Information Systems (IS) enables new approaches to improve efficiency and efficacy of business models.

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Mr. Nishant Singhai

PrefaceInformation Systems (IS) enables new approaches to improve efficiency and efficacy of business models. This course will equip the students with understanding of role, advantages and components of an Information System. The objective of the course is to help students integrate their learning from functional areas, decision making process in an organization and role of Information Systems to have a vintage point in this competitive world.

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Course Contents:Module I: Organizations, Management and Information Meaning and Role of MIS, Organization Structure, Business process Module II: Information Technology Infrastructure Managing Hardware and Software Assets, DBMS (Data base management system) Module III: Management and Organizational Support Systems for the Firm Decision Making Process: Structured, Un-Structured Decision, Semi-structured, Decision Support System, Enhancing Management Decision Making by the use of such tools. Module IV: Management Control Management control and operations, Continuous improvement methods Module V: MIS in Developing countries Financial Management Information Systems in Developing Countries by International Monetary Fund

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IndexModule I: Meaning and Role of MIS 6 Organization Structure 22 Business process 32 Module II: Managing Hardware and Software Assets 39 DBMS (Data base management system) 46 Module III: Decision Making Process 51 Decision Support System 56 Enhancing Management Decision Making by the use of such tools. 70 Module IV: Management control and operations 80 Continuous improvement methods 101 Module V: MIS in Developing countries 106

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Module I Organizations, Management and Information

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Introduction With the rising need to manage vital organizational information, balance the risks and profits of a business, and achieve perfection, the definition of information management has rapidly evolved over the past few years. In todays world of cut throat competition accompanied with the tussle to trounce competitors, it is critical for an organization to scrutinize its business operations. There are multifaceted factors that contribute to the progress of a business, which can be acknowledged with the help of meticulous information management. Evolution Earlier reports were generated manually and occasionally with some statistics, which failed to provide adequate and timely information to the management. With the introduction of technology, old paper work was replaced by MIS that electronically tracked all data, thus occupying less office space. The obligation to maintained data electronically augmented with the advent of globalization. Operations of an organization were no longer restricted only to a city or nation. Organizations started sprawling across the globe with branches in different countries. As a result, managing and transmitting information across the world become imperative. One could no longer depend on the traditional paper-work to maintain records as it was time consuming, costly, and difficult to maintain. This was also a labor intensive affair and had flaws, such as lack of co-ordination among people, human errors, maintaining consistency etc. With the advancement in technology and growth of organizations, which manage thousands of employees who work across the globe, implementing information management became quite daunting. Information management in todays world has become simpler due to the rapid development of technology, especially the introduction of computers and telecommunication. Computers and telecommunication networks play a vital role during data collection. Computer provides essential features, such as optimal storage capacity, speed, accuracy, automation, and security of data. Telecommunication networks, such as telephone, e-mails, voicemail, and Internet are used for secure transmission of information across the globe at utmost speed.Page

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Information management no longer includes simply computing the payroll and keeping track of accounts payable and receivable. Today, information management includes in-depth tracking of sales, inventories, resource and people management, project management etc. This made way for Management Information Systems (MIS) that helped organizations track data across all functions, analyze progress, and make important decisions. Management as defined by Mary Follett is the art of getting things done through People. A manger is defined as a person who achieves the organizations goals by motivating others to perform not by performing himself. Whether management is an art or a science is a very subjective question. But it can be said without doubt that modern management in the environment of technology is becoming more of a science than an art. We define management for the purpose of Management information Systems as the process of planning, organizing, staffing, coordinating and controlling the efforts of the members of the organization to achieve common stated goals of the organization. In the process of management, a manager uses human skills, material resources and scientific methods to perform all the activities leading to the achievement of goals.The manager uses a variety of tools, techniques and skills while executing the management process of planning, organizing, staffing, coordinating and controlling. An efficient way of handling this process is to treat the organization as a system.

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MANAGEMENT INFORMATION SYSTEM ( MIS) CONCEPT The initial concept of MIS was to process data from the organization and present it in the form of reports at regular intervals. The system was largely capable of handling the data from collection to processing. It was more impersonal, requiring each individual to pick and choose the processed data and use it for his requirements. This concept was further modified when a distinction was made between data and information. The information is a product of an analysis of data. This concept is similar to a raw material and the finished product. The MIS differs since the people in two organizations involved in the same business. The MIS is for the people in the organization. The MIS model may be the same but it differs greatly in the contents. The MIS, therefore, is a dynamic concept subject to change, time and again, with a change in the business management process. It continuously interacts with the internal and the external environment of the business and provides a corrective mechanism in the system so that the change needs of information are with effectively. APPROACHES TO MANAGEMENT Frederick W Taylor*, is recognized as the father of scientific management. His principles can be summarized as follows: 1.Replace the rules of thumb with scientific rules. 2. Obtain a harmony in group action. 3. Achieve assistance of human beings, rather than chaotic individualism. 4. Work for a maximum production. 5. Develop all workers to the possible potential for their own highest possible

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1. Replace the rules of thumb with scientific rules

Taylor has emphasis that in scientific management organized knowledge should be applied which will replace the soul authority.

2. Obtain a harmony in group action Group harmony suggest that there should be mutual and with in a group.

3. Achieve cooperation of human beings Scientific management involves achieving co-operation mutual confidence and good way.

4. Work for a maximum output Scientific management involves continuous improvement in production and productivity instead of restricting product either by management or worker.

5. Development of workers Scientific management gave importance for the growth of workers through training and education program.

Principles of Operational Management sl.no 1 2 principles Division of work Authority and comments Efficient handling of workPage

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Pinpoints accountability

responsibility 3 4 5 Discipline Unity of command Unity of direction Adherence to rules, regulations, norms and priorities Single source directed towards one objective Efforts should be directed towards one objective

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Subordination of Ignore the individual interests for overall individual To Corporate betterment of the organization. interest Remuneration Centralisation Should be fair for maximum satisfaction Authority should be centralized just enough for control. Overcentralization is unproductive Chain of authority vested into the people should not be short-circuited Orderly arrangement of men, material and other resources is necessary Subordinates should be dealt with kindliness and justice to elicit loyalty and devotion It is necessary to ensure that the turnover of people is controlled for stability The initiative of subordinates should be encouraged,sacrificing personal vanity of the superior

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Scalar chains

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Order

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Equity

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Stability of tenure

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Initiative

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What is MIS?Management Information System (MIS) is an organized, automated, and diverse information system that gathers, stores, processes, and distributes data associated with different departments of the organization. This data is processed in various forms, such as graphs, diagrams, charts, and reports to generate accurate, relevant and valuable information for the management. This information is further communicated to the various departments to be used for decision-making and business management. MIS system provides central storage of all the business information. There are various types of MIS systems, such as decision support system, financial management systems, system and people management systems, project management system, accounting management systems, and marketing management systems, which are used to gain better understanding of the market and enterprise. Vital functions performed by an MIS include: Generate reports that help in analyzing records Answer questions, such as what, when, where, how at the managerial level Support decision-making Augment communication among employees Collect, store, process, and distribute information throughout the organization Reduce cost by employing less labor and automating processes Complement an organization in achieving its strategic goals MIS is used across all levels in an organization. For example, MIS provides vital information at senior levels to help make strategic decisions. At other levels, MIS observes an organization's activities and distributes information to everyone in the organization and customers. MIS is different from information management systems and computer science. This is because these systems do not help in the decision-making process. MIS is more advanced because it not only collects and manages information, but also represents it in various formats useful for the management to make important organizational decisions.

