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Conceptual Foundations
MIS
What is MIS?
Why MIS?
Todays Manager is confronted with TWO main challenges: he/she has to
Data
Record of all the players in one day cricket matches. Detailed Marks of all students in a class. Business data as obtained from various business houses.
Information
Processed data, which is useful to the recipient. Examples: Profit of the company in the current year The highest ever score in one day cricket First ten toppers in a class The top 50 business houses of India.
System
A system is a group of interrelated components working together towards a common goal by accepting inputs and producing outputs in an organized process. System has three basic components: Input Data, Raw material, human effort. Processing- Manufacturing process, calculation , manipulation. Output- reports, finished goods, services. System has two additional Components: Feedback data about sales performance is feedback to sales manager. Control- monitoring and evaluating to determine whether the system is moving towards the achievement of goal.
A business is an organizational system where economic resources ( input) are transformed by various organizational processes ( processing) into goods and services ( output). Information system provide information ( feedback) on the operation of the system to management for the direction and maintenance of the system ( control). Economic Resources People, Money, Material Organizational Processes Production, Marketing, Finance, HR Goods & Services- Products, Services, Information Phases of an Information System
Information system
It is an organized combination of people, hardware, software, communication networks and data that collects, transform and share information in organization for a specific purpose.
Hardware resources: It include all physical devices and material used in information processing. Computer system: It consists of CPU, video monitors, printers, scanners, keyboard, mouse, floppy disk, track ball etc. Software resources: It include all set of information processing instructions as well as instruction to control hardware. E.g. of software resources: System software: OS that control and support the operation of computer. Application software: These are program that direct processing for particular use of computers by end users. e.g. Payroll program.
Data Resources: Data is the raw material for information system. E.g. Product description, customer records, employee files and inventory database. Network resources: Networking is essential for successful operation of organization and their computer based information system. Network resources includes: Communication media : Twisted pair cable, coaxial cable, fiberoptics cable and communication satellite system. Network support: Modem, hub, routers, NIC,TCP/IP and other communication control software. Information products: Management reports and business documents using text and graphics display etc.
Information systems include hardware, software, processes, and people. The role of an information system is to process data into information using information technology, business processes, and people resources. Information Technology is thus a component of Information Systems. Information systems generally use a three-phased model of input, process, and output.
No single information system can support all the business needs of an organization.
Management is generally categorized into three levels- Strategic, Middle, and Operational. Each management level has different information requirements.
Top management : Board of directors , CEO and top executives develop overall organizational goals, strategies and objectives. Middle management: Managers, they develop short range plans, schedules and objectives for their sub-units of the company. They allocate resources and monitor the performance of their organizational sub-units. Operational management: Supervisors , sales executives , develop short range plans such as weekly production schedules. They direct the use of resources and perform the task according to procedures and within the budget and on schedule time.
Decision structure
Operational management: Decision at this level is Structured. Structure decision involve situation where the procedures to follow when decision is needed can be specified in advance. E.g. Inventory reorder decision. Middle management: Decision at this level is Semi structured. Some decision procedures can be specified , but not enough to lead to a definite decision. E.g. Setting market budgets for consumer products. Top management: decision at this level is Unstructured. Unstructured decision involve situation where it is not possible to specify in advance most of the decision procedures to follow. e.g. decision related to long term strategy. Development projects for the next year
Output of information products: Information in various forms is transmitted to end users and made available to them in output activity. Common information products are video display, paper documents, message,, forms, reports, graphics display etc. Storage of data resources: It is the basic system components of information system. Storage is the information system activity in which data and information are retained in an organized manner for later use. Common data elements are fields, records, files and database.
Classification of MIS
Level- II
Level- III
Transaction Processing Systems
E.g. To produce a LCD, a manufacture need to buy materials, pay for labor and electricity, ship LCD to customer, bill customers and collect money. A bank that maintain the company account must keep account balance up-to-date, accept deposit and mail a monthly statement. Each transaction may generate a additional transaction. E.g. purchasing material may change the inventory level, paying an employee reduce the cash on hand.
