1|Page

Functional Aspects of the MIS

 A management information system is organized according to the
business functionality of an organization.
 Thus an MIS contains systems in areas of accounting, human
resources, marketing, manufacturing, research and development,
legal services, operations/support, and finance. See figure next
page.
 Each functional system uses its own set of function-specific
subsystems, all of which interface with both the TPS and the
MIS.
 Each functional system requires different information and
support for decision making; but they share some common
information needs.
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Marketing Information Systems

Before we discuss about use of Management Information System in marketing
we must first be familiar with the term ‘Management Information System’. It is
defined as a system or process that provides the information necessary to
manage an organization effectively. MIS and the information it generates are
generally considered essential components of prudent and reasonable business
decisions.

Management Information Systems are distinct from Regular information

systems in that they are used to analyze other information systems applied in
operational activities in the organization. Academically, the term is commonly
used to refer to the group of information management methods tied to the
automation or support of human decision making, e.g. Decision Support
Systems, Expert systems, and Executive information systems.

MIS should have a clearly defined framework of guidelines, policies or

practices, standards, and procedures for the organization. These should be
followed throughout the institution in the development, maintenance, and use
of all MIS. It is viewed and used at many levels by management. It should be
supportive of the institution’s longer term strategic goals and objectives.

MARKETING INFORMATION SYSTEMS

Marketing is one of the major factors for the sustenance of any business as
revenues are a direct outcome of it. Information systems in marketing process
include technologies that allow managers to access important and updated
information about the customer wants and preferences and current market
demands so that they can offer prompt and apt services. Information Systems
also aid in determining and implementing effective marketing strategy.

The Marketing Information System focuses on only the marketing aspects of

the management information system. It is an organized way of continually
collecting, accessing and analyzing information that marketing managers need
in order to make better decisions.

To understand the proper role of information systems one must examine what
managers do and what information they need for decision making. We must
also understand how decisions are made and what kinds of decision problems
can be supported by formal information systems. One can then determine
whether information systems will be valuable tools and how they should be
designed.
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COMPONENTS OF A MARKETING INFORMATION SYSTEM

A marketing information system (MIS) is intended to bring together disparate

items of data into a coherent body of information. An MIS is more than raw
data or information suitable for the purposes of decision making. An MIS also
provides methods for interpreting the information.

The MIS model consists of four main parts: the internal reporting system, the
marketing research system, the marketing intelligence system and the
marketing models.

IMPORTANCE OF MIS IN MARKETING

The marketing function identifies consumer needs and develops products

based on such market needs. It matches the product offering with the
consumer needs and ensures ready buyers for the products of company.
4|Page

Marketing is a crucial activity for business firms and this function is a major
user of information system facilities.

Some of the areas of applications of MIS in marketing are as given below:

 Order Processing System: Computerized order processing system

captures sales orders from customers and processes the orders for
further action. It checks the inventory availability, pending orders,
production details etc., before accepting the customer order.
Computerized sales order processing generates control report daily on
orders processed, details of back orders, etc.

 Sales Management System: Computerized sales management system

uses the data from sales order processing system to generate various
sales related reports. This system supports accounts management, direct
marketing, sales forecasting and sales Presentations.

 Logistics Management: The physical distribution is a major activity of

marketing function. It uses computer based OR models to find optimum
location of warehouses, shipment routes, quantity to be transported and
stocked etc.

 Consumer Research: Computerized transaction processing systems

capture huge quantity of data about customers and their buying patterns
etc. It is used to generate vital information about consumer behaviour.

 Sales Forecasting: Computer based mathematical and operations

research models are used to forecast sales and marketing expenses.

Sources of marketing information

 Transaction data: The transaction data includes data about marketing

activities such as sales data and sales expense data.

 Marketing research data: This includes data about consumers, product

promotion, prices, and packaging distribution agents.

 Corporate strategy and corporate plans: Corporate strategy and

corporate plans based on detailed analysis of the company’s capabilities
are useful sources of marketing information.

 Marketing research agencies: Marketing research agencies regularly

collect data about markets and make such database available to
companies at a fee.
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Features of Marketing Information System MIS

1. Continuous system: MIS is a permanent and continuous

system of collecting information. It collects information
continuously.