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The main challenge of an organization is to balance the risks and profits. MIS is a critical component of the organization's overall risk management strategy. Risk is the possibility of a threat that can adversely affect the profits or normal working of on organization. Risks that are unexpected and not planned are difficult to manage and overcome. The success of an organization largely depends on how the management projects such risks and the measures it takes to reduce the risks. While managing the operations for a business, you may come across many constraints, such as time, funds, resources, risks, and competition. These factors can be evaluated based on previous reports of an organization prepared using MIS. Records maintained across multiple months and years can be used for comparing and analyzing the collected data to predict the future. Another approach for relating information systems is that proposed by Harsh and colleagues. They define information as one of four types and all these types are important component of a management information system. Furthermore, the various types build upon and interact with each other. A common starting level is Descriptive information. This information portrays the what is condition of a business, and it describes the state of the business at a specified point in time. Descriptive information is very important to the business manager, because without it, many problems would not be identified. Expressive information includes a variety of types of information including financial results, production records, test results, product marketing, and maintenance records. Explanatory information can also be used as inputs to secure other needed types of information. For example, what is information is needed for supplying restraints in analyzing farm adjustment alternatives. It can also be used to identify problems other than the what is condition. Descriptive information is necessary but not completely sufficient in identifying and addressing farm management problems. The second type of information is diagnostic information, this information portrays this what is wrong condition, where what is wrong is measured as the disparity between what is and what ought to be. This assessment of how things are versus how they should be (a fact-value conflict) is probably our most common management problem. Diagnostic information has two major uses. It can first be used to define problems that develop in the business. Are production levels too low? Is the rate earned on investment too low? These types of question cannot be answered with expressive information alone (such as with financial and production records). A manager may often be well supplied with facts about his business, yet be unable to recognize this type of problem. The manager must provide norms or

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standards which, when compared with the facts for a particular business, will reveal an area of concern. Once a problem has been identified, a manager may choose an appropriate course of action for dealing with the problem (including doing nothing). Corrective measures may be taken so as to better achieve the managers goals. Several pitfalls are involved for managers in obtaining diagnostic information. Adequate, reliable, descriptive information must be available along with appropriate norms or standards for particular business situations. Information is inadequate for problem solving if it does not fully describe both what is and what ought to be. As description is concerned with what is and diagnostics with what is wrong, prediction is concerned with what if...? Predictive information is generated from an analysis of possible future events and is exceedingly valuable with desirable outcomes. With predictive information, one either defines problems or avoids problems in advance. Prediction also assists in analysis. When a problem is recognized, a manager will analyze the situation and specify at least one alternative (including doing nothing) to deal with it. Predictive information is needed by managers to reduce the risk and uncertainty concerning technology, prices, climate, institutions, and human relationships affecting the business. Such information is vital in formulating production plans and examining related financial impacts. Predictive information takes many forms. What are the expected prices next year? What yields are anticipated? How much capital will be required to upgrade production technologies? What would be the difference in expected returns in switching from a livestock farm to a cropping farm? Management has long used various budgeting techniques, simulation models, and other tools to evaluate expected changes in the business.

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Without detracting from the importance of problem identification and analysis in management, the crux of management tasks is decision making. For every problem a manager faces, there is a right course of action. However, the rightness of a decision can seldom, if ever, be measured in absolute terms. The choice is conditionally right, depending upon a farm managers knowledge, assumptions, and conditions he wishes to impose on the decision. Prescriptive information is directed toward answering the what should be done question. Provision of this information requires the utilization of the predictive information. Predictive information by itself is not adequate for decision making. An evaluation of the predicted outcomes together with the goals and values of the manger provides that basis for making a decision. For example, suppose that a manager is considering a new changing marketing alternative. The new alternative being considered has higher predicted returns but also has higher risks and requires more management monitoring. The decision as to whether to change plans depends upon the

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managers evaluation of the worth of additional income versus the commitment of additional time and higher risk. Thus, the goals and values of a farm manager will ultimately enter into any decision. A management information system (MIS) is 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. MIS is viewed and used at many levels by management. It should be supportive of the institution's longer term strategic goals and objectives. To the other extreme it is also those everyday financial accounting systems that are used to ensure basic control is maintained over financial recordkeeping activities. Financial accounting systems and subsystems are just one type of institutional MIS. Financial accounting systems are an important functional element or part of the total MIS structure. However, they are more narrowly focused on the internal balancing of an institution's books to the general ledger and other financial accounting subsystems. For example, accrual adjustments, reconciling and correcting entries used to reconcile the financial systems to the general ledger are not always immediately entered into other MIS systems. Accordingly, although MIS and accounting reconcilement totals for related listings and activities should be similar, they may not necessarily balance.

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MIS in an INSTITUTION

An institution's MIS should be designed to achieve the following goals: Enhance communication among employees. Deliver complex material throughout the institution. Provide an objective system for recording and aggregating information. Reduce expenses related to labor-intensive manual activities. Support the organization's strategic goals and direction. Because MIS supplies decision makers with facts, it supports and enhances the overall decision making process. MIS also enhances job performance throughout an institution. At the most senior levels, it provides the data and information to help the board and management make strategic decisions. At other levels, MIS provides the means through which the institution's activities are monitored and information is distributed to management, employees, and customers. Effective MIS should ensure the appropriate presentation formats and time frames required by operations and senior management are met. MIS can be maintained and developed by either manual or automated systems or a combination of both. It should always be sufficient to meet an institution's unique business goals and objectives. The effective deliveries of an institution's products and services are supported by the MIS. These systems should be accessible and useable at all appropriate levels of the organization. MIS is a critical component of the institution's overall risk management strategy. MIS supports management's ability to perform such reviews. MIS should be used to recognize, monitor, measure, limit, and manage risks. Risk management involves four main elements: Policies or practices. Operational processes. Staff and management. Feedback devices. Frequently, operational processes and feedback devices are intertwined and cannot easily be viewed separately. The most efficient and useable MIS should be both operational and informational. As such, management can use MIS to measure performance, manage resources, and help an institution comply with regulatory requirements. One example of this would be the managing and reporting of loans to insiders. MIS can also be used by management to provide feedback on the effectiveness of risk controls.

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Controls are developed to support the proper management of risk through the institution's policies or practices, operational processes, and the assignment of duties and responsibilities to staff and managers. Technology advances have increased both the availability and volume of information management and the directors have available for both planning and decision making. Correspondingly, technology also increases the potential for inaccurate reporting and flawed decision making. Because data can be extracted from many financial and transaction systems, appropriate control procedures must be set up to ensure that information is correct and relevant. In addition, since MIS often originates from multiple equipment platforms including mainframes, minicomputers, and microcomputers, controls must ensure that systems on smaller computers have processing controls that are as well defined and as effective as those commonly found on the traditionally larger mainframe systems.MIS for Farm Management

The importance of management information systems to improve decision making has long been understood by farm management economists. Financial and production records have long been used by these economists as an instrument to measure and evaluate the success of a farm business. However, when computer technology became more widely available in the late 1950s and early 1960s, there was an increased enthusiasm for information systems to enhance management decision processes. At an IBM hosted conference, Ackerman, a respected farm management economist, stated that: The advances that have taken place in calculating equipment and methods make it possible to determine the relationship between ultimate yields, time of harvest and climatic conditions during the growing season. Relationship between the perspective and actual yields and changing prices can be established. With such information at hand the farmer should be in a position to make a decision on his prediction with a high degree of certainty at mid-season regarding his yield and income at harvest time. This statement, made in 1963, reflects the optimism that prevailed with respect to information systems. Even though there was much enthusiasm related to these early systems they basically concentrated on accounting activities and production records. Examples include the TelFarm electronic accounting system at Michigan State University and DHIA for dairy operations. These early systems relieved on large mainframe computers with the data being sent to a central processing center and the reports send back to the cooperating businesses. To put these early efforts

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into a management information system framework, the one proposed by Alder is useful. They would be defined as data oriented systems with limited data analysis capabilities beyond calculating typical ratios (e.g., return on assets, milk per cow, etc.). By the mid 1960s it became clear that the accounting systems were fairly effective in supplying descriptive and diagnostic information but they lacked the capacity to provide predictive and prescriptive information. Thus, a new approach was needed a method of doing forward planning or a management information system that was more models oriented. Simulation models for improving management skills and testing system interaction were developed. As an example, Kuhlmann, Giessen University, developed a very robust and comprehensive whole farm simulation model (SIMPLAN) that executed on a mainframe computer. This model was based on systems modeling methods that could be used to analyze different production strategies of the farm business. To be used by managers, however, they often demanded that the model developer work closely with them in using the model.

