BBA ( E-Commerce) IV Semester

MIS NOTES

( Keep on checking your Mail Box for Notes on rest of the Units)

Unit 1

The Meaning & Role of MIS- What is MIS system view of Business, System Approach, Importance of MIS, Evolution of MIS, Computers in MIS. Concept of DSS, ESS, KM, OAS,TPS

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Background

The Entire world is being swept by an Information revolution. Each person whichever may be his/her occupation is getting overwhelmed with its awesome and mind boggling growth and drawn into its realms. Most businesses are getting drawn into the myriads of exciting opportunities created by it. All developed and growing nations have identified it as their vehicle of economic progress There is no area in our lives which is not affected by IT. We can feel its impact and its all pervasive vibrant presence. Each nook and corner of the Globe is now accessible to the Businesses, new markets ready to explored and relationships built for mutual benefit. The world has really shrunk and industries with an IT Framework in place, may move toward a real-time business model in which transactions are near-instantaneous.

Different experts and thinkers have prophesized the impact of IT in different ways.

“How you gather, manage, and use information will determine whether you win or lose”

- Bill Gates

Information Technology as is well known is the study or use of systems such as Computers, telecommunications etc for storing, retrieving and sending information. Infrastructure is the basic structural foundation of an enterprise. Management is the process of managing ie to organise, regulate and be in charge of business or to provide professional administration of business concerns.

Till the recent past, IT was considered the domain of technocrats where persons with general, administrative and management background could not enter and rather treated as outsiders. All the issues concerning IT comprising of selection of IT hardware, software, and related network were left to Engineers and concerned specialists. As such activities under IT were concerned a forbidden zone for end users and managers.

Now the scene is radically changed and is no more the domain of a select few but many of us. That includes professionals of many disciplines who are finding themselves confronted with the task of setting up It Infrastructure for their own companies. On the other end we have fresh engineers and managers entrusted with the same task. While most of them had an adequate exposure to Desk tops and laptops they have to fathom through multiple dimensions of IT Infrastructure. These include advising their superiors about what and why to procure IT equipment and the extent of budgetary approvals required. This book provides a first hand information resource to them and encouraging them to take correct decisions without referring to diverse sources of information. Yes because IT Infrastructure and its management does require one to examine issues from different angles without overlooking any important aspects which may appear trivial on the face value but have far reaching consequences in the longer run.

Since last two decades Business units have identified potential of IT as an important business Enabler and not only a service provider.

The decision makers and top echelon of the company have become growingly aware of the critical role played by IT and asking more from their IT departments.

Business strategies and IT strategies have to be matched and have to go hand in hand for Business organisations to reap the rewards through maintaining a Competitive edge over their rivals.

Infrastructure has to be created and MIS has to be developed to match the business goals and also to ensure minimum Return on Investment (ROI).

The Meaning & Role of MIS

The scope and purpose of MIS is understood better if each part of its term is defined;

MIS

Management Information Systems

Management

Management for our purpose comprises of the processes or activities that describe what managers do in the operation of their organisation; plan, organize, initiate and control operations. They plan by setting strategies and goals and selecting the best course of action to achieve the plan. They organize the tasks necessary for the operational plan, set these tasks into homogeneous groups and assign delegation. They control the performance of work by setting performance standards and avoiding deviations from standards.

As decision making is a fundamental requisite to each of the foregoing process the job of MIS becomes that of facilitating decisions necessary for planning, organising and controlling the work and functions of the business.

Information

Data are facts and figures that are not currently used in a decision process and may be considered as historical facts. Information consists of data that have been retrieved, processed or otherwise used for informative or inference purposes, argument or as a basis for forecasting or decision making.

Systems

A system can be described as a set of elements joined together for a common objective. A subsystem is a part bof a larger system with which we are concerned.

The system concept of MIS is therefore one of optimising the output of the organisation by connecting the operating subsystems through the medium of information interchange.

MIS- Definition

MIS is a computer based system that optimises the collection, collation, transfer and presentation of information throughout an organisation through an integrated structure of databases and information flow.

It is also defined as an integrated ,user machine system for providing information to support operations ,management and decision making functions in an organisation. The system utilises computer Hardware, software, manual procedures, models for planning and analysis, control and decision making in a database.

