National Institute of

Business Management
Master of Business (
Administration M
B
A
)
Management Information System
 CONTENTS

Chapter Title Page No.

I INTRODUCTION AND BASIC CONCEPTS 5

II COMPOSITION AND STRUCTURE OF

MIS - DEVELOPMENT 18

III ROLE OF MIS IN ORGANIZATION -

PLANNING AND DECISION MAKING 29

IV IMPLEMENTATION OF MIS IN ORGANIZATION 44

V COMPUTER AND DATA MANAGEMENT IN MIS 59

VI EMERGING TRENDS IN MIS 78

VII MIS IN MARKETING INFORMATION SYSTEM 86

VIII FUTURE THRUSTS AND METHODOLOGIES

OF MANAGEMENT INFORMATION SYSTEMS 100
 CHAPTER - I
INTRODUCTION AND BASIC CONCEPTS

Objective
Management Information Systems are of pivotal importance for the array of industries
and organisations. MIS is an excellent tool to provide management information at all stages of
decision making, thus, greatly helping an organisation to achieve its set of goals and objectives.
MIS may be explained as a distinct methodology in conceiving, creating, planning and
implementation of all managerial functions.
An effective MIS helps to supply accurate, relevant and timely information to the
management of the organisation and that of a poor MIS may provide inaccurate, irrelevant and
obsolete information which becomes too expensive or fatal to an organisation.

CONCEPTS
The word ‘MIS’ comprises of three basic elements such as :
a) Management
b) Information
c) System

Management
The Management is the technique of getting things done through people by following
careful planning, organizing, staffing, directing and controlling. The effective management process
includes right communication, motivation, and leadership by incorporating dynamism in
implementing an integrated frame work of system. The word management also may be defined as
working with and through individuals and groups to accomplish total organisational goals. It may
be applicable to any organisation viz., business, educational institutions, hospitals, families, social
institutions and political organisations.
A management process involves planning, organising, motivating and controlling in the
capacity of Presidents, Chairperson, Department Heads, Foremen, Superiors, College Deans,
Bishops and Governmental Heads or even a well run Household Manager. Management hierarchy
involves strategic planning, Management control and operational supervision.
Planning involves setting up of goals for the Organisation’s development, (preparing work
maps, job charts etc.).
The first level i.e., strategic planning decides what should be the type of business now
and what should be the nature of business in the near future.
The next level, management control, includes processor functions that facilitate the
management of those processes delegated to the operational control level. An example of this
is
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production scheduling, where a system is established wherein a product passes through various
points for transformation within a factory. The feed back received from the production scheduling
process helps the management to have proper control over the operation.

Operational control narrates the processes performed to control the basic product or
services of the Company.

Information

The concept MIS gives very high regard to the individual and his ability to use
information. MIS gives information through data analysis. Therefore, while analyzing data, it
depends on many academic disciplines. These generally include theories, principles and concepts
from management science, management accounting, operational research, organisational behaviour,
computer engineering science etc. Human psychology makes MIS more effective and useful. These
disciplines are used in designing the MIS, evolving decision support tools for modeling and
decision making. The foundation of MIS is the principles of management and practices.
Management information system can be evolved for a specific objective, if it is developed after a
systematic planning and design. It demands for an analysis of business, management views and
policies, organisational culture and management style.

The concept therefore, is a blend of principles, theories and practice of management

information and system giving rise to a single product known as MIS.

Conceptual view of MIS

Information systems
Business goals and mission Application of pure and Social sciences
Application of principles and practices of management

Use of database and knowledge base

Computers and information technology

The physical view of the MIS can be seen as an assembly of several sub-systems based

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on databases in the organisation. These may range from data collection, transaction processing
and

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validating, processing, analysing and storing the information in the database. The sub-system can be
at functional level or corporate level.

The physical view of the MIS can be outlined as follows :

MIS

Business information system

Mission critical applications

Functional information sub systems

Data and knowledge base

Data processing and analyzing system

Validating systems and storage

The MIS has been understood and described in a number of ways. It is also referred to as:
a) Information system
b) Information and decision system
c) Computer based information system
MIS can be defined in a number of ways :
1. The MIS is defined as a system which provides information support for decision making
in the organisation.
2. MIS is an integrated system of men and machines for providing the information to
support the operations, the management and decision making functions in the
organisation.
3. MIS is defined as a system based on the database to the Organisation evolved for the
purpose of providing information to the people in the Organisation.
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 4. MIS can be explained as computer based information system.

In present day world the MIS is a computerized business processing system, generating
information for the people in the Organisation to meet the information needs for decision making
to achieve corporate objectives of the Organisation. In order to achieve better grip on the
activity of information processing, it is essential to have a formal system which should take care of
the following points.

◆ Handling of huge data.

◆ Confirmation of the validity of data and transactions.
◆ Complex processing of data and multi-dimensional analysis.
◆ Quick search and retrieval.
◆ Mass storage of data
◆ Communicating the information system to the user.
◆ Achieving the changes needed of the
information. The important ingredients of MIS are as
follows:

(i) Concept and value of information such as planning, implementation and controlling.
(ii) The management functions associated with information.
(iii) MIS incorporates the dynamism associated with its operations as well as implementation
in an integrated frame work of system approach.

Systems

A system is an integrated set of components or entities, that interact to achieve a

particular function or goal. The system has characteristics such as boundaries, outputs, inputs,
methods of converting inputs into outputs and system interfaces.

Systems are composed of interrelated and inter dependent sub systems. Eg. a college
class room, which includes class room situation including instructor, students, text books and
facilities. This can be depicted as below.
Input Teacher Students Output
Students with
skills and
(Students without knowledge
Textbooks and Facilities
knowledge and
skills) Course material

System boundaries

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 Every system has a boundary that defines its scope of activities. For example, the activities
in a class room include lectures, discussions, examinations, grading etc., with the responsibilities of a

10
teacher to perform duties. In this case boundary delineates area of responsibility. While defining a
system one should establish its boundaries.

Sub system
The main system consists of several sub-systems; each of these has elements, interactions
and objectives. Sub-systems perform specialised tasks related to overall objectives of the total
system. For example, a defined degree of course in a college will have several courses as a sub-
system. In a business system various functions such as marketing, finance and product
manufacturing are sub- systems.

Inputs and Outputs

The inner working of a system or sub-systems are organized to produce outputs from
inputs. In this conversion process some value or utility should be added. For example, training
programme to produce trained employees with adequate knowledge and skills.

Interface
Interface is a connection at system or sub system boundaries. This serves as a medium
to convey the output from one system as the input of another system. For example, two typical
business systems that interface with each other are inventory control and purchasing.
Information is generally defined as “ data that has been processed into a form that is
meaningful to the recipient and whose real value has been perceived”. The term ‘data and
information’ are often used interchangeably, however, data is the raw material for the information.
The constrains of information communication can be classified into three levels: -
a) Technical level How accurately can information be transmitted?
b) Presentation level How precisely do the transmitted symbols, signs,
convey the desired meaning?
c) Effectiveness level (quality) How suitable is the message to motivate human action?
Different management levels need different types of information as they perform
different functions in an organisation.
Most of the engineering products are complicated, hence can only be designed by
considering them as a system. System is explained as a set of elements joined together to
achieve common objectives. A system is made up of sub-systems composed of further sub-
systems. For example, the business organisation is a system and parts such as divisions,
departments, functions, units etc. are sub-systems.
The word ‘system may be defined as engineering artifacts that are easily analyzed,
described or designed and is an assembly of simpler components’.

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Illustration of system
:- System
(Business organisation)

Sub-systems

Marketing Production Finance Materials Personnel

Sub-sub system of marketing

Sales Marketing Promotion

Research

Sub-sub-sub-system of promotion

Publicity Advertising Direct Selling

A piece of data is a system element, for example, pay cheque is a system and
receiver’s names, amount etc., are sub-systems.

Information needs at different management levels:

(1) Top management Unstructured, non-programmed, future, inexact, external etc.\
(2) Operating management Structured, programmed, exact, historical, internal etc.
(3) Middle management In between of (1) and (2)

The information model from analysts point of view are described

below: Raw datum A pure form of facts.
Compiled data Data put together with or without processing.
Information Complied data which confirms a shift from the
current knowledge state of the reviewer.
Knowledge It is totality of a range of information assimilated either
through years of experience or by formal research studies.
Behavioural drive It is the nature of ‘being’ constituted of values, attitudes,
beliefs,
needs and ambitions.
Behaviour Is a manifested effect of information determined by nature
of being who reacts to the information.
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Characteristics and Organization of MIS
MIS should have a few parameters which are explained as follows:
1. System approach : The system approach involves holistic approach to the study of the
system. This approach is anti-piece meal, in the sense taking comprehensive view or
complete picture of all sub-systems that operate within the organisation, thus avoiding
serious short comings.
2. Management orientation : This is a very important characteristic and for MIS designs,
top down approach in developing should be followed.
3. Information need based: MIS design and development should be as per information
needs of managers at different levels like strategic level, management control level and
operational control level.
4. Exception based: MIS should be developed on exception based reporting principle.
When there is an abnormal situation, it should be reported to the decision making
authority of appropriate level.
5. Integrated : It is a very indispensable characteristic of MIS and it produces more
meaningful information. Eg:- For developing an effective production scheduling system the
balance of the following factors is necessary.
(a) set up cost
(b) work force
(c) over time rates
(d) production cost/capacity
(e) inventory level
(f) capital requirements and
(g) customer service.
6. Common data flow: This helps to have an opportunity to avoid duplication and redundancy
in data gathering, storage and dissemination. The common data flow concept supports
several basic tenants of system analysis- avoiding duplication, combining similar functions and
simplifying operations.
7. Heavy planning : In MIS generated over long periods, a heavy planning is involved.
MIS designer should have future objectives and needs of the company in mind. The
designers must avoid the possibility of system getting obsolete.

8. Future oriented: The emphasis has to be on the future instead of past or historical
information.

Management Information System is a system having combination of persons, missions,

procedures and data base as its elements, which pool data from internal and external sources of
an Organisation, and after processing of these data, supply management information to Managers
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in an organisation, to support decision-making process of management.

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 It may be also explained as a system in which all the informations applicable to
requirements of each management level, whenever and wherever, should be prepared through the
collection and accumulation of internal and external information proper to each
corporation/organisation. The generalized concept of information system is depicted
diagrammatically.

DECISIONS REPORTS

PRODUCT

ENGINEERING PURCHASING

RESEARCH MANUFACTURING

FINANCE MIS INVENTORY

PLANT DISTRIBUTION

PERSONNEL SALES

FORECASTS

THE GENERALISED REPRESENTATION OF MIS

Organisation of MIS

The type of business decides the location, organization and importance of MIS. In
some organisations, MIS pervades all areas of business. The MIS can be organised under
financial department, under the direct control of CEO or as different entity depending on the
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importance of MIS to the organization.

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Information characteristics

It is very logical that information attributes, which are important for evaluation of
MIS effectiveness and relevant for analysis of information of managers at different levels,
depend on following characteristics: -

1. Time limit: For effective decision making information must reach the decision maker at
right time.

2. Accuracy: Accuracy is a paramount key attribute of management information. It means that

information is free from mistakes, errors and it is clear and accurate reflecting the meaning
and data on which it is based. It conveys an accurate picture to the recipient.

3. Relevance: The management information must be relevant to the recipient for making
decision. Irrelevant information may not be tolerated by top management. Information
should be clear and specific at each level of reporting. The data should be updated with
adequate explanation. Over loading of the information should be avoided to prevent chaos or
crisis.

4. Up-to-date: Apart from being timely, the information must be up to date, stale information
will lead to faulty decision.

5. Adequacy: The information provided must be sufficient enough for a manager to take a
decision based on it. Inadequate information will result in a wrong decision, detrimental to the
Organisation.

6. Avoid overloading: Overloading with information will lead to chaos and faulty decision.
Whereas information must be adequate, voluminous unwanted information will lead to
confusion and waste of effort.

7. No-duplication: Avoid overlapping and redundancy of information. Duplicate information

will result in ineffectiveness of decision making.

8. Explicitness: A report is said to be good if further analysis is not required by the

recipient. The report should be such that a Manager need not waste anytime on further
processing to take a decision. This reduces wasteful time and expenditure.

9. Exception-based reporting: Report has to be precise and such information which will be
of use for the appropriate level only need be reported. This will result in saving of time for
the top Management and help the Management to devote its precious time to pursue
growth of the organization.

10. Format clarity: MIS of an organisation should provide reports in simple formats to read
and understand. The headings, codes, columns, rows and structures of the report formats
should be meaningful. Therefore, a good MIS should generate reports in clear formats for
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Managers at all levels. No duplication of data should be reported.

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Defective reports generated by defective MIS in terms of information attributes: -

Characters Defective report

Timeliness Late reports
Accuracy Reports containing inaccurate information
Relevance Irrelevant information
Up-to-dateness Without current information
Adequacy Inadequate information
No overloading Over loaded information
Format clarity Ambiguity
No duplication Duplicate information
Explicit Require further analysis
Exception based Not based on exception
reporting

Decision making

A decision may be defined as an act of choice wherein an executive forms a

conclusion about what must be done in a given situation. A decision may be explained as a
particular course of action chosen by a manager as a most potent tool at his disposal for
achieving the goals or solving the problem beset with the Organisation. It should be the simplest in
a selection of alternatives.

Decision making is a science and art involving both intuitive and deductive faculties. It
includes activities of coordination, information processing, problem solving and evaluating that
precede the decision. The decision may depend on the following.

a) Nature of decision making situation

b) Ambience of decision making
c) Personalities involved.

The decision made in an organisation may be classified as :

(i) Strategic and tactical

(ii) Programmed / non-programmed
(iii) Organisational or personal
(iv) Policy and operating
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(v) Administrative and executive
(vi) Individual and group.

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Role of information in decision making

Most decisions such as formulating and introducing new products, selecting

marketing channel, enhancing sales etc are to be carefully analyzed and deliberated. Decision
making involves the following steps:

(1) Setting of goals

(2) Identifying the problems
(3) Analysis of the problems
(4) Developing alternative solutions
(5) Evaluation of the alternative solutions
(6) Selection of one of the alternative solutions
(7) Implementation of decision
(8) Follow up and control.

Nomenclature of information system

The concepts of Information System has evolved over years since it is a concept which
is matter of degree rather than absolute. Therefore, it is classified for convenience in the following
way and there will be overlapping among the following classes.

1) Transaction Processing System (TPS) : TPS uses data and produces data.
2) Management Information System (MIS) : Uses TPS for its data inputs. Generates
information out of data which can be used for control of operations, planning and
problem solving.
3) Decision Support System (DSS) : It is an information system application that assists
decision making.
4) Executive Support System (ESS) : It is an extension of MIS meant for Chief Executive of
an organization.
From all the above discussions, it emanates that the concept of MIS continues to evolve.
The hierarchy of information system is as follows :

ESS - DSS - MIS - TPS

Executive
Decision Management Trasaction
Support Support Information Processing
System System System System

The above figure illustrates the overlapping nature of the various classes of information.
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Summary

Management Information is a critical resource in the operation and management of

organizations. Timely availability of relevant information is vital for effective performance of
managerial functions such as planning, organizing, leading, and control. An information system in
an organization is like the nervous system in the human body: it is the link that connects all the
organization’s components together and provides for better operation and survival in a competitive
environment. Indeed, today’s organizations run on information.

The term management information system usually refers to a computer-based system,

one that is designed to support the operations, management, and decision functions of an
organization. Information systems in organizations thus provide information support for decision
makers. Information systems encompass transaction processing systems, management information
systems, decision support systems, and strategic information systems.

Information consists of data that have been processed and are meaningful to a user. A
system is a set of components that operate together to achieve a common purpose. Thus a
management information system collects, transmits, processes, and stores data on an
organization’s resources, programmes, and accomplishments. The system makes possible the
conversion of these data into management information for use by decision makers within the
organization. Amanagement information system, therefore, produces information that supports the
management functions of an organization.

Information is data that have been put into a meaningful and useful context and
communicated to a recipient who uses it to make decisions. Information involves the
communication and reception of intelligence or knowledge. It appraises and notifies, surprises and
stimulates, reduces uncertainty, reveals additional alternatives or helps eliminate irrelevant or poor
ones, and influences individuals and stimulates them to action. An element of data may constitute
information in a specific context; for example, when you want to contact your friend, his or her
telephone number is a piece of information; otherwise, it is just one element of data in the
telephone directory.

Computers have made the processing function much easier. Large quantities of data can
be processed quickly through computers aiding in the conversion of data to information. Raw
data enter the system and are transformed into the system’s output, that is, information to
support managers in their decision making.

The characteristics of good information are relevance, timeliness, accuracy, cost-

effectiveness, reliability, usability, exhaustiveness, and aggregation level. Information is relevant if it
leads to improved decision making. It might also be relevant if it reaffirms a previous decision. If
it does not have anything to do with your problem, it is irrelevant.

Information has a great impact on decision making, and hence its value is closely tied
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to the decisions that result from its use. Information does not have an absolute universal value.
Its value is

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related to those who use it, when it is used, and in what situation it is used. In this sense,
information is similar to other commodities.

Information supports decisions, decisions trigger actions, and actions affect the
achievements or performance of the organization. If we can measure the differences in
performance, we can trace the impact of information, provided that the measurements are carefully
performed, the relationships among variables are well defined, and possible effects of irrelevant
factors are isolated. The measured difference in performance due to informational factors is called
the realistic value or revealed value of information.

Questions:
1. Why is MIS important to an organization?
2. What are the basic elements of MIS. Explain?
3. While defining a MIS, what are the boundaries to be established?
4. What is an interface?
5. Define a System? Illustrate with suitable example?

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 CHAPTER - II
COMPOSITION AND STRUCTURE OF
MIS - DEVELOPMENT

Objective
The subject of management information system has inspired and evoked emotions as
wide as spectrum of light. It adds in the understanding of MIS concept and is greatly useful to
Organisations in designing or redesigning of their information system.
Information management is the collection and management of information from one or
more sources and distribution to one or more audiences who have a stake in that information or a
right to that information. Management here means the organization of and control over the
structure, processing and delivery of information. Information Management (IM) is characterized
by the phrase ‘Getting the right information to the right person at the right place at the right time’.
It does not, however, address the question of what constitutes the ‘right information’. This omission
can be addressed through the philosophy of Informational management (IaM). IaM is characterized
by the phrase, ‘Knowing what information to gather, knowing what to do with information when
you get it, knowing what information to pass on, and knowing how to value the result.’ This
identifies the ‘right information’ and the resulting whole solution is worth more than the sum of
its parts.
Composition of MIS – Different approaches
MIS is a system where Manager could access detailed piece of information
instantaneously. For example, it also explains annexures and appendages of accounting system and
financial summary statements.
The basic composition of MIS can be explained in terms of different approaches:
1) Physical components
2) Information system functions
3) Decision support
4) Management hierarchy
5) Organisational functions.
MIS can be defined as an integrated man-machine system that provides information to
support planning and control function of Managers in the Organisation.
MIS reveals clear planning targets to control operations and information of performances.
The major purpose of MIS could be generalized as to sub-serve managerial functions, routine
collection of information, support and review planning control decisions.
The five approaches mentioned above are explained in detail below.
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1. Physical components
Physical components of MIS can be explained to a person interested in understanding
structure of MIS in the organisation. The physical components are;
Hardware Refers to physical computer equipment and associated devices
such as CPU, monitor, keyboard, printer, discs, tapes and CD’s.
Software It is a broad word assigned to the instructions that direct the
operations of the hardware. This can be further classified as a
system software and application software.
Data Base This consists of all data used by the application software and
stored in files.
Procedure Regular operating procedures like manuals also form a part of
physical structure.
Operating Personnel like computer operator programmer, system analyst,
System
Technician Manager are users of information system.
MIS helps to assess internal sources, market research, government rules, publications,
advertisements, external data and special analysis of information needed.

