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Spring 2012

Master of Computer Application (MCA)Semester IV

MC0076Management Information Systems (Book ID: B0901)

Assignment Set

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1) What do you understand by Information processes data?Data are generally considered to be raw facts that have undefined uses and application;

information is considered to be processed data that influences choices, that is, data that have

somehow been formatted, filtered, and summarized; and knowledge is considered to be an

understanding derived from information distinctions among data, information, and knowledge

may be derived from scientific terminology. The researcher collects data to test hypotheses; thus,

data refer to unprocessed and unanalysed numbers. When the data are analysed, scientists talk

about the information contained in the data and the knowledge acquired from their analyses. The

confusion often extends to the information systems context, and the three terms maybe used

interchangeably

2) How do you retrieve information from manual system?Retrieving desired data from manual systems can be time consuming and expensive executives

spend approximately six weeks a year on average looking for misplaced material. Secretariesmay spend as much as 30 percent of their time looking for paper documents and approximately

20 percent of that time searching for misfiled items. Because paper files require large amounts of

space, managers may store the data on a different floor or even in a different building. The

labour costs of retrieving even small amounts of information exceed those for retrievinginformation electronically unless the organization can create small and compact storage for its

paper records. Electronic systems provide rapid and inexpensive access to information storedelectronically in an organized fashion. The costs incurred are only those of using the computerequipment for a fraction of a second, particularly when retrieval is part of ongoing processing. If

an individual requests the retrieval, it may require additional processing to translate the retrieval

request from a form understood by the person to a form understood by the computer. Then the

information is stored in a different place from where it is requested, the request must betransmitted electronically to where the data are stored, and the retrieved data must be transmitted

back. Communication costs are relatively low for small amounts of information, but the

communication equipment and infrastructure can be expensive unless amortized over a

sufficiently large volume of data communication. Companies that have small communicationneeds can pay to use the infrastructure of third parties, such as telephone companies.

3) What are the challenges of information management?In identifying their information management requirements, individuals face four major chal-

lenges in addition to securing the most appropriate information.

First, they must deal with large quantities of information that may create overload.

Second, they may face insufficient or conflicting information.


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Third, they must find ways to enhance their personal productivity.

Fourth, they must acquire and maintain the technical skills needed for effective personal

information management.

Dealing with Quantities of Information

The gap between the amount of information that an organization can collect and the ability of its

employees to make sense of that information has been widening rather than narrowing. The early

fear that computers would so improve a persons ability to process and manage information thata job holder would need only one-third to one-half the time to do his or her job has been

dispelled The reverse has occurred. Often employees face an infoglut, an overload of

information. As individuals move higher in the organizational hierarchy and assume more

managerial responsibility, information overload become an even more significant challenge. Toavoid such overload individuals must carefully asses their information needs and then find

effective ways of managing the required and available information. They must also find ways to

manage data better.

Facing Insufficient or Conflicting Information

Although computers can make large quantities of information available to individuals, such

information may not address their needs. Ramesh, ASM of Airtel, may wish to do some library

research about competitors products. In spite of the large amount of information in the libraryselectronic catalog, she may not be able to secure the precise information she needs. Because

computers process input from diverse sources, users may also obtain conflicting information if

one source updates information more frequently than another does.

Enhancing Personal Productivity

Employees in any organization increasingly use information technology to improve their

personal productivity. To ensure high productivity, employees must know how to use computers

to facilitate, not hinder, their performance. They must know how to access the information theyrequire and recognize when manual data collection and processing is adequate. Often employees

must lobby their employers to add new technology that will help increase personal productivity.

The ability to show the cost-effectiveness of additional expenditures for diagnosing and meetinginformation needs is critical. Employees must also understand and demonstrate when advanced

technology is a detriment rather than an asset.

Maintaining Technical Skills

Finally, using information technology effectively requires continuous updating of technicalskills. Although many companies provide training to their employees, others do not. Ensuring

that employees have the appropriate skills has both financial and time cost implications. As a

result, employees may find their mobility and productivity limited by the extent to which theycan learn new technical skills independently of their employer.


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4) Explain the different components of MIS.The physical components of MIS comprise the computer and communications hardware,

software, database, personnel, and procedures. Almost all organizations employ multiplecomputer systems, ranging from powerful mainframe machines (sometimes including

supercomputers) through minicomputers, to widely spread personal computers (also known as

microcomputers). The use of multiple computers, usually interconnected into networks by meansof telecommunications, is called distributed processing. The driving forces that have changed

the information processing landscape from centralized processing, relying on single powerful

mainframes, to distributed processing have been the rapidly increasing power and decreasingcosts of smaller computers.

Though the packaging of hardware subsystems differs among the three categories of computers(mainframes, minicomputers, and microcomputers), all of them are similarly organized. Thus, a

computer system comprises a central processor (though multiprocessors with several central

processing units are also used), which controls all other units by executing machine instructions;

a hierarchy of memories; and devices for accepting input (for example, a keyboard or a mouse)

and producing output (say, a printer or a video display terminal). The memory hierarchy rangesfrom a fast primary memory from which the central processor can fetch instructions for

execution; through secondary memories (such as disks) where on-line databases are maintained;to the ultra high capacity archival memories that are also employed in some cases.