MIS IN GENERALIn this discussion, I refer to management information systems (MIS) as identifiable sets of policies, models, procedures and files of information which operate to record, manipulate, store, retrieve, process and display information useful in managing some aspect of an organized enterprise. Such systems may depend only on rather simple mechanical devices operated directly by human hands, such as pencils, pens, ledgers, charts, and so on; or they may also depend on more complex devices and machines, such as slide rules, calculators and electronic data processing systems. They all seem to depend on paper to a great extent! Perhaps Moses had the first MIS when he came down the mountain with the Ten Commandments chiseled into stone tablets. At least today's reports carry more information per pound, but they are certainly no lighter to carry than the stone tablets of Moses' day.The basic classes of primary management information systems may be identified as follows:

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General management Financial Logistics Business acquisition Resources

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ROLE OF THE MANAGEMENT INFORMATION SYSTEMThe role of the MIS in an organization can be compared to the role of heart in the body. The information is the blood and MIS is the heart. In the body the heart plays the role of supplying pure blood to all the elements of the body including the brain. The heart works faster and supplies more blood when needed. It regulates and controls the incoming impure blood, processes it and sends it to the destination in the quantity needed. It fulfills the needs of blood supply to human body in normal course and also in crisis. The MIS plays exactly the same role in the organization. The system ensures that an appropriate data is collected from the various sources, processed, and sent further to all the needy destinations. The system is expected to fulfill the information needs of an individual, a group of individuals, the management functionaries: the managers and the top management. The MIS satisfies the diverse needs through a variety of systems such as Query Systems, Analysis Systems, Modeling Systems and Decision Support Systems the MIS helps in Strategic Planning, Management Control, Operational Control and Transaction Processing. The MIS helps the clerical personnel in the transaction processing and answers their queries on the data pertaining to the transaction, the status of a particular record and references on a variety of documents. The MIS helps the junior management personnel by providing the operational data for planning, scheduling and control, and helps them further in decision making at the operations level to correct an out of control situation. The MIS helps the middle management in short them planning,target setting and controlling the business functions. It is supported by the use of the management tools of planning and control. The MIS helps the top management in goal setting, strategic planning and evolving the business plans and their implementation. The MIS plays the role of information generation, communication, problem identification and helps in the process of decision making. The MIS,

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therefore, plays a vita role in the management, administration and operations of an organization. State of Database Management In Organizations: The needs of organizations and management are changeable, diverse and often illdefined, yet they must be met. Added to these are outside pressures from federal taxing authorities, federal securities agencies and legislators making privacy laws. Both internal and external forces demand that organizations exercise control over their data resources. Decisions and actions in the organization are based upon the image contained in the corporate database. Managerial decisions direct the actions at the operational level and produce plans and expectations which are formally captured and stored in the corporate database. Transactions record actual results of organizational activities and environmental changes and update the database to maintain a current image. People in the organization query the database for information to conduct the daily operations. Middle management receives reports comparing actual results to previously recorded plans and expectations. The corporate database provides data for modeling and forecasting which support top management needs. The corporate database supports all levels of an organization and is vital for operations, decision making and the management process. While management seeks to control data resources, computer applications grow. When a corporation achieves comprehensive support of its operations, for instance, computer applications begin to penetrate into higher management levels. With comprehensive database support of operations, an MIS can mature as a tool for planning, control and decision making. Earlier, in the development of an MIS, an organization must appoint a DBA to manage its data resources. While an organizations move toward the database approach can be hastened by the acquisition of a DBMS, the latter is not necessary. Most commercially available DBMSs fall substantially short of ideal capabilities, making their

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acquisition an interim measure - a move to help the organization learn how to operate in a managed data environment. In seeking DBMS capability, building ones own system is unrealistic except for large organizations with special needs, such as a very large database or large volumes of known transactions requiring rapid online response. Data is a vital resource in an organization and must be managed. The organizational database is an essential component in a management information system. Of the four components of a data processing system, attention to data has lagged behind the development of machines and programming technology. Taking a database approach requires an organization to focus on data as a valued resource. Data is separate from programs and application systems which use it.

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Organization Structure and ManagementOrganizations are collections of interacting and inter related human and non-human resources working toward a common goal or set of goals within the framework of structured relationships. Organizational behavior is concerned with all aspects of how organizations influence the behavior of individuals and how individuals in turn influence organizations. Organizational behavior is an inter-disciplinary field that draws freely from a number of the behavioral sciences, including anthropology, psychology, sociology, and many others. The unique mission of organizational behavior is to apply the concepts of behavioral sciences to the pressing problems of management, and, more generally, to administrative theory and practice. In approaching the problems of organizational behavior, there are a number of available strategies we can utilize. Historically, the study of management and organizations took a closed-systems view. The preoccupation of this view is to maximize the efficiency of internal operations. In doing so, the uncertainty of uncontrollable and external environmental factors often were assumed away or denied. This traditional closed-systems view of organizations made substantial contributions to the theory of organizational design. At the same time, for analytical reasons, organizations came to be viewed as precise and complex machines. In this framework, human beings were reduced to components of the organizational machine. More recently, the study of organizations and the behavior of human beings within them have assumed a more open-systems perspective. Factors such as human sentiments and attitudes, as well as technological and sociological forces originating outside the organizations, have assumed greater importance in analyzing organizational behavior.

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The behavior of the organization is a result of the following factors: Organizational Culture; Organizational Power; Organizational Change; Organizational Learning; Organizational Motivation. ORGANISATIONAL CULTURE The cultural is a set of attitudes, beliefs, values, norms and understandings; the people have in the organization. The culture is a collective behavioral result of the people who man the organization. Depending upon the person, whether he is a manager, an officer or a worker, the cultural pattern emerges and it is known as a managerial culture and a work culture, etc. Let us take an example of quality of product which a particular organization manufactures and markets. The attitude of the employees towards quality must be positive and it must be seen in the organization in all the activities. Unless the attitude is positive, it cannot be seen in the product as desired. The culture may be reflected in the philosophy, policy, strategy, goals and managerial style of the organization. If the organization culture is generating a behavior which affects the performance adversely, it can be changed by management actions such as training, education, creating awareness, transferring people, encouraging young recruitments and talent in the organization. ORGANISATIONAL POWER The organizational power is the ability of the organization structure to use human and material resources to achieve the stated goals and objectives of the organization. The power of the organization is distributed uniformly all over the organization but it may be concentrated in small groups representing a function, a department or a section. It might be localized with the individuals.