2. Information system functions

The information system could be explained in terms of its processing functions.
i) Transaction: Information system process transactions. Transaction may be defined as an
activity taking place in the Organisation. It may be internal or external. For example -
purchase or sale of a product in an Organisation.
ii) To produce reports: Many reports are produced on a regular basis which are termed
as schedule reports. It may be adhoc or special reports.
iii) To process inquiries: Data base information system is utilized for processing inquiry.
They may be regular with a pre-defined format or adhoc inquiries.
iv) To process interactive support applications: Various types of models are used for
processing applications designed to support planning, analysis and decision making. The
mode of operation is interactive with the user responding to questions and requests for
data yielding immediate results.
v) To maintain master files: Information system is used to create and maintain master files
of an organisation. For example :
a) processing of pay slips,
b) wages,
c) employee’s rate of pay,

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d) deduction etc.

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3. Decision support

The basic structure of the MIS can be differentiated on the basis of its support in
decision making in an Organisation. The decision can be highly structured or unstructured. A
structured decision is programmable and they are routine in nature. The information system
support will differ for two types of decision and so also information system. Some decisions will
fit easily into this classification, but some decisions are more or less structured and have some
elements that are programmable and some that are not, such decisions are called semi-structured
decisions.

4. Management Hierarchy

MIS supports management activities in terms of hierarchy and they can be

classified into three levels : (a) strategic planning level
(b) management control level

(c) operation control level

a) Strategic planning deals with long term considerations such as choice of business, market
strategy, product mix, etc.
b) Management control level has a medium term planning horizon including acquisition and
organisation of funds, programming work schedule, training personnel etc.
c) Operational control is generally short-term decisions. Immediate operations like production
level pricing, inventory are as a result of operational control.
Therefore, information system will be different for all the three levels of management
hierarchy even though the management activities and information processing for the 3 levels are
inter-related. Eg: Inventory control functions at all levels.

5. Organisational functions

MIS is essentially a federation of information systems that are designed to support the
functions of sub-system of an organisation.
There is no set classification of functions but a designed group of functions are necessary
in any manufacturing organisation which include production, sales, finance and accounting,
materials, personnel, marketing and information systems. Each of the above function has unique
information needs and requires specific information support.

MIS development approaches

MIS development is construed as a process involving various phases. A clear

understanding of these approaches would be necessary to make a proper selection for
development of MIS and to ensure proper implementation and running of systems. The
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following models are used for MIS development:

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 I.System development life cycle
(SDLC) II.Prototyping

I SDLC APPROACH
In this approach, a system is visualized as a living organism with different phases of life
such as birth, growth, maturity and death. The following are the phases of it.
1.Investigation
2.Analysis
3.Design
4.Construction
5.Implementation
and 6.Maintenance

1. System investigation
This consists of two sub-stages :
i) Problem definition
ii) Feasibility study (Organisation, Economic, Operation)
i) Problem definition
It is always essential that problem to be solved should be clearly defined for the
system development. System analyst should prepare a written statement of the objectives and
scope of the problem based on interview with the Management and the end users. System
analyst should also provide rough estimate of the costs involved for the system development.
ii) Feasibility studies
Feasibility report can be considered as high level capsule version of entire process, trying
to answer number of questions about the problem. The report should be brief and crisp to the
objectives with sense of scope and should be presented to the user and Management. Feasibility
study report represents an excellent model of the system analyst’s understanding of the problem to
provide a clear sense of direction for the future development of the system. The main objectives of
feasibility studies is to evaluate alternative systems and to propose most desirable method for
development. The four major categories, to which the feasibility of a proposed system can be
evaluated are given below :
a) Economic feasibility: To identify and understand expected rise in returns, reduction in
costs, lowering required investment and other benefits over the costs of developing and
operating proposed system.
b) Technical feasibility: Whether exact and reliable hardware and software capable of
meeting the needs of the proposed system can be developed in time.
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 c) Organisational feasibility: This report deals with how good the proposed information
system will support the organisation to implement strategic plans for information system.
d) Operational feasibility: The attitudes of the management, employees, customer, suppliers
and so on towards the proposed system.

2. System analysis
The system analysis involves detailed examination of :
● The information needs of the organisation and its end-users.
● Existing information system (activities, resources, and products).
● Expected information system.

3. System design
System design specifies how the system will meet the objectives, set. The system design
should stress on the following activities such as user interface, data and process design.

4. Construction and testing

The system is developed according to the specification to a physical form. The
required programme are coded, debugged and documented. The system is tested with some old or
new data to test its ability to cope up with the objective of system change.

5. Implementation
The system implementation stage involves hardware and software acquisition, site
preparation, user training and installation of the system.

6. Maintenance
System should be maintained and updated to make desirable improvements.

II. PROTOTYPING
Prototyping approach is easy and convenient compared to SDLC since it is
comprehensive and does not include all the requirements of the user. The process of prototyping
includes:
1. Identifying the user’s basic information requirements
2. Developing the initial prototype system
3. Use of prototype system to refine the users requirement and
4. Revise and enhance the prototype system.
Generally the user is requested to use the system and suggest required modifications
to improve the system. The feed back, which is the basis for designing the system, is made use
of to prepare specification documents.
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The processes involved are described below:
1. Identification of the user’s basic information requirements
In this case user identifies basic requirement in terms of output from the system. The
designer should establish realistic user expectations and calculate the costs for the development of
prototype.
2. Development of the initial prototype system
In this step functional interactive application system is developed that, is required by
the user. The prototype is developed using high level language. More emphasis is laid in the speed
rather than efficiency of operations.
3. Use of prototype system to refine the user’s requirements
This facilitates the user to get the experience with the system and to understand what it
does and does not perform. The user decides the changes necessary to have a control on
development time.
4. Revise and enhance the prototype system
In this step designer makes required changes using basic principle. The emphasis is on
speed to complete the modification and return to the user.
Prototyping approach is highly suitable for the large organizations with multiplicity and
complexity of the operations involved. Prototyping methodology has significant advantages in
development of applications having high uncertainty as to requirements:
1. Ability to ‘try out’ ideas without incurring huge costs.
2. Low cost for development where requirements change frequently.
3. The ability to get a functioning systems into the hands of the user quickly.
MIS in today’s world of ever increasing complexities of business and management
become essential to survive and grow. MIS supplies accurate, relevant and timely information to the
Management of the Organisation. If the MIS is poorly developed, designed and implemented,
becomes irrelevant or obsolete to improve an Organisation.

Development of MIS
Development of MIS is vital and most important in any Organisation for its success.
The Organisation should have top management executives to involve with commitment and proper
direction. The important basic questions to be answered are:-
a) What should be the characters of MIS ?
b) In what manner study should be organised ?
c) To what extent sophistication is required ?
d) Should the total system be developed or critical sectors only be built ?
e) What will be the cost of the system ?
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Objectives of MIS and a comparison with Business Plan
A long-range MIS plan provides direction for the development of systems and helps
to achieve targets against time frame.
It is essential to develop the goals and objectives for the MIS to support business
goals. The MIS objectives should consider management philosophy, policy, constraints, business
risks, internal and external environment of the Organisation and business.
The typical goals and objectives of the MIS are as follows :
● Provide online information on the stocks, markets and accounts balances.
● The query processing should not exceed more than three seconds.
● The focus of the system will be on end user computing and access facilities.
● Information support will be first in the strategic areas of management such as marketing
or service of technology.

Business plan versus MIS plan

Business plan MIS plan

1. Business goals and objectives MIS objectives consistent to the goals
and objectives.
2. Business plan and strategy Information strategy for the business
plan implementation playing a supportive
role.

3. Strategy planning and decisions Architecture of MIS to support

decisions.

4. Management plan for execution and System development schedule,matching

control the plan execution.
5. Operation plan for the execution Hardware and software plan for the
procurement and the implementation.

The MIS designer has to take a number of strategic decisions for the achievement of MIS
goals and objectives. They are listed below :
1. Development strategy.
2. System development strategy.
3. Resources for system development.
4. Manpower composition.

33
 A model of the MIS plan:
Contents Particulars Focus
Corporate information Business environment and Where are we?
current operations
Corporate philosophy Policy, guidelines, culture What is the foundation
of business?
Corporate mission / Current and new mission / Where do we want to
goals/ objectives goals/objectives reach?
Business risk and rewards Clear quantitative statements What is the risk? Is
on these factors showing it worth the risk?
a trade off between
the risk and rewards
Business policy and strategy Details of the strategic and How do we achieve
policy decisions affecting the goals and
the business objectives?
Information needs Strategic/planning, What is the key
operational information?
Architecture of the plan Information technology What are the tools for
details achievement?
Schedule of development Details of the system and When and how will it
sub systems and their be achieved?
linkage charted against the
time scale.
Organisation and execution Manpower and delegation Who will achieve it?
of the plan details. Internal and
external resources
Budget Details on the investment How much will it cost?
schedule and benefits
Critical steps in building MIS
In the development of MIS the following steps are recommended for successful functioning:
i) Study the organisation
ii) Identification of decision responsibilities
iii) Establishing information flow to different decision centres
iv) Evaluate the information flow
v) Development of conceptual design of the new system
vi) Production of detailed system for creation of data bank and out put from the system
vii) Implementation of the entire system.

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Cost / Benefit analysis
In establishing cost estimates for a system, the organisation should consider several
cost factors such as hardware, personnel, facility, operating and supply costs.
1. Hardware costs generally relate to the actual purchase or lease of computer and
peripherals like printer, disk drive, tape unit, ink etc.
2. Personnel costs include staff salaries and other benefits such as health insurance, leave
travel and sick pay. All these costs become recurring once the installation of the system
is over.
3. Facility costs and expenses incurred in the preparation of physical facilities like flooring,
lining acoustics, lighting and air conditioning. These are regarded as one time costs.
4. Operating costs are associated with day-to-day operations of the system. The total costs
depend upon number of employees required, shifts, experience and caliber of the
operating staff.
5. Supply costs are highly variable with increased use of the system. They include paper,
ribbons, discs and other materials.

Determination of cost / benefit ratio

This technique reveals cost / benefit analysis and rules associated within the system. The
outlined steps are as follows :
a) Establishment of costs and benefits pertaining to a defined project
b) Categorization of different benefits for analysis
c) Selecting exact method for evaluation
d) Interpretation of data of the analysis
e) To take right action.

Summary

All businesses share one common asset, regardless of the type of business. It does not
matter if they manufacture goods or provide services. It is a vital part of any business entity,
whether a sole proprietorship or a multinational corporation. That common asset is information.
Information enables us to determine the need to create new products and services. Information
tells us to move into new markets or to withdraw from other markets. Without information, the
goods do not get made, the orders are not placed, the materials are not procured, the shipments
are not delivered, the customers are not billed, and the business cannot survive.

But information has far lesser impact when presented as raw data. In order to maximize
the value of information, it must be captured, analyzed, quantified, compiled, manipulated, made
accessible, and shared. In order to accomplish those tasks, an information system (IS) must be
designed, developed, administered, and maintained.

35
 An information system is a computer system that provides management and other
personnel within an organization with up-to-date information regarding the organization’s
performance; for example, current inventory and sales. It usually is linked to a computer
network, which is created by joining different computers together in order to share data and
resources. It is designed to capture, transmit, store, retrieve, manipulate, and or display
information used in one or more business processes. These systems output information in a form
that is useable at all levels of the organization: strategic, tactical, and operational. Systems that are
specifically geared toward serving general, predictable management functions are sometimes
called management information systems (MIS). The administration of an information system
is typically the province of the MIS or information technology (IT) department within an
organization.

The design of an information system is based on various factors. Cost is a major

consideration, but there certainly are others to be taken into account, such as the number of users;
the modularity of the system, or the ease with which new components can be integrated into
the system, and the ease with which outdated or failed components can be replaced; the amount
of information to be processed; the type of information to be processed; the computing power
required to meet the varied needs of the organization; the anticipated functional life of the system
and/or components; the ease of use for the people who will be using the system; and the
requirements and compatibility of the applications that are to be run on the system.

There are different ways to construct an information system, based upon

organizational requirements, both in the function aspect and the financial sense. Of course, the
company needs to take into consideration that hardware that is purchased and assembled into a
network will become outdated rather quickly. It is almost axiomatic that the technologies used in
information systems steadily increase in power and versatility on a rapid time scale. Perhaps the
trickiest part of designing an information system from a hardware standpoint is straddling the
fine line between too much and not enough, while keeping an eye on the requirements that the
future may impose.

Applying foresight when designing a system can bring substantial rewards in the future,
when system components are easy to repair, replace, remove, or update without having to bring
the whole information system to its knees. When an information system is rendered inaccessible
or inoperative, the system is considered to be “down.”

A primary function of the maintaining an information system is to minimize downtime,

or hopefully, to eradicate downtime altogether. The costs created by a department, facility,
organization, or workforce being idled by an inoperative system can become staggering in a short
36
amount of time. The inconvenience to customers can cost the firm even more if sales are lost as a
result, in addition to

37
any added costs the customers might incur. The location and retrieval of archived information can
be a direct and logical process, if careful planning is employed during the design of the system.
Creating an outline of how the information should be organized and indexed can be a very
valuable tool during the design phase of a system. A critical feature of any information system
should be the ability to not only access and retrieve data, but also to keep the archived
information as current as possible.

Questions:
1. What are the different approaches used to explain the composition of MIS? Explain?
2. Discuss the models used for MIS development?
3. What are the goals and objectives of MIS? Compare MIS plan with a Business Plan?
4. What are the Strategic decisions taken by a MIS designer for achieving MIS goals
and objectives?
5. Prepare a model of MIS plan under the following heads: Contents, Particulars and Focus?

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 CHAPTER - III
ROLE OF MIS IN ORGANIZATION - PLANNING AND
DECISION MAKING

Objective
Planning means taking a deep look into the future, assessing the likely events in the total
business environment and the course of action to meet any eventuality. It further means generating
the courses of actions to meet the most likely eventuality. Planning is a dynamic process. As the
future becomes the present reality, the course of action decided earlier may require a change.
Planning, therefore, calls for a continuous assessment of the pre-determined course of action
versus the current requirements of the environment. The essence of planning is to see the
opportunities and the threats in the future and pre-determine the course of action to convert the
opportunity into a business gain, and to meet the threat to avoid any business loss.
Planning involves a chain of decisions, one dependent on the other, since it deals with a
long term period. A successful implementation of a plan means the execution of these decisions in
a right manner one after another.
Planning, in terms of future, can be long range or short range. Long range planning is
for a period of five years or more, while short range planning is for one year at the most. The
long range planning is more concerned about the business as a whole, and deals with subjects
like the growth and the rate of growth, the direction of business, establishing some position in the
business world by way of a corporate image, a business share and so on. On the other hand,
short range planning is more concerned with the attainment of the business results of the year.

Essentiality of strategic planning

There are some compelling reason which force all the organisations to resort to
strategic business planning. The following reasons make planning an essential management
process to keep the business in a good shape and condition.
a. Market forces
b. Technological change
c. Complex diversity of business
d. Competition
e. Environment (Threats, Challenges and Opportunities)
a) Market forces
It is very difficult to predict the market forces such as the demand and supply, the trend
of the market growth, the consumer behaviour and the choices, the emergence of new products
and the new product concepts.

39
b) Technological change
There are a number of illustrative cases throughout the world on the technological
breakthroughs and changes which have threatened the current business and also creating new
business opportunities. The emergence of the microchip, plastic, laser technology, fiber optics
technology, nuclear energy, wireless communication, audio-visual transmission, turbo engines,
thermal conductivity and many more, are the examples which have made some products
obsolete, threatening the current business, but at the same time, have created new business
opportunities. The technological changes have affected not only the business prospects but also
the managerial and operational styles of the Organisations.
c) Complex Diversity of Business
As the business grows, it reaches a stage where the strategies such as the expansion -
vertical or horizontal, integration - forward or backward, diversification - in the same line or in
the diverse line of business, are the issues which the Management is required to handle. These
issues are investment oriented and have a far reaching effect on the business growth, direction and
profitability.
d) Competition
Competition is a natural phenomenon in business, and it has to be dealt with in a
proper manner to protect business interests. This means that the management has to continuously
evolve new strategies to deal with the competition. Evolving strategies and their implementation,
calls for forward thinking and planning, without which it is not possible to handle competition.
Competition forces the management to look for new products, new markets, and new
technologies to keep the market share intact, the process controlled and the quality improved.
Strategies also have to be implemented in a proper sequence as business competition demands
an intricate planning, testing and implementation of the strategies. The competition should never
be underestimated and has to be met squarely through corporate planning.
e) Environment
The environment is beyond the control of the management. Depending upon the
Organisation’s business and its purpose, different environments have bearing on the fortunes of
business. It could be one of the social, business, economic, industrial, technological environments
affecting the business. Many a times, it could be a mix of different environments. The
environmental changes are difficult to predict and are generally slow. Therefore, many times the
managements, are caught unaware by the environmental changes.

Development of the Business Strategies

Long range strategic planning
In the very beginning of the planning process, it is necessary to establish and
communicate to all concerned, the social and economic responsibilities of the organisation. In
order to discharge
40
these responsibilities, it is necessary to decide the purpose of the organisation for which it
works. Many Organisations call it a mission.
The mission or the aim of an Organisation is a broad statement of the Organisation’s
existence which sets the direction of the Organisation and decides the scope and the boundaries of
the business.
The task after deciding the mission or the aim is to set goal(s) for the Organisation.
The goal is more specific and has a time scale of three to five years. It is described in the
quantitative terms in the form of a ratio, a norm or a level of certain business aspect such as the
largest share, leader in the industry, dominant in certain product, quality, reach and distribution,
etc.
After determining the mission and the goals, the next task is to set various objectives for
the organisation. The objectives are described in terms of business results to be achieved in a short
duration of a year or two. The objectives are measurable and can be monitored with the help of
business tools and techniques. Objectives may be the profitability, the sales, the quality standard,
the capacity utilization, etc. When achieved, the objectives will contribute to the accomplishment of
the goals and subsequently the mission.
The next step in the planning process is to set targets for more detailed working and
reference. The objective of the business is to be translated in terms of functional and operational
units for easy communication and decision making. The targets may be monthly for the sales,
production, inventory and so on. The targets will be the direct descendants of the objectives.
The success in achieving the goals and objectives is directly dependent on the
management’s business strategies. Business is like a war where two or more business
competitors are set against each other to win and are constantly in search of a strategy to win.
The strategy means the manner in which the resources, such as the men, the material, the money
and the know-how will be put to use over a period to achieve the goals. The resources of an
organisation are deployed based on its goals and its business strategies but also the competition
being faced by it. The game is of evolving strategies and counter strategies to win.
The development of the strategy also considers the environmental factors such as the
technology, the markets, the life style, the work culture, the attitudes, the policies of the
Government and so on. A strategy helps to meet the external forces affecting the business
development effectively and further ensures that the goals and the objectives are achieved. The
development of the strategy considers the strength of the organisation in deploying the resources
and at the same time it compensates for the weaknesses. The strategy formulation, therefore, is an
unstructured exercise of a complex nature riddled with the uncertainties. It sets the guidelines for
use of the resources in kind and manner during the planning period.

