flow, invoicing, sales, and many more. Thus, IT division in a business corporate has important role and responsibility to create reliable and powerful applications applications to let other divisions divisions run the system very well. Following are the the main characteristics of a good information system:

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Accessible: - Accessibility - Accessibility is the main requirement requirement of information system because all authorized users have to access the system first to do their works. The system must be designed accessibly so the employees can do the jobs through desktop/gadget, software, and internet network easily.

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Accurate: - Of - Of course, information system must be accurate in calculating and showing the information because a business may even get loss if i f there is any inaccurate data or calculation. Wrong data or information in an information system will impact the result and even make worse because managers surely tend to make wrong decision.

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Simple:- Using Simple:- Using information system is intended to simplify business works. Thus, it must be designed and created simply to allow all authorized users access t he system to manipulate data easily because they’ll get confused to do their works if they use a complex system.

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Flexible: - It’s - It’s essential to have a flexible information system that can be used by all divisions in a company to see valuable v aluable and important information. information. For example, people in production division need to see outgoing products in sales database so they can keep producing timely and estimate the products amount to be produced.

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Secure: - Only authorized users are able to input and a nd manipulate data so there must be username and password required for them to access the information. Information Information system that has good security will keep all data including customers’ data, cash flow, etc.

Role & Importance of Information System:All companies use information to set strategies and accomplish business objectives Every business, program or system must address well-defined objectives, which will add value, either directly to the bottom line or toward the achievement of the organization's goals and objectives. Good management information objectives usually fall into one of three categories: •

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Service (effective and efficient), Profit (or cost-avoidance, and Social (moral, ethical and legal) responsibility .

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A good management information system will only reap the benefits if the companies gain insight to better align strategies and identify critical relationships and gaps along four key company dimensions – people, process, culture and infrastructure. The following are the most important reasons to have a good management information system: 1. Operational 1. Operational excellence 2. New 2. New products, services, and business models 3. Customer 3. Customer and supplier intimacy 4. Improved 4. Improved decision making 5. Competitive 5. Competitive advantage 6. Survival 6. Survival The emergence of a global economy, transformation of industrial economies, transformation of the business enterprise, and the emergence of digital firm make information systems essential in business today. Information system is a foundation for conducting business today. In many businesses, survival and the ability to achieve strategic business goals is difficult without extensive use of information technology. There are six reasons or objectives why businesses use information system: 1. Operational excellence. Business excellence. Business improve the efficiency of their operations in order to achieve higher profitability. Information systems are important tools available to managers for achieving higher levels of efficiency e fficiency and productivity in business operations. A good example is Wal-Mart that uses a Retail Link L ink system , which digitally links its suppliers to every one of Wal-Mart's stores. as soon as a customer purchase an item , the supplier is monitoring the item item knows to ship a replacement to the shelf. models. Information system is a major tool for firms 2. New products, services, and business models. Information to create new products and services, and also an entirely new business models. A business model describes how a company produces, delivers, and sells a product or service to create wealth. ��

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Example: Apple Example: Apple inc. transformed an old business model based on its iPod technology platform that included iPod, the iTunes music service, and the iphone. 3. Customer/supplier Customer/supplier intimacy. intimacy. When a business serves its customers well, the customers generally respond by returning and purchasing more. This raises revenue and profits. The more a business engages its suppliers, the better the suppliers can provide vital inputs. These lower costs. Example: The Mandarin Oriental in Manhattan and other high-end hotels exemplify the use of information systems and technology to achieve customer intimacy. They use computers to keep track of o f guests' preferences, such as their preferred room temperature, check-in time, television programs. making. Many managers operate in an information bank, never having 4. Improved decision making. Many the right information at the right time to make an informed decision. These poor outcomes raise costs and lose customers. Information system made it possible for the managers to use real time data from the marketplace when making decision. Example: Verizon Corporation uses a Webbased digital dashboard to provide managers with precise real -time information on customer complains, network performance.. Using this information managers can immediately allocate repair resources to affected areas, inform customers of repair efforts and restore service fast. advantage. When firms achieve one or more of these business objectives( 5. Competitive advantage. When operational excellence, new products, services, and business b usiness models, customer/supplier intimacy, and improved decision making) chances are they have already achieved a competitive advantage. Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales, and higher profits. Example: Toyota Production System focuses on organizing work to eliminate waste, making continues improvements, TPS is based on what customers have actually ordered. 6. Day to day survival. survival. Business firms invest in information system and technology because they are necessities of doing business. These necessities are driven by industry level changes. Example: Citibank introduced the first automatic teller machine to attract customers through higher service levels, and its competitors rushed to provide ATM's to their customers to keep up ��

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with Citibank. Providing ATMs services to retail banking customers is simply a requirement of being in and surviving in the retail banking business. Firm turn to information system and technology to provide the capability to respond to these.

Difference between computer literacy and information system literacy Information literacy is the ability to understand how information is organized and identify the information that is needed and used in business intelligence. Computer literacy is the ability to use the computer. This is an understanding of how to use productivity software on the computer such as word processing, excel, and powerpoint presentations. It is also having knowledge on how to use the internet, collaboration tools, and technology .

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Chapter III Major Enterprise Information Systems/Applications

Enterprise Resource Planning Introduction:Information Technology is revolutionizing the way in which we live and work. It is changing all aspects of our life and lifestyle. The amount of calculation power that is available to mankind is increasing at an exponential rate. Computers and communication are becoming integral part of our lives. To survive, thrive and beat the co mpetition in today’s world, one has to manage the future. Managing the future means managing the information. IT has many roles to play in the t he organization. All organizations have have cert certain ain object objective ivess and and goals goals to achi achieve eve.. For For any any or ga ni za t io n to su c ce ed , all bus iness u nits or departmen ts shou ld work t owards t hese com common goal. But each department or business function in the organization will have its own goals and procedures. The departmental objectives can sometimes be conflicting. For example the finance finance department might might want to cut down down the advertising budget, whereas t h e ma r k e t i n g d e p a r t me n t mi g h t want more money.

S i m i l a r l y p r o d u c t i o n - p l a n n i n g d ep ep ar ar t me me nt nt

might want to reduce the inventory level, but the production people might want to reduce the inventory level, but the production people might want to have more stocks. To success of an organization rests in resolving the conflicts between the various business functions and making them do what is good for the organization as a whole. For this, information is critical. Everybody should know what is happening in other parts of the organization. It is not enough that each depart departme ment nt mana manages ges its activi activitie tiess effic efficien iently tly,, it sh ou ld al so he l p ot he r departmen ts manage their function s effic iently. For these to hap happen, the organization should cease to function of islands of information, each working in ��

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isolation. Each and every employee should know what his/her counter-parts c ounter-parts are doing, h o w h i s / h e r a c t i o n s a n d d e c i s i o n s

will affec t the other

departments. This kind of information sharing was difficult in the early days. Now with the advancement in Information Technology this is possible. IT has a crucial role to play, both at the organizational level and at the departmental level. At the organizational level, IT should assist in specifying objectives and strategies of the organization. IT should aid in devel developi oping ng and and suppo supporti rting ng syste systems ms and and proce procedur dures es to ac h ie ve t he m. At th e departmental level, IT must ensure a smooth flow of information across departments, and should guide organizations to adopt the most viable business practices. At this level, IT ensures seamless flo w of in for mat ion ac ros s th e di ffe re nt depa depart rtm ments ents and and deve develo lops ps and and maintains an enterprise-wide database. This database will eliminate the need of the isolated data islands that existed in each department and make the organization’s o rganization’s data accessibl accessiblee across the departm departmental ental boundari boundaries. es. The enterpris enterprise-wi e-wid d e d at a sharing has many benefits like automation of the procedures, availability of high quality information for better decision making, faster response time and so on. The system has work around the core activities of the organization, and should facilitate seamless flow of information across departmental barriers. Such as systems can optimally plan and manage all the t he resources of the organization and hence, they can be called as Enterprise Resources Planning (ERP) systems. An Enterprise is Enterprise is a group g roup of people with a common goal, which has certain resources at its disposal to achieve that goal. go al. The group has some key functions to perform in order to achieve its goal. Resources included Resources included are money, manpower, material, and all the other things that are required to run the enterprise.

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Pl P l a n n i n g is done to ensu re that nothing goes wrong. Planning is putting necessary functions in place and more importantly, putting them together. Therefore Enterprise Resources Planning or ERP is a method of effective planning planning of all the resources resources in an organization. organization. Meaning of ERP:ERP means Enterprise Resource Planning, a business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing. As the ERP methodology has become more popular, software applications have emerged to help business managers implement ERP in business activities such as inventory control, order tracking, customer service, finance and human resources. Enterprise resource planning's true ambition is to integrate all departments and functions across a company onto a single computer system that can serve all those different departments' particular needs. Thus ERP attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments' particular needs. ERP concepts are shown with figure figure as follows:-

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Enterprise Resource Planning (ERP) Enterprise Resource planning is a core software used by companies to coordinate information in every area of the business. Which help to manage company wide business processes using a common database and shared management reported tools. In each & every company different Departments are existed. In companies departments are separated through its functions. In most of the companies include some major & common functional departments.& each functional department having an area of work. Need for Enterprise Resource Planning - Why ERP? Separate systems were being maintained during 1960/70 for traditional business functions like Sales & Marketing, Finance, Human Resources, Manufacturing, and Supply Chain Management. These systems syste ms were often incongruent, hosted in different databases and required batch updates. It was difficult to manage business processes across business functions e.g. procurement to pay and sales to cash functions. ERP system grew to replace the islands of information by integrating these traditional business functions. & following points also explain the need of ERP •

Business integration and automated data update

•

Linkage between all core business processes and easy flow of integration

•

Flexibility in business operations and more agility to the company

•

Better analysis and planning capabilities

•

Critical decision making

•

Competitive advantage

•

Use of latest technologies

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Salient Features of ERP are, 1. Accommodating variety: The variety: The ERP software solution provides both multi lingual and multi-currency capabilities. Also multi mode manufacturing manufacturing and multifacility provide the capability required to compete and succeed globally. 2. Integrated Management Information: (i) Today’s business managers use ERP for Flexible reporting tools to extract the information as and when needed without depending on an information system department (MIS department). e lectronically accept customer (ii) Electronic data interchange (EDI) to (EDI) to electronically information like purchase orders, schedule amendments, or cash payment and electronically send order acknowledgement and invoices to customers. (iii) Imaging to provide the ability to display drawings or specification, ability tostore original sale orders, purchase orders, and quotations, and contracts. (iv) Data base creation: creation: Starting with time and attendance reporting, monitoring and control of machines and post-sales statistics.