2. Basic objective: The basic objective of MIS is to provide the

right-information at the right-time to the right-people to help
them take right decisions.

3. Computer based system: MIS is a computer-based system. It

uses computers for storing, analyzing and supplying
information. It also uses micro-films for storing information.
Therefore, it is very quick and accurate.
6|Page

4. Future-oriented: MIS is future-oriented. It provides

information for solving future problems. It is not past-oriented.

5. Used by all levels: MIS is used by all three levels of

management, i.e. top, middle and lower. It is used for making
marketing plans, policies and strategies. This is used to solve
marketing problems and to take advantage of business
opportunities.

6. Sources: MIS collects information from both, internal and

external sources. For example, information is collected from
company records, publications, etc.

7. Collects marketing information: MIS collects all types of

marketing information. It collects information about the
consumer competition, marketing environment, government
policies, etc. It supplies this information to the marketing
managers.

8. Helps in decision making: MIS supplies up-to-date and

accurate information. It helps marketing managers to take
quick and right decisions.

HRIS
Case Study

Learning Objectives

By the end of this case, students will:

 Understand how time, cost and scope affect the project

management of HRIS integration.

 Identify potential problems in a global integration of an HRIS.

 Identify cultural issues present in a global integration of an

HRIS.
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 Describe why evaluation is important and how it could be

done when integrating an HRIS.

 Identify the skills needed by employees when participating in a

global HRIS integration.

 Analyze the case and identify lessons learned from the global
integration of an HRIS.

Background

A global energy company incorporated in the United States has

approximately 54,000 employees in more than 180 countries. The
U.S.-based human resource information system (HRIS) currently
houses approximately 20,000 employee records and tracks both bi-
monthly and bi-weekly payrolls. The system also tracks employees
who are represented by a variety of unions. The U.S.-based HRIS is
owned and operated by the HR functional group but supported by a
different HR group within the information technology (IT)
department. The IT support group has approximately 140
employees and contractors. The HR IT support manager reports to
the IT support manager with a dotted line to the global HR
manager. There are plans to integrate the European division’s HRIS
into the U.S.-based HRIS. The European division’s HRIS houses
approximately 1,000 employee records and one union representing
a small percentage of the 1,000 employees. The European HRIS is
owned and supported by the HR group whose manager reports to
the global HR manager. At the same time of the HRIS integration, a
merger has caused changes to the existing U.S.-based HRIS. In
addition, another part of the company is about to bring in 88
countries into the U.S.-based enterprise resource planning (ERP)
system, including the HR portion. The integrations have different
timelines for completion, and coordination is critical so that
changes that affect each of the integrations do not create problems
that affect the current production system.
8|Page

Description of Project Team

The HR department in London owns and supports the European

HRIS for the portion of the company that will be integrated into the
U.S. HRIS. Their current system lacks proper controls and received
an unsatisfactory internal audit. It was determined that the system
would require extensive changes and that it would be more cost
effective to replace the system than to make the changes. The
London-based HR office selected an HRIS implementation partner,
Limited Experience, Inc., to facilitate the integration. The firm has
no knowledge of the U.S.-based system and has relatively little
experience with integrating part of an HRIS into an already existing
system. The London-based HR office has provided the project
manager for the integration, Frankie. Frankie has knowledge of the
European HRIS but no experience with IT projects and the current
U.S.-based HRIS. Limited Experience, Inc. has provided a co-project
manager, Pat. Pat has never led a project of this size nor does Pat
have knowledge of the U.S. system or how current HR projects
would affect their project. In the end, Frankie and Pat ended up
being co-project managers, though Frankie was more of the lead.
Lyn was also hired by the London office to be the technical team
lead. Lyn has no experience as a technical team lead on an IT
project that uses this HRIS software and does not know the culture
of the London-based group or the U.S.-based group. Lyn comes
from an organization where it is acceptable to yell at employees who
do not meet expectations. This is not the culture for the HR
organization in either London or the United States. Lyn also has no
experience with the U.S. software or the U.S. technical team’s
processes. A U.S.-based senior design analyst, Jamie, was added to
the team on a consultation basis. Jamie travels between London
and the United States, spending approximately 50 percent of the
time in each location. Jamie has led similar projects, is familiar
with other concurrent HR projects and is knowledgeable about the
production support processes. Jamie has no knowledge of the
9|Page

London-based HRIS. Jamie’s responsibility is to inform the project

and HR leadership of any design issues that may cause concerns
with the current production system or the concurrent projects. The
project team consists of people from various HR groups within
Europe. None of these team members have previous HR IT project
experience. There are also people from the project implementation
partner company on the team.