COMPONENTDESCRIPTION

Hardware Multiple computer systems: mainframes, minicomputers,personal computers

Computer system components are: central processor(s),memory hierarchy, input and output devices

Communications: local area networks, metropolitan area

networks, and wide area networks

Software Systems software and applications software

Database Organized collections of data used by applications software

Personnel Professional cadre of computer specialists; end users in

certain aspects of their work

Procedures Specifications for the use and operation of computerizedinformation systems collected in user manuals, operator

manuals, and similar documents

Multiple computer systems are organized into networks in most cases. Various networkconfigurations are possible, depending upon an organizations need. Fast local area networks

join machines, most frequently clusters of personal computers, at a particular organizational sitesuch as a building or a campus. The emerging metropolitan area networks serve large urban

communities. Wide area networks connect machines at remote sites, both within the company

and in its environment. Through networking, personal-computer users gain access to the broadcomputational capabilities of large machines and to the resources maintained there, such as large

databases. This connectivity converts personal computers into powerful workstations.


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Computer software falls into two classes: systems software and applications software. Systems

software manages the resources of the system and simplifies programming. Operating systems(UNIX, for example) control all the resources of a computer system and enable multiple users to

run their programs on a computer system without being aware of the complexities of resource

allocation. Even if you are just using a personal computer, a complex series of actions takes

place when, for example, you start the machine, check out its hardware, and call up a desiredprogram. All of these actions fall under the control of an operating system, such as DOS or IBM

OS/2. Telecommunications monitors manage computer communications; database

management systems make it possible to organize vast collections of data so that they areaccessible for fast and simple queries and the production of reports. Software translators-

compilers or interpreters, make it possible to program an application in a higher-level language,

such as COBOL or C. The translator converts program statements into machine instructions

ready for execution by the computers central processor.

Many categories ofapplications software are purchased as ready-to-use packages. Applicationssoftware directly assists end users in their functions. Examples include general-purpose

spreadsheet or word processing programs, as well as the so-called vertical applications serving aspecific industry segment (for example, manufacturing resource planning systems or accounting

packages for small service businesses). The use of purchased application packages is increasing.However, the bulk of applications software used in large organizations are developed to meet a

specific need. Large application systems consist of a, number of programs integrated by the

database.

To be accessible, data items must be organized so that individual records and their components

can be identified and, if needed, related to one another. A simple way to organize data is tocreate files. A file is a collection of records of the same type. For example, the employee file

contains employee records, each containing the same fields (for example, employee name and

annual pay), albeit with different values. Multiple files may be organized into a database, or anintegrated collection of persistent data that serves a number of applications. The individual files

of a database are interrelated.

Professional MIS personnel include development and maintenance managers, systems analysts,

programmers, and operators, often with highly specialized skills. The hallmark of the present

stage in organizational computing is the involvement of end users to a significant degree in thedevelopment of information systems. Procedures to be followed in using, operating, and

maintaining computerized systems are a part of the system documentation.

5)Mention different characteristics of MRS.

1) MRS are usually designed by MIS professionals, rather than end users, over an extensiveperiod time, with the use of life-cycle oriented development methodologies (as opposed to first

building a simpler prototype system and then refining it in response to user experience). Great

care is exercised in developing such systems because MRS is large and complex in terms of the

number of system interfaces with various users and databases.


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2) MRS is built for situations in which information requirements are reasonably well known and

are expected to remain relatively stable. Modification of such systems, like their development, isa rather elaborate process. This limits the informational flexibility of MRS but ensures a stable

informational environment.

3) MRS does not directly support the decision-making process as a search for alternativesolutions to problems.Naturally, information gained through MRS is used in the managers

decision-making process. Well-structured decision rules, such as economic order quantities forordering inventory or accounting formulas for computing various forms of return on equity, are

built into the MRS itself.

4) MRS is oriented towards reporting on the past and the present, rather than projecting the

future.

5) MRS generally has limited analytical capabilities-they are not built around elaborate models,

but rather rely on summarization and extraction from the database according to given criteria.

Based on simple processing of the data summaries and extracts, report information is obtainedand printed (or, if of limited size, displayed as a screen) in a prespecified format.

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

6)List down the Potential External Opportunities, potential internal Weaknesses.

Potential External Opportunities

Serve additional customer groups

Enter new markets or segments

Expand product line to meet broader range of customer needs

Diversify into related products

Vertical integration

Falling trade barriers in attractive foreign markets

Complacency among rival firms

Faster market growth

Potential Internal Weaknesses

No clear strategic direction


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Obsolete facilities

Lack of managerial depth and talent

Missing key skills or competence

Poor track record in implementing strategy

Plagued with internal operating problems

Falling behind in R&D

Too narrow a product line

Weak market image

Weaker distribution network

Below-average marketing skills

Unable to finance needed changes in strategy

Higher overall unit costs relative to key competitors

7) What are the technology evaluation factors that need to be considered during ERPselection.

1) Client server architecture and its implementation-two tier or three tier.

2) Object orientation in development and methodology.

3) Handling of server and client based data and application logic.

4) Application and use of standards in all the phases of development and in the product.

5) Front end tools and back end data based management system tools for the data, process

presentation management.

6) Interface mechanism: Data transfer, real time access, OLE/ODBC compliance.

7) Use of case tool, screen generators, report writers, screen painter and batch processor.

Support system technologies like bar coding, EDI, imaging, communication, network.


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9) Down loading to PC based packages, MS-Office, lotus notes, etc.

10) Operating system and its level of usage in the system.

11) Hardware-software configuration management.

8)What are the common business exposures and risk of using internet by organization .