•

Scope of ERP Finance: Financial Finance: Financial accounting, Managerial accounting, treasury management, asset management, budget control, costing and enterprise control

•

Logistics: Production Logistics: Production planning, material management, plant maintenance, project management, activities and events management etc.

•

Human resource: Personnel resource: Personnel management, training and development etc.

•

Supply Chain: Inventory Chain: Inventory control, purchase and order control, supplier scheduling, planning etc.

•

Work flow: Integrate flow: Integrate the entire organization with the flexible assignment of tasks and responsibility to locations, position, jobs etc.

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Advantages of ERP:The successful implementation of an ERP system will have many advantages, as indicated below: 

Business integration and Improved Data Accuracy: Accuracy: ERP ERP system is composed c omposed of various modules/ sub modules where a module represents a particular business component. If data is entered in one module such as receiving, it automatically updates other related modules such as accounts payable and inventory. This updating occurs at real time i.e. at the time a transaction occurs. Since, data needs to be entered only once at the origin of transaction, the need of multiple entries of the same data is eliminated. Likelihood of duplicate/ erroneous data is, therefore, minimized. The centralized structure of the data base also enable better administration and security provisions, which minimizes loss of sensitive data.



Planning and MIS: The MIS: The various decision support tools like planning engines and simulations functions, form integral part of an ERP system which helps in proper utilization of resources like materials, human resources and tools. Constrained based planning help in drawing appropriate production schedules, thereby improving operation of plant and equipment. As a part of MIS, an ERP system, contains many inbuilt standard reports and also a report writer which produce ad hoc reports, as and when needed.



Improved Efficiency and Productivity: In Productivity: In addition to provision of improved planning, ERP system provides a tremendous boost to the efficiency of day to day and routine transactions such as order fulfillment, on time shipment, vendor v endor performance, quality management, invoice reconciliation, sales realization, and cash management. Cycle time is reduced for sales to cash and procurement to pay sequences.



Establishment Establishment of Standardized Procedures: ERP Procedures: ERP system is based on processes of international best practices, which are adopted by the organizations during implementation. Department Department silos are purged and maverick practices are done ��

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away with. Because of top down view available to management, chances of theft, fraud and obsolescence are minimized. 

Flexibility and technology: Due technology: Due to globalized environment, where production units, distribution centers and corporate offices reside in different countries, organizations need multi currency, multi language and multi accounting modes, in an integrated manner. These provisions are available in most of the ERP systems, particularly in products offered by tier 1 and tier 2 vendors. ERP vendors are also quick to adopt latest technologies, from mainframe to client server to internet. Unlike a bespoke system, Upgrading to latest technology for a running ERP system is uncomplicated, involving mostly adoption of service packs and patches. Other benefits of ERP system are:Direct Benefits 1. Reduce the cost of production and services 2. Lead time reduction 3. Faster production 4. Automated ordering and payment 5. Inventory reduction Indirect Benefits:Benefits:1. Improve customer response 2. Support strategic planning 3. Uniform and standard reporting accorting to global standards. 4. Save time and efforts in data entry. 5. Can reach more vendors, producing more competitive bids. 6. Access to accurate data 7. Faster access to data for timely decisions

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Disadvantage of ERP: •

Expense and time in implementation

•

Difficulty in integration with other system

•

Risk of implementation failure

•

Difficulty in implementation change

•

Risk in using one vendor

Customer Relationship Management (CRM) CRM is an enterprise application module that manages a company's interactions with current and future customers by organizing and coordinating sales and marketing, providing better customer services along with technical support. Meaning / Definition Definition of CRM Customer relationship management management (CRM) is a system for managing a company's interactions with current and future customers. It involves using technology to organize, automate and synchronize sales, marketing, customer service, and technical support. According to Atul Parvatiyar Parvatiyar and Jagdish N. Sheth Sheth Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and the customer. It involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value. The purpose of CRM “The focus of CRM is on creating value for the customer and the company over the longer term” When customers value the customer service that they receive from suppliers, they are less likely to look to alternative suppliers for their needs

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CRM enables organizations to gain g ain ‘competitive advantage’ over competitors that supply similar products or services. & CRM is important because Today’s because Today’s businesses compete with multiproduct offerings created and delivered by networks, alliances and partnerships of many kinds. Both retaining customers and building relationships with other valueadding allies is critical to corporate performance” “ The adoption of C.R.M. is being fuelled by a recognition that long-term relationships with customers are one of the most important assets of an organization”

Need of CRM: •

To keep track of all present and future customers

•

To identify and target the best customers

•

To let the customers know about the existing new products and services

•

To provide real-time and personalized services based on the needs, wants and habits of the existing customers

•

To provide superior service and consistent customer experience

•

To implement a feed-back system

Features of CRM Customer Relationship Management is a strategy which is customized by an organization to manage and administrate its customers and vendors in an efficient manner for achieving excellence in business. It is primarily entangled with following features: Needs- An organization can never assume what actually a 1. Customers Needs- An customer needs. Hence it is extremely important to interview a customer about all the likes and dislikes so that the actual needs can be ascertained ��

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and prioritized. Without modulating the actual needs it is arduous to serve the customer effectively and maintain a long-term deal. Response- Customer response is the reaction by the 2. Customers Response- Customer organization to the queries and activities of the customer. Dealing with these queries intelligently is very important as small misunderstandings could convey unalike perceptions. Success totally depends on the understanding and interpreting these queries and then working out to provide the best solution. During this situation if the supplier wins to satisfy the cu stomer by properly answering to his queries, he succeeds in explicating e xplicating a professional and emotional relationship with him. 3. Customer Satisfaction- Customer Satisfaction- Customer satisfaction is the measure of how the needs and responses are collaborated and delivered to excel customer expectation. In today’s competitive business marketplace, customer satisfaction is an important performance performance exponent and basic differentiator of business strategies. Hence, the more is customer satisfaction; more is the business and the bonding with customer. Loyalty- Customer loyalty is the tendency of the customer to 4. Customer Loyalty- Customer remain in business with a particular supplier and buy the products regularly. This is usually seen when a customer is very much satisfied by the supplier and re-visits the organization for business deals, or when he is tended towards re-buying a particular product or brand over times by that supplier. To continue the customer loyalty the most important aspect an organization should focus on is customer satisfaction. Hence, customer loyalty is an influencing aspect of CRM and is always crucial for business success. Retention- Customer 5. Customer Retention Customer retention is a strategic process to keep or retain the existing customers and not letting them to diverge or defect to other suppliers or organization for business. Usually a loyal customer is tended towards sticking to a particular brand or product as far as his basic needs continue to be properly fulfilled. He does not opt for taking a risk in

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going for a new product. More is the possibility to retain customers the more is the probability of net growth of business. Complaints- Always there exists a challenge for suppliers to deal 6. Customer Complaintswith complaints raised by customers. Normally raising a complaint indicates the act of dissatisfaction of the customer. There can be several reasons for a customer to launch a complaint. A genuine reason can also exist due to which the customer is dissatisfied but sometimes complaints are launched due to some sort of misunderstanding in analyzing and interpreting interpreting the conditions of the deal provided by the supplier regarding any product or service. Handling these complaints to ultimate satisfaction of the customer is substantial for any organization and hence it is essential for them to have predefined set of process in CRM to deal with these complaints and efficiently resolve it in no time. 7. Customer Service- In Service- In an organization Customer Service is the process of delivering information and services regarding all the products and brands. Customer satisfaction depends on quality of service provided to him by the supplier. The organization has not only to elaborate and clarify the details of the services to be provided to the customer but also to abide with the conditions as well. If the quality and trend of service se rvice go beyond customer’s expectation, the organization is supposed to have a good business with customers. Scope of CRM

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Advantages of CRM •

Provide better customer service increased customer revenues

•

Discover new customers

•

Cross sell and up-sell products more effectively

•

Help sales staff close deals faster

•

Make call centers more efficient

•

Simplify marketing and sales processes

Disadvantages of CRM •

Some time record loss is major problem

•

Overhead costs

•

Giving training to employees is issue in small organizations

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Decision Support System (DSS) Introduction:In the 1970’s a number of business organization began developing Information Systems, which are significantly different from the information systems then in use. The new systems were interactive and were designed to help specific end users utilize data and models to discuss & divide –not solve- semi-structured and unstructured problems these systems were called the Decision Support System the end 1980’s was extended to groups and entire organizations. The Decision Support Systems were interactive information system, that rely on an integrated set of user-friendly hardware & software tools to produce and present information that is targeted to support management in the decision-making process. OR Decision support systems are interactive software-based systems intended to help managers in decision making by accessing large volume of information generated from various related information systems involved in organizational business processes, like, office automation system, transaction processing system etc. It was extended to groups and entire organizations by the end of 1980s. The Decision support systems assist management decision-making by combining data, sophisticated analytical models and user-friendly software into a single powerful system that can support semi-structured or unstructured decision making. The DSS is under user control, from early inception to final implementation and daily use. Decision support systems helps to close the information gap to enable manager to improve quality of their decision.