Challenges of Integration

For one of the first steps of the project, the team documented the
current HR processes and systems. As the team went through each
process, the team member assigned to that particular area would
describe and chart the current processes and the differences
between the European and U.S. processes. After this
documentation was completed, the project team invited subject
matter experts (SMEs) to meetings lasting from half a day to three
days to discuss the current processes and the effects of changing
from the European processes to the U.S. processes. The U.S. senior
design analyst attended as many of these meetings as possible to
ensure that the project team understood the current processes.
However, the design analyst would often need to ask someone from
the U.S. support team to clarify specific details. Because of the time
difference between the London and U.S. teams, this often involved
at least a one-day delay. When certain processes—such as
reporting, payroll and interfaces—were analyzed or discussed, the
senior design analyst encouraged that these areas be reviewed.
These areas were not reviewed in an appropriate manner because
the project team manager (Frankie) and co-manager (Pat) were
adamant that these areas didn’t need to be reviewed at the time.
They said that reporting would be reviewed at each of the various
SMEs meetings and that payroll was being outsourced and did not
need to be reviewed at the project-team level. It was discovered
much later in the project that reporting should have been analyzed
earlier; much of the reporting is based on management needs and
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does not necessarily need to be created for a particular area. Also,

many of the codes that were used for reporting were not appropriate
or consistent. For example, the U.S. Equal Employment
Opportunity report with the designation of African American was
not relevant for European employees. Also, employees on family
leave are designated as “on leave” for U.S. reporting, while
European reporting requires they be designated as “active,” per HR
Revenue and Customs (previously called the Inland Revenue Office).
It was also later discovered that the payroll process should have
been analyzed. Master data was collected in the HRIS, and certain
fields had to be sent to an outsourced company. The data needed to
be interfaced back to the financial system for reporting
requirements. In addition, audit and control requirements
necessitated that additional payroll data be interfaced back to the
new integrated HRIS. Also, the confidentiality of the payroll data
required that specific encryption software be used. The outsourced
company had never used the encryption software used in the U.S.
system. At the end of the project, the outsourced company realized
it had to obtain the encryption software, train their technical team
to use it and design a process that would meet the U.S. technical
team’s standards. This required some project team members to
travel to the United States to work with the U.S. network support
team. As the project team progressed from documenting current
processes and the effect of using U.S. processes, a methodology was
created to determine what new coding would be acceptable for the
global integration. If the project team leaders, the senior design
analyst (with agreement from concurrent project team leaders) and
the HR production support manager agreed on the new process, the
coding or technical decision was implemented. If there was no
consensus, project team leaders and the senior design analyst
would present options to the global HR manager and the HR IT
support manager. The issues were often technical and complex. The
project team would schedule meetings at times when the senior
design analyst was unable to attend and then present the issue in a
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way that their preferred outcome would be approved. In many

cases, the decisions turned out to be unworkable and were
reversed, causing additional delays. One of the most difficult
decisions during the integration was determining if a change was a
legal requirement. SMEs would often say that the current process
was required by law, but when they were asked to provide the
actual law, it turned out that it was not a legal requirement but a
preferred solution by current managers or employees. Some U.S.
processes also thought to be legal requirements turned out not to
be the case. When the online interface for the HRIS was being
designed, various issues arose. One issue was language. At the
start of the project, it was thought that language would not be an
issue because both groups spoke and wrote English. However, the
spelling of many words was different, such as “center” or “centre”
and sometimes different terms were used for the same meaning. It
was decided to use U.S. English, a decision that was not popular
with the project team. Another challenge of the online interface for
the HRIS was to decide which data could be changed online by
employees. When a U.S. employee wanted to change an address, he
or she could not change that information online because it may
involve benefits changes. For example, if an employee moved from
California to Texas, her current health care provider may not be
available in Texas, requiring the employee to coordinate the address
change with a medical plan choice. In addition, some address
changes needed to allow for a new home address for tax purposes
(versus a work address for a tax location) in the system. For
example, if an Atlanta, Georgia, employee moved to Aiken, South
Carolina, so that his home address was in South Carolina and his
work address was in Georgia, this tax combination may not be in
the system, requiring a system change that would need to be
created, tested and moved to production before the address change
could be made. In Europe, however, address changes did not affect
benefits or tax data. As the project team moved to the coding and
testing phases of the project, it became apparent that having only
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one U.S. representative on the team was not sufficient. Many