Common Business Exposures

Business Exposure Some of the Possible Causes

Erroneous record keeping Incomplete or inaccurate processing of

transactions

Unacceptable accounting Improper interpretation or Willful disregard for

accounting practicesBusiness interruption Many factors including irreparable damage to

organizational databases

Erroneous management

decisions

Misleading information or failing to acquire

necessary information

Fraud or embezzlement Deliberate communication of wrong

information

Statutory sanctions Violation of laws or reporting regulations

Excessive costsFailure to acquire approvals for high-value

expenditures

Loss or destruction ofresources Lack of adequate safeguards overorganizational resources

Loss of competitive

advantage

Many factors including use of poor IS/IT to

satisfy customer requirements

Risks of Internet to Organizations

Contracting viruses

Interception of passwords by hackers

Interception of sensitive/commercial data

Illegal/objectionable use of site by users

Inability to effectively disconnected Internet to own employees

Misrepresentation of identity by site visitors


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Legal loopholes in electronic contracts

No security against eavesdropping

No security against interception

Misuse of supplied/captured information

Misrepresentation of identity of site

9) Explain with relevant example the concept of business process. Also mention theirelements.

Ans: For initiating business re-engineering, one is required to make some very basic andfundamental changes in ones conventional thinking. The business is re-engineered throughprocess reengineering and the business has a number of processes which together produce the

business results. You concentrate on the process and not on the task when it comes to re-engineering.

The business process is defined as a set of activities performed across the organization creating

an output of value to the customer. Every process has a customer who may be internal orexternal to the organization. The scope of the process runs across the departments and functions

and ends up in substantial value addition which can be measured against the value expectation of

a customer.

For example, the order processing scope in the traditional sense is within the marketing

department. But when it comes to re-engineering, the scope expands to manufacturing, storing,

delivering and recovering the money. Likewise, the scope of the bill payment is not limited to theaccounts and finance departments but it covers ordering the vendors, receipt and acceptance or

goods and paying the bill amount.

In a classical organizational set-up, the different processes are handled in parts within the four

walls of the department and the functions are limited to the responsibility assigned to them.

When the bill payment process is to be re-engineered, it will be re-engineered right from thepurchase ordering to cheque payment to the vendor. The reason for covering the purchase

ordering as a part of the bill payment process, is that the purchase order information decides the

number of aspects of bill payment.

The basic element of the processes is motivation to perform certain activities. In the processexecution, the data is gathered, processed and stored. The data is used in the process to generatethe information which would be checked, validated and used for decision making. The decision

is then communicated. The process is executed through the basic steps such as receiving the

input, measuring the input, analysing the document, performing, processing, recording, accessing

data, producing the results and communicating them.

Basic elements of business process are:


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Motivation to perform

Data gathering, processing and storing

Information processing

Checking, validating and control

Decision making

Communication

All these relate to human initiative. A business process in any area of the business organization

performs through basic steps, such as, receive input, measure, analyze, document, perform,

process, record / store, access, produce and communicate. When the process is performed, itconsumes resources and time. The re-engineering approach attempts to eliminate or shorten the

steps so that resource consumption is reduced and time of process execution is shortened. Iteliminates redundancy by eliminating the steps, which do not contribute, to the value customer is

looking for.

A business process defined for re-engineering has a clear cut start and end, resulting into abusiness result. In organization, there are long processes and short processes. There are critical

processes and non critical processes. The critical business processes are those, which contribute

to the value significantly. While the non-critical processes do not contribute much to the value,

the customer is looking for.

For example, the process of receiving a visitor in the organization could be considered as non-

critical. But the process of new product development from the concept to the prototype is criticalas it is expected to contribute high value to the customer. If the external customer focus is taken

as a criterion for process selection, then all the processes which generate and add value to the

customer are called the value stream processes. The value stream processes are critical andbecome the immediate candidates for reengineering. The other processes in the organization

contribute to the overheads of performing the business function. For example, the processes

involving attendance, leave, payment of wages, security, travelling and accounting are not value

stream processes as the resources employed in them do not create a value or improve a value tothe customer. Such processes are a second priority as far as re-engineering is concerned. Every

process is made of a series of activities. In each activity some work is done which produces

some result for processing into the next activity. If the work done under any activity is analyzed,

it will be seen that the people are moving papers and products to achieve some result. In theprocess they collect the information for decision making and then carry out a physical activity of

pushing the product or the output using the paper for record, document and communication.


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Work model comprising six elements.

The people who manage the business are engaged in the series of such work modules distributed

across the organization. When such work modules are viewed together as a single entity, it is a

business process. In such process, participating people are considered as a team working with the

sole objective of achieving the customer expectation on value. In re-engineering exercise all thesix entities, viz., people, paper, activity, information, decision and product stand to scrutiny

through a fundamental rethinking for radical redesign to produce dramatic results.

10)Explain the link between MIS and BPR.

Any exercise towards building design of the management information system will be preceded

by an exercise of business process re-engineering. Building the MIS is a long-term project. It is,therefore, essential to have a relook at the organisation where the mission and goals of the

organisation are likely to be replaced. The business itself would undergo a qualitative change in

terms of the business focus, work culture and style and the value system. This would change the

platform of business calling for a different MIS.

The MIS will concentrate more on the performance parameter evaluation which is different inthe re-engineered organisation. The data capture, processing, analysis and reporting would be

process central and performance efficiency would be evaluated in relation to the value generated

by the processes.

The decision support systems will be integrated in the business process itself, where triggers are

used to move the process. The triggers could be business rules and stored procedures, enablingthe process to become automotive in its execution. The MIS in the re-engineered organisation

would be more of a performance monitoring tool to start with and then a control for the

performance. The traditional MIS is function-centered like finance, production, material, etc. TheManagement Information System in a re-engineered organisation would be process centred,evaluating customer satisfaction, expectations and perceptions.