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While MIS is considered useful for structured decisions, Decision support systems is considered to be more useful for decisions at the Strategic levels, where decision makers are often confronted with complex decisions which are beyond their human abilities to synthesize properly the factors involved. The decision makers compile co mpile useful information from raw data, documents, personal knowledge, and/or business models to identify and solve problems and make decisions. Decision support systems sy stems generally involve non-programmed decisions.Therefore,there decisions.Therefore,there will be no exact report, content or o r format for these systems reports are generated on the fly. Components of a DSS The DSS has three basic components 1. The Database 2. A Model Base & 3. DSS Software System 1) The Database:The DSS database is a collection of current or historical data from a number of application groups. It is organized in such a manner that it provides easy access for a range of applications. Adequate precaution is taken to ensure the data integrity while controlling the processing that keeps the data current. DSS do not create or update data, but rather use live organizational o rganizational data so that the decisions could be taken based upon actual conditions. It would also be imperative to remember that most DSS don’t have direct access to organizational data but usually use data that have been extracted from relevant databases-both databases-both internal & external and stored specifically for the DSS. 2) The Model Base A Model is an abstract representation that illustrates the components or relationships of a phenomenon. A model can be physical model, a mathematical ��

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model or a verbal model. DSS can mane use of different types of models. The models could be broadly classified into three types as follows

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a) Behavioural Model:The focus of behvioural Model of DSS is on on studying/understanding studying/understanding the behavior and trends among the business variables. The decision maker can then make decisions giving due regard to such behavioural relationships. The trend analysis, forecasting and the statistical analysis models belong to this category. The trend analysis indicates how different variables behave in trend setting in past & future. A regression model shows relation between one or more variables. These types of models are largely used in process control, marketing, psychology, agricultural, sciences, manufacturing. manufacturing.

b) Management Science Model:-

These models are developed on the principles of business management, accounting and econometrics. In management areas the improved methods of management control are available which can be

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used for the management decisions. Some of the management systems can be converted into the decision support system models. E. g. Cost Accounting System, Budgetary System, Production Planning & Control, Manpower Planning & forecasting etc.

c) Operations Research Model:The Operations Research Model are mathematical model. These models represent a real life problems situation in terms of the variables, constants and parameters expressed in algebraic equations.

E.g. Linear Programming, Mathematical Programming Techniques, ABC Analysis etc.

Characteristics of a DSS 1.

Support for decision makers in semi structured and unstructured problems.

2.

Support for managers at various v arious managerial levels, ranging from top executive to line managers.

3.

Data access

4.

Support for individuals and groups. Less L ess structured problems often requires the involvement of several individuals from different departments and organization level.

5.

Support for interdependent or sequential decisions.

6.

Support for intelligence, design, choice, and implementation.

7.

Support for variety of decision processes and styles

8.

DSSs are adaptive over time.

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Improves efficiency and speed of decision making activities

•

Increases the control, competitiveness and capability of futuristic decision

making of the organization •

Facilitates interpersonal communication c ommunication

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•

Encourages learning or training

•

Since it is mostly used in non-programmed non-programmed decisions, it reveals new

approaches and sets up new evidences for an unusual decision •

Helps automate managerial processes

Difference between MIS & DSS Sr.

MIS

DSS

No. 1

Structured Decision

Semi-structured Semi-structured & Unstructured Decisions

2

Reports based on routine flow of

Focused on specific decisions or

data

classes of decisions.

3

MIS are regular and recurring

The need of DSS can be irregular

4

MIS places emphasis on efficiency

DSS provides strategic information

of decision 5

Structured information flows

Emphasizes change, flexibility, quick responses.

6

Presentation in form of reports

Presentation in form of graphics

7

Traditional systems development

Develop through prototyping iterative process.

Classification of DSS There are several ways to classify DSS. Hoi Apple and Whinstone classify DSS in following: •

Text Oriented DSS: It DSS: It contains textually represented information that could have a bearing on decision.It allows documents to be electronically created, revise and viewed as needed

•

Database Oriented DSS: Database DSS: Database plays a major role here; it contains organized and highly structured data. ��

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Spreadsheet Oriented DSS: it DSS: it contains information in spread sheets that allows create, view, modify procedural knowledge and also instruct the system to execute self-contained instructions.The most popular tool is Excel and Lotus 1-2-3.

•

Solver Oriented DSS: it DSS: it is based on a solver, which is an algorithm or procedure written for performing certain calculations and particular program type.

•

Rules Oriented DSS: It DSS: It follows certain procedures adopted as rules.

•

Rules Oriented DSS: Procedures DSS: Procedures are adopted in rules oriented DSS. Export system is the example.

•

Compound DSS: It DSS: It is built by using two or more of the five structures explained above

Types of DSS Following are some typical DSSs: •

Status Inquiry System: helps System: helps in taking operational management management level or middle level management decisions, for example daily schedules of jobs to machines or machines to operators.

•

Data Analysis System: System: needs needs comparative analysis and makes use of formula or an algorithm,for example cash flow analysis,inventory analysis etc.

•

Information Analysis System: In System: In this system data is analyzed and the information report is generated.For example,sales analysis,accounts receivable systems,market analysis etc.

•

Accounting System:keep System:keep tracks of accounting and finance related information,for example,final account,accounts receivables,accounts payables etc. that keep track of the major aspects of the business.

•

Model Based System: Simulation models models or optimization optimization models used for decision- making used infrequently and creates general guidelines for operation or management.

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Knowledge Management System (KMS) All the systems which discussing here comes under knowledge management category. A knowledge management system is not radically different from all these information systems, but it just extends the already existing systems by assimilating more information in formation.. Data is raw facts, information is processed and/or interpreted data and knowledge is personalized information. in formation. What is knowledge? •

Personalized information

•

State of knowing and understanding

•

An object to be stored and manipulated

•

A process of applying expertise

•

A condition of access to information

•

Potential to influence action

Sources of Knowledge of an Organization •

Intranet

•

Data warehouses and knowledge repositories

•

Decision support tools

•

Groupware for supporting collaboration

•

Networks of knowledge workers wo rkers

•

Internal expertise

•

The Internet (URLs)

•

CRM database

• ERP database • E-mails , Instant messaging , Voice mail , faxes • Supplier’s systems ,Customer’s systems

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Definition of KMS Knowledge Management comprises a range of practices used in an organization to identify, create represent distribute and enable adoption to insight and experience. such insights and experience comprise knowledge, either embodied in individual or embedded in organizational processes and practices. OR Knowledge management (KM) is the process of capturing, developing, sharing, and effectively using organizational knowledge. It refers to a multidisciplined approach to achieving organizational objectives by making the best use of knowledge OR A method for the improvement of business process performance. A knowledge management system is most often used in business in applications such as information systems, business administration ad ministration,, computer science, public policy and general management. Common company departments for knowledge management systems include human resources, business strategy and information technology.

Knowledge management efforts typically focus on o n organizational objectives such as improved performance, competitive advantage, innovation, innovation, the sharing of lessons learned, integration and continuous improvement of the organization. KM efforts overlap with organizational learning and may be distinguished from that by a greater focus on the management of knowledge as a strategic asset and a focus on encouraging the sharing of knowledge. It is an enabler of organizational learning.

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Purpose/Objective of a KMS The purpose of the Knowledge Management process is to share perspectives, ideas, experience and information; to ensure that these are available in the right place at the right time to enable informed decisions; and to improve efficiency by reducing the need to rediscover knowledge. The objectives/Purpose of Knowledge Management are to: • Improve the quality of management decision-making by ensuring that reliable and secure knowledge, information and data is available through the service lifecycle. • Enable the service provider to be more efficient and improve quality of service, increase satisfaction and reduce the cost of service by reducing the need to rediscover knowledge . • Ensure that staff have a clear and common understanding of the value that their services provide to customers and the ways in which benefits are realized from the use of those services . • Maintain a Service Knowledge Management System (SKMS) that provides controlled access to knowledge, information and data that is appropriate for each audience . • Gather, analyze, store, share, use and maintain knowledge, information information and data throughout the service provider organization

Activities in Knowledge Knowledge Management Management •

Start with the business problem and the business value to be delivered first.

•

Identify what kind of strategy to pursue to deliver this value and address the KM problem

•

Think about the system required from a people and process point of o f view.

•

Finally, think about what kind of technical infrastructure are required to support the people and processes.

•

Implement system and processes with appropriate change management and ��

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literative staged release.

Level of Knowledge Knowledge Management

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Executive Support System (ESS) Executive support systems are intended to be used by the senior managers directly to provide support to non-programmed non-programmed decisions in strategic Information System(EIS) EIS/ESS System(EIS) EIS/ESS is management.or it is also called as Executive as Executive Information a relatively new decision-failitating technology. EIS/ESS has emerged in response to the emerging dynamic situation where the Top Executives are bombared with the huge amount of data, efficiently leading to “Information overload” with the resultant understandable confusion and dilemma. Meaning/Definition Meaning/Definition of EIS/ESS EIS/ESS is is in a way, socialized DSS that includes all hardware, software,

data procedures and people used to assists senior/top sen ior/top level executives within the organization. The primary goad of EIS/ESS is to obtain data from a variety of sources, integrate and aggregate that data and display the resluting information in an easy to use comprehensible format. Meaning/Definition Meaning/Definition of EIS An EIS is “a computer-based computer-based syste syste that serves the the information needs needs of Top Executives. It provides provides rapid access access to timely information information and direct direct access to Management Reports. Reports. It is very user-friendly user-friendly and and is supported by by graphics, providing Exception Exception Reporting and Drill Drill down capabilities capabilities & it can also also be easily connected with online information services and electronic mail”

OR An EIS is “ a computer computer based information information system system that combines the decision-maker’s imagination imagination and judgment with the computer’s ability to store, retrieve, manipulate, compute and report internal and external information’s.”

Meaning/Definition Meaning/Definition of ESS

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An ESS is a Comprehensive Comprehensive executive support support system that that goes beyond the EIS to include communications, communications, office automation, analysis analysis support & intelligence.

These information are often external, unstructured and even ev en uncertain. Exact scope and context of such information is often not known beforehand. This information is intelligence based: •

Market intelligence

•

Investment intelligence

•

Technology intelligence

Examples of Intelligent Intelligent Information Following are some examples examples of intelligent information, information, which is often often source of an ESS: •

External databases

•

Technology reports like patent records etc.

