ASSIGNMENTS - MBA II SEMESTER

MB0031 (4 CREDITS)

SET 2

MANAGEMENT INFORMATION SYSTEMS

Q.1:- Explain the different business models that work together in an E-

enterprise system. Give example for each.

Ans:- Managing an E-business & Challenges before an E-business -Due to Internet

capabilities and web technology, traditional business organization definition has
undergone a change where scope of the enterprise now includes other company
locations, business partners, customers and vendors. It has no geographic
boundaries as it can extend its operations where Internet works. All this is possible
due to Internet and web moving traditional paper driven organization to information
driven Internet enabled E-business enterprise. E-business enterprise is open twenty-
four hours, and being independent, managers, vendors, customers transact business
any time from anywhere. Internet capabilities have given E-business enterprise a
cutting edge capability advantage to increase the business value. It has opened new
channels of business as buying and selling can be done on Internet. It enables to
reach new markets across the world anywhere due to communication capabilities. It
has empowered customers and vendors / suppliers through secured access to
information to act, wherever necessary. The cost of business operations has come
down significantly due to the elimination of paper-driven processes, faster
communication and effective collaborative working. The effect of these radical
changes is the reduction in administrative and management overheads, reduction in
inventory, faster delivery of goods and services to the customers.

In E-business enterprise traditional people organization based on 'Command

Control' principle is absent. It is replaced by people organization that is empowered
by information and knowledge to perform their role. They are supported by
information systems, application packages, and decision-support systems. It is no
longer functional, product, and project or matrix organization of people but E-
organization where people work in network environment as a team or work group in
virtual mode. E-business enterprise is more process-driven, Technology-enabled
and uses its own information and knowledge to perform. It is lean in number, flat in
structure, broad in scope and a learning organization. In E-business enterprise, most
of the things are electronic, use digital technologies and work on databases,
knowledge bases, directories and document repositories. The business processes
are conducted through enterprise software like ERP, SCM, and CRM supported by
data warehouse, decision support, and knowledge management systems. Today
most of the business organizations are using Internet technology, network, and

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wireless technology for improving the business performance measured in terms of
cost, efficiency, competitiveness and profitability. They are using E-business,
Ecommerce solutions to reach faraway locations to deliver product and services. The
enterprise solutions like ERP, SCM, and CRM run on Internet (Internet / Extranet) &
Wide Area Network (WAN). The business processes across the organization and
outside run on E-technology platform using digital technology. Hence today's
business firm is also called E-enterprise or Digital firm.

The paradigm shift to E-enterprise has brought four transformations, namely:

1. Domestic business to global business.

2. Industrial manufacturing economy to knowledge-based service
economy.
3. Enterprise Resource Management to Enterprise Network Management.
4. Manual document driven business process to paperless, automated,
Electronically transacted business process.

These transformations have made conventional organization design obsolete.

In E-enterprise, business is conducted electronically. Buyers and sellers

through Internet drive the market and Internet-based web systems. Buying and
selling is possible on Internet. Books, CDs, computer, white goods and many such
goods are bought and sold on Internet. The new channel of business is well-known
as Ecommerce. On the same lines, banking, insurance, healthcare are being
managed through Internet E-banking, E-billing, E-audit, & use of Credit cards, Smart
card, ATM, E-money are the examples of the Ecommerce application. The digital
firm, which uses Internet and web technology and uses E-business and Ecommerce
solutions, is a reality and is going to increase in number.

MIS for E-business is different compared to conventional MS design of an

organization. The role of MIS in E-business organization is to deal with changes in
global market and enterprises. MIS produces more knowledge-based products.
Knowledge management system is formally recognized as a part of MIS. It is
effectively used for strategic planning for survival and growth, increase in profit and
productivity and so on. To achieve the said benefits of E-business organization, it is
necessary to redesign the organization to realize the benefits of digital firm. The
organization structure should be lean and flat. Get rid of rigid established
infrastructure such as branch office or zonal office. Allow people to work from
anywhere. Automate processes after reengineering the process to cut down process
cycle time. Make use of groupware technology on Internet platform for faster
response processing. Another challenge is to convert domestic process design to
work for international process, where integration of multinational information systems
using different communication standards, country-specific accounting practices, and
laws of security are to be adhered strictly. Internet and networking technology has

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thrown another challenge to enlarge the scope of organization where customers and
vendors become part of the organization. This technology offers a solution to
communicate, coordinate, and collaborate with customers, vendors and business
partners. This is just not a technical change in business operations but a cultural
change in the mindset of managers and workers to look beyond the conventional
organization. It means changing the organization behaviour to take competitive
advantage of the E-business technology.