Our study shall therefore deal with three systems;

(a) A social system termed organisation.

(b)A system of management which is used to improve the operations and productivity of the organisation.

(c) MIS which provides information for making decisions

Summarising:

(a)MIS supports decision making in both structured and unstructured problem environments.

(b) Supports decision making at all levels

(c)Integrated throughout the organisation.

(d)Concerned with all aspects of decision making.

(e)MIS consists of people, computers, procedures, databases, query facilities, evolutionary, adaptive and easy for people to use.

An IS Framework for Business Professionals

As a MIS or Business professional you have to understand the basis on which information systems are created. These are:

(a)Foundation concepts- These are systems,behavioural, economic , social theories on which MMIS is built.

(b)Business applications including enterprise collaboration systems, decision making systems using internet, intranet and extrane.

(c)Development Processes- How the systems are actually developed.

(d)Management challenges- These are challenges of effectively and ethically managing e-business technologies, strategies and security at thr end user, enterprise and global level of business.

(e)Information Technologies are the major concepts, developments and management isdsues in information technology which include hardware, software, networks, data resource management and many internet based technologies.

Management challenges

Business Information

Applications Information Technologies

Systems

Development Foundation

Processes Concepts

What is MIS system view of Business,

Developing MIS therefore requires a clear understanding of the organisational structure, the business vision , goals of the company. From the perspective of a MBA ( eCOM) student the system may appear as under:

Business Vision &Policies

IT Policies

IT Infrastructure

Meeting Management Information System Needs

Gaining Competitive Advantage

Emerging Trends in Technologies & their impact

Changes in Business Needs

Business

Strategies Internet Customer Value

Processes based

Structures Info System Business Value

& Culture

IT

Infrastructure

However from a comprehensive analysis the MIS diagram looks as under giving a clear understanding of its constituent systems is required to identify the correct information flow within it to result in the desired end result.

Management, Organisational Theory and the Systems Approach

1. Top Level (Business Vision, Business Policies, Strategic Alignment, Approving IT Framework, Budgetory Allocation, to get Competitive advantage)

Top Level Business Organisation

Process Theory Behavioural Theory Decision Theory Systems Theory

Business Theories

2. Middle Level (Designing IT System, Define IT Policies,SDP, SSP, Update IT infrastructure in consonance with emerging trends))

3.Operational Level(Implement IT Infrastructure,All activities pertaining to SDP,SSP,Security Mgt,IT Ethics)

System Approach

The systems approach is based on synergism. The systems approach to management is designed to utilize scientific analysis in complex organisations for

(a) Developing and managing operating systems eg money flow or personnel systems.

Motivation Informal Organisation Leadership Dealing with Changes

Functions of Management

organising Controlling & Coordinating

Management Organisational Theory and Systems Approach

Planning Directing Staffing

Creating/Procuring, Upkeep, Upgrading Hardware, Networking infrastructure

Creating/Procuring(, Maintaining, Updating Software for Operational & Management systems including Business intelligence

Assist in generating Reports for meeting Management requirements at different levels

(b) Designing information systems for decision making..

The link between the two is obvious because the reason for information system design is to assist in decision making regarding the management of operating systems.

The systems approach means the interrelationship between the parts or subsystems of the organisation.The focus is on the design of the whole and not design of individual components. It is the synergistic characteristic which is emphasised. A basic tenet of the systems theory is that every system is held together by information exchange.

Classical and Systems approach in Organisation & information flow

Nomenclature- 1. Lines with Arrows show Classical authority

2. Lines & Curves without Arrowheads depict Systems or information Flow.

In the information approach the lines of authority ( solid lines) are not emphasised but the importance to information flow ( light lines) is given.

Importance of MIS in Organizations

In today's scenario MIS plays a pivotal role in Organizations. Organizations worldwide making its extensive use. It is designed by the top management of an organization and is a tool to assembling & accumulating facts & figures of all the important business processes.MIS has great importance / advantages in organizations:

The organization that uses MIS is able to record ,process, route & tabulate all important business transactions. As & when need arises the organization is able to incorporate the needed changes & improvements in the area of concern.