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Some individuals by virtue of their position, responsibility and seniority, enjoy more power than others. Some individuals by virtue of their nearness to the management and a strong personality derive power in the organization structure ORGANISATIONAL CHANGE Even though the organization is structured properly, over the period of time it starts failing slowly due to the change in the environment, the people and the business. Like a living organization, an organization undergoes a process of birth and death. The process of organization outlives the purpose for which it is established moves much faster, if proper corrective action is not taken. The organization structure in its life cycle, starting from the introduction, growth, maturity and decline should change suitably in the respective phases. The behavioral change through the organizational change is achieved by creating a climate for change, deciding designing and implementing the change, watching and institutionalizing the change. ORGANISATIONAL LEARNING The organizational behavior improves with the experience it gathers from all business fronts. With experience, people are in a position to identify the cause and effect relationship. It is possible to predict the errors and probable mistakes in the business operations. The rules, systems and procedures are streamlined over a period of time. With this learning experience, some changes in the organization structure are inevitable and they should be carried out. The individuals in the organization are able to assess the strength and weaknesses within them and are able to take steps to improve. As organizational learning increase, the organization.s behavior shows maturity. With increased learning the organization moves towards high degree of formalization affecting itself. The organizational learning is faster if people and the management are dynamic and progressive.

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Organizational Motivation Organizational behavior can be monitored and directed if proper motivation is provided to the people. Motivation inspires the people to perform. Monetary rewards, presentations are the known methods of motivation. If a proper leadership is provided it is observed that the people perform beyond expectations. The leadership is an interpersonal influence on the subordinates which persuades or motivates them to perform to perform to achieve the goal. There are two leadership styles, autocratic and supportive. In an autocratic style, the leader determines everything and dictates decisions. The decisions are enforced by the power of authority. Under such a leadership style people are not trained to shoulder higher responsibilities. The enterprising ones are frustrated under such a leadership style. The supportive leadership style calls for participation consultation and respects the opinion of the subordinates. The process evokes initiative amongst the subordinates and gives them a feeling of importance and satisfaction. Another method of motivation is though job environment. A job is to be designed in such a way that it provides challenge to the skills of an employee. It should be a complete task identifiable with the person and with a potential to create an impact on other people or on the business. The person should feel autonomy in its operation and should get the direct feedback of the result.

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MIS: BUSINESS PLANNING Business environment is prone to changes and this factor makes business planning very complex. Some factors such as the market forces, technological changes, complex diversity of business and competition have a significant impact on any business prospects. MIS is designed to assess and monitor these factors. The MIS design is supposed to provide some insight into these factors enabling the management to evolve some strategy to deal with them. Since these factors are a part of the environment, MIS design is required to keep a watch on environment factors and provide information to the management for a strategy formulation. Strategy formulation is a complex task based on the strength and the weakness of the organization and the mission and goals it wishes to achieve. Strategy formulation is the responsibility of the top management and the top management relies on the MIS for information. There are various business strategies such as overall company growth, product,market, financing and so on. MIS should provide the relevant information that would help the management in deciding the type of strategies the business needs. Every business may not require all the strategies all the time. The type of strategy is directly related to the current status of business and the goals it wishes to achieve. The MIS is supposed to provide current information on the status of the business vis--vis the goals. MIS is supposed to give a status with regard to whether the business is on a growth path or is stagnant or is likely to decline, and the reasons thereof. If the status of the business shows a declining trend, the strategy should be of growth. If business is losing in a particular market segment, then the strategy should be a market or a product strategy. The continuous assessment of business progress in terms of sales, market, quality, profit and its direction becomes the major role of MIS. It should further aid the top management in strategy formulation at each stage of business. The business does not survive on a single

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strategy but it requires a mix of strategy operating at different levels of the management. For example, when a business is on the growth path, it would require a mix of price, product and market strategies. If a business is showing a decline, it would need a mix of price-discount, sales promotion and advertising strategies. The MIS is supposed to evaluate the strategies in terms of the impact they have on business and provide an optimum mix. The MIS is supposed to provide a strategy-pay off matrix for such an evaluation. In business planning, MIS should provide support to top management for focusing its attention on decision making and action. In business management, the focus shifts from one aspect to another. In the introductory phase, the focus would be on a product design and manufacturing. When the business matures and requires and requires to sustain or to consolidate, the focus would be on the post sales services and support. The MIS should provide early warning to change the focus of the management from one aspect to the other. Evolving the strategies is not the only task the top management has to perform. It also has to provide the necessary resources to implement the strategies. The assessment of resource need, and its selection becomes a major decision for the top management. The MIS should provide information on resources, costs, quality and availability, for deciding the cost effective resource mix. When the strategies are being implemented, it is necessary that the management gets a continuous feedback on its effectiveness in relation to the objective which they are supposed to achieve. MIS is supposed to give a critical feedback on the strategy performance. According to the nature of the feedback, the management may or may not make a change in the strategy mix, the focus and the resource allocation.Page

MIS has certain other characteristics for the top management. It contains forecasting models to probe into the future-the business model

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for evaluation of the strategy performance by simulation business conditions. It contains functional models such as the model for a new product launching, budgeting, scheduling and the models using PERT /CPM technique for planning. MIS for the top management relies heavily on databases which are external to the organization. The management also relies heavily on the internal data which is evolved out of transaction processing. Management uses the standards, the norms, the rations and the yardsticks while planning and controlling the business activities. They are also used for designing strategies and their mix. The MIS is supposed to provide correct, precise and unbiased standards to the top management for planning. We can summaries the role of the MIS in the top management function as follows. MIS supports by way of information, to 1. Decide the goals and objectives, 2. Determine the correct status of the future business and projects, 3. Provide the correct focus for the attention and action of the management, 4. Evolve, decide and determine the mix of the strategies, 5. Evaluate the performance and give a critical feedback on the strategic failures, 6. Provide cost-benefit evaluation to decide on the choice of resources, the mobilization of resources, and the mix of resources. 7. Generate the standards, the norms, the ratios and the yardsticks for measurement and control. Success of a business depends on the quality of support the MIS gives to the management. The quality is assured only through an appropriate design of the MIS integrating the business plan with the MIS plan.

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ORGANIZATIONAL STRUCTUREOrganizational structure depends on the product to be developed. Wheelwright and Clark define a continuum of organizational structures between two extremes, functional organizations and project organizations. Functional organizations are organized according to technological disciplines. Senior functional managers are responsible for allocating resources. The responsibility for the total product is not allocated to a single person. Coordination occurs through rules and procedures, detailed specifications, shared traditions among engineers and meetings (ad hoc and structured). Products that need a high level of specialized knowledge require a functionally organized structure. A light-weighted matrix organization remains functional and the level of specialization is comparable to that found in the functional mode. What is different is the addition of a product manager who coordinates the product creation activities through liaison representatives from each function. Their main tasks are: to collect information, to solve conflicts and to facilitate achievement of overall project objectives. Their status and influence are less as compared to functional managers, because they have no direct access to working-level people. A heavy-weighted matrix organization exists of a matrix with dominant the project structure and underlying the functional departments. The product manager has a broader responsibility. Manufacturing, marketing and concept development are included. The status and influence of the product manager, who is usually a senior, is the same or higher as compared to the functional manager compared to functional managers, because they have no direct access to working-level people. A project organization exists of product oriented flows: project and teams. The project members leave their functional department and devote all their time to the project. They share the same location. The professionals are less specialized and have brioader tasks, skills and responsibilities. The functional manager is responsible for the personnel development and the more detailed technology research in the functional groups. Companies can be classified to their organizational structures. Another variable company can be classified to is the nature of the projects undertaken. We characterize projects by the number of employees needed to perform the tasks, or workload, and the number of tasks that are fundamentally different in nature. An example of the latter aspect is PCB development and structural design. Another way to classify organization structure is by one of the following four categories: I. The product to be developed is comprehensible for one person. One person is likely to have all the knowledge needed to develop Manufacturing and Assembly. The development department in companies that undertake these kinds of projects are usually very small. If a company consists of more than one department, it is usually structured as a functional organization. The product to be developed has a fairly low complexity, but total work is high. These kind of products are likely to be developed within one functional department. A research department may also be an example of a department in which type II

II.