The last but not the least important is the challenge to organize and
implement information architecture and information technology platforms,
considering multiple locations and multiple information needs arising due to global
operations of the business into a comprehensive MIS. E-COMMERCE is a second
big application next to ERP. It is essential deals with buying and selling of goods.
With the advent of intent and web technology, E-Commerce today covers an entire
commercial scope online including design and developing, marketing, selling,
delivering, servicing, and paying for goods. Some E-Commerce application add
order tracking as a feature for customer to know the delivery status of the order.

E-Collaboration helps work effectively on applications like calendaring and

scheduling tasks, event, project management, workflow application, work group
application. E-collaboration system components are internet, Intranet, Extranet and
LAN, WAN networks for communication through GroupWare tools, browser.

Let us illustrate the model using an event in the business such as receipt of
material for a job to be processed on the shop floor. In this event there is a
transaction receipt of material, which needs to be processed, and then a workgroup
will use this information of material receipt. Each member of this workgroup has a
different goal.

Q.2:- What are the different emerging fields in MIS? Explain with an
application of your own for each.

Ans:- A Strategic Information System (SIS) is a system to manage information and

assist in strategic decision making. A strategic information system has been defined
as, "The information system to support or change enterprise's strategy."

A SIS is a type of Information System that is aligned with business strategy

and structure. The alignment increases the capability to respond faster to
environmental changes and thus creates a competitive advantage. An early example
was the favourable position afforded American and United Airlines by their
reservation systems, Sabre and Apollo. For many years these two systems ensured
that the two carriers' flights appeared on the first screens observed by travel agents,
thus increasing their bookings relative to competitors. A major source of controversy
surrounding SIS is their sustainability.

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 SISs are different from other comparable systems as:

1. they change the way the firm competes.

2. they have an external (outward looking) focus.
3. they are associated with higher project risk.
4. they are innovative (and not easily copied).

It is mainly concerned with providing and organization and its members an

assistance to perform the routine tasks efficiently and effectively. One of the major
issue before any organization is the challenge of meeting its goals and objectives.
Strategic IS enable such organization in realizing their goals. Strategic Information
System (SIS) is a support to the existing system and helps in achieving a competitive
advantage over the organizations competitors in terms of its objectives. This unit
deals with the critical aspects of the strategic information system. This units indicates
the theoretical concepts and the way in which the same are realized in practice. The
flow of the unit is in such a way that it starts
with the development of contemporary theory about strategic uses of corporations'
internal information systems leading to systems which transcend the boundaries of
particular organizations. The process whereby strategic information systems are
created or identified is then examined. A number of weaknesses in the existing body
of theory are identified, and suggestions made as to directions in which knowledge is
or may be progressing. A strategic information system is concerned with systems
which contribute significantly to the achievement of an organization's overall
objectives. The body of knowledge is of recent origin and highly dynamic, and the
area has an aura of excitement about it. The emergence of the key ideas, the
process whereby strategic information systems come into being is assessed, areas
of weakness are identified, and directions of current and future development
suggested.

Information system is regarded as a tool to provide various services to

different management functions. The tools have been developing year by year and
the application of the tool has become more and more diverse. In management it is
now a very power means to manage and control various activities and decision
making process. The original idea of automating mechanical processes got quickly
succeeded by the rationalization and integration of systems. In both of these forms,
IS was regarded primarily as an operational support tool, and secondarily as a
service to management. Subsequent to the development, it was during the last few
years that an additional potential was discovered. It was found that, in some cases,
information technology (IT) had been critical to the implementation of an
organization's strategy. An organizations strategy supported by information system
fulfilling its business objectives came to be known as Strategic Information System.
The strategic information system consists of functions that involved gathering,
maintenance and analysis of data concerning internal resources, and intelligence

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about competitors, suppliers, customers, government and other relevant
organizations.

Q.3:- How is MIS used for decision making in the organization?

Ans.:- Todays managers depend on information systems for decision making. The
managers have handful of data around them but manually they cannot process the
data accurately and with in the short period of time available to them due to heavy
competition in modern world. Therefore mangers depend on information systems.

The concept of MIS

Management Management has been defined in a variety of ways, but

for our purposes it comprises the process or activities what managers do in the
operation of their organization: Plan, Organize, Initiate and Control operations.

Information Data are facts and figures that are not currently being used in a
decision processes and usually take the form of historical records that are recorded
and filed without immediate intent to retrieve for decision making.

Information consists of data that have been retrieved, processed or otherwise

used for information or inference purposes, argument, or as a basis for forecasting
or decision making.

System can be described simply as a set of elements joined together for a

common objective. A subsystem is is part of a larger system with which we are
concerned. All systems are part of larger systems.