The role of Management Information System will be raised to a level where the followingactivities would be viewed for the management action:

Control of process cycle time
http://resources.smude.edu.in/slm/wp-content/uploads/2010/07/clip-image00434.jpg


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Work group efficiency

Customer satisfaction index

Process efficiency and effectiveness

Effectiveness of the Management in enterprise management and not in enterprise resource

The strength of the organisation in terms of knowledge, learning and strategic effectiveness

The traditional role of the MIS as a decision supporter will continue, however.


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Spring 2012

Master of Computer Application (MCA)Semester IV

MC0076Management Information Systems (Book ID: B0901)

Assignment Set2

1) Explain the needs for information in the following areasa) Cost leadership b) Global corporation

c) ERP architecture d) Technology Evaluation Factor

a)A cost leadership strategy seeks to achieve competitive advantage by allowing the business

unit to make more profit than its competitors when selling to customers at the same price.

Complete information about costs makes costs easier to control and creates a competitiveadvantage. The company requires quality internal information to reduce costs by achieving

efficiencies in production, distribution, and sales. Even hospitals can use information technology

to reduce costs by eliminating paperwork and improving services. Bedside terminals can store

patient records; electronic conferencing can bring the expertise of a team of physicians in remotelocations to a single problem; home health terminals allow patients to consult with doctors

online; and diagnostic systems can supportphysicians diagnoses, identify preferred treatments,and specify their cost benefits.

b) Prior to the 1980s, the inability of a company to obtain information about its foreignoperations time to compete with foreign companies operating in their own countries prevented

organizations from operating globally. Most global corporations were holding companies that

bought and sold regional companies in different parts of the world; each remote company, after

acquisition, would continue to operate in its own realm with minimal management by theholding company.

Todays competitive technology has reduced the barrier of distance. Now companies operatingaround the globe can exchange information with nearly the same ease as if they were in the same

country. Toys "R" Us has expanded globally into Canada, England, Singapore, Hong Kong, and

other locations since 1984. Its overseas stores are identical to American stores and rely on thesame information processing systems as they do in the United States.

Although language differences, regulation of information flows, and lack of a communication

infrastructure remain barriers to the exchange of information, in general, companies of all sizes

now have the resources and information systems to allow them to operate globally. Information

systems meet the need for coordination of diverse enterprises in distant locations. Going global

remains one of the easiest ways for a company to expand its market. A company pursuing thestrategy of rapid growth and high market share increases its opportunities for success by

considering the entire world as its market and using information systems to help it attain the

information it requires functioning internationally. Information technology helps multinationalcompanies compete internationally by supporting foreign subsidiaries, better integrating

worldwide operations, allowing greater flexibility in responding to local market needs, and

serving clients more innovatively. Creating a mature technological environment abroad helps


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meet customer needs for new products and managements needs for consistency and control in

worldwide locations.

c) Any information system has three basic components, viz., the Data Management, the

Application Logic, and the Presentation. These components can be built with the client server

role definitions. The client is a user and the server provides the services required by the user theto run the system. Since, the information needs are dynamically changing, the architecture

required is to separate the data and its management from its application. The user requires thechoice of using the data as it suits him the most. Hence, the application logic has to be separate

from the data. There is also variability in the manner how the application logic is developed and

presented. The architecture could be a two tier or three tier as shown in Fig 6.2 below.

d) 1) Client server architecture and its implementation-two tier or three tier.

2) Object orientation in development and methodology.

3) Handling of server and client based data and application logic.

4) Application and use of standards in all the phases of development and in the product.

5) Front end tools and back end data based management system tools for the data, process

presentation management.

6) Interface mechanism: Data transfer, real time access, OLE/ODBC compliance.

7) Use of case tool, screen generators, report writers, screen painter and batch processor.

Support system technologies like bar coding, EDI, imaging, communication, network.

9) Down loading to PC based packages, MS-Office, lotus notes, etc.

10) Operating system and its level of usage in the system.


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11) Hardware-software configuration management.

2)How information is selected and organized?

Acquiring Information

The acquisition of information is a first step in its use. We can obtain information from eitherformal or informal sources. Formal sources provide information in a relatively organized and

predictable fashion, for example, business forms; electronic monitoring equipment such as

digital thermometers; and machine-readable purchased data such as an encyclopaedia (Personal

records, corporate annual reports, summarized transaction histories) on a compact disc. Informalsources provide information in a less structured way and include conversations with customers,

suppliers, and other employees, as well as general observations of personal and organizational

activities. Generally, acquiring information through informal sources costs less, but the

information acquired may be harder to organize and use effectively.

Data acquisition can occur manually or electronically. Managers often hand-write evaluation

reports or salespeople maintain written records of customer orders. Increasingly, managers canenter evaluation data directly into the computer, and salespeople can use point-ofsale terminals to

record detailed sales information electronically. Experts estimate that electronic forms for

capturing data cost at least 70 percent less to design, purchase, use, carry, and revise than theequivalent paper forms.

Processing Information

Processing information describes transforming it into a usable form. Processing typically occursat two times: first, between the acquisition and storage of information, and second, between itsretrieval and communication. The processing that occurs between acquisition and storage

generally requires a large amount of personal labor. Manual processing, involves duplicating,

sorting, and filing data. Electronic processing, such as with electronic scanners, involvestransforming and entering the data into an electronic form. Although both manual and

computerized processing may require significant clerical time and incur high costs, electronic

processing can reduce these costs. Processing occurs between storing and communicatinginformation for both manual and computerized systems. In manual systems, filing clerks

typically perform the processes of retrieval, formatting, and display. When summaries or special

analyses are required, analysts with special skills, such as skills in finance or accounting, may

process the data. Manual information processing involves high labour and time costs but lowequipment costs. Manual processing of large volumes of data tends to be more expensive than

computer processing. In computerized systems the processing between retrieval and

communication allows more analysis and display possibilities in a shorter time. The costs of

computerized processing include rental or depreciation of computer equipment, the labor costs ofoperating the equipment, and the costs associated with programming software to retrieve, format,

and display information. Computerized processing involves lower labour and time costs but

higher equipment costs than manual processing.