•

Technical reports from consultants

•

Market reports

•

Confidential information about competitors

•

Speculative information like market conditions

•

Government policies

•

Financial reports and information

Why EIS/ESS:EIS/ESS emerged , indeed the emergence became imperative, due to various factors both internal & external, obtaining in the corporate operating environment world-wide. According to Watson and others EIS/ESS has become imperative(vital/ imperative(vital/ authorities command) due to certain internal & External factors as follows: Internal Factors •

Need for Rapid status updated on various business activities. a ctivities.

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Need for more accurate information

•

Need for for improved communication

•

Need for timely information

•

Need for access to corporate database

•

Need for access to operational data

•

Need for ability to identify historical trends

External Factors •

Rapidly changing business environment

•

Need to more Pro-active

•

Need to access external database

•

Increased and intensifying global competition

EIS/ESS is developed to support decision-making actions/proesses at the Top Executive/Management Level. EIS/ESS is used by the Top Executives as they require specialized support when/while making strategic decisions. EIS/ESS is required and used at fairly senior level including members of the Board of Directors and executives with the titles of CEO, COO(Chief Operations/Operating Operations/Operating Officer), CFO(Chief Finance Officer) etc.

Features/ Characteristics of EIS/ESS The EIS/ESS have an broad characteristics & therefore for the sake of convenience it could be divided into three categories:a) Informational Characteristics b) User-Interface/Orientation User-Interface/Orientation Characteristics c) Managerial/ Executive Characteristics.

a) Informational Characteristics:•

Produce Correct Information.

•

Produce Relevant Information

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Produce Validated information

•

Flexibility and ease of use

•

Provides timely information with short response time & quick retrieval

b) User-Interface/Orientation Characteristics •

Facilitates access from many places

•

Provides secure, reliable and confidential access and access procedure.

•

Contains sophisticated ‘Self-help’ , user friendly interfaces including Graphic User Interface(GUI) Interface(GUI)

•

Is customized tailor-made to suit the management style of individual executives.

c)

Managerial/ Executive Characteristics:Characteristics:•

Supports the need/access for/to the External Data/Database

•

Provides support for Strategic Management (Strategic Planning/ Organising/Control/Staffing Organising/Control/Staffing etc)

•

Provides supoort for defining overall Vision, Mission and Strategy as it has a Strategic/futuristics Strategic/futuristics orientation

•

Can Help with the situation that have a high degree of risk/uncertainty

•

Is Linked with value-added business processes.

•

Has capabilities like ‘Dril Down’, Exception Reporting’ and ‘Critical Success Factors’ identification.

•

Has a high Result/performance Orientation.

Advantages/Benefits of EIS/ ESS: •

Easy for upper level executive to use

•

Ability to analyze trends

•

Augmentation of managers' leadership capabilities

•

Enhance personal thinking and decision making

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Contribution to strategic control flexibility

•

Enhance organizational competitiveness in the market place

•

Instruments of change

•

Increased executive time horizons.

•

Better reporting system

•

Improved mental model of business executive

•

Help improve consensus building and communication

•

Improve office automation

•

Reduce time for finding information

•

Early identification of company performance

•

Detail examination of critical success factor

•

Better understanding

•

Time management

•

Increased communication capacity and quality

Disadvantage of ESS •

Functions are limited

•

Hard to quantify benefits

•

Executive may encounter information overload

•

System may become slow

•

Difficult to keep current data

•

May lead to less reliable and insecure data

•

Excessive cost for small company

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Business Intelligence System (BIS) The term 'Business Intelligence' has evolved from the decision support systems and gained strength with the technology and applications like data warehouses, Executive Information Systems and Online Analytical Processing (OLAP). Business Intelligence System is basically a system used for finding patterns from existing data from operations. Characteristics of BIS •

It is created by procuring data and information for use in decision-making

•

It is a combination of skills, processes, technologies, applications and

practices •

It contains background data along with the reporting tools

•

It is a combination of a set se t of concepts and methods strengthened by fact-

based support systems •

It is an extension of Executive Support System or Executive Information

System •

It collects, integrates, stores, analyzes, and provides access to business

information •

It is an environment in which business users get g et reliable, secure,

consistent, comprehensible, easily manipulated and timely information •

It provides business insights that lead to better, faster, more relevant

decisions Benefits of BIS •

Improved Management Processes

•

Planning, controlling, measuring and/or applying changes that results in

increased revenues and reduced costs •

Improved business operations

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Fraud detection, order processing, purchasing that results in increased

revenues and reduced costs •

Intelligent prediction of future

Approaches of BIS: For most companies it is not possible po ssible to implement a proactive business intelligence system at one go. The following techniques and methodologies could be taken as approaches to BIS: •

Improving reporting and analytical capabilities

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Using scorecards and dashboards

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Enterprise Reporting

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On-line Analytical Processing (OLAP) Analysis

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Advanced and Predictive Analysis

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Alerts and Proactive Notification

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Automated generation of reports with user subscriptions and "alerts" to problems and/or opportunities

Capabilities of BIS 

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Data Storage and Management: •

Data ware house

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Ad hoc analysis

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Data quality

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Data mining

Information Delivery •

Dashboard

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Collaboration /search

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Managed reporting

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Visualization

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Scorecard

Query, Reporting and Analysis

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Ad hoc Analysis

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Production reporting

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OLAP analysis

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Supply Chain Management (SCM) Definition and Meaning Meaning of SCM Supply chain management is the systemic, strategic coordination of the

traditional business functions and tactics across these business functions - both within a particular company and across businesses within the supply chain- all coordinated to improve the long-term performance of the individual i ndividual companies and the supply chain as a whole. In a traditional manufacturing environment, supply chain management meant managing movement and storage of raw materials, work-in-progress inventory, and finished goods from point of origin to point of consumption. It involves managing the network of o f interconnected smaller business units, networks of channels that take part in producing a merchandise of a service package required by the end users or customers. With businesses crossing the barriers of local markets and reaching out to a global scenario, SCM is now defined as: Design, planning, execution, control, and monitoring of supply c hain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally. SCM consists of: •

operations management

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logistics

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procurement

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information technology

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integrated business operations

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Objective of SCM •

To decrease inventory cost by more accurately predicting demand and

scheduling production to match it. •

To reduce overall production cost by streamlining production and by

improving information flow. •

To improve customer satisfaction.

Feature of SCM

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Scope of SCM

SCM Processes •

Customer Relationship Management

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Customer Service Management

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Demand Management

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Customer Order Fulfillment

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Manufacturing Flow Management

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Procurement Management

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Product Development and Commercialization Commercialization

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Returns Management

Advantages of SCM SCM

SCM have multi-dimensional advantages: 

To the suppliers: •

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Help in giving clear-cut instruction i nstruction Online data transfer reduce paper work

Inventory Economy: •

Low cost of handling inventory

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Low cost of stock outage by deciding optimum size of replenishment orders

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Achieve excellent logistical performance such as just in time

Distribution Point: •

Satisfied distributor and whole seller ensure that the right products reach the right place at right time

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Clear business processes subject to fewer errors

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Easy accounting of stock and cost of stock

Channel Management: •

Reduce total number of transactions required to provide product assortment

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Organization is logically capable of performing customization requirements

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Financial management: •

Low cost

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Realistic analysis

Operational performance: •

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It involves delivery speed and consistency.

External customer: •

Conformance of product and services to their requirements

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Competitive prices

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Quality and reliability

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Delivery

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After sales services

To employees and internal customers: •

Teamwork and cooperation

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Efficient structure and system

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Quality work

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Delivery

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Chapter IV Management Information System Introduction of MIS MIS is popularly known as the Management Information System. MIS is considered as one such method of generating information which is used by management of organization for decision Making, control of activities, a ctivities, operations etc. During the period 1940 to 1960 computers were commercially used for census and payroll work. This involved large amount of data and its processing. Since then the commercial application exceeded the scientific applications for which the computer were mainly intended for. MIS is an information System which helps in providing the management of an organization with information which is used by management for decision making. MIS is all about using information for discharging among others the management functions of initiating, planning, organizing, forecasting, staffing, directing, coordinating and controlling.MIS is a tool for better management and scientific decision-making. MIS helps in providing right information, in formation, in right quantity, to right person/s (managers), at right time. Management Information System is an implementation of the organizational systems and procedures. The three components in MIS gives a more complete and focused definition, where System suggests integration and holistic view, Information stands for processed data and Management is the ultimate user, the decision makers. Management information system can thus be analyzed as: Management: Management covers the planning, control, and administration of the operations of a concern. The top management handles planning; the middle management concentrates on controlling; and the lower management is concerned with actual administration a dministration OR “Management can be defines as a science of using resources rationally (mobilization, allocation, combination, utilization of resources in judicious manner using appropriate skills, approaches and techniques) and economically to achieve the desired results or meet the targeted performance p erformance level” Information Information, in MIS, means the processed data that helps the management in planning, controlling and operations. Data means all the facts arising out of the ��

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operations of the concern. Data is processed i.e. recorded, summarized, compared and finally presented to the management in the form of MIS report. “Information is data that has been processed into a form that is meaningful to the recipient and is of real or perceived value in current or progressive decision” – Davis and Olson •

A data processing system processes data to generate information. The quality of information determines the quality of action or decision.

•

The data information cycle can be expressed as – Idea

Intelligence Data

Knowledge

Information

Information has come to occupy very important position in the survival su rvival of business •

The source and destination for any information in formation can be – International, National, Industry, Corporate, Department and Individual.

System Data is processed into information with the help of a system. A system is made up of inputs, processing, output and feedback or control. OR “A system can be defined as a group of inter-related, often interacting units that together perform a task in a synchronized manner to provide the desired result” •

Solar system: system: The sun and the celestial celestial bodies that that revolve around it.

