MC0076 Management Information Systems

1. What do you understand by Information processes data? Ans:

Data are generally considered to be raw facts that have undefined uses and application; information is considered to be processed data that influences choices, that is, data that have somehow been formatted, filtered, and summarized; and knowledge is considered to be an understanding derived from information distinctions among data, information, and knowledge may be derived from scientific terminology. The researcher collects data to test hypotheses; thus, data refer to unprocessed and unanalyzed numbers. When the data are analyzed, scientists talk about the information contained in the data and the knowledge acquired from their analyses. The confusion often extends to the information systems context, and the three terms maybe used interchangeably. The acquisition of information is a first step in its use. We can obtain information from either formal or informal sources. Formal sources provide information in a relatively organized and predictable fashion, for example, business forms; electronic monitoring equipment such as digital thermometers; and machine-readable purchased data such as an encyclopedia (Personal records, corporate annual reports, summarized transaction histories) on a compact disc. Informal sources provide information in a less structured way and include conversations with customers, suppliers, and other employees, as well as general observations of personal and organizational activities. Generally, acquiring information through informal sources costs less, but the information acquired may be harder to organize and use effectively. Data acquisition can occur manually or electronically. Managers often hand-write evaluation reports or salespeople maintain written records of customer orders. Increasingly, managers can enter evaluation data directly into the computer, and salespeople can use point-of-sale terminals to record detailed sales information electronically. Experts estimate that electronic forms for capturing data cost at least 70 percent less to design, purchase, use, carry, and revise than the equivalent paper forms. Processing information describes transforming it into a usable form. Processing typically occurs at two times: first, between the acquisition and storage of information, and second, between its retrieval and communication. The processing that occurs between acquisition and storage generally requires a large amount of personal labor. Manual processing, involves duplicating, sorting, and filing data. Electronic processing, such as with electronic scanners, involves transforming and entering the data into an electronic form. Although both manual and computerized processing may require significant clerical time and incur high costs, electronic processing can reduce these costs. Processing occurs between storing and communicating information for both manual and computerized systems. In manual systems, filing clerks typically perform the processes of retrieval, formatting, and display. When summaries or special analyses are required, analysts with special skills, such as skills in finance or accounting, may process the data. Manual information processing involves high labor and time costs but low equipment costs. Manual processing of large volumes of data tends to be more expensive than computer processing. In computerized systems the processing between retrieval and communication allows more analysis and display possibilities in a shorter time. The costs of computerized processing include rental or depreciation of computer equipment, the labor costs of operating the equipment, and the costs associated with programming software to retrieve, format, and display information. Computerized processing involves lower labor and time costs but higher equipment costs than manual processing.

2. How do you retrieve information from manual system? Ans:

Retrieving desired data from manual systems can be time consuming and expensive executives spend approximately six weeks a year on average looking for misplaced material. Secretaries may spend as much as 30 percent of their time looking for paper documents and approximately 20 percent of that time searching for misfiled items. Because paper files require large amounts of space, managers may store the data on a different floor or even in a different building. The labour costs of retrieving even small amounts of information exceed those for retrieving information electronically unless the organization can create small and compact storage for its paper records. Electronic systems provide rapid and inexpensive access to information stored electronically in an organized fashion. The costs incurred are only those of using the computer equipment for a fraction of a second, particularly when retrieval is part of ongoing processing. If an individual requests the retrieval, it may require additional processing to translate the retrieval request from a form understood by the person to a form understood by the computer. Then the information is stored in a different place from where it is requested, the request must be transmitted electronically to where the data are stored, and the retrieved data must be transmitted back. Communication costs are relatively low for small amounts of information, but the communication equipment and infrastructure can be expensive unless amortized over a sufficiently large volume of data communication. Companies that have small communication needs can pay to use the infrastructure of third parties, such as telephone companies.

3. What are the challenges of information management? Ans:

Managers at different hierarchical levels in the organization have special concerns. At the highest level, managers are concerned with setting long-term goals and directions for the organization. At the lowest level, managers are concerned with supervising the conduct of day-to-day activities. As one moves up the corporate ladder, decisions have a longer term and wider ranging impact on the organization. These differences affect the characteristics of managers information needs. At all levels managers cope with less-than-perfect information in an uncontrollable environment. They use information systems to help them bring as much order and completeness to the available informal possible. Executive Management Top-level managers establish the overall direction of an organization by setting its strategy and policies. They may decide that cost cutting requires reducing the number of employees or that introducing a new product line calls for hiring more workers. They typically develop, a mission, reflected in a mission statement that defines the basic character and characteristics of the organization, that is, who the organization is, why the organization is in business, and what the organization is in the business to do. These executives also develop pre and activities in line with stated profit or service objectives. Top executives typically have both an internal and external orientation: They must that work gets done within their particular subsidiary or division while they interact with executives in other organizations and with the general public. Increasingly, such interactions span regional and national boundaries, requiring executives to have large repositories of information about an array of global issues. They may need to know the cost of labor in Taiwan and zoning laws in Detroit. Top executives may also spend large amounts of time in ceremonial roles,