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Storing Information

The primary cost of storing information is the cost of the storage medium and space on-

computerized storage uses paper, microform, or both. These media require much more physical

storage space than electronic media and typically incur a greater cost for leasing or buying space

than do electronic media. Computerized storage uses a variety of media, including hard disks,diskettes, pen drives and CD-ROM, depending on the amount of information to be stored and the

desired speed of retrieval. The organizational overhead to monitor and control informationstorage, including staff salaries and physical equipment, adds to the cost of information storage.

Most large companies keep duplicates of their electronically stored information at a secure siteremote from their processing facilities to ensure that the data can be retrieved in the event of a

disaster such as a fire or flood or terrorist strikes. In addition, most companies keep duplicate

paper or microform copies of much of their data. The cost of the media, physical facilities, and

staff for these backup systems also contributes to the storage costs.

Both document and electronic storage have an ancillary cost for storing the documentationneeded to locate information. Storing large amounts of data calls for simultaneously developing

and storing an index or map that assists in locating the data.

3) Briefly explain components of MIS.

The physical components of MIS comprise the computer and communications hardware,software, database, personnel, and procedures. Almost all organizations employ multiple

computer systems, ranging from powerful mainframe machines (sometimes including

supercomputers) through minicomputers, to widely spread personal computers (also known as

microcomputers). The use of multiple computers, usually interconnected into networks by means

of telecommunications, is called distributed processing. The driving forces that have changedthe information processing landscape from centralized processing, relying on single powerful

mainframes, to distributed processing have been the rapidly increasing power and decreasingcosts of smaller computers.

Though the packaging of hardware subsystems differs among the three categories of computers

(mainframes, minicomputers, and microcomputers), all of them are similarly organized. Thus, a

computer system comprises a central processor (though multiprocessors with several central

processing units are also used), which controls all other units by executing machine instructions;a hierarchy of memories; and devices for accepting input (for example, a keyboard or a mouse)

and producing output (say, a printer or a video display terminal). The memory hierarchy ranges

from a fast primary memory from which the central processor can fetch instructions for

execution; through secondary memories (such as disks) where on-line databases are maintained;to the ultra high capacity archival memories that are also employed in some cases.

COMPONENTDESCRIPTION

Hardware Multiple computer systems: mainframes, minicomputers,

personal computers


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Computer system components are: central processor(s),memory hierarchy, input and output devices

Communications: local area networks, metropolitan area

networks, and wide area networks

Software Systems software and applications softwareDatabase Organized collections of data used by applications software

Personnel Professional cadre of computer specialists; end users in

certain aspects of their work

Procedures Specifications for the use and operation of computerized

information systems collected in user manuals, operatormanuals, and similar documents

Multiple computer systems are organized into networks in most cases. Various networkconfigurations are possible, depending upon an organizations need. Fast local area networks

join machines, most frequently clusters of personal computers, at a particular organizational site

such as a building or a campus. The emerging metropolitan area networks serve large urbancommunities. Wide area networks connect machines at remote sites, both within the company

and in its environment. Through networking, personal-computer users gain access to the broadcomputational capabilities of large machines and to the resources maintained there, such as large

databases. This connectivity converts personal computers into powerful workstations.

Computer software falls into two classes: systems software and applications software. Systemssoftware manages the resources of the system and simplifies programming. Operating systems

(UNIX, for example) control all the resources of a computer system and enable multiple users torun their programs on a computer system without being aware of the complexities of resource

allocation. Even if you are just using a personal computer, a complex series of actions takes

place when, for example, you start the machine, check out its hardware, and call up a desiredprogram. All of these actions fall under the control of an operating system, such as DOS or IBMOS/2. Telecommunications monitors manage computer communications; databasemanagement systems make it possible to organize vast collections of data so that they are

accessible for fast and simple queries and the production of reports. Software translators-compilers or interpreters, make it possible to program an application in a higher-level language,

such as COBOL or C. The translator converts program statements into machine instructions

ready for execution by the computers central processor.

Many categories ofapplications software are purchased as ready-to-use packages. Applications

software directly assists end users in their functions. Examples include general-purpose

spreadsheet or word processing programs, as well as the so-called vertical applications serving aspecific industry segment (for example, manufacturing resource planning systems or accounting

packages for small service businesses). The use of purchased application packages is increasing.

However, the bulk of applications software used in large organizations are developed to meet aspecific need. Large application systems consist of a, number of programs integrated by the

database.


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receivables.

Operational

Information on the production,sales. Purchase, despatches

consumptions, etc. in the form of

planned versus actual. The

information for monitoring ofexecution schedules.

Operational and

Management

Supervisor, Section

officer

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

5) How do you define Management Reporting Systems?

Management reporting systems (MRS) are the most elaborate of the management-oriented MIS

components. Indeed, some writers call MRS management information systems, the name we

reserve for the entire area of informational support of operations and management.

The main objective of MRS is to provide lower and middle management with printed reports andinquiry capabilities to help maintain operational and management control of the enterprise.