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III.

projects are undertaken. Are more departments involved, then the light weighted matrix structure is preferable. Employees are involved on a full-time basis. Tasks may be performed concurrently. The sequence can be determined using the Design Structure Matrix. The product to be developed consists of a lot of different elements, such as software, PCB, power supply and mechanical structure. The product is however in the engineering phase, i.e. it is clear what needs to be done to get the product into production. Various disciplines perform their own tasks. These tasks have mostly a low workload. Employees cannot work full-time on one project. This creates a complex situation that may be compared to a job shop situation in production logistics.

Though the comparison between manufacturing and product development is not accepted by all product development managers, it may yield good results. Studying each step in the Product Development Process and fluctuations in workloads reveals ways to reduce variation and eliminate bottlenecks. It is necessary to view the Product Development Process as a process and not as a list of projects. Three important findings regarding this are: 1. Projects get done faster if the organization takes on fewer at a time. 2. Investments to relieve bottlenecks yield disproportionately large time-to-market benefits. 3. Eliminating unnecessary variation in workloads and work processes eliminates distractions and delays, thereby freeing up the organization to focus on the creative parts of the task. Creating cross-functional concurrent engineering teams is the right way to develop products. However, the pitfall is too many project at the same time, so that key people from engineering, marketing and manufacturing work at five or more projects at once. This results in congestion. Striving to work at 100% of the product development capacity legthens product development lead times enormously. A more realistic percentage is 80%. Attention must be focused on bottlenecks, these days most commonly found at the software development side of the project. IV. The product is complex. Total work is high. Employees can thus participate on a full-time basis. A project organization is the most appropriate organizational structure for these kind's of products. The structure is built to achieve goals and objectives fitting into the environment. The structure built on any principle shows division of work, managerial and non- managerial manpower allocation as well as flows of decision responsibility and exchange of information.

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Business ProcessTOOLS OF PLANNING Planning, long-range or short-range, strategic or tactical, involves a series of decisions to be taken by the managers in the organization. So when we talk about the tools of planning, we are talking about the tools of decision-making with reference to planning. Decisions relate to several aspects of corporate business planning. There are number of alternatives, choices and options available while planning the business. Further, there is selection of resources and their allocation in an optimum manner to maximize the gains.Then there is selection of method whereby the efforts at all the levels are coordinated towards a common goal and direction. The planning, therefore, involves decision-making with the help of tools. These tools are based on one or more factors. These factors are: Creativity: Systems approach: Sensitivity analysis: Modeling. Creativity Creativity comes out of an experience, a judgment, an intuition of an individual or a group of individuals. When decision making is called for a situation which has no precedent then creativity is the only tool to resolve the problem of decision making. Creativity is the result of the conceptual skills of an individual. The conception skills comprise the following skills. 1. The ability to generate a number of ideas rapidly. 2. The ability to change quickly from one frame of reference to another. 3. Originality in interpreting an event and generating different views on the situation. 4. The ability to handle with clarity and ease a complex relationship of various factors in a given situation. A person who possesses these skills in said to have a conceptual fluency. If an organization has a number of people, at least at key positions, with conceptual fluency, then it becomes a creative organization. Such an organization creates new ideas and new strategies for development of business. The plans are made on the strength of experience and conceptual fluency.

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Systems Approach Systems approach to planning considers all the factors and their interrelationship relevant to the subject. It takes a course to an analytical study of the total system, generates alternative courses of action and helps to select the best in the given circumstances. It is uses in situation of risk or uncertainty, and examines the various alternative courses of action. I help to find solutions to problems. The systems approach helps to understand the situation with clarity. It helps to sort out the factors on the principles of critical and non-critical, significant and insignificant, relevant and irrelevant, and finally controllable and uncontrollable. It tests the solutions for feasibility-technical, operational and economic. It further studies the problems of implementation of the solution. Broadly, the systems approach has the following characteristic: 1. It uses all the areas and the branches of knowledge. 2. It follows a scientific analysis to identify the problem. 3. It uses a model of a complex situation to handle the problem. 4. It weighs cost against benefit for assessment of the alternatives. 5. It deals with the problems where time context is futuristic. 6. It considers the environment and its impact on the problem situation. 7. Every solution is tested on the grounds of rationality and feasibility, and accepts a given criterion for selection of the most preferred alternative. 8. It uses operations research models if the problem is well defined. Alternately,it uses a simulation approach to solve the problem. It uses tools such a Gantt chart, PERT/CPM, Network analysis for scheduling and coordinating the activities. The systems approach is a way of looking at a problem in a systematic manner using the scientific methods and applying the principles of a rational decision making to solve the problem. Sensitivity Analysis The sensitivity analysis helps to test the validity of the solution in variable conditions. The problem situation is handled with certain assumptions and conditions. Based on these considerations, a rational solution is found. Sensitivity analysis requires knowing whether the solution will still remain valid if the assumptions changed, constraints were relaxed and new condones emerged. It helps to assess the impact of change on the solution in economic terms. If various factors are involved, the sensitivity analysis helps to assess the criticality of the factor against the impact it makes on the solution. Some factors will

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be highly sensitive and some will not be so. Most of the decision making problems are resolved on the principle of optimality, where you are trying to balance the two aspects of the problems, such as, inventory carrying cost versus ordering cost, waiting time cost versus idle time cost, costs, verses benefits, opportunity loss versus investment cost and so on. The sensitivity analysis helps to test the validity of the optimal solution under changed conditions. Sensitivity analysis helps to test the solutions on the principle of utility. A solution which is economically rational and is based on sound business principles may be rejected on the principle of utility. The utility profiles of all the people in the organization are not the same. The utility profile, alternately known as a preference curve, shows the attitude and preference of the decision maker towards the gains and the losses against a time scale. The profile shows indirectly the risktaking ability of the decision maker. It uses techniques such as the decision tree analysis, methods of discounting, payoff matrix, simulation, and the modeling. Modeling A model is a meaningful representation of a real situation on a mini scale, where only the significant factors of the situation are highlighted. The purpose of a model is to understand the complex situation based on only the significant factors. There are several types of models. The model could be a physical model, like a model of a house, a park, a sports complex, etc. The model could be a scale model reducing a large body to a small one. The model could be mathematical model like break even analysis model, linear programming model, queuing model, network model, etc. Here a situation is represented in a mathematical form such as equations, matrices graphs and polynomials. A complex situation is represented using variables, constants and parameters which play a significant role in that situation. The model is based on the relations the variables have. The relation among the variables may be linear or non-linear. The model only considers the relation of high significance. The model, when a situation is complex, tries to simplify the complexity by ignoring minor factors and emphasizing only minor important factors. A model could be static or dynamic. The physical models are static models. Some business models like the break even analysis model, the statistical regression models and some of the O.R.programming models are static models. The static model does not change over a time period.