representing their company to the public. They must have knowledge of the customs and rituals of different cultures to perform these responsibilities effectively. What types of information do top-level managers typically need? Top executives often need performance-related information about results of various divisions or product groups: they may require summary data about sales, production levels, or costs to assess the organizations performance. Top executives also use information about new technology, customers, suppliers, and others in the industry to gain a competitive advantage over other firms. As organizations increase their international focus, top executives require economic, legal, and cultural information about other countries in which the organization operates. Top-level managers may combine these various types of information to formulate a strategy for the organization and a plan for implementing it. Of course, they never have complete information and try to use the available information as effectively as possible. Consider the job of a senior marketing manager in the hair-care products division of a large company. She must determine the best mix of products for the company, authorize advertising and marketing research expenditures, and supervise a staff of managers responsible for accomplishing the departments goals. What types of information might she require? Now compare her information needs with those of a senior financial manager or even with those of a senior marketing manager in a computer software firm. Clearly these three managers have some needs in common, but they also have needs unique to their job, organization, and industry. Diagnosing the particular information needs of senior executives requires tracking their organizational and job goals and then assessing the information that help accomplish those goals. Middle Management Unlike top executives, middle managers focus primarily on implementing the policies and strategies set by top management. Plant managers, regional sales managers, directors of staffing and other middle managers usually deal with internal organizational issues, such finding ways to increase productivity, profitability, and service. Middle managers must meet production schedules and budgetary constraints while still acting independently. They all participate actively in various personnel decisions, including the hiring, transfer, promotion or termination of employees. Middle managers serve as the interface between executives at firstline supervisors: They disseminate top managements directives to lower levels of organization and communicate problems or exceptional circumstances up the hierarchy. They may work in the home country or abroad, directly managing one or more work teams, coordinating interdependent groups, or supervising support personnel. Middle managers require more detailed information than executives do about the functioning of the groups or workers they supervise, although generally they do not require as detail information as a first-level supervisor requires. Often middle managers need detailed but data, extensive information about workers performance, schedules, and skills, and data about their groups products or services to perform their jobs well and to ensure that their workgroup focuses on organizational goals. Often they cannot obtain perfect information must use the best information they can secure. Middle managers who act as project managers might be responsible for one or more unique projects, such as the development of new spreadsheet software or a new computer chip, or ongoing projects, such as the provision of accounting services to a small business. Project managers typically supervise teams of workers who must accomplish a specific goal. Organizations consist of multiple, overlapping teams, only some of which are formally recognized by group or departmental boundaries. The manager must ensure that the project team works together effectively toward its common goal. The manager must know each team members job responsibilities as well as the members skills, abilities, and knowledge. The manager must also have information about the individuals, group,

organization, and its environment to help in leading, motivating, resolving conflicts, and coordinating activities. Middle managers might also serve as links between their own work groups and others in the organization. Occasionally these links may extend beyond local or regional boundaries, posing additional challenges for the manager. The middle manager, too, might require special knowledge about managing a multicultural workforce or conducting business internationally. DuPont, for example, charged five managerial teams around the world with ensuring employee retention in their areas; they use conferencing by telephone to share ideas. First-line Supervision First-level managers have the most direct responsibility for ensuring the effective conduct of their organizations daily activities. The supervisor of long-distance telephone operators handles any problems that arise in servicing customers; the customer services manager in an insurance company oversees the interactions between customer service representatives and policy holders. Such supervisors might plan work schedules, modify a subordinates job duties, train a new worker, or generally handle problems employees encounter. They ensure that their subordinates accomplish their daily, weekly, and monthly goals and regularly provide workers with feedback about their performance. They screen problems and may pass particularly significant, unusual, or difficult problems to middle managers for handling. First-line supervisors also spend large amounts of time in disturbance-handling roles, such as replacing absent workers, handling customer complaints, or securing repairs for equipment. They, too, may experience imperfections in the information they receive; they must recognize these deficiencies and respond accordingly. Consider the night-shift nursing supervisor in the pediatrics ward of a hospital. What information must she have to perform her job? Certainly she requires detailed information about pediatric nursing procedures, knowledge about the skills of the nurses on the shift, and detailed listings of the nursing services required for each patient. If the staff is unionized, she should also know the provisions of the union contract. The head nurse might also require information about daily and vacation schedules as well as the ability to secure temporary employees. She should have a basic knowledge about the equipment on the floor as well as how to obtain repairs for it. What information does she need to solve an understaffing or absenteeism problem? Does she need the same information to answer questions about administration of medications or delivery of meals to patients on the floor? The nightshift supervisor in a manufacturing plant might require comparable information about the tasks, workers, and equipment. Of course, the specific details will differ as a function of the setting. Both the nursing supervisor and the plant supervisor may encounter special problems that require unique information. Diagnosis of information needs must be ongoing and responsive to the particular situations these managers face.