Characteristics of MRS

1) MRS are usually designed by MIS professionals, rather than end users, over an extensive

period time, with the use of life-cycle oriented development methodologies (as opposed to firstbuilding a simpler prototype system and then refining it in response to user experience). Great

care is exercised in developing such systems because MRS is large and complex in terms of the

number of system interfaces with various users and databases.

2) MRS is built for situations in which information requirements are reasonably well known and

are expected to remain relatively stable. Modification of such systems, like their development, isa rather elaborate process. This limits the informational flexibility of MRS but ensures a stable

informational environment.

3) MRS does not directly support the decision-making process as a search for alternative

solutions to problems. Naturally, information gained through MRS is used in the managers

decision-making process. Well-structured decision rules, such as economic order quantities forordering inventory or accounting formulas for computing various forms of return on equity, are

built into the MRS itself.

4) MRS is oriented towards reporting on the past and the present, rather than projecting the

future.

5) MRS generally has limited analytical capabilities-they are not built around elaborate models,

but rather rely on summarization and extraction from the database according to given criteria.


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Based on simple processing of the data summaries and extracts, report information is obtained

and printed (or, if of limited size, displayed as a screen) in a prespecified format.

6) MRS generally report on internal company operations rather than spanning the companys

boundaries by reporting external information.

6) Explain with relevant examples the concept of business process. Also mention theirelements.

Ans: For initiating business re-engineering, one is required to make some very basic and

fundamental changes in ones conventional thinking. The business is re-engineered

through process reengineering and the business has a number of processes which together

produce the business results. You concentrate on the process and not on the task when itcomes to re- engineering.

The business process is defined as a set of activities performed ac ross the organization

creating an output of value to the customer. Every process has a customer who may beinternal or external to the organization. The scope of the process runs across the

departments and functions and ends up in substantial value addition which can be

measured against the value expectation of a customer.

For example, the order processing scope in the traditional sense is within the marketing

department. But when it comes to re-engineering, the scope expands to manufacturing,

storing, delivering and recovering the money. Likewise, the scope of the bill payment is not

limited to the accounts and finance departments but it covers ordering the vendors, receipt

and acceptance or goods and paying the bill amount.

In a classical organizational set-up, the different processes are handled in parts within the

four walls of the department and the functions are limited to the responsibility assigned to

them. When the bill payment process is to be re-engineered, it will be re-engineered right

from the purchase ordering to cheque payment to the vendor. The reason for covering the

purchase ordering as a part of the bill payment process, is that the purchase order

information decides the number of aspects of bill payment.

The basic element of the processes is motivation to perform certain activities. In the

process execution, the data is gathered, processed and stored. The data is used in the

process to generate the information which would be checked, validated and used fordecision making. The decision is then communicated. The process is executed through the

basic steps such as receiving the input, measuring the input, analysing the document,

performing, processing, recording, accessing data, producing the results and

communicating them.

Basic elements of business process are:


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Motivation to perform

Data gathering, processing and storing

Information processing

Checking, validating and control

Decision making

Communication

All these relate to human initiative. A business process in any area of the business

organization performs through basic steps, such as, receive input, measure, analyze,

document, perform, process, record / store, access, produce and communicate. When the

process is performed, it consumes resources and time. The re-engineering approach

attempts to eliminate or shorten the steps so that resource consumption is reduced andtime of process execution is shortened. It eliminates redundancy by eliminating the steps,

which do not contribute, to the value customer is looking for.

A business process defined for re-engineering has a clear cut start and end, resulting into abusiness result. In organization, there are long processes and short processes. There are

critical processes and non critical processes. The critical business processes are those,

which contribute to the value significantly. While the non-critical processes do not

contribute much to the value, the customer is looking for.

For example, the process of receiving a visitor in the organization could be considered as

noncritical. But the process of new product development from the concept to the prototypeis critical as it is expected to contribute high value to the customer. If the external customer

focus is taken as a criterion for process selection, then all the processes which generate and

add value to the customer are called the value stream processes. The value stream

processes are critical and become the immediate candidates for reengineering. The other

processes in the organization contribute to the overheads of performing the business

function. For example, the processes involving attendance, leave, payment of wages,

security, travelling and accounting are not value stream processes as the resources

employed in them do not create a value or improve a value to the customer. Such processes

are a second priority as far as re-engineering is concerned. Every process is made of a

series of activities. In each activity some work is done which produces some result for

processing into the next activity. If the work done under any activity is analyzed, it will beseen that the people are moving papers and products to achieve some result. In the process

they collect the information for decision making and then carry out a physical activity of

pushing the product or the output using the paper for record, document and

communication.


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Work model comprising six elements.

The people who manage the business are engaged in the series of such work modules

distributed across the organization. When such work modules are viewed together as a

single entity, it is a business process. In such process, participating people are considered

as a team working with the sole objective of achieving the customer expectation on value.In re-engineering exercise all the six entities, viz., people, paper, activity, information,

decision and product stand to scrutiny through a fundamental rethinking for radical

redesign to produce dramatic results.

7)What are the uses of Executive Information Systems?

Executive information systems (EIS), are becoming the primary tools of top-level control insome organizations. They can be best understood by contrasting them with DSS, which they

complement.

The feature of EIS is to access to a large variety of internal and external data, terse presentationof information with colorful graphics, the ability to "drill down" on more and more detailed data,

and the ability to control the system in a very easy way.