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Capitalist Market System: Set of inter-related ideas and principles

A business is also a system where resources such as people, money, material, machines etc., are transformed by various organization processes into goods and services. Thus MIS means a system for processing data in order to give proper information to the management for performing its functions

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Definition of MIS Management Information System, 'MIS' is a planned system of collecting, storing and disseminating data in the form of information needed to carry out the functions of management. OR A management information system (MIS) provides information that organizations require to manage themselves the mselves efficiently and effectively. Management information systems are typically computer systems used for managing. The six primary components of an MIS are: 1. Hardware 2. Software 3. Data (information for decision making), 5. Procedures (design, development and documentation), and 6. People (individuals, groups, or organizations). OR A computer based information system for providing management with accurate timely information necessary for decision making. It is a planned & integrated system for gathering relevant data, converting it in to right information & supplying the same to the concern executives/manager. OR According to David J. Olson, “ A Management Information System is an integrated user machine system for providing information to support the operations, management, analysis and decision-making functions in an organisation”. Needs of MIS: Managers play a key role in any organization. They are responsible for taking decisions appropriate to the need of the market. Information systems have become the main tool used by managers in decision making. Managers perceive information as the driving force to achieve success in any business. Hence there is a need for MIS as: •

Support of its business process and operations

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Support of decision making by its employees and managers

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Support of its strategies for competitive advantage-Gaining a strategic advantage

The major roles of the business applications of a Management Information Objectives of MIS Goals of an MIS are to implement the organizational structure and dynamics of the enterprise for the purpose of o f managing the organization in a •

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better way and capturing the potential of the information system for competitive advantage. Following are the Basic the Basic objectives of objectives of an MIS: Capturing Data: capturing contextual data, or operational information that will contribute in decision making from various internal and external sources of organization Processing Data: the captured data is processed into information needed for planning, organizing, coordinating, directing and controlling functionalities at strategic, tactical and operational level. Processing data means: •

Making calculations with the data

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Sorting data

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Classifying data and

Summarizing data Information Storage: information or processed data need to be stored for future use. Information Retrieval: the system should be able to retrieve this information from the storage as and when required by various users. Information Propagation: information or the finished product of the MIS should be circulated to its users periodically using the organizational network. •

Nature & Scope of MIS:

Accounting is meant for monitoring, Controlling the organizational performance and initiating course corrective action ac tion whenever/whenever required. Accounting also provides specific information, cost etc. about various activities ��

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which can be made use for analytical and decision making activities. Thus Accounting is useful and is made use of o f in MIS. Management Techniques and principles are inseparable part of o f decision making. They explain the dynamics of decision making process, specify management functions at various levels and thereby facilitate development of MIS. MIS has to be developed and implemented in an oraganizational context. enable MIS professional to Organizatioal Theory/ Behavioural Science Behavioural Science enable understand organisations, their types, cultures and behaviour. These are valuable inputs as the success of MIS would depend on how it adopts to the specific orgnisational requirements. E. g. MIS perception in a proprietary firm, family owned company, Government Corporation or A multi national enterprise is certainly different. Hence MIS also draws heavily upon the Organisational Behaviour/ Behavioural Sciences Theory. Decision Making today involves extensive use of mathematical and statistical techniques Model Building, creating scenarios, forecasting – all these activities involve mathematical /statistical techniques. These techniques, embodies in Operational Research – Research – which is using statistics and mathematicas for arriving at an optimal solution-are made use of in MIS. MIS is today based on Computers. It is then no wonder that MIS makes extensive use of computer science and technology for data storage, processing, manipulation, retrieval etc. due to the speed and processing capabilities an memory size of the computer. As MIS cannot be developed without making use of the various theories, principles, formulae, MIS is viewed as a Multi-disciplinary Subject

Features of MIS: It should be based on a long-term planning. It should provide a holistic view of the dynamics and structure of the organization. It should work as a complete and comprehensive system covering all interconnecting sub-systems within the organization. It should be planned in a top-down way, as the decision makers or the management should actively take part and provide clear direction at the development stage of the MIS. It should be based on need of strategic, operational and tactical information of managers of an organization.

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It should also take care of exceptional exc eptional situations by reporting such situations. It should be able to make forecasts and estimates, and generate advanced information, thus providing a competitive advantage. Decision makers can take actions on the basis ba sis of such predictions. It should create linkage between all sub-systems within the organization, so that the decision makers can take the right decision based on integrated view. It should allow easy flow of information through various sub-systems, thus avoiding redundancy and duplicity of data. It should simplify the operations with as much practicability as possible. p ossible. Although the MIS is an integrated, complete system, it should be made in such a flexible way that it could be easily split into smaller sub-systems as and when required. A central database is the backbone of a well-built MIS. •

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Characteristics of Good MIS Management information systems (MIS) is an organized approach to gathering information from company operations and making a strategic management decision. Developing quality characteristics ch aracteristics for gathering information is essential to making solid management decisions. 1. Relevance Information should be relevant to the strategic decision that company management is currently reviewing. Because companies may review several business opportunities at one time, avoiding information not relating to the decision is essential. 2. Accurate MIS information should be accurate and avoid a void any inclusions of estimates or probable costs. Making decisions based on estimates can lead to cost overruns or lower profits from future operations. ope rations. 3. Timely Many management decisions are based on information from a certain time period, such as quarterly or annual periods. Information outside of the requested time frame may skew information and lead to an improperly informed decision. 4. Exhaustive MIS information gathering should resemble an upside-down triangle. The early stages of information gathering should be exhaustive, including all types of company information. As management narrows its decision-making process, the information is refined to include only the most relevant pieces. ��

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5. Cost-Effective The MIS needs to be a cost-effective and efficient system for gathering information. Most of these systems are developed internally, creating costs that cannot be passed to clients.

Characteristics of Computerized MIS Following are the characteristics of a well-designed computerized MIS: It should be able to process data accurately and with high speed, using various techniques like operations research, simulation, heuristics etc. It should be able to collect, organize, manipulate and update large amount of raw data of both related and unrelated nature, coming from various internal and external sources at different periods of time. It should provide real time information on ongoing events without any delay. It should support various output formats and follow latest rules and regulations in practice. It should provide organized and relevant information for all levels of management: strategic, operational and tactical. It should aim at extreme flexibility in data storage and retrieval. •

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ADVANTAGES OF MIS MIS is a process of collection and storing of the data useful for the organization. The following points can summarize the importance of MIS :1. It facilitates Planning : MIS improves the quality of plans by providing relevant information for sound decision – making. Due to increase in the size and complexity of organizations, managers take help of information systems to know about the status of operations. 2. In minimizes Information overload : MIS change the larger amount of data in to summarized form and there by avoids the confusion which may arise when managers are flooded with detailed facts. 3. MIS encourages De-centralization : Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures. 4. It brings Co-ordination : MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centers in the organization.

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5. It makes control easier : MIS serves as a link between managerial planning and control. It improves the ability of management to evaluate and improve performance. The used computers has increased the data processing and storage capabilities and reduced the cost. 6. MIS assembles, process , stores , Retrieves , evaluates and Disseminates the information. 7. It helps in minimizing risk in decision making. 8. It helps the executives to avail the information regarding the functional areas quickly. 9. It processes the data and derives information out of them & helps in preparing corporate report. DISADVANTAGES OF MIS MIS enhances the overall throughput of the organization. But it has certain limitations :  

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The qualities of the outputs of MIS are basically governed by the qualities of inputs and processes. It may not have requisite flexibility to quickly update itself with the changing needs of time, especially in a fast changing and complex environment. MIS effectiveness decreases due to frequent changes in top management, organizational structure and operational team. It can not replace managerial judgment in making decisions in different functional areas.

Functions of MIS The prime objective to set up MIS in an organization is to use the management information by its managers for decision-making. Thus, MIS needs to perform the following functions to meet its objective: •

Capturing data : MIS performs usage of data whether manual or through

computer terminals by using several internal and external springs of an association . The data related to transactions that take place in the organization is stored in some physical medium such as a paper form or entering it directly into a computer system by the end users. •

Processing data : Processing data includes converting the captured data

into the required management information . To process the data, you need

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to perform various activities such as calculating, comparing, sorting, classifying and summarising the data. These data processing activities organise, mathematical, operations research and other business models. Information storage : MIS saves the less frequently used information as

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an organisational record and thus stores the processed or unprocessed un processed data for future use. While performing this storage activity , data and information are reserved and organised in the form of fields, records , files and databases for future use. Information retrieval : Information retrieval includes retrieving the stored

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information as per the requirements of the management users . In such cases, the retrieved information is used or is processed again to meet the exact management information demands. Disseminating management information: Disseminating management

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information, which is a finished product of MIS is divided and distributed to the users in an organization. o rganization. This information could be periodic, through reports or online through computer terminals. MIS Development Process

In MIS, the information is recognized as major resource like capital and time. If this resource has to be managed well, it calls upon the management to plan for it and control it, so that the information becomes a vital resource for the system. •

The management information system needs good planning.

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This system should deal with the management information not with data

processing alone. •

It should provide support for the management planning, decision making

and action. •

It should provide support to the changing needs ne eds of business management.

Major challenges in MIS implementation are: •

Quantity, content and context of information - how much information and

exactly what should it describe

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Nature of analysis and presentation - comprehensibility of information

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Availability of information - frequency, contemporariness, on-demand or

routine, periodic or occasional, one-time info or repetitive in nature and so on •

Accuracy of information

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Reliability of information

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Security and Authentication of the system.

Planning for MIS

MIS design and development process has to address the following issues successfully: There should be effective communication between the developers and users of the system •

There should be synchronization in understanding of management, processes and IT among the users as well as the developers •

Understanding of the information needs of managers from different functional areas and combining these needs into a single integrated system •

Creating a unified MIS covering the entire organization will lead to a more economical, faster and more integrated system, however it will increase in design complexity manifold. •

The MIS has to be interacting with the complex environment comprising all other sub-systems in the overall information system of the organization. So it is extremely necessary to understand and define the requirements of MIS in the context of the organization •

It should keep pace with changes cha nges in environment, changing demands of the customers and growing competition •

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It should utilize fast developing in IT capabilities in the best possible way

Cost and time of installing such advanced IT-based systems is high, so there should not be a need n eed for frequent and major modifications •

It should take care of not only the users i.e., the managers but also other stakeholders like employees, customers and suppliers •

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Once the organizational planning stage is over, the designer of the system should take the following strategic decisions for the achievement of MIS goals and objectives: •

Development Strategy: Ex. an online, batch, a real time.