4. Explain the different components of MIS. Ans:

The physical components of MIS comprise the computer and communications hardware, software, database, personnel, and procedures. Almost all organizations employ multiple computer systems, ranging from powerful mainframe machines (sometimes including supercomputers) through minicomputers, to widely spread personal computers (also known as microcomputers). The use of multiple computers, usually interconnected into networks by means of telecommunications, is called distributed processing. The driving forces that have changed the information processing landscape from centralized processing, relying on single powerful mainframes, to distributed processing have been the rapidly increasing power and decreasing costs of smaller computers.

Though the packaging of hardware subsystems differs among the three categories of computers (mainframes, minicomputers, and microcomputers), all of them are similarly organized. Thus, a computer system comprises a central processor (though multiprocessors with several central processing units are also used), which controls all other units by executing machine instructions; a hierarchy of memories; and devices for accepting input (for example, a keyboard or a mouse) and producing output (say, a printer or a video display terminal). The memory hierarchyranges from a fast primary memory from which the central processor can fetch instructions for execution; through secondary memories (such as disks) where on-line databases are maintained; to the ultra high capacity archival memories that are also employed in some cases. COMPONENT DESCRIPTION Multiple computer systems: mainframes, minicomputers, personal computers Computer system components are: central processor(s), memory hierarchy, input and output devices Hardware Software Database Communications: local area networks, metropolitan area networks, and wide area networks Systems software and applications software Organized collections of data used by applications software Professional cadre of computer specialists; end users in certain aspects of their work Specifications for the use and operation of computerized information systems collected in user manuals, operator manuals, and similar documents

Personnel

Procedures

Multiple computer systems are organized into networks in most cases. Various network configurations are possible, depending upon an organizations need. Fast local area networks join machines, most frequently clusters of personal computers, at a particular organizational site such as a building or a campus. The emerging metropolitan area networks serve large urban communities. Wide area networks connect machines at remote sites, both within the company and in its environment. Through networking, personalcomputer users gain access to the broad computational capabilities of large machines and to the resources maintained there, such as large databases. This connectivity converts personal computers into powerful workstations. Computer software falls into two classes: systems software and applications software. Systems software manages the resources of the system and simplifies programming. Operating systems (UNIX, for example) control all the resources of a computer system and enable multiple users to run their programs on a computer system without being aware of the complexities of resource allocation. Even if you are just using a personal computer, a complex series of actions takes place when, for example, you start the machine, check out its hardware, and call up a desired program. All of these actions fall under the control of an operating system, such as DOS or IBM OS/2. Telecommunications monitors manage computer communications; database management systems make it possible to organize vast collections of data so that they are accessible for fast and simple queries and the production of reports. Software translators-compilers or interpreters, make it possible to program an application in a

higher-level language, such as COBOL or C. The translator converts program statements into machine instructions ready for execution by the computers central processor. Many categories of applications software are purchased as ready-to-use packages. Applications software directly assists end users in their functions. Examples include generalpurpose spreadsheet or word processing programs, as well as the so-called vertical applications serving a specific industry segment (for example, manufacturing resource planning systems or accounting packages for small service businesses). The use of purchased application packages is increasing. However, the bulk of applications software used in large organizations are developed to meet a specific need. Large application systems consist of a, number of programs integrated by the database. To be accessible, data items must be organized so that individual records and their components can be identified and, if needed, related to one another. A simple way to organize data is to create files. A file is a collection of records of the same type. For example, the employee file contains employee records, each containing the same fields (for example, employee name and annual pay), albeit with different values. Multiple files may be organized into a database, or an integrated collection of persistent data that serves a number of applications. The individual files of a database are interrelated. Professional MIS personnel include development and maintenance managers, systems analysts, programmers, and operators, often with highly specialized skills. The hallmark of the present stage in organizational computing is the involvement of end users to a significant degree in the development of information systems. Procedures to be followed in using, operating, and maintaining computerized systems are a part of the system documentation.