MIS facilitates informed DECISION MAKING.It usuallly represents a number of options from which one can choose the best.

The top management ANALYSES whether its resources are being utillized optimally.

A TWO WAY COMMUNICATION FLOW is greatly enhanced by the MIS. The management freestyles/ empowers the job responsibilities to its employees. The employees in return discuss their doubts & grievances.

MIS supports the planning & controlling function of managers in the organization .Managers use past/historical data as well as the current data to analyse the performance & hence apply controlling measures.

MIS encourages DECENTRALISATION in the organisation. Decentralisation is possible when there's a system to measure operations at the lower levels.

It brings COORDINATION.It facilitates integration of specialized activities by keeping each department aware of the problems & requirements of other departments.

Hence, in some way MIS keeps the organization binded and synergises its subsystems.

Evolution of Systems since 1960s

The IS/IT Systems have witnessed a pronounced change over the years. These can be categorised as the Electronic Data Processing, Management Information system and the Strategic information System periods or Eras. The changes undergone may be studied under different categories. These are:

1. Technological Changes.2. Operational actions.3. System developmental issues.4. System Characteristics.5. Purpose of using technologies.

Thus under these categories EDP Era was restricted by Hardware limitations, Less User control, More emphasis on Programming and Project management, Greater importance to the Operational issues and aimed towards automation.

The MIS Era was manifested by technology based on distributed systems, directed by management functions , support business needs, amenability to control and user oriented.

The Strategic information System is based on Network Systems, Close to users, directed by Business strategy , amenable to business requirements and a Business enabler .

The IS/IT Systems have gradually got closer to the Users than the earlier era when they were treated as outsiders. The Systems are now User friendly and aim at translating the dreams and aspirations of the Users rather than those developed by Technologist to suit their own ego. Being so the IT systems are clearly envisioned as business enablers and give a Competitive advantage to the Business.

To support these three Eras of IT development three respective IT Organisational models were developed . They are now integral part of different organisations , suitably modified and established to meet their specific IS needs. The models have been designated as Model A,B and C organisational structures .

These are based on Nolan’s stage analysis which describes the growth of IT infrastructure in any growing organisation or based on its maturity.

Product/Service

The Right Market

Business Competitive advantage

Relevant Technology including IT

Human Resource to provide Expertise

Adequate Financial Resources at Right Time

Richard Nolan –IS Stages Analysis

IS Stages Analysis

CIO ERA

( Executive Leadership)

MIS MANAGER ERA

(Managerial Leadership)

DP ERA

(Technology Leadership)

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6

1960 1980 1990

Stage 1- Initiation

Stage 2 – Contagion

Stage 3 – Control

Stage 4 - Integration

Stage 5 – Architecture

Stage 6 - Demassing

FUNCTIONS MODEL IT HEAD

Electronic Data Processing Model A EDP Manager

Management information system Model B Manager MIS

Information Resource Management Model C VP ( IS) or CIO

Model A

Model B

Chief Executive Officer

Legal Officer Finance Officer

HR Executive PR Officer

Head Manufacturing Head engineering Chief Controller Head Marketing

EDP manager

Incharge Operations Incharge Applications Development

Chief Executive Officer

Model C

Legal Officer Finance Officer

HR Executive PR Officer

VP Manufacturing VP engineering VP Marketing

Director MIS

Planning staff

Operations staff

Telecom engineer

Database Engineer

Application programmers

User Support staff

VP Finance or VP Admin

Chief Executive Officer

Other Divisions or SBUs’

Computers in MIS

CASE STUDY ( Infrastructure for implementing MIS)

E-commerce Technology architecture using Microsoft & Allied products. Typically such architecture is installed by all modern companies . It is

Legal Officer Finance Officer

HR Executive PR Officer

Chief Technical Officer

Chief Finance Officer

Planning staff

Operations staff

Telecom engineer

Database Engineer

Application programmers

Chief information Officer

assembled to meet their corporate goals. Other technologies like IBM may also be used to create similar configuration.