41
 Environment Socio-economic purpose
Mission, goals

Factors for strategy formulation

Strength and weakness Business strategy Competition

of the organisation

Types of Strategies
A strategy means a specific decision(s) usually, but not always, regarding the deployment
of the resources to achieve the mission or goals of the Organisation. The right strategy beats
competition and ensures the attainment of goals, while a wrong strategy fails to achieve the goals.
Correction and improvement, in case of a wrong strategy is possible at a very high cost. Such a
situation is described as a strategic failure.
If a strategy considers a single point of attack by a specific method, it is a pure strategy.
If a strategy acts on many fronts by different means, then it is a mixed strategy. The business
strategy could be a series of pure strategies handling several external forces simultaneously.
Hence, the strategy may fall in any area of the business and may deal with any aspects
of the business. It could be aspects like price, market, product, technology, process, quality,
service, finance, management strength and so on. When the management decides to fight the
external forces of a single area by choice, it becomes a pure strategy. If it uses or operates in
more than one area, then it becomes a mixed strategy.
The success of an organisation, inspite of its strength, depends on the strategic moves
or planning the Management pursues. The strategy may be pure or mixed. It can be classified into
four broad classes :
1. Overall Company Strategy;
2. Growth Strategy;
3. Product Strategy; and
4. Marketing strategy.
1. Overall Company strategy
This strategy considers a very long-term business perspective, deals with the overall
strength of the entire company and evolves those policies of the business which will dominate the
course of the business movement. It is the most productive strategy, if chosen correctly and fatal if
chosen wrongly.
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2. Growth strategy
An Organisation may grow in two different ways. Growth may either mean the growth
of the existing business turnover, year after year, or it may mean the expansion and diversification
of the business.
Growth strategy means the selection of a product with a very fast growth potential. It
means choice of industries such as electronics, communication, transport, textile, plastic and so
on where the growth potential exists for expansion, diversification and integration. The growth
strategy means acquisition of business of the other firms and opening new market segments.
Growth strategies are adopted to establish, consolidate, and maintain a leadership and
acquire a competitive edge in the business and industry. It has direct, positive impact on the
profitability.
3. Product strategy
A growth strategy, where the Company chooses a certain product with particular
characteristics, becomes a product strategy. A product strategy means choice of a product
which can expand as a family of product and provide the basis of adding associated products.
It can be positioned into the expanding markets by way of model, type and price.
4. Marketing strategy
The product and the marketing strategies are closely related. The marketing strategies deal
with the distribution, services, market research, pricing, advertising, packing and choice of the
market itself.

Use of strategic management in the industry

Presently most of the well established organisations use effective Decision Support
System as a tool by the strategic management.
To conduct research on the evaluation of system, any MIS researcher should keep in
mind the following procedures.
1. Objective of the investigation - to understand DSS and its acceptance in Indian
organisations.
2. Research methodology to be adopted - scope and importance of the study, sample
size and sampling techniques, appropriate data collection, scoring and analysis of data and
finally discussion of results and interpretation to arrive at final inference.

Short - Range planning

Short-range planning deals with the targets and the objectives of the organisation. Based
on the goals and the objectives, a short-range plan provides the scheme for implementation of the
long- range plan. Short-range plans are made for one year in terms of the targets which are to be
achieved within the given budgets. The organisation translates long-range plans into the target
covering all the critical areas of business, to be achieved by the Organisation on a time scale. A
43
manufacturing

44
Organisation will make targets for production, sales, capacity etc. Most of the companies after
deciding the targets, work on the budgets.
Advantages of short range planning
1. It gives the Manager a clear target for achievement.
2. It specifies to the Manager the resource allocation for a given task and the freedom to
use it.
3. It provides the Manager with information on the performance; whether it is under or
over the budget.
4. It helps the Management assess the overall performance of the business in the light of
short- term targets and long-term goals.
5. It provides an efficient tool to co-ordinate all the efforts within the organisation.
6. It provides the Management selective information on the shortfalls and overruns, for
immediate action.
7. It provides all the information in monetary terms for comparison between any two
business entities in the Organisation.

Tools of planning
Planning, long-range or short-range, strategic or tactical, involves a series of decisions to
be taken by the managers in the organisation. So when we talk about the tools of planning, we are
talking about the tools of decision making with reference to planning.
Decision relate to several aspects of corporate business planning. There are a 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 maximise the gains. Then there is
selection of method whereby the efforts at all the levels are co-ordinated 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 ; and modelling.
a) Creativity
Creativity comes out of an experience, a judgement, an intuition of an individual or a
group of individuals. When decision making is called for on 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 conceptual skills comprises the following:
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.

45
b) Systems approach
Systems approach to planning considers all the factors and their inter-relationship
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 used in
a situation of risk or uncertainty, and examines the various alternative courses of action. It helps 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 problem of implementation of the solution.
c) 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 to know whether the
solution will still remain valid if the assumptions change, constraints were relaxed and new
conditions 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 critically the factors against the
impact it makes on the solution.
d) Modelling
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.
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 model and the short-range management and operations models are
mostly static models.

MIS : Business planning

Business environment is prone to changes and this factor makes business planning very
complex. Some factors like 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

46
provide information to the Management for a strategy formulation.

47
 Strategy formulation is a complex task based on the strength and the weakness of the
organisation 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-à- 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 strategy
but it requires a mix of strategies 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 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
needs, 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 allocations.
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 MIS has certain other characteristics for the top management. It contains forecasting
models to probe into the future - the business model for evaluation of the strategy performance by
simulating 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 database which are external to the
organisation. The management also relies heavily on the internal data which is evolved out of
transaction processing. Management uses the standards, the norms, the ratios 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 summarize the role of the MIS to 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, the mix of resources.
7. Generate the standards, the norms, the ratios and the yardsticks for measurement and
control. Success of business depends on the quality of supports 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.

Decision making concepts

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
judgement and a resolution. A decision is the choice out of several options made by the decision
maker to achieve some objectives in a given situation.

Business decisions are those, which are made during 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 decisions, 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 :
49
a) Sequential in nature.

50
 b) Exceedingly complex due to risks and trade offs.
c) Influenced by personal values.
d) Made in institutional settings and business environment.
The decision making process requires creativity, imagination and a deep understanding of
human behaviour. The process covers a number of tangible and intangible factors affecting the
decision process.
The problems faced in making rational decisions
a. Uncertainty in the problem.
b. Insufficient knowledge.
c. Not enough time to be rational.
d. The environment may not co-operate.
e. Other limitations.
Decision methods, tools and procedures
Decision making is a process which the decision maker uses to arrive at a decision. The
core of this process is described by Herbert Simon in a model. He describes the model in three
phases as shown in figure viz., (a) Intelligence (b) Design and (c) Choice. MIS follows this
model in its development stage.

Intelligence

Design

Choice
Intelligence: Raw data collected, processed and examined. Identifies a problem calling for a decision.
Design : Inventing, developing and analyzing the different decision alternatives and testing the
feasibility of implementation. Assess the value of the decision outcome.
Choice : Select one alternative as a decision, based on the selection criteria.
In the intelligence phase, the MIS collects the data. The data is scanned, examined,
checked and edited. Further, the data is sorted and merged with other data and computations
are made, summarised and presented. In this process, the attention of the manager is drawn to all
the problem situations by highlighting the significant differences between the actual and the
expected, the budgeted or the targeted.
In the design phase, the Manager develops a model of the problem situation on which
can generate and test the different decisions to facilitate its implementation. If the model developed
is useful in generating the decision alternatives, he then further moves into phase of selection called
as choice.

51
 In the phase of choice, the manager evolves a selection criterion such as maximum
profit, least cost, minimum waste, least time taken and highest utility. The criterion is applied to
the various decision alternatives and the one which satisfies the most is selected.
In these three phases, if the manager fails to reach a decision, he starts the process all
over again from the intelligence phase where additional data and information is collected, the
decision making model is refined, the selection criteria is changed and a decision is arrived at.
Decision making systems
The decision making systems can be classified in a number of ways. There are two types
of systems based on the manager’s knowledge about the environment. If the manager is
functioning in a known environment it becomes closed decision making system and the conditions
that operate are as follows:
a) The Manager has a known set of decision alternatives and knows their outcomes fully in
terms of value, if implemented.
b) The Manager has a model, a method or a rule whereby the decision alternatives can
be generated, tested and ranked.
c) The Manager can choose one of them, based on some goal or objective.
A few examples are a product mix problem, an examination system to declare pass or
fail, or an acceptance of the fixed deposits.
If the Manager operates in an environment not know to him, then the decision making
system is termed as an open decision making system. The conditions of this system are :
a) The Manager does not know all the decision alternatives.
b) The outcome of the decision is also not known fully. The knowledge of the outcome
may be a probabilistic one.
c) No method, rule or model is available to study and finalise one decision among the set
of decision alternatives.
d) It is difficult to decide an objective or a goal and, therefore, the manager resorts to
that decision, where his aspirations or desires are met best.
The MIS tries to convert every open system to a closed decision making system by
providing information support for the best decision. The MIS gives the information support, whereby
the Manager knows more and more about the environment and the outcomes, he is able to
generate the decision alternatives, test them and select one of them. A good MIS achieves this.
Types of decisions
A good MIS tries to convert a decision making situation under uncertainty to the
situation under risk and further to certainty. Decision making in the operations management, is a
situation of certainty. This is mainly because the Manager in this field, has fairly good knowledge
about the events which are to take place, has full knowledge of environment, and has a pre-
determined decision alternatives for choice or for selection.
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 Decision making at the middle Management level is of the risk type. This is because of
the difficulty in forecasting an event with hundred per cent accuracy and the limited scope of
generating the decision alternatives.
At the top Management level, it is a situation of total uncertainty on account of
insufficient knowledge of the external environment and the difficulty in forecasting business
growth on a long- term basis.
A good MIS design gives adequate support to all the three levels of Management.
Nature of decisions
Decision making is a complex situation. To resolve the complexity, the decisions are
classified as programmed and non-programmed decisions. If a decision can be based on a rule,
method or even guidelines, it is called the programmed decision.
Under this condition, the MIS itself can be designed to make a decision and even
execute it. The system in such cases plays the role of a decision maker based on a given rule or
a method. Since the programmed decisions are made through MIS, the effectiveness of the rule
can be analysed and the rule can be reviewed and modified from time to time for an
improvement. The programmed decision making can be delegated to a lower level in the
management cadre.
A decision which cannot be made by using a rule or a model is the non-programmed
decision. Such decisions are infrequent but the stakes are usually larger. Therefore, they cannot be
delegated to the lower level. The MIS in the non-programmed decision situation, can help to
some extent, in identifying the problem, giving the relevant information to handle the specific
decision making situation. The MIS in other words, can develop decision support systems in the
non-programmed decision making situations.
Behavioural concepts in Decision making
A Manager, being a human being, behaves in a peculiar way in a given situation. The
response of one Manager may not be the same as that of the two other managers, as they differ
on the behavioural platform. Even though tools, methods and procedures are evolved, the decision
is many a times influenced by personal factors such as behaviour.
The Managers differs in their approach towards decision making in the organisation,
and therefore, they can be classified into two categories, viz., the achievement oriented i.e.,
looking for excellence and the task oriented i.e., looking for the completion of the task somehow.
The achievement oriented manager will always opt for the best and therefore, will be enterprising
in every aspect of the decision making. He will endeavour to develop all the possible alternatives.
He would be scientific and therefore, more rational. He would weigh all the pros and cons
properly and then conclude.
The manager’s personal values will definitely influence ultimately. Some of the managers
show a nature of risk avoidance. Their behaviour shows a distinct pattern indicating a conservative

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approach to decision making - path of low risk or no risk. Further, even though decision
making tools are available, the choice of the tools may differ depending on the motives of the
manager.

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 The behaviour of the Manager is also influenced by the position he holds in the
Organisation. The behaviour is influenced by a fear and an anxiety that the personal image may
be tarnished and the career prospects in the organisation may be spoiled due to a defect or a
failure. The Managerial behaviour, therefore, is a complex mix of the personal values, the
atmosphere in the Organisation, the motives and the motivation, and the resistance to change.
Such a behaviour sometimes overrides normal rational decisions based on business and
economic principles.
Organisational decision making
An Organisation is an arrangement of individuals having different goals. Each individual
enjoys different powers and rights because of his position, function and importance in the
Organisation. Since there is an imbalance in the power structure, the different individuals cannot
equally influence the organisational behaviour, the management process and the setting of business
goals. Ultimately, what emerges is an hierarchy of goals which may be conflicting, self defeating
and inconsistent.
The corporates goals and the goals of the departments/divisions or the functional goals,
many a times, are in conflict. If the Organisation is a system, and its departments/divisions or
functions are its sub-systems, then unless the system’s objectives and the sub-system’s objectives
are aligned and consistent to each other, the corporate goals are not achieved.
In case of inconsistent goals, the conflict in the Organisation increases, affecting the
organisation’s overall performance. The Organisational decisions making should help in the
resolution of such conflicts. Otherwise, the organisation suffers from indecision.
MIS and decisions making concepts
The methods of decision making can be used directly in the MIS provided the method
to be applied has been decided. A number of decision making problems call for optimisation,
and operational research models are available which can be made a part of the system. The
optimisation models are static or dynamic, and both can be used in the MIS. Some of the
problems call for a competitive analysis, such as a payoff analysis. In these problems, the MIS
can provide the analysis based on the gains, the regrets and the utility.
The concepts of the organisational and behavioural aspects of decision making provide
an insight to the designer to handle the organisational culture and the constraints in the MIS. The
concepts of the rationality of a business decision, the risk averseness of the managers and the
tendency to avoid an uncertainty, makes the designer conscious about the human limitations, and
prompts him to provide a support in the MIS to handle these limitations. The reliance on
organisational learning, makes the designer aware of the strength of the MIS and makes him
provide the channels in the MIS to make the learning process more efficient.
The relevance of the decision making concepts is significant in the MIS design. The
significance arises out of the complexity of decision making, the human factors in the decision
making, the organisational and behaviour aspects, and the uncertain environments. The MIS

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design addressing these significant factors turns out to be the best design.

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Summary

Management Information Systems (MIS) can be used successfully to facilitate access

to a wide range of integrated data sets. They are consistent, modular and flexible tools for the
systematic acquisition, analysis and archiving of data and information from a variety of
sources. When socio- economic data are also included, MIS can become even more powerful
tools for planning and decision- making

The term ‘information system’ is a general term for a system that facilitates access to
information; however, a ‘management information system’ refers to integrated data sources
and information systems, which meet the particular needs and requirements of planning and
decision- making. In an ideal case, the major objectives of MIS are to:
1. reach an understanding of the relevant processes on the basis of the available historic
information. This element forms the basis for the development of models, required for
forecasting and simulation.
2. provide information on the current situation, especially for early warning purposes, for
instance related to issues impacting on food security, water resources or pest and disease
status.
3. forecast changes and impacts, either natural or man-made, as an element in
vulnerability assessments.
4. forecast the consequences of policy decisions and measures before they are implemented
in reality. This implies evaluating options for several given scenarios based on the possible
results and predicted consequences, and selecting the most acceptable alternative.
In view of the broad scope and wide variety of planning and decision-making tasks,
MIS generally generate a range of outputs or results. These can be in a textual (report) or graphical
(curve, graphic) form. A number of desired outputs can be generated automatically and
periodically (daily, weekly) and transmitted to the relevant users in a printed or digital form.
These outputs generally serve as a check on the situation and the developments in the field. A
second group of outputs could be generated only in the case where certain conditions are fulfilled
(drought reports in case of low precipitation levels) or when certain levels are being exceeded
(contaminants in ground or coastal water). A third group relates to specific, dedicated outputs, to
assess the possible consequences of certain measures or activities, for instance the construction of
a hydroelectric dam.

MIS are precious and costly assets, and require detailed planning if their design,
implementation and operation are to be successful. The adequate introduction and performance of
MIS require that they build on already existing elements, and ensure consultation and coordination
with all stakeholders.

A key issue for the application of MIS is open distribution of information, providing each
of the actors with the same basic overview and synthesis. Manipulating the information provision
by selective information distribution causes an information imbalance between the partners,
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leading to less than optimal decisions and when discovered is detrimental to mutual trust.
Therefore a strong,

58
positive commitment from all involved is needed: active participation and accountability of users
and contributors of environmental information at all levels, including local actors. Under such
conditions, the benefits of the MIS by far outweigh the cost of acquiring and organizing the
information, including the manpower required and the maintenance cost of the system.

MIS applications should meet criteria relating to:

 Timeliness
 Completeness
 Reliability
 Availability
 Accessibility
 Cost-effectiveness
The need for up-to-date information implies the need for continuous collection, analysis
and dissemination of environmental data on a regular, well standardized basis: monitoring. The
information collected should be relevant for all stakeholders: from the policy makers to the local
population, to ensure the relevance, quality and continuity of the process. It should be collected in
compatible formats, in minimal time and with minimal cost. Monitoring is also useful to detect
possible negative impact on the environment and existing agricultural systems, but for this purpose
baseline data should be available as a reference on the original situation.

It is difficult to foresee precisely what information (or combinations) will be the

appropriate information for decision-making in the future. Based upon experience, the data sets
presented in the previous paragraph are given as a first approach, but should be adapted to the
specific requirements of each situation. Implementation of all parameters depends highly upon the
capabilities and the situation in each country.

Questions:
1. Explain the functions aiding MIS with respect to Production, Marketing, Finance
and Personnel?
2. What are the phases favouring breaking down of decision making process?
3. What are the factors influencing successful use of MIS in an organization?
4. Enumerate the strategies for plan achievement?
5. Describe the methods used in implementing MIS?

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 CHAPTER - IV
IMPLEMENTATION OF MIS IN ORGANIZATION

Objective
The technological advancement has created a challenge to the Management.
Traditional Management used to think how to manage resources such as money, materials, men
and machines. Now it must also manage a resource known as information. Manager in the
organisation is defined as translator or transducer of information into decision making body. This
chapter describes the main features of a management information system in organisational setup
with various functions, importance, relationship with planning, control and operations, indicating
clearly what is MIS and what is not.

As businesses are gradually moving their orientation from production perspective to

customer perspective, they are expected to dynamically adjust their production methodology to
suit market and trend demands. This requires a highly reliable management system to support
overall business processes. Businesses can no longer compromise with inefficiency and
inaccuracy caused by either human or system factors.

In today’s life, business means competition. Every business will contend to produce not
only a better and more reliable product but also providing a better customer service. In the
mean time, they are enforced to minimise their production costs as well as their overhead costs.
These can only be achieved through developing a better information system, a highly reliable
infrastructure and a more efficient management system.

Management Divisions

Management is segmented into two main divisions such as:

(1) Planning - means deciding what to do and
(2) Control - means assuring that desired results are
obtained. MIS aids in the following functions :-
(1) Strategic planning
(2) Management control and
(3) Operational control.
These concepts can be defined as follows :
1) Strategic planning - is the process of deciding on objectives of the organisation such
as changed objectives and policies that govern acquisition, use and disposition of
resources.
2) Management control – is nothing but assurance of the manager that these resources are
obtained and utilized efficiently in the accomplishment of organisation objectives.

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3) Operational control - is method of assuring that defined tasks are carried out very
benevolently and effectively.

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 The various functions of management planning and control are listed below for quick
and easy understanding.

Functions Strategic planning Management control Operational control

Production Location of new/ old Determining the type Scheduling specific jobs.
unit. of product mix, for
a monthly production
programme.
Marketing Decision on entering Planning for mass Deciding and planning
export market. media advertisement. for sales contacts for next
fortnight.
Finance Raising capital by Ascertaining max. Decision of action for non-
shares, credit level for payment by a customer.
debentures and customers.
warrants.
Personnel Deciding on changes Filling a vacated post Deciding the shift schedule.
to be made in the at middle and lower
organisation setup. levels of the
organisation.

Many experts favour breaking down of decision making process into three phases as :
1) Intelligence : In this particular stage decision maker recognises that there may be
problem or opportunity that compels him to make a decision.
2) Design : This stage helps to determine alternative action that could resolve the problem or
create advantage of opportunity.
3) Choice : This phase is concerned with the process by which one of the alternative
created in stage - 2 to be singled out to be persued.

Factors influencing successful use of MIS in an Organisations

1. Involvement of top management in computerization efforts explaining the role of
computer in achieving the goals of the organisation.
2. Selection of manager who has practical skills in choosing areas of application,
identification of information needs and designing reports.
3. An acceptable level of spending on hardware and software.
4. Computer personnel with inter-disciplinary skills in management and operation research.