System Development Strategy: Designer selects an approach to system development like operational verses functional, accounting ac counting verses analysis. •

Resources for the Development: Designer has to select resources. Resources can be in-house verses external, customized or use of package. p ackage. •

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Manpower Composition: The staff should have the staffs of an analyst, and

programmer. Information system planning essentially involves: •

Identification of the stage of information system in the organization

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Identification of the application of organizational IS.

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Evolution of each of this application based on established evolution

criteria. Establishing a priority ranking for these application Determining the optimum architecture of IS for serving the top priority applications. •

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Information System Requirements

The following diagram illustrates a brief sketch of the process of information requirement analysis:

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The following three methodologies can be adopted to determine the requirements in developing a management information system for any organization: •

Business Systems Planning (BSP) - this methodology is developed by IBM. 

It identifies the IS priorities of the organization and focuses on the way data is maintained in the system.

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It uses data architecture supporting multiple applications.

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It defines data classes using different matrices to establish relationships among the organization, its processes and data requirements

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Critical Success Factor (CSF) - this methodology is developed by John Rockart of MIT. 

It identifies the key business goals and strategies of each manager as well as that of the business

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Next it looks for the critical success factors underlying these goals

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measure of CSF effectiveness becomes an input for defining information system requirements

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End/Means (E/M) analysis - this methodology is developed by Wetherbe and Davis at the University of Minnesota. 

It determines the effectiveness criteria for outputs and efficiency criteria for the processes generating the outputs

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At first it identifies the outputs or services provided by the business processes

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Then it describes the factors that make these outputs effective for the user

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Finally it selects the information needed to evaluate eva luate the effectiveness of outputs

Information System Analysis & Design

System analysis and design follows the typical System/Software Design Life Cycle (SDLC) generally passes through the following phases: •

Problem Definition

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Feasibility Study

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Systems Analysis

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System Design

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Detailed System Design

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Implementation

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Maintenance

In the analysis phase, the following techniques are commonly used: •

Data flow diagrams (DFD)

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Logic Modeling

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Data Modeling

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Rapid Application Development (RAD)

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Object Oriented Analysis (OOA)

Technology for Information Systems

The technology requirement for an information system can be categorized as: Devices Data center systems - it is the environment that provides processing, storage,

networking, management and the distribution of data within an enterprise Enterprise software - these are software system like ERP, SCM, Human Resource

Management etc. that fulfills the needs and objectives of the organizations

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IT services - it refers to the implementation and management of quality IT services

by IT service providers through people, process and information technology. It often includes various process improvement frameworks and methodologies like TQM, Telecom services and so on System Test Planning & Execution

The system should be fully tested for errors before being fully operational. The test plan should include for each ea ch test: •

Purpose

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Definition

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test inputs

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detailed specification of test procedure

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details of expected outputs

Each sub-system and all components of each sub-system should be tested using the various test procedures and data to ensure that each component is working as it is intended. The testing must include the users of the system to identify errors as well as get the feedback. System Operation

Before the system is in operation, the following issues should be taken care of: •

Data security, backup and recovery

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Systems control

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Testing of the system to ensure that it works bug-free in all expected

business situations •

The hardware and software used should be able to deliver the expected

processing •

The system capacity and expected response time should be maintained

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The system should be well documented including 

A user guide for inexperienced users

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A user reference or operations manual for advanced users

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A system reference manual describing system structures and architecture

Once the system is fully operational, it should be maintained throughout its working life to resolve any glitches or difficulties faced in operation and minor modifications might be made to overcome such situations. Factors for Success and Failure

MIS development projects are high-risk, h igh-risk, high-return projects. Following could be stated as critical factors for success and failure in MIS development: •

It should cater to a specific, well-perceived business

The top management should be completely convinced, able and willing to such a system. Ideally there should a patron or sponsor for the system in the top management. •

All users including managers and other employees should be made an integral part of development, implementation and use of the system •

There should be an operational prototype of the system released as soon as possible, to create interest among the users. •

There should be good support staff with necessary technical, business, and interpersonal skills •

The system should be simple, easy to understand without adding much complexity. It is best practice, not to add up an entity unless there is both a use and user for it. •

•

It should be easy to use and navigate with high response time.

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The implementation process should follow a definite goal and time

There should be proper training of all users including the top management, so that they have a good knowledge of the content and function of the system and can use it fully for various managerial activities like reporting, budgeting, controlling, planning, monitoring etc. •

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It should and must produce useful outputs to be b e used by all managers.

The system should be well integrated into the management processes of planning, decision-making, and monitoring. •

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Management Information System

Chapter 5 System Vulnerability System Vulnerability and Abuse • Security: Policies, Security: Policies, procedures and technical measures to prevent unauthorized access, alteration, theft, or physical damage • Controls: Methods, Controls: Methods, policies, and organizational procedures ensure safety of organization’s assets; accuracy and reliability of accounting records; and operational adherence to management standards • Vulnerability through technical, organizational and environmental factors, poor management decisions, communication layers • Accessibility of networks • Hardware problems (breakdowns, configuration errors, damage from improper use or crime) • Software problems (programming errors, installation errors, unauthorized changes) • Disasters (fires, floods.) • Use of networks/computers outside of firm’s control • Loss and theft of portable devices

Internet vulnerabilities • Network open to anyone, Size: abuses can have wide impact • Use of fixed Internet addresses creates fixed targets hackers • Unencrypted VOIP(Voice Over Internet Protocol) (no use of VPN-Virtual Private Network) • E-Mail, P2P(Network Peer to Peer), IM: Interception, Attachments with malicious software, Transmitting trade secrets New Satara College of BCA, Pandharpur

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Wireless security challenges • Radio frequency bands easy to scan • SSIDs (service set identifiers): Identify access points, Broadcast multiple times • War driving: Eavesdroppers drive by buildings and try to detect SSID and gain access to network and resources, set up rogue access points • WEP (Wired Equivalent Privacy) WPA2 (WiFi Protected Pro tected Access) Access) Security standard for 802.11; use is optional o o Uses shared password for both users and access point Malware (malicious software) Viruses: Rogue software program that attaches itself to other software • Viruses: Rogue programs or data files in order to be executed, deliver “payload”, spread through humans • Worms: Independent Worms: Independent computer programs that copy themselves from one computer to other computers over a network • Trojan horses: Software horses: Software program that appears to be benign but then does something other than expected, does not replicate • Computers, mobile devices, web 2.0 applications • SQL injection attacks: attacks: Hackers submit data to Web forms that exploits site’s unprotected software and sends rogue SQL query to database • Spyware: Small Spyware: Small programs install themselves surreptitiously on computers to monitor user Web surfing activity and serve up advertising • Key loggers: Record loggers: Record every keystroke on computer to steal serial numbers, passwords, launch Internet attacks

Hackers and computer crime • •

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Hackers vs. crackers (criminal intent): unauthorized access, weakness in security protections System intrusion + System damage Cybervandalism: Intentional disruption, defacement, destruction of Web site or corporate information system Spoofing o Misrepresenting oneself by using fake E-mail addresses or masquerading as someone else

New Satara College of BCA, Pandharpur

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Prof. Kirpekar R.R.


o

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Redirecting Web link to address different from intended one, with site masquerading as intended destination

Sniffer Eavesdropping program that monitors information o traveling over network o

Enables hackers to steal proprietary information such as e--‐mail, company files, etc.

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Denial--‐of--‐service attacks (DoS): Flooding server with thousands of false requests to crash the network.

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Distributed denial--‐of--‐service attacks (DDoS): Use (DDoS): Use of numerous computers to launch a DoS Botnets: Networks Botnets: Networks of “zombie” PCs infiltrated by bot malware Computer crime: “any crime: “any violations of criminal law that involve a knowledge of computer technology for their perpetration, investigation, or prosecution” Computer may be target of crime, e.g.: Breaching o confidentiality of protected data, Accessing a computer system without authority Computer may be instrument of crime, e.g.: Theft of trade secrets, o Using E‐ mail for threats or harassment Identity theft: Theft theft: Theft of personal Information (social security id, driver’s license or credit card numbers) to impersonate someone else send ing e--‐mail messages that Phishing: Setting Phishing: Setting up fake Web sites or sending look like legitimate businesses to ask users for confidential personal data. Evil twins: Wireless networks that pretend to offer trustworthy Wi--‐Fi connections to the Internet (e.g log credit card numbers) Pharming: Pharming: Redirects users to a bogus Web page, even when individual types correct Web page address into his or her browser (possible when they gain access to the Internet Address Information stored by internet service providers to speed up web browsing and the ISP companies have flawed software in their servers, hack into and change addresses) •


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Prof. Kirpekar R.R.

Management Information System •

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Click fraud: fraud: Occurs when individual or computer program fraudulently clicks on online ad without any intention of learning more about the advertiser or making a purchase Global threats: Cyber threats: Cyber terrorism and Cyber warfare, targeting software that runs electrical power grids, air traffic control systems, networks of major banks

Internal threats: employees • Security threats often originate inside an organization leaking Inside knowledge • Sloppy security procedures, User Us er lack of knowledge • Social engineering: Tricking employees into revealing their passwords by pretending to be legitimate members of the company in need of information • End users entering faulty f aulty data, not following instructions instructions • IS specialists: errors in design, development, maintenance Software vulnerability • Commercial software contains flaws that create security vulnerabilities – Hidden bugs (program code defects), Zero defects cannot be achieved because complete testing is not possible with large programs – Flaws can open networks to intruders, impede performance • Patches: Vendors release small pieces of software to repair flaws (patch management by users), However exploits often created faster than patches be released and implemented Business Value of Security and Control • Failed computer systems can lead to significant or total loss of business function • Confidential personal and financial data, Trade secrets, new products, strategies • A security breach may cut into firm’s market value almost immediately • Inadequate security and controls also bring forth issues of liability • Strong security: high ROI, employees productivity, lower operational costs


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Prof. Kirpekar R.R.