decisions required involving multiple members of the current
production support team. After various members met together, one
person or a few people created the changes in the test system and
tested the procedure. It would often take many tries before a
successful test. By the end of the project, most of the London team
spent two to four weeks in the United States to resolve issues that
couldn’t be resolved with team members “across the pond.” When
the system went live, the current U.S. production support team sent
a team to London to help resolve issues that arose during the first
two weeks of implementation. They had not met the entire project
team or most of the SMEs located in London. During the time they
spent in London, members of the U.S. production support team
tried to quickly resolve production issues from the implementation,
worked with new people and adjusted to the time difference. They
also had to coordinate times to meet with their U.S.-based
counterparts. Because of the time difference, these meetings often
occurred during the U.S.-based teams off hours.

What hours support would be available and who would provide

what level of support was a lively discussion. In the first couple of
weeks after going live, the U.S. support teams had representatives
in Europe and were able to provide support during their work day.
Once that time had passed, adequate support had to be provided
for a much longer time than had previously been required.

Conclusions

The project was about three months late, over budget, and many
items had to be fixed when the system went live. Despite this, the
London-based team had a party to celebrate their success, which
included a dinner at an expensive restaurant and a limo ride home
if necessary. They also received a handsome bonus. The U.S. team
members and the global HR manager were not invited to the
celebration or given bonuses. After the senior design analyst found
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out about the celebration, a U.S. celebration (consisting of a lunch)

was held and a similar bonus awarded. The London project
managers were invited but were unable to travel at the time. The
hot topic at the celebration lunch was how future project teams
should be formed when other HR areas wanted to integrate their
current system. The length of the answers to the questions should
be between 5-10 pages. Please use the instruction from the syllabus
for style and format. If time allows, have students discuss these
questions in small groups prior to the writing assignment.

Questions

1. What are the major issues presented that affected the time, cost
and scope of the project?

2. What are the minor problems presented that affected the

integration?

3. What are the cultural issues that are interwoven in this project
that affected HR or IT?

4. What type of evaluation/closure would help in this project?

5. Who should be involved in future global integration projects?

What skills should team members have and how should they be
selected?

6. If you were to create some of your own “lessons learned,” what

might they be and how would they affect future projects?

Human Resource Management Information System

Human Resource MIS are concerned with activities related
to employees and potential employees of the organization.
The HR functions that are facilitated by HRMIS are as:
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•Manpower Planning
•Staffing
•Training & Development
•Performance evaluation
•Wage & Salary administration
•Separation activities

Types of Human Resource Information Systems (HRIS)

Operational HRIS

Operational human resource information systems provide the

manager with data to support routine and repetitive human
resource decisions. Several operational-level information systems
collect and report human resource data. These systems include
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information about the organization’s positions and employees and

about governmental regulations.

1. Employee Information Systems

The human resource department must maintain information on

each of the organization’s employees for a variety of decision and
reporting purposes. One part of this employee information
system is a set of human resource profile records. An employee
profile usually contains personal and organization-related
information, such as name, address, sex, minority status, marital
status, citizenship, years of service or seniority data, education and
training, previous experience, employment history within the
organization, salary rate, salary or wage grade, and retirement and
health plan choices. The employee inventory may also contain data
about employee preferences for geographical locations and work
shifts. Another part of an employee information system is an
employee skills inventory. The skills inventory contains information
about every employee, such as work experience, work preferences,
test scores, interests, and special skills or proficiencies.

2. Position Control Systems

A job is usually defined as a group of identical positions. A position,

on the other hand, consists of tasks performed by one worker. The
purpose of a position control system is to identify each position in
the organization, the job title within which the position is classified,
and the employee currently assigned to the position. Reference to
the position control system allows a human resource manager to
identify the details about unfilled positions.