Strategies for the Plan achievement

The designer has to take a number of strategic decisions for the achievement of the MIS
goals and objectives, such as;
a. Development strategy : An online, a batch, a real time.

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b. System development strategy : An approach to the system development - Operational
versus

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 Functional ; Accounting versus Analysis ; Database versus Conventional approach;
Distributed versus Decentralized processing ; One Database versus Multiple databases.
c. Resource for system development : In-house versus external, customized
development versus the use of packages.
d. Manpower composition : Analyst, programmer skills and know-how.
The selection of the architecture, the approach to the information system development
and the choice of hardware and software are the strategic decisions in the design and development
of the MIS in the organisation. The Organisations which do not care to take proper decisions in
these areas suffer from over-investment, under utilization and are not able to meet the critical
information requirements.
It is important to note the following points :
1. The organisation’s strategic plan should be the basis for the MIS strategic plan.
2. The information system development schedule should match with the implementation
schedule of the business plan.
3. The choice of information technology is a strategic business decision and not a
financial decision.

Ascertaining the Class of Information

Ascertaining the information needs of the Management for the business execution is a
complex task. The complexity can be handled if the information is classified on the basis of its
application and the user, which becomes the basis for the ascertainment.

Classes of information
Information class Example of information User
Organisational The number of employees, products, Many users at all the
services, locations, the type of business, levels
turn over and variety of the details of
each one of these entities.
Functional Purchases, sales, production, stocks, Functional heads
receivables, payables, outstanding,
budgets, statutory information.
Knowledge The trends in sales, production Middle and the top
technology, the deviations from the management
budgets, targets, norms etc. competitor’s
information, industry and business
information plan performance and target;
and its analysis.

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 Decision Status information on a particular aspect, Middle management
such as utilisation, profitability standard, and
requirement versus availability. operations management.
Information for problem solving
and modelling.Quantitative
information on the business status.
Non-moving inventory, overdue
payments and receivables.
Operational Information on the production, Operational and
sales, purchase, dispatches, management-supervisor,
consumption, etc. in the form section officers.
of planned versus actual.
The information for
monitoring of execution
schedules.

The design of the MIS should consider the class of information as a whole and
provide suitable information system architecture to generate the information for various users in the
Organisation. Let us now proceed to ascertain the information needs of each class.

Determining the Information Requirement

The sole purpose of the MIS is to produce such information which will reduce
uncertainty in a given situation. The moment what is unknown becomes known, the decision
maker’s problems become simple. Methods have to be evolved to handle the degree of
uncertainty, the Management is expected to deal with.
The difficulty to determine a correct and complete set of information is on account of the
factors given below :
1. The capability constraint of the human being as an information processor, a problem
solver and a decision maker.
2. The nature and the variety of information.
3. Reluctance of decision makers to spell out the information for the political and the
behavioural reasons.
4. The ability of the decision makers to specify the information.

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 Methods of handling uncertainty
Level of uncertainty Level of management Method
Low (near certainty). Operations management. Ask questions such as,
‘what do you need’?
Precise probabilistic Middle management. Determine from the
knowledge existing systems and
(A risk situation). methods of decision
making and problem
solving.
Not able to determine in Middle and top management. Determine through the
probabilistic terms critical success factors,
precisely (Very risky). decisions parameters
and decision
methodology.
High (Total uncertainty). Top management. Determine through
modelling and
sensitivity analysis.
experimentation,

There are four methods of determining the information requirements. They are :

1. Asking or interviewing.
2. Determining from the existing system.
3. Analyzing the critical success factors.
4. Experimentation and modelling.

Implementation of MIS

The choice of the system or the sub-system depends on its position in the total MIS
plan, the size of the system, the user’s understanding of the system and the complexity and its
interface with other systems. The designer first develops systems independently and starts
integrating them with other systems, enlarging the system scope and meeting the varying
information needs.

Determining the position of the system in the MIS is easy. The real problem is the degree
of structure, and formalization in the system and procedures which determine the timing and
duration of development of the system. Higher the degree of structuredness and formalization,
greater is the stabilization of the rules, the procedures, decision making and the understanding of
the overall business activity. Here, it is observed that the user’s and the designer’s interaction is
smooth, and each other’s needs are clearly understood and respected mutually. The
development becomes a methodical approach with certainty in inputs-process and outputs.

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 MIS is generally used by medium and larger scale organisations. However, small
organisations are yet to understand its application. There is dire need to build up computer
culture by properly disseminating information about computer applications and its benefits.

Implementation of MIS can be achieved by using any of the methods such as direct,
parallel, modular or phase in.

a) Direct approach

Direct installation of the new system with immediate discontinuance of the old existing
system is referred as ‘cold turnkey’ approach. This approach becomes useful when these
factors are considered.

1. The new system does no replace the existing system.

2. Old system is regarded absolutely of no value.
3. New system is compact and simple.
4. The design of the new system is inexpensive with more advantages and less risk involved.
b) Parallel approach

The selected new system is installed and operated with current system. This method
is expensive because of duplicating facilities and personnel to maintain both the systems. In this
approach a target date must be fixed when the operations of old system cease and new one will
operate on its own.

c) Modular approach

This is generally recognized as ‘Pilot approach’, means the implementation of a system

in the Organisation on a piece - meal basis.

This has few advantages / merits

1. The risk of systems failure is localized.

2. The major problem can be easily identified and corrected before further implementation.
3. Operating personnel can be trained before system is installed in a location.
d) Phase-in-implementation

This approach is similar to modular method but it differs because of segmentation of

system, however, not the Organisation. It has advantages that the rate of change in a given
Organisation can be totally minimized and the data processing resource can be acquired
gradually over a period of time. System exhibits certain disadvantages such as limited applicability,
more costs incurred to develop interface with old system and a feeling in the Organisation that

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system is never completed.

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Implementation procedures

(a) Planning the implementation

After designing the MIS it is essential that the Organisation should plan carefully for
implementation. The planning stage should invariably include the following :
1. Identification of tasks for implementation: Planning the implementation activities,
acquisition of facilities, procedure development, generating files and forms, testing the
system and evaluating and maintenance of the system.
2. Relationship establishment among the activity: Network diagram must be prepared to
correlate concurrent and sequential activities.
3. Establishing of MIS : For monitoring the progress of implementation and for proper
control of activities, efficient information system should be developed.
(b) Acquisition of facilities
For installation of new system or to replace current system the Manager should prepare
a proposal for approval from the Management by considering space requirement, movement of
personnel and location for utility outlets and controls.
(c) Procedure development
This is an important step for implementation of the system including various activities
such as evaluation, selection of hardware, purchase or development of software, testing and
implementation strategies.
(d) Generating files and forms
The MIS manager should generate files and formats for storing actual data. This
requires checklist data, format data, storage forms and other remarks in data base.
(e) Testing of the system
Test should be performed in accordance with the specifications at the implementation
stage consisting of component test, sub-system test and total system test.
(f) Evaluation and maintenance of system
The performance should be evaluated in order to find out cost effectiveness and efficacy
of the system with minimum errors due to designs, environmental changes or services.

Software maintenance
The proper maintenance is the enigma of the system development and it holds
software industry captive, tying up programming resources. There are some problems in
maintenance such as regarding it as non-rewarding, non-availability of technicians and tools,
noncognizance of users about maintenance, problem and cost, lack of standard procedures and
guidelines. Most programmers feel

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maintenance as low level drudgery. If proper attention is paid over a period of time eventually
less maintenance is required.
Types of maintenance
The maintenance of system can be classified into corrective/ adaptive/ perfective.
Corrective maintenance means repairing process or performance failures. Adaptive maintenance
means changing the programme function, whereas perfective maintenance deals with enhancing
the performance or modifying the program.
Primary activities of a maintenance procedure
Documentation is major part of maintenance in system development. Maintenance staff
receives requests from the authorized users. Programming library should be maintained.
Reduction in maintenance costs
Several Organisations having MIS generally go in for reducing maintenance costs and it
consists of three major phases.
1. Maintenance management audit through questionnaires and interviews.
2. Software system audit.
3. Software modification.

Evaluation methods
Evaluation of the MIS in an Organisation is integral part of the control process. There
are several evaluation approaches such as quality assurance review, compliances of audits,
budget performance review, computer personnel productivity assessment, computer performance
evaluation, service level monitoring, user audit survey, post installation review and cost benefit
analysis.
Evaluation performance measurement can be classified into two classes as effectiveness
and efficiency. The relationship between effectiveness and efficiency is that the former is a
measure of goodness of out put and the latter is a measure of the resources required to achieve the
out put.

Information Resource Management (IRM)

IRM is a concept, an idea and a perspective rather than an entity. IRM attempts to
focus attention on the information that is produced by a system rather than the system itself or on
the hardware and software components of the system. [IRM emphasises managerial abilities but not
technical. It is interaction of managers and technicians.
The change over of traditional organisation into MIS brings out change in attitudes
towards information system. These changes bring distinct perspective.
1. Information is taken as resource but not a by-product of transaction processing.
2. It becomes resource of entire organisation but not of an unit.

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3. Information from traditional data processing activities change to collection of information
from many resources.

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Ingredients and Implementation of IRM
IRM activity comprises of all the information resources of an organisation which
include business data processing, data management information centres, end user computing and
networking. The major function of IRM is to integrate and co-ordinate all the above activities in
the organisation.
The implementation of the system is a management process. It brings about
organisational change, it affects people and changes their work style. The process evokes a
behaviour response which could be either favourable or unfavorable depending upon the
strategy of the system implementation.
In the process of implementation, the system designer acts as a change agent or a catalyst.
For a successful implementation he has to handle the human factors carefully.
There are certain guidelines for the systems designer for successful implementation of the system.
1. Not question should limit the information need of the user.
2. Not to forget that his role is to offer a service and not to demand terms.
3. Remember that the system design is for the use of the user and it is not the designer’s
prerogative to dictate the design features. In short, the designer should respect the
demands of the user.
4. Not mix up technical needs with the information needs. He should try to develop
suitable design with appropriate technology to meet the information needs. The designer
should not recommend modifications of the needs, unless technically infeasible.
5. Impress upon the user the global nature of the system design which is required to meet
the current and prospective information needs.
6. Not to challenge the application of the information in decision making. It is the sole right
of the user to use the information the way he thinks proper.
7. Impress upon the user that the quality of information depends on the quality of input
which he provides.
8. Impress upon the user that he is one of the users in the organistaion and that the
information is a corporate resource and he is expected to contribute to the development
of the MIS.
9. Ensure that the user makes commitment to all the requirements of the system design
specifications. Ensure that he appreciates that his commitments contribute largely to the
quality of the information and successful implementation of the system.
10. Ensure that the overall system effort has the management’s acceptance.
11. Enlist the user’s participation from time to time, so that he is emotionally involved in
the process of development.
12. Realise that through serving the user, he is his best guide on the complex path of
development.
13. Not expect perfect understanding and knowledge from the user as he may be the user of
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a non-computerized system. Hence, the designer should be prepared to change the
system specifications or even the design during the course of development.

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 14. Impress upon the user that the change, which is easily possible in manual system, is not
that easy in the computer system as it calls for changes in the programs.
15. Impress upon the user that perfect information is non-existent, his role therefore still has
an importance in the organisation.
16. Take care that the problems in the organisation are resolved first before the system is
taken for development.
17. Conduct a periodical user meetings on systems where you get the opportunity to know
the ongoing difficulties of the users.
18. Train the user in computer appreciation and systems analysis as his perception of the
computerized information system will fall short of the designer’s expectation.
Implementation of the MIS in an organisation is a process where organisational
transformation takes place. This change can occur in a number of ways.
The Lewin’s model suggests three steps in this process.

(1) The first step is unfreezing the organisation to make the people more receptive and
interested in the change.
(2) The second step is choosing a course of action where the process begins and reaches
the desired level, and
(3) The third step is re-freezing, where the change is consolidated and equilibrium is
reinforced. Many a times, this process is implemented through an external change
agent, such as a consultant, playing the role of a catalyst. The significant problem in these
tasks is the resistance to change. The resistance can occur due to three reasons viz., the
factors internal to the users of information, the factors inherent in the design of the
system and the factors arising out of the interaction between the system and its users.
The problem of resistance can be handled through education, persuasion, and
participation. This itself can be achieved by improving the human factors, and
providing incentives to the users, and eliminating the organisational problems before
implementing the system.

Management of Quality in the MIS

Information is a corporate resource, as important as the capital, know-how etc. and is

being used for decision making. Its quality, therefore, is required to be very high. A low quality
information would adversely affect the organisational performance as it affects decision making.
The quality of information is the result of the quality of the input data, processing design, system
design, system and procedures which generates such a data, and the management of the data
processing function. Quality, unlike any other product, is not an absolute concept. Its level is
determined with reference to the context and its use, and the user. Perfect quality just as perfect
information is non-achievable and has cost-benefit implications.
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 However, it is possible to measure the quality of information on certain parameters. All
these parameters need not have a very high value in terms of the unit of measure. Some
parameters may have lesser importance in the total value on account of their relevance in the
information and its use.
The quality of these important parameters is ensured by conducting a proper systems
analysis, designing a suitable computer system and ensuring its maintenance from time to time and
also subjecting it to audit checks to ensure the system integrity.
The quality of the parameters is assured if the following steps are taken.
1. All the input is processed and controlled.
2. All updating and corrections are completed before the data processing begins.
3. Inputs (transactions, documents, fields and records) are subjected to validity checks.
4. The access of the data files is protected and secured through an authorization scheme.
5. Intermediate processing checks are introduced to ensure that the complete data is
processed right through i.e., run to run controls.
6. Due attention is given to the proper file selection in terms of data, periods and so on.
7. Back up of the data and files are taken to safeguard corruption or loss of data.
8. The system audit is conducted from time to time to ensure that the computer system
specifications are not violated.
9. The system modifications are approved by following a set procedure which begin
with authorization of a change to its implementation followed by an audit.
10. Systems are developed with a standard specifications of design and development.
11. Computer system processing is controlled through programme control, process control
and access control.
Quality parameters
Parameter of quality Example Comments
Complete data of all All invoices of the month. This achieves integrity of
the transactions All vouchers of the month. data with respect to the
time period.
Valid transaction and input data Only correct transaction Ensures the validity of
types are permitted in the the data and in turn,
system. Only that data assures a valid
which meet the design information.
specifications can be used.
Assures that the results

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Accuracy and precision Correct use of the are accurate and
formula or procedure and precisely correct based
relevant data. on rule, act or law using

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 complete data.
Relevance to the user It should be relevant to the If the relevance is
user for a decision making. appropriate, the quality
required is high.
Timely information Information on the sales If the information is
despatch, pending position. received late it becomes
useless from a point of
view of decision making.
Meaningful and complete Production information Incomplete information
information should be reported in forces the user to infer
terms of quantity, quality or interpret erroneously
and groups,or family and leading to a wrong
rejection and reasons. decision.
It should be
given in a proper
format with
references.

The assurance of quality is a continuing function and needs to be evolved over a period
and requires to be monitored properly. It cannot be assessed in physical units of measures. The
user of the information is the best judge of the quality. Utility of information and its relevance
are the two other measures of quality.

Organisation for implementation of the MIS

Proper organisation is basic to the management of any activity or function. The same
thing is true for the application of MIS. The principles of the organisation and structuring the
organisation to the specific needs of the function is a prime necessity. When we talk with
reference to the MIS a number of issues come up and they are not the same in all the
organisations. Hence, the organisation structure of the MIS would differ from one organisation to
the other.

The type, the size and the structure of corporate organisation becomes the basis for
the MIS organisation for handling the MIS function and management alternatives. The major issues
involved are :

1. Whether the function should be handled as a centralized or decentralized activity.

2. The allocation of the hardware and software resources.
3. The maintenance of the service level at an appropriate level.
4. Fitting the organisation of the MIS in the corporate organisation, its culture and the
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management philosophy.

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MIS : The factors of success and failure

Many organisations use MIS successfully, others do not. Though the hardware and
the software is the latest and has appropriate technology, its use is more for the collection and
storage of data and its elementary processing. There are some factors which make the MIS a
success and some others, which make it a failure. These factors can be summarized as follows.

a) Factors contributing to success

If a MIS is to be a success then it should have all the features listed as follows:

● The MIS is integrated into the managerial functions. It sets clear objectives to ensure
that the MIS focuses on the major issues of the business. Also adequate development
resources are provided and the human and organisational barriers to progress are
removed.
● An appropriate information processing technology required to meet the data processing
and analysis needs of the users of the MIS is selected.
● The MIS is oriented, defined and designed in terms of the user’s requirements and its
operational viability is ensured.
● The MIS is kept under continuous surveillance, so that its open system design is
modified according to the changing information needs.
● MIS focuses on the results and goals, and highlights the factors and reasons for non-
achievement.
● MIS is not allowed to end up into an information generation mill avoiding the noise in
the information and the communication system.
● The MIS recognizes that a Manager is a human being and therefore, the systems must
consider all the human behavioral factors in the process of the Management.
● The MIS recognises that the different information needs for different objectives must be
met with. The globalization of information in isolation from the different objectives leads
to too much information and its non-use.
● The MIS is easy to operate and therefore the design of the MIS has such features
which make up a user friendly design.
● MIS recognises that the information needs become obsolete and new needs emerge. The
MIS design, therefore, has a basic potential capability to quickly meet new needs of
information.
● The MIS concentrates on developing the information support to Manager critical
success factors. It concentrates on the mission critical applications serving the needs

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of the top management.

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b) Factors contributing to failures

● The MIS conceived as a data processing and not as an information processing system.
● The MIS does not provide the information which is needed by the managers but it tends
to provide the information generally the function calls for. The MIS then becomes an
impersonal system.
● Underestimating the complexity in the business systems and not recognising it in the
MIS design leads to problems in the successful implementation.
● Adequate attention is not given to the quality control aspects of the inputs, the process
and the outputs leading to insufficient checks and controls in the MIS.
● The MIS is developed without streamlining the transaction processing systems in the
Organisation.
● Lack of training and appreciation that the users of the information and the generators of
the data are different, and they have to play an important responsible role in the MIS.
● The MIS does not meet certain critical and key factors of its users such as a response
to the query on the database, an inability to get the processing done in a particular
manner, lack of user-friendly system and the dependence on the system personnel.
● A belief that the computerized MIS can solve all the management problems of planning
and control of the business.
● Lack of administrative discipline in following the standardized systems and procedures,
wrong coding and deviations from the system specification result in incomplete and
incorrect information.
● The MIS does not give perfect information to all the users in the Organisation. Any
attempt towards such a goal will be unsuccessful because every user has a human
ingenuity, bias, certain assumptions not known to the designer. The MIS cannot make up
these by providing perfect information.

Summary

Alignment of business and MIS goals has become a key consideration for most
businesses. This is especially true with technology infrastructure increasingly being viewed as a
strategic asset by most companies. Consequently, information systems department leaders are
frequently called upon to provide a strategic vision for the enterprise, which compliments the
company’s stated business objectives. Understanding and applying the strategic planning process
has become a vital skill for today’s technology leader.
Management information is an important input for efficient performance of various
managerial functions at different organization levels. The information system facilitates
decision making. Management functions include planning, controlling and decision making.

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Questions:

1. Explain the functions aiding MIS with respect to Production, Marketing, Finance
and Personnel?
2. What are the phases favouring breaking down of decision making process?
3. What are the factors influencing successful use of MIS in an organization?
4. Enumerate the strategies for plan achievement?
5. Describe the methods used in implementing MIS?