Legal and regulatory requirements for electronic records management and privacy protection • Protection data from abuse, exposure, unauthorized access HIPAA: Medical security and privacy • HIPAA: Medical pr ivacy rules and procedures • Gramm--‐ Act: Requires financial institutions to ensure the Gramm--‐Leach--‐ Leach--‐Bliley Act: Requires security and confidentiality of customer data • Sarbanes--‐ Sarbanes--‐Oxley Act: Imposes responsibility on companies and their management to safeguard the accuracy and integrity of financial information that is used internally and released externally Electronic evidence • Evidence for white collar crimes often in digital form Data on computers, e--‐--‐mail, instant messages, e --‐--‐commerce transactions • Proper control of data can save time and money when responding to legal discovery request Computer forensics: • Scientific collection, examination, authentication, preservation, and analysis of data from computer storage media for use as evidence in court of law • Includes recovery of ambient and hidden data, plan needed Establishing a Framework for Security and Control Where company at risk, what controls must be in place, security policy, plans for keeping business running if i f IS not operational Information systems controls • Manual and automated controls • General and application controls General controls • Govern design, security, and use of computer programs and security of data files in general throughout throug hout organization’s IT infrastructure. • Apply to all computerized applications • Combination of hardware, software, and manual procedures to create overall control environment • Types of general controls: Software controls, Hardware controls, Computer operations controls, Data security controls, Implementation controls, Administrative controls


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Prof. Kirpekar R.R.


Application controls • Specific controls unique to each computerized application, such as payroll or order processing • Include both automated and manual procedures • Ensure that only authorized data are completely and accurately processed by that application • Input controls: authorization, conversion, editing, error handling • Processing controls: updating • Output controls Risk assessment • Determines level of risk to firm if specific activity or process is not properly controlled • Determine value of info assets, points of vulnerability, likely frequency of the problem, potential for damage • Concentration on the control points with greatest vulnerability and potential for loss Security policy • Ranks information risks, identifies acceptable security goals, and identifies mechanisms for achieving these goals, most important assets • Acceptable use policy (AUP): Defines acceptable uses of firm’s information resources and computing equipment, unacceptable, consequences • Authorization policies: Determine differing levels of user access to information assets Identity management • Business processes and tools to identify valid users of system and control access: Identifies and authorizes different categories of users, Specifies which portion of system users can access, Authenticating users and protects identities • Identity management systems: Captures access rules for different levels of users Disaster recovery planning: Devises planning: Devises plans for restoration of disrupted services Business continuity planning: Focuses on restoring business operations after af ter disaster


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Prof. Kirpekar R.R.


MIS audit • Examines firm’s overall security environment as well as controls governing individual information systems, data quality qu ality • Reviews technologies, procedures, documentation, training, and personnel • Simulate disaster to test response of technology, IS staff, other employees • Lists and ranks all control weaknesses and estimates probability of their occurrence, Assesses financial and organizational impact of each threat Technologies and Tools for Protecting Information Resources Identity management software • Automates keeping track of all users and privileges • Authenticates users, protecting identities, controlling access • Authentication: Password systems, Tokens, Smart cards, cards , Biometric Firewall: Combination Firewall: Combination of hardware and software that prevents unauthorized users from accessing private networks • Static packet filtering: examines selected fields in headers of individual packets • Stateful inspections: track info over multiple packets, part of approved conversation, legitimate connection • • •

Network address translation (NAT): conceals (NAT): conceals IP addresses of internal host computers Application proxy filtering: examines app content of packets

Intrusion detection systems: • Monitor hot spots on corporate co rporate networks to detect and deter intruders • Examines events as they are happening to discover attacks a ttacks in progress • Raises alarm or shuts down sensitive network part Antivirus and antispyware software: • Checks computers for presence of malware and can often eliminate it as well • Require continual updating Unified threat management (UTM) systems: firewalls, VPNs, IDS, web content filtering, anti spam software


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Prof. Kirpekar R.R.


Securing wireless networks • WEP security can provide some security by Assigning unique name to network’s SSID and not broadcasting SSID, Using it with VPN technology • Wi--‐Fi Alliance finalized WAP2 specification, replacing WEP with stronger standards: Continually changing keys, Encrypted authentication system with central server Encryption •

•

•

• •

Transforming text or data into cipher text that cannot be read by unintended recipients, encryption key Secure Sockets Layer (SSL) and successor Transport Layer Security (TLS) between 2 computers Secure Hypertext Transfer Protocol (S--‐--‐HTTP) limited to individual messages Symmetric key encryption: Sender and receiver use single, shared key Public key encryption: Uses two, mathematically related keys: Public key and private key, Sender encrypts message with recipient’s public key, Recipient decrypts with private key

Digital certificate: •

•

•

Data file used to establish the identity of users and electronic assets for protection of online transactions Uses a trusted third party, certification authority (CA), to validate a user’s identity CA verifies user’s identity, stores information in CA server, which generates encrypted digital certificate containing owner ID information and copy of owner’s public key

Public key infrastructure (PKI) Use of public key cryptography c ryptography working with certificate authority Widely used in e --‐--‐commerce • •

Ensuring system availability: Online availability: Online transaction processing requires 100% availability, no downtime • Fault--‐ systems: Contain redundant hardware, Fault--‐tolerant computer systems: software, and power supply components that create an environment that provides continuous, uninterrupted service New Satara College of BCA, Pandharpur

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Prof. Kirpekar R.R.


•

High--‐--‐availability computing Helps recover quickly from crash, Minimizes not eliminates o downtime Backup servers, multiple server distribution, high capacity o storage, god disaster recovery and business continuity plans

Recovery--‐ Recovery--‐oriented computing: Designing computing: Designing systems that recover quickly with capabilities to help operators pinpoint and correct of faults in multi-‐component systems • Controlling network traffic: Deep packet inspection (DPI) Video and music blocking, using prioritizing • Security outsourcing: Managed security service providers (MSSPs) •

Security in the cloud • Responsibility for security resides with company owning the data • Firms must ensure providers provides adequate protection • Service level agreements (SLAs) including controls Securing mobile platforms • Security policies should include and cover any special requirements for mobile devices • Tools to authorize all devices in use, maintain inventory records, updates, lock Ensuring software quality (software metrics and testing) metrics: Objective assessments of system in form of • Software metrics: Objective quantified measurements, identify problems as they occur • Carefully designed, formal, objective, used consistently • Examples: Number of transactions, Online response time, Payroll checks printed per hour, Known bugs per hundred lines of code • Early and regular testing to uncover errors • Walkthrough: Review Walkthrough: Review of specification or design document by small group of qualified people Debugging: Process by which errors are eliminated • Debugging: Process


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Prof. Kirpekar R.R.


Introduction MIS is a practical stream. The aim of MIS is to provide information for decision making. Data has to be captured, collected, collated and processed into information. This formation has to be channeled to the right user at the t he night time and in the right way. The MIS designer has to study the organization as a system, with all its sub-systems. The information sub-system, in particular, has to be studied and a new, generally computerized sub-system has to be designed, developed and implemented. The study of t he existing system – and the design of a new system demands a thorough knowledge of business processes and business as a whole. The MIS M IS Designer needs to know how goods are manufactured, what data is generated at each point, how this data is captured and transmitted id how the final reports are produced. Man management management skills to play an important role in i n ting able to understand how the existing system operates. The MIS designer has to be able to speak the language of the user, and this demands an understanding of the particular area of operation of the user. Thus, the MIS Designer should be able to understand the language of a top Floor Supervisor as well as Marketing personnel, Materials personnel and personnel in her functional area. At the same time, the MIS designer needs to have a proper understanding of the different formation needs of different organizations. With information Technology becoming a highly specialized field, more and more organizations or ganizations are turning to Information Technology consultants and experts to design the MIS for the organization. In such cases, it is quite probable it the MIS designer may become a specialist in i n the design, development and implementation. MIS in different organizations. It is quite possible that he will be “called in as an external entity to implement the MIS and then go on to another organization to repeat the implementation process there, much the same way as Chartered Accountants and Lawyers can be several different clients and not belong to any one client. Thus, he will be called upon to design MIS different types of organizations at different times. Therefore, the MIS designer will need to be an understanding of MIS operates differently in different sectors, such as the manufacturing and service sectors, as well as in different functional areas such as production, marketing, personnel, etc. MIS used in different sectors as well as in different functional areas & MIS to be able to understand the different approaches approaches required, the different information needs, etc. from the followings

Application of MIS in Manufacturing :The manufacturing sector is concerned with the production and marketing of physical goods. The organization purchases raw materials, processes them into finished products and markets these products in the market place. The data that is generated relates to


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Prof. Kirpekar R.R.


the procurement , of physical raw material, the storage and movement of this raw material through the manufacturing process, the testing and checking of the finished goods, the packaging and subsequent subsequent sale of the finished goods. The data relates to quantities, prices, process materials, packaging packaging material, etc. In other words, to a large extent the data in the manufacturing sector relates to physical goods. Of course, there are intangible entities involved too, such as market perception, expenses of the t he personnel, etc. However, by and large the data refers to physical entities.

1. Productions The Production Management function of the organization is concerned with the production It interacts with functions such as Production Planning and Control, Maintenance, Maintenance, Quality Control, etc. It receives inputs from inventory Control. It receives feedback from Quality Control and Marketing. The functional goods Production Management Management are fuller utilization utili zation of manufacturing capacity and resources, reduction in rejection rates, maximizing uptime of the plant & machinery and adherence to production schedules. schedules. Thus, the MIS will seek to aid management management in achieving these goals. The data will be input into the MIS through following documents: 1. Production Programme 2. Production Schedule 3. Process Planning Sheet, 4. Job Card / Job Register 5. Quality rating sheet / form 6. Finished Goods Advice 7. Breakdown Advice 8. Material Requisition Form, etc. The MIS system will be expected to give information on the following: 1. Quantity produced for a given period of time 2. Material requirement and usage 3. Rejection rates at various control points and at final stage 4. Breakdown reports on machinery 5. Labour utilization 6. Consumption of power, fuel, consumables, consumables, etc. 7. Utilization of various items of machinery 8. Hours worked or overtime shift run, etc. At various points, management may query the MIS M IS about information such as: l. Status of a particular job and adherence to production schedule New Satara College of BCA, Pandharpur

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Prof. Kirpekar R.R.