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All the planning models and all the forecasting models are dynamic models. In a dynamic model, in addition to the variables considered, time is a dimension of the variables. The values of these variables change with the change in time. Such variables are called the stochastic variables. A model, physical or mathematical, static or dynamic, needs to be tested for its utility or effectiveness. The model can be tested by using the control results already obtained. This would show the difference between the result given by the model and the actual result in a real life situation. If the difference is not significant, then one can say that the model represents the real situation. Once the model is proved useful, it is used for testing the various solution alternatives. The selection of a solution, from many alternative solutions, depends on the objective chosen. In a linear programming model, a solution is selected on the principle of maximization of the profit or minimization of the cost. In the queuing model a solution is selected, when the cost of the waiting time of a customer is less than the cost of the idle time of facility. The selection of a solution is based on the attainment of certain value of some aspect of the business, such as the turnover, the cost and the profit and so on. The planning model considers those business variables which affect the business prospects and which show a significant impact on the business results. The long-range strategic models are, generally, dynamic models and the shortrange management and operations models are mostly static models.

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End chapter quizzesThe term used to describe the degree to which tasks in an organization are divided into separate jobs isWork specialization Span of control Centralization Chain of command

The accounting department in an organization is an example of a __________ organized department.Functionally Product Customer Geographically

__________ refers to the right inherent in a managerial position to tell people what to do and expect them to do it.Responsibility Unity of command Authority Accountability

Employees with more training and experience are able to work with less direct supervision whichCreates a highly centralized organization. Allows for a wider span of control and a flatter organization.

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Requires a very narrow span of control and more levels of managers.

Violates Fayols principle of chain of command.

An organization that wants to be more responsive to changes in its environment, especially to customers, is likely to have an organization structure that isVery formal and rule oriented. Highly centralized. Decentralized and empowers employees. Mechanistic

Alfred Chandler initially researched the strategy-structure relationship. Current frameworks show that an organization that pursues meaningful and unique innovations is likely to haveA flexible, free-flowing, organic design. A highly mechanistic and controlled structure. Very narrow spans of control and a lot of supervisory controls. Very little employee empowerment.

Since Woodwards original work on the relationship between technology and structure, studies have shownNo relationship between these two variables. That organizations adapt their structures to their technology. That organizations need not adapt their structure to the technology. The more routine the technology the more organic the structure must be.

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Module II Information Technology Infrastructure

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Managing Your Organizations Technology AssetsBy: Chris Peters

This article was adapted from a forthcoming IT workbook created by TechSoup's MaintainIT Project, an effort funded by the Bill & Melinda Gates Foundation to gather and distribute stories around maintaining and supporting public computers. IT Asset management refers to any set of processes and procedures that help an organization keep track of its technology resources. At the simplest level, asset management is really just inventory control. What hardware and software do you own, and where is it located? In its more advanced forms, asset management can help you better understand how your staff uses technology, with the goal of becoming more efficient and standardized in your purchasing and decision making. Most organizations use software to help track their assets. A Microsoft Excel spreadsheet will do in a pinch, especially for smaller organizations. However, lots of programs are designed specifically for asset control. A few of these programs are discussed in more detail in the Further Resources section that follows. Among other things, an asset management system should be able to record serial numbers, vendor contact information, warranty information, software license numbers, activation keys, hardware configuration and networking data (for example, IP address, subnet mask, etc). Keep in mind that asset management is a continuous process rather than a one-time event to help your organization comply with regulations and license agreements. Any time you acquire new software or hardware, it has to be entered into the asset management system. Any time you move a computer or dispose of it, those changes have to be recorded. IT managers and software vendors sometimes distinguish between hardware asset management and software asset management (also known as SAM or software license management). The term IT asset management encompasses both hardware and software. As youre doing research, youll also see reference to asset management as it relates to finance and investment, which is completely unrelated to the topic of this article.

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Why Use an Asset Management System? Avoiding duplicate purchases.

When youre managing 20, 50 or 200 computers, how often do you lose track of what you own? How often do you over-purchase, buying extra licenses or extra copies that you dont really need? The software may be hidden in someones filing cabinet. Maybe you decommissioned an old computer and never reclaimed the software licenses. If a colleague needs a new computer, do you have an unused PC in the building? Does it have enough power and memory? Do you have the right software licenses? Its easy to lose track of computers, printers, routers, cell phones, PDAs, and its even easier to lose track of software CDs and software licenses. Asset management can help stop you from buying more than you need. Automating reports and inventories.

How many PCs in your nonprofit are more than four years old? Which computers need an update because they have an old version of Adobe Reader or Flash? Which machines dont have enough RAM to run Office 2007? You can answer all of these questions with good asset management software. Renegotiating license agreements.

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With asset management software, youll know which machines have installed copies of a particular program. You might find that you have 35 copies of Microsoft Office installed in your organization, but youve paid for 40 licenses. Maybe you installed Adobe Photoshop on someones PC last year, but that staffer moved on to another project and doesnt use the software anymore. In other words, you may be able to remove unused and under-used copies of a program and then renegotiate that licensing agreement. Or you can reclaim forgotten copies of the software and offer them to other employees. Even if you cant renegotiate your licensing agreement, youll have a better sense of usage patterns so that you dont over-purchase in the future. Some asset management software will actually keep track of how often your end-users are running different applications (this function is sometimes known as software metering). Saving time.

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Having all of your IT information in a single, centralized location will save you countless hours of frustrated searching. How many times in the average month do you need to track down a software license number, an activation key, the phone number of a sales representative or a tech support department? Complying with software license agreements.

Once you buy a copy of Adobe Photoshop or Microsoft Office, its easy to start installing the software everywhere, regardless of how many licenses you actually own. There might be three or four people in the organization who think theyve been empowered to install software and manage licenses. Or it could be that no one is doing this. Whatever the reason, lack of centralized asset management often leads to violations of software licensing agreements. In other words, if the Business Software Association (BSA) ever audits your organization, you could be faced with significant fines for mismanaging software. Standardizing your IT environment.

After you have an up-to-date inventory of your hardware and software, you may notice that you own three different graphics editing programs and four different word processing programs. And you have 12 different hardware configurations. If youre trying to simplify maintenance and troubleshooting by standardizing your IT environment, an asset management system will help you establish a baseline. It also helps you ensure that new technology acquisitions meet the standards that youve established. Responsible accounting.

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If you receive funds from government agencies or large foundations, your activities are, no doubt, overseen by a wide array of financial regulations designed to prevent fraud and abuse. Furthermore, you probably have your own set of internal regulations and guidelines to adhere to. For example, if you purchased new computers within the past few years, your funders may ask you to locate those PCs and match them to your purchasing records. Also, if you

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bought a grant-funded computer to help manage mass mailings to your constituents, that computer should be dedicated to its original task for a certain amount of time. Asset management tools can help you in locating and identifying equipment in this way. Planning and budgeting.

If you always have an up-to-date inventory of your current hardware and software, its much easier to predict your future requirements.

Evaluation Criteria Decide what youll track.

Make a list of the information youre tracking now and discuss with your colleagues whether you should be tracking anything else. This can help you decide on an asset management tool. Do you need software for this?

A lot of small nonprofits use a notebook to track their IT assets, and it costs about $4. If youre ready to go digital, a spreadsheet may be all you need if you only manage a handful of computers. However, even for small organizations there are advantages in using specialized asset management software such as TechAtlas or Spiceworks. How much does it cost? TechAtlas is a free program that combines asset management, technology planning and help desk management functionality. You can use it to document the configuration of desktop PCs, servers, printers, local networks, wide area networks, Internet connections, and more. Its easy to use, andWebJunction provides documentation, training, and support. Spiceworks is another free program with good asset management functionality.

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How automated is it?

Some asset management programs are better than others at detecting changes in hardware and software on your network. Some asset management tools dont have an automated scanning utility at all, and youll need to manually enter information about the software and hardware components of each PC. With other programs you have sit down at each machine (or login remotely) and begin the scan one machine at a time. With more advanced asset management programs you can set your machines up so they periodically send information about their current hardware and software configuration back to a centrallocation, or the program itself queries all the computers on the network.