5. Mention different characteristics of MRS. Ans:

1) MRS are usually designed by MIS professionals, rather than end users, over an extensive period time, with the use of life-cycle oriented development methodologies (as opposed to first building a simpler prototype system and then refining it in response to user experience). Great care is exercised in developing such systems because MRS is large and complex in terms of the number of system interfaces with various users and databases. 2) MRS is built for situations in which information requirements are reasonably well known and are expected to remain relatively stable. Modification of such systems, like their development, is a rather elaborate process. This limits the informational flexibility of MRS but ensures a stable informational environment. 3) MRS does not directly support the decision-making process as a search for alternative solutions to problems. Naturally, information gained through MRS is used in the managers decision-making process. Well-structured decision rules, such as economic order quantities for ordering inventory or accounting formulas for computing various forms of return on equity, are built into the MRS itself. 4) MRS is oriented towards reporting on the past and the present, rather than projecting the future. 5) MRS generally has limited analytical capabilities-they are not built around elaborate models, but rather rely on summarization and extraction from the database according to given criteria. Based on simple processing of the data summaries and extracts, report information is obtained and printed (or, if of limited size, displayed as a screen) in a prespecified format.

6) MRS generally report on internal company operations rather than spanning the companys boundaries by reporting external information.

6. List down the Potential External Opportunities, potential internal Weaknesses. Ans: Increasingly, organizational advantages come from incorporating external information into the information system. partially captured by the organizational TPS, but a good part of it must be acquired from external sources. Representative examples include: Sales volume of a firms primary competitor in a specific sales district Potential customer segments for various company product lines Questionnaire data regarding a projected new product, obtained via a Series of focus groups Geographical distribution of company stockholders Much external information is not quantitative; for example, legal, regulatory, tax, and labor union negotiations information is generally difficult to quantify. A corporation can succeed only by adapting itself to the demands of its environment. This environment is represented by a number of groups that affect the companys ability to achieve its objectives or that are affected by it. These groups are called the stakeholders of a firm. The internal stakeholders are, of course, a firms employees, who may be classified in terms of their informational needs. Table 4.2 lists principal external stakeholders of organizations, along with the principal informational demands generated by their presence. The boundary-spanning role of an information system consists in keeping the organization continually informed about the activities of these external stakeholders; some of them (for example, stockholders and government agencies) must also be kept informed by the organization. The development of the information society has created an infrastructure for transmission of various types of data, such as electronic data interchange (EDI) and other valueadded networks, and has made information itself an important product. Organizational MIS have become progressively embedded within these networks and markets so that now, in various areas, the distinction between external and internal data has become blurred. For example, consider: Inventory data maintained by your organization in behalf of a customer firm that relies on your company for all its supply needs within a certain product area (such as a hospital relying on a drug distributor) An information processing subsidiary of a diversified corporation handling the information of another business unit for the parent company The original data processing systems were oriented toward the past, in that they maintained accounting data about company activities. With the advent of on-line systems, it was possible to maintain up-to-date data about the present. Next, planning became possible, particularly with decision support systems. Continuing comparison of present and projected results is the fundamental tenet of management control. Today, MIS maintain information about the past, present, and projected future of the company, its operating units, and the relevant aspects of its environment.

7. What are the technology evaluation factors that need to be considered during ERP selection. Ans:
1) Client server architecture and its implementation-two tier or three tier. 2) Object orientation in development and methodology. 3) Handling of server and client based data and application logic. 4) Application and use of standards in all the phases of development and in the product. 5) Front end tools and back end data based management system tools for the data, process presentation management. 6) Interface mechanism: Data transfer, real time access, OLE/ODBC compliance. 7) Use of case tool, screen generators, report writers, screen painter and batch processor. 8) Support system technologies like bar coding, EDI, imaging, communication, network. 9) Down loading to PC based packages, MS-Office, lotus notes, etc. 10) Operating system and its level of usage in the system. 11) Hardware-software configuration management.