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 CHAPTER - V
COMPUTER AND DATA MANAGEMENT IN MIS

Objective
Management Information System is vital for all kinds of organisations. In todays world
of ever increasing complexities of business management MIS comes handy to the management in
providing information at various stages of decision making. This helps the organisation in
achieving its predetermined goals and objectives.
Computer may be referred as a fast and accurate electronic symbol manipulating
system that is designed and organised to accept automatically input data and process that for
producing outputs results, under set detailed stage by stage directions and programmes.
This word computer is derived from latin word ‘computare’ meaning to reckon or to
compute. Computers can be classified as analog computers and digital computers. An analog
computer that measures physical value of temperature, pressure that exhibits on a continuous
scale. On the other hand digital computers are those which directly counts the number that
represent numericals, letters and other specials. Most of the present day computer are of digital
system and differ from mechanical and electronic calculators in their nature like speed, internal
memory, stored programme and auxiliary memory.

Classification of computers
Present day computers are grouped into various categories based on their speed,
memory, capacity, no. of users it supports and number of peripherals attached. With advancement
of computer technology lot of categories of computers are fast vanishing.
Micro computers: These are generally based on micro processor with semi conductor ROM
for storing programmes and data. These are extensively used as personal (PC’s) and home
computer.
Mini computer: Micro-computers are essentially of single user system where as Mini-computers
are multiuser type with more peripheral support. Examples under this categories are HP 3000,
super 16 of ECIL. These are normally referred as superminies.
Main frame and super computers
These are very powerful system than other categories of computers. They have very
high capacity for raw data processing and used for complex applications like molecular structural
analysis, weather predictions and nuclear research.
Special features of computer
The unique characters of computer are explained below :
1. Speed : The time required for computer to execute a basic operation may vary from few
microseconds (1ms= 10-6S ) to nano seconds (1 ns =10-9 S)

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 2. Versatality : Computers can be used for preparing documents to launching of
satellites, thus makes them versatile machines.
3. Deligence : Computers can work long as hours than human beings without fatigue and
hindrance. Its diligence is never questionable.
4. Automation : Computers work without human intervention once data are fed with
program instructions.
5. Storage capacity : Computers are capable of storing huge information depending upon the
type i.e., in a PC-10 to 300 MB (1 MB = 10,00,000 characters).
6. Accuracy : The computers will produce accurate results provided the data are correct,
relevant and program instructions relevant and reliable.
Data processing
Computers take data at one end and produce information at the other end. The data
may be referred as basic facts, such as names and number and information means that data
transformed into more meaningful intelligent form.
Data processing may be explained as a process of collecting data together and
converting into information, generally referred as Electronic Data Processing (EDP).
In most countries MIS is viewed as a Computer Based Management Information
System (CBMIS). It is planned, analyzed, designed, developed, implemented and evaluated as an
activity of management.
Electronic Data Processing
There are three basic activities of EDP. They are :
1. Capturing data : The required data should be recorded in various forms before they
are processed and done through input devices.
2. Manipulating data : The important operations involved in manipulating data are
classification, calculating, summarizing and logical decision making.
3. Managing out put results : The major operations involved are storing and
retrieving, communicating and reproducing.

Computer application
Computer is an excellent technological invention influencing the society and extends
and expands human capabilities in terms of computer power. Examples of Computer application are
pay roll maintenance, customer accounts, inventory and production schedules. In many advanced
countries MIS has evolved to IRM through Decision Support System (DSS) and Executive
Support System (ESS).

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Computer based customer service
Use of on line terminals and past response processing data means will help for
processing many customers transactions, while serving the customer. For example, air line, bus
and train reservations, stock exchange and bank transactions.
Analysis and processing of data through computers
There are several computer oriented techniques developed because of high speed and low
cost involved for computation. Some of the examples are :
(a) System simulation
(b) Information retrieval
(c) Critical path scheduling
(d) Linear programming (this technique is used to achieve optimum results such as
minimizing the cost and maximizing the profits).
Guidance and controls
Computers are used to guide and control. Various mechanical systems are controlled by
computers according to the need and functions to be carried out based on the data furnished to it.
Examples (1) Missile and satellite guidance
(2) Nuclear submarines and warships.
Education
Computers are extensively used in teaching process such as CAI (Computer Aided
Instructions), decision simulations, management of games, management of information.
Other applications
(1) Medical diagnosis
(2) Computer art

Computer organisation
Computer comprises of hardware and software. The hardware of the computer involves
physical equipment that go together to make computer, while software is the specific group of
programs that computer needs to function to meet the specific objectives.
Hardware consists of fine principal components.
(1) Input
(2) Memory
(3) Control
(4) Arithmetic logic
(5) Out put device.

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Input device Converts information from form suitable to
human beings to one usable by the
computer
Control unit Directs the result of the processing to output unit
or and to the memory unit for storage
Memory unit Stores information as directed by the control
unit Arithmetic and Logic Unit (ALU) Performs arithmetic operation and conducts
comparison of stored information to make logical
decisions. This particular unit contains detailed
components such as adders, counters, multipliers,
compactors and accumulators.
Out put device converts the results to a form understandable by human beings.

Software
Software is nothing but set of programs that are run in a computer. There are 4 major
types of computer programmes.
a) Operating system
b) Utility programme
c) Language processors
d) Application programme.
a) Operating System
These programmes are normally within and supplied by computer manufactures. These
are designed to (i) govern and control, the computer hardware components such as memory and
input output devices. (ii) act as an interface between the users programme and the computer
components.
b) Utility programme
Most of the these programmes are written and supplied by manufactures. This type of
utility programmes are used in data based management system to manipulate and print out results.
The major functions are
(a) To load the program into the memory
(b) To duplicate magnetic tapes.

c) Languages processors
These processors are used to translate programmer written instructions into machine code
instructions.
d) Application programme
These programmes are specific with an intention to serve specific jobs such as pay roll,
billing and reservations.
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Programming language
The language used in communication or computer instructions is termed as programming
language. Presently the following programming languages are available.
a) Machine language
b) Assembly language
c) Procedure oriented language
a) Machine language
This is the only language understood by computers. It generally consists of a large number
of binary digits (Bits) of One’s and Zero’s. Programming in this language is slow and intricate.
b) Assembly language
In this system mnemonic codes are
used. Eg. Add/A = Addition,
Sub/S = Subtraction etc.
The programmes written in assembly language should be transformed into machine
language before it is used. This translation is done by a computer programme referred to as
assemble or translator. Generally writing a programme in a machine language is tedious and very
slow.
c) Procedure-oriented language
These languages are generally developed for problem solving by the user than being
machine centered. Hence they are known as high level languages which are used to translate
machine language through a system software called compiler or translator. Most of the
programmes written in HCL are known as source programmes. Source programme (Programme
in high level language) à Compiler (translator) a Programme in low level language (object
language) à Machine language.

Computer terminology for memory

Bits A bit is an abbreviation for a binary digit and can contain either 0 or 1.
Bytes Eight adjacent bits designed to store the binary code for a single
character (decimal digits or other characters) are referred to as a byte.
Word Each storage locations is called a word, a word can store a number
or a character or an instruction.
Storage locations These are labeled from o and
up. or cells
Address The label of location is called its
address. Auxiliary memory It is usually in the form of disks
and tapes.
Common high level languages
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 There are several high level languages developed during last few years. Some of them
are summarized hereunder :

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 FORTRAN - Used in science and engineering and latest version is FORTRAN 77.
ALGOL - Used in Science and engineering termed as ALGOL 68 or extended ALGOL.
LISP - Employed in artificial intelligence reformed as LISP-1.6.
APL - Utilized in science and engineering abbreviated as APLSV.
COBOL - Common Business Oriented Languages employed in business and called as
COBOL -74
BASIC - Beginners All Purpose Symbolic Instruction Code used in science and
engineering called as standard basic.
PL/1 - Programme Language 1 used in general programs and available as PL/1,
optimism, NASI-standard.
PASCAL - Blaise Pascal used in general programming and referred to as standard
PASCAL Ada - Augusta Add Pryron utilized in general programming and called as Ada.

DataBase concepts
A database is an integrated collection of well defined data and information, centrally
controlled in all its aspects, created and stored in a typical structure for an organisation. In an
organisation, the database could be, one or more, depending upon the needs and the operations
of the organisation. The data structure and its storage should be such that it facilitates shareability,
availability, evolvability and integrity of the data.

Why Database
Conventionally, in an information system, the information is obtained by developing the
systems and integrating them. This calls for breaking the system into various sub systems and
developing the information systems independently. In this approach, each system will have its
master and transaction files. They have to be processed separately at different times, depending
upon the needs and schedules. The file layouts and the access methods could be different in
different systems. Therefore, the files will be updated at different times. This approach does affect
the quality of the information across all the systems. The main disadvantages are data redundancy
and inconsistency, difficulty in access to the data, concurrent accessanomalies and integrity of the
data and security problems. To eliminate these problems, database approach is the solution.
Database is designed independent of its use for the application. The user of database should view
the data in the database as on which he can develop his system separately.
The advantages in the database approach are as follows :
1. All the Managers are using the same database, hence, any report using the information
will not be inconsistent.
2. All the Managers can view the database as per their needs.
3. The application system can be developed independent of the database.
4. The data validation and updating will be once and same for all.

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 5. The data is shared by all the users.
6. The data security and privacy can be managed and ensured because the data entry in
the database occurs once only and is protected by the security measures.
7. Since the database is a storage of the structured information, the queries can be
answered fast by using the logic of the data structures.

Database models
There are three types of database models which are common in the industry. They are the
Hierarchical Data Model, the Network Data Model and the Relational Data Model. These models
have their own particular nature, and therefore, they are applicable in the industry where a similar
situation exists. There is a fourth model known as the Object Data Based Model (ODBM) in
which data is structured as objects at a much higher level as compared to the other models
providing a flexibility in designing the applications.

Difference between Three models

The main difference between three models of the database lies in representation of the
entity relationships and its structure, and the user has to understand the structure, while
designing the application based on the database models. The network model provides the
relationship in the form of network giving easy navigating path to the user of the database. The
HDBM shows Parent Child relation. The NDBM shows the Owner-Member relation and the
dependencies of any two entities.
Of the three, the Relational Model has found wider acceptance for the following reasons:
a. Simplicity: The entity relationships are identified in simple tabular form, understandable
to the users of the data. It is not related to any structure of entities like the hierarchy
or the network.
b. Non-procedural requests: Since there is no structure dependence, the information can
be obtained from any point in the database. No procedural language is to be used.
c. Data independence: Since the model is based on the relations and not on the structure
there is a high degree of data independence. This, however, calls for ensuring that the
relationships must be complete and accurate.
d. Theoretical foundation: The relational data model is based on the set theory of
relations and is designed on the principle of normalization. For the other models, such
mathematical foundation does not exist. The disadvantages of the relational model are
that it demands a large amount of storage, access and speed capabilities to handle the
model.

Database Design
To develop a database that satisfies the information needs of today as well as tomorrow,
it is necessary to understand the database conceptually. The first task of the designer is to develop
the Conceptual Model. The conceptual model is independent of the user applications, the hardware
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and the DBMS.

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The steps in the development of the conceptual model are :
1. Data analysis
2. Relational identity
3. Graphical representation
4. Design process

Data analysis
The database administrator should initiate a plan to collect the data needs of each person
to the organisation. It is necessary to investigate further as to how the data is processed by these
persons in executing their functional responsibilities.

Relational Identity
The conceptual model is used to develop a logical model which can be implemented
with the relational, hierarchical or network model of the Database Management System. The major
concept used from the relational theory is Normalization. The normalization process groups the
entities and attributes in the form of two-way tables.

Design process
It is necessary to examine systematically the purpose of the input data which will find
place in the database of the desired outputs. The design process considers information requirements
of many different types of users (data views) and the designs the inputs for the database. The
conceptual relationship will decide the key data entities and its attributes. While designing the
database, these elements play an important role.

Physical Database Model

The physical model of the database is a stored framework of data on a physical
device. Since a large percentage of the database are used in an on-line environment, one has to be
concerned with the visible performance. The performance of the database is a multivariate function
with the physical model as a major variable.
The designing of the database always tries to optimise the physical model for the space
and the time considerations. The three areas, where the database designer needs expertise for an
optimum performance of the database are :
1. Knowledge of the database management system.
2. Understanding of the characteristics of the direct access devices and the access needs.
3. Knowledge of the applications.

Relational Database Management System (RDBMS)

The decision making is required more in a real time environment where the decision
making process, right from the problem definition to solution, needs to be handled quickly.

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The business

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environment is distributed and decentralized requiring a real time resource (hardware, software,
data, and information) sharing with a complex data flow. All this demands the RDBMS which can
serve both the decision support and the transaction processing requirements.
The latest RDBMS systems have two sub-systems or parts. One deals with data
management and transaction processing which is independent of its application in the information
process. The second part provides a set of tools for developing and utilizing on-line applications
for the decision support. This is handled by the Client-Server architecture which separates the
data management functions from its application.
The latest trend in the Information Technology is to make the end user computing
simple, easy to understand and easy to use. The concept is extended to the system analyst and
programmers, where the RDBMS provides the tools, saving development and processing time. It
allows the business rules of the organisation, standard transactions and queries to be programmed
once and makes them available to all the users and developers as a stored procedure in the Data
Dictionary. These stored procedures can be nested to develop an application. These procedures
are, both reusable and sharable and are developed using the standard SQL. The RDBMS is also
capable through the interface to handle the data sources from the other databases and application
tools developed on different Operating Systems.
The user does not have to change the development made on other platforms, i.e., the
RDBMS can interact with the other RDBMS, or call the data from a Personal Computer based
Lotus application or can use the programme written in the other language such as C, FORTRAN,
COBOL etc. With these advantages of the modern RDBMS over the traditional DBMS, the
information processing through-put and the resultant performance are considerably enhanced.
Modern RDBMS allows high level security by providing various tools to the system
administrators, the database owners and the users to grant and revoke permissions to the specified
users or a group of users on the specified tables, views, columns, stored procedures and
commands. In the traditional DBMS system, the data was required to store in different databases
in line with the security levels, while in the modern RDBMS system a multiple security is taken
care of by one integrated database management system.
The latest RDBMS allows an on-line maintenance, rapid recovery and software based
fault tolerance. These features ensure the availability of the database round the clock as the
database maintenance is possible on line when the system is in use.
The modern RDBMS, unlike the traditional DBMS, handles the distributed
heterogeneous data sources, software environments and hardware platforms.
RDBMS allows communication at the database level and performs in a unified manner
as a single entity through the updates, and processing would take place at the respective distributed
locations. This is achieved through a software interface across the organisation.

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 The characteristics of the modern RDBMS includes hardware independence,
software independence, workability under a client architecture, a control feature of integrity,
security and autonomy and built-in communication facilities to achieve and open the system
feature for the MIS. It, therefore, provides a very efficient and effective tool to a skillful designer,
developer and user for handling the information needs of the business enterprise.

MIS and RDBMS

The MIS is supported by database in its endeavour to support the management in
decision making. The database models be it the NDBM, the HDBM or the RDBM, play the
same role in the MIS. With the latest computer hardware and software capabilities the RDBMS
have become popular. The concept of the end user computing can be implemented easily with the
database approach to the information system. With the database approach, considerable data
processing efforts, which were spent in the approach of the conventional system, are saved. The
data is made independent of its application.
Now, the users of the data have a clear understanding of the entities and its attributes
owing to the concept of the data dictionary. The major problems, which the MIS designers had
to face earlier, were on account of the different definitions of data by the different users, and its
applications. These problems have automatically disappeared with the database approach. Another
problem which the designers faced was that of data concurrency and redundancy. Once an entity is
defined and located in the database, it is same and common to all. All the users using the database
will get the same results on account of the concurrency and hence avoid data redundancy.
With the database approach, the manager’s information needs on queries can be easily
met. With the RDBMS and the development of the Structured Query Language (SQL), it is
possible to interact with the database and satisfy the queries by using the SQL. The development
of the SQL is a blessing to the users of the database.
The attributes of a good information, viz., accuracy, scope, timeliness, form and so on
can be easily achieved with the database approach to the MI System.
The MIS designs have become more dependable due to the database and the SQL.
The rigidity of the design is replaced by the flexibility of the design. It is now possible to
review the applications more frequently from the point of view of utility and have them modified,
if necessary.
The database has strengthened the foundations of the MIS due to the following :
a. The database can be evolved to the new needs of the MIS.
b. The multiple needs can be met with easily.
c. The data design and the output design are flexible.
d. Open system design of the MIS is possible.
e. The query handling becomes easier due to the Standard SQL.
f. User friendly end user computing is possible.
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 g. The data is freed from its ownership and its use has become universal.
h. The Information Technology provides tools to handle distributed multiple databases
making the MIS richer.

Client - Server Architecture

The need to access right information at the right time by its user is increasing at a
rapid pace. With the business environment becoming competitive and cost of business processing
increasing rapidly, the managers of business need flexible, dynamic, simple-to-use, technology friendly
information systems to meet their business information needs. Big business operations have
multiple locations and multiple divisions and because of that data generation, acquisitions and
maintenance became a technological challenge. To contain cost of running the business and to
improve the services to the customer, the managers developed variety of strategies.
The computing technology of the sixties and seventies supported centralized processing
with mainframe computing. In this period data and transactions were brought to a central place,
processed in batch mode and the resultant information was delivered at fixed intervals in pre-
determined form and content. In this period computing, storage and communication technologies
were grossly inadequate to take care of dynamically changing needs of business information.
On analysis of the needs it was found that what was needed is the capability to
separate data from its usage of application. It was found that data entities are same but they need to
be processed differently in different situations. It was a case when a situation demands more data
from different sources. The user of information also wanted freedom of option to choose
information and its processing. In the wake of such requirements, large data volumes and
transactions required speedier processing to deliver the desired information. Mainframe, host based
computing technologies did not serve these needs satisfactorily.
With downsizing of mainframes, increased CPU power and data storage capabilities,
this problem was overcome to a limited extent by resorting to distributed processing. In
distributed processing hardware-software is distributed at various locations and further data is
distributed where it is required most. The approach was to bring the data and the application closer
to the user, reducing dependence on centralized authority.
The networking technology coupled with Personal Computer (PC) becoming powerful, the
user found great relief in meeting their needs.
The environment of the business puts certain demands on the architecture of information
processing system. The demands are as follows :
1. Data, business rules and usage should be independent.
2. Data and database should be distributable with controlled access from any point.
3. Choice of hardware and software should be such that it is application independent.
4. The processing platform should be easily scalable with no need to change the
development.