Speaking tersely: while DSS are primarily used by middle- and lower-level managers to project

the future, EIS primarily serve the control needs of higher-level management. They help anexecutive to spot a problem, an opportunity, or a trend. EIS also have forecasting capabilities that

can be used in an "automatic pilot" fashion; in addition to their other features, these capabilities

make EIS a strategic planning tool. The relationship between these two types of information

systems, EIS and DSS, is shown infigure 10.6.


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Fig. 10.6

Seen in the light of the structure of a decision-making process, EIS primarily assist topmanagement in uncovering a problem or an opportunity. Analysts and middle managers can

subsequently use a DSS to suggest a solution to the problem. More recently, EIS-type

applications are coming into use by middle managers as well

At the heart of an EIS lies access to data. EIS may work on the data extraction principle, as DSSdo, or they may be given access to the actual corporate databases. The first kind of EIS can fully

reside on personal workstations; EIS of the second kind need the power of minis or mainframes

to access corporate data. The technical problems of EIS data access pale in comparison with the

problem of potential resistance from managers below the top level. Once an EIS has been set up,its executive users are able to obtain virtually instantly any information supported by the EIS

data-unfiltered and unable to know their subordinates.

In the design of EIS, developers frequently rely on the critical success factors (CSF)methodology developed by John Rockart of MIT. He defined CSFs as "those few critical areas

where things must go right for the business to flourish." With the use of this methodology,executives may define just the few indicators of corporate performance they need. Many

executives have already fallen into the habit of reviewing these indicators on a regular,

sometimes daily, basis. With the drilldown capability, they can obtain more detailed data behindthe indicators. An executive who is experienced with such a system can perceive a trend (and aproblem) in seconds.

As opposed to the CSF methodology, which relies on the individual critical success factors, thestrategic business objectives methodology of EIS development takes a company-wide

perspective. Following the identification of the strategic business objectives of a firm, the critical

business processes are identified and prioritized, and then the information needed to supportthese processes is defined-to be obtained with the EIS that is being planned. This methodology

avoids the frequent pitfall of aligning an EIS too closely to a particular sponsor.


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In the United States, Commander EIS (by Comshare of Ann Arbor, Michigan) and Pilot EIS (by

Pilot Executive Software of Boston) lead the EIS field. RE SOLVE from Metapraxis (NewYork and of Kingston upon Thames, England) is a leader in Europe. All of these systems are

actually EIS generators, which help to configure a specific EIS.

In general, organizational DSS are conceptually more complex than the rather well-structuredEIS, primarily due to the model-management component of DSS.

8)Explain various Organizational limits to Relational Decision Making.

The rational model of organizational decision making reflects only some aspects of the decision-making environment: those that lend themselves most readily to receiving support from

information systems. Other aspects include incrementalism, chance-driven choice making,

political/competitive behavior, and programmed choice making. As you shall see, most of thesedecision-making behaviors are rooted in the divergent interests of the people involved in making

a decision. Therefore, various types of group decision support systems (GDSSs) can help these

groups to negotiate, foresee, and manage a crisis, or to look at a broad array of alternativesbefore arriving at a decision.

Charles Lindblom analyzed how the decision-making process, particularly in large organizations(including governments), differs from the rational model. He contended that decision making in

large organizations under ordinary circumstances is a process of "muddling through"-making

small, incremental changes from existing actions and policies. The important criteria in thisdecision-making mode are avoiding the uncertainty of major changes and maintaining the

consensus of all involved. Making a decision is not concluded by the "choice" of an alternative;

it is rather a continuous process, during which any chosen course of action may be modified as it

is implemented.

The more recent, and most pessimistic, so-called garbage can theory of organizational decisionmaking is based on the premise that not all organizations are destined to succeed-many

companies (even those considered excellent at some point) will fail. These firms are unable to

adapt to the changing environment, and much of their decision making consists of attaching

solutions to problems in a rather random manner. In one sense, "garbage-can" decision making ispresent to some extent in all companies: because of the difficulty in forecasting outcomes,

chance does playa role in providing a solution to many an organizational problem.

Other aspects of organizational decision making are reflected by what George Huber called the

political/competitive model. A decision process generally includes several participants, each of

whom may seek to influence the decision in a direction favorable to themselves or to the unit

they represent. For example, several studies of budget development clearly point to it being a po-litical process. The need to reconcile the diverging interests of various stakeholders (for example,

senior management, labor, government, and others) often leads participants to avoid making

major departures from current policies-and is thus one of the reasons for incremental decisionmaking.


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Rational decision making in organizations is also limited byprogrammed behavior. When

decision makers engage in this type of behavior, they follow standard operating procedures,which constrains their choices and prevents creative problem solving as they opt for the "safe

and tried." An analysis of the results of previous choices, assisted by information systems, may

help decision makers relax the constraints of programmed choice making.

9) Explain different components of DSS.

The three principal DSS subsystems and their principal capabilities are shown in figure 10.1.

Various commercial systems support DSS development and package these DSS capabilities in avariety of ways by distributing them among a series of optional modules.

Components of DSS

Data Management Subsystem

The data management subsystem of a DSS relies, in general, on a variety of internal and external

databases. Indeed, we have said that the power of DSS derives from their ability to provide easy

access to data. This is not to say that a simple, usually spreadsheet-based DSS for the personal

use of a manager cannot rely on the managers limited personal database. It is simply thatmaintaining the currency and integrity of a significant database of this kind is usually a daunting

task. Proliferation of personal databases also contradicts the principles of information resource

management.


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Data Management Subsystem

On the other hand, it is usually undesirable to provide a DSS with direct access to corporate

databases. The performance of the transaction processing systems that access these databases, as

well as the responsiveness of the DSS, would both be degraded. Usually, therefore, the database

component of DSS relies on extracts from the relevant internal and external databases. The useris able to add to these data at will. This is shown in figure 10.2.