The objective of an MIS (Management Information System) is to provide

information for decision making on planning, initiating, organizing, and controlling the
operations of the subsystems of the form and to provide a synergetic organization in
the process.

Decision Support System: It is sometimes described as the next evolutionary

step after Management Information Systems (MIS) . MIS support decision making in
both structured and unstructured problem environments.. It supports decision making
at all levels of the organization .IS (Information Systems) are intended to be woven
into the fabric of the organizations , not standing alone. IS support all aspects of the
decision making process.MIS are made of people, computers, procedures,
databases, interactive query facilities and so on. They are intended to be

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evolutionary/adaptive and easy for people to use.

Methods of Decision Making MIS is a technique for making programmed

decisions. If we include the computer and management science as integral parts or
tools of computer based information systems, the prospects for a revolution in
programmed decision making are very real. Just as a manufacturing process is
becoming more and more automated so is the automation of programmed decisions
increasing to support this production and other information needs throughout
the organization.

Q.4:-Below is the list of data from a sample project

Most likely Immediate
Activity duration (Days) Predecessors to
activity
A 4 E,B
B 7 A,E
C 5 ---
D 11 C
E 9 ---

a. Draw the PERT network for the above data. Also draw the critical path
for the network.
b. Given the optimistic time estimate as 3, the most likely time estimate as 12
and the pessimistic time estimate as 21, calculate the activity time estimate.

Ans:- (a) The critical path is that path which takes the longest time for start to
end. The critical path for the above mentioned network is as follows:-

C
2 5
A E

0
4
D 3 B

(b) to the optimistic time estimate = 3

tm the most likely time estimate = 12
tp the pessimistic time estimate = 21
te the activity time estimate = to + 4tm +tp
6
- ,- = 3 + 4(12) + 21

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 6
-,- = 12

Q.5:- Explain the difference between Intranet and Extranet

Ans:- Information Systems have grown powerful year after year. The role of the
traditional MIS has been obscured by newer software applications. Various
applications known collectively as enterprise resource planning (ERP) software
has taken a dominant position among large business applications. These
packages, which typically come in functional modules such as an accounting
module, a human resources module, and a manufacturing supply chain
module, serve many of the functions that a traditional MIS would, and they
tend to be more flexible, integrated, and user-friendly
than legacy MIS. While early implementations of ERP suites were largely cross
functional databases with minimal high-level management tools, later upgrades
have added decision support and
data manipulation tools to facilitate a wide range of analyses.

In future, MIS is likely to be verbal and qualitative in nature. It will depend upo
n the strength of the organizations Information Systems. Most of the enterprises are
growing and their systems also have to grow. The ever growing demands of the syst
ems will force out the old conventional systems by newer systems. The next decade
is going to witness several fundamental and qualitative changes in the practice of
management of commercial enterprises and other types of organizations.
These changes would be necessitated by better rates of economic growth,
intensification of competition, diversified and rapid technological developments,
continuing fluidity in economicpolitical environments, and sociopolitical changes
involving the values and attitudes of people working in organizations
at all levels.
To support these demands and meet newer challenges in
the business, organizations will have to resort to various technologies. This unit
is based on such possible technologies which
will enable the enterprises to support their MIS.

Extranet An extranet is a private network that uses the Internet protocols and
the public telecommunication system to securely share part of a business's
information or operations with suppliers, vendors, partners, customers, or other
businesses. An extranet can be viewed as part of a company's intranet that is
extended to users outside the company. An extranet requires security and privacy.

A new buzzword that refers to an intranet that is partially accessible to

authorized outsiders. Whereas an intranet resides behind a firewall and is accessible

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 only to people who are members of the same company or organization, an extranet
provides various levels of accessibility to outsiders. You can access an extranet only
if you have a valid username and password, and your identity determines which
parts of the extranet you can view.

An extranet is somewhat very similar to an intranet. Extranets are designed

specifically to give external, limited access to certain files of your computer systems
to:

1. Certain large or privileged customers.

2. Selected industry partners.
3. Suppliers and subcontractors... etc.

Therefore, a carefully designed extranet can bring additional business to your

company. Intranets and extranets all have three things in common:

1. They both use secured Internet access to the outside world.

2. Both can drastically save your company or organization a lot of
money.
3. Both need a user ID & password to control access to the whole
system.

The professional development team at My Web Services has the expertise

and the right tools to design the right intranet or extranet that will meet your exact
needs, both for today and the future.

Intranet An internal use, private network inside an organisation that uses the
same kind of software which would also be found on the Internet. Inter-connected
network within one organization that uses Web technologies for the sharing of
information internally, not world wide. Such information might include organization
policies and procedures, announcements, or information about new products.