Once Youve Found an Asset Management Tool Create a baseline inventory.

Once youve picked a tool, do a complete inventory of the hardware and software in your organization. Assess your licensing compliance.

Once you have a complete list of all your software, compare it to your current software-licensing agreements and ask yourself if you are under-licensed in any key areas.

Look for savings.

Do you have more copies of a program and more software licenses than you really need? You might be able to renegotiate with the software vendor, sell some of your unused copies, or plan better so you dont over-purchase again next time.

Simplify.After youve completed your inventory, ask yourself and your staff, Are there any ways we can simplify and standardize our hardware and software so that were supporting fewer configurations?

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Further ResourcesIT Asset ManagementThe Wikipedia articles on asset management in general and software asset management in particular have useful information. Systems management software suites often include tools for managing hardware and software assets. Microsofts System Center Configuration Manager 2007 is one such package and its available to many nonprofits through Techsoup. In addition, help desk management applications, network monitoring programs and other IT management tools often contain asset management functionality. So look around. You might already own an asset management tool. TechAtlas and Spiceworks are two free products with robust asset management features. If youre looking for a standalone, proprietary asset management program, there are dozens to choose from. Examples include SystemHound, Computer Admin, and Numara Track-it.

Software Asset Management (aka Software license management)Microsoft has developed lots of material on software asset management. You might begin with SAM Step by Step. They also created a free tool called the Software Inventory Analyzer that crawls your network and collects information about the installed Microsoft programs. Keyfiler and LicenseKeeper (Mac only) focus solely on software asset management. They appear to be fairly simple tools and might not work well in a larger nonprofit. For a discussion of other low cost techniques for managing software licenses check out this review at Lifehacker, especially the comments thread.

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A traditional File management system would look like

But this system will bring in lots of trouble: Data redundancy Program-data dependence Lack of flexibility Poor security Lack of data-sharing and availability

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That is why new companies and many old companies are shifting there focus to Database Management System (DBMS) A database is a collection of data organized to service many applications at the same time by storing and managing data so they appear to be at one location. The Database Management System (DBMS) Software which creates and maintains databases Eliminates requirement for data definition statements in Application Programs Acts as interface between application programs and physical data files Separates logical and physical views of data Components of a Database Data Definition Language: Specifies content and structure of database and defines each data element Data Manipulation Language: Manipulates data in a database

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Data Dictionary: Stores definitions of data elements, and data characteristics Types of database Hierarchical DBMS Organizes data in a tree-like structure Prevalent in large legacy systems Less flexible than RDBMS Lacks support for English language-like queries Relational DBMS (RDBMS) Represents data as 2D tables called relations Relates data across tables based on key Egs: DB2, Oracle, MS SQL Server, MS Access Three Basic Operations in a Relational DBMS Select: Creates subset of rows that meet specific criteria Join: Combines relational tables to provide users with information Project: Enables users to create new tables containing only relevant information Data Warehouse Consolidates current and historical data Supports query tools for management decision making Data Mining Tools for finding hidden patterns and relationships in large pools of data

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End module quizzesEvery record in a file should contain:more than one field. an entry in the key field. at least one numeric field. a denominating stabilizer.

The confusion created by data redundancy makes it difficult for companies to:create online processing capabilities. work in batch processing load. use a distributed database. integrate data from different sources.

Data redundancy occurs when:multiple reports are accessed simultaneously. the programs that access the data are changed. different users enter information. fields in many different files contain the same information.

The data dictionary is the automated or manual file that:stores information about data elements and data characteristics. allows the creation of supplementary reports. presents the data as they would be perceived by end users.

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is used in conjunction with conventional third- or fourth-generation programming languages.

A field is also called a(n):attribute. data element. Characteristic. entity-relationship.

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Module III Management and Organizational Support Systems for the Firm

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Management and Organizational Support Systems for the FirmDECISION MAKING CONCEPTS If we would talk about decision then the simplest definition of decision can be the act of making up your mind about something; "the burden of decision was his"; "he drew his conclusions quickly" The word decision is derived from the Latin root decido, meaning to cut off. The concept of decision, therefore, is settlement, a fixed intention bringing to a conclusive result, a judgment, and a resolution. A decision is the choice out of several options made by the decision maker to achieve some objective in a given situation. Business decisions are those, which are made in the process of conducting business to achieve its objectives in a given environment. In concept, whether we are talking about business decisions or any other decision, we assume that the decision maker is a rational person who would decide, with due regard to the rationality in decision making. The major characteristics of the business decision making are: (a) Sequential in nature. (b) Exceedingly complex due to risks and trade offs. (c) Influenced by personal vales (d) Made in institutional settings and business environment. The business decision making is sequential in nature. In business, the decisions are not isolated events. Each of them has a relation to some other decision or situation. The decision may appear as a snap decision but it is made only after a long chain of developments and a series of related earlier decision.Page

The decision making process is a complex process in the higher hierarchy of management.

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The complexity is the result of many factors, such as the inter-relationship among the experts or decision makers, a job responsibility, a question of feasibility, the codes of morals and ethics, and a probable impact on business. The personal values of the decision maker play a major role in decision making. A decision otherwise being very sound on the business principle and economic rationality may be rejected on the basis of the personal values, which are defeated if such a decision is implemented. The culture, the discipline and the individuals commitment to the goals will decide the process and success of the decision. Whatever may be the situation, if one analyses the factors underlying the decision making process, it would be observed that there are common characteristics in each of them. There is a definite method of arriving at a decision: and it can be put in the form of decision process model. The decision making process requires creativity, imagination and a deep understanding of human behavior. The process covers a number of tangible and intangible factors affecting the decision process. It also requires a foresight to predict the post-decision implications and a willingness to face those implications. All decisions solve a problem but over a period of time they give rise to a number of other problems.

Decision Making process: It is said that an efficient decision-making involves a series of steps that require the input of information at different stages of the process, as well as a process for feedback. A decision: Is only as good as the data that informed it Is only as good as it is an informed one

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Is only good if you have the means to implement it

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Is only as good as the system which exists to implement

Is only good if other people understand it and what it means Decision making videos: http://www.youtube.com/watch?v=H3HmwVOMVFo

An ideal Decision making process would look like according to Baker

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Typology of Decisions: Robert Anthonys Classification: Strategic Planning Management Control Operational Control Simons Classification Programmed/ structured decisions Nonprogrammed/ Unstructured decisions

Properties of Programmed/ structured decisions: Well-defined decision situation Some specified procedure or decision rule can be applied Routine and repetitive Can be modeled as a quantitative model Can be delegated to lower levels or automated

Properties of Non-programmed/ unstructured decisions: Not well-defined Have no pre-specified procedure or decision rule Decision situation may be novel one (e.g.: catastrophe) Or it may be related to recurring problems where conditions change very frequently and so substantially that no decision rule can be specified Cant be delegated to lower levels and cant be automated

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Semi-structured/ partially programmed decisions: Decisions falling within the two extremes Some semblance of structuring is possible, which is then programmed Human judgment is applied to the situational factors which are not structured and thus not programmed

Classifying Decisions on the basis of - Knowledge of Outcomes: Decisions under certainty Outcome of each alternative is fully known Only one outcome for each alternative Decisions under risk Possibility of multiple outcomes Probability of occurrence can be attached Decisions under uncertainty Number of outcomes for each alternative and their probabilities of occurrence not known