Objective of TPS
Primary goal of organization is to provide all the information to needed functional areas so to keep the business running properly and efficiently. To provide timely documents and reports, to provide necessary data for top and middle system such as MIS, DSS, to assure accuracy and integrity of data and also to protect data from unauthorized users.
Characteristics of TPS
Large amounts of data are input, processed and output. TPS processes information on a regular basis. Daily, weekly etc. High reliability is required because TPS can be viewed as blood line of organization, interruption in the flow of TPS data can be failure for the organization. A high level of security , integrity is needed. Issues such as privacy of data are strongly related to TPS. High level of details is observable. Structured format for input and output of data. Output data are formatted in standard way.
Activities of TPS
First data re collected by people and entered into the computer via any input devices. System process the data in two ways : batch or real time processing. Batch Processing: Transaction data is accumulated over a period of time and processed periodically. Real time processing : Data is processed immediately after a transaction occurs. E.g. system at many retail store use electronic cash register terminal to electronically transmit sales data over telecommunication links to regional computer center for immediate ( real-time) or weekly ( batch) processing.
The data of TPS stored in two file: Transaction file and Master file. Transaction file: It contain the individual transactions that took place during a specified time. E.g. a purchase order from a vendor or the receivable amount of specified client on given data include in transaction files. The information in transaction file is updated whenever the transaction occurs. Master file: It is a Parent file. Every transaction of transaction file are stored in master file.
New System: Invoice less Processing. When the purchasing department initiates an order, it enter the information into an online database. It doesnt send a copy of purchase order to anyone. When the goods arrive at the receiving point, the receiving clerk check the database to see if the goods correspond to outstanding purchase order. If so, he accept them and enter the transaction into the computer system, if he cant find a database entry for the received goods, or if there is mismatch, he simply return the order. New approach matching done automatically. And computer prepare check and send to the vendor.
Manufacturing Production reports Quality control report Finance & Accounting Financial statements Tax records Expense accounts Inventory Management Material usage Inventory levels
Periodic reports and statements: cash-flow statements, payroll summaries, productivities summaries etc. Fixed assets management: Organizations own a large amount of fixed assets such as buildings, cars and machines. These assets depreciate over a time. It is necessary to keep record of original cost of each item, the depreciation rate used for tax purpose, book value for each assets. Payroll: Preparing the periodic payroll was one of the first application of computer in business. Preparing payroll is a routine computer job that involve computing gross salary during a given period , deduction etc.
Problem
Allocation of resources Project management Inventory control Forecasting results Transporting and distributing goods Matching item to each other
Software
Linear, nonlinear programming PERT Inventory management model Forecasting models, regression analysis Transportation models Assignment Model
Process Control System: This system monitor and control physical processes. In which decision adjusting a physical production process are automatically made by computers. E.g. Automatic inventory reorder decision. Office Automation System: It is a type of information system that use a variety of information technologies to help people work together. It use e-mail, chat, videoconferencing to share ideas , share resources etc. Goal of this system is to use IT to enhance the productivity and creativity of teams and workgroup in modern business enterprise.
Management Support system: When information system focus on providing information and support for effective decision making by managers ,they are called management support system. Management Information System: MIS are most common form of management support system. It provide end users with information that support their day to day decision making needs. It provide variety of reports. E.g. weekly sales analysis reports etc.
Role of MIS
Role of MIS in organization can be compared to the role of heart in the body. The information is the blood and MIS is the heart. MIS ensure that inappropriate data is collected from various sources, processed and sent further to all the needy destination. The system is expected to fulfill the information needs of an individual, group of individuals, managers etc.
MIS reports
Types of report provided by system: Periodic Scheduled Reports: It provide information to managers in pre specified format designed to provide managers with information on regular basis. E.g. Weekly sales analysis reports and monthly financial statements. Exception Reports: Reports are produced only when exceptional condition occur. E.g. Credit Manager can be provided with reports that contain only information on customers who exceeds their credit limits.