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 5. The architecture of the hardware should be scalable to meet the budget constraints
meeting ongoing changing user needs.
6. The application designed should be such that it follows standards of coding,
presentation and storage giving same look and feel in all application to all users.
7. Data and hardware resources should be sharable.
8. Its platform should remain same even if the organisation is restructured, downsized,
protecting the investment and development.
The system architecture from the sixties to eighties was grossly inadequate, inefficient
and incapable to handle these genuine business requirement. This was mainly due to
technology incompetence which is now (in the nineties) overcome. The technology in all walks
of business has become very efficient to handle these requirements. The technologies of
computing, storing, programming, processing, communicating and presenting the processed result
are so advanced that one can build a new architecture called as Client Server.
Client Server Architecture (CSA) is a distributed, co-operative, processing environment
whereby the entire task of processing is divided in such manner that there is a demand on the
system through a client and there is a server in the system to serve this demand. The
architecture has two components, client and server, where client makes a request and the server
then processes the request and serves the client by offering the result. The clients and servers are
connected to each other through a network component which handles communications between the
two.
In the CSA, client sits at the front end and the server is at the back end. The client
represents front end tasks requested by the end user. The server represents the back end tasks
of processing and communicating to the clients.
The simple architecture of Client Server is where application is broken into two
logical divisions, data and its processing logic. While data sits on back end server and its
management is done by DBMS and the application processing logic such as validations,
application of business rules and computing is placed in a front end client device. Both client and
servers are essentially computers of varying capacity and capability.
The client and servers are connected through either LAN or WAN network. The client
has its own processing application logic and server has its own processing logic to handle data
and its processing.
The client handles server independent tasks through its stored application logic and
server handles clients’ requests which are triggered after processing in the client. Hence, true Client
Server implementation requires, application programs split in such a manner that client level
processing is done by the client and communicated to server to carry out the rest and offer the
feedback to the client with the processed result. Broadly, back end server has DBMS system and
related application logic, and the client has front end tools to handle the requirement in terms of
input, process and presentation. This is a traditional model of the mainframe system. An improved
version of the traditional model is known as PC centric client – server system, which is known as
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first generation client – server

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model consisting of (1) server (Database) (2) work station (main PC) with logic sites
(secondary PC) Based on the two tier first generation model, second generation two tier client
server model is evolved.
There are three basic software components of Client Server - front-end software,
middleware and the server software for a three-tier client – server model. Front-end software
includes application development tools and reporting tools, including spreadsheets and word
processors. The role of this software is to connect to servers, submit the requests and receive
processed information result. Front- end development tools such as Power builder, Delphi, Visual
Basic are widely used. These front-end tools support open database connectivity (ODBC) feature
to popular database like Oracle, Sybase, Progress, Ingress, making these tools DBMS independent.
Report tools also link to Database servers, allowing users to create ad-hoc reports and
graphs using back end database. These tools provide rapid application development allowing
users to use prebuilt components of other application systems which reside in the directory or
library.
A typical three tier Client Server Model has three components i.e., Data Server,
Application Server and PC-Client. The middle tier, usually is used for transaction processing or
object request processing. Since middle level servers can be provided easily, developer can plan the
system for much more number of users than the two tier model provides. The second server
can be introduced considering the possibility of dividing the application processing, and
distributing it on more than one server. Such distribution makes the processing faster. The
techniques of distributed processing and parallel processing would be used for suggesting the
partitioning of the processing logic.
Whatever may be the number of tiers, each tier has a role to play in the application
processing. Database servers don’t just serve up the data, they provide locking mechanisms, access
controls, optimise database queries and support communication calls received from server to client.
Database server also stores procedures to be used in application when called by client
or server. The stored procedures, triggers and rules allow developers to program the database
server itself providing another location for application logic. The stored procedures or triggers are a
collection of SQL statements and procedure logic, which can be placed in database server as
objects. Client applications can execute these stored procedures or triggers by making call on
them. The difference between stored procedure and triggers is that the trigger is activated
automatically by data -related events that the database server may come across. A rule (stored
procedure) is a special type of trigger which is activated if data is checked for a condition and it is
satisfied.
Application server is used for application logic processing. Using partitioning tools
the processing logic is split into server or between servers, and PC clients. Essentially it is a place
where applications are broken into smaller units, known as transactions and the server ensures that
they are processed completely in a co-ordinated manner to produce the application result.
Application partitioning tools Dynasty of Dynasty Technologies and Forte of Forte Software
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enable developers to partition a logic application dynamically over several servers reducing the
processing load resulting into better performance.

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 At client level, application development tools are put to use to develop and execute
the application. Some of the popular tools are Borland’s Delphi, Symantic’s Enterprise
Developer, Powersoft’s Powerbuilder, Gupta’s SQL Windows 5 and Microsoft’s Visual Basic. The
basic features of all these tools are that they perform the role of middleware, help in object
oriented development, aid in designing GUI (Graphical User Interface) features and provide
mechanism for the application distribution among the client and servers. With the ODBC
feature, developer needs only to load appropriate database drivers and log-on information leaving
rest of the process to the tool itself.
Report writer is the third component which is provided to developers and end users
to generate documents, records and reports. All front end tools are supported by the report
writers. They use middleware or ODBC to communicate with database server. Based on the
user criteria, report writer generates the database request and sends it to server or servers. It
processes the request and returns the data in a desired format of the client. All report writers run
in Microsoft Windows GUI Environment.
The Report Writer allows developers to select data elements from a menu and paste
them directly on the report. These tools support application development in three ways, as
stand alone reports, as embedded objects and as components of an application. Some of them
provide a complete development environment with runtime report distribution facility.
Second generation Client - Server characteristics are :
● Application logic placement in servers.
● Application partitioning.
● Transaction intensive.
● Scalable from simple to complex environment.
● Supports multiple platforms.
● High order security, testing and maintenance.
It uses Oracle, Sybase, Informix, Open-Ingress as back end database in database servers.
It uses application servers for loading transaction processing portion of the application. It uses
development tools such as Powerbuilders, Delphi, Visual Basic, SQL on PC client. Most of the
current Client Server implementation use ERP packages such as SAP, Peoplesoft, MAMIS, Oracle
financials with their proprietary development tools.
The Client Server architecture will continue to mature over next three to five years. The
research and development is continuing on all components of the architecture. Improvement in
front end tools, middleware and DBMS will facilitate easy customization of the architecture in
terms of distributed computing, partitioning of applications and processing on more than one
server and achievement of the desired performance.

Client Server Implementation Strategies

The Client-Server Implementation, is a customised solution. It is complex to conceive and

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difficult to plan.

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The complexity of the implementation is due to following reasons :
● Application mix and load
● Varying load with different nature of applications such as transaction intensive,
database intensive, traffic intensive.
● Organisation structure: Divisions, locations and information management requirement.
● Hardware-Software variety due to applications, special and general, requiring co-existence.
● High processing load and data transfer and replication requirements for implementation
in multiple locations.
● Seamless integration of technical talent, hardware and software with varying configurations.
● Conceiving enterprise wide solutions for at least, five years.
The implementation procedure would broadly involve the following steps :
1. Setting the goal, time frame to cover the scope to be brought under the implementation.
2. Forming a project group of experts comprising business analyst, system analyst,
information analyst, network specialist, hardware and software specialist, supported by a
consultant.
3. Discussing the requirement of information in terms of definition, scope, content,
frequency, number of users, distributed processing, data and application responsibilities
and so on.
4. Translating the requirement of information into applications with systems involved and
the processes which run the systems.
5. Making a broad classification of applications as critical and non-critical, transaction
intensive and data intensive. Further putting them by location and assigning the
responsibility and ownership.
6. Understanding the underlying processes which run across the functions, locations and
usage to define the integration needs.
7. Classifying the applications in terms of their requirement of dedicated specialised
hardware and software, like CAD/CAM/CAE, and use of other technologies.
8. Constructing an application grid, system grid to bring clarity of enterprise functioning
with mission critical and other applications marked.
9. Deliberating and deciding Hardware, Software, Operating System needs and configuring
each of them based on load, nature of load, users, processing needs, nature of processing,
reporting needs and so on.
10. Making a plan of networking the variety of platforms with infrastructural details
namely servers, routers, gateways, TCP/ IP, NOS and networking strategy LAN/WAN,
Internet / Intranet.
11. Selecting enterprise wide solution comprising ERP solution, dedicated local solutions to
meet specific needs, solution on supporting technologies for data capture, transaction
capture, data replication and transfer.
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12. Deciding on RDBMS, front end tools, report writers, packaged solutions for text
processing, data handling and communication. Care should be taken while deciding
whether they can co-exist and function in a co-operative and co-ordinated manner and in
an intelligent way to meet the unified needs of information across the organisation.
13. Assessing the needs of hardware and software of all kinds in terms of users, capacity,
capabilities and quantity. Configuring them in terms of disk capacity, RAM, controllers,
drivers, utilities and features and most important processing speed in terms of Mhz.
14. Finalising the numbers of servers, clients and hardware components in network with
clear role identification as data servers, applications servers, dedicated servers and clients.
15. Focusing on long term requirements and choosing vendors who have clear vision on
technology, growth and are committed to serve and support your plans. The products are
selected first for its merit and then the vendors who make them. The client server
architecture is a customised structure to achieve total performance. Hence, each
component however, small contributes to the performance. Therefore its selection is
strategic to the success of the system. Choice of the number and capabilities are decided
by network traffic which may arise due to transaction process, DSS or combination of
both. Every Client Server implementation requires fresh scrutiny before it is finalised.
16. Most of the programming is done on the client and selection of the appropriate
development tool is very important. The choice of tool should largely be based on the
features it offers, in comparison with the features required by the applications.
17. Client server implementation is a cultural change in work style, managerial style and
operations. In this implementation, roles not only change but they are fixed to individuals.
It is therefore strategic to assess manpower resource to manage server, network and
client operations. A thorough training is essential to each of them to understand the
working of the system and their role in it. A team of experts headed by a system
administrator should support and maintain the system.
18. Long-term planning, with phased implementation to protect investment and then to
ensure the best technology, is critical to the success of Client Server implementation.
Information Technology, business and the information requirements change continuously to
an extent that obsolescence cannot be ruled out. Hence, architecture plan must be long
term, investment in hardware and software should be adequate to meet present needs
and some of the future as well. Investment in the application software should be slightly
long term. This approach provides flexibility to change and protect investment and gives
highest price performance in a given situation.
19. Ideally after planning, a pilot project should be chosen to confirm variety of decisions
involved in Client Server implementation. If pilot project proves efficient, the decisions on
large scale be implemented.
20. A typical Client Server project implementation would take two to three years to
establish and mature.

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MIS and Client Server Architecture
The classical definition of MIS of supporting decision making is continuously undergoing
a change due to the changing environment of business. The traditional definition served well in the
era of slower economic growth, protected local markets, limited competition and longer product
life span and the management process was basically supply management.
In the earlier environment, architecture of the MIS on the traditional lines with host
computer driven systems could meet the requirement of information, which were largely of routine
nature. The focus was on data capture, processing for summary information to confirm the plan
and budget norms and statutory reporting. Hardware-software architecture and MIS architecture
both could be stable with very little change. The environment is known as legacy systems
environment.
But in the nineties business game has considerably changed due to fast economic growth,
stronger competitors, customer driven business strategies, faster product obsolescence and the
technology assuming strategic importance. To serve this change, quality, quantum, nature and
frequency of decision making required a significant modification where flexibility, speed and
innovative skills assumed great importance.
MIS design is more dynamic with well defined authority and decision making structure.
The client server architecture, because of its capabilities, serves well this need of the MIS. It
provides comprehensive support to the decision makers.
Client Server Architecture provides this environment where MIS is a flexible and
dynamic model as compared to traditional model of MIS working on main frame model.
MIS for competitive and strategic needs requires heavy transaction processing and using
processed information to update the business status initiating a variety of actions. Client-
Server architecture offers such functions to perform.
Ability of Client Server architecture to store data and swift access and processing
capability helps to try and simulate variety of strategies before they are firmed up. It also facilitates
analysis of the various strategy models. Use of Executive Information System (EIS), Data reverse
engineering for evolving and analysis of strategies is easily possible because of Client-Server
architecture using front end tools and packaged software on business modelling, risk analysis and
forecasting.
Hardware software platforms with ODBC drivers and other systems software
facilitate pooling of the information residing at different platforms at different locations and then
presenting it in a form which is easy to understand to evoke a managerial response. Modern day
business requires MIS which can pool such information from various sources and present it to the
user in an appealing manner.
MIS essentially revolves around mission critical applications designed for highest
customer satisfaction. A majority of such applications are real time transaction processing at multiple
locations.
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 MIS today serves the effort of enterprise management. The enterprise management requires
management of following technologies, namely:

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 ● Information technologies
● Data capture technologies
● Bar coding, scanning, imaging
● Communications
● Network technologies
● CAD/CAM/ CAE
● Process automation and computer based manufacturing and many more.
Client server architecture recognise this need and provides interfaces, connectivity
and gateway to these systems.
With second generations multi-tier Client Server architecture, it is possible to build MIS
which is efficient to provide rich information for decision making at all levels. One can
conceptualise different models of MIS i.e., Corporate MIS, Function MIS, Division MIS,
Personal MIS and Private MIS where data and information integrity, consistency and security is
reassuring. A good MIS designer’s requirement is fully met in this model of Client Server as,
business intelligence is available on the desktop PC (client).

Summary

MIS refers broadly to a computer-based system that provides managers with the tools
for organizing, evaluating and efficiently running their departments. In order to provide past,
present and prediction information, an MIS can include software that helps in decision making,
data resources such as databases, the hardware resources of a system, decision support systems,
people management and project management applications, and any computerized processes that
enable the department to run efficiently. Within companies and large organizations, the department
responsible for computer systems is sometimes called the MIS department. Other names for MIS
include IS (Information Services) and IT (Information Technology).

To develop information systems that fill users’ needs, MIS professionals must
understand organizational structures, business objectives, and business operations (including
processes and the flow of data between processes), how to communicate effectively with users,
and how to design systems that support their activities. MIS professionals must also stay up-
to-date with evolving information technologies and have a solid foundation of technical skills to
select appropriate technologies and to implement computer-based information systems. Thus, the
MIS combines computer- with business. Create business applications in an event-driven
programming language (such as Visual Basic) including the development of user interfaces, use of
controls, writing/debugging code, and the creation of interactive menus.

Apply data modeling techniques (such as normalization and ER diagramming) to create

a database model.

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 Implement a database model in a relational database management system (such as SQL
or Access) including the creation of tables, establishing referential integrity constraints, loading
data, creating views, and producing forms and reports using database data.

Select and apply appropriate systems analysis and design techniques to create a system
design for a business process including systems development planning, requirements
determination and analysis, and data/process modeling.

Use modern application development products as prototyping tools in the systems

development process.

Management information systems and computer science are similar in some respects, in
that they are both concerned with using computers to solve problems. But there are definite
distinctions between these two fields. A MIS professional’s task is to help an organization realize
the maximum benefit from its investment in equipment, personnel, and business processes. This
process may include planning and developing new computer systems or devising ways to apply
existing systems resources to additional operations. An important element within the MIS field is
“requirements analysis” which consists of interviewing clients to determine the goals of the
organization. Once the goals have been established the MIS professional would determine what
hardware and software would be needed to meet those goals. This person would prepare
specifications, work diagrams, and structure charts for computer programmers to follow and
then work with them to debug or eliminate errors from the system. They coordinate tests and
observe initial use of the system to ensure it performs as planned. Due to the close interaction with
management MIS will be centered around team work, leadership, project management, customer
service, and underlying business theories.

Computer science is a discipline that involves the understanding and design of computers
and computational processes. The current focus of this discipline is on new and better ways of
writing technical software, like operating systems, graphical interfaces, software utilities, and
network protocols. Some of the crucial areas of computer science are theory, algorithms,
programming methodology and languages, software engineering, and artificial intelligence. In
particular, the field is concerned with optimizing the capabilities of computer hardware and
other technology. Computer involves the understanding and design of computers and
computational processes. The current focus of this discipline is on new and better ways of writing
technical software, like operating systems, graphical interfaces, software utilities, and network
protocols. Some of the crucial areas of computer science are theory, algorithms, programming
methodology and languages, software engineering, and artificial intelligence. In particular, the field
is concerned with optimizing the capabilities of computer hardware and other technology.
Questions:
1. Discuss the role of computer and data management in MIS?
2. Describe the special features of a computer?
3. What are the basic activities of EDP?
4. What are the principal components of hardware?
5. What is software? Explain the major types of computer programmes?
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 CHAPTER - VI
EMERGING TRENDS IN MIS

Objective
Science is playing a pivotal role in developing objective decision methods which
involve continuous involvement of theory and scientific procedures. To fulfil the objectives, scientific
approach to decision making along with the intuition experience and subjective knowledge take
over the decision process.

The notions of heuristics coupled with utility theory have brought the managers closer
to science. Economists, econometricians, social scientists, socio metricians and management
scientists are increasingly motivated to solve the individual, institutional and organisational
decision making problems.

The new decision methods have roots that can be traced atleast as far back as
Aristotelian logic. A substantial contribution came from the work of Bertrand Russel and Alfred
North Whitehead (in their Principia Mathematics of 1912). Later developments in symbolic
logic, as reflected in the work of carnap, Rosenbloom and others (Circa, 1930), were also critical.
These approaches stressed linguistic logic, which (as Russel, among other, later noted) can be
converted perfectly into mathematical descriptions of the same problems. Gradually, the search
for ‘ideal’ forms of objective, logical expression yielded to the logician’s ultimate weapon,
mathematics, with increasing success. Matrices, for example are one of the most convenient
methods of representing logical statements. They also facilitate the bounding of systems into
logical sets and subsets. Consequently the matrix form is widely used for understanding the
structure of management decisions and necessarily, the concepts of matrix construction are critical
for our purposes.

Decision Support System (DSS) - latest in information system

To upkeep the needs of management at various levels in a future data processing

environment, there is an urgent need for a new directions systems, frequently referred to as DSS.
This system directly supports the Managers in order to enhance the professional judgements
required in making decision, particularly when problem structures tend to be semi-structured and
unstructured.

The relationship between DSS and MIS can be illustrated as follows :

Type of system Principle type of problem structure Decision making capability

DSS Semistructured and unstructured Manager / machine

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 interface where the
manager retains control for
synergic decision making

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 MIS Well structured New information
produced by analytical
methods for specific
decisions, summarization
of information for periodic
decision making, collection
and tabulation of data
using transactional
processing for decision
making.
There are several reasons for non-use of DSS in many Indian organisations. The possible
causes are :-
1. Trained computer personnel not available.
2. Organisation not heard of DSS.
3. Unit has no time pressure in decision making.
4. Industry do not face ‘buts’ and ‘ifs’ in decision making.
5. Financial constraints.
6. DSS is too expensive to use.
7. Not aware of potential use of computers.
8. Decisions made are too simple to keep the computer.

Essential characteristics of DSS : Listed

Broad-based approach to supporting decision making - accent on ‘Management by
perception’: Decision support systems go beyond capabilities of a typical management information
system by taking a broad view of the organisation in terms of supporting decisions. They
utilize ‘management by perception’, whereby managers are assisted in perceiving important
future trends and helped in adapting the organisation to upcoming conditions.
Human/machine interface where human retains control over the decision making process
: The utilization of CRT terminals gives the decision maker, the capability to retrieve, manipulate,
present and store data such that there is a human/machine dialogue during decision making.
Throughout the interface, the decision maker has complete control over all stages of decision
making process in solving a problem.
Support decision making for solving structured, semi-structured and unstructured
problem: Generally the focus is on semi-structured and unstructured decisions although well
structured decisions can also be made in a DSS environment. Basically DSS recognises the need
for bringing together human judgement and computerized information for improving the quality of
the final decisions.
Utilization of appropriate mathematical and statistical models : Based on the needs of
the problem being solved, one or more mathematical/or statistical models are employed to
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assist the decision maker in evaluating alternative solutions. The real pay-off from mathematical
and statistical

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models as well as modelling languages comes from integrating them into the decision support
system as decision tools.
Query capabilities to obtain information by request-interaction mode : In DSS, query
capabilities go beyond those of interactive computations and include those of responsiveness. The
latter item refers to utilizing the system as an extension of the individual’s reasoning process
throughout the decision making process.
Output directed to organisation personnel at all levels : Although DSS has the capability
to supply top and middle management with important short-to-long range planning information for
decision making (that was not available with earlier computer systems), it is also capable of
providing lower management and their operating personnel with the necessary output for
supporting decision on controlling current operations.
Integrated sub-systems : This conception refers to the capability of processing data for use by all
sub system along broader, functional lines rather than the traditional, narrow departmental
lines. Integrated sub-systems allow Managers and their personnel to retrieve and manipulate
information of concern to them for supporting decisions.
Comprehensive data base : Contents of data base for DSS must go beyond just providing
historical informations about current and past operations. It must also contain appropriate external
information that is compatible with internal information contained in the database. Generally, it is
desirable to utilize a data base management system (DBMS) to assist a human/machine dialogue.