3. Applicant Selection and Placement Information Systems

After jobs and the employee requirements for those jobs have been
identified and after a suitable pool of job candidates has been
recruited, the candidates must be screened, evaluated, selected,
and placed in the positions that are open. The primary purpose of
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the applicant selection and placement information system is to

assist human resource staff in these tasks.

4. Performance Management Information Systems

Performance Management Information Systems include

performance appraisal data and productivity information data.
Performance management information systems data is frequently
used as evidence in employee grievance matters.
Careful documentation of employee performance and of how the
performance was measured and reported is critical to acceptance of
appraisal information in grievance hearings. Performance
management information can lead to a number of decisions beyond
merely supporting the operational decision to retain, promote,
transfer, or terminate a single employee.

5. Government Reporting and Compliance Information Systems

Government Reporting and Compliance Information Systems

provide information needed both to maintain compliance with
government regulations and to improve productivity and reduce
costs associated with employees.

Tactical HRIS

Tactical human resource information systems provide managers

with support for decisions that emphasize the allocation of
resources. Within the human resource management area, these
decisions include recruitment decisions; job analysis and design
decisions, training and development decisions, and employee
compensation plan decisions.

1. Job Analysis and Design Information Systems

The information inputs to the job analysis and design information

system include data from interviews with supervisors and workers
and affirmative action guidelines. Inputs also include information
from sources external to the firm, such as labor unions,
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competitors, and government from sources external to the firm,

such as labor unions, competitors, and government agencies. The
outputs of the job analysis information system are job descriptions
and job specifications. These outputs provide managers with the
basis for many tactical human resource decisions.

2. Recruiting Information Systems

To direct the recruiting function, the organization needs to develop

a recruiting plan. The plan specifies the positions to be filled and
the skills required of the employees for these positions. To develop
the plan and to monitor its success, a recruiting information system
is necessary to collect and process the many different types of
information needed to construct the plan, including a list of unfilled
positions; the duties and requirements of these positions; lists of
planned employee retirements, transfers, or terminations;
information about the skills and preferences of current employees;
and summaries of employee appraisals. Other inputs to the
recruiting plan include data about turnover rates and about the
success of past placements.

3. Compensation and Benefits Information Systems

The Compensation and Benefits Information Systems may support

a variety of tactical human resource decisions, especially when
compensation and benefits information is related to information
from internal and external sources. Compensation and benefit
plans can play an important part in improving an organization’s
productivity. Tying employee productivity to pay or encouraging
increased productivity with incentive pay plans can often improve
an organization’s productivity substantially.

4. Employee Training and Development Systems

The training offered by the employee training and development

systems must meet the needs of jobs available in the organization
as identified through the position control system and the job
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analysis and design system. The training should also be directed at

those persons interested and capable of benefiting from it, as
identified by the skills inventory and human resource files.

Strategic HRIS

1. Information Systems Supporting Workforce Planning

Organization involved in long-term strategic planning, such as

those planning to expand into new market areas, construct
factories or offices in new locations, or add new products, will need
information about the quantity and quality of the available
workforce to achieve their goals. Information systems that support
workforce planning serve this purpose.

2. Information Systems Supporting Labor Negotiations

Negotiating with craft, maintenance, office, and factory unions

requires information gathered from many of the human resource
information systems. The human resource team completing the
negotiating needs to be able to obtain numerous ad hoc reports that
analyze the organization’s and union’s positions within the
framework of both the industry and the current economic situation.
It is also important that the negotiating team be able to receive ad
hoc reports on a very timely basis because additional questions and
tactics will occur to the team while they are conducting labor
negotiations.

3. Specialized Human Resource Information Systems Software

A great deal of software has been specifically designed for the

human resource function. This software is available for all types
and sizes of computers, including microcomputers. Software
specifically designed for the human resource management function
can be divided into two basic categories: comprehensive human
19 | P a g e

resource information systems software and limited-function

packages that support one or a few human resource activities.

Comprehensive HRIS

In the last few years, the software industry has produced several
products that organize the various human resource information
systems into integrated software referred to as human resource
information systems or HRIS software.

In general, the computerization of HRIS has resulted in an

integrated database of human resource files. Position files,
employee files, skills inventory files, job analysis and design files,
affirmative action files, occupational health and safety files, and
many other human resource files are constructed in a coordinated
manner using database management systems software so that
application programs can produce reports from any or all of the
files. Thus, the human resource management director can produce
reports listing likely internal candidates for open positions by
running an application program that queries position files, job
requirements files, and skills inventory files.