Firewall Front- End

Micros MS Proxy Server

MS SQL Server

Company Database

Web Commerce Servers Web clients

Windows NT,MS IIS,

MS Transaction Server

MS Site Server

Categorisation of Information Systems

Information Systems

Back-End Application Software

Credit Verification Software By

CISCO Routers

1. Enterprise collaboration System 1. MIS

2. TPS 2. DSS

3. Process Control System 3. EIS

Operational Support Systems- Support of business operations on a day to day basis.

Under which we have:

(a)Enterprise Collaboration Systems for team and workgroup collaboration. Also include Office Automation Systems.

(b)Transaction Processing System for processing business transactions. For example Point of Sale ( POS) machines, Enterprise Resource Planning ( ERP) Systems

(c)Process Control System to control industrial processes.

Management Support Systems to support managerial decision making.

Under which we have:

(a) Management Information System for pre-specified reporting for managers

Operational Support System

Management Support System

(b)Decision Support System for interactive decision Support.

(c)Executive Information System for information tailored for executives.

Concepts of DSS, ESS, KM.OAS, TPS

Decision Support System

They are computer based information systems that provide interactive information support to managers and business professionals during decision making process. They use ( a) analytical methods (b) specialised database (c) decision makers own judgement and (d) an interactive computer based modelling system to support structured and unstructured decisions.

Executive Information System or Executive Support System

They are information systems which combine many features of the MIS andDSS. They focuson meeting the strategic information needs of the top management. They provide easy access to executives to a company’s critical success factors that are key factors to accomplish company’s strategic objectives. They include web browsing, e-mail, DSS, groupware tools and expert systems. They present information to executives in a form of their preference. They provide trend analysis and exception reporting as well.

Office Automation Systems

They are collaborative work management tools and include facilities for groupware products. They support facilities for threaded discussions, virtual discussion groups, discussion tracking and maintain discussion databases. They also include calendaring and scheduling tools, task and project management, workflow systems and knowledge management tools. Examples are Lotus Notes, Microsoft Exchange,

They support Electronic brainstorming such as how to double sales over the next five years. It is followed by an idea organisation listing key

issues., prioritisation meaning which out of these is important and finally policy development meaning which are the top five ideas and who shall accomplish it.

Knowledge Management SystemsAre knowledge based information systems that support the creation, organization and dissemination of business knowledge to employees

and managers throughout a company.

They are created to evolve techniques, technologies and rewards for getting employees to share what they know and to make them better use of accumulated workplace knowledge.

Employees of a company are leveraging knowledge as they do their jobs.

Competitive advantage is gained by companies only if they are knowledge creating companies or learning organisations, meaning consistently create new business knowledge , disseminating it widely through out the company and quickly building the new knowledge into their products and services.

Knowledge Management : Components of an Enterprise knowledge portal

It is the entry to Corporate intranets that serve as a primary knowledge management system. It is composed as mentioned below:

Web User Employee/Customer)

Enterprise Knowledge Portal

Structured Data Source

Unstructured Data Source

Enterprise Knowledge

The portal serves as;

1. A single point of access to all corporate data.

2. It provides personalized view of all data.

3. It provides Collaboration tools.

4. It provides community work areas.

The portal automatically takes care of:

1. Searching the structured and unstructured data sources.

2. Categorises searched data, tags, and hyperlink information.

3. Builds user profiles based on activities.

Transaction Processing SystemTransactions are events that occur as part of the business such as sales, purchase, deposits, withdrawals, refunds and payments. The TPS are cross functional systems that process data resulting from the occurrence of business transactions. Refer to Unit 7 ( ERP) as a classical example of TPS. They provide current information of the company to the operational and to some extent middle level managers to

ERP Database CRM Database

Other Databases

Enterprise Knowledge base

E-mail groupware File systems- Documents, Presentations

Web- Internet, Intranet, Extranet

act upon. They support OLTP ( On Line Transaction Processing) queries.

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Remember the DON’TS IN DEVELOPMENT OF MIS

1. No Management System to build upon.2. No clear definition of Mission & Purpose.3. No objectives of the Company.4. Lack of Management participation.5. Misorganisation.6. Overreliance on Consultants or Manufacturer.7. The Communications Gap.8. Performance of Key people.

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