2. Load status on different machines 3. Material status, stock situation, material flow 4. Results of new processes, etc. The above information helps management make different decisions related to production, such as Make-Or-Buy decisions, Sub-contracting decisions, horizontal integration feasibility, etc., which will be based on the capacity utilization, marginal cost, load on machinery, breakdown pattern, etc. The negative feedback mechanism mechanism of the MIS will have to highlight items like: 1. Incidence of excessive rejection 2. Abnormal levels of WTP (Work-in-Progress) inventory 3. Excessive breakdown of machinery 4. Deviations from norms in production rate and / or quality 5. Underutilization of facilities 6. Excessive delays and failure to meet delivery deadlines, etc. The various reports generated by the MIS will be for the purpose of evolving norms and standards and informing management of the adherence to these norms and standards.

2. Marketing:Marketing management is concerned with satisfying the needs of the customer. The MIS will have to aid in identifying the needs of customers evolving, product concepts, designing the product, positioning the product, pricing, promotion, etc. Market research, consumer surveys, advertising, sales promotion campaigns, campaigns, dealer networks, etc. form the major tasks in marketing management. management. Studying the data input into the MIS system s ystem in marketing management, management, we realize that the following documents form an important part of the input process: Purchase Orders from customers •

Order Acceptance Advices A

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Delivery Advices from the godown

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I Delivery Notes to customers

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I Invoice / Credit Note /Debit Note, etc. In addition, marketing management needs other data that i s not produced

through transactions. The data- is generated through self-initiated actions such as market surveys. Customer satisfaction polls, etc., as well as through external sources such as trade journals, marketing publications, industry association journals and magazines, etc. The MIS will have to refer to such data inputs as well, since they form an important of the decision making success and in forecasting trends, customer demand, new product ideas, etc. The MIS will be expected to give regular reports on the t he smooth functioning of the New Satara College of BCA, Pandharpur

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Prof. Kirpekar R.R.


\marketing function, including including dealer development development reports, customer customer base, market share, complaints, etc. In addition, the management may query the system on the following:•

Pending Orders

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Customer Complaints and Suggestions

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Purchase Trends

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Buying Patterns

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Sales Performance on different bases such as Area-wise, Product- wise, Salesman-wise, Season-wise, Season-wise, etc.

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Finished Stock Levels, etc. The reports will have to help management make decisions on day-to-day

functioning as well strategic and tactical decisions such as pricing policy, packaging, product positioning, etc. day-to-day decisions can be made with t he help of decision support systems using models and decision rules. However, for strategic strat egic and tactical decisions, other models such as break-even analysis models, risk analysis models, forecasting models, network models, etc. may be needed. In addition, the negative feedback mechanism mechanism of the MIS will have to give details as to sale versus, targets, cost versus budgeted cost, consumer complaints, etc,

3. R & D (Research & Development) Many times it is thought t hought that the Research and Development Development activities of an organization is not be regulated. While it is true t rue that R&D does not behave the way production or marketing does, it nevertheless has a role to perform in the organization. R & D has become an important part of business, for it offers a way to stay ahead of the competition through (innovation. Thus, it has a definite goal and must be properly monitored for i t to be able to achieve this goal. Inputs to the R and D department are not transaction t ransaction based. Most of the time, top management management may provide a direction. Sometimes, a specific ask is allocated to the department, such as crash safety guards, fuel efficiency pollution control, etc. Sometimes, the government lay step in and demand that an industry follow certain norms in environment protector), such as the Euro I and II norms in automobiles. Most countries also have safety norms that the manufacturer must provide, such as seat belts, impact buffers, etc. In such cases the R & D department will have to work towards a specific goal within a specific time frame. Even if there is no specific government directive, organizations have found that the marketplace demands constant improvement. Safety features, fuel efficiency, pollution control, etc. have become saleable points in the marketing strategy. Therefore R&D occupies an important place in the marketing strategy of many companies. Thus, there has to be a mechanism by which management can keep their finger on New Satara College of BCA, Pandharpur

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Prof. Kirpekar R.R.


the pulse of the R & D department. Input is usually given to the R & D department through inter- office memos and meetings. On its own, the R & D department will take inputs from – other research journals, technology reports and breakthroughs, the work of scientists in certain fields, etc. Output will be given to management in the form of current research projects, project start date, current status, prototypes, computer simulation models, etc. Management may, in turn, query R&D about the status of projects that it feels are worthwhile to focus on, the results of specific instructions on reduction of pollution, increase in fuel efficiency, safety features,

Application of MIS in the Service Industry The Service Industry is responsible for the provision of services to people. It deals in intangibles, such as hospitality, health care, financial services / products (loans, etc.) and other services that are difficult to quantify and measure. Service providers are also called “People, intensive Organizations”, because because services demand a high level of interaction with the customer. Thus, a hotel does not merely provide a place for the customer to stay. Subject to interactions such as the politeness of the doorman, the helpfulness of the registration clerk, the efficiency of the bellboy, etc. all go towards the rating of t he hotel in the customer's mind. Physical comforts do play an important part, but all the t he physical comforts will be wasted if the customer carries away a negative impression because of a rude clerk. Therefore, service organizations need number of systems to keep in touch with customer expectations. Some service industry experts recommend that service providers should go beyond customer expectations expectations and aim for ‘customer delight. Thus it is i s important for service providers to be able to predict levels of customer satisfaction and customer delight. A great deal of customer feedback is necessary and the MIS has to t o devise ways of tracking customer buying behaviour, customer requests, etc. Tom Peters, in “The Service Edge", defines five principles of a distinctive service: l. Listen, Understand and Respond to the t he Customer 2. Define a Superior Service and establish a Service Strategy 3. Set Standards and Measures of performance’ 4. Select, Train and Empower employees to work for the customer 5. Recognize and Reward accomplishments accomplishments Thus, the above principles not only emphasis the service aspect to the t he customer, but also point out that it is the employee that services the customer and therefore a great deal of emphasis must be placed on empowering the employee to do so and recognizing and rewarding the employee when he does provide superior service.


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Prof. Kirpekar R.R.


MIS Applications in Hotels Hotels may have started out as a place to stay when one is away from home, but the concept has undergone rapid and drastic change. There has been a transition from convenience to comfort, comfort to enjoyment and enjoyment to delight or total service. Hotels today are specifically designed designed to cater to the needs of different kinds of travelers, whether individuals, or businessmen, or company executives, or families on holiday or tourist groups. Some hotels manage to cater to all these segments. Some define themselves by particular segments to which they cater. Whatever the hotel may choose to do, it will have to keep the following information needs in mind:

1. Need to track Customer Profile The hotel will need to maintain a database of its customers and specifically specifically track the Following information: 1. Type of Customer 2. Nature or Purpose of the visit 3. Duration of stay ' 4. Service demanded 5. Socio-economic Socio-economic class of the customer 6. Religion, culture and language of the customer The customer profile thus generated will help to determine the facilities the hotel provides, such as swimming pool, gymnasium, shopping Centre, transportation, etc.

2. Occupancy Levels and Occupancy Pattern The hotel will need to monitor occupancy levels levels at different times and seasonal variations in occupancy. It will then be able to offer incentives like off-season discounts, package holidays, premium suites, etc., based on occupancy preferences and patterns. The MIS should be capable of providing such information to the management of the hotel.

3. Customer Expectation Levels The hotel will have to develop a sophisticated system to determine the expectation levels of customers. The hotel's reputation, t he customer's previous experiences, etc. all go towards creating an expectation in the mind of the customer. The hotel should be able to match this expectation, if not surpass it. Human nature is such that expectations rise with every satisfaction. In other words, if a hotel surpasses a visitor's expectation, the surpassed level level becomes his expectation in the future. Therefore, if the hotel finds that it is beginning to get a regular clientele, it must think of ways to surpass the customer's expectations every time. New Satara College of BCA, Pandharpur

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Prof. Kirpekar R.R.


The MIS plays an important role in capturing, storing, retrieving and communicating bits of data at various levels. All this data must be properly processed to be able to give the management a clear idea of customer expectations, levels of satisfaction,‘ employee behaviour, etc.

MIS in Hospitals Hospitals are another important constituent of the Service Sector. Hospitals are healthcare providers and today have outgrown the traditional sterile image they once had. Today, hospitals are run on the lines of business organizations and have a clearly stated mission of providing healthcare to people. Hospitals no longer have ‘patients’ but ‘customers. Customers are a wider definition and include referring doctors, specialists, medical consultants and paramedical personnel. In order to best serve their ‘customers, hospitals need to track information about the following:

1. Patient Database This database is important to be enable the hospital to service queries about past patients, healthcare provided, etc. to patients, t heir relatives and to doctors

2. Medical Server Database This database contains records of medical service providers including regular staff, specialists, consulting physicians, etc. It also contains data on institutions allied to the medical sector such as blood banks, ambulance services, laboratories, etc. that can be called upon in regular course or in emergencies.

3. Resource Planning and Control This is an online query service that would provide information on the level and availability of resources at different times and the customer scheduling capability of the hospital. Such a system would also provide information on the utilization of services and the spare capacity that can be made available to other healthcare providers.

4. Medical Case History Database Such a database would be very helpful to medical researchers, students, consultants and specialists who need to access various case histories. Many a time, the case history of patients may help to judge the efficiency of certain drugs and the likely reaction of patients with similar case histories to certain forms of treatment. In addition to the above, the hospital would need other MIS subsystems such as back office operations, manpower planning, payroll billing and recovery inventory control, etc.


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Prof. Kirpekar R.R.

MIS Full Notes for MBA, BBA , BCA(Commerce)

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