Limited-Function HRIS

Numerous commercial software packages are sold for use on

mainframes, minicomputers, and microcomputers that are designed
to handle one or a small number of human resource functions.
Microcomputer versions of these single-function software packages
are relatively inexpensive and easy to operate and allow the human
resource manager to automate a function quickly and easily.

1. Training Software

Many training software packages are available for all types and
sizes of computers to provide on-line training for employees. They
include

 Management training software

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 Sales training software

 Microcomputer training software

 Word processing training software

These software packages can be used in computer-based training

programs designed by human resource department for training
specific employees’ in-group and independent study programs.
Computer-based training aids often simplify the trainer’s job and
allow the trainer to individualize instruction more easily than in
traditional, group-based training classes.

Financial Information System

A Financial Management Information System (FMIS) can be broadly
defined as a set of automation solutions that enable governments to
plan, execute and monitor the budget, by assisting in the
prioritization, execution, and reporting of expenditures, as well as the
custodianship and reporting of revenues. Accordingly, FMIS
solutions can contribute to the efficiency and equity of government
operations.

Modern FMIS platforms help governments comply with domestic

and international financial regulations and reporting standards,
and support decentralized operations through centralized web-
based solutions providing access to a large number of authorized
budget users at all levels. More recently, open budget initiatives
have led to an increase in the provision of public sector financial
information for the general public, facilitated by FMIS. In summary,
FMIS solutions offer a great potential for increasing predictability,
participation, transparency and accountability.

Financial Information System provides financial information to all

financial managers within an organization and a broader set of
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people who need to make better decisions. Financial MIS performs

the following functions:

•Makes financial data available on a timely basis to shorten

analysis turnaround time.

•Provides easy access to data for both financial and non-financial

users, often through the use of corporate intranet.

•Integrates financial and operational information from multiple

sources, including the Internet, into a single MIS.

•Enables analysis of financial data along multiple dimensions time,

geography, product, plant , customer etc.

•Analyzes historical and current financial activity.

•Monitors and controls the use of funds over time.

•For adhering to legal requirements

Financial MIS aids managers in:

•Capital Budgeting Decisions

•Financing decisions

•Dividend decisions

•Current asset management

Financial MIS composes of the Inputs

1. Transaction Data: This data includes credit applications, billing,

payment vouchers, stock transfers, cheques, journal and ledger
entries etc.

2. Financial Intelligence: This data is collected from banks,

government, stock markets, etc. which is processed to determine its
impact on the company’s economy.
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3. Organizational Plan: Another important input to Financial MIS

that portrays the objectives of the company. This needs to be
reflected in the output of Financial MIS, which may be in the form
of financial plans.

Enterprise Resource Planning

ERP is an integrated, real-time, cross-functional enterprise
application, an enterprise-wide transaction framework that
supports all the internal business processes of a company.

It supports all core business processes such as sales order

processing, inventory management and control, production and
distribution planning, and finance.

Why of ERP?

ERP is very helpful in the following areas −

 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
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 Better analysis and planning capabilities

 Critical decision-making

 Competitive advantage

 Use of latest technologies

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Features of ERP

The following diagram illustrates the features of ERP −

Scope of ERP

 Finance − Financial accounting, Managerial accounting,

treasury management, asset management, budget control,
costing, and enterprise control.

 Logistics − Production planning, material management, plant

maintenance, project management, events management, etc.

 Human resource − Personnel management, training and

development, etc.

 Supply Chain − Inventory control, purchase and order

control, supplier scheduling, planning, etc.
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 Work flow − Integrate the entire organization with the flexible

assignment of tasks and responsibility to locations, position,
jobs, etc.

Advantages of ERP

 Reduction of lead time

 Reduction of cycle time

 Better customer satisfaction

 Increased flexibility, quality, and efficiency

 Improved information accuracy and decision making capability

 Onetime shipment

 Improved resource utilization

 Improve supplier performance

 Reduced quality costs

 Quick decision-making

 Forecasting and optimization

 Better transparency

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

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Manufacturing Information System.