The extraction procedure itself is generally specified by a specialist rather than an end user. The

specialist needs to pay particular attention to data consistency across multiple decision support

systems that extract data from the corporate databases. If extracts for the DSS serving the same

functional area are made at different times, the extracted databases will differ and "battles of theprintout" may result.

The Model Management Subsystem

The power of DSS rests on the users ability to apply quantitative, mathematical models to data.

Models have different areas of application and come from a variety of sources. Software


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packages for developing DSS (so-called DSS generators) contain libraries of statistical models.

These models include tools for the exploratory analysis of data-tools designed to obtainsummarized measures such as mean and median values, variances, scatter plots, and so forth.

Other statistical models help analyze series of data and forecast future outcomes by

approximating a set of data with a mathematical equation, by extending the trend of a curve by

extrapolation techniques, or by providing for seasonal adjustment. The capabilities of the modelmanagement component of DSS are summarized in figure 10.3.

Other models help establish (or reject) causal relationships between various factors (for example,

whether the drop in sales volume is caused by the aging of our target market segment). Market

response models show how sales depend on such factors as price and promotion. Simulationmodels that generate input values randomly from a certain probability distribution (also called

Monte Carlo models-after the city where the famous casino is, of course) are employed for

waiting-line problems, such as establishing the number of operators needed for order taking or

deciding on staffing levels for a service center.

Model Management Subsystem

Optimization models, developed by management scientists, are available for use in DSS. These

models aim to allocate resources to maximize profit or minimize cost or time. A number of such

models are based on a linear programming technique. These include models that allocate inputresources (labor, materials, capital) among various products; models that assign activities topersonnel or equipment; and models that determine the best shipping schedules from several

points of origin to several destinations. Other models optimize inventory levels or determine


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optimal network configurations. Specialized model libraries are available for financial modeling,

risk analysis, or marketing.

A particular advantage of DSS is the decision makers ability to use a model to explore the

influence of various factors on outcomes (a process known as sensitivity analysis). Two forms of

such analysis are the what-if analysis and goal seeking.

When doing what-ifanalysis, the decision maker creates multiple scenarios by assuming variousrealistic values for input data, Thus, the decision maker asks "What if these are the values of the

inputs?" The model recomputes outputs for each case. Here are some examples of questions that

can be directed toward appropriate models:

Whatwill be the cost of goods sold ifthe cost of raw materials increases by 10 percent?

Whatwill be the effects on the company bonus program if sales increase by 3 percent and direct

expenses increase by 5 percent?

When goal seeking, the decision maker works backward from the assumed results to the needed

input values. Thus, the decision maker asks "What will it take to achieve this goal?" Some

examples of questions asked in this mode are:

What sales volume will be necessary to ensure a revenue growth of 10 percent next year?

How many service center employees will it take to ensure that every order is handled within

three minutes?

What quarterly revenues will we need from each of our three products to generate the desired

profits during these quarters?

The actual form in which these questions may be asked depends on the options offered by thedialog management subsystem of the DSS, which we shall discuss next.

There is significant research interest in providing a degree of automated model management. Theuser would be able to present the problem in a system of this kind, and the system would

automatically select an appropriate model or construct one from the existing models and

"building blocks."

The Dialog Management Subsystem

Along with DSSs ability to apply models to large volumes of data from a variety of sources, a

single advantage of DSS is the user-friendly and flexible interface between the human decision

maker and such a system. This stands in contrast to management reporting systems. The notablefeature is support of multiple forms of input and output. By combining various input and output

capabilities of a DSS, users can engage in the individual dialog styles that best support their

decision-making styles. The field of artificial intelligence has made some notable contributions

to dialog management, such as the ability to specify what is wanted in a subset of natural


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language or to activate the system by voice. The window capability enables the user to maintain

several activities at the same time, with the results displayed in screen windows (the useremploys a mouse to move between the windows). A variety of help and even training-by-

example capabilities may be offered. Significant attention has been devoted by researchers to the

effectiveness of computer graphics, as opposed to the tabular display of data. Gary Dickson and

his colleagues found that, in general, one cannot claim an advantage (however intuitivelyappealing it may he) for graphics throughout all decision-related activities. They did find,

however, that graphs outperform tables when a large amount of information must be presented

and a relatively simple impression is desired. This is very often the case-and the main reasonwhy executive information systems, discussed later in this chapter, rely heavily on graphics.

By analyzing the results of research in this area, Ali Montazemi and Shuohong Wang, concluded

that line graphics have time-saving effects on decision making for more complex decision tasks

only, and are less

defective at providing precise information. Color graphics were found to improve decisionquality, but they did not reduce the time necessary to arrive at a decision. Graphic representation

of quantitative information requires considerable care to prevent distorted perception; EdwardTufte gives a thorough and exciting presentation of the subject.

10)Write a note on Ethical and Social issues with E-Commerce

1. Internet can be used in illegal ways, as there are no laws related to its use. Many serverscontain illegal, immoral, defamatory information (which cannot be legally communicated using

facilities like TV, radio, etc.).

2. There is minimal or no control over the Internet (unlike telephone, radio, TV, etc.).Limited

banning of material in Internet is not possible i.e. all-or-none rule.

3. Free speech advocates say that screening of incoming material is the responsibility of thereceiving end

4. There is no law against Spamming i.e. sending unsolicited mail

5.Massive flaming of large quantity of e-mail to one address. The question arises Is

sending/receiving large quantity of mail ethical?

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