8. What are the common business exposures and risk of using internet by organization. Ans:
Contracting viruses Interception of passwords by hackers Interception of sensitive/commercial data Illegal/objectionable use of site by users Inability to effectively disconnected Internet to own employees Misrepresentation of identity by site visitors Legal loopholes in electronic contracts No security against eavesdropping No security against interception Misuse of supplied/captured information Misrepresentation of identity of site

9. Explain with relevant example the concept of business process. Also mention their elements. Ans:
For initiating business re-engineering, one is required to make some very basic and fund amental changes in ones conventional thinking. The business is re-engineered through process reengineering and the business has a number of processes which together produce the business results. You concentrate on the process and not on the task when it comes to reengineering. The business process is defined as a set of activities performed across the organisation creating an output of value to the customer. Every process has a customer who may be internal or external to the organisation. The scope of the process runs across the departments and functions and ends up in substantial value addition which can be measured against the value expectation of a customer. For example, the order processing scope in the traditional sense is within the marketing department. But when it comes to re-engineering, the scope expands to manufacturing, storing, delivering and recovering the money. Likewise, the scope of the bill payment is not limited to the accounts and finance departments but it covers ordering the vendors, receipt and acceptance or goods and paying the bill amount. In a classical organisational set-up, the different processes are handled in parts within the four walls of the department and the functions are limited to the responsibility assigned to them. When the bill payment process is to be re-engineered, it will be re-engineered right from the purchase ordering to cheque payment to the vendor. The reason for covering the purchase ordering as a part of the bill payment process, is that the purchase order information decides the number of aspects of bill payment. The basic element of the processes is motivation to perform certain activities. In the process execution, the data is gathered, processed and stored. The data is used in the process to generate the information which would be checked, validated and used for decision making. The decision is then communicated. The process is executed through the basic steps such as receiving the input, measuring the input, analysing the document, performing, processing, recording, accessing data, producing the results and communicating them. Basic elements of business process are: Motivation to perform Data gathering, processing and storing Information processing Checking, validating and control Decision making Communication All these relate to human initiative. A business process in any area of the business organisation performs through basic steps, such as, receive input, measure, analyze, document, perform, process, record / store, access, produce and communicate. These steps are performed a number of times across the execution

process. When the process is performed, it consumes resources and time. The re-engineering approach attempts to eliminate or shorten the steps so that resource consumption is reduced and time of process execution is shortened. It eliminates redundancy by eliminating the steps, which do not contribute, to the value customer is looking for. A business process defined for re-engineering has a clear cut start and end, resulting into a business result. In organisation, there are long processes and short processes. There are critical processes and not so critical processes. The critical business processes are those, which contribute to the value significantly. While the non-critical processes do not contribute much to the value, the customer is looking for. For example, the process of receiving a visitor in the organisation could be considered as noncritical. But the process of new product development from the concept to the prototype is critical as it is expected to contribute high value to the customer. If the external customer focus is taken as a criterion for process selection, then all the processes which generate and add value to the customer are called the value stream processes. The value stream processes are critical and become the immediate candidates for reengineering. The other processes in the organisation contribute to the overheads of performing the business function. For example, the processes involving attendance, leave, payment of wages, security, travelling and accounting are not value stream processes as the resources employed in them do not create a value or improve a value to the customer. Such processes are a second priority as far as re-engineering is concerned. Every process is made of a series of activities. In each activity some work is done which produces some result for processing into the next activity. If the work done under any activity is analyzed, it will be seen that the people are moving papers and products to achieve some result. In the process they collect the information for decision making and then carry out a physical activity of pushing the product or the output using the paper for record, document and communication.

10. Explain the link between MIS and BPR. Ans: Any exercise towards building design of the management information system will be preceded by an exercise of business process re-engineering. Building the MIS is a long-term project. It is, therefore, essential to have a relook at the organisation where the mission and goals of the organisation are likely to be replaced. The business itself would undergo a qualitative change in terms of the business focus, work culture and style and the value system. This would change the platform of business calling for a different MIS. The MIS will concentrate more on the performance parameter evaluation which is different in the re-engineered organisation. The data capture, processing, analysis and reporting would be process central and performance efficiency would be evaluated in relation to the value generated by the processes. The decision support systems will be integrated in the business process itself, where triggers are used to move the process. The triggers could be business rules and stored procedures, enabling the process to become automotive in its execution. The MIS in the re-engineered organisation would be more of a performance monitoring tool to start with and then a control for the performance. The traditional MIS is function-centered like finance, production, material, etc. The Management Information System in a re-engineered organisation would be process centred, evaluating customer satisfaction, expectations and perceptions.

The role of Management Information System will be raised to a level where the following activities would be viewed for the management action: Control of process cycle time Work group efficiency Customer satisfaction index Process efficiency and effectiveness Effectiveness of the Management in enterprise management and not in enterprise resource The strength of the organisation in terms of knowledge, learning and strategic effectiveness The traditional role of the MIS as a decision supporter will continue, however.