Easy-to-use approach : The hall mark of effective DSS is that it is easy to use, that is; not only
does it assist the decision maker in supporting decisions via. a human/machine interface, but also
allows the individual to pursue his/her own natural tendencies to problem solving. From this view,
the individual feels comfortable and ‘at home’ with the system rather than intimidated by it.
Adaptive system overtime : The main thrust of adaptive system concept is that, the decision
maker is able to confront changing conditions and adopt the system to meet these changes. The
time factor for effecting system changes is a few weeks to several months.

Important characteristics of DSS

Some of the most vital parameters of DSS are mentioned below :
1. Type of system : Forward and backward movement planning and control system with
integrated sub-systems.
2. Type of files : Storage of files on line for internal data and external environment data.
3. Data elements : Comprehensive data base.
4. Exception reporting : Current goals and plans based on management perception and
used for examining exceptions.

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 5. Information orientation : Input - Output terminals with graphic capabilities.
6. Processing mode : Interactive processing mode for human interface with
computerized information to arrive at effective decisions.
7. Mathematical models : Use of simple to complex mathematical and statistical models
which are standard or custom made.

Decision Support System

DSS is more than defined as support and integrated sub systems but includes the
words such as accessibility, flexibility, facilitation, learning, interaction and easy to use. In this
system, there is a three dimensional approach in decision making than two dimensional approach
with MIS. MIS is more concerned with operational aspects of controlling operations, but the key
issue of DSS is one of what decision making process or decisions are being supported to assist the
Managers in fulfilling their organisational duties and responsibilities. DSS gives support to the
Managers and does not replace the individual. The characteristics within a DSS framework are
more concerned with providing decision maker with a service as opposed to delivering a product
as found in MIS environment. DSS allows the decision maker to combine judgement with
computer output in a human/machine interface for producing meaningful support to the decision
making process. They are capable of solving all types of problems such as structured, semi-
structured and unstructured.
From the overall point of view DSS can be looked upon as an integral part of
decision makers approach to problem solving with broad perspective by employing
“management by perception” principle.

Expert system

Expert systems are programmes that contain large amounts of expert knowledge that
can be conveyed to users in the form of consultative advice. They are designed to solve the
practical problems. It is so important in the development of artificial intelligence that they have
been described as ‘agents of second computer revolution’. Generally, expert system requires a
knowledge base on which contains expertise, problem solver to make inferences by applying
knowledge known about the specific case, a data base of facts about specific problems and a
user interface to enable the expert to communicate to the user.

The nature of the feed back

In general, feed back written about the evaluation of section of a report utilizes the
following types of comments :

1) Programme explanations.
2) Alternative tutor explanations.
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3) Extra tutor comments.

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 4) Extra remedial comments.
5) Feature lists or overall performance for each equipment and tabulations.
6) Qualitative judgements.
7) Textual connectives.

Improving the system

ES should be (a) heuristic i.e., it reasons the judgmental knowledge as well as formal
knowledge of established theories, (b) transparent - it provides explanations of its line of reasoning
and answers to queries about its knowledge and (c) flexible - it integrates new knowledge
incrementally into its existing store of knowledge.

Relationship of Management Information System (MIS) and Decision Support System

(DSS) in terms of decision making

DSS

MIS Human / Machine

interface model : Synergic
decision making
Routine and structured tasks to produce a quality decision.
Utilization of
of data processing.
mathematical and
statistical
Tabulation and aggregation of models for making well
periodic reports for decision structured problems : solution
making (i.e., decision) for problem under
study

Introduction to Object Oriented Technology (OOT)

With high computing and processing power, miniaturisation of memory chips,
parallel processing, distributed data processing, client server technology, seamless
communication, and multimedia technologies, it is possible to look at the organisation as a
whole and also to analyze the business in terms of processes as against functions. The business
can now look beyond the corporate boundaries. The new approach calls for looking at the
business as a network of business processes.
The conventional design approach based on SSAD (Structured System Analysis And
Design) or SASD (Structured Analysis And Structure Design) with the help of life

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cycle/waterfall or spiral model approach were found grossly inadequate and deficient to handle
changing information needs of business. If processes were not changed fast, it would have
affected the business adversely. It was, therefore, necessary to evolve a methodology to handle
continuous changes in the process. For

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example, sales statistics and analysis and related management information remain the same but
order acceptance, sales processing, billing etc., are continuously required to change. Many
times new processes are required to perform the same business activity. To handle such complex
and speedy changes, an altogether different approach was necessary to execute new requirements
very fast. This new approach is called Object -Oriented Technology (OOT).
OOT helps in retaining the main behaviour and changing only the required aspect of
sales order processing minimizing the time and cost of change.

Object Oriented Analysis (OOA)

The purpose of OOA is to understand the application in terms of its functional requirement.
The OOA contains the following steps :
1. Finding the objects - Object view of the application.
2. Organising the objects - View the objects in terms of a relation representing an application.
3. Specifying object interaction - Identifies the objects association and relation to each other.
4. Defining the operations of the objects - Mechanism to change the status.
5. Constructing the objects in terms of behaviour, attributes and parts - Model the object in
a microscopic detail.

Object oriented languages

The use of Object Oriented Technology (OOT) requires programming languages for
implementation. The object oriented languages are higher order languages and they stand out
differently over second, third generation languages.
The development of languages also is linked with progress made in the science of
computing, data types and processes. Programming languages, grouped into four generations with
the criteria whether they support mathematics, algorithmic, data, or object oriented abstractions,
have enriched the understanding of the semantics of the statements, modules and abstractions.
There are two types of languages in object oriented technology implementation. The
language is object based if it directly supports data abstraction and classes. The language is
object oriented when it is object based and supports inheritance and polymorphism. All the objects
handling languages have been evolved from language ‘SIMULA’, developed in the sixties by Dahl,
Myhrhaug and Nygard. Its foundation is ALGOL, further strengthened by concepts of
encapsulation and inheritance.

Object oriented language is evaluated and rated on the basis of support it gives in
handling object model. The OO language capability in supporting the object model is evaluated on
seven factors, namely, Abstraction, Encapsulation, Modularity, Hierarchy, Typing, Concurrency and
Persistence.
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 The language must be able to recognise this, and act accordingly. The widely used
languages small talk, C++, Ada, Pascal and Eiffel are object oriented. Smalltalk was created by the
work group members of the Xerox Palo Alto Research Centre. It is so popular that graphic user
interfaces such as Macintosh, Window and Motif are influenced by Smalltalk development. The
C++ was designed by AT & T Bell Laboratories. It is an extension of C and better than C. The
C++ corrects many deficiencies of C, and adds to the language a support for classes, type
checking and many other features required for OOT implementation. Ada is developed by the
United States Department of Defence (DOD). It is designed with three objectives efficiency,
reliability and maintenance.

It is seen that C++ is by far most preferred language because of its supportive ability on
most required parameters of object oriented language. The C, and C++ have widespread
acceptance on UNIX platform.

OOT and MIS

With OOT it is possible to universalise the objects disregarding organisaton, industry

business and country. One can aim at building global systems of data and information processing
saving a lot of effort by way of system development. Internet and WEB systems will play a
significant role when objects assume universal character, modeling them as reusable by all
concerned.

With OOT, MIS will undergo a structural change transforming from an assembly of
information systems to one system of information processing which is not owned by a function or
functions or by group of people. It will address information needs of changing the key result areas
of business.

Summary
Decision support systems are a class of computer-based information systems
including knowledge based systems that support decision making activities.

Because there are many approaches to decision-making and because of the wide
range of domains in which decisions are made, the concept of decision support system (DSS) is
very broad. A DSS can take many different forms. In general, we can say that a DSS is a
computerized system for helping make decisions. A decision is a choice between alternatives
based on estimates of the values of those alternatives. Supporting a decision means helping
people working alone or in a group gathers intelligence, generate alternatives and make choices.
Supporting the choice making process involves supporting the estimation, the evaluation and/or

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the comparison of alternatives. In practice, references to DSS are usually references to computer
applications that perform such a supporting role.

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 The need for decision support systems stems from the realities of cognitive, economic,
and temporal limits. The capacity for having decision support systems stems from ongoing
technological advances that puts inexpensive, yet powerful, computers on our desktops, in our
vehicles, and even in our pockets. It also stems from conceptual and software advances made by
decision support researchers and practitioners. The nature of support that can be furnished by a
DSS has progressed rapidly over the past decade and is likely to make continued advances.
Because knowledge forms the fabric of decision making, all the various kinds of support that a
DSS can provide are essentially exercises in knowledge management.

Questions:

1. Illustrate the relationship between Decision Support System and MIS?

2. What are the reasons for non-use of Decision Support System in an Indian Organisation?
3. List the essential characteristics of Decision Support System?
4. What are the important characteristics of Decision Support System?
5. Define Decision Support System and Expert System?
6. Illustrate the relation ship of MIS and Decision Support System in Decision making?
7. Write notes on
(a) Object Oriented Analysis
(b) Object Oriented Languages

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 CHAPTER - VII
MIS IN MARKETING INFORMATION SYSTEM

Objective
Market information system may be defined as factual knowledge about the actions,
antecedents or consequences of social actors outside or inside the firm and the environment in
which they operate. Social actors are as consumers, competitors, employees, institutions,
suppliers, wholesalers, retailers, govt. bodies and NGO’s. The environment actors are physical,
technological, economic, legal and social taboos.
Marketing decision support systems (MKDSS) is an information system that helps
with decision-making in the formation of a marketing plan. The reason for using a MKDSS is
because it helps to support the software vendors’ planning strategy for marketing products; it can
help to identify advantageous levels of pricing, advertising spending, and advertising copy for the
firm’s products .This helps determines the firms marketing mix for product software.
Constituents of information needs in the context of marketing
Various constituent are: - consumer behaviour, aggregate demand, the competition, political
/legal / social environments, product consideration, distribution questions, pricing
consideration, communication issues and organisational behaviour.

Marketing Information System

Marketing information system can be defined as a collection of equipment, people
and programs in the organisation whose functions are to monitor, gather, analyze, evaluate, store
and to disseminate the knowledge. The company market linkage is shown below.

(Company) ● Finance
Input
Through put

Feed Back
Further details are provided below

Input:- Internal

environment
Top management

Formal departments
● Production
● Accounting
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(Market) Output

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 ● Public relation
● Procurement
● Marketing sub-groups
● Staff / line groups
● Groups
External environment:
-
● Consumers
● Suppliers
● Intermediaries
● Competitors
● Government
● Special interest group
● General public
Throughput: - MIS (Marketing Information system)
- Communication system
Exchange function
● Data gathering
● Information storage
● Knowledge
dissemination Proactive
functions
● Selling
● Service
● Negotiation
● Lobbying

Market science system

Market science system includes statistical models and analysis, data base, quantitative
analysis, mathematical models and analysis, and product analysis. All these lead to
‘interpretation of analysis and findings’ to arrive at conclusions and recommendations.

Normative system
This system narrates shapes of judgement of an organisation what is good or bad,
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important or unimportant, what action should be or should not be taken in. It is connected to
communication system and marketing science system. The normative system translates
organisational goals into sub-goals, policies and standards.

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Output
The overall output of MIS in the management decision systems arrives at policies, rules,
procedures and directives with regard to organising, planning, staffing, executing and controlling.

Feed back
Feed back on an environment and organisation is through the output of marketing information system.
However, one cannot specify what information is needed for decision making until
an explanatory model of the decision process and the system involved in it are constructed and
tested. The marketing information system enables in assessing the managerial information and their
feed back effects on environment and organisation. This is a continuous process to locate the very
open system of marketing in terms of responses to the internal and external pressures.

Enterprise Management Systems (EMS)

Computer, electronics, communication and audio video technologies have converged
closely to produce a new style of operating business. The dynamic business environment of today
is full of challenges and opportunities. The dependence on the information, as a driving
energy source, is increasing. Every business activity has additional dimensions, viz., speed and time.
The business needs of today are beyond the transaction processing. It requires an instant real time
response in every case, wherever it occurs.
The word enterprise is chosen to convey that it encompasses the larger business
community covering all the players and their participation in the business. The system is
extended beyond the Corporate boundaries.
Instant processing needs the management of EDI systems to get hooked to the customer
and vendor for a quick information communication. It also requires the management of
interfaced system such as CAD/CAM, MRP etc. It also requires event monitoring and updating
systems such as the Paging, Internet and the Imaging Systems.

The tools, the technologies and the well designed solutions and systems are available
to support all needs of the business. What is needed is an integrated solution out of these
technologies and the systems offering an enterprise wide management support. Such an integrated
solution is called as the Enterprise Management System (EMS). The following systems, which
when implemented in an integrated manner for co-ordinated and co-operative function of the
business give rise to the Enterprise Management System, i.e., EMS.
ERP Enterprise Resource Planning Systems
EDI Electronic Data Interchange System for
Commerce, Communication and Action
CAD/CAM/CAE: Computer Aided Design, Manufacturing and
Engineering Systems for Production Management
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AMS Attendance Management Systems, i.e., employee
attendance and presence management for the role
management or Data Capture Systems on floors, in
stores, at gates etc.
DMS Document Management Systems viz., imaging, copying
and text management and despatching document DBMS
CMS Communication Management Systems, such as,
Paging, cordless, mobile telephone systems and the
audio video systems
SMS Security Management Systems such as the close
circuit television, alarm or warning systems,
movement tracing systems etc.
Enterprise Resource Planning (ERP) System

The ERP system deals with the planning and use of resources used in the business.
The resources are finance, materials, manufacturing capacity and human resource. The ERP
provides methodology of assessing the resource needs for a given business plan to achieve
certain business objectives. It also helps to execute the strategies, plans, decisions, and actions in a
time bound manner. The ERP provides a support system in the transaction processing, updating
and reporting across the functions. The ERP is a package comprising all major functions of the
business. The product is generic in nature and is supposed to incorporate the best business
practices, generally followed in most of the companies.

ERP Model and Modules

The generic ERP package represents the commonly operated business model of the
organisation. It is built with the function models like Finance, Materials, Marketing, Sales, and
Personnel and their sub-modules. These modules are then integrated to perform, ensuring data and
information consistency and concurrency.

The seamless integration of the modules allows the users at any level to take a micro
and a macro view of the function and process view of the transaction across the function. A
typical ERP solution has the following modules:

● Business forecasting, planning and control (Business)

● Sales, distribution, invoicing (Sales)
● Production planning and control (Production)
● Materials management (Materials)
● Finance and accounting (Finance)
● Personnel Management (Personnel).
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General Features
● Separation of the programme code and the data areas.
● Command language
● Screen based flow control
● Application logic
● Common service function such as the currency, date, editing and help
● Diagnostic functions
● Transaction flow control
● Help functions
● Central table system for management of parameters, texts and master data, online logical
check and validations
● Word processing, text editing
● Action messages
● Tunin get fixing and allocation by the key parameters.
● MIS for strategy monitoring and control.
● Business modelling for the strategy development and testing. DSS for resource planning.
● Information base management for management applications.

Sales
● Basic data (master) management
● Order processing
● Despatching and invoicing
● Order analysis, forecasting
● Sales analysis, budgets and controls
● Finished goods stores management
● Dealer, distributor management system
● Receivable analysis
● Market / customer/ product analysis
● Market research information database
● Marketing personnel management
● Sales forecasting and budgeting.

Production
● Basic master data management.
● Bill of materials, classification.
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 ● Process sheet, routing.
● Work under generation, scheduling and control.
● Production planning : BOM, MRP, MPS and capacity planning.
● Interface of CAD/CAM/CAE systems.
● Quality systems for data capture, analysis and control.
● WIP tracking, valuation.
● Work station/ machine centre management.
● Production materials interface.
● Collection of unit data for valuation and costing.
Materials
● Purchasing and procurement.
● Goods receipt and issue system.
● Stock management and valuation.
● Inventory analysis
● Stores ledger, valuation, analysis, disposal.
● Excise / customs interface.
● Data integration with production, accounts systems.
● Quotation / Enquiry processing.
● Sub-contracting, material accounting and bill passing.

Finance
● General accounting functions.
● Ledger, payable and receivable.
● Subsidiary ledgers.
● Cash flow management.
● Loan management, funds management.
● Working capital management.
● Budgeting, planning and control.
● Balance sheet processing.
● Tax management, status reporting.
● Assets accounting.
● Cost accounting : cost centre accounting, order accounting, product costing.
● Cost analysis for business decisions.
● Bank reconciliation.

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 ● Letter of credit management.
● Consolidation of accounts.

Personnel
● Personnel data management.
● Personnel attendance system, time management.
● Payroll accounting : salary, wages, incentives, bonus, income tax and other deductions
and contributions to various public and provident funds.
● Human resources management : Planning, recruitment, training and upgradation.
● Personnel cost, projection and planning.

Fixed assets
● Fixed assets accounting : Inventory , register.
● Depreciation accounting.
● Capital work in progress.
● Fixed assets retirement and disposal.
● Year end processing for balance sheet schedules.

Maintenance
● Plant maintenance planning.
● Breakdown, preventive, conditional maintenance.
● Maintenance management : Initiation, planning, execution, control and cost accounting.
● Monitoring performances for maintenance action as all kinds of productive assets.
● Contract management.

Quality control
● System of data gathering to assess quality and measure against standard.
● Analysis of quality by process, material, work centre location.
● Analysis of quality by reasons and actions taken.
● Building quality assurance data for equipment / process/ technology selection.
● Monitoring quality across the organisation from input to output for operating decisions
and business decisions.

Consolidation of Business operations

● Accounting by units and divisions with local focus.
● Consolidation by accounts in corporate functions.

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 ● Bringing out comprehensive reporting system for business decisions.

Characteristics of ERP solution

● Modular structure.
● Scalable architecture.
● Seamless integration of modules.
● RDBMS independent.
● Independence of hardware platform.
● Interface capabilities.
● PC download/ upload facility.
Benefits of the ERP
1. Better management of resources reducing the cost of operations.
2. Planning at functional and process level. Simultaneous increase in the productivity of
the business possible.
3. Customer satisfaction increased due to shorter delivery cycle. Closer contact with the
customer.
4. Simultaneous activisation of the decision centres because of instant inducement through
triggers or updates.
5. Business operations transparency between business partners cutting down the execution
time of critical business operations.
6. Intelligent ERP downloads the decision making at lower level, releasing the burden on
the middle management.
7. Due to faster processing technology and SQL, management can see the information in
their perspective and take different view of the business.
8. Due to strong interface capabilities, the human resource can be utilized better due to
access to the information across the databases distributed over the organisation.
9. Since, the ERP design is proactive, it makes the management alert at a number of
points demanding the decision or action.
10. The processes become faster due to work group technology and application of work
flow automation.
11. Due to the support technologies like EDI, E-mail, office automation, paperless office is
a newer possibility as communication is faster and systems get connected directly.
12. The ERP still remains a valid solution with the expansion of business as it is a
scalable architecture.
13. Due to the client - server architecture, the application of object technology and use of
the front end tools, the process changes can be easily carried out in a short duration of
time. Hence, the user service can be maintained at a higher level.

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 14. The ERP implementation automatically leads to the usage of the best business
procedures bringing the consistency of operations in the world of business.
15. With the use of the data warehousing and data reverse engineering, management
becomes knowledge driven and the organisation becomes a learned one.
16. The ERP scope can be enlarged through the Internet / Intranet access, making the
ERP sensitive to the latest events in the business, market and technology.
17. The quality of decision making improves as the user decisions maker is made alert and
he is made knowledgeable and better informed dynamically.
18. The tools available to the decision maker are friendly whereby he is equipped to take
decision and execute it simultaneously.

ERP selection
Since, the market offers a number of ERP packages, it is up to the buyer to make a
choice. Each product has its own USP and differs in a number of ways in content, scope, an
ease of implementation etc. The selection can be made on three dimension viz., the vendor, the
technology, the solution scope and architecture.