A management information system that is targeted for use
anywhere production is taking place. Modern management
information systems are generally computerized and are designed
to collect and present the data which managers need in order to
plan and direct operations within the company.

Manufacturing or Production Information System provides

information on production/ operation activities of an organization
and thus facilitates the decision-making process of production
managers of the organization.

Manufacturing MIS facilitate decision making in areas as:

•Product Design: CAD, CAE

•Plant Location & Layout:

•Production Planning & Control: Routing, Scheduling, and Loading

•Quality Control
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Geographic Information Systems (GISs)

 Enables managers to pair pre-drawn maps or map outlines with

tabular data to describe aspects of a particular geographic
region.

 A housing company may use it to display various data for a plot

along with the map.

 Government agencies may use it to display good or bad crops for

a region in a broad geographical region.
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 Finding a location or distance between to points is common use

in the web.

 Fire department may use it to quickly locate a fire hydrant in

case of emergency.

What is Expert System?

An expert system is an advanced computer application that is implemented for
the purpose of providing solutions to complex problems, or to clarify
uncertainties through the use of non-algorithmic programs where normally
human expertise will be needed. Expert systems are most common in complex
problem domain and are considered as widely used alternatives in searching
for solutions that requires the existence of specific human expertise. The expert
system is also able to justify its provided solutions based on the knowledge and
data from past users. Normally expert systems are used in making business
marketing strategic decisions, analyzing the performance of real time systems,
configuring computers and perform many other functions which normally
would require the existence of human expertise.

The difference between an expert system with a normal problem-solving system

is that the latter is a system where both programs and data structures are
encoded, while for expert system only the data structures are hard-coded and
no problem-specific information is encoded in the program structure. Instead,
the knowledge of a human expertise is captured and codified in a process
known as knowledge engineering. Hence, whenever a particular problem
requires the assistance of a certain human expertise to provide a solution, the
human expertise which has been codified will be used and processed in order
to provide a rational and logical solution. This knowledge-based expert system
enables the system to be frequently added with new knowledge and adapt
accordingly to meet new requirements from the ever-changing and
unpredictable environment.

Components of Expert System

An expert system has many core system components to function and interfaces
with individuals of various roles. The following diagram displaying expert
system components and human interfaces.
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The major components of expert system are:

 Knowledge base – a set of rules as representation of the expertise,

mostly in IF THEN statements.

 Working storage – the data which is specific to a problem being solved.

 Inference engine – the code at the core of the system which derives
recommendations from the knowledge base and problem-specific data in
working storage.

 User interface – the code that controls the dialog between the user and
the system.

There are certain major roles of individuals who interact with the expert system
to fully exploit its functionality and capability. They are the:

 Domain expert – the individual or individuals whose expertises are

solving the problems the system is intended to solve;

 Knowledge engineer – the individual who encodes the expert’s

knowledge in a form that can be used by the expert system;

 User – the individual who will be consulting with the system to get advice
which would have been provided by the expert.
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Majority of the expert systems are built with expert system shells which
contains an inference engine and user interface. The shell will be used by a
knowledge engineer to build a system catered for specific problem domain.
Sometimes expert systems are also built with custom developed shells for
certain applications. In this scenario, there will be another additional
individual

 System engineer – the individual who builds the user interface, designs
the declarative format of the knowledge base, and implements the
inference engine.

Depending on the size of the project, the knowledge engineer and the system
engineer might be the same person. For a custom built system, the design of
the format of the knowledge base and the coding of the domain knowledge are
closely related. The format has a significant effect on the coding of the
knowledge.

One of the major hurdles to overcome in building expert systems is the

knowledge engineering process. The process of the codifying the expertise into
a required rule format can be a challenging and tedious task. One major
advantage of a customized shell is that the format of the knowledge base can
be designed to facilitate the knowledge engineering process.

Since the major challenge in expert system development is the building of the
knowledge base, it is encouraged that gap and difference between the expert’s
representation of the knowledge and the representation in the knowledge base
should be minimized. With a customized system, the system engineer can
implement a knowledge base whose structures are as close as possible to those
used by the domain expert.

Knowledge-based Expert Systems

Not all expert systems have learning components to adapt in new environments
or to meet new requirements. But a common element each expert system
possesses is that once the system is fully developed it will be tested and be
proven by being placed in the same real world problem solving situation,
typically as an aid to human workers or a supplement to some information
system.