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Decision Support SystemAbbreviated DSS, the term refers to an interactive computerized system that gathers and presents data from a wide range of sources, typically for business purposes. DSS applications are systems and subsystems that help people make decisions based on data that is culled from a wide range of sources. For example: a national on-line book seller wants to begin selling its products internationally but first needs to determine if that will be a wise business decision. The vendor can use a DSS to gather information from its own resources (using a tool such as OLAP) to determine if the company has the ability or potential ability to expand its business and also from external resources, such as industry data, to determine if there is indeed a demand to meet. The DSS will collect and analyze the data and then present it in a way that can be interpreted by humans. Some decision support systems come very close to acting as artificial intelligence agents. Information Systems researchers and technologists have built and investigated Decision Support Systems (DSS) for approximately 40 years. This paper chronicles and explores the developments in DSS beginning with building modeldriven DSS in the late 1960s, theory developments in the 1970s, and the implementation of financial planning systems, spreadsheet DSS and Group DSS in the early and mid 80s. Data warehouses, Executive Information Systems, OLAP and Business Intelligence evolved in the late 1980s and early 1990s. Finally, the chronicle ends with knowledge-driven DSS and the implementation of Web-based DSS in the mid-1990s. DSS applications are not single information resources, such as a database or a program that graphically represents sales figures, but the combination of integrated resources working together. A decision support system is a way to model data and make quality decisions based upon it. Making the right decision in business is usually based on the quality of your data and your ability to sift through and analyze the data to find trends in which you can create solutions and strategies for. DSS or decision support systems are usually computer applications along with a human component that can sift through large amounts of data and pick between the many choices. While many people think of decision support systems as a specialized part of a business, most companies have actually integrated this system into their day to

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day operating activities. For instance, many companies constantly download and analyze sales data, budget sheets and forecasts and they update their strategy once they analyze and evaluate the current results. Decision support systems have a definite structure in businesses, but in reality, the data and decisions that are based on it are fluid and constantly changing. The key to decision support systems is to collect data, analyze and shape the data that is collected and then try to make sound decisions or construct strategies from analysis. Whether computers, databases or people are involved usually doesn't matter, however it is this process of taking raw or unstructured data, containing and collecting it and then using it to help aid decision making. It is important to note that although computers and artificial intelligence is at work or in play with data, it is ultimately up to humans to execute these strategies or comprehend the data into a usable hypothesis. It is important to note that the field of DSS does not have a universally accepted model, meaning that there are many theories vying for supremacy in this broad field. Because of there are many working theories in the topic of DSS, there are many ways to classify DSS. For instance, one of the DSS models available is with the relationship of the user in mind. This model takes into consideration passive, active and cooperative DSS models. Decision support systems that just collect data and organize it effectively are usually called passive models, they do not suggest a specific decision, and they only reveal the data. An active decision support system actually processes data and explicitly shows solutions based upon that data. While there are many systems that are able to be active, many organizations would be hard pressed to put all their faith into a computer model without any human intervention. A cooperative decision support system is when data is collected, analyzed and then is provided to a human component which then can help the system revise or refine it. It means that both a human component and computer component work together to come up with the best solution. While the above DSS model takes the relationship of the user in mind, another popular DSS model takes into consideration the mode of assistance as the underlying basis of the DSS model. This includes the Model Driven DSS, Communications Driven DSS, Data Driven DSS, Document Driven DSS, and Knowledge Driven DSS. Model Driven DSS is when decision makers use statistical, simulations or financial models to come up with a solution or strategy. Keep in mind that these

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decisions are based on models; however they do not have to be overwhelming data intensive. A Communications Driven DSS models is when many collaborators work together to come up with a series of decisions to set in motion a solution or strategy. This communications driven DSS model can be in an office environment or on the web. A Data Driven DSS model puts its emphasis on collected data that is then manipulated to fit the decision maker's needs. This data can be internal, external and in a variety of formats. It is important that usually data is collected and categorized as a time series which is a collection of data that forms a sequence, such as daily sales, operating budgets from one quarter to the next, inventory levels over the previous year, etc. A Document Driven DSS model uses documents in a variety of data types such a text documents, spreadsheets and database records to come up with decisions a well as further manipulate the information to refine strategies. A Knowledge Driven DSS model uses special rules stored in a computer or used by a human to determine whether a decision should be made. For instance, for many day traders a stop loss limit can be seen as a knowledge driven DSS model. These rules or facts are used in order to make a decision. You can also look at the scope in which decisions are made as a model of DSS. For instance, an organizational wide decision, department decision or single user decision, can be seen in the scope wide model.

Brief HistoryIn the 1960s, researchers began analytically studying the use of computerized quantitative models to assist in decision making and planning (Raymond, 1966; Turban, 1967; Urban, 1967, Holt and Huber, 1969). Ferguson and Jones (1969) reported the first investigational study using a computer aided decision system. They investigated a production scheduling application running on an IBM 7094. In retrospect, a major historical turning point was Michael S. Scott Morton's (1967) dissertation field research at Harvard University. Scott Mortons study involved building, implementing and then testing an interactive, model-driven management decision system. Fellow Harvard Ph.D. student Andrew McCosh asserts that the concept of decision support systems was first articulated by Scott Morton in February 1964 in a basement office in Sherman

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Hall, Harvard Business School (McCosh email, 2002) in a discussion they had about Scott Mortons dissertation. During 1966, Scott Morton (1971) studied how computers and analytical models could help managers make a recurring key business planning decision. He conducted an research in which managers actually used a Management Decision System (MDS). Marketing and production managers used an MDS to coordinate production planning for laundry equipment. The MDS ran on an IDI 21 inch CRT with a light pen connected using a 2400 bps modem to a pair of Univac 494 systems. The pioneering work of George Dantzig, Douglas Engelbart and Jay Forrester likely influenced the feasibility of building computerized decision support systems. In 1952, Dantzig became a research mathematician at the Rand Corporation, where he began implementing linear programming on its experimental computers. In the mid-1960s, Engelbart and colleagues developed the first hypermediagroupware system called NLS (oNLine System). NLS facilitated the creation of digital libraries and the storage and retrieval of electronic documents using hypertext. NLS also provided for on-screen video teleconferencing and was a forerunner to group decision support systems. Forrester was involved in building the SAGE (Semi-Automatic Ground Environment) air defense system for North America completed in 1962. SAGE is probably the first computerized data-driven DSS. Also, Professor Forrester started the System Dynamics Group at the Massachusetts Institute of Technology Sloan School. His work on corporate modeling led to programming DYNAMO, a general simulation compiler. In 1960, J.C.R. Licklider published his ideas about the future role of multi access interactive computing in a paper titled Man-Computer Symbiosis. He saw mancomputer interaction as enhancing both the quality and efficiency of human problem solving and his paper provided a guide for decades of computer research to follow. Licklider was the architect of Project MAC at MIT that furthered the study of interactive computing. By April 1964, the development of the IBM System 360 and other more powerful mainframe systems made it practical and cost-effective to develop Management Information Systems (MIS) for large companies (cf., Davis, 1974). These early MIS focused on providing managers with structured, periodic reports and the information was primarily from accounting and transaction processing systems, but the systems did not provide interactive support to assist managers in decision making.

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Around 1970 business journals started to publish articles on management decision systems, strategic planning systems and decision support systems (cf., Sprague and Watson 1979).. For example, Scott Morton and colleagues McCosh and Stephens published decision support related articles in 1968. The first use of the term decision support system was in Gorry and ScottMortons (1971) Sloan Management Review article. They argued that Management Information Systems primarily focused on structured decisions and suggested that the supporting information systems for semi-structured and shapeless decisions should be termed Decision Support Systems. T.P. Gerrity, Jr. focused on Decision Support Systems design issues in his 1971 Sloan Management Review article title