An intranet is a restricted-access network that works like the Web, but isn't on
it. Usually owned and managed by a company, an intranet enables a company to
share its resources with its employees without confidential information being made
available to everyone with Internet access. A network based on TCP/IP protocols (an
internet) belonging to an organization, usually a corporation, accessible only by the
organization's members, employees, or others with authorization. An intranet's Web
sites look and act just like any other Web sites, but the firewall surrounding an
intranet fends off unauthorized access. Like the Internet itself, intranets are used to
share information.

An intranet is an information portal designed specifically for the internal

communications of small, medium or large businesses, enterprises, governments,

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industries or financial institutions of any size or complexity. Intranets can be custom-
designed to fit the exact needs of businesses no matter where they are situated.
Users of intranets consists mainly of:

1. Members of the executive team.

2. Accounting and order billing.
3. Managers and directors.
4. Sales people and support staff.
5. Customer service, help desk, etc.

Q.6:- Explain the control issues in management information systems.

Ans:- A management control systems (MCS) is a system which gathers and uses
information to evaluate the performance of different organizational resources like
human, physical, financial and also the organization as a whole considering the
organizational strategies. Finally, MCS influences the behavior of organizational
resources to implement organizational strategies. MCS might be formal or informal.
The term management control was given of its current connotations by Robert N.
Anthony (Otley, 1994).

According to Maciariello et al. (1994), management control is concerned with

coordination, resource allocation, motivation, and performance measurement. The
practice of management control and the design of management control systems
draws upon a number of academic disciplines. Management control involves
extensive measurement and it is therefore related to and requires contributions from
accounting especially management accounting. Second, it involves resource
allocation decisions and is therefore related to and requires contribution from
economics especially managerial economics. Third, it involves communication, and
motivation which means it is related to and must draw contributions from social
psychology especially organizational behavior

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Management control systems use many techniques such as

1. Balanced scorecard The balanced scorecard (BSC) is a

strategic performance management tool - a semi-standard structured report
supported by proven design methods and automation tools that can be used by
managers to keep track of the execution of activities by staff within their control and
monitor the consequences arising from these actions.

2. Total quality management (TQM) Total Quality Management (or

TQM) is a management concept coined by W. Edwards Deming. The basis of TQM
is to reduce the errors produced during the manufacturing or service process,
increase customer satisfaction, streamline supply chain management, aim for
modernization of equipment and ensure workers have the highest level of training.
One of the principal aims of TQM is to limit errors to 1 per 1 million units produced.
Total Quality Management is often associated with the development, deployment,
and maintenance of organizational systems that are required for various business
processes.

3. Kaizen (Continuous Improvement) Kaizen (Japanese for

"improvement" or "change for the better") refers to a philosophy or practices that
focus upon continuous improvement of processes in manufacturing, engineering,
supporting business processes, and management. It has been applied in healthcare,
government, banking, and many other industries.

4. Activity-based costing Activity-based costing (ABC) is a costing model

that identifies activities in an organization and assigns the cost of each activity
resource to all products and services according to the actual consumption by each: it
assigns more indirect costs (overhead) into direct costs. In this way an organization
can precisely estimate the cost of its individual products and services for the
purposes of identifying and eliminating those which are unprofitable and lowering the
prices of those which are overpriced.

5. Target costing Target costing is a pricing method used by firms. It is

defined as "a cost management tool for reducing the overall cost of a product over its
entire life-cycle with the help of production, engineering, research and design". A
target cost is the maximum amount of cost that can be incurred on a product and
with it the firm can still earn the required profit margin from that product at a
particular selling price.

6. Benchmarking and Benchtrending Benchmarking is the process of

comparing one's business processes and performance metrics to industry bests
and/or best practices from other industries. Dimensions typically measured are
quality, time, and cost. Improvements from learning mean doing things better, faster,
and cheaper.

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 JIT: JIT may refer to:-

(a) Various meanings of Just In Time.

(b) Just-in-time compilation - a technique for improving the
performance of virtual machines in computing.
(c) Just-in-time (business) - a business inventory strategy.

7. Budgeting A budget (from old French bougette, purse) is generally a list of

all planned expenses and revenues. It is a plan for saving and spending.[1] A budget
is an important concept in microeconomics, which uses a budget line to illustrate the
trade-offs between two or more goods. In other terms, a budget is an organizational
plan stated in monetary terms.

8. Capital budgeting Capital budgeting (or investment appraisal) is the

planning process used to determine whether a firm's long term investments such as
new machinery, replacement machinery, new plants, new products, and research
development projects are worth pursuing. It is budget for major capital, or
investment, expenditures.

9. Program management techniques, etc.

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