Although reference books are able to provide a tremendous amount of

knowledge, users have to read, comprehend and interpret the knowledge for it
to be used. Conventional computer programs are built to perform functions
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using conventional decision-making logic — having only little knowledge along

with the basic algorithm for performing the specific functions and fulfill the
necessary boundary conditions.

The so-called “knowledgebase” was created in purpose of utilizing some

knowledge representation formalism to capture and store the Subject Matter
Expert’s (SME) knowledge. The process includes gathering that knowledge from
the SME and codifying it according to a standardized format. Knowledge-based
expert systems collect the small segments of human knowledge and combined
into a set of knowledge-base which is used to aid in solving a complex problem.
Any other problem that is within the range and domain of the knowledge-base
can also be solved using the same program without reprogramming.

Knowledge-based expert systems solve problems which normally require

human intelligence. These said expert systems represent the expertise
knowledge as data or rules within a system. These rules and data can be used
and called upon for reference when needed to solve complex problems.

When compared to conventional programming, the system has the ability to

reason the process with explanations by back-traces and calculate the levels of
confidence and deal with uncertainty. The knowledge has to be codified into
programming code, hence as the knowledge changes, the program has to be
changed accordingly as well and then rebuilt.

Expert System Features

There are a number of features which are commonly used in expert systems.
These features allows the users to fully utilize the expert system’s capability
conveniently in providing the most logical and reasonable decision in a
problematic situation.

 Backward chaining – an inference technique which continuously break

a goal into smaller sub-goals which are easier to prove via IF THEN rules

 Dealing with uncertainties – the system has the capability to handle

and reason with conditions that are uncertain and data which are not
precisely known

 Forward chaining – an inference technique which deduce a problem

solution from initial data via IF THEN rules

 Data representation – the method where the specific problem data is

stored and accessed in the system
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 User interface – that portion of the code which creates an easy to use
system;

 Explanations – the ability of the system to explain the reasoning process

that it used to reach a recommendation.

The Advantages of Using Expert System

Expert system has been reliably used in the business world to gain tactical
advantages and forecast the market’s condition. In this globalization era where
every decision made in the business world is critical for success, the assistance
provided from an expert system is undoubtedly essential and highly reliable for
an organization to succeed. Examples given below will be the advantages for
the implementation of an expert system in business:

1. Providing consistent solutions – It can provide consistent answers for

repetitive decisions, processes and tasks. As long as the rule base in the
system remains the same, regardless of how many times similar
problems are being tested, the final conclusions drawn will remain the
same.

2. Provides reasonable explanations – It has the ability to clarify the

reasons why the conclusion was drawn and be why it is considered as
the most logical choice among other alternatives. If there are any doubts
in concluding a certain problem, it will prompt some questions for users
to answer in order to process the logical conclusion.

3. Overcome human limitations – It does not have human limitations and

can work around the clock continuously. Users will be able to frequently
use it in seeking solutions. The knowledge of experts is an invaluable
asset for the company. It can store the knowledge and use it as long as
the organization needs.

4. Easy to adapt to new conditions – Unlike humans who often have

troubles in adapting in new environments, an expert system has high
adaptability and can meet new requirements in a short period of time. It
also can capture new knowledge from an expert and use it as inference
rules to solve new problems.
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The Disadvantages of Using Expert System

Although the expert system does provide many significant advantages, it does
have its drawbacks as well. Examples given below will be the disadvantages for
the implementation of an expert system in business:

1. Lacks common sense – It lacks common sense needed in some decision

making since all the decisions made are based on the inference rules set
in the system. It also cannot make creative and innovative responses as
human experts would in unusual circumstances.

2. High implementation and maintenance cost – The implementation of

an expert system in business will be a financial burden for smaller
organizations since it has high development cost as well as the
subsequent recurring costs to upgrade the system to adapt in new
environment.

3. Difficulty in creating inference rules – Domain experts will not be able

to always explain their logic and reasoning needed for the knowledge
engineering process. Hence, the task of codifying out the knowledge is
highly complex and may require high

4. May provide wrong solutions – It is not error-free. There may be errors

occurred in the processing due to some logic mistakes made in the
knowledge base, which it will then provide the wrong solutions.