Demand Reports and responses: Information is provided whenever a manager demand it. E.g. DBMS query language and report generators allow managers at online workstations to get immediate response or reports as a result of their request for information. Manager do not have to wait for periodic reports to arrive as scheduled.
DSS
Decision support system is an computer based system which help decision makers utilize data and models to solve unstructured problem. DSS are computer based information system that provide information support to managers during decision making process. Decision Support system: It allow decision makers to retrieve data and test alternative solution during the process of problem solving. E.g. Airline DSS helps manager to decide how much to overbook and how to set price for each seat so that plane is filled up and profit are maximized.
DSS rely on model base as well as database as system resources. DSS model base is a software component that consists of model used in computational purpose and analytical routine that mathematically express relationship among variables. E.g. how changes to selected variable affects other variable. If we cut advertising by 10% what would happen to sales. Making repeated changes to selected variable until a chosen variable reaches a target value. Let try to increase in advertising cost until sales reach 1 million.
DSS software package can combine model components to create integrated model that support specific type of decision. DSS software typically contains built in analytical modeling and also enable you to build your own models. DSS Packages e.g. Insurance: Risk advisor . Telecom: NCR custom retention program.
Analytical Modeling
What if analysis: observing how changes to selected variables affects other variables. E.g. If we cut advertising by 10 percent what would happen to sales. Sensitive analysis: Observing how repeated changes to a single variable affect other variables.
E.g. Lets cut advertising by $100 repeatedly so we can see it s relationship to sales. Goal-seeking analysis: Making repeated changes to a selected variable until a chosen variable reaches a target value. E.g. Lets try to increase advertising until sales reaches $1 million.
Optimization analysis: Finding an optimum value for selected variables, given certain constraints. E.g. You could try to determine the highest possible level of profits that could be achieved by varying the value for selected revenue sources and expense categories. Changes to such variable could be subject to constraints such as limited capacity of production process or limit to available financing.
Characteristics of DSS
DSS provides support for decision makers mainly in semi structured and unstructured situations by bringing together human judgment and computerized information. Support to provide for various managerial levels, from top executive to managers. A DSS is easy to construct ( even by end users). User friendliness, flexibility, strong graphic capabilities and language that resemble English can greatly increase the usability of DSS.
Components of DSS
Data management: It include database which contain relevant data for situation, managed by DBMS. User interface: User can communicate and command the DSS. Model management: This include software package with financial, statistical models that provide the system analytical capabilities. These components constitute the software portion of DSS. They are housed in computer and can be facilitated by additional hardware and software.
DSS Components
Expert tool users: Person is skilled in the application of one or more types of specialized problem solving tools. Business Analyst: This person has general knowledge of the application area, administration education and skills in DSS construction tools.
Building DSS
The development process of DSS is similar to the development of any other applications except that the process of prototyping .
This involves series of short construction steps with immediate feedback from users on issues ranging form the correct information needs to the way the output is to be presented. This approach involves four activities: Select an important sub problem: The user and the builder jointly identify a sub problem for which the initial DSS is constructed. The sub problem should be small enough so that the nature of the problem, the need for computer based support, and the nature of that support are clear.
Develop a small but useable system to assist the decision makers: No major system analysis is involved. The system should be simple. Evaluate the system and improve it, then evaluate it again: At the end of each cycle, the system is evaluated by the user and the builder. The evaluation mechanism is what keeps the cost and the effort of developing a DSS consistent with its value.
Expand and modify the system in cycles: All the analysis-design-construction-implementation-evaluation steps are repeated in each successive refinement. This process is repeated several timers until a stable system evolves.
There is always balance of effort and cooperation between the user and the builders, the users takes the lead in utilization and evaluation activities while the builder is stronger in design and implementation phases.
Flexible format