Vendor evaluation
Factors
1. Business strength of the vendor.
2. Product share in total business of the vendor.
3. R&D investment in the product.
4. Business philosophy of the vendor.
5. Future plans of the vendor.
6. Market reach and resource strength of the vendor.
7. Ability to execute the ERP solution.
8. Strength in the other technology knowledge and the ability to use them.
9. Perspective plan of the ERP improvement with the technology development.
10. Image in the business and in the information technology world.
11. Financial strength of the vendor to sustain and handle the business and technology risk.
12. Organisation for product development and support.
13. The global experience of the vendor and commitment to the product for long term.

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

ERP solution evaluation

Factors
1. ERP fit for the business of the organisation in terms of the functions, features and
processes, business scope versus application scope and so on.
2. The degree of deviation from the standard ERP product.
3. Ease of use : Easy to learn, implement and train.
4. The ability to migrate to the ERP environment from present status.
5. Flexible design.
6. The level of intelligent usage of ‘help’, error messages, dictionaries.
7. The ability for a quick start on implementation.
8. Versatility of the solution for implementation on a platform with the objectives of saving
the investment.
9. Rating on performance, response and integration.
10. Product quality in terms of security, reliability and precision in results.
11. Documentation for system handling and administration.
12. Product rating in its class of products.
13. Solution architecture and technology.
Once the committee makes the decision, the vendor should be asked to resubmit the
technical and commercial proposal with price and the terms of offer. The proposal should have
the following details :
1. Scope of supply.
2. Objectives.

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 3. Modules and deliverables.
4. Implementation methodology.
5. Plan and schedules of hardware and software implementation.
6. Resource allocation.
7. Responsibility division between the organisation and the vendor.
8. Process implementation.
9. Organisation for implementation.
10. Progress monitoring and control of the important events.
11. Process of resolving the issues at all levels.
12. The official product literature.
13. Association with the other vendors its purpose.
14. Commercial submission : Price by module and number of users, Payment terms.
15. Process of acceptance of the ERP by stages and linking with the payments.

ERP implementation.
The ERP implementation, generally, follows the waterfall model approach. Once a firm
order is received, the implementation begins with the kick-off meeting between the vendor and
the organisation. In such meetings the organisational issues are taken care of. Since it is a long-term
activity a preliminary planning is done to start the implementation.

The implementation steps are given as follows :

1. A user meeting is arranged to explain the ERP and process of implementation.
2. The Requirement Definition And Description (RDD) and the Deviation Requirement
Definition And Description (DRDD) are explained for understanding and approval.
3. The resource to carry out the changes in the system, generally, known as customization,
is provided. This could be business specific or customer specific.
4. The DERP (Deviation ERP) solution is tested.
5. The solution on the recommended platform is loaded.
6. The solution is tested on sample data of substantial nature.
7. The solution is then demonstrated to the users for their understanding and confirmation.
8. The users are trained to run the solution and resolve the difficulties in operations of the
system solution.
9. The change overs from the manual system to the ERP solution are meticulously
planned, taking care of the cut off dates, the opening balances, the data transfer etc.
10. A logbook of the system usage is kept to note down the problems, solutions and
modifications carried out to make the solution more efficient and effective.

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 11. Standard reports like checklist, ledger, trial balance, and sales analysis are taken to
confirm the integrity of the ERP solution.
12. The standard documentation of the ERP solution is changed to the changed version of
the ERP.
13. The system performance is checked in terms of speed, response, etc. and the ERP
solution and /or the hardware is tuned for improving the performance of the solution.
14. After three to four month’s working, a review meeting with the users is conducted,
taking the support of the log system for the purpose of improvement, confirmation and
finalization of the ERP implementation.

The major problems in the ERP implementation are due to :

1. The resistance of the users in the acceptance of standard ERP solution.
2. The limited awareness of the users and the appreciation of the Information
Technology applications.
3. The ability of the users to change over from the old conventional systems to the
technology based new systems.
4. The level of acceptance of the standard business processes incorporated in the system.
Lower the acceptance, longer the implementation time, resulting into a loss of
efficiency and effectiveness of the solution.
5. A lack of clarity on the business requirement, the customer focus and the strategy of
business and its impact on the ERP solution.
6. The ERP implementation is carried out without properly evaluating the business
processes and practices through business process re-engineering and is preceded by
restructuring of the organisation.
7. The choice of the ERP solution. Not all the ERP solutions are appropriate for the
organisation. Each solution has its own peculiarities in terms of design, architecture,
technology, coverage of business scope, functions and features. Some solutions are good
for certain type of business and industry and not for all the businesses and industries.

EMS and MIS

There is a qualitative change in the MIS design due to the complexity of the business
operations and the risk involved in handling the business.

The MIS is now required to maximise the process productivity and performance. The
decision making support is required for the process optimisation. The decision models are built
across the business management functions. Besides the normal MIS reports required for the top
Management, it also need a set of additional reports, where the critical business processes and the
critical success factors are a focus area.
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 The ERP solution caters to this requirement very easily. The ERP solution is an
integrated solution. The solution operation is seamless, disregarding the hardware or the software
platform. The ERP solution takes care of data integrity and consistency across the organisation,
which may have multiple locations.

The conventional MIS design is more or less embedded in the ERP solution. They
provide all the routine reports at any time for the middle management of the organisation. The
ERP, over and above this, provides an executive information for the strategic management of
business. It further helps to formulate the strategies to achieve these goals taking its implementation
further.
The ERP through such an MIS design, improves the decision making skills of the
individuals very effectively. It provides an autonomy in a global system operations. With the ERP,
the MIS design is more flexible, highly decision intensive and efficient.
ERP along with other systems becomes an EMS, MIS design uses ERP which in turn
uses other systems for inputs in terms of data capture, transaction processing and data based
creation. MIS in ERP environment is a sophisticated design serving the needs of the organisation.

Summary
Marketing information system are information systems used in marketing and
management that automate some sales and sales force management functions. They are frequently
combined with a marketing information system, in which case they are often called customer
relationship management systems. Sales Force Automation Systems (SFA), typically a part of a
company’s customer relationship management system, is a system that automatically records all
the stages in a sales process. SFA includes a contact management system which tracks all contact
that has been made with a given customer, the purpose of the contact, and any follow up that
might be required. This ensures that sales efforts won’t be duplicated eliminating the risk of
irritating customers. SFA also includes a sales lead tracking system, which lists potential
customers through paid phone lists, or customers of related products. Other elements of a SFA
system can include, sales forecasting, order management and product knowledge. More
developed SFA systems have features where customers can actually model the product to meet
their required needs through online product building systems. This is becoming more and more
popular in the automobile industry, where patrons can customize various features such as color
and interior features such as leather vs. upholstered seats.
An integral part of any SFAsystem is company wide integration among different
departments. If SFA systems aren’t adopted and properly integrated to all departments, there
might be a lack of communication which could result in different departments contacting the
same customer for the same purpose. In order to mitigate this risk, SFA must be fully integrated
in all departments that deal with customer service management.

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 Sales force management systems are information systems used in marketing and
management that automate some sales and sales force management functions. They are frequently
combined with a

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marketing information system, in which case they are often called customer relationship
management systems.
Enterprise Management System (EMS) is any of the strategies and technologies
employed in the information technology industry for managing the capture, storage, security,
revision control, retrieval, distribution, preservation and destruction of documents and content.
EMS especially concerns content imported into or generated from within an organization in the
course of its operation, and includes the control of access to this content from outside of the
organization’s processes.
Enterprise management systems are designed to manage both structured and
unstructured content, so that an organization, such as a business or governmental agency, can
more effectively meet business goals (increase profit or improve the efficient use of budgets), serve
its customers (as a competitive advantage, or to improve responsiveness), and protect itself
(against non-compliance, law-suits, uncoordinated departments or turnover within the
organization). In a large enterprise, EMS is not regarded as an optional expense, where it is
essential to content preservation and re-usability and to the control of access to content - whereas,
very small organizations may find their needs temporarily met by carefully managed shared
folders. Recent trends in business and government indicate that EMS is becoming a core
investment for organizations of all sizes, more immediately tied to organizational goals
than in the past: increasingly more central to what an enterprise does, and how it accomplishes
its mission.

Questions:

1. Define (a) Market Information System

(b) Market Science System
(c) Normative System
(d) Enterprise Management Systems
(e) Enterprise Resource Planning Systems?
2. What are the modules of an Enterprise Resource Planning Solution?
3. Enumerate the benefits of an Enterprise Resource Planning System?
4. What are the factors responsible for a Vendor Evaluation, Technology
Evaluation, ERP Solution Evaluation?
5. How is ERP implemented? What are the major problems in ERP implementation?

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 CHAPTER - VIII
FUTURE THRUSTS AND METHODOLOGIES OF
MANAGEMENT INFORMATION SYSTEMS

Objective
With the development of personal computers, and workstations, the importance of
the mainframe and the mini computers drastically came down as the computing and processing
power centre shifted to the users to reach on their desktop.
The personal computers and the workstations became more powerful day by day and
so capable that each user started having such desktop systems personalising the use of that data
and information. This attitude of the users created problems of data availability, redundancy,
communication, sharing of resources and information management as a resource for decision
making. Though the hardware and software became powerful and the desktop systems became
more efficient, the organisations suffered from its utility to the other needs of the business
management. So, the efficient islands of desktop systems became a bottleneck for the information
flow, usage and sharing.

It was, therefore, necessary to put these information islands on one platform whereby
they can talk to each other. They can share the resources and the information, though processed
locally, becoming a corporate resource and an asset which is accessible, sharable and
updateable and simultaneously meeting the requirements of confidentiality, security and integrity.

The solution at the physical level is to connect them through a medium forming a
network of PCs and workstations. The networking primarily fulfilled the resolution of
communication and access issues. The initial implementation due to the technology limitation of
distance was the departmental networks popularly known as the Local Area Networks (LAN).

With the computer technology advances in disk storage, access capabilities, speed
and operating systems, it is possible to distribute a resource and be made available to the users
in any corner. The output devices such as the printers, the plotters, and the storage devices could
be shared by all from any point of the network reducing the investment and improving the
utilization of these costly resources. With the increase in the processing power and
communication speed, large Local Area Networks became efficient and attractive in terms of
speed and response.

More and more technologies are supporting basic networking technology, making
network approach to information management most stable, efficient and effective. The coverage of
network is now shifting from LAN to WAN to Global to WEB, and the network, in general is
becoming an open processing platform, independent of hardware and OS. The network
standards are now established and they are mandatory for successful implementations.
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Network Features
The network essentially serves some important features like,
1. It allows the users / departments/ divisions to share the hardware resources like the
laser printers, the plotters and any other storage media like the disk drives.
2. It allows the information to be shared across the Company. The information such as
the product literature, the price lists, the organisation information, the vendor / customer
masters, the rules and regulations, etc., can be stored and maintained at one location to
be shared by the others through a controlled access mechanism.
3. It enables the electronic transfer of mail, document, or data at the addressed locations
with a confirmation.
4. It provides an access to other computer systems in the network to the data file for the
local processing need.
5. With a wide area network, different computer systems can talk to each other for the
purpose of processing, sharing and communicating.
6. It enables seamless integration of the functions and divisions at the operation level and
also at the application level.

Features of the Local Area Network

Apart from the cost saving features, it creates an environment of integrity because in
such cases the data, file and the information management are handled as a centralized function,
ensuring protection to the system as a whole.
The productivity of the work group increases due to quick access to the information and
its usage. The communication being fast, the networks are used for E-mail for sending the
corresponding data and information. Due to faster communication there is an easy access to the
processed information. The work cycles have been reduced increasing the manpower productivity.
Due to the network features and softwares like work flow automation, it is possible to restructure
the work group such that the work group productivity also increases.
In the event of growth, the network can be enhanced from all sides. It is possible to
change the server or add more servers. It is possible to increase the terminals with a proper
networking technology. Hence, meeting the growth needs is feasible and economical as the
existing network and the application development can still run as extended or enhanced network.
It is also possible to improve the efficiency of the network by configuring its basic
resources at the server level keeping a long term view. It is possible to change the roles of servers
from dedicated to non-dedicated and vice-versa. Hence, the network can be restructured with
marginal investment to take up the new processing needs.

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These features enable to offer :
1. A multiuser cost effective environment.
2. A customized application environment.
3. A department integrity and implementation of the critical applications.
4. Services to more users with a marginal investment.
5. An information processing platform which is easy to learn and use.
LAN has basically three components viz., the server, the networking components
(Cables, hubs, network interface cards) and a terminal (PC, workstation or output devices). LAN
further has its own operating system called the NOS.
The Network Interface Unit (NIU) is a microprocessor based device containing a
hardware and a software which supply the intelligence to control the access and the
communication across the network. It is a means to connect the workstations and the personal
computers functionally and physically. It has two parts, viz., the communication interface and the
host interface. The host interface supplies the connection between a specific terminal or
workstations and the communication interface unit. The communication interface plays the role of
transmission of the data or the information between the two units. The choice of the NIU decides
the speed, the response and certain capabilities of the network.

The Network Operating System (NOS) is a system software that facilitates and controls
the LAN working. As the personal computer or the MINI Main Frame has an operating system,
the LAN also has its own NOS to manage the network functionally. The NOS works in
conjunction with the local operating like MS-DOS. It performs the following functions :
● Directory hashing
● Disk file catching
● Record or file locking for security
● System fault tolerance
● Printer or a plotter spooling
● Online helping
● Menu utilities, drivers etc. for user assistance.
● Assisting in resource sharing and access control.

Data communication
Data communication is a process of transporting the data from one location to the
other. Airlines reservation system, automated banking and the point of sale system used in
departmental stores are the examples of the data communication which is central to these
systems. The data communication, therefore, needs a system to transport the data. The role of
the system is to accept
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the input data, structure it for quick transportation and restructure it when received at the
destination in an understandable form. It uses the data communication software along with
numbers to perform the communication.
There are five components in data communication system.

1. Computer - To create data for sending.

2. Communication device - MODEM for data convertibility to send or to receive.
3. Communication channel or link - Telephone lines, microwave relay systems to carry
the communication.
4. Receiving computer - To receive the data and display it on the screen.
5. Communication software - To handle communication requirements to access, process,
send and receive and then display on the receiving computer in a format.

ATM Technology
The need for increasing network capacity in LAN is one of the catalysts behind
Asynchronous Transfer Mode (ATM) networking to the desktop. Most of the business and
scientific computing requires network capabilities to handle data as well as video, or circuit
on the same network. To facilitate the evolution of the network from LAN to ATM, ATM
network must support the existing application on desktop.
However, connection oriented ATM networks are different in operations from
connection- less LAN with regard to broadcast, setup and addressing. To raise existing LAN to
ATM, based emulated LAN (ELAN) one needs following setup.

● LAN Emulation Server (LES)

● LAN Emulation Configuration Server (ELCS).

LES is the address resolution server for ELAN. ELAN is associated with LES on one
to one basis. LECS maintains the database of configuration information for each ELAN.

The LAN emulation protocol provides an easy means of migrating existing applications
and evolving them to ATM LAN. One of the potentials of ATM is its ability to carry many kinds
of traffic over the same network link. ATM also provides each applications with the appropriate
speed, the control, while, making the best use of network capacity. ATM LAN has many benefits
eg., increased security, better possibilities for sharing bandwidth.

Corporate management information system

Corporate management information system consists of well defined aspects viz., goals,
role of computer, practice and strategic issues. The above aspects are very important in the
implementation
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of MIS in a corporate management. The horizontal and vertical development of organisation
clearly depends on sheer organized information system for management planning and control.
The chronological phases of MIS development during last few years are manual
reporting system, centralized betals processing system, real time system, data base system,
decentralized processing system, distributed processing system and distributed data base system.

MIS methodologies
Techniques associated with MIS show basically the listed sequences :-
a) Using computer in MIS
b) Planning of MIS
c) Development of MIS
d) Design of MIS
e) Implementation of MIS
f) Evaluation of MIS
The methodologies of MIS depends on the use of computer evaluation. The
information management ensures accuracy, completeness, consistency, logical balance and
homogeneity of data.

Summary
ATM creates a fixed channel, or route, between two points whenever data transfer
begins. This differs from TCP/IP, in which messages are divided into packets and each packet
can take a different route from source to destination. This difference makes it easier to track and
bill data usage across an ATM network, but it makes it less adaptable to sudden surges in
network traffic.

❖ Constant Bit Rate (CBR): specifies a fixed bit rate so that data is sent in a
steady stream.This is analogous to a leased line.
❖ Variable Bit Rate (VBR): provides a specified throughput capacity but data is not
sent evenly. This is a popular choice for voice and videoconferencing data.
❖ Available Bit Rate (ABR): provides a guaranteed minimum capacity but allows data
to be busted at higher capacities when the network is free.
❖ Unspecified Bit Rate (UBR): does not guarantee any throughput levels. This is used
for applications, such as file transfer, that can tolerate delays.
Asynchronous Transfer Mode (ATM) is a technology designed for the high-speed
transfer of voice, video, and data through public and private networks using cell relay
technology. ATM is an International Telecommunication Union Telecommunication
Standardization Sector (ITU-T) standard. Ongoing work on ATM standards is being done primarily
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by the ATM Forum, which was jointly founded by Cisco Systems, NET/ADAPTIVE, Northern
Telecom, and Sprint in 1991.

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 A cell switching and multiplexing technology, ATM combines the benefits of circuit
switching (constant transmission delay, guaranteed capacity) with those of packet switching
(flexibility, efficiency for intermittent traffic). To achieve these benefits, ATM uses the following
features:

➢ Fixed-size cells, permitting more efficient switching in hardware than is possible

with variable length packets
➢ Connection-oriented service, permitting routing of cells through the ATM network
over
virtual connections, sometimes called virtual circuits, using simple connection identifiers
➢ Asynchronous multiplexing, permitting efficient use of bandwidth and interleaving of
data of varying priority and size
The combination of these features allows ATM to provide different categories of service
for different data requirements and to establish a service contract at the time a connection is set
up. This means that a virtual connection of a given service category can be guaranteed a certain
bandwidth, as well as other traffic parameters, for the life of the connection.

To understand how ATM can be used, it is important to have a knowledge of how

ATM packages and transfers information. The following sections provide brief descriptions of the
format of ATM information transfer and the mechanisms on which ATM networking is based.

The basic unit of information used by ATM is a fixed-size cell consisting of 53 octets, or
bytes. The first 5 bytes contain header information, such as the connection identifier, while the
remaining 48 bytes contain the data, or payload. Because the ATM switch does not have to
detect the size of a unit of data, switching can be performed efficiently. The small size of the cell
also makes it well suited for the transfer of real-time data, such as voice and video. Such traffic
is intolerant of delays resulting from having to wait for large data packets to be loaded and
forwarded.

Questions:
1. Write an essay on the future thrusts and methodologies of MIS?
2. Discuss the features of Local Area Network?
3. What is Data Communication? What are its components?
4. Describe ATM Technology?
5. What is Corporate Management Information System?

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 MODEL QUESTION PAPER

National Institute of Business Management

Chennai - 020

SECOND SEMESTER EMBA/ MBA

Subject : Management Information System

Time : 3 hours Marks : 100

Section A

I Answer all questions. Each question carries 2 marks :-

1. Define Management.
2. Which are the three basic elements of MIS?
3. What is the conceptual view of MIS? Illustrate with a diagram.
4. What is a System?
5. What are Inputs and Outputs?

5x2=10 marks
Section B
II Answer all questions. Each question carries 6 marks :-
1. What is Interface?
2. What are the characteristics of MIS?
3. What are the characteristics of Information?
4. What is the role of information in decision making?
5. Which are the critical steps in building MIS?
5x6=30 marks
Section C
III Answer any three questions. Each question carries 20 marks :-
1. Explain the five different approaches of the composition of MIS.
2. What are the objectives of MIS and compare it with Business
Plan?
3. What are the essentialities of Strategic Planning?
4. Briefly explain the different types of strategies and its uses in the industry.
5. What is the role of MIS in Business Planning?
